The Capacity Building Bolivarian Computer?

   
   
   
   
   

Do you remember the Bolivarian Computer promoted by Venezuelan President Hugo Chávez? Venezuela Analysis has some more details of it and in short, it's not really all that impressive, with the cheapest model selling for $405, with 3 differently-priced desktops and a laptop. The most expensive model (probably the laptop, running on a 2.0 GHz Intel Core 2 Duo) will be $1,400:

Bolivarian Computer
"The price of other similar brands is US$ 930, and the price of our computer is US$ 690, almost 40% less," explained President Chavez. "But, in addition, it has an added value, given that it comes with open-source software and a three year guarantee, while other brands only offer one year."
OK, so, a desktop computer with some peripherals (a webcam and headphone/mic set plus a snazzy flatpanel monitor, according to the photo), but none of the revolutionary add-ons that the OLPC for mesh networking or flexibility with regards to power supplies.

The first production run is for 80,000 desktops but only 6,000 laptops, so the focus is at least initially on computer labs or home computers, as opposed to the ultra-portable OLPC approach. On the plus side, Venezuela is increasingly focusing on using Open Source software, and this PC will be no different, and presumably someone could load up Sugar on it.

The catch for the Bolivarian Computer (BC) though, is that it is domestically produced, including local assembly. Unlike the OLPC which is parachuted in from Quanta's factory floor, the BC will be manufactured in Venezuela through a joint partnership between the government's Ministry of Light Industry and Commerce and Lang Chao, a Chinese company, VIT (Venezuela de Industria Tecnológica).

The only other country thus far that is benefiting at all on the production side as well as the educational side of One Laptop Per Child has been Brazil, which is manufacturing school servers domestically. Venezuela Analysis says:

Until now Venezuela has always imported computers both from well-known brands and generic brands from the developed world. With this new venture the Venezuelan government hopes to diversify national production, integrate national productive chains, and work towards technological independence for the country.

By the end of the year, the intention is to begin to locally produce some of the technology in order to substitute some of the imported components used in the assembly of the machines for components produced in Venezuela. In order to do this, the government has built installations for research and development in order to design the components inside the same factory.

olpc Hugo Chávez
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Beyond the manufacturing, Venezuela is also trying to build up their own distribution and international market:
We are working with cooperatives and small companies to form our own distribution network," said the manager of sales Eduardo Hernandez. "It's a slow process. This month we have already completed the formation (of a distribution network) in Caracas and by the end of the year we will have distribution and technical support throughout the whole country."

According to the web page of the new state company, VIT has the objective of "production, marketing and sale of technological products, with an emphasis in manufacturing and assembling computers and accessories. Our efforts are also focused on national export, with a future projection to the international market."

While the Bolivarian Computer may not stack up to the OLPC technology, Venezuela's long-term development of their technology sector may prove a better strategy for the country.

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17 Comments

As if having a technology for assembling computer parts is something that important.

Wayan, while we can all agree that domestic production would be a great step forward for many countries I have my doubts that a place like Venezuela can do more than just assemble a computer in the forseeable future. Not even 5 years from now do I see them producing components for high-tech ICT equipment. So I'm not sure what the VenezuelaAnalysis article means by "locally produce some of the technology in order to substitute some of the imported components"? What are they talking about: processors, motherboards, hard-drives, fans, enclosures, power-supplies?

Brazil is a different story to some degree as the country certainly seems to be more advanced when it comes to up-to-date manufacturing of products. But even here they talk about school server being "manufactured and distributed" and not about actual hardware production.

All in all I think the first step a country like Venezuela should take is to try and offer as much technical support as it locally can. Over time this will provide the basis for future and more advanced development.

ChristophD,

I think Jon will be very disappointed to learn that his writing style could be confused with mine.

That being said, I am on the record with the opinion that local assembly has a great impact on a country, from the direct economic multiplier effect of the assembly jobs & investment, to the more subtle but just as transformative impact of workers learning international-level job skills and business practices: http://www.olpcnews.com/hardware/production/local_olpc_assembly_justification.html

When I lived in Merida in 2002, you couldn't swing a dead cat without hitting a cybercafe with it - almost literally. In the downtown area, there was at least one per block. Admittedly, Merida's a university town, but even so - when I first visited in 1998, there was only one public cyber (that I knew of) at the science and technology museum. I'd guess that the tech support market is already there and probably close to saturation. I don't think it's a bad idea for Venezuela to try and build up local capacity and enter new markets. It may be grandiose of Chavez (no, really?) to think he can compete with Brazil's computer business, but maybe there's a niche.

I believe that we have to consider this particular initiative in the general frame of mind of Mr. Chavez's Bolivarian Revolution, not just as a computer strategy. I don't want to get into details here, OLPC News being a forum for the OLPC project, not general discussion on the ideological underpinnings of development policies.

But at least: in an industry so heavily commodified as PC manufacturing, where all the gains come from productivity since the actual parts aren't going to come cheaper than they already are, exactly how do you actually make the business model work?

I don't have any figures about Venezuelan industrial productivity, but even with a significant local market indirectly subsidized by the government ("Buy Venezuelan!") I fail to see how much the actual earnings of this enterprise will come from a real competitive position, with all its "virtuous circle" effects, or just by artificially raising the prices on imported items, like Latin America did in the 60s and 70s with not so great effects on productivity, industrial development and wealth creation.

This appears more like an attempt to establish a command-economy model for computers than an actual, working business endeavor. Just in sync with Mr. Chavez's understanding of economic development.

A command economy on computers? Like having a country's government buy millions to hand out for free? Hmm.. that sounds quite familiar.

I doubt this would have much economic impact. Venezuela has 27 million people. How many workers does it take to assemble 80,000 computer in a year, and how much skill and knowledge do they need?

I think the idea is to start at that size, and then grow to larger production and increased high-skill work - don't forget it involves not just the people putting the parts together, but management and marketing. I think any industrial incubation Venezuela can do outside of PDVSA is a good idea.

I noticed these PCs are using Intel's processors. It's quite surprising that Chavez decided to use "corporate american" parts for his machine. Could VIA have been a more appropriate choice?

A receipe to build a $72 computer:
http://www.popsci.com/popsci/how20/157a2ea4fc033110vgnvcm1000004eecbccdrcrd.html

Maybe not quite as robust as the OLPC.

Winter

Wayan, as previously mentioned I also believe that local assembly has a great impact on a country and its economy.

All I'm saying is that I don't see countries like Venezuela, Peru, Nigeria, Libya, etc. having the basis for that step. Local tech support might be viable in these places but anything more advanced requires higher levels of development in terms of education of the workforce, infrastructure, political stability, etc.

Graham, I wouldn't be surprised if future versions of the Bolivarian Computer (or maybe the Bolivarian ThinClient "Pequeño Hugo";-) were based on the MIPS Godson/Loongson processors developed by the Chinese government and the Chinese Institute of Computing Technology.

Winter, have you really looked at that setup? To call it appalling would be an understatement... That Celeron 500MHz processor uses up to 27.2W (compared to the Geode [email protected] at 433MHz), the 128MB of PC100 SDRAM would have a crippling effect on the overall system peformance and that 200W PSU probably has an efficiency of less than 65%. Plus those $72 don't even include a screen. This isn't even an apples and oranges comparison!

I forgot the humor tags , or the smilleys ;-)

Even worse. If you start buying 5 million pieces of each, they won't stay cheap very long.

Winter

Venezuela (according to NationMaster) is 106th in Internet users per capita (The US is 10th). Nigeria is 152nd, Peru is 93rd, and India, shining beacon of ICT industries and development, is 141st. (The selection of stats for Internet access wasn't the greatest). ITU's (The International Telecom Union) puts Venezuela at .47 on their "Digital Access Index" which combines phone and cell lines, tariff rates, educational levels and other measures to get an overall picture of raw access as well as ability to take advantage of it. There too India comes in worse, at .32, Peru at .34, and Nigeria at .15. For comparison, the US (11th from the top) has .78, and Sweden, at the top, has .85

This is all to say, don't presume that these countries don't have a base line of capacity to build on. If South Korea had taken the world's advice, it would still be producing what was commonly believed to be its "comparative advantage" - rice.

Jon, I'm not able to follow your argument.

The example of India is perfect: you can have a marvelous ICT industry without no impact in the local and national economy, just as you can have a marvelous local and national economy without a significant ICT industry... Development is quite more complex than assembling computers, and demands for telecommunication services, for instance, are driven by the level of connection of a local economy to the "network economy", rather than by the existence of specific industries that cater to local demands.

That said: it is quite possible to follow Korea's example and start a national development strategy based on competitive production of consumer goods. The main consideration here is "competitive". Are the Venezuelan PCs going to be competitive?

Again, I don't have productivity figures for Venezuela, nor am willing to look for them. But PC manufacturing has become a quite commoditized activity, with parts and process well known around the world. Industrial organization, especially regarding distribution, and marketing, are key. That's why most of the computers of the world are being made at a few places in countries with significant industrial bases, although not necessarily the biggest or best innovative industries. Taiwan and China are still process-innovation hubs, not product-innovation and certainly not the places to look for radical innovations. They are great at commoditizing technology invented elsewhere, from blenders and mixers to flash memory.

So, exactly what does Venezuela brings to the fix? A ever-growing, subsidized state-run sector of the economy, with little room to buy but what's being ordered from above? That is precisely the best invitation towards less-than-stellar productivity. According to the The Inquirer in Spanish, http://es.theinquirer.net/2007/06/17/hugo_chavez_presenta_sus_prime.html, prices aren't exactly to fall in love with, at least in international terms (I don't know if comparatively, they are cheaper than the competition in Venezuela). How much depends on subsidies? How long till profitability is reached?

Maybe they can find something to do with wifi? http://blog.wired.com/gadgets/2007/06/w_wifi_record_2.html

That being said, perhaps Venezuela can't find a niche in the global ICT industry and it will end up being an import-substitution debacle, but with a constantly growing market in high-tech gear, it seems like any first steps into the industry are a good investment in domestic human capital. Now, the hard part, particularly with Chavez's Venezuela, will be admitting that perhaps middle-of-the-road PCs are not the right market to pursue, but other high-tech gadgetry?

Been trawling around a bit on this - one thing I noticed at VITs product page http://www.vit.com.ve/productos.asp is that the 3 year warranty is only shown as applying to the desktop units (3 years for main unit, monitor, keyboard, and mouse - 1 year for factory defects).

The laptop only shows the 1 year warranty. Could just be an error on their site, but still, you'd think they'd correct it if it was a marketing advantage.

Must say that 2 hours battery life is not very good.

Another thing I noticed is that current specs only mention Linux compatible as an OS, though a January article mentioned Windows before Linux http://www.vit.com.ve/noticia.asp?idnoticia=14 "VIT computers work with proprietary Windows program, or with open access software").

Looks to be the last (and only) mention of Windows I could find at the site - doesn't look like they want to get into it much anymore.

Alec

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