IT's About Business 1.3 Information Technology Has the Potential for Revolutionizing Cuba In recent years, Cuba's...

  

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IT's About Business 1.3 Information Technology Has the Potential for Revolutionizing Cuba In recent years, Cuba's private sector has been undergoing a huge transformation. Hundreds of thousands of Cubans have obtained licenses to operate small businesses, but only in a limited set of service categories such as restaurants, hair salons, and transla- tion services. Despite the limitations, by mid-2016, the number of licensed entrepreneurs-called cuentapropistas in Cuba; roughly translated as "those who are on their own"-rose to almost 500,000. Unfortunately, the vast majority of these entrepreneurs do not use the Internet because they do not have access to it. In fact, experts estimate that only about 5 percent of Cuba's citizens have even periodic Internet access. As of mid-2016, only the "elite" had easy Internet access, and only 5 percent of Cubans could access the Internet from home. The public can visit cybercafs that are sanc- tioned by the government. However, it costs more than $5 per hour to access sites outside the country. To put this in perspective, the average Cuban earns $20 a month. Another barrier to Internet ac- cess is that visitors to cybercafs must sign agreements that their Internet use will not hurt "public security." As we discuss further on, Cuba is a country of memory sticks and human middlemen, physically sent to conduct what in the developed world are frictionless digital transactions. In Cuba, smartphones are common, but they do not have data connections. Furthermore, there is no legal way to send or receive payments us- ing credit cards or PayPal. Young, highly motivated Cuban entrepreneurs, the country's millennials, are circumventing these enormous hindrances by us- ing digital technologies in different ways. Let's consider four exam- ples: Revolico, Ala Mesa, El Paquete Semanal, and Vistar. MKT Revolico (www.revolico.com). Black markets have been commonplace in Cuba for many years, but it was difficult for buyers and sellers to find each other. In December 2007, a young Cuban anonymously created Revolico, a website for classified ads that quickly became the Craigslist of Cuba. Three months after the site's launch, the government blocked it. Revolico got around the blocks by changing the web address for its servers and e-mailing personalized URLS to its users. The back- and-forth between Revolico and the government continues as of this writing (mid-2016). Despite these tensions, however, Revolico has become part of the daily life of many Cubans. percent of these restaurants pay, in cash, to be promoted on the site and app. Foreigners planning a trip to Cuba can download the app while at home. In Cuba, devoted fans spread the app by physi- cally passing memory sticks to one another. El Paquete Semanal. El Paquete Semanal ("the weekly pack- age") is an instant Internet solution for a nonconnected country. More precisely, it is the Internet on a portable hard drive. El Paquete is a large digital collection of recent movies, TV shows, magazines, apps, software updates, and other digital content made available to Cubans. It is copied and distributed on portable hard drives to 100 people, who then distribute it to 1,000 people, and so on. El Paquete is delivered through an informal network of human "mules" who travel in public buses to every corner of the island. Most customers get the drive at home, where they exchange it for. last week's drive. Customers pay more for more recent material and they pay based on how much material they receive. Vistar (www.vistarmagazine.com). In 2013, the Cuban govern- ment's Office of Periodicals and Publications turned down a young Cuban's application to start an online magazine focusing on Cuba's youth culture. The young man decided to publish the magazine anyway, without identifying the magazine's creators. The first issue of Vistar came out in March 2014. It contained excellent photogra- phy and articles on food, music, ballet, art, and celebrities. By July 2016, Vistar had published 16 monthly issues and even listed the magazine's staff on the masthead. Significantly, the government has not yet officially objected. Although Vistar's readers have not been harassed by the gov- ernment, they have to deal with their country's lack of connectiv- ity. As a result, they access the magazine by sharing memory sticks and hard drives. The magazine's staff support themselves through advertising. This process is noteworthy because advertising that is not linked to the government has been almost nonexistent for half a century. Vistar, which now publishes in English as well as Spanish, has more than 100,000 downloads, with 60 percent of them origi- nating outside Cuba. Cuba's relations with the United States are improving, follow- ing then-President Obama's decision in December 2014 to begin normalizing relations between the two countries. Under the pro- posal, Cuban citizens could have access to much better communi- cations technology. However, the Internet is still strictly controllec under the Ral Castro regime, and there are economic barriers as well as political ones, so it's not certain whether and when Cubans will have inexpensive and open Internet access. ples tes the vide and sellers to find each other. In December 2007, a young Cuban anonymously created Revolico, a website for classified ads that quickly became the Craigslist of Cuba. Three months after the site's launch, the government blocked it. Revolico got around the blocks by changing the web address for its servers and e-mailing personalized URLs to its users. The back- and-forth between Revolico and the government continues as of this writing (mid-2016). Despite these tensions, however, Revolico has become part of the daily life of many Cubans. By July 2016, Revolico had approximately 8 million monthly page views and 25,000 new daily listings. About half of its traffic came from outside Cuba-most of it from south Florida, which houses a large Cuban population-where the site makes some money selling ads. In Cuba, Revolico has no legal standing. The site charges for premium listings, which it promotes. Associates of Revolico collect payment for those listings unofficially, in cash. MKT AlaMesa (www.alamesacuba.com). AlaMesa is a web- site and Android app that promotes Cuban culinary culture (think Yelp and OpenTable). Going door to door, AlaMesa staff members check out restaurants, examine their menus, and, if the restaurants agree, list them on the website and app. More than 600 restau- rants in nine Cuban provinces have agreed to be listed. Roughly 30 has more than 100,000 downloads, with 60 percent of them origi- nating outside Cuba. Cuba's relations with the United States are improving, follow- ing then-President Obama's decision in December 2014 to begin normalizing relations between the two countries. Under the pro- posal, Cuban citizens could have access to much better communi- cations technology. However, the Internet is still strictly controllec under the Ral Castro regime, and there are economic barriers as well as political ones, so it's not certain whether and when Cubans will have inexpensive and open Internet access. What of the situation in the fall of 2016? Cuban citizens con tinue their entrepreneurial activities, not knowing whether the government will shut them down. In 2015, the Cuban state phon company, ETECSA, had 65 Wi-Fi hotspots, and another 80 hotspot: were planned for 'installation in 2016. Cubans can access thes hotspots for $2 per hour. Internet cafs and some hotels offer In ternet access for $4 to $6 per hour. Cubans wryly note that this i "good news, bad news." The good news is that the government i allowing any-Wi-Fi hotspots at all. The bad news is that most Cu bans still cannot afford to use them. In the fall of 2016, approximately 15 percent of Cuban citizen have some form of Internet access. Furthermore, fewer than 5 pei cent of Cubans have an Internet connection at home. 24 CHAPTER 1 Introduction to Information Systems Sources: Compiled from D. Renwick, B. Lee, and J. McBride, "U.S.-Cuba Relations," Council on Foreign Relations, September 7, 2016; E. Griffith, "What It's Like Trying to Get Online in Cuba," Fortune, April 22, 2016; "The Internet in Cuba Today," Cuba Business Report, April 7, 2016; A. Popescu, "Cuban Web Entrepreneur Endures a Murky Status," MIT Technology Review October 6, 2015; I. Lakshmanan, "Where the Internet Revolution Is Waiting to Happen," Bloomberg BusinessWeek, September 7-13, 2015; M. Helft, "Cuba's Tech Revolutionaries," Forbes, July 21, 2015; J. Hamre, "Cuba, an Internet Laggard, Opens Wi-Fi Hotspots across Country," Reuters, July 2, 2015; V. Burnett, "Cuba Offers Its Citizens Better Access to Internet," New York Times, June 18, 2015; "Cuba to Expand Internet Access to Battle Country's Dire Lack of Connectivity," The Guardian, June 18, 2015; S. Marshall, "This Is What It's Like Using the Internet in Cuba," ABC News, March 31, 2015; N. Young, "Cuba's Underground Alternative to the Internet," www.cbc.ca, January 25, 2015; T. Johnson, "No Internet in Cuba? For Some, Offline Link to World Arrives Weekly," McClatchyDC, January 9, 2015; D. Talbot, "Cuba's Internet Revolution Faces Economic and Political Realities," MIT Technology 7 ANSWER Questions These Review, December 21, 2014; S. Fernandes and A. Halkin, "Do Cubans Really Want U.S.-Style Internet Freedom?" nacla.org, December 20, 2014; P. Baker, "U.S. to Restore Full Relations with Cuba, Erasing a Last Trace of Cold War Hostility," New York Times, December 17, 2014. Questions 1. Describe the work-arounds that Cuban entrepreneurs must perform to use digital technologies in the four examples dis- cussed in this case. 2. Discuss how free, open access to high-speed Internet con- nections would transform the operations of each of the four examples. 3. Why would the Cuban government limit access to the Inter- net? Provide specific examples in your answer. IT's About Business 1.3 Information Technology Has the Potential for Revolutionizing Cuba In recent years, Cuba's private sector has been undergoing a huge transformation. Hundreds of thousands of Cubans have obtained licenses to operate small businesses, but only in a limited set of service categories such as restaurants, hair salons, and transla- tion services. Despite the limitations, by mid-2016, the number of licensed entrepreneurs-called cuentapropistas in Cuba; roughly translated as "those who are on their own"-rose to almost 500,000. Unfortunately, the vast majority of these entrepreneurs do not use the Internet because they do not have access to it. In fact, experts estimate that only about 5 percent of Cuba's citizens have even periodic Internet access. As of mid-2016, only the "elite" had easy Internet access, and only 5 percent of Cubans could access the Internet from home. The public can visit cybercafs that are sanc- tioned by the government. However, it costs more than $5 per hour to access sites outside the country. To put this in perspective, the average Cuban earns $20 a month. Another barrier to Internet ac- cess is that visitors to cybercafs must sign agreements that their Internet use will not hurt "public security." As we discuss further on, Cuba is a country of memory sticks and human middlemen, physically sent to conduct what in the developed world are frictionless digital transactions. In Cuba, smartphones are common, but they do not have data connections. Furthermore, there is no legal way to send or receive payments us- ing credit cards or PayPal. Young, highly motivated Cuban entrepreneurs, the country's millennials, are circumventing these enormous hindrances by us- ing digital technologies in different ways. Let's consider four exam- ples: Revolico, Ala Mesa, El Paquete Semanal, and Vistar. MKT Revolico (www.revolico.com). Black markets have been commonplace in Cuba for many years, but it was difficult for buyers and sellers to find each other. In December 2007, a young Cuban anonymously created Revolico, a website for classified ads that quickly became the Craigslist of Cuba. Three months after the site's launch, the government blocked it. Revolico got around the blocks by changing the web address for its servers and e-mailing personalized URLS to its users. The back- and-forth between Revolico and the government continues as of this writing (mid-2016). Despite these tensions, however, Revolico has become part of the daily life of many Cubans. percent of these restaurants pay, in cash, to be promoted on the site and app. Foreigners planning a trip to Cuba can download the app while at home. In Cuba, devoted fans spread the app by physi- cally passing memory sticks to one another. El Paquete Semanal. El Paquete Semanal ("the weekly pack- age") is an instant Internet solution for a nonconnected country. More precisely, it is the Internet on a portable hard drive. El Paquete is a large digital collection of recent movies, TV shows, magazines, apps, software updates, and other digital content made available to Cubans. It is copied and distributed on portable hard drives to 100 people, who then distribute it to 1,000 people, and so on. El Paquete is delivered through an informal network of human "mules" who travel in public buses to every corner of the island. Most customers get the drive at home, where they exchange it for. last week's drive. Customers pay more for more recent material and they pay based on how much material they receive. Vistar (www.vistarmagazine.com). In 2013, the Cuban govern- ment's Office of Periodicals and Publications turned down a young Cuban's application to start an online magazine focusing on Cuba's youth culture. The young man decided to publish the magazine anyway, without identifying the magazine's creators. The first issue of Vistar came out in March 2014. It contained excellent photogra- phy and articles on food, music, ballet, art, and celebrities. By July 2016, Vistar had published 16 monthly issues and even listed the magazine's staff on the masthead. Significantly, the government has not yet officially objected. Although Vistar's readers have not been harassed by the gov- ernment, they have to deal with their country's lack of connectiv- ity. As a result, they access the magazine by sharing memory sticks and hard drives. The magazine's staff support themselves through advertising. This process is noteworthy because advertising that is not linked to the government has been almost nonexistent for half a century. Vistar, which now publishes in English as well as Spanish, has more than 100,000 downloads, with 60 percent of them origi- nating outside Cuba. Cuba's relations with the United States are improving, follow- ing then-President Obama's decision in December 2014 to begin normalizing relations between the two countries. Under the pro- posal, Cuban citizens could have access to much better communi- cations technology. However, the Internet is still strictly controllec under the Ral Castro regime, and there are economic barriers as well as political ones, so it's not certain whether and when Cubans will have inexpensive and open Internet access. ples tes the vide and sellers to find each other. In December 2007, a young Cuban anonymously created Revolico, a website for classified ads that quickly became the Craigslist of Cuba. Three months after the site's launch, the government blocked it. Revolico got around the blocks by changing the web address for its servers and e-mailing personalized URLs to its users. The back- and-forth between Revolico and the government continues as of this writing (mid-2016). Despite these tensions, however, Revolico has become part of the daily life of many Cubans. By July 2016, Revolico had approximately 8 million monthly page views and 25,000 new daily listings. About half of its traffic came from outside Cuba-most of it from south Florida, which houses a large Cuban population-where the site makes some money selling ads. In Cuba, Revolico has no legal standing. The site charges for premium listings, which it promotes. Associates of Revolico collect payment for those listings unofficially, in cash. MKT AlaMesa (www.alamesacuba.com). AlaMesa is a web- site and Android app that promotes Cuban culinary culture (think Yelp and OpenTable). Going door to door, AlaMesa staff members check out restaurants, examine their menus, and, if the restaurants agree, list them on the website and app. More than 600 restau- rants in nine Cuban provinces have agreed to be listed. Roughly 30 has more than 100,000 downloads, with 60 percent of them origi- nating outside Cuba. Cuba's relations with the United States are improving, follow- ing then-President Obama's decision in December 2014 to begin normalizing relations between the two countries. Under the pro- posal, Cuban citizens could have access to much better communi- cations technology. However, the Internet is still strictly controllec under the Ral Castro regime, and there are economic barriers as well as political ones, so it's not certain whether and when Cubans will have inexpensive and open Internet access. What of the situation in the fall of 2016? Cuban citizens con tinue their entrepreneurial activities, not knowing whether the government will shut them down. In 2015, the Cuban state phon company, ETECSA, had 65 Wi-Fi hotspots, and another 80 hotspot: were planned for 'installation in 2016. Cubans can access thes hotspots for $2 per hour. Internet cafs and some hotels offer In ternet access for $4 to $6 per hour. Cubans wryly note that this i "good news, bad news." The good news is that the government i allowing any-Wi-Fi hotspots at all. The bad news is that most Cu bans still cannot afford to use them. In the fall of 2016, approximately 15 percent of Cuban citizen have some form of Internet access. Furthermore, fewer than 5 pei cent of Cubans have an Internet connection at home. 24 CHAPTER 1 Introduction to Information Systems Sources: Compiled from D. Renwick, B. Lee, and J. McBride, "U.S.-Cuba Relations," Council on Foreign Relations, September 7, 2016; E. Griffith, "What It's Like Trying to Get Online in Cuba," Fortune, April 22, 2016; "The Internet in Cuba Today," Cuba Business Report, April 7, 2016; A. Popescu, "Cuban Web Entrepreneur Endures a Murky Status," MIT Technology Review October 6, 2015; I. Lakshmanan, "Where the Internet Revolution Is Waiting to Happen," Bloomberg BusinessWeek, September 7-13, 2015; M. Helft, "Cuba's Tech Revolutionaries," Forbes, July 21, 2015; J. Hamre, "Cuba, an Internet Laggard, Opens Wi-Fi Hotspots across Country," Reuters, July 2, 2015; V. Burnett, "Cuba Offers Its Citizens Better Access to Internet," New York Times, June 18, 2015; "Cuba to Expand Internet Access to Battle Country's Dire Lack of Connectivity," The Guardian, June 18, 2015; S. Marshall, "This Is What It's Like Using the Internet in Cuba," ABC News, March 31, 2015; N. Young, "Cuba's Underground Alternative to the Internet," www.cbc.ca, January 25, 2015; T. Johnson, "No Internet in Cuba? For Some, Offline Link to World Arrives Weekly," McClatchyDC, January 9, 2015; D. Talbot, "Cuba's Internet Revolution Faces Economic and Political Realities," MIT Technology 7 ANSWER Questions These Review, December 21, 2014; S. Fernandes and A. Halkin, "Do Cubans Really Want U.S.-Style Internet Freedom?" nacla.org, December 20, 2014; P. Baker, "U.S. to Restore Full Relations with Cuba, Erasing a Last Trace of Cold War Hostility," New York Times, December 17, 2014. Questions 1. Describe the work-arounds that Cuban entrepreneurs must perform to use digital technologies in the four examples dis- cussed in this case. 2. Discuss how free, open access to high-speed Internet con- nections would transform the operations of each of the four examples. 3. Why would the Cuban government limit access to the Inter- net? Provide specific examples in your answer.