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Not everyone suffers equally during a financial downturn--even one that is beginning to look more and more like a nascent depression.  One of the gems hidden away in the International Telecommunication Union’s latest report, “Confronting the Crisis,” released in February, was the observation that economic recessions can provide a fertile environment for launching new companies that have come up with nifty solutions involving problem solving technologies. When the economy is booming, there is less  incentive to try something new just to cut costs and boost efficiency. When every cent counts, the picture begins to look different. The key term here is “disruptive technologies,” new ideas or innovations that change the way we think and the way the market operates.  Digital cameras would be a disruptive technology, particularly if, like Kodak, you had been in the photographic film business.  The impact that digital music sales over the net have had on the music industry is another, and it is beginning to look like web-based publishing  is threatening to put an end to the costly  formula that wags characterize  as "Yesterday's news in tomorrow's paper."

It is this kind of period when people are likely to try out a new idea that promises to provide a solution to a growing list of problems.  The ITU report notes that Google was launched in 1998, right in the middle of the Asian financial crisis. Skype took off in 2003, at the height of the dot.com crash.

While most industries were doing a dance of death last fall, Google’s revenues were 18% higher in the 4th quarter of 2008 than they had been during the same period a year earlier. Over the same time span, chipmaker, Intel’s revenues sank 23%.

Consultancies and outsourcing firms are also expecting to experience a surge, while more conventional firms suffer.  Another advantage of economic slowdowns is thatprices drop on the stuff that you need to get started, whether its the cost of bandwidth or actual equipment.

Undoubtedly the most revolutionary technology to take the world by storm lately is the cell phone.  Mobile phones are so pervasive in Europe and the US that they are hardly noticed anymore. But the tsunami impact of nearly everyone owning a phone is still evolving in much of the developing world, and no matter where you are, once you've had your own mobile phone, you are not likely to go back.

The ITU notes that telecommunications can’t necessarily make up for the global downturn, but it is strategically positioned to play a significant supporting role. It currently represents 7.5% of global GDP.  Pyramid Research projects that Telecom services alone account for $1.4 trillion. Forrester Research predicts that IT goods and services purchases in 2009 will be $1.66 trillion, a decline of 3% from 2007. 

While telecom companies are not exactly ecstatic about the slowdown that even they are experiencing, they have to admit that they are weathering the storm better than the auto industry in Detroit, or any number of soon to be nationalized banks.

The boom is hitting some countries that used to be considered too poor for such a luxury.  India, which passed the US as the largest cell phone market in 2008, added 10 million new mobile customers last September, and then an additional 10.4 million in October.  It’s not quite Nirvana. Indian mobile phone users have lower salaries so they pay less for subscriptions.  Consequently, for every customer that British phone operator Vodafone loses in England, it will need to connect ten new customers in India to maintain its revenues. 

But the potential for growth is still staggering.  The world’s biggest mobile phone operator, China Mobile, added 74 million new subscribers in the first nine months of last year. That was compared to 55 million for all of 2007.  Brazil added four million subscribers in 2008, double the preceding year.

By the end of 2008, there were an estimated 4 billion mobile phone subscribers in the world—an increase of 650 million over 2007.  Two thirds of the world’s population may be living on less than $2 a day, but roughly the same number is communicating on cell phones.   By the end of 2008, nearly one out of two people in the developing world had a mobile phone.

In Africa and elsewhere mobile phones have become so integrated into the social and financial systems that it is hard to imagine doing without them.  African farmers and fishermen rely on mobile phone networks to decide on the best time to go to market and what prices to ask.  In many remote places the mobile phone operates as a bank, with people in villages using mobile minutes as an exchangeable form of currency. 

The growth potential is so enormous that the ITU report suggests that it will make sense in the south to stop waiting for northern bankers to get over the traumatic shock caused by the crisis. If they are afraid to lend, the report hints, it may be time for southern economies to look for funding in their own hemisphere.  The bottom line is that there is still money to be made, but as always, the profits will go to those not afraid to take risks.