After having devoted my last posts to more abstract aspects of the base of the pyramid, Jim Rosenberg, from our sister organization CGAP, kindly brought me to the ground again with an e-mail about how to connect the BoP to Internet through their mobiles.The beauty of the mobile phone phenomenon in developing countries (and the reason for its success at the BoP) is its capacity to build linkages between people and markets, thus helping generate wealth in the short and long term for the agents involved thanks to a connection that previously didn't exist. The growth of it has been dramatic: Since 2000, the yearly growth of mobile phone subscribers has averaged 24% and only a few weeks ago, the International Telecommunication Union (United Nations's branch dealing with telecom...
You're sick, so you go to the doctor. He prescribes you drugs. The medicine makes you better, right? Unfortunately, that's not always the case – especially for the billions of people living at the base of the economic pyramid. Taylor Thompson and Nathan Sigworth are on a mission to make sure medicine makes patients better, every time. They are the co-founders of PharmaSecure, a for-profit startup targeting the problem of global pharmaceutical counterfeiting – which kills millions each year. PharmaSecure will soon launch a cell phone-based system that allows healthcare professionals and consumers to easily confirm the validity of purchased drugs, bridging the information gap that allows counterfeiters to sell more than $50 billion worth of fake drugs every year....
The initial $100 price tag of the XO Laptop from Nicholas Negroponte's One Laptop Per Child (OLPC) created quite a furor when it was first announced many years ago. At the time, the cheapest laptops were hovering around $400 to $500. This subject has been rehashed many times in the press and the blogosphere, but reading a recent report on Total Cost of Ownership (TCO) for computers deployed in Indian schools prompted me to write about the pricing debate and what learnings can be found from it. A longer version of the report can be found here. The report was done by VitalWave Consulting, a firm specializing in consulting and research for technology companies growing businesses in emerging markets. They performed a study in India, funded by Microsoft, on the TCO of computers deployed...
Last July CGAP issued a new report about the main building blocks for any bank that is thinking about offering mobile phone financial services to its customers. (Shame on me for doing this post so late). Banking on Mobiles: Why, How, for Whom? is, not surprisingly, very good report. After all, these are the people currently in the forefront of research efforts to understand and develop mobile phone banking and the place to go for anyone interested in this market. An additional point in their favor is that their reports are “waffle-free” and go straight to the point.The report takes the perspective of a small/middle sized bank or microfinance institution in a developing country that wants to start offering mobile phone financial services, but does not really know how or where to...
I absolutely love that phrase. I heard it at the Social Capital Markets 2008 conference this week in beautiful San Francisco, said by William Foote, Founder and President of Root Capital, on a panel I didn't attend but heard about later. The phrase perfectly epitomizes the mood and underlying themes of the conference, and the panel I myself moderated, as well as the panel I was asked to blog about for NextBillion.net.I love this phrase because I see the positive message within it, just as I tend to see the positive in most things, including my approach to business strategy which I call "disruptive leadership." which I've already blogged about here.You could argue there is absolutely nothing positive in the word "pathological." The Encarta® definition...
With three weeks to go before the U.S. presidential election, it’s no surprise that there’s a lot of interest in democracy here at the Social Capital Markets conference. Fortunately, the conversation has (thus far) steered clear of moose burgers and the Weather Underground. After all, the democracy we’re discussing here at SoCap08 is actually related to democratic capital, not democratic governance. What is democratic capital, and why should the base of the pyramid community care? Well, on a very basic level, the democratic capital panel is all about giving investors and borrowers the power to connect directly, without the intermediation of too many financial institutions. This person-to-person connection takes the shape of four panelists and their social enterprises:...
Guest blogger Jenara Nerenberg is the Founder of BOP Source. She is a graduate of UC Berkeley and Harvard University and lives in Kathmandu, Nepal, where she is a Columnist for a national business magazine and a Consultant on new media marketing. Jenara was a Consultant to the Harvard Center for Health Communication and worked on cause-related marketing at the Harvard Business School and the Harvard Kennedy School of Government, bringing together leaders from YouthAIDS, MTV, and the academic community.By Jenara NerenbergManuel Bueno recently wrote a post about the need to go beyond basic needs business strategies to a more holistic approach when engaging the BoP in business. I thought I would take this idea up in the context of my own field, new media marketing. Below is what I think...
Guest blogger Mark Beckford worked at Intel for the last 13 years, where he did extensive work on the company's strategy in emerging markets. His record includes architecting and leading the World Ahead program which developed, among other projects, Intel's Classmate PC.Mark describes himself as a "passionate expert in digital access as a pathway to both social good and world progress". He writes Disruptive Leadership, a blog about the power of business to deploy technology and digital access in emerging markets. Make sure to read the first part of this post. By Mark BeckfordIn general, the penetration of tech products into emerging markets has not made a significant impact in closing the digital divide, even with higher overall growth rates than typically found...
Guest blogger Mark Beckford worked at Intel for the last 13 years, where he did extensive work on the company's strategy in emerging markets. His record includes architecting and leading the World Ahead program which developed, among other projects, Intel's Classmate PC.Mark describes himself as a "passionate expert in digital access as a pathway to both social good and world progress". He writes Disruptive Leadership, a blog about the power of business to deploy technology and digital access in emerging markets.By Mark BeckfordSomeone or something that is disruptive is usually associated in the negative. The sub-prime mortgage crisis has disrupted financial and housing markets. That's bad. My son was being disruptive at dinner while someone else was talking....
One in eight people on the planet lives in an Indian village. That's 775 million people, about half of whom live on less than $1 per day.To Drishtee and its founder, Satyan Mishra, these numbers aren't daunting; rather, they represent an incredible opportunity. Drishtee is franchisor that helps Indian entrepreneurs set up internet-enabled kiosks to provide basic services in their villages. (Full disclosure: Drishtee is an Acumen Fund investee; I work for Acumen Fund.)Since 2000, Drishtee's network has grown to encompass nearly 1,900 villages, bringing goods and services to about 2 million customers.(This post continues past the break; click "Read More" to continue)read more...
A recent report, "Wireless Technology for Social Change: Trends in NGO Mobile Use," by the United Nations Foundation and The Vodafone Group Foundation highlights emerging trends by NGOs in the use of mobile technology to affect social change in global public health, humanitarian assistance and environmental conservation. While this report offers some great insights on how to use technology and telecom tools to address some of the world's toughest problems, it leaves out one of the most important challenges that NGOs, and most ICT for Development projects face; how toensure sustainability. To shed some light on this tension, I spoke with Ken Banks, the founder of FrontlineSMS (a tool for mass text messaging) about sustainability and the choices he is currently grappling...
Our regular NextBillion readers will already know that the MIT is one of the most important universities in the base of the pyramid arena. Some of their most important initiatives are the Legatum Center for Development and Entrepreneurship, stimulating bottom-up entrepreneurship fueled by innovations, and the Lemelson-MIT Awards, recognizing the impact that inventors can have on economic and social well-being. In these and other cases, MIT's strategy has been to apply its engineering prowess to try to solve BoP problems in the shape of technologically-adapted inventions.Now, MIT has launched a Next Billion Network to deploy innovative mobile technologies that can help people reduce friction in their local markets from the bottom up. This approach is based upon the belief (which I...
Rose Shuman, founder of Open Mind and the innovative Question Box project, shared with us the following work opportunity. Please read on if you are interested in working with the venture that is making the 'Digital Alladin's Lamp' a reality. Position: Interns/ VolunteersLocation: Anywhere with connectivityDescription: Want to really make a difference in the life of an organization? Smart, enthusiastic interns & volunteers needed for Question Box Project! Open Mind, a start-up nonprofit, is building capacity and momentum with our Question Box project. We are at a critical moment, and need interns and volunteers to help us scale and develop.Question Box brings the power of the Internet to people in the developing world using voice and a mobile phone. The idea is a...
Many regular NextBillion.net visitors will have noticed that the News Section has been nearly monopolized of late by news about the takeover battle surrounding mobile operator MTN, followed by a lull in events. For those who have not had the time or patience to track this news, what follows is a summary of what has happened and why it is so important to those of us interested in the base of the pyramid.MTN is a mobile phone operator backed by the South African government, with 68.2 million customers in more than 20 countries and a market value of $33 billion. Its largest operations are in South Africa, Nigeria and Iran. On March 20th, MTN announced that it was looking for acquisitions and would consider targets outside its existing territories in Africa and the Middle East. That same day,...
During a recent workshop at the M-banking conference in Cairo, Egypt, a number of practitioners and interested parties discussed the state of mobile banking or-more properly-mobile transactions. One of the interesting insights that emerged comes from the experience of the Vodafone company Safaricom in Kenya with its M-PESA mobile transaction service. Launched in March, 2007, the service has been an astounding success, reaching 2 million customers by May of 2008. New field research by Olga Morawczynski on use of M-PESA's by low-income customers in the Kibera slum of Nairobi-now posted in our resources section-sheds some light on both the how and why. The dominant use of M-PESA by Kibera residents is to transfer money home to their native rural villages, underscoring the importance of...
This weekend I had the chance to read CGAP’s new report about branchless banking. The report is a short summary about the current state of the branchless banking market. To those readers who do not know anything of the market it is an easy introduction. To those readers who have been following the sector in recent months, it offers a good peek into the future of what branchless banking may become and what it needs to get done. The paper lists off seven key observations about the current state of the market, in addition to four uncertainties about how the market will develop and four predictions. In my opinion, most of the seven observations are already well-known. Still, these known knowns are nicely and succinctly explained. Many of these observations were brought up during my...
This post is the second in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I tell the story of a rural connectivity pilot project; an example of this new model for development in action. A Last Mile Model for Rural Connectivity Son Tay commune, Quang Ngai Province. I was sitting across a table in a remote rural outpost of Vietnam, negotiating (via a translator) with the manager of a local radio station about access to his tower. He asked a series of technical questions and seemed satisfied with the answers, but then he wondered aloud: "Can we get Internet access here?" He didn't just want it for the radio station, it emerged, but for the surrounding small community - even though...
It was sunny, and tempting to sit outside at the University of San Diego to enjoy the weather. Inside, however, a group of global practitioners and scholars - organized by Patricia Marquez of USD and Carlos Rufin of Sussex University and Babson College - were discussing the role of utilities at the Base of the Pyramid. (See 'attachments' at the end of this post, where I have uploaded the meeting's full agenda as a PDF.) Utilities provide basic services - telecommunications, water, power - that are essential to people's lives and increase their productivity. But a decade ago, many utilities in emerging markets were failing—service to low-income communities was poor, and many of their customers simply didn't pay or acquired the service informally. The picture that...
All of us at NextBillion.net were both humbled and thrilled to see the New York Times Sunday Magazine draw on our work - and the work of many colleagues - to write an extended piece on the impact of cell phone usage in emerging economies. Sara Corbett's article follows Nokia researcher Jan Chipchase as he navigates the human terrain of countries like Ghana, Brazil and Uzbekistan, trying to figure out why a farmer in Kenya or a prostitute in Brazil is finding unique value in their cell phone. The article uses Jan's experience as a device for sparking a broader discussion on the potential for the booming cell phone market to increase incomes and quality of life among the BoP. What was most interesting about the piece is that the author poses her central theme as a question, not...
A new wave of Internet connectivity for the BoP is under way by means of making the Web audible.Internetspeech has developed a technology that makes the Internet accessible over the phone. That's right. Just a phone line and your voice; no keyboards, no screens and no literacy required.Click here to listen to a demo while you read the rest of the post. The model is similar in concept to Question Box, and would allow a potentially large segment of the BoP to benefit from the access to information and a global marketplace that the Web offers.(This post continues past the break; click "Read More" to continue.)read more...
Mark Pickens is a Microfinance Analyst with the Consultative Group to Assist the Poor (CGAP), a global resource center for microfinance housed at the World Bank. We published the first part of the interview here on April 4th. They are arguably the most authoritative source of information about branchless banking services and are currently in the forefront of research efforts to understand and develop this market. Mark has co-authored a global review of regulation for mobile- and other forms of branchless banking, forming an evidence base from more than 500 interviews with central bankers and executives in mobile, banking and technology industries. His work has been quoted in The Economist, The Banker and CNN.com. Prior to joining CGAP, Mark consulted with the UN, US government,...
Mark Pickens is a Microfinance Analyst with the Consultative Group to Assist the Poor (CGAP), a global resource center for microfinance housed at the World Bank. We have quoted CGAP on NextBillion in several posts (see them here, here and here). They are arguably the most authoritative source of branchless banking services and are currently in the forefront of research efforts to understand and develop this market. Mark has co-authored a global review of regulation for mobile and other forms of branchless banking, forming an evidence base from more than 500 interviews with central bankers and executives in the mobile, banking and technology industries. His work has been quoted in The Economist, The Banker and CNN.com. Prior to joining CGAP, Mark consulted with the United Nations, US...
By all measures, this has been a pretty long post to finalize.In January, Ana’s post about the mobile phone banking conference at Chemonics aroused a series of insightful comments. Al Hammond then weighed in with a post of his own (he also recently wrote about Biometric Security for Mobile Banking). In this context, I felt I could join in the debate with a post about business strategies in the mobile phone banking sector (or m-banking, as it is commonly known). Specifically, I set out to analyze what affects mobile phone banking business models, their most common critiques and their challenges for the future.However, the post quickly got a bit out of hand, growing beyond what I had envisaged to more than 10 pages. With this in hand, I felt I could develop it from a blog post into a...
Mobile phone banking is already fully commercial in the Philippines, South Africa, and Kenya. It's about to happen in perhaps a dozen additional countries. With more than 1.5 billion mobile phones deployed in the developing world, the potential market is large and growing. The need is equally apparent-most of the BOP have no access to modern financial services, despite the success of microfinance. So what is keeping this from becoming a revolution in financial services for the poor? In a word, regulatory hesitation. Central banks-and behind them, the U.S. Treasury-want to be sure that the democratization of financial services does not also lead to widespread money laundering and consumer fraud. And a key part of current security systems-the SIM card that gives each phone a unique...
An article that appeared in The Washington Post last Sunday titled "Our Cells, Ourselves" talks extensively about the growth of cell phone technology. According to that article, we have on a global scale reached yet another tipping point. As Malcolm Gladwell might say, the cell phone has become a social epidemic. Depending on who you ask, we have either just passed, or are about to pass the point in time in which there are half as many cell phones in use as there are people on the planet. It is notable that Eric Schmidt, chairman of the board and enlightened CEO of Google says that "It will end with 5 billion out of the 6 billion with cell phones," a figure that reaches well into the Base of the Pyramid.In fact, as we are seeing more and more with the BoP, a cell phone...
I had an interesting meeting today, during which one of the people I was speaking with brought up a talk given by Jonathan Schwartz last August. Schwartz - the CEO of Sun Microsystems - delivers a fascinating talk over about 25 minutes during which he relates important demographic and development trends to Sun's need to develop and implement a "base of the pyramid" strategy.(Full disclosure: during the speech, Schwartz mentions NextBillion writer and WRI Vice President Al Hammond by name, and cites data from The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid. What can I say - I'm proud that Fortune 500 CEOs are looking to Al and to our report in support of their emerging markets strategies.) read more...
Position: Communications Officer / Web EditorLocation: Washington, DCOrganization: CGAP (Consultative Group to Assist the Poor) is a consortium of 33 public and private funding organizations - bilateral and multilateral development agencies, private foundations, and international financial institutions - working together to expand poor people's access to financial services. Position Description: CGAP seeks a Communications Officer with high energy and fresh thinking who can generate innovative ideas for communicating CGAP's work to a wide range of audiences as well as implement these ideas for strategic results. The ideal candidate will be an experienced Web editor with knowledge of Web marketing techniques, the ability to write well and a track record in effective Web...
Over the past year, I have posted two submissions developed by Darrell Owen, a former U.S. Agency for International Development (USAID) employee who has been working at the bleeding edge of rural connectivity for the BoP. Darrell's posts and his white papers reflect ongoing work in the area of expanding rural access to information and communications technology, specifically broadband through wireless technologies. The first post, Internet for All: A Field Report on the Wireless Revolution, cited some early working papers developed based on his experience. In the second, we posted a related white paper and PowerPoint presentation, Expanding Rural Access - The Case for MicroTelcos, that provide a summary. Last week, I hear from Darrell again – he has just enhanced and expanded...
Today, Bill Gates' speech at Davos has thrown the spotlight on "creative capitalism" and an emerging groundswell of interest in market-based solutions and business models that can drive positive social and environmental change. The excitement around these ideas to create self-sustaining, scalable options for development at the bottom of the economic pyramid (BoP) is encouraging, and the potential for a snowball effect of increased action is huge. Yet all of the grand words and fanfare remind me that what is most riveting - what really seems to capture attention and combat ingrained suspicions (about "development aid" and about "capitalism") - are the actual stories of the models themselves. So, today I'd like to provide a brief vignette of pieces...
In
Housing,
Agriculture,
General Banking,
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water,
The Policy Agenda,
Business Development,
Microfinance,
Successful Models,
Financial Services,
Strategy,
Health,
Consumer Products,
Telecommunications and IT
Two new papers exploring the 'base of the pyramid' concept crossed my desk recently. We posted both of them to the Newsroom, but they also merit a slightly longer discussion. First, Jean-Louis Warnholz of the University of Oxford's Queen Elizabeth House has a new working paper out entitled "Poverty Reduction for Profit? A critical examination of business opportunities at the Bottom of the Pyramid." In his paper, Warnholz studies overarching BoP strategy and applies a new dataset - based on price survey data - to look deeply at the extent of a 'poverty penalty' at the BoP. Warnholz's paper merits a close read, especially for academic members of the BoP community. I will hold off on giving my impression of his paper - other than to say that it's...