Tuesday, July 14, 2015

Amplifying the Utility of National IDs

National identification systems come in many flavors. Roughly 60% of nations have some form of national ID card, but the requirements, coverage, captured data, and advantages of possessing a card vary greatly. Some developing countries (e.g., Malaysia, Estonia) are models of multi-purpose systems that allow efficient access to a broad range of services, while helping the state manage civic and social programs. Other efforts to create a national ID system have faltered due to corruption, inefficiency, poor leadership, political in-fighting, or suspicion that the system will be used as a means of state control or oppression. Kentaro Toyama may have been thinking of national ID systems when he explained the "Law of Amplification." He states: "Technology doesn't cause a fixed benefit wherever it's used; rather, it amplifies underlying human forces. ... Democratic governments use digital tools to improve transparency, but repressive regimes censor content and track voices of protest online."

When designed and managed well, national ID cards facilitate a number of critical functions - travel, banking, healthcare, driving, and voting, to name a few. With biometric features built in, the potential for fraud is greatly reduced, and issues such as illiteracy and mobility are mitigated. Further, a national identification system increases the potential of digital and mobile services. However, there are myriad challenges to implementing a comprehensive, efficient system. Integration with state, health, education, and financial systems is complex, and requires active collaboration among a diverse set of federal and provincial organizations. The process of developing and rolling out a comprehensive system is expensive, time-consuming, and resource-intensive. After launch, the collection, storage, and use of data require a lot of training and skilled management. And public buy-in is not guaranteed.

The development community can play a vital role in helping governments design and implement (or improve) a national ID system with the broadest positive impact. Development organizations can sponsor research, provide guidance, coordinate development efforts between stakeholders, deliver training, and measure effectiveness. Organizations can leverage long histories and influential contacts in specific verticals (e.g., healthcare, financial services) to ensure that ID systems are well integrated with their areas of focus. They can also advocate for strong privacy and security measures. For many in the development community, the benefits of a viable national ID (particularly with biometric features) are readily apparent. A reliable ID system is essential for the expansion of other ICT4D, allowing organizations to verify the identity of aid recipients, deliver and track healthcare, expand financial services to the poor, reduce elections fraud, and increase state revenues through taxation. With focus and tenacity, development organizations can ensure that national ID systems amplify the good in the countries they serve.

Monday, July 13, 2015

Innovation for Emerging Markets Done Right

A recent Nugget considered some of the latest innovations that would be clearly useful in emerging markets, but were being priced, marketed or distributed almost exclusively in mature markets - often for less compelling use cases like gaming, back-up power, or delivering dog food to remote Australian farmers. Perhaps a bit of balance is in order. There are many examples of novel technologies and ideas that also have a clear utility to emerging-market users, and are being marketed and distributed specifically to those consumers.

Consider the following innovations:
  • Swiss scientists made a 1.3-ounce, foldable quadcopter that can deliver messages or take photos of inaccessible disaster areas.
  • What3words assigns a unique 3-word identifier (currently in 8 languages) to every 3 square meters on the planet. Companies pay to use the technology, which has been piloted in the favelas of Rio, where there are no street names or house numbers. If widely adopted, it could revolutionize navigation and delivery services throughout the developing world.
  • The "power bank phone," with 3 SIM card slots, a brick-sized battery with connections to charge other phones, a light, and an FM radio, addresses all of the pain points of a typical Ghanaian - frequent blackouts, multiple promotions by different carriers, and increasingly power-hungry apps. It is flying off the shelves in Ghana.
  • Facebook Lite is a low-bandwidth variation of the popular site aimed squarely at EM users who have to deal with slow, spotty 2G networks and high data costs. The new offering carefully strips back the features to offer the Facebook experience with lower bandwidth (and cost to the end user).
These innovations, created to meet specific developing-country needs, are coming from a wide range of sources (academia, start-ups, hardware companies, Internet giants). Some of these groups are better equipped than others to navigate the varied go-to-market challenges of achieving scale in diverse emerging markets, but all have the advantage of a compelling use case and swelling, increasingly tech-savvy, consumer ranks. There are many examples of viable products that started with nothing more than these basic ingredients. The emerging-markets focus and ceaseless drive to mobile and cloud technologies make these innovations - and many others - promising opportunities. Localized, social-driven marketing, together with new funding and business models, lend these opportunities an encouraging timeliness.

Wednesday, June 17, 2015

The Sharing Economy and Emerging Market Development

Jane Donor went trekking in Nepal a few years ago, and the place left a magical impression. After the recent earthquake, she kept thinking of all the wonderful people she met - guides, inn-keepers, market vendors - who must be struggling to rebuild. She wants to help with the rebuilding effort, but wants to be sure her donation will be used for a targeted, lean, effective relief program in Nepal (rather than a bloated general fund). Jane has been a member of the sharing economy for years; she finds lodging on Airbnb, summons rides through Uber, and supports startups on Indiegogo. So, she does what she normally does to find resources and solve problems nowadays - she whips out her smartphone.

Within minutes, she finds a long list of organizations working in Nepal. After digging into their mobile website, she weighs the merits of each program and a few criteria begin to crystalize. There has to be solid evidence that the organization is doing meaningful, long-term work in Nepal. (Some websites seem to use the disaster as a landing-page hook, but provide little information about their actual work in country.) She wants a clear understanding of how much of her donation will actually go to the specific relief program. It takes money to run an organization; a portion for overhead is acceptable, but how big is that portion? She eventually sends a donation (through PayPal) to an NGO with rich data on their medical equipment deliveries to government-run clinics in several of the villages she visited during her trip.

New tech-enabled models are making it easier for the Jane Donors of the world to participate directly in a wide range of development efforts - from disaster relief, to small business loans, to "no-strings" cash infusions. Comparatively, small innovative organizations like Kiva, MyC4, Bondora, and GiveDirectly are taking advantage of leaner, platform-based models that challenge traditional development financing, long dominated by foundations, NGOs, banks, and MFIs. It?s unlikely that these new web-enabled technologies will completely replace the standard model of development funding. Sometimes, it takes a big organization with a sizeable general fund to steer healthcare systems, regulatory environments, infrastructure policies, and other big ships. But development organizations would benefit from integrating crowdfunding and peer-to-peer transactions into their own funding models. One option is to support an existing (or nascent) P2P funding tool that is already infiltrating higher-income groups in developing countries and regions. With guidance and investment, such a tool could be extended to poorer segments of the population. Another option is to create such a system internally, and support it with data-rich, mobile-friendly marketing. This would involve many activities NGOs already perform - awareness-raising, education, localization, record-keeping, partnerships. Would Jane Donor be more inclined to donate to an NGO that offered an in-house P2P donation service? Maybe, but if they don't adapt their operational model to this kind of funding, they may have lost Jane Donor forever.

Wednesday, May 27, 2015

Finally! Relief for Hungry Farm Dogs

Last summer, Google introduced its developmental drone delivery system, "Project Wing," with a video showing a dog food air drop to a farmer in the Australian outback. This was at the height of the Ebola outbreak in West Africa, and just a few weeks after deadly mudslides in Afghanistan and India, and a severe earthquake in Ludian, China. Instead of highlighting the disaster relief potential for drone delivery, or demonstrating that drones have uses beyond spying and launching missiles, Google's marketing department promised help for rural dog owners hoping to avoid a long drive into town. And this spectacular marketing miss has since been repeated by other leading tech innovators. The slick videos, launch parties, and press releases for Tesla's home battery, Apple's HealthKit, and Microsoft's HoloLens all suggest there is no world beyond North American and Europe.

These innovations would be a slight convenience or a cool new gadget for developed-country users, but a valuable necessity in developing countries, where systems of house numbering, street naming, postal delivery, grid power, data collection, job training, and healthcare are all lacking. Few will blame tech giants for focusing mainly on lucrative consumer, gaming, and medical markets in developed countries; that's where their marketing and distribution channels exist. And of course there are considerable challenges to launching and scaling in developing countries. But the principle of user-centered design begins with the idea that users really need what you're building. Do doctors in a remote relief center in Nepal need antibiotics delivered by drone? Yes, they do - much more than an Aussie farmer needs a bag of kibble. They also need to report and track cholera outbreaks. And they might also have to walk a scared, inexperienced health worker in another town through an amputation - both wearing a HoloLens connected to a Tesla Powerwall.

The use cases for these innovations in emerging markets are plentiful, and the utility is far more convincing than it is in most mature-market contexts. Tech innovators would certainly claim that developing-country consumers are free to buy and use their new products and services, but they are being priced too high for most people, and there has been no appreciable effort to market or distribute them in developing countries. (Elon Musk claims the Powerwall would be great for "people in remote parts of the world," but China is the only developing country for which Tesla's website has been adapted.) Tech companies that ignore emerging markets are leaving the doors of opportunity open to low-cost imitators and counterfeiters. Instead, they should be developing tailored, affordable versions of these solutions for specific geographies and use cases. They could also pair these new products (through partnership or acquisition) with enabling innovations in payment and delivery so they can market, sell, and distribute them anywhere in the world. Apple will make a quarter of their income - more than $60 billion - in China this year, up from less than $1 billion in 2009. Are tech companies doing what it takes to realize this kind of growth in emerging markets when today's innovations are as common as a second-hand iPhone?

Tuesday, April 14, 2015

The Ends Justify the Menial

Among the world's most influential foundations (Gates, Rockefeller, Grameen, etc.), there's little doubt that digital financial services are a benefit to the world's poor. Local and national banks, which were stunningly slow to see the opportunity advocated by MFIs and mobile money services like M-Pesa, are now getting with the program. Government reaction ranges from actively supportive to behavior that would make an ostrich blush. But what do poor people think about digital financial services? As the MasterCard Foundation recently stated, they're "trapped in a cash economy," but are they even aware that digital alternatives are possible?

Well, sending a few mBucks back to the family in the village is certainly cheaper and less risky than taking a long bus ride with a pocket full of cash. And small-scale efforts to, for instance, deliver training per diems or pay school fees through mobile money have been well received by consumers and their institutional partners. Many such initiatives are part of a concerted effort to build a digital financial services (DFS) ecosystem that supports a wide variety of transfer, payment, savings, and insurance programs. In their 2015 annual letter, Bill and Melinda Gates made it clear they would be among the drivers of this effort. And when organizations with the power to move the needle as much as the Gates Foundation begin talking about creating an ecosystem, it doesn't take a bloodhound smell an opportunity.

A robust DFS ecosystem in Africa, Asia, and Latin America would serve three billion people who, for a variety of reasons, have been largely ignored by formal financial service providers like banks and insurance companies. People at the bottom of the pyramid are eager to smooth out the shocks of inflation, currency devaluation, political turmoil, crop-killing droughts, or monthly bus rides to the village. A healthy, comprehensive DFS ecosystem would serve this purpose, but creating it will require a lot of heavy lifting. Some members of the value chain can be relied on to pursue a profitable new market. Back-end networking and data firms, credit and payment companies, aggregators, and programmers will be on board. But the big players - government agencies, formal financial institutions, mobile operators - may need more convincing that an inclusive DFS ecosystem is in their best interest. The development community can influence this process through advocacy and by supporting research, innovation, and scale. This is not a trivial commitment. It means a whole lot of hot taxi rides, endless meetings, menial data collection, aggravating partnerships, roadblocks and course reversals, trial and error, followed by trial and success. In short, it will require all the sustained, determined effort that gets people into development work to begin with, because the result will be helpful to millions and millions of people.

Wednesday, March 11, 2015

Markets Grow up so Fast These Days

All eyes were on the Mobile World Congress in Barcelona last week. The annual event has become a critical showcase for new technologies and a premier forum for lively discussions about all aspects of global mobile markets. All the key players are present - operators, handset manufacturers, platform and content companies, government and NGO representatives.

There were a number of hot topics at MWC 2015. Last-mile connectivity initiatives like Internet.org and Google's Loon never fail to garner attention, even though, as Facebook CEO Mark Zuckerberg pointed out, 90% of the world's population already has access to mobile Internet coverage on their phones. Social media and “over the top” (OTT) apps are shifting operator revenues from voice and SMS to data, though some of the most prominent service providers are pushing for free access. (The money will come later, we promise!) Demand for smartphones continues to skyrocket, and low-cost models are flooding markets from Jo'berg to Jakarta. Creative partnerships and service bundles are blossoming in some countries, turning narrow service apps into potentially powerful, multi-industry platforms. And everyone from handset makers to app developers is going hyper-local, offering different languages, content, and business models to meet the quirky demands of local regulators, partners, and specific user groups.

Segmentation and hyper-localization are signs of market maturity, even though the global mobile market has a lot of growing up to do. This year's MWC featured a lot of jockeying for position in anticipation of a market full of people with smartphones, universal mobile broadband connectivity, and a broad range of mobile-based services. It was the digital equivalent of mourning a child's loss of innocence, while eagerly waiting for the day when he has his driver's license and you don't have to drive him around all day. The opportunity for philanthropic organizations in this environment is to facilitate the transition to maturity, especially in ways that are not obviously profitable for enterprise partners - training, capacity building, public service tie-ins to for-profit or OTT platforms, partner-driven initiatives, match-making, and entrepreneurial support. This is a critical role for the development community, aiding both end users and the companies that serve them. Jumping into maturity (or being dragged into it) can be traumatic, and every driving student can use a good co-pilot.

Wednesday, December 10, 2014

Not so fast

Anyone paying attention to the news can be forgiven for feeling that things have been moving really fast lately. In less than 10 years, over half the world could be connected to the Internet via smartphones. People will order (and pay for) everything electronically, and products will be delivered by drones. We'll go from point A to point B in electric vehicles that drive themselves, and wear a diverse array of devices and sensors that inform our health, manage our time, and control our "things" (fridge, car, solar panels, etc.). Our glasses will take videos and stream our lives on Facebook, auto-saved to the Cloud and scanned by data-bots that mine our life-streams for marketing gold.

It's easy to feel that the current rate of change is so fast, it's no use designing for current markets. The big winners are designing ecosystems, not products. But this would be a mistake. Yes, mobile phones have arrived, even in remote, rural areas of developing countries. And in some countries, they are being used for an impressive variety of financial, health, entertainment, or social services. But the vast majority of people in emerging markets still use mobile phones as a tool for basic communication. Their adoption of new mobile services is gaining momentum, but it will always be guided by the perceived utility and relevance of the service. Feature phones are regularly used to send or receive money because it saves people from long, expensive bus rides, or from walking around with a pocketful of cash. But mobile money is still not very common in mature markets. As two billion emerging-market consumers acquire smartphones, there is no reason to believe they will use apps and services in the same way as they do in developed countries.

Conventional wisdom says that companies must control the platforms and onramps to the mobile web to thrive in the global market, but there are opportunities for any company that supports, enables, and promotes the development of locally relevant content and services. Large and small companies in many industries can directly engage with local content and service developers through acquisition, partnerships, and incubation programs. As the pace of change quickens and smartphones usher in the Internet of Things, even appliance makers need to understand the challenges of owning a fridge in Zimbabwe.