Thursday, December 12, 2013

All Aboard!?

Despite the raging success of M-Pesa in Kenya, the spread of mobile payments in neighboring countries has been more restrained. Less reliable phone networks, a different rural/urban distribution, mistrust of the technology, and even education levels have been cited as possible explanations for the comparatively subdued reception of mobile money in other parts of Africa.

When Vital Wave began working with USAID Uganda to help non-government organizations (NGOs) make bulk digital payments to trainees at health and education workshops around the country, one thing was clear: the transition from cash to digital payments had to be logical and smooth for NGO staff so they would accept the change and advocate its advantages to trainees. Vital Wave's field implementation team began by reaching out to NGOs in Kenya and Tanzania, which had started to make the transition to digital payments. Research showed that it was preferable to work with "aggregators" (companies that managed the payments process) rather than directly with network operators, and discussions with USAID, NGOs and other players pointed to concrete ways the aggregators' platforms could be upgraded to better serve NGOs. After selecting five NGOs and three aggregators in Uganda, the field team decided to test the digital payment process with NGO staff. These pre-tests would allow aggregators and NGOs to functionally test the system while fostering internal buy-in and reducing the risk of beneficiary resistance.

The program is still underway, early results are promising, and the takeaways so far are worth considering. Many well-conceived projects in developing countries are scuttled by a lack of local buy-in. This is usually clear after the project is completed, but it's the early decisions and actions that determine whether local recipients will see the benefits and work to adopt a new technology, process, or idea. In the case of digital payments, the benefits for the NGOs are not the same as the benefits for the trainee recipients. NGOs see cash payments as risky, vulnerable to fraud or theft. Trainee beneficiaries may see a text message confirming payment in a dimmer light than the warm glow of cash in the hand. Reconciling these perceptions will require the development and adoption of a much broader system of mobile money - particularly by local merchants - but for the NGOs participating in the program, learning from pioneers and turning staff into advocates are crucial early steps.

Sunday, October 13, 2013

The Good, the Bad, and the Unknown

Ekocenter. Stare at the word for a while and you still might not see the cleverly hidden moniker of one of the world's most ubiquitous brands - Coke. There it is, the first four letters staring in a mirror. Coca-Cola's CEO Muhtar Kent first described the Ekocenter initiative in January, saying it grew out of a partnership with renowned inventor Dean Kamen (of Segway fame), who created the "Slingshot" - an efficient water-purification box capable of purifying enough water for 300 people a year. An Ekocenter is a fully-contained, solar-powered, re-purposed shipping container, equipped with a Slingshot water purifier, an electrical charging station, an Internet access point, refrigerated vaccines, and a few basic necessities - all run by entrepreneurial women in remote locations around the developing world. That's the theory, anyway. The prototype can be seen in Heidelberg, South Africa, and the goal is to deploy 300 more Ekocenters to villages in 20 African and Latin American countries by 2015.

Coca-Cola is working with both public- and private-sector partners, including IBM, Qualcomm, IBM, McCann Health, the Inter-American Development Bank and others to develop and deliver the kiosks. The challenge, well-known by the project partners, is to find the right business model - one that offers a flexible set of tailored products and services, and enough profit to warrant rapid scale. As they fine tune their business model, Coca-Cola can draw from decades of telecenter and cybercafe projects that saw varying degrees of success. These initiatives typically had a narrower range of services - usually telephones and/or internet connectivity - and often followed a franchise model. Many succumbed to the challenges of providing training, support, and security, paying the high cost of telecommunications, or finding long-term economic buyers after the start-up support dried up.

Ekocenters will undoubtedly benefit from the mother company's world-beating distribution system, deep pockets, and the seemingly genuine support of top management. But it's one thing to drop off a case of Coke 500 miles north of Timbuktu, quite another to supply, train, support and protect a scarcely educated woman running the franchise with your logo on it. Coca-Cola and its partners bring enough assets to the Ekocenter initiative to have a fighting chance of success, but finding the right business model is only the first step. The second, third, and fourth step (and every step thereafter) will be committing to that model through ongoing investment, evaluation, improvement, and scale. 

Friday, September 20, 2013

A Data Bridge over the Digital Divide

When Facebook and friends announced the creation of a few weeks ago, with the stated aim of bridging the digital divide in developing countries, some may have been tempted to compare it to past socially responsible initiatives by Microsoft (Unlimited Potential), Intel (World Ahead) and AMD (50x15). True, the aim is similar, and the new kid on the block suffered the same snide comments as their predecessors ("Sure, it'll help people, but it ain't bad for business, either"), but there's a notable difference, too. Microsoft, AMD and Intel struggled to offer solutions to developing-country consumers who had limited purchasing power while maintaining profit margins in mature markets. Emerging-market buyers felt they were getting a "dumbed-down" product, and mature-market consumers weren't happy that less expensive alternatives were not available in their area. is not likely to face this kind of reaction because it re-tools back-end elements that are invisible to consumers. The private companies, nonprofits and developers who comprise the coalition are trying to increase Internet access by compressing data, reducing costs and encouraging new business models. It would be hard to imagine an emerging-market user complaining that her data was compressed too much, or a mature-market consumer grousing that the companies he deals with don't have a business model that works well in Brazil.'s focus on data, together with the expanding applications of Big Data, and a new emphasis on Open Data, signal a shift in thinking from hardware and software to (you guessed it) data and bandwidth.

Initiatives such as and the Google and Cisco-sponsored Alliance for an Affordable Internet are good news for emerging market consumers, who are largely at the mercy of governments and entrenched market players when it comes to available bandwidth. It also has considerable upside for the development community. Cheaper and more efficient data transmission could significantly lower costs and allow for expansion of remote projects (think mHealth or eEducation). Further, development organizations (who had no influence, or interest, in hardware and software markets) can play a wide range of data-centric roles as brokers, purveyors, developers, generators and consumers of information. All efforts to bridge the digital divide are as welcome as new friends. But as anyone with a Facebook account can attest, some friends are more welcome than others.

Friday, August 30, 2013

Mobile Meals

The Economist is the latest to serve up lukewarm Emerging Market news after a decades-long buffet with all the gluttonous expansion the world could ingest. Slowed growth, lackluster ROI, bribery and corruption scandals, and of course the PC getting served with divorce papers by a few billion former prospects. Companies that have counted on emerging-markets growth have fallen short, leading some to question whether the buffet is closed for good.

These are worrying trends, to be sure, but they are hardly signs of the apocalypse. Emerging markets are not the feast they used to be, but they still offer myriad opportunities for growth. As smartphones pass the noteworthy milestone of outselling feature phones globally - due largely to swelling sales in Asia, Latin America and Eastern Europe - many opportunities will be mobile-based. Besides the obvious boon for operators and handset manufacturers, there is promised growth for everyone in the mobile Internet value chain (app developers and store owners, content and service providers, networking and even peripherals). The ad agency Publicis, which recently merged with Omnicom, has seen the writing on the wall and gone on a buying spree of emerging-market firms. As billions of new consumers acquire smartphones and tablets (and the means to purchase more goods), it makes sense to be the one who speaks to those buyers. 

Who will mobile advertisers be working with in 10 years? They will be working with companies that develop products and services with compelling features and functionality, at the right price for wildly diverse emerging-market customer segments. Their clients will have a plan for navigating an increasingly competitive environment, hyper-localized go-to-market strategies, and careful management of country risk factors. They will be working with company executives who don't mind snacking on-the-go. 

Monday, August 19, 2013

Facing Traffic Mortality in Emerging Markets, Head On

This week, Vital Wave's CEO was in a head-on car collision with a Ugandan boda boda (or scooter). Amazingly, everyone involved walked away unscathed, narrowly avoiding joining the 50 million people worldwide who are injured or killed in car accidents each year. This incident also underscored an issue that is highly relevant to the continued growth of emerging markets. The World Health Organization (WHO) has labeled traffic fatalities a serious but neglected public health issue that disproportionately affects developing countries. A full 90% of the 1.3 million people killed each year in road traffic injuries are in low- and middle-income countries. Low-income rural countries have a per capita traffic death rate more than twice that of high-income countries, despite owning only 1% of registered vehicles. This discrepancy appears to be widening, and current trends suggest that road traffic injuries will be the third leading cause of death and disability worldwide by the year 2020.

"The use of smart phones to reinforce safety habits will be much more affordable in developing countries than integrated, in-vehicle systems such as collision avoidance systems. The technology and some applications already exist to connect vehicles with smart phones for supporting safe behaviors such as speed limit and seat belt compliance."
- Nicholas Ward, Professor of Mechanical and Industrial Engineering, Montana State University
The impact of traffic injuries is felt across all sectors of emerging markets. Economically, road crashes cost developing economies the equivalent of 1-3 percent of GNP each year. These costs will only go up as car ownership and traffic levels balloon faster than the surrounding road infrastructure and traffic safety culture can support. In addition to the direct costs of automotive crashes, the healthcare resources required to treat these injuries also take away from efforts across the developing world to address high rates of infectious disease and the increasing burden of chronic disease.

Cross-sector efforts present opportunities to address this growing but neglected health and economic problem in emerging markets. The WHO points out that "reducing the risk in the world's road traffic systems requires commitment and informed decision-making by government, industry, non-governmental organizations and international agencies, and participation by people from many different disciplines, such as road engineers, motor vehicle designers, law enforcement officers and health professionals and community groups." Such coordinated efforts – through public-private partnership, strategic investments, and rigorous evaluation of needs and interventions – stand to have direct, positive impact on social and economic goals as well as business growth in industries as diverse as high-tech, healthcare, and automotive.

Monday, August 12, 2013

Analytics in a Changing Landscape

Analyzing data in emerging markets used to be fairly easy. Of course, that's because there were little or no data to analyze. But those days are pretty much over. The bleak landscape of reliable data on customers and markets in developing countries has bloomed like a flooded desert. And today, new data are being captured through government and business information systems, mobile phones, social networks, and retail transaction systems. With two-thirds of its growth expected to come from emerging markets in coming years, perhaps no other industry stands to benefit more from rigorous data analytics in emerging markets than Pharma.

The pharmaceutical industry can benefit from solid analysis at every stage of the value chain. For instance, disease tracking data support the discovery and development of new therapies. Remote data collection and diagnostic or treatment support can aid clinical investigations and help companies understand how health workers and patients manage health and disease. Improved analysis can help companies segment diverse global customers and devise localized pricing, packaging, and educational programs. Once products are in the field, data can be mined to make improvements in the supply chain, patient education, and communication or training for health workers.

If applied creatively and skillfully, data analytics could help pharmaceutical companies move past the role of pill manufacturer and toward the business of providing personalized health services. As data grow and become more accessible, the time is ripe for pharmaceutical companies to develop and apply new tools that enhance the care experience (and grow their business). This will require evaluation and prioritization of areas where data can bring the most value, and then a clear plan of action to implement the technical and analytical systems to capture, analyze, and integrate that data. With agility and a business-driven focus on quality data analytics, pharmaceutical companies will discover the value of making medicine from desert flowers. 

Tuesday, July 23, 2013

Oh Moses, Where Art Thou?

When a small town government on the New Jersey shore wanted to build protective sand dunes along the Atlantic coast, it faced stiff resistance from homeowners who demanded compensation for losing their view of the ocean. The conflict made its way to the courts before Hurricane Sandy hit the Northeastern coast in October, 2012. After Sandy, the courts, governments at all levels, the real estate and insurance industries, and even homeowners with a view admit that houses shielded by natural barriers fared much better than those without. The case for compensation was blown away like a 1920's bungalow.

The argument for "green-gray" infrastructure – a combination of engineering and natural barriers like sand dunes, oyster beds and salt marshes – is building worldwide as rising sea levels cause increasingly erratic weather patterns and violent storms. Governments and funders have learned the hard way that vast infrastructure investments can be completely undone by natural disasters. This is particularly true in seaside urban centers in developing countries, where huge populations, entrenched poverty, and misguided policies put tremendous pressure on the environment through polluting, overfishing, and the destruction of coastal forests. In fact, as part of a broad research effort, studies funded by the Rockefeller Foundation found that there is substantial interest by funders and governments in climate change adaptation, but little funding is focused directly on protecting the 200 million urban poor in coastal areas.

There are limits to what any single organization can do to combat rising sea levels. Government efforts generally end at their own borders, and the motivation for private industries (e.g., engineering and construction) is to build, baby, build – regardless of the potentially long-term negative effects of artificial sea-walls and dykes. The most likely candidate for battling the rising waters isn't a single entity; it's a coalition of stakeholders focused on funding and scaling high-profile projects to demonstrate the effectiveness of green-gray infrastructure. A cross-sector coalition including the public and private sectors, non-profits, foundations, and academia can provide incentives for sustainable green-gray strategies, while discouraging short-term, ecologically harmful engineering and construction projects. These coalitions may not be able to hold back the waters, but they can mitigate risk and maximize impact by tying funds to sustainable long-term solutions.