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.

Monday, October 27, 2014

The Tension Between Those Who Have Data, and Those Who Need It

By David Sessions

In recent weeks, experts from all over the world have come together to solve some very vexing issues relating to the use of data by private institutions, public agencies, and civil society.  As the sheer volume of data collected begins to mount, and myriad sources of new data come available, questions emerge about who should have access, under what conditions, and what role the data owner has in governing its use.  In most cases, individuals are unaware their data is being even being collected and used without permission.  But data has significant utility in solving social issues such as disease containment and eradication, poverty, government service delivery, and even the creation and timely provision of commercial products, so the issues must be resolved.

The Stanford Center on Philanthropy and Civil Society (Stanford PACS) recently hosted a conference with over an hundred participants on the topic of Ethics of Data in Civil Society.  At the conference, scholars, activists, policy makers, and funders considered the implications of how data are collected, stored, and disseminated, then suggested specific actions that would promote access to data while maintaining individual rights.  Policy that governs data in both developed and emerging markets were tested through working small working groups and active discussions with the entire conference.  The conference produced several actionable ideas, university courses, and even a potential for a startup company to evaluate algorithms used to analyze data.

Given the number of conversations taking place in other venues on the topic of data ethics, the problem is growing and is exacerbated by a wide diversity of policy.  Some policies restrict the use of certain data under any circumstances, and the liability for misuse or loss remains with the data collection entity, regardless of how or where the data enters the public domain. Meanwhile, policies provide little or no protection for the individual, much less any control.

Search engines, mobile phone companies, financial institutions (largely through payment accounts like debit or credit cards), and social websites all collect behavior and transaction data.  As access to the Internet becomes more ubiquitous, the responsibility for the ethical collection, access, and governance of data will only increase.  These issues are complex, and the solutions will require unprecedented collaborations across political and geographic boundaries.  Those with the most power in this conversation are those who profit from data, and they must take the lead in providing solutions whether through the execution of an active Corporate Social Responsibility program, or because they understand that by improving the lives of all global citizens they create larger addressable markets for their products.

Monday, October 20, 2014

Gold Rushes and Good Deeds

As articles on Myanmar (or Burma) pop up in the news like so many mushrooms, there was some debate about whether to address the opportunities in the country as a corporate or philanthropic issue. (Vital Wave alternates between corporate and philanthropic editions of the Nugget. With a business-forward approach to development, and an emphasis on sustainability and social responsibility in business growth, we try to provide something of value to all readers in each edition.)

Most reports on Myanmar, particularly in the telecoms and mobile services space, see it as the next big Gold Rush. Breathy pronouncements about the untapped, 50-million-person market and the inevitable rapid uptake of smartphones promised steep growth rates and high profits. But in reality, the companies that stand to build an honest, sustainable, and profitable business in Myanmar are already active in other Southeast Asian markets, paving roads to the gold-laden Burmese mountains with years of relationship building and regulatory battles. In short, you know who you are, and you know what to do. 

Far more intriguing is the potential role of the development community in Myanmar. The country presents a unique opportunity to measure the true economic and social impact of mobile technology in relative isolation. All those claims about the broader economic bump from ICT investment can now be validated or improved. But few development organizations will be content to stand back and observe. There will also be a vital role to play in implementation and education. Many reports on mobile services conclude that a significant barrier to adoption is a lack of understanding of exactly what a smartphone can do. In most markets, operators, handset manufacturers, and service providers are content to let awareness grow organically. In Myanmar, however, the technological literacy gap is likely to be wider than in other Asian countries, particularly in rural areas. Development organizations can steer the perceived utility of mobile phones toward self-empowering tools and services, and away from time- and resource-sucking games and social media sites. They can also help educate users about the potentially negative impact of new technologies - loss of privacy, ubiquitous advertising, and government surveillance. As the Gold Rush in Myanmar unfolds, the development community can ensure that some of that gold dust settles on Burmese entrepreneurs, activists, women, students, teachers, doctors, farmers, and so many others.

Monday, October 6, 2014

A Piece of the Pie a la Modi

Last week, Adobe quietly announced it would close its R&D center in China due to rampant software piracy, a strategic shift toward a cloud-based, software-as-a-service business model, and China's increasingly hostile business environment. Just a few days after Adobe's announcement, India's new Prime Minister, Narenda Modi, was having lunch with Wall Street's fattest cats, a cozy dinner with President Obama, and a loud rally with 19,000 Indian-Americans in Madison Square Garden.

Modi's Magical Mystery Tour of the US was perfectly timed. As the list of American companies being harassed, blocked, banned, investigated, censored, shuttered, or spied on by Chinese authorities continues to grow, few can blame them for seeking another billion-person market with good growth prospects. Meanwhile, Modi is making all the right noises about improving infrastructure, cutting red tape, and welcoming foreign partnership and investment. In fact, there's a big pile of cash looking for a home right about now. Foreign direct investment in China was down 17% in July, and 14% in August - the first consecutive double-digit drop since 2009. The Financial Times blames China's protectionist policies, slowed production, and distressed banking and real estate markets for this pull-back. Business growth in India, on the other hand, has rebounded from years of stagnation since Modi took office. Everything from cookies to tires is selling well, riding a wave of consumer optimism and a steadily growing middle class. One Asia-focused investment banking company, CLSA, predicts that India's economic growth rate will exceed China's as early as 2016. 

It's too soon to shift all the eggs from the Chinese to the Indian basket. India has stubborn infrastructure, bureaucracy, and poverty problems that will take years of focused, effective governing to overcome. But the contrast between the current Indian and Chinese attitudes toward partnership and investment is stark. If Modi succeeds in reforming India's huge bureaucracy and creating honest incentives, there will be excellent opportunities in a wide range of industries. Modi's own commitment will be tested when foreign companies push for lower competitive barriers (e.g., as Amazon and Alibaba battle local heroes like Flipkart and Snapdeal). But if reality follows rhetoric (not always guaranteed), smart companies will start throwing their nets a little wider to catch the world's fastest-growing big fish.

Friday, October 3, 2014

Into Africa

Which area of the world boasts seven of the top 10 fastest growing economies since 2011? Latin America - nope. Asia - so ten years ago! The place to be for real growth is Africa, where private equity investments have doubled in just two years, and the US, Chinese and European governments are tripping over each other to pave inroads for their own corporations. In fact, the World Bank says the collective economy of the entire continent grew by 5.6% last year.

The first US Africa Summit, held in Washington DC in August, was widely reported as a pivotal shift in perceptions of Africa as a place of war, corruption, and disease to a place of economic growth, investment, and grassroots innovation. Many suspect this shift in perceptions is due to a realization among American politicians and business leaders that China is far beyond the US in terms of market creation in Africa. Companies in a wide range of industries are now forging ahead in Africa despite persistent challenges to the business environment (e.g., infrastructure, socioeconomic inequality, corruption, and regulatory obstacles). Technology, pharma, media, and consumer goods companies reason that the burgeoning young, urban consumer class, though still a minority in all African countries, has more disposable income and the tools (i.e., phones and Internet) to buy what they want.

But where exactly are the greatest opportunities? Corporations are approaching the market from the top-of-pyramid down to the middle class, and the development community from the base-of-pyramid upwards. In such an environment, the most potent opportunities are at the intersection of corporate and development community interests. For MNCs, this means designing and delivering digital and mobile services with both a strong commercial value proposition and the potential for social impact. As the development community seeks to bring digital and mobile services to scale, there will be a real opportunity for enterprise-grade solutions and platforms that deliver key financial, health, agriculture, and public services. (At the US Africa Summit, Power Africa was frequently cited as a model initiative.) For their part, local governments are playing the tricky game of encouraging investment without creating dependency or hobbling local industry. Despite the increasing power of the consumer class, few companies will succeed without the collaboration and support of key government and local stakeholders. As Africa grows and flexes its economic muscle, multinational technology companies will do better to be seen as a partner than as a vendor. 

Tuesday, September 23, 2014

Development is Dead, Long Live Development

Flowminder, a non-profit based in Sweden, was lauded last month when they partnered with Orange Telecoms to release illustrated data - gleaned from anonymized and aggregated cell phone signals - on population movements in West Africa. The data helped health officials predict the possible spread of Ebola and decide where to focus medical resources and information campaigns. Meanwhile, in India, a start-up called Biosense is adding to its growing collection of mobile-based diagnostic tools by building an online platform for the country's poorest people to share ideas (particularly health solutions), create a business plan, and raise capital through crowdfunding.

On the surface, these two organizations have little in common. One is non-profit, the other a private company. One focuses on data, the other on devices. But they also share a few very important characteristics: 1.) their work is only possible in a world where billions of people are using mobile phones, and 2.) they represent the future of development. That's a big claim, but it's getting harder and harder to argue against the transformative impact of mobile technology on traditional development models. In the old days, an aid group or a company swept into a developing country, identified a problem, and announced a grand plan (preceded by a pilot project) to address the issue. Today, mobile phones have turned every project beneficiary into a stakeholder (or a potential customer). And the growing importance of data is transforming measurement and evaluation, product design, and partnership equations.

The transition to mobile-based, data-driven development creates myriad opportunities for both public and private organizations - something Flowminder and Biosense understood before the rest of us. A faster-paced, better-connected development landscape will require greater agility, an on-the-ground presence, and a comprehensive approach. Funders and companies that can deliver this agility and work well in a broad, diverse collection of public and private partners will set the directional needle for development in the years and decades to come. 

Monday, August 25, 2014

It's all fun and games until someone trips over 5 million subscribers

If MobiThinking's "Insider's Guide to mobile Web marketing in India" is accurate, 90% of the country's mobile subscribers have voted for a reality show-based contest via SMS. Half of them subscribe to regular SMS jokes, and nearly as many use their phones to get astrology or sports information. This is pretty remarkable in a country where many development organizations are struggling to achieve scale for their mobile-based health, agriculture, and education programs.

Writing for the GSMA recently, Kristen Roggeman pointed out that there is an obvious demand for entertainment among mobile users in both rural and urban India. She describes an innovative marketing effort by Hindustan Unilever (HUL), whereby mobile phone users make a missed call and receive an automatic call-back with 15 minutes of radio programming. The service now has 5 million subscribers and sends out 25,000 hours of programming every day. HUL has now dropped traditional radio marketing from its advertising mix. The hunger for entertainment is not unique to India. In Brazil, The most popular apps are for music, entertainment and navigation, followed by photo, video and social networking. In Nigeria, the national brewery ran a spectacularly successful SMS marketing campaign inviting 18- to 25-year-old men to attend music concerts. The ads had a response rate of more than 30% and a click-through rate of almost 9%. And in the US, drug makers and insurance companies are developing game-like apps that give points and gifts for sticking to drug regimens. (Failing to follow drug prescriptions is estimated to cost US employers, insurance companies and health providers around $200 billion a year.)

Development organizations might take note: even for the poor, entertainment is a central aspect of mobile phone usage. Mobile devices are quickly supplanting radio and television as the main conduit for personal entertainment in developing countries. Integrating entertainment - music, games, sports, movies, and contests - into dry but useful information campaigns is a viable way of extending the reach and impact of programs. Also, strategic partnerships (e.g., with sports, music, or media groups) could help defray the cost of promotion and generate buzz. Development organizations hoping to capitalize on soaring mobile penetration rates frequently devise SMS-based outreach programs. Making them more fun will require a little "outside the box" thinking, but it could be rewarded by increased awareness, adoption, and effectiveness. 

Thursday, August 14, 2014

Trust and Verify

Two seemingly unrelated announcements were made by a pair of tech industry heavyweights - Apple and (eBay's) PayPal. Apple extended two-step verification - where a code sent to an old device must be used to change an account or buy something on a new device - to 49 countries, including China, India, Brazil and dozens of other developing nations. Nigeria was not on the list. This is noteworthy because PayPal announced that tens of thousands of Nigerians signed up for PayPal in the first week of operations there. PayPal and its partners (a prominent local lending partner, suppliers in Dubai and China, and fast-growing online retailer Jumia) claim that e-commerce in Nigeria has officially arrived.

Of course, for consumers, signing up for PayPal or verifying a new iPhone is only the beginning of the online buying experience. The bloom will quickly fade from the e-commerce rose if buyers fail to receive an order or fall victim to identity theft. The trust barrier is considerably higher for emerging-market consumers than it is for their mature-market counterparts. In many developing countries, people generally mistrust banks, operators, mail delivery organizations, foreign companies, and the legal system's capacity to prosecute fraud or theft. It will take a concerted effort to build trust and educate new smartphone users about risk, data protection and privacy.

As smartphones and wearables are used for more and more functions, trust and education will determine the growth rate for online purchasing. Device makers, app developers, and service providers (including back-end hosts) all have tremendous opportunities up and down the e-commerce value chain. Multinational companies that build reliable public - and private-sector partnerships (particularly with delivery services) and implement strong, user-friendly security measures will foster trust. To be truly effective, these efforts should accompany early and continued investment in brand marketing via localized content and messaging that reinforces security features. Providing a platform for user reviews and focusing on early adopters and influencers through social media can also validate the online buying experience and address the trust issues of willing but wary buyers. 

Tuesday, July 22, 2014

Misgivings and Missed Opportunities

Let's face it. For all the success stories, the uplifting anecdotes about plucky women making a living with their mobile phones, or farmers realizing greater profits by checking prices on the Internet, there are still many in the development community who are deeply ambivalent about the value and impact of technology. Yes, anyone who spends 10 minutes in Nairobi or Kuching can see the ubiquity of the mobile phone, and it's clear that clever, resourceful people are wringing value out of the devices far beyond simple phone calls and text messages. But a longer, deeper look at the impact of technology on society can be troubling. Social norms and traditions are disrupted by material acquisition. Kids who used to kick a ball of woven cloth now play video games. And in the most desperately needy corners of the world, clean water, food, shelter, education and medical care are higher priorities than phones and Internet access.

Within every philanthropic organization, regardless of its mission, there are opportunities to mitigate the negative effects of technology and maximize the positive ones - for individuals, societies, or the organization itself. In past Nuggets, we've considered how to extend mobile broadband and create an environment conducive to mobile-based health, finance, governance, commerce, and education. But what about smaller, local NGOs that aren't actively involved in this space? Or what if Internet access might help your programs, but isn't necessarily your core focus?

The truth is, mobile and broadband adoption is continuing apace. In Africa, which had less than 1% mobile penetration at the turn of the century, 60-80% of all adults will own a mobile phone by the end of this year. This means beneficiaries who once stood in line for a cash-based training per diem can now catch the bush taxi home and receive a mobile payment on the way. With the torrid pace of mobile and broadband adoption, local NGOs can now achieve far more than the obvious improvements in communication and reduced travel costs. This includes potential co-funding through partnerships, alignment with corporate or government priorities, better operational efficiency, and the opportunity to steer responsible, sustainable technology usage while it's still in its infancy. Local NGOs can also support local innovation and technological independence by delivering on-the-ground training programs and capacity support. Many development organizations have benefited from stepping back to re-assess their mission and program portfolios. A comprehensive review of programs and a reallocation of resources to maximize the benefits of the new tech reality would be both healthy and timely, even for the deeply ambivalent.

Wednesday, June 18, 2014

The Currency of Good Data

Measurement was a hot topic at the Council on Foundations' annual conference last week in Washington D.C. As data and evidence-based decision making continue to wend their way to the center of today's philanthropy conversation, funders and grantees increasingly look to monitoring and evaluation (M&E) for proof of a solution's value and to make programmatic improvements. Rigorous approaches such as Randomized Control Trials are considered the gold standard of impact measurement, and systems like the Impact Reporting and Investment Standards (IRIS) have been developed to standardize social, financial, and environmental performance metrics. Now, networks such as ANDE are encouraging grantees and funders to move beyond standardization and to integrate impact metrics with financial and operational processes, while broadening the collection and distribution of data to benefit an entire ecosystem or society.

Despite these positive trends, M&E is still hard to do well in developing countries. Good information is difficult to obtain, and its collection costs time, effort, and money that many feel would be better spent on direct beneficiaries. Furthermore, many grantees on the ground still struggle with basic evaluations, much less the rigorous M&E systems preferred by many funders. Grantees also frequently need help integrating this data into feedback loops and decision processes in order to make operational improvements.

Practical M&E programs in the developing world means measuring the right indicators with the right approach and the right amount of rigor. For corporate funders and CSR groups, measuring the business value alongside social impact is critical to conveying the full value of programs and ensuring continued financial support. There is an excellent opportunity to share the cost of collecting and analyzing program data with other donors and private sector players. Solid data - particularly on the opaque small-business sector - could help partners improve programs, design products or services, develop strategies, and create effective marketing campaigns. The collaborative approach to development is not new, but the currency of good data has the potential to bring a lot more collaborators into the tent. 

Tuesday, May 27, 2014

Car Talk

First came machines, then came machines that talk. Up next, machines that talk to each other. Consider the automobile, which started out as a fairly simple machine, then acquired more computer components and systems, and will soon be equipped with dozens, perhaps hundreds, of sensors integrating with drivers and passengers, the environment, and other cars.

The next wave of car technology is coming just as millions of new drivers in Asia, Africa, and Latin America get their first cars, and the role and function of cars is expanding beyond a simple people mover. More and more, cars are being seen as data generators, and the data they yield can populate an ever-wider range of databases (mapping, traffic, civil services, planning, insurance, consumer trends, health, and more). Given the amount of time people spend in their cars, there is already jockeying for position among data-hungry tech companies to integrate portable handheld devices with car systems - or better yet, to build sensors, chips, antennae, and software right into the cars. Tech industry giants, including Google, Apple, Microsoft, Qualcomm, and Intel, have been making sizeable investments in car-based technologies for several years.

These companies are sensing opportunities, and rightly so. Global sales of passenger cars will top 70 million in 2014, led by China (at 18 million units, or more than double the sales in the US). Among drivers - even in lower-income countries - there is a clear interest in avoiding traffic and collisions, and optimizing the driving environment with safety, comfort, entertainment, and information. The companies behind these technologies also understand that driving somewhere is evidence of consumer habits and intent. In emerging markets, having capable and reliable broadband networks, the right business models, the ability to connect multiple device types, and tailored solutions for different demographic segments are some of the more obvious challenges. As these challenges are better understood, there will be openings for hardware and software companies, mobile operators, service providers, programmers, and many others. One day soon, you may have to squeeze your Google Roadster between an Apple iCar and an AlibabaVan on the crowded streets of Bangkok.

Tuesday, May 13, 2014

Sustainable Crises

The US National Climate Assessment and the UN's Intergovernmental Panel on Climate Change (IPCC) both recently signaled a heightened sense of urgency for dealing with global warming. The general message was: climate change is having very real, observable effects on the weather, agricultural production, and important ecosystems, and we're already paying a heavy price to fight it.

A particular focus in both reports was the high cost of severe weather events, which are increasing in number and intensity as the world warms. And many in the development community, governments, academia, and the private sector are turning their attention to strategies for mitigating the costs and improving resource management after these events. Past disasters have shown that quickly re-establishing phone and Internet connectivity is critical to the efficient deployment of food, water, medicine, and shelter. While some governments have increased their investments in disaster preparedness, the ability to coordinate a response after large-scale events is often dependent on a diverse set of public and private service providers. Network operators are in the best position to work with governments and aid organizations to restore communications, locate the missing, and track relief efforts. But the ownership and use of private data, the responsibility for rebuilding infrastructure, and the profit motive are thorny issues that can put operators at odds with governments and aid organizations.

The development community can serve as facilitator, influencer, funder, and lead builder of a sustainable (or at least more efficient) model for coordinated, multi-sector disaster relief. Each of these roles demands more resource-efficient programs, better integration, robust technology platforms, and implementing organizations that can successfully complete multi-dimensional projects in the field. The case for taking these measures is heating up along with the rest of the world.

Monday, April 28, 2014

Money Changers

What are the basic tools in your personal financial toolbox? Cash, of course. A debit card tied to a checking account. Credit cards. A savings account. And then there are a whole bunch of comparatively passive tools designed to stave off disaster - health and life insurance, retirement account, mortgage, stocks, and bonds.

Now imagine you were born and raised in rural Tanzania, or Thailand, or Brazil, and you have none of the pre-conceived notions about those financial tools. There are no banks in the village, and even if there were, you're not sure the bank can be trusted. No one owns a credit card, or insurance, or stocks or bonds. You're paid in cash for the work you do. Your daughter convinced you to sign up for mobile money when she moved to the capital to work, and it was the easiest way to send money home. Then, it seems overnight, you could use your mobile wallet to buy food, or pay for a taxi. Now you have a better phone, and your daughter says you can use it to find information about the weather or yesterday's game, open a savings account, buy insurance, apply for a small loan, and pay bills.

The fact is, the concept of money is undergoing a fundamental transformation, and different players are stepping in to offer financial services where there were none before. (Think M-Pesa and its imitators, Google Wallet, and Facebook's quiet, impending launch of mobile money in Ireland.) New financial services by any company will have to gain the trust of wary consumers and navigate a tricky set of regulatory and business-model obstacles. Still, the relatively open regulatory environment, the greenfield technology and banking landscape, and a clear willingness by consumers to adopt technologies that improve their lives make developing countries fertile ground for the introduction of new financial services. Emerging markets are already out in front of a brave new financial world, and villagers in Tanzania, Thailand, and Brazil are starting to look at our paper checks and credit cards with a mix of confusion and humor.

Monday, April 14, 2014

Net Wars - Attack of the Drones

At the recent Mobile World Congress in Barcelona, Facebook's Mark Zuckerberg urged operators to offer unlimited, low-cost service bundles, in which free versions of Facebook, Whatsapp, Google, Skype and other popular sites are treated like "utilities." Experience in the Philippines and Paraguay, he said, prove that the net benefit - typically in broader penetration, more subscribers, and increased daily use - justifies the expense of building out a network and offering free and bundled services. This assertion received a polite but muted response from an audience that is all too aware of the capital and operating costs of rolling out more, bigger, and better networks. Less than a month after the MWC, Zuckerberg (as the figurehead and public face of reiterated his intention to deliver last-mile Internet services with solar-powered drones, satellites, and lasers. Though light on details, the idea has generated a fair amount of buzz and only a few critical comments about how developing countries may not be excited about a fleet of US-company-supported drones circling their airspace. Even fewer consider the implications of Facebook's drones (or Google's balloons) bypassing network operators completely, and putting the keys to Internet access firmly in the hands of advertising giants.

The Day of Global Internet Coverage is coming, though no one knows the date. It's notable that the advertising, e-commerce, and mobile phone crowd is making the most noise about it. And why shouldn't they? They have a lot to gain from Bushmen friending Sherpas. Someone will find a workable model for extending Internet connectivity to every corner of the globe, by working with network operators to reduce their CAPEX and OPEX exposure (e.g., through leasing models, sponsored access, compressed bandwidth technologies, PAYGI or PAYGS plans), or by floating drones and balloons, or with a combination of these and other ideas. 

No single company will achieve the goal of global coverage., with the footprint, depth of experience, and vast assets of all the partners (Facebook, Qualcomm, Ericsson, Samsung, and others) could move it along significantly. But all those assets still need to be marshalled under a clear and detailed strategy, as surely as solar-powered drones need the sun.

Monday, March 31, 2014

Russian Roulette

When your standard marching orders are to grow the company's emerging market business, what's to be done with sudden political crises like those we've seen in Russia? Since Vladimir Putin decided to help himself to part of Ukraine, the Russian economy has seen $70 billion in capital flight (slightly more than all of 2013), leading to stagnant growth and fears of inflation. Investors and business managers are less concerned with a few Black Sea ports than they are with precedents like annexing ethnic enclaves and shutting off oil spigots to Ukraine or Europe.

Seasoned emerging-market veterans will see the rising tension between Russia and the West for what it is - part of the cost of doing business in a market with inherent political risks. As the Russian oligarchy and its pugnacious leader engage in riskier behavior, executives in tech, pharma, and a number of other industries might decide to make their big moves elsewhere. However, it's worth noting that business growth in Russia (and other politically risky emerging markets) has been fairly robust for almost 20 years, and though the oil-and-gas gravy train may be slowing, most of the other engines are on track: the middle class is growing, demand for consumer products and services is soaring, and there's room for growth in many industries.

With the exception of a few industries, business leaders who worry about getting in bed with robber barons have a few mitigating factors to consider. Technology has a democratizing effect, education and healthcare help the masses, financial services spread the wealth, and agriculture puts food on the table. By focusing on trends, not on the crisis, companies can identify long-term opportunities that merit the complex navigation through political storms. There will be opportunities in Russia after Crimea, in India after the elections, in Brazil when the debt bubble bursts. When choosing the "wait and see" approach, don't stop asking the man on the street what he's going to do with all that hard-earned cash when the dust settles.

Friday, March 14, 2014

The Shift to Sustainability in the Post-2015 Agenda

From November 2013 to February 2014, Richard Heeks at ICT4D published a series of nuanced and well-cited analyses of the process and likely outcomes of the post-2015 development agenda. His 4-part investigation included a graphic history of the creation of MDGs, a review of post-MDG events, textual analysis of the documents resulting from those events, and a comparison of new agenda items to the outgoing goals and objectives. For anyone in the development community, or even private sector players who understand how the global development agenda can influence public policies and expenditures, Heeks' concise analysis is worth a read.
Heeks argues that the development agenda dynamics "reflect real-world change," responding to the shifting roles of aid and the private sector, the rising tide of domestic and international migration, the supremacy of services over manufacturing, and the ubiquity of mobile devices. According to his early analysis, three issues will increase in importance after 2015:
  1. Environment and Sustainability
  2. Migration
  3. Open and Inclusive Development
These three issues are likely to cut across industry-specific initiatives, requiring "systems thinking" as the development community moves from strategy to implementation.

Systems thinking means the development community will need to understand not just an isolated issue, but how that issue (and programs designed to address it) impacts and is impacted by other elements in the ecosystem. When choosing partners, organizations may want to consider how those partners and their incentives will shift dynamically over time. In effect, no matter where the compass points when the post-2015 course is set, thorough ecosystem assessment, dynamic business modeling, and understanding links between different solutions can help organizations implement more sustainable programs and measure holistically their impact over time. 

Tuesday, February 18, 2014

Wildflower Hunters: Take the Mountain Road to the Back Country

800 million people is a respectable market opportunity. Okay, it's more than respectable - it's really big. But when gauging market potential, businesses have to consider many things. Chief among those considerations is, "How many people actually want what we're selling?" 

The good news for the many providers of smartphones, mobile broadband services and applications, is that there is a potential 800-million-strong market available - and a lot of the people in that market want what they're selling. Who are these hungry buyers? Working women in the developing world. In a recent study conducted with Qualcomm and the GSMA, Vital Wave surveyed over 1,000 employed women throughout Brazil, China, India, Indonesia, and Nigeria who own either a feature phone or a smartphone. The study showed that working women highly value mobile broadband for communicating with co-workers, locating customers, marketing their goods and services, and finding educational or job opportunities. Of those surveyed, 77 percent already own a smartphone would not go back to using a phone without Internet access. Two-thirds of the feature phone owners reported that they want smartphones and would be willing to pay for a mobile data plan, and half said they intend to buy a smartphone within the next two years. 

Despite these numbers, capturing this market will not be as simple or easy as picking wildflowers in a summer meadow. For all the programs that currently exist to expand technology in the developing world, very few focus on marketing, products and services to working women. In order to succeed, handset manufacturers, operators, governments, and even NGOs need to address the limited awareness as to the value of the Internet and the cash-flow implications of the handset purchase - the two most immediate barriers to smartphone uptake for women. Strategies to address these challenges include the development of public-private partnerships, creative financing, sponsored data schemes, and shared-use plans. Expanding Internet access, particularly in rural areas, will also increase women's use and appreciation for online services - a crucial first step for women who don't see the utility or convenience of mobile broadband. To discover additional insights, country-specific observations, market segmentation information, and directions to the best wildflower fields, download the full report here.

Wednesday, January 29, 2014

Fighting the Health War on Two Fronts

As any student of history will tell you, the surest way to lose a war is to fight on two fronts. For decades, developing countries have been fighting a war against persistent poverty, famine, and disaster-related illnesses like cholera and diarrhea. Resources were stretched to the breaking point in many countries as they struggled to build a health system that is responsive to a well-established set of health problems. So it probably came as welcome relief when economic fortunes turned rosy, and developing-country governments could allocate more resources to infrastructure and public services like health and education. Until, of course, the spoils of rapid economic development began to spoil.

Health systems across the developing world are suddenly dealing with a range of health issues that hitched a ride with prosperity: diabetes, hypertension, obesity, and heart disease - to name only a few. It turns out that a sedentary fast-food lifestyle is as unhealthy for the Chinese as it is for Americans. In fact, the Overseas Development Institute, a UK-based think tank, calculated that the number of overweight and obese people in developing countries has quadrupled to one billion people in only 30 years.

In newly prosperous countries, this is not a transition; it's an addition to the normal roster of water-borne and tropical diseases which are still thriving in remote, rural areas. The opening of a new, unfamiliar front in the health war presents opportunities for both the development community and the private sector (e.g., pharma). With many years of data on the long-term cost of chronic diseases in developed countries, there is a compelling argument for even modest investment in nutrition, wellness and preventative programs. Such modern illnesses can by addressed by mobile-based information campaigns, digital reminders, and remote reporting and diagnostics. It's not very sporting to capitalize on another's misfortune. But mature-market providers can chalk it up to helping the new kids learn from past mistakes, and giving them a fighting chance in a historically uphill battle.