Here is one of the most interesting articles I have read in a long time --
from today's NYT.
Keith
<<<<<
DO BELIEVE IN HYPE
Thomas L. Friedman
The Hindustan Times carried a small news item the other day that, depending
on your perspective, is good news or a sign of the apocalypse. It reported
that a Nepali telecommunications firm had just started providing
third-generation mobile network service, or 3G, at the summit of Mount
Everest, the world's tallest mountain, to allow thousands of climbers and
trekkers who throng the region every year access to high-speed Internet and
video calls using their mobile phones.
I can hear it already: Hi, mom! You'll never guess where Im calling from . . .
This is just one small node in what is the single most important trend
unfolding in the world today: globalization -- the distribution of cheap
tools of communication and innovation that are wiring together the world's
citizens, governments, businesses, terrorists and now mountaintops -- is
going to a whole new level. In India alone, some 15 million new cellphone
users are being added each month.
Having traveled to both China and India in the last few weeks, here's a
scary thought I have: What if -- for all the hype about China, India and
globalization -- they're actually underhyped? What if these sleeping giants
are just finishing a 20-year process of getting the basic technological and
educational infrastructure in place to become innovation hubs and that we
haven't seen anything yet?
Heres an example of why I ask these questions. It's a typical Indian
start-up I visited in a garage in South Delhi, EKO India Financial
Services. Its founders, Abhishek Sinha and his brother Abhinav, began with
a small insight -- that low-wage Indian migrant workers flocking to Delhi
from poorer states like Bihar had no place to put their savings and no
secure way to send money home to their families. India has relatively few
bank branches for a country of its size, so many migrants stuff money in
their mattresses or send cash home through traditional hawala,or
hand-to-hand networks.
The brothers had an idea. In every Indian neighborhood or village there's
usually a mom-and-pop kiosk that sells drinks, cigarettes, candy and a few
groceries. Why not turn each one into a virtual bank? So they created a
software program whereby a migrant worker in Delhi using his cellphone, and
proof of identity, could open a bank account registered on his cellphone
text system. Mom-and-pop shopkeepers would act as the friendly neighborhood
local banker and do the same.
Then the worker in New Delhi could give a kiosk owner in his slum 1,000
rupees (about $20), the shopkeeper would record it on his phone and text
receipt of the deposit to the systems mother bank, the State Bank of India.
Then the workers wife back in Bihar could just go to the mom-and-pop kiosk
in her village, also tied into the system, and make a withdrawal using her
cellphone. The shopkeeper there would give her the 1,000 rupees sent by her
husband. Each shopkeeper would earn a small fee from each transaction.
Besides money transfers, workers could also use the system to bank their
savings.
Since opening 18 months ago, their virtual bank now has 180,000 users doing
more than 7,000 transactions a day through 500 branches-- mom-and-pop
kiosks -- in Delhi and 200 more in Bihar and Jharkhand, the hometowns of
many maids and migrants. EKO gets a tiny commission from the Bank of India
for each transaction and two months ago started to turn a small profit.
Abhishek, who was inspired by a similar program in Brazil, said the kiosk
owners are already trusted people in each communityand are already in the
habit of extending credit to their poor customers: So we said, "Why not
leverage them?" We are the agents of the bank, and these retailers are our
subagents.The cheapest cellphone today has enough computing power to become
a digital mattress and digital bank for the poor.
The whole system is being run out of a little house and garage with a dozen
employees, a bunch of laptops, servers and the Internet. The core idea,
says Abhishek, is to close the last mile -- the gap where government
services end and the consumer begins.There is a huge business in bridging
that last mile for millions of poor Indians -- who, without it, can't get
proper health care, education or insurance.
What is striking about the small EKO team is that it includes graduates
from India's most prestigious institutes of technology who were working in
America but decided to come home for the action, while the chief operating
officer,Matteo Chiampo, is an Italian technologist who left a good job in
Boston to work here where the excitement is, he said.
India today is this unusual combination of a country with millions of
people making $2 and $3 a day, but with a growing economy, an increasing
amount of cheap connectivity and a rising number of skilled technologists
looking to make their fortune by inventing low-cost solutions to every
problem you can imagine. In the next decade, I predict, we will see some
really disruptive business models coming out of here -- to a neighborhood
near you. If you thought the rate of change was fast thanks to the garage
innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and
Bangalore get fully up to speed. I sure hope we're ready.
>>>>
Keith Hudson, Saltford, England
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