[GKD-DOTCOM] A Closing Message from WRI
Dear Colleagues, This has been a powerful and rewarding discussion for me -- and I hope for everyone else. On behalf of the World Resources Institute, I want to thank all those who have participated and shared their insights and experience. I have been particularly struck by the degree of consensus that sustainability should be an integral part of the design of all ICT for development projects, and that, with appropriate qualifications and concerns, profitability is both necessary for private sector efforts and can serve as a valuable incentive in support of development objectives. Lots of interesting examples and discussion on social metrics or other ways to measure profit in addition to dollars. We will capture and summarize these discussions, along with other materials, for a CD that will be provided to all registrants at the Eradicating Poverty Through Profits conference next month in San Francisco (details at http://povertyprofit.wri.org ). We will also deliver many of the key messages we had heard to the conference attendees through other means, and we will post the summaries on the conference website for anyone to download. Much of the other materials we are sharing are already posted there--we invite you to take a look under the resources tab. Again, many thanks. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
[GKD-DOTCOM] ICT and Sustainable Development
On 11/17/04, Tom Abeles [EMAIL PROTECTED] wrote: What I would like to see is WRI's projection on the resources of the world with its increasing success in this approach to poverty alleviation even with increased efficiency and maximum recycling. Tom Abeles raises the question of resource use if development succeeds. I don't want to get into that issue, although I think it is clear that the choice of whether and how to develop lies with individual countries and peoples, not with anyone else. But ICT is quite powerful in its ability to make possible livelihoods and economies based on knowledge (an infinite resource) rather than on natural resources, and to enable access to information and education that can help people make more sustainable choices. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
[GKD-DOTCOM] Win-Win Business Models
For Tom Abeles and others who have joined the conversation recently, I would like to point out that we have documented a number of what we believe can be win-win models, and even sustainable models, in connectivity, agriculture, finance, health care, and other sectors, in detailed case studies that can be found on www.digitaldividends.org or with links under the resources page of the conference website, http://povertyprofit.wri.org. We have also posted earlier in this discussion detailed market data characterizing the size of the low-income or bottom-of-the-pyramid markets in a number of developing countries. Many of the companies coming to the Eradicating Poverty Through Profits conference in San Francisco next month are seriously exploring how to serve such markets in ways that generate real local value, while also yielding a profit. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?
Chetan Sharma points out that technology by itself may not generate jobs. But entrepreneurship certainly does--and the examples of Germany and Finland he points to may reflect lack of an entrepreneurial culture more than anything about technology. And technology can play a role in helping create entrepreneurial opportunities or in supporting small enterprises. The Sanchalak's that run ITC echoupals generate additional income from their entrepreneurial role as the computer hosts, the kiosk and PTO entrepreneurs in India phone and (growing) Internet networks are a similar example; so too the village phone entrepreneurs in Bangladesh and South Africa and now Uganda. Both the need for shared-access points--the dominant model for access to connectivity among the very poor and even the not so poor in developing countries (even in middle-class, urban Peru, for example) and the entrepreneurial opportunities such needs create and can create are a prime example of how the spread of ICT networks can help stimulate job creation. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org On 11/8/04, Chetan Sharma asked: Why do small European economies such as Germany and France, who have always embraced technology and have such a huge technological advancement, have major employment problems? Why does Finland, despite home-grown Nokia, continue to languish with unemployment and joblessness? If we do not have jobs of any nature--if we do not even have stable livelihoods--then what has been the worth of Globalization and technological advancement? ..snip... This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
[GKD-DOTCOM] Profitability as an Indicator and a Driving Force
Sam Lanfranco makes some nice points about profitability as an indicator and driving force, even for non-profit or socially-motivated projects. I'd like to turn the point around and argue that being profitable, or the profit motive, is not a good basis for judging the social motivation or social potential of an activity. In effect, I'd like to challenge the more-or-less automatic assumption, which I see expressed in many parts of the NGO and development communities, that a for-profit activity cannot also have a socially beneficial goal. Of course, many businesses have no social motivation. However, in our research, we have found that many of the successful companies in BOP markets have an explicit social metric or goal as well as a business goal. This is true in large companies as well as in entrepreneurial start-ups. I agree that profitability is, in several senses, an important indicator for many activities--and I think that the profit motive does not disqualify an entity from also having a social motive. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?
I agree fully that benefits must reach the very poor, whose greatest need is often livelihoods. And you are right that globalization--on the export platfrom model--has so far contributed little to such people. But I do believe that when companies target poor communities as customers, something different happens. Because to succeed, they need to build the capacity to consume in their customers; and to reach those customers, they may need to employ lots of local entrepreneurs, creating jobs; and given how price-sensitive low income customers are, the companies will have to have a compelling value proposition, and price performance ratio, or their customers simply won't buy. In Indian terms, it is the business model of Datamation, of n-Logue, of Drishtee, of Reliance--rather than the out-sourcing or export manufacturing models--than can have impact on poverty. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org On Monday, November 8, 2004, Chetan Sharma wrote: Historical evidence suggests that technological developments of all kinds can make improvements in the process, time management, convenience for the consumer. However, to the best of my knowledge, no technological innovation has demonstrated enhanced employability of the people. I do not want to start my postings on a negative note; but if we talk of the poor then we must talk about the poorest of the poor who probably do not have the education, nor tools nor technologies for eking out livelihods for themselves. ..snip... If we do not have jobs of any nature--if we do not even have stable livelihoods--then what has been the worth of Globalization and technological advancement? It was said that when economies transitioned from agrarian economies to manufacturing and then to services, that huge opportunities would get created for the poor across the globe. Regretably, nothing of this sort has happened, at least in India where it ought to have happened. So should we not hesitate to dig even deeper into the African and Latin American malaise? ..snip... This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?
Bettina Hammerich and Jim Forster both make useful points. Of course, markets don't attend well to everything. But the core of providing useful services at prices people will pay--and the market discipline of listening to customers that Forster underscores--is a strength of the business approach, one that might be usefully incorporated further into development strategies even in very poor communities. I'd like to share some analysis that pertains to this question. We have been analyzing income structure in developing countries, using a cut-off of $6000 per household/y as a working definition of the level below which the bottom of the pyramid or poorly-served market exists. This is not absolute poverty, but it is still very low income, a few $ per day per person. In China, there are 286 million households below this cutoff with a collective income of $691 billion/y--67% of the total income in China. For India, the figures are 171 million households, $378 billion, 75% of the total income. Across some 18 countries, the BOP market has more than $1.7 trillion in income--about the size of Germany's GDP. This is a substantial market. From a number of detailed case studies, we can document that low-income households are willing to spend 4-7% of their income on communications and access to information (because it often substitutes for more expensive travel). Thus the potential ICT market in developing countries exceeds $100 billion per year, most of it larely untapped. The size of the market means that substantial investment to tap it might be warranted. It's dispersed character (much of it in rural areas) means that wireless systems may have an advantage in aggregating that demand up to commercially viable levels. And it means that the market opportunity is for services (including the infrastructure and device cost) that cost $50-$300 per household per year. That in turn means a strong advantage for shared use models or other approaches that spread network and device costs over a large number of users or concentrate them in local entrepreneurs serving pre-paid or pay-per-use customers, as well as for services that can be bought in increments of a few cents up to a few dollars. Not surprisingly, we find that most of the successful models we have documented in case studies have one or more of these characteristics. A few examples, some well-known, others perhaps less so. GrameenPhone's rural village phones generate an average of $96/m each--they are very profitable. Smart Telecommunications in the Philippines has built a profitable cellular phone business with over 14 million customers on the strength of selling pre-paid text-messaging units to low income customers at units as small as $.03. They use a network of some 500,000 local entrepreneurs to sell those units; the business grew 40 % last year. ITC's e-choupal network in India reaches 4 million poor farmers via an Internet-connected PC network, more than recouping the cost of the system by savings on the price of the grain it buys over the network and other sources of value. Similar imbedded systems can be found in health care, education, and banking enterprises aimed at BOP markets. We do not believe that these examples, and others we have documented, though limited, are unique or due to special circumstances. The underlying business models are quite robust and, we believe, replicable; indeed, the GrameenPhone model is now being successfully adapted to Uganda, and many of the elements of the ITC model are being adapted by Pride Africa to Kenya. So we conclude that there is enormous untapped scope for market-driven ICT services that confer significant benefits on the customers and communities served. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
[GKD-DOTCOM] Blurring Corporate and NGO Lines
Vickram Crishna offers interesting insights--and I accept that the world is more complicated and that boundaries are often blurred in practice. How do we understand the recent marketing partnership between Care and Hindustan Lever in rural India--is it business (yes) or social development (yes)? Nonetheless, until recently, few socially-minded entrepreneurs were starting for-profit businesses aimed at serving the poor, and few large companies consciously adopted strategies aimed at low-income markets, and now it is distinctly more than a few--we are looking, potentially, at a paradigm shift here. We can measure this shift in two ways - the amount of investment aimed at serving low-income customers, or the number of households who receive goods and services that meet their needs and at prices and distribution points that they can afford/access. I like the household or customer-centered metric. So if we're serious about making a dent in poverty, ask yourself this question: how many NGOs can reliably provide service to a million customers or clients every day? How many developing country governments? Not many, in either case, although governments in some countries are learning to use ICT to provide scale in service delivery. Then ask how many large corporations can provide service to a million, or even 10 million, customers every day? The answer is pretty obvious. So if we're talking about improving the quality of life for 100's of millions of people, then we better be talking about how to use the capabilities of large companies--their management skills, logistic capability, access to finance and technology, etc., in addition to the needed efforts of NGOs and governments. To me, the most salient fact of the ITC e-choupal model (which is not perfect--not only caste, but also gender is a barrier in some areas) is that it already reaches and empowers close to 4 million farmers, and is growing rapidly. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?
Cornelio Hopmann raises some important points. I agree that IT may often be used by service providers rather than by the poor directly. But I don't agree that there is no connection between what companies can sell to the poor and the needs of poor households. In conjuction with Professor CK Prahalad and others, we have documented a number of win-win business models. I realize that such approaches are still controversial, and that examples of corporate practices that have not benefitted the poor still come readily to mind. But for example, ITC, an Indian company that has put Internet-connected computers in farmers' houses, situating these e-choupals so that each serves 600 or so farmers, and supplied daily market prices for crops, found it necessary to create trust and economic and social value in order for its business model to succeed. They are now serving 4 million farmers. The case study can be found on www.digitaldividend.org. Nor is this an isolated example. We and our colleagues have documented win-win examples in many sectors. And we have evidence that companies which simply try to take their products downmarket often fail. So I would suggest that there may be an important and overlooked connection between the market forces that drive globalization and their need for growth, when taken to the village level--and meeting the real needs of the poor. In many but not all of the examples we have studied, ICT plays a critical role--as a tool that enables transparent transactions, or helps drive costs down, or provides access to information, etc. Perhaps the connection between a business approach and the poor would be more clear if I describe the benefits to the poor that we think we see from pro-poor business strategies, and then the appropriate role of technology might be more evident. These include: 1) Breaking local monopolies of traditional goods and services, whether credit, or water, or agricultural inputs. Often local middlemen are the most exploitive of all, and a large company that rationalizes the supply chain can lower price and improve quality, providing competition to the local middlemen in ways that benefits poor people. Micro-finance is a classic example; or the e-choupals that ITC has deployed, offering lower price inputs and higher prices for the farmer's grain than the local (monopoly) auction markets. 2) Providing access to empowering technologies and/or information. In the example above, ITC provides internet access and market prices, empowering farmers. Internet kiosks, such as those provided by n-Logue, Drishtee, can often play a similar role. So can cell phones, such as those provided by Smart Communications in the Phillipines, which makes pre-paid text-messaging units available in very small units ($.03), within the range of virtually everyone--enabling people to find jobs, sell goods, even do remittance transactions; virtually all of the 14 million customers Smart serves are very low income, yet the company is growing rapidly and is profitable. 3) Creating jobs. HLL's Shakti distribution system for consumer products aims to create 500,000 self-employed entrepreneurs. Grameen Phone has close to 100,000 entrepreneurs providing village phone service. Vodacom in South Africa has more than 10,000 entrepreneurs who own and manage community phone shops. These are big, profitable businesses who are also creating jobs and wealth for local entrepreneurs--both win. In effect, these companies are extending commercial activities and market processes down to the village level--and in ways that are, we believe, beneficial to customers and local partners, as well as to the company. In fact, we think these mutual benefits are closely linked--that, in most cases, large companies will succeed commercially in selling to poor people if they also serve their real needs and create real local value and trust. If that's true, then it is not a matter of enlightened leadership, but as I suggested above, of extending the market processes that characterize global economic integration clear down to the village level--so that poor people can benefit from choice, market competition, and better price and quality, employment opportunities, etc., just as other (middle class) consumers do. It is this potential overlap between the needs of large companies for growth and what they need to do to succeed in low income communities, and the needs of the poor, that is truly a huge opportunity. And it suggests that a key step to making globalization work for the poor is to get large companies to stop ignoring the poor and instead take them seriously as a market. As for technology, we see good examples using Internet kiosks, cell phones, handhelds, software on servers that is accessible over any form of connectivity, wireless broadband--in our experience the business model is more critical in determining whether the technology is really useful in serving the poor than is the choice of technology per se. But that is not
Re: [GKD-DOTCOM] What's on the Horizon?
I agree strongly with Simon Woodside's answers--experimentation, more modern technology, and broadband. But I was also struck by what another contributor said, e.g. Find successful and sustainable activities. Replicate. Get constraints out of the way. Get funding on the right basis. Let the demand pull what is wanted. I think the aid community should continue experimentation, but also be willing to fund scale-ups of apparently successful models--yes, that would include those that have a business model--even to the point of making equity investments or funding additional training and social networking that leverage a private sector enterprise and its network. There are beginning to be some successful models, many of them driven by the private sector, and some not aimed primarily at connectivity, but at an agricultural solution or a microfinance solution or a health solution. Nonetheless, they will spread access perhaps more rapidly. See our case studies at www.digitaldividend.org. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages: http://www.GKDknowledge.org
Re: [GKD-DOTCOM] Improving Access Via Mobile Telephony
I think William Lester and Fola Odufuwa are pointing out something important--the potential of cellular networks to provide data connectivity inexpensively, if imperfectly. As converged devices proliferate and newer network technologies spread to developing countries, these problems will ease--and in the meantime, the installed user base is more than twice that of the Internet and growing more rapidly. Phones already have the potential to provide secure ID (combining voice and face recognition at the server level), and can serve as powerful transaction platforms (see the current micro-entrepreneur reseller activity with Smart Buddy in the Phillipines.) Whether WiFi-like or cellular solutions are most feasible may depend as much on the regulatory environment (what's legal) and on the openness to innovation in cellular providers. Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages: http://www.GKDknowledge.org
Re: [GKD-DOTCOM] Bringing Connectivity to Under-Served Communities
A resource that describes briefly many such efforts can be found on line at www.digitaldividend.org--our Clearinghouse, with over 900 ICT for development projects. Quite a few are basic connectivity efforts--both networks, like n-Logue, EID Parry's Corners, ITC echoupal, etc., as well as access points like telecenters (we list more than 100). These efforts vary widely--see our in-depth case studies of several of them also posted at that site, and our analysis of telecenters. In general, all face high connectivity costs, and some also face regulatory barriers or opposition from legacy telcoms; virtually all those in our database seek to foster development. Most of the telecenters do not have sustainable business models, and will probably eventually fail. Many of the emerging networks that seem sustainable target their efforts--eg to rural farmers, in the case of ITC echoupal. Most use phone-line connectivity or VSAT, but n-Logue is using wireless links. We believe that emerging wireless technologies will dominate efforts to provide low-cost connectivity in the coming years--both MESH networks using WiFi, and larger area networks using WiMax. In some areas, newer cellular networks may also compete for basic connectivity, primarily because they already have a successful business base, and we have documented a number of instances where cellular companies are providing singificant social value (Grameen Telecom, Vodacom Phone Shops). Allen L. Hammond Vice President for Innovation Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729- F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages: http://www.GKDknowledge.org
