Alleviating Poverty

A Business Week report looks at promising projects in the developing world which can be replicated globally:

The Bangladesh Rural Advancement Committee (BRAC) has educated and provided business loans to 4 million poor women who have long been disenfranchised in that predominantly Muslim society. In China, an ambitious effort to award long-term land tenure to 210 million families is giving the rural poor a chance to build wealth and diversify into cash crops. In Mexico, a microcredit bank is on its way to becoming a profitable institution while still serving the poor. In India, digital technologies are helping transform impoverished villages. And in Mozambique, an innovative program to immunize children against diseases could serve as a model for mobilizing aid to conquer a wide range of health problems.

An interesting point made by BW: “The biggest drops in global poverty will likely come in the nations that don’t need big infusions of aid because they already have the resources needed to propel growth. These include China, India, most of Latin America, the Middle East, and Eastern Europe. What these regions require is technical help, and more investment in their own people so the gains of economic growth spread more widely. That’s what East Asia did during its takeoff from the ’70s through the ’90s, when the region’s poverty rate plunged from 58% to 8%. These developing nations still need to better mobilize the domestic savings, export earnings, and sheer entrepreneurial energy they already possess.”

Via Emergic, we want to create technologies which can bring computing and communications to the mass markets, thus creating the infrastructure for various other programmes.

India’s Cellphone Market

Writes Business Week: “No longer are cell phones the exclusive privilege of India’s wealthiest. Today, taxi drivers, plumbers, and all manner of small tradesmen are buying phones. By 2006, India will have 44 million subscribers, predicts Gartner Group. That would make it the third-largest cellular market in Asia, after China and Japan. And with many industry experts expecting China’s market to hit saturation level, India is looking all the more attractive to the likes of Motorola, Nokia, and Ericsson , which can’t count on much excitement from sluggish markets in the West.”

The last sentence reiterates a point I am making in this week’s Tech Talks – that the next markets for technology are the emerging markets. In the developed markets of the West, much of tech has reached saturation, especially when it comes to attracting new consumers.

The BW article also has some interesting comparisons between the Indian and Chinese mobile telephony markets: “India has fewer than 8 million cellular subscribers, compared with China’s 190 million…Chinese carriers add 5 million subscribers monthly, compared with India’s 500,000. That means China continues to buy far more equipment: Its capital expenditures for cellular networks will be $14 billion this year, compared with just $1 billion for India, according to Pyramid Research.”

Geographical Information Systems

From Knowledge@Wharton:

GIS is a computer-based technology composed of hardware, software and data that is used to capture, display and analyze spatial data information. Used in more than 50 countries, GIS technology can create cost-effective and accurate solutions in an expanding range of applications. These applications include land use planning and tax assessment; management of natural resources and environmental analysis; transportation and logistics planning, and emergency and dispatch services. The private sector is increasingly adopting GIS as a way to improve performance and decision-making, at the same time as the business community is using public-sector-created geographic data.

Jack Dangermond, one of the foremost pioneers in the development of GIS technology, is founder and president of ESRI, a Redlands, Ca., company which delivers GIS-based solutions to governments and businesses throughout the globe…Dangermond spoke of the growth in applications for GIS while citing business and government examples. The functionality of GIS is just beginning to be harnessed, he noted, adding that its application is limited only by the imagination of those who use it. Dangermond unveiled a new software application developed by ESRI called Whole Earth Visualization that enables the user to view the planet, including land topography and natural features of continents, augmented by satellite images, and zoom in seamlessly to view a single home as well.

WiFi’s Promise

From McKinsey Quarterly (via News.com):

Wi-Fi–known among techies as 802.11–is an alternative means of Internet access: Simply hook up an inexpensive Wi-Fi base station (a chip plus a transceiver) to a high-speed Internet connection such as DSL, a cable modem, or a T1 line and place this base station within a couple of hundred feet of a house. All people in the vicinity who have a very inexpensive Wi-Fi device in their PCs or PDAs can then share low-cost, high-speed access to the Internet without having to pay individually for more expensive dedicated DSL or cable modem service.

Even better, with exciting new technologies such as mesh and ad hoc networks, improved Wi-Fi devices could create overlapping Wi-Fi networks in hotels, airports, office buildings and malls. Strings of linked Wi-Fi networks can stretch through apartment buildings, campuses and neighborhoods. Forget about digging up streets for fiber to every building or about erecting forests of towers. Wi-Fi can stretch the fabric of Internet connectivity, cheaply and painlessly, over any community to points where traffic is aggregated onto high-speed fiber backbone networks.

Wi-Fi exploits the spectrum used by gadgets such as cordless telephones and microwave ovens–airwaves that haven%u2019t been auctioned or allocated to an exclusive user. This is the proverbial free lunch of spectrum. At last, Internet access can be easy, cheap, always on, everywhere. And Wi-Fi access is fast: Indeed, with a fiber rather than a DSL or cable modem connection from the backbone network to the Wi-Fi base station, the transfer speed of Wi-Fi can be faster than the typical speeds of those technologies.

A fiber connection of this sort would make it easy to download, stream, and swap movies–or vast volumes of corporate data–not only to computers but also to a new generation of flat screens equipped with Wi-Fi chips. People will be able to make telephone calls by speaking into microphones in their lapels or on the edges of their computer screens.

TECH TALK: Technology’s Next Markets: The Gulf of Money

Think of where we are today as the end of the first phase of the technology boom. The past two decades have seen relentless technology spending and adoption but most of this has been in the developed markets of the world. This is the boom that has ended. The industry will continue to grow, but it will do so now as a mature industry with growth in the single-digits (perhaps, even countable on the fingers of one hand). Technology has overshot the needs of the consumers in these markets. It is like the automobile industry in the developed markets people continue to buy cars, but there are very few new customers. In other words, it is an upgrade or trade-up market.

Yet, at the same time, there is a whole new world waiting to be discovered. These are the users in the worlds emerging markets. 4 billion people and 20 million enterprises, spread across Asia, Eastern Europe, Africa and Latin America. They are the bottom of the pyramid. They too would like to get their hands on technology. They are the next frontier in technologys march. But the problem is that they are separated by the Gulf of Money.

Existing technology solutions are simply too expensive for most of them. Though these markets want solutions like the ones deployed in the developed markets, they can only pay a fraction for the same. The result: low penetration of computers and high levels of software piracy. Even the Internet, with all its concomitant benefits, has only made a limited difference because connectivity is still slow and intermittent in most emerging markets. Money is at the root of it all.

What these markets need are solutions that cost a small percentage of what they do in the developed markets. To make this happen, there are two possible approaches. The first approach is to create technologies from scratch which can meet the price points that consumers are prepared to way. The problem with this is that the R&D costs and the time that this development can take is counter-productive. Emerging markets cannot afford huge research costs for developing new technologies. Besides, they need the solutions now, not a few years into the future.

There is a second approach: to learn from and leverage what has already been created in the developed markets. The emerging markets dont need the latest and greatest of technologies, especially since many of these technologies are more than good enough for even the developed markets who needs the next 10 features in Windows XP or Office XP, or for that matter, the additional hundreds of megahertz added to a 2.8 Ghz CPU? The emerging markets can do with a generation or two older technologies which can be available at very low price-points.

In addition, they dont need an Ocean of Features. By focusing on a subset of what is needed (especially on the software side), it is possible to think of putting together solutions which are affordable for the masses in the emerging markets. One of the biggest advantages that enterprises have is that there is very little legacy of technology (or even electronic information). This eases the path for adoption of good enough new technologies which are smaller, cheaper, and simpler.

Building out these solutions will create technologys next markets and the next set of entrepreneurial opportunities.

Tomorrow: The Deviant Entrepreneur