Month: September 2012

Social innovation and the art of reinvention

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Big companies are on the move.

Within the next few weeks Microsoft will officially launch Windows 8. Their flagship operating system has undergone a complete redesign on a scale not seen since Windows 95. Myspace are going through a vigorous rebranding exercise ahead of a major relaunch. And Nokia are feeling the pain as they work through a huge shift in their approach to the smart phone market. Three different organisations. Three different challenges. One thing in common.

Windows 8 is Microsoft‘s response to the growing threat of the smartphone and tablet, two high-growth markets where they’re not yet major players.

Myspace are attempting a fight back for fourth time as their value and online membership continue to lose ground on the Facebook’s of this world.

And Nokia, like many device manufacturers, got totally caught out by the iPhone which did, in fact, change everything. As market leaders they had furthest to fall. The rest is history.

Three companies, three challenges, all responses to external market pressures. In a sense, you might argue that the ultimate destiny of these companies is no longer in their hands. Out of the three, Microsoft are best placed in that they’re responding at a time they’re still relatively dominant. It’s the opposite for Myspace and Nokia, who in reality are on the slide and attempting to fight back from much weaker positions. If either gets their new strategy wrong, it could be curtains.

Today, Apple are riding high and can do no wrong. But they’d be the first to admit that they’re in a precarious position – they, after all, have it all to lose. Despite the rhetoric, we’re yet to see a true iPhone killer, but there will be one. And Apple need to make sure it’s them who build it. Apple, in a sense, have to kill their own product if they’re to succeed in an increasingly competitive future.

This kind of “inward reinvention” is not so common in the ICT4D world. Solutions come and go, pilot projects come and go, some organisations even come and go. The vast majority of the changes we see are driven by one single external factor – technological innovation. Think of all the new projects and organisations that have come about as a result of the growth of smart phones in emerging markets. And think of all the new ones that will exist when tablet computers, or 4G, become ubiquitous.

Once they’re up-and-running, few ICT4D-focused organisations undergo radical changes in their approaches or technologies, instead focusing on incremental upgrades to policies and technologies. Some of those are voluntary, but many are forced by new entrants into the market, new technologies, or some kind of paradigm shift. It’s those that strike first – adapting their approaches and offerings before change is forced upon them – that will survive in an increasingly competitive world. And, yes – developing solutions to the world’s social and environmental ills is a competitive industry.

Although technology-focused non-profits don’t face the same problems as their commercial counterparts, this doesn’t mean they shouldn’t regularly rethink their strategy, their brand, their leadership or their technology solutions. If they’re to succeed in the longer term they need to be the ones in the driving seat, not the ones simply responding to external pressures or developments. ICT4D as a sector is still relatively new in the grand scheme of things, and as things hot up – as they will – increasing numbers of organisations will end up calling it a day. Fortune will favour the brave.

Many find themselves under pressure in a few key areas:

Increasing competition for funding. The number of technology-focused social enterprises is rising at a higher rate than available funding, putting a squeeze on donors. Social enterprises responding with hybrid models – allowing them to raise investment as well as donations – will stand a better chance in this brave new world, as will those who master the emerging crowd funding phenomenon.

The democratisation of development. As I wrote in a recent BBC Future article, the spread of the Internet and mobile phones means there are likely more people working on solving social and environmental problems in the world today than ever before in human history. There’s a lot of competition out there, and a lot is coming from garden sheds, bedrooms and kitchen tables.

The rise of local innovation hubs. For quite some time there’s been general agreement that the best people to solve developing world problems are people in the developing world. I’ve always maintained that the greater the distance between a problem and the problem solver, the less likely the chance of success. The rise of local innovation hubs around the world – Africa in particular – means that not only is that distance shrinking, it’s nurturing entirely new industries in developing countries.

An increasing focus on emerging markets from large companies. Non-profits have historically only had to compete with other non-profits, but that’s no longer the case. Designing (mobile) applications for the next billion, or the bottom of the pyramid, or the other 90% – whatever you choose to call it – is big business. IBM’s announcement earlier this month that their next research centre will be based in Nairobi – their first in Africa – is further proof. According to IBM, “We want to help train Africans to innovate in Africa. The best minds there should be working on big national problems and African problems”. Google, Microsoft, Nokia, Hewlett Packard and Samsung – among others – have set up shop there, too.

In a couple of months time I’ll be celebrating my tenth year in mobiles-for-development. I’ve been incredibly lucky to have been there from almost the beginning, and I’ve seen first-hand the growth of the discipline and the impact of the technology on communities across Africa. The next ten years will present a whole new set of challenges for our sector, and if many ICT4D-focused organisations are going to survive they’re going to need to work very hard – and be very brave – to stay one step ahead of the game.

Something Myspace, Nokia (and Blackberry, come to think of it) – with all their resources – failed to do.

Technology and the democratisation of development

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I was recently invited to contribute an article to BBC Future‘s A Matter of Life and Tech, a series which features a “range of voices from people helping to build Africa’s tech future”. In the article, I argue that technology has become a vital tool in the fight against poverty, allowing people to participate in development in ways never previously possible. The original article is not available in the UK due to licensing restrictions.

Twenty years ago, if you were information technology-literate and interested in international development, your options were limited.

That’s how things were for me when, in 1993, armed with ten years programming and networking experience I began turning my attention to the developing world.

My efforts didn’t get me far. The information technology revolution we see today had barely started at home, let alone in many of the developing nations. If you weren’t an English teacher, a doctor, a policy maker, an economist or a dam builder, careers in development seemed somewhat limited.

How things have changed. Driven largely by the spread of the world wide web and the burgeoning mobile phone sector, opportunities to develop solutions to many of the world’s social and environmental problems have reached almost every bedroom and garden shed in the land.

The irony today is that arguably the greatest developmental tool we have in our hands isn’t a product of the tens of billons of developmental aid spent over the years, but a by-product of private sector investment. Putting the debate around costs and coverage to one side, the development sector has a lot to thank the mobile industry for.

In 1993 the number of mobile subscribers in Africa numbered in the hundreds of thousands. By 1998 that had crept to four million. Today there are an estimated 735 million with penetration running at around the 70% mark. Not bad in less than 20 years.

Everyday innovation

The result of this growth is that many Africans now experience their first phone call on a mobile, and their first experience of the world wide web comes on the same small screen. And it’s been that way for a while. Mobile phones are to most Africans what our laptops, tablet computers and landlines are to us, combined.

They’re also their banks. Today, as they pay bills and transfer money to friends and family with the press of a few key strokes, tens of millions of Africans will be doing something  most of us in the west  can only dream of.

But this rise in mobile phone ownership, and the slower but still significant rise in access to the internet, doesn’t just represent a significant business opportunity. A few short years ago, non-profit organisations working on the ground suddenly found themselves with a new tool in their fight against poverty.

Mobile phone ownership among the communities many of them serve presents new opportunities to increase the reach and efficiency of their work. Simply being able to send messages to coordinate meetings, or to remind people of key messages, can save hours – even days – on the road.

Community healthcare workers can also stay in better touch with the hospital when they’re back in their villages. Farmers can access advice and market information directly from their fields. Citizens can report corruption, or engage in debate. Births can be registered. Illegal logging can be recorded and reported. It’s safe to say that mobile phones have touched every sector of development in one way or another. It has become so ubiquitous that, in just a few short years, many development workers can hardly imagine life without them.

The beauty of mobile technology is that, unlike larger development efforts, it doesn’t discriminate against the smaller, grassroots organisations. As we’ve found with the countless number of FrontlineSMS users over the years, if you give people the right tools and conditions to work in they’re capable of innovating as well as anyone. Some of the most exciting technology-based development work going in Africa today is African. Barriers to entry are as low as they’ve ever been.

This “democratisation of development” isn’t just taking place in cities, towns and villages across Africa. With the internet as the distribution mechanism, and the mobile phone as the target device, anyone anywhere can today build a tool and make it available to a global audience with the minimum of funding and the minimum of effort. This is exactly how FrontlineSMS came about almost seven years ago.

‘Extreme affordability’

How to go about developing the right tools is, of course, an ongoing debate but at least the phones are in the hands of the end users, and by-and-large the delivery mechanism is in place. The next stage of the communications revolution will come in the shape of smart phones, presenting yet more opportunity. What we see happening today is exciting, but we haven’t seen anything yet.

Prestigious universities and colleges around the world now devote entire courses to technology-for-development, many wrapped up with subjects such as design and entrepreneurship. Stanford University helps “design for extreme affordability”, while MIT initiatives aim to “educate students in science and technology that will best serve the world in the 21st century”.

There are likely more people working on solving social and environmental problems in the world today than ever before in human history.

Since starting out working with mobiles almost ten years ago, I’ve seen at first hand this shift in focus. Designing mobile applications for the next billion, or the bottom of the pyramid, or the other 90% – whatever you choose to call it – is now big business. You only have to look at cites like Nairobi, where companies like Google, IBM, Microsoft, Nokia, Hewlett Packard and Samsung have set up shop.

Their mission, in many cases, is to help to get the best African minds thinking about African problems. Clearly, if this trend continues then Africans are less likely to be left behind in designing solutions for their own continent than they were before. It would be hard for anyone to argue that this is not a positive step.

At the same time as this influx of big business, there are increasing numbers of homegrown initiatives. Innovation and technology labs have been springing up over the continent for at least the last three years. According to Erik Hersman, Founder of the iHub, there are now more than 50 tech hubs, labs, incubators and accelerators in Africa, covering more than 20 countries. Mobile phones will be at the centre of the majority of solutions their tenants develop.

I’ve always maintained that one of the best things about the use of mobile phones as a development tool is that it was never planned. The development sector has shown that, historically, it’s not been overly successful at delivering on those.

Instead, anyone anywhere with an internet connection and a software development kit can help tackle some of the bigger problems of our time. What we are witnessing is the democratisation of development.

Today, you don’t need to be a doctor, teacher, economist or dam builder to make a positive impact on your – or any other – country’s development. And that can only be a good thing.

Indigenous and ingenious: The roots of mobile banking in Africa

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In Ghana, it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today, you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations. Although, in our excitement to implement new technologies and solutions, we sometimes fail to recognise them. Innovations such as mobile banking – great as they may be – are hailed as revolutionary without much consideration for what may have come before, or who the original innovators may have been.

The image of traditional African societies as predominantly “simple hunter-gatherer” is more myth than truth. The belief that Africa had little by way of economic institutions and processes before the arrival of the Europeans is another. As Niti Bhan pointed out during a fascinating “Life is Hard” presentation at the Better World By Design Conference a couple of years ago, many rural communities today are familiar with concepts such as loans, barter, swap, trade, credit and interest rates, yet the majority remain excluded from the mainstream modern banking system and have never heard of things like ATMs, banks, mortgages or credit cards. It’s not that people don’t understand banking concepts – it’s just that, for them, things go by a different name.

In Kenya, as few as one in 10 people may have a bank account, but that doesn’t stop many of them from using a number of trading instruments or running successful businesses. Technology can certainly help strengthen traditional trading practices, and we know this because when technology is made available, the users are often the first to figure out how to best make it work for them. Mobile technology is today showcasing African grassroots innovation at its finest.

Africans are not the passive recipients of technology many people seem to think they are. Indeed, some of the more exciting and innovative mobile services around today have emerged as a result of ingenious indigenous use of the technology. Services such as “Call Me” – where customers on many African networks can send a fixed number of free messages per day when they’re out of credit requesting someone to call them – came about as a result of people “flashing” or “beeping” their friends (in other words, calling their phones and hanging up to indicate that they wanted to talk). A lot of interesting research on this phenomenon has been carried out by Jonathan Donner, an anthropologist working at Microsoft Research. Today’s more formal and official “Call Me”-style services have come about as a direct result of this entrepreneurial behavior.

The concept of mobile payments did, too.

Researchers have for some time been observing the behavior of users in developing countries, seeking to identify the next big thing. As Jo Best recently put it, many of these ideas spring from “the fertile mind of some user who wanted to do something with a mobile that their operator hadn’t provided yet.”

Tapping into these fertile minds is a fascinating business, something that Jan Chipchase (formerly of Nokia, now with Frog Design) is famous for. Some of Jan’s earlier observations identified emerging mobile payment-style services long before the mobile operators, or even the ICT4D community, had even thought of them. The mantra “build it and they will come” seems alive and well in the African mobile context.

Whilst many traditional development approaches generally introduce alien ideologies and concepts into developing countries – sometimes for the better, often for the worst – today’s emerging mobile services are very much based on a model of indigenous innovation. Take M-Pesa, the much-touted Kenyan mobile money transfer service developed by Vodafone and the U.K. Department for International Development, as an example. Increasing numbers of African users were already carrying out their own form of money transfers through their mobiles long before any official service came into being. SENTE, from Uganda, is one of the better known indigenous systems (M-Sente is now the name of Uganda Telecom’s official mobile money service).

What M-Pesa has done is formalise and scale this kind of activity and bring it fully to market. Its impact has been spectacular, with around 17 million subscribers now using the service, and 50% of Kenya’s entire GDP expected to pass through the platform over the next twelve months. But what services such as these, rolling out in increasing numbers of African countries, have done to earlier “indigenous” systems – mobile-based, such as SENTE, or more traditional microfinance solutions, such as susu, tontines or chilembe – is not so clear, although the latter were most likely well on the decline long before mobile phones came on the scene.

Many indigenous economic systems still exist today where they haven’t been wholly replaced by modern financial structures or technologies. In “Africa Unchained,” George Ayittey states his belief that future African economic prosperity lies in traditional systems and practices:

“Women traders can still be found at most markets in Africa. They still trade their wares for profit. And in virtually all traditional markets today, bargaining over prices is still the norm — an ancient tradition. Traditional African chiefs do not fix prices. And it is this indigenous economic system, characterised by free village markets, free trade and free enterprise that Africa must turn to for its economic rejuvenation.”

It’s likely that many people would argue strongly against Ayittey on this, believing that progress across the African continent is based on embracing change and the new world economic and technological order. It’s an active and fascinating debate. Whichever side of the fence you’re on, all of this does raise one important question.

Should technology solutions aimed at the developing world, and mobile solutions in particular, seek to build on and enhance indigenous, traditional activities – economic or otherwise – or, where necessary, is it okay just to replace and lose them?

That isn’t the only question, either. How does the introduction of emerging mobile services shift the balance of power in traditional African societies? Will women, for example, remain as economically active participants in the new mobile-powered world, or will men take more control? Do mobiles narrow or widen gender inequalities? Is technology exacerbating the gap between the haves and have-nots, or is it truly proving as transformational as we all believe or hope?

Very few businesses would willingly throw out all of their processes and procedures in order to implement a new IT system, however good it may be. The more astute ICT solutions providers know this and, wherever possible, aim to allow seamless integration of any new technology into their clients’ workplaces and working practices. Doesn’t it make sense that we should take the same approach with indigenous societies and seek to build on existing procedures and traditions, and not just assume that a new, modern solution is better and replace everything that went before?

It’s a fine balancing act and one people are still trying to figure out. The irony could be that while growing numbers of social scientists are turning to technology to help preserve and document disappearing cultures, the same technologies may be contributing to their ultimate decline.