BOP markets used to be regarded, if they were regarded by large corporations at all, mostly as a place to unload excess or obsolete product. That has changed, as I will attempt to illustrate in this and following posts. What I am suggesting is that low-income, predominantly rural communities located at the edge of the telecom network, the edge of the electrical grid, and the edge of existing commercial markets, are becoming a key driver of technology innovation, in large part because their sheer scale warrants such attention.

BOP markets are beginning to be targeted with technologies designed specifically for the needs of low-income communities, and R&D and commercialization investment in such technologies is increasing. These technologies range from the prosaic but important, like low tech pedal-driven water pumps, to advanced hi tech inventions aimed at improving health and cultivating economic growth. They include near-term deployments, such as new wireless technologies and advanced low cost ATMs, as well as longer-term visions based on emergent composite, IT, nanotech, and biotech innovations that are beginning to attract venture capital investments.

Two articles about low-cost cell phones were posted to the Newsroom this week. The first talks about plans by the GSM Association's Emerging Market Handset Program to purchase 6 million of Motorola's new phones, expected to wholesale below $30. The article mentions several other chip and handset makers that are aggressively developing lower cost platforms, including Philips, whose goal is to get cell phones below $15 "with basic feature like voice, SMS and polyphonic ringtones."

The second cautions that the program, which relies on telecom operators for distribution, has not been as successful in China as had been hoped:

Several new technology innovations developed specifically for BOP markets are already making a noticeable impact. KickStart (formerly ApproTech) has been developing and promoting such technologies since 1991, with the explicit goal of helping entrepreneurs in East Africa establish and run profitable small scale enterprises. To date, the organization's efforts have resulted in the creation of more than 35,000 businesses which currently generate a total of $37 million in new profits and wages annually.

The innovations KickStart has commercialized are diverse. Its suitably-named MoneyMaker irrigation pumps, for instance, allow small-scale subsistence farmers to turn their land into vibrant commercial enterprises. The inexpensive ($52-90) treadle operated pumps irrigate plots up to 2 acres in size from water pumped from hand-dug wells, rivers, streams, lakes or ponds. Mafuta Mali, KickStart's manually operated oilseed press, has resulted in the creation or expansion of more than 700 cooking oil businesses. The organization's building technologies allow entrepreneurs to cheaply produce high quality bricks, roofing tiles, latrine covers and carpentry tools. Other innovations include technologies for hay bailing, sanitation, and transportation.

The recent Technology at the Edge posting by Al Hammond reminded me what amazing ideas can come about while re-imaging products and services for the poor. Hearing his descriptions of innovative technologies in Africa is thrilling. It reminded me of another article I had just read which discusses the recently re-announced sub $100 laptop by MIT.

See: Switched On: Cheapest laptop boasts rich innovation over at Engadget.Com. There the author outlines some of the innovative tech in this new PC and notes how useful it might be for the general market:

Earlier this year, the Shell Foundation released a report - Enterprise Solutions to Poverty - arguing that enterprise and business thinking must be placed at the heart of the war on poverty if we are really going to "Make Poverty History". Backing its words up, the Foundation has established a $100 million fund to enable Small and Medium-Size enterprises (SMEs) to scale throughout Africa.

In its newly released follow-up report, Aid Reform and the Role of Enterprise, the Shell Foundation shows how the aid industry can finally put poor country entrepreneurs at the centre of the fight against poverty. The report's author and Shell Foundation director, Kurt Hoffman (who was interviewed by Nextbillion.net in July), explains:

Three of the eight Millennium Development Goals focus specifically on improving the health of the world's poor, but improving healthcare is critical if any of the goals are to be achieved. Much of the medical equipment produced for rich countries is too expensive for use in rural developing areas, despite the need for improved care. Tackling this contradiction are several initiatives that are reinventing medical devices and procedures with the needs and resources of poor countries in mind.

Disease Detection

Recognizing that conventional laboratory diagnosis of diseases can be prohibitively expensive in developing countries, San Francisco-based Sustainable Sciences Institute (SSI) is helping public health workers in poor areas take advantage of the latest advances in molecular and biological technology. The group has demonstrated how - with a basic knowledge of the processes - DNA, blood and urine analysis can be done without expensive equipment for one-hundredth the cost of traditional methods.

NextBillion.net is pleased to announce the creation of a new Resources section of the site. Content is organized into five categories:

* Featured Content: Research and interviews produced exclusively by the Development Through Enterprise team.

* Case Studies: More than 3 dozen case studies of BOP-oriented enterprises organized by the following sectors: Agriculture, E-Commerce, Education, E-Governance, Energy, Financial Services, Health, Housing, IT & Telecommunications, Retailing, and Strategy.

* Publications: Books, Reports, and Videos that explore the relationship between development and enterprise.

* Conference Resources: Agendas, speaker bios, session summaries, presentations, and videos of keynote speakers for WRI-organized BOP conferences.

* Links: To several Academic Institutions, Blogs, Initiatives, Consulting Firms and other Relevent Sites that focus on the base of the pyramid.

The dream of a low-cost computer for the masses has been around for a long time, gaining increased momentum earlier this decade as awareness grew about the opportunities associated with bridging the global digital divide, as well as the consequences of failing to do so. Initial entrants in this market included Wipro's Janata PC, the Simputer, the iStation, and Brazil’s Popular PC. Despite the promise and hype surrounding these devices, none managed to reach commercial viability or the level of success that was initially hoped for.

In spite of such early setbacks, the demand for low-cost computers continues to grow. Even a small drop in price creates millions of new customers. As a result, manufacturers are aggressively developing new devices aimed at this market. Nowhere is this more apparent than in India, where several companies are trying to break the $200 barrier.

Google has announced the creation of a foundation with the explicit goal of “giving on world poverty and the environment, an unusual move in the world of corporate philanthropy, which usually picks safer causes such as education.”

One of the most interesting aspects of the fund is that it will support for-profit enterprises.

``They're taking the approach of, `Let’s spend a little bit of money to figure out what would be the best way to spend a lot more money,' in the hopes of creating a philanthropic organization that could ``eclipse Google itself in terms of overall world impact.''

Given the right business model, high-tech devices can also find appropriate uses in developing countries.

Wireless Access

When a group of emerging market cellular operators put out a tender for low-cost basic GSM phones, nobody paid much attention until Motorola won the tender by promising to produce the phones at prices as low as $35 each. The company started shipping the first 6 million phones this past summer. Not long after, Sony-Ericsson also announced low cost phones for low-income, BOP markets. Most recently, Germany-based Infineon Technologies announced their intentions to begin selling handsets for under $20 beginning in early 2006. Since the most rapidly growing cellular markets are in Africa, Asia, and Latin America – with more than 500 million customers in China, India, and Brazil alone – this should not be surprising. Nonetheless, it marks the emergence of meaningful consumer market power in telecommunications equipment for the developing world.

With little legacy infrastructure, inefficient markets, and a vast amount of unmet needs, the BOP represents an enormous opportunity for research and development firms looking to translate new technologies into financial returns.

Some of the best prospects today are in the energy industry, where investments in alternative or clean energy technologies has doubled in recent years. For example, venture capital firms have increased their investments in solar cell start-ups based on nanotechnology, anticipating cost breakthroughs that would enable them to tap the huge, unmet demand for energy in emerging markets, especially in rural areas. The idea is to incorporate solar cells into thin flexible sheets of plastics that could serve as roofing or building materials. The companies developing the technology estimate it will be able to provide energy for as little as $1 per watt - as low as the electricity currently provided by utilities.

The World Business Council for Sustainable Development is hosting a new online discussion on 'The business of development.' The forum follows in the footsteps of this spring’s online discussion ‘Business & Development - What is the right approach?’ and will give stakeholders a platform to voice their opinions and share their experiences on the role of business in creating wealth and opportunities in developing countries. The various contributions and questions raised during the previous discussion were taken into account in the production of the latest WBCSD report, titled Business for Development - Business solutions in support of the MDGs.

For more details, please visit the WBCSD's Web site.

Regular NextBillion readers won't be shocked by a recent AP news article about cell phone use in Africa. It's even been noted as a "worldchanging" leapfrog technology - and rightly so. However, this article sticks out from the rest when it analyzes why cell phones came from nowhere to become a huge business and a big BOP friendly technology:

"The mistake, providers say, was to make plans based on GDP figures, which ignore the strong informal economy, and to assume that because land line use was low, little demand for phones existed. The real reason for weak demand was that land lines were expensive, subscribers had to wait for months to get hooked up, and the lines often went down because of poor maintenance, floods and theft of copper cables. Cell phones slice through all those obstacles and provide African solutions to African problems."

"With the private sector booming, industry and services have overtaken farming to account for 54 percent of rural income."

This amazing factoid comes from an article that Rob Katz just posted from the International Herald Tribune: Poor rural India? It's a richer place by Anand Giridharadas.

I find it one of the most compelling items I've run across recently. Since the end of WW2, and the dawn of modern thought on economic development, the holy grail of development has been how to foster wealth creation in rural areas. While nobody might put India forward as the ideal model to emulate, it's clear that (as the article goes on immediately to suggest) that current Indian policies are helping to turn the corner. A welcome glimmer of hope.

Al Hammond recently finished posting his series on ‘Technology Innovations at the Edge.’ The full series is now available as a downloadable PDF file here.

One of the premises of the report is that technologies created for developed countries may actually be more useful and financially successful in developing countries. In fact, a recent informal survey of patents granted to Cornell University revealed that 50% of them had potential BOP applications.

I came across a couple of interesting articles today that illustrates the point nicely. The first piece discussed the increasingly well-known wireless broadband technology WiMax. Sometimes referred to as "Wi-Fi on steroids”, it can provide high speed connectivity at a distance of up to 30 miles or more. More than 400 companies are backing the technology, including Intel which expects to begin selling WiMax-enabled processors within 2 years. Although there is some debate over how quickly the standard can be commercialized, demand from Asia and Africa might push up the timetable: