Emerging Demand

Motorola wins contract to provide ‘ultra-low-cost’ phones in emerging markets where millions of would-be wireless customers await

I found this Red Herring article really interesting. It is clearly a BOP strategy for them to be selling sub-$40 handsets in emerging markets. This finally puts connectivity in the reach of many people.

Many regions in the world lack the water and energy services they need to function and progress. The Second International Forum on Partnerships for Sustainable Development, held in Marrakech on 21-23 March discussed partnerships as a vehicle to deliver these services. The WBCSD was invited by the UN and Moroccan government organisers as the leading business voice of the event. Supported by several member companies, ideas were exchanged and examples given to show how business can contribute constructively to partnerships for progress.
Cécile Churet's report found here. 

That’s often the initial response when people hear of the $30 cell phone that Motorola is building for emerging markets. Or the $185 internet access device (a PC, except that you can’t load new software on it) that AMD is shipping to India and the Caribbean. Or a nifty little home water purifier that can supply a family’s needs for $10 a year (to be launched in India this summer).

But when the product or service is designed to meet the real needs and circumstances of bottom-of-the-pyramid (BOP) communities, low price can also mean superior quality. An affordable basic GSM cell phone (with text-messaging) is what most individual BOP customers need. The AMD device not only boots quickly, but is intended to have much lower support costs than a normal PC—a critical feature in communities where technical talent is scare. And the water purifier? It’s based around a new, nanotechnology filter that has passed US EPA and California quality standards and will remove bacteria and viruses that pass right through the Brita filter in your refrigerator—its better and it needs to be, for the billion + people without safe drinking water. More about these examples in my next post, but I think we’re seeing the beginnings of a wave of sophisticated technology built into products designed explicitly for low-income markets, and that will provide superior quality at very low prices.

Underwriters Laboratories Inc. (UL), Chicago, and the Institute of Design at Illinois Institute of Technology announced that UL will provide a $25,000 grant to support the institute’s efforts to design cost-effective ways to transport and distribute drinking water in the slums of Mumbai, India. The initiative is part of the institute’s Design for the Base of the Pyramid project, which aims to create new products and services that improve daily life and generate sustainable economic growth in the developing world’s impoverished cities.

Europe's Hypermarkets Under Fire

This economist.com story (Retailing in Poland) makes an interesting point - how do consumers react when large multinational companies enter low-income markets? In this case, so-called hypermarkets (similar to American Wal-Mart stores) have been gaining market share over local small businesses, and not everyone in Poland is pleased. Making things worse are allegations that some hypermarkets have been exploiting their workers, not paying them overtime and subjecting them to poor labor conditions.

SciDev.net has created a new dossier on R&D:

This dossier, compiled under the guidance of an international panel of advisors, brings together a range of articles that cover topics of direct relevance to understanding R&D policy in developing countries. It contains policy briefs, opinion articles, news items and features, as well as links to key documents and relevant organisations, that provide a brief but essential guide to this issue.

Inspired by this Time Europe article.

Many commentators have noted how movie stars turned heads at the World Economic Forum meeting at Davos, in their efforts to drum up support for dealing with poverty. They also shifted attention away from—and may have undercut—perhaps the most promising attempt to reduce poverty and improve quality of life, namely efforts by large and small companies to find sustainable business solutions to the conditions that plague the poor. While Sharon Stone was galvanizing a packed house with her pledge to give $10,000 for bednets in Africa—she raised more than $1 million on the spot—a much smaller audience heard the Chairman of Unilever, the CEO of the 2nd largest bank in India, the CEO of Visa, and Microsoft’s Chief Technology Officer talk about what their companies are already doing—business activities on a far larger scale—that will improve opportunities for or bring benefits to tens of millions of low income
households.

The conference left a powerful impression—of huge companies and NGOs more or less on the same page, of governments and aid agencies endorsing business approaches to poverty, of entrepreneurs and visionary CEOs from enterprises in developing countries being recognized as pioneers in new business strategies. But most of all the impression was of people and their energy and excitement over an emerging new approach to development. You can revisit some of that through the videos and speaker presentations posted under Conference Resources. We have tried to sum up the wealth of ideas and discussions in the posted document that covers both the plenary sessions and the more hands-on workshop tracks.

One of the strongest themes to come out of the 'Eradicating Poverty Through Profit' conference was the need for companies to develop a deeper understanding of their target market's needs before developing products and services that intend to fulfill them. 

This report addresses some of the challenges of assessing the needs of people at the BOP.  Although it refers specifically to defining community needs for the SARI telecenter project in Southern India, the lessons learned by the field researchers are applicable to all businesses looking to better understand their target market through surveys and outreach.  Challenges cited include:  local villagers having little ability or basis on which to judge the costs and benefits of unfamiliar technologies, the researchers themselves contaminating the results with their own biases, and the delicate balance between patient research and the implementation of a business model. 

I  wanted to draw people's attention to one of the more excting areas of this new site - the NewsRoom. When we were designing the site - we searched for appropriate RSS feeds that could be featured on the sidebars.  What we found was that there is no single good source of news on this subject - so we created our own.  Also very cool is the News Archive where we have articles that go back to January 05.  The variety of sources and range of stories - all with a development through enterprise theme - is really incredible.  Have a look around.

I'm currently in Kathmandu researching an innovative e-commerce company called Thamel.com.  The business allows the Nepalese diaspora to purchase gifts online that are produced and delivered locally to their relatives back home.  By doing so, all the money spent is kept in the local economy, thereby creating jobs.  The company is now about to launch a new service in partnership with a local bank, which would allow family members living abroad to secure housing and car loans, as well as a variety of insurance plans, for their relatives back home. 

Last night, I attended a panel session co-organized by the UN Foundation and Vodafone, the huge multinational telco based in the UK but active worldwide. The session highlighted a report recently released by Vodafone entitled, Africa: The Impact of Mobile Phones. At the session, the report's authors discussed the impact of mobile telephony (a huge business) on development.

Corporate Watch recently released a provocative report on the upcoming G8 summit to be held in Scotland this July. The G8 has had some important things to say about development and the role of private enterprise, especially in Africa under the UK's presidency. The report, Bringing the G8 Home, puts some important issues on the table such as ecological health, social justice, and transparency -

I first read about these wind-powered, off-grid cell phone chargers on WorldChanging, which cites Gizmodo as a reference. The product, designed by students at the Indian Institute of Technology, is a small (fits in your pocket) wind-powered turbine that can quickly and easily recharge a cell phone - and it costs only 200 rupees (5 dollars). It strikes me as great for off-grid, rural areas that may have intermittent or non-existent electricity.

As its summer session gets going, the water temperature is already rising in the Capitol. The US Congress is currently debating legislation that would prioritize clean water projects within America's international aid budget and push the private sector to get involved, too. The bill's co-sponsors say that the private sector can quickly and effectively provide clean water using innovative technologies. Opponents contend that privatized water systems in developing countries tend to exclude the poor in order to break even, and have introduced competing legislation that keeps water provision in the public sphere. It will be interesting to keep an eye on these bills as they move through Congress. Will US companies currently developing new clean water technology shift research and development elsewhere if opponents win? Most importantly, how will underserved communities be affected by shifting priorities in the US international aid budget? It may be a long, dry summer before we find out. For more, check out this segment from NPR's "Living on Earth" radio show here.