NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Last week, I attended “UN Meets Silicon Valley,” an event convened by the UN Global Alliance for ICT and Development.? Craig Barrett, former CEO and now Chairman of Intel (full disclosure: WRI and Intel are partners), also chairs the UNGAID.? Going in, I was a bit skeptical, since the UN and the corporate world are often so different.? My main question was whether the event would run like a corporate meeting, or be dragged down in bureaucratic posturing.

Barrett’s opening remarks were refreshing.? He spoke without notes, clearly excited about the potential of Silicon Valley to push the ICT4D agenda forward.? The UNGAID hopes to catalyze economic growth, and for Barrett, it all comes down to a simple question: “Where are the next billion users coming from?”? His answer: emerging markets.? No surprise there; Intel has been using the phrase “next billion users” for some time now in their communications.? But for the chairman to say that in front of a room full of corporate competitors and UN reps shows his committment to the business side of ICT for development and the BOP theory in general.Hamadoun Tour?, Secretary General of the International, had the unenviable challenge of following Barrett.? Between the requisite UN-ese of his slideshow, Tour? managed to make a few off-the-cuff remarks, including a surprising “challenge” to Silicon Valley on the UN’s behalf.? No offense, but the UN tends to back away from challenges, so I saw this as a good step – they want to play ball, but won’t let the businesses get decent PR and intelligence from the process unless they contribute.

There were some more plenary speakers, but nothing noteworthy.? The panel sessions were overly dry at points, but had a few diamonds in the rough.? Among them were Jim Fruchterman, who spoke on the “Silicon Valley’s Innovators” panel.? Fruchterman is best known as the founder of Benetech, and a 2006 recipient of the MacArthur genius grant.? He argued that there is an inherent tension between the market potential necessary to interest business (he suggested $100 million as a minimum) and that companies could do a lot of good by licensing some of their technology to develop this space.? As the licensed technology grows into viable businesses, these startups could be acquired by incumbents or brought on as partners – a low risk strategy for incubating new businesses.

The best panel was on venture capital and development.? Stuart Davidson of the Acumen Fund and Khaled Ismail, an advisor to the Egyptian government charged with tech business incubation, both added a lot to the discussion.? For his part, Ismail suggested that venture capital is largely absent from Egypt, but that his ministry was able to bring some to the table by carefully incubating tech startups.? His approach differs from the standard incubation model – he brought technical assistance, angel investors, and on-site incubation to the table all at once.? At this point, his “ecosystem” approach has generated a successful incubator in Cairo, a research and development center, and two venture capital funds.

Davidson, meanwhile, added insights from the Acumen Fund.? Specifically, he faced the question of exit head-on, a tough task for any VC, but especially for one whose goal is to create social outcomes.? He suggested that convertible debt is a good first step, but that the real market for BOP venture capital would take hold as partner funds become more established.? For Acumen, these are local venture capitalists who are better able to take an investment through an IPO or even help the founder buy out Acumen’s investment.

This discussion continued toward the end of the day, when Kevin Jones of Good Capital moderated a group discussion on venture capital in one of the side rooms.? At first, only 10 or 15 people showed up, but by the end of the session, the room had nearly 40.? We worked through questions of mentoring, rate of return, dealflow, and measuring social impact.? Kevin later observed to me that the group didn’t want to be moderated, but this wasn’t a failure on his part – it was a direct result of the energy in the room.? Clearly, even at a UN and NGO heavy meeting, there’s a lot of excitement around the use of venture capital in development.

We’ll see where UNGAID goes.? As a first step, I’ll suggest that they need to spend some serious time re-working their web site – some info on there is wrong, there are broken links, and it reads like a UN manifesto (note: you’re not going to interest the private sector with a UN manifesto).? But based on the folks who attended last week’s meeting, as well as Craig Barrett’s infectious optimism, I think this could be a partnership that really works.

For a mainstream media take on the day’s proceedings, check out Richard Waters’ article in the Financial Times, UN Warning to Silicon Valley Over Digital Rift.