Digital Globalization

This article was originally written for Huffington Post.

Still overcoming their sea legs, the founders of 15 social enterprises took to the stage at the State Department to pitch their technology-driven solutions. After travelling to 13 countries with the shipboard program Unreasonable@Sea, they had finally arrived at their last destination and were standing in front of a crowded amphitheater of government leaders, business executives and social innovators.

Their lightning talks, with slides rotating non-stop every 20 seconds, showed their impressive entrepreneurial efforts: capturing carbon pollution from factories in India and processing it into materials used to make Boeing airplanes; expanding a fleet of sailing drones that were used to clean oil spills in the gulf of Mexico to other needy marine environments; spreading teacher training software being utilized in more than 3,000 schools in India to better achieve educational outcomes in other parts of the world; among other bold efforts.

During the event, the State Department’s Director for Global Partnerships, Thomas Debass, announced, “we believe throughout the State Department that these models are game changing.”

In many ways, these hybrid companies are changing business as usual by not only balancing social impact and financial returns but also by blurring borders by prioritizing needs above country’s boundaries. “Communities approach us to develop our products,” Scott Frank, founder and CEO of One Earth Designs, explained to me after his presentation. “We collaborate in the design and ideation, and we work together to test, iterate, and refine in-field to ensure the product meets both the needs and wants of users.”

Working in tangent with Himalayan populations in China, Frank’s company developed a solar-powered cooking stove that can abate approximately four tons of carbon dioxide a year and reduces as much as 70 percent of the fuel they use. The product stemmed from the nomadic populations concern with smoke being emitted from their wood-fired and coal stoves (globally, it is estimated that these pollutants contribute to four million premature deaths a year). One Earth Designs is the first company based in China to be certified as a B-Corp, joining the likes of Patagonia and 732 companies that meet the nonprofit’s legal and performance requirements of “benefiting society as well as their shareholders.”

However, as these social entrepreneurs break the molds of traditional business, they are being confronted with uncertainty that comes with this unchartered domain. “Across many geographies we’ve come to see a variation among definitions of social entrepreneur,” Frank explained to me. “In some cases, people see this term in a positive light. In others, it elicits confusion or skepticism.”

And this confusion is causing some traditional investors to shy away from social enterprises due to an uncertainty, in the end, of how they prioritize both monetary and social returns. However, this sector is also evolving, and increasingly a new type of investor – referred to as impact investing – is building metrics and filling this gap. Last year, an estimated $4 billion worth of impact investments were made, and this amount is expected to reach $1 trillion in the next decade, according to a report by J.P. Morgan.

Although crucial, funding is just one piece of the puzzle. This new breed of entrepreneurs also requires support systems to evolve with them. Unreasonable@Sea is one of the more elaborate programs to rise to the challenge. The business accelerator is focused on building entrepreneurs’ networks by sailing around the world and bringing together a collage of different mentors on the ship including Archbishop Desmond Tutu (Nobel Peace Laureate), Matt Mullenweg (founder of WordPress), and Hunter Lovins (Time Magazine Hero of the Planet), among others.

The bold and borderless endeavors of these social entrepreneurs are also quickly inspiring a larger global movement. And it is these increasingly plugged-in and globally engaged supporters that are proving to be a crucial platform and legitimizing network for these social entrepreneurs. In the end, policymakers, funders, and social innovators are smart to not overlook the momentum behind this increasingly global and connected movement. And although some will dismiss it as naive and youthful, the creative bravery of its pioneers and resoluteness of its supporters will make you reconsider.

This article was originally written for CNN International.

What happens when you mix 11 budding startups with Google executives, Stanford professors, a Nobel Peace Laureate and 600 college students and put them on a ship to circumnavigate the world?

An experiment launched this month called Unreasonable at Sea hopes that this eclectic group will unleash global entrepreneurship.

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Last week, as part of their Mobile Economy Project, the Brookings Institution invited me to participate in panel discussing the universal impact of mobile technology. The event highlighted how mobile technology is affecting economies, politics, education, and healthcare, and only just getting started. In my remarks, I argued three main points: Continue reading

After months of research, data collection and interviews with almost 30 of India’s leading financial institutions, colleagues and I released a report this month titled “From Social Banking to Financial Inclusion: Understanding the Potential for Financial Services Innovation In India“.

I was excited to see that The Wall Street Journal wrote up a nice summary of some of the takeaways from the research here: “Why So Few Indians Have Bank Accounts” along with the social enterprise blog, Next Billion: “Innovative Banking Strategies for the BOP in India“.

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I’ve been excited by the recent recognition and support shown for a project a colleague and I have been working on in our free time called MOOLAH, which is a mobile application that seeks to empower low-income individuals with personalized financial information and services (more details in the press release below).  Last week, the App design won an award in the US Treasury’s MyMoneyAppUp Challenge and also got some airtime in the White House’s “West Wing Week” Video.

(The press release below was originally posted on The Ladder)

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I recently participated in a panel hosted by The Atlantic and National Journal to discuss how technology is transforming the economy and the way individuals interact with companies and institutions. Clive Crook from The Atlantic who was moderating the panel (and did a great job) put me on the spot right at the start by asking how I saw technology disrupting the norm in my work and research. See the video of my panel below: Continue reading

This article was originally written by Eric Tyler for Next Billion.

The excitement of mobile money has been dampened by an inability of deployments to take hold outside a handful of successful markets. Driving the enthusiasm forward is the opportunity to bridge the gap between one billion people in emerging markets who have mobile phones but no bank account. On Tuesday, McKinsey & Company released a report “Mobile money: Getting to scale in emerging markets” seeking to cut through this excitement and identify critical success factors for implementation.

Through interviews and workshops with 40 mobile money providers, the report stresses three important elements as critical for a successful mobile money enterprise post launch:

(1) Pay close attention to managing the agent network;

(2) Create a compelling product offering;

(3) Maintain a corporate commitment.

The report also rightfully acknowledges other pre-launch factors like regulation, market structure, technology execution, and partnerships, as being central to a mobile money deployments’ success.

There is also a clear need to answer the important questions before launching a product. After comparing developed mobile money environments with the developing environments of Brazil, Nigeria, Sri Lanka, and Thailand, the IFC has worked to develop a framework to assess a country’s potential for a successful mobile money deployment, including demand and user perception surveys and current regulatory and financial services assessments.

As part of the SPINNAKER project, we have focused our research in Kenya and the Philippines on two of the leading mobile money environments in the world. And in a report being released next month, we examine the regulatory framework and financial management behind the growth of agent networks in Kenya and early examples beyond mobile transfers of integrated mobile money and financial products.

With 130 mobile money deployments underway and 93 in planning according to the GSMA, it’s helpful to evaluate what lesson we have learned so far, and the McKinsey findings and IFC framework help to refocus the excitement of the field. But what is also needed is a re-evaluation of the end goal of mobile money, which is an opportunity to progress mobile money beyond money transfers into mobile banking and deeper financial inclusion for the next billion.

This article was originally written by Eric Tyler for CNN.

Yes, if you are predicting that mobile technology will mean the end of the digital divide and that a mobile phone in every hand will solve all problems. No, if you are saying that utilizing mobile phones already in the hands of nearly 6 billion people is profoundly better than dropping tablet computers out of helicopters.

Mobile phones are leading the developing world into the information economy and digital age. Already, we’ve seen the potential of the devices to transform an entire industry, as mobile money did in Kenya. And for a large portion of the developing world’s next generation, it will be through mobile phones that Internet connectivity is gained.

But let’s not get ahead of ourselves and throw mobile phones at every problem we see. The sustainability and effectiveness of mobile solutions will be closely tied to the human reality and context that surrounds these devices. And important questions still need to be asked around replicability and costs. For example, why has mobile money not yet taken hold outside of Kenya? And how can prices come down for those who cannot afford mobile phones?

A promising sign of mobiles phones’ potential are early randomized evaluations of projects showing a range of positive impacts. One such study of a mobile money transfer project in a drought prone village in Niger showed a huge reduction in distribution costs and greater diversity in crop allocation, purchasing decisions, and diet for mobile transfer beneficiaries.

“Mobile development” is still in its infancy. After all, the first call was made from a mobile less than forty years ago. The inventor Martin Cooper picked up the two and half pound handheld and dialed his rival company’s head researcher to gloat. Martin couldn’t have envisioned the implications of his breakthrough for helping the world’s poorest, and the picture is still coming into focus today. Whatis already clear is that this is just the beginning, and as mobile phones get smarter, cheaper, and more widespread, they will continue to play an integral role in adapting international development to the digital age.

This article was originally written by Eric for CNN

Last April, M.I.T. held a business conference on campus titled “Africa 2.0: Achieving Growth Through Innovation.” In the keynote speech, Dr. Ngozi Okonjo-Iweala, managing director of the World Bank, announced to a packed room, “Africa is now the new frontier.”

When it comes to the discussion of emerging markets, the conversation is normally dominated by talk of China, India and Brazil. However, many African countries are demanding a place in the discussion, and the continent’s rapid growth and extreme market conditions may well be changing the traditional notions of what innovation is and where it can come from.

The International Monetary Fund forecasts that in the next five years, Africa will have seven out of the ten fastest-growing economies in the world. In addition, consumer spending in Africa is growing two to three times faster than in developed countries. In the next ten years, this consumer market is expected to grow to $1.4 trillion, according to the McKinsey Global Institute. This growth is giving rise to an exploding technology sector that seems to know no boundaries.

In the past five years, the information and communication technology sector in Sub-Saharan Africa experienced an annual compounded growth rate of 40%, the fastest globally. And in the last decade, telecommunication companies added over 300 million African cell phone subscribers, more than the entire population of the United States.

At last year’s diplomacy briefing series on Sub-Saharan Africa, Judith McHale, the State Department’s Under Secretary for Public Diplomacy and Public Affairs, described the pace of technology innovation in Africa:

“One of the interesting things about new technology is because so many countries in Africa have come late to the development, they’ve actually leap-frogged, and the applications that they’ve developed for mobile telephony, for one, are far more advanced than many of the things you’ll see in the [United States], which is why I always say we not only have to talk to people, but we have to listen. And we have to learn.”

Tech-inspired entrepreneurs and businesses are innovating to keep up with growing demands and needs of Africa’s increasingly tech-enabled markets.

“Kenya’s advantage in the mobile payment space, South Africa’s social networks and web apps, Somalia’s mobile information system, and Ghana’s up-and-coming tech sector are all compelling stories on where innovation in both African business and African tech are taking us,” explained Erik Hersman, founder of iHub, a technology innovation center in Nairobi, Kenya

“If you come from a different continent, African innovation might not look like the innovation you are used to seeing but that doesn’t mean it’s not there.”

However, despite this enormous growth, many African countries are lacking investment and solid networks for its entrepreneurs to grow their ideas beyond micro-enterprises into larger, more stable businesses.

In attempt to capitalize on this knowledge of local market demands, efforts to harness and formalize African born ideas are currently underway. The World Bank’s African Incubation Network has grown to more than forty “business incubators” across twenty African countries. And global technology companies like Google, Microsoft, Nokia and IBM, have also recently established incubation and innovation centers in hopes of launching the next big idea.

As African economies surge forward connecting even the margins of the continent to new technologies and business opportunities, stories of innovation and breakthrough will emerge from all levels of African markets. And these stories will not only challenge the traditional rules of innovation, but they should also make us rethink Africa’s development and its place in the discussion.

This blog post was originally written for the Global Assets Program of New America Foundation.

The first place winner of the State Department’s Apps 4 Africa Competition – a calling for technologists in East Africa to build the best digital tools to address community challenges – was awarded to a mobile application called iCow.  The voice-based App helps farmers maximize the value of their cows by tracking breeding periods and monitoring nutrition levels leading up to a calf’s birth. Another winner was an SMS service called Mamakiba, a mobile platform designed to help low-income women cope with the financial burdens of maternal health such as antenatal care and clinical delivery. The App maintains savings targets for user’s healthcare costs and establishes prepayments through a mobile money platform (M-PESA). 

If there could be a competition for the technology device with the fastest adoption in the developing world, mobile phones far and away would take first place. From 2003 to 2009, in Least Developed Countries, average penetration of mobile subscriptions rose from 2 per 100 inhabitants to 25 per 100 inhabitants (with this penetration likely being higher due to numerous mobile users and multiple SIM cards per single phone). To put this into perspective, a report from the United Nations University concluded that more people in India have access to mobile phones than bathrooms. Globally, by the end of this year, there will be an estimated 5.3 billion mobile cellular subscriptions; more astoundingly, the developing world will account for more than two-thirds of these subscriptions. No such technology has ever seen such a rapid rate of adoption according to the International Telecommunication Union, and the developing world is leading the way.

So how is this ubiquitous device being leveraged as a tool for poverty reduction?

Just as the winners of the Apps 4 Africa Competition demonstrated, mobile phones can be utilized by those living in poverty in a number of different ways. One of the most revolutionary methods is mobile banking. A CGAP Paper published last month examined the question: does branchless banking live up to the hype and actually lead to increased and more effective financial services for the poor? After studying 18 branchless banking providers (only four of which were completely non-mobile^[1]), with more than 50 million customers in 10 different countries around the world, their conclusion was quite simply yes. 37% of the active users examined had previously been unbanked, and transaction values were almost 20% cheaper than traditional banks.

Just as mobiles are spreading so are mobile banking services beginning to take off and expand. For example, M-PESA, a mobile banking platform that has processed more transactions domestically in Kenya than Western Union has globally, had reached 44% of households in 2008, and only a year later, seven out of every ten households were using the platform. The GSMA provides a live deployment tracking of mobile banking around the world; currently, 96 services are underway, and nearly the same amount (91) are in planning.

Mobile phones have the ability to be amazingly entrepreneurial –as proven by the winners of the Apps 4 Africa competition – while also never losing touch with their users, which sadly can be the story of many humanitarian technology employments. Take for example the 40,000 sugar cane farmers in the Warana District in western India. Fluctuating supply and demand and difficulties coordinating with sugar mills that process and then sell the sugar often leads to farmers travelling long distances (up to 15 miles) only to find their crops out of demand. To bridge this gap, a computer-based information exchange system was constructed, but due to high costs and poor infrastructure, the website fell to disuse. Soon after, a mobile-based system using text messaging was piloted, connecting the farmers to market information. The wireless system was less costly, easier to maintain, more accessible and provided immediate price information. Over eight months, the unwired system has had widespread usage and success, resulting in savings of more than 1 million rupees for the farmers.

It is clear that communities in the developing world have chosen their own tool for poverty reduction. In many rural and poor communities where schools and hospitals struggle to get the resources they need and intermittent electricity and inadequate roads remain, mobile phones and the infrastructure to support them are booming. A report examining income expenditures of 17 African countries found that on average the poorest individuals in over half the countries were spending more than 16 percent of their income on mobile services. And where non-financial barriers present themselves, users have adapted solutions to remain engaged with their mobile phones; car batteries have become phone chargers, and even illiteracy has not stopped users.

Mobile phones provide those living in poverty with an opportunity to be their own problem solvers, business entrepreneurs and aid workers. Connectivity and creativity have transformed mobile phones from a technology device into a tool of economic empowerment, and their rapid spread in recent years have established it as a powerful tool of 21^st century poverty alleviation.

^[1] The four non-mobile branchless banking providers are Banco Postal (Brazil), Bradesco (Brazil), Caixa  Economica (Brazil) and Fino (India), which are the larger branchless banking institutions studied, and additional four services use both mobiles and smartcards.