Thursday, May 24, 2007
Designing for the Poor
WSJ writes:
WSJ.com: When you design products for the poor, what must you keep in mind?
Mr. Fisher: The No. 1 items will be money-making devices, and money-saving ones only if they're extremely cheap. You need something easy to maintain without many tools, and something that can be easily transported, because the poor live in remote areas. It can't require a pickup truck. Human powered -- maybe no petrol and no electricity. It has to be energy efficient. You're dealing with 80 watts of human power.
Mr. Polak: You have a whole different range of affordability when you're surviving on a dollar a day. We see it a little differently on quality versus affordability. People will pick a product that only lasts two years if it's cheap. But some of the design principles are the same [as when you design for the rich] -- you look at a tool and identify the key contributors to cost and look at ways to design around them.
Saturday, May 19, 2007
MicroFranchising
Sramana Mitra points to a paper by Kirk Magelby and writes: "MicroFranchising is a development tool that seeks to apply the proven marketing and operational concepts of traditional franchising to small businesses in the developing world. The primary feature of a MicroFranchise is its ability to be streamlined and replicated. The businesses are designed for microentreprenuers and usually target development issues such as health, sanitation, and energy."
Saturday, May 5, 2007
Cities are the Future
The Economist writes in a survey: "After this year the majority of people will live in cities. Human history will ever more emphatically become urban history."
Friday, May 4, 2007
Urbanising India
The Mint has an article by Atanu Dey and Reuben Abraham:
India has a choice of futures, say, in 2030. Will the majority of Indians continue to live in 600,000 small villages engaged in near-subsistence agriculture or will they be in living in 600 well-planned vibrant cities (or 6,000 towns of 100,000 population, for that matter) working in non-agricultural sectors and enjoying a rich social and cultural life?
Depending on how we use our resources, the latter future can be a reality. Achieving that reality would be the greatest challenge for India and arguably, the most rewarding as well. Rather than trying to trap people in villages and agriculture, the focus should be on the creation of new urban centres which will lead to economic growth and development of people
Wednesday, April 11, 2007
RISC Presentation
Atanu Dey has put up his presentation on RISC made recently at ISB. It is good supplemental reading to the ongoing Tech Talk series.
Sunday, April 1, 2007
Marketing to Rural India
India Knowledge@Wharton writes:
On one side are the fast-moving consumer goods (FMCG) and the consumer durables companies. On the other are consumers in rural India, potentially the largest segment of the market. Finally, the two are coming together.
The fact that this has not happened in the past is not for want of trying. In Mumbai and New Delhi corner offices, executives have long recognized that to build real sales volumes they will have to reach outside the big cities. In several categories, rural India already accounts for the lion's share. According to MART, a New Delhi-based research organization that offers rural solutions to the corporate world, rural India buys 46% of all soft drinks sold, 49% of motorcycles and 59% of cigarettes. This trend is not limited just to utilitarian products: 11% of rural women use lipstick.
Sunday, March 18, 2007
Microfinance
The Economist writes:
Microfinance is in vogue thanks partly to the IFIs, which provided grants, loans and training to untested microcredit institutions. The private sector shunned the risk—out of ignorance, a lack of expertise and fears that making money from the poor would look predatory. The pioneering work of donors means there are now some 10,000 microfinance institutions lending an average of less than $300 to 40m poor borrowers worldwide.
...
Only a fraction of the world's 500m impoverished “micro-entrepreneurs” have access to the financial system. There is not enough donor or “socially responsible” money in the world to meet the demand. That's why microfinance needs private-sector capital. Aid agencies, philanthropists and well-meaning “social” investors can help attract it by investing only where commercial outfits will not. When the children come of age, the best parents step aside.
Saturday, March 10, 2007
Mobiles in Rural India
A note from Nokia: "Mobile communication is revolutionizing economic and social life in rural India, spawning a wave of local entrepreneurs and creating greater access to social services according to a new study by The Center for Knowledge Societies (CKS) commissioned by Nokia. The research identifies seven major service sectors including transport, finance and healthcare that could be radically transformed through mobile technologies."
Saturday, January 27, 2007
Technology Development
Atanu Dey writes:
I briefly surveyed all major areas of technological advancement, from transportation to medicine to entertainment to whathaveyou. In every single sphere, the conclusion was unavoidable, that though the advancement was made with an eye to benefit the rich, eventually the poor benefited as well. I could not come up with an instance of any technology that was developed successfully specifically for the poor. It appears to be an empirical law. How do I explain that?
A little pondering and I had what I consider the economic reasoning for that empirical fact. Briefly the story goes this way. Technology advancements have high fixed costs, the recovery of which require high initial prices. The rich are early adopters and pay for the privilege, thus underwriting the development costs. As the marginal costs are typically low, economies of scale kick in and average costs approach the low marginal costs. Note that there is a time element to the whole story. First, it takes a bit of time for the high fixed cost of development to be recovered. Second, as time goes by, there is "learning by doing." Firms figure out how to do things more efficiently. Average costs come down further. Finally, marketplace competition forces prices to reflect low average costs.
Wednesday, November 22, 2006
Microfinance in India
India Knowledge@Wharton writes:
In India, the history of rural finance is typified by the image of a nationalized banking system which has failed to deliver credit and, if it has, not been able to recover it. Microfinance, by contrast, is increasingly being seen as an innovation in lending and the panacea for rural India's indebtedness to money lenders.
The recent focus on microfinance in India marks a paradigm shift in orientation. The recipients of state-sponsored subsidized loans in the early 1980's, 75 million poor households today have become the driver of new assets. While no accurate estimate of the size of the Indian microfinance market exists, M-CRIL (Micro-Credit Ratings International), a leading micro credit rating agency based in Gurgaon, puts the estimated demand at Rs. 480 billion ($10.7 billion). That is calculated for 60-70 million households at an average household credit demand of Rs. 8,000 (less than $200).
Indian banks may soon saturate high- and middle-income customers with retail loans and home loans, and are under pressure to move to low-income and even poor households. To do this, they are choosing to partner with MFIs, most of which have current recovery rates of over 96%. Foreign banks with little or no presence outside India's major metros are also looking to work with MFIs to secure their micro-lending market shares.
Thursday, November 16, 2006
Urbanisation Needed in India
[via Atanu] Financial Express has an article by Janmejaya Sinha of Boston Consulting Group, India:
The real problem is that India has currently only eight real cities. These cities have civic amenities. They have schools, hospitals, running water, power for large parts of the day, public transport and a much better police force and security than the rest of India. They are not easy cities to live in—by no means. But they are the best we have. This shows the skew as well as the opportunity for India.
My real point is, why are there only eight real cities in India? I know we have some urban conglomerations that have a million people. But when do we move to 100 real cities and 300 real towns? The operative word here is ‘real’?
Our population needs to move out of the village into real towns and cities. They don’t all need to come to Mumbai or Delhi, as everyone in the US does not move to New York or LA. They need to be able to move to places where they can access real opportunities.
It is impossible to provide every village this opportunity, but surely we could develop 100 cities. Let us identify these cities and build proper urban infrastructure around them.
Saturday, November 11, 2006
Transforming Education
My colleague, Atanu Dey, has a post on how he would like to transform education in India. "Want to transform education? Want to re-engineer the whole system of education so that it is effective, efficient, and relevant to the world of today? I have the business plan and the funding. I need committed smart people who want to accomplish an important task, have fun while doing it, and make a lot of money (exactly in that order.)" Atanu's big idea:
Provide an end-to-end managed service to educational institutions which will make education more effective, efficient, and relevant.
The service will be to provide all educational content (rich, multi-media, massively hyperlinked across domains) and tools (learning, teaching, testing, evaluation, teacher training, administration, reporting), and the technology platform to host the content locally and to access it.
Saturday, October 28, 2006
Microfinance
Knowledge@Wharton writes about a recent conference:
The business of making loans to poor people in underdeveloped countries is itself entering a critical period of development, according to panelists at this year's Wharton Finance Conference.
On one hand, they said, foundations and other non-governmental groups have shown the private sector that there is money to be made in lending to some of the globe's poorest populations. And, they acknowledge, only the private sector has the capital to do this at the necessary scale. But they also warned, at the panel and in interviews afterward, that the drive for profit could leave behind some of the neediest citizens -- particularly those in remote rural areas -- and thus defeat the enterprise. Meanwhile, as an indication that microfinance is indeed on the global agenda, economist Muhammad Yunus, founder of Grameen Bank in Bangladesh, was awarded the Nobel Peace Prize on October 12.
Tuesday, October 10, 2006
Emerging Education Technologies
Smart Mobs links to New Media Consortium's Horizon Report:
The four major trends that emerged are identified below and reflect significantly changing attitudes toward technology and communication that surfaced again and again in the research. The significance of critical thinking skills and participatory media literacy is mentioned.
...
Dynamic knowledge creation and social computing tools and processes are becoming more widespread and accepted.
...
Mobile and personal technology is increasingly being viewed as a delivery platform for services of all kinds.
...
Consumers are increasingly expecting individualized services, tools, and experiences, and open access to media, knowledge, information, and learning.
...
Collaboration is increasingly seen as critical across the range of educational activities, including intra- and inter-institutional activities of any size or scope.
Wednesday, September 20, 2006
Bottom of Pyramid Mirage?
Atanu Dey discusses a paper by Aneel Karnani:
Karnani’s paper argues against the BOP proposition. He summaries the BOP proposition as: there are profits to be made by selling to the billions of the world’s poor, and by doing so, bring prosperity to them, thus alleviating poverty, and that multinational corporations (MNCs) should sell to the poor to do good while doing well for themselves.
First there is the disagreement regarding the actual size of the BOP market. The BOP camp estimates that the potential market at PPP terms is US$13 trillion. Karnani estimates a more modest US 1.2 trillion at PPP, and more like US$ 0.3 trillion at the financial exchange rate. That’s an order of magnitude difference there.
Furthermore, Karnani points out that the poor spend most of their income on food; the poor have little disposable income. Therefore, if their incomes don’t rise, they cannot afford to consume more than they actually do. If there are ways of making stuff more affordable to the poor, it is certainly not by selling stuff in smaller packages. Smaller packages in fact have a higher unit cost, not lower. Pretending that smaller packages increase affordability is similar to pretending that selling food in very small packets will solve the hunger and malnutrition problem of the poor. He concludes that the “single serving revolution is a dud.”
More discussion.
Wednesday, August 30, 2006
Education and the Web
[via Smart Mobs] Judy Breck writes:
Education practice today does little more than toy with the emerging innovation of digital connectivity—when, in fact, a new knowledge ecology it causes will have to become central to global learning for education as an institution to remain relevant into the future.
You may believe that education does not belong in the open chaos of the emerging Internet. But thinking that misses a wonderful new cognitive order of learning that emerges from the chaos of connected knowledge. Education should be right in there with the other major elements in the ubiquitous mix of the Web world. The openness of the content within the Internet is a change for learning that is as complete as the invention of phonetic symbols was for language.
Monday, August 28, 2006
Education in India
Ramesh Jain writes: "The higher education system can not grow without the elementry education system. India needs education system for masses at every level. India does have excellent Institutions for higher as well as early education, but they are all only for a small fraction of population. It will be great if the current momentum takes India to build the infrastructure, including education infrastructure, in India."
Wednesday, August 9, 2006
More on OLPC
Atanu Dey continues his dissection:
Since the “One Laptop Per Child” (OLPC) proposal is being considered here, we have to have alternate proposals which can be considered in contradistinction to it. I propose, for arguments sake, the “One Blackboard Per School” (OBPS), “One Teacher Per School” (OTPS), and “One Set of Basic Facilities Per School” (OSOBFPS) schemes out of many potential candidates. First, we will consider how they stack up against the OLPC proposition. The next thing we do is to figure out which of the alternates is the one that is “perfect” and which therefore poses the threat to the achievement of the “good.”
...
Which of the two—the OLPC or the OBPS—is the “perfect” and which the “good”? If OLPC is the prefect solution, then clearly it will impair the good solution of providing basic educational opportunities to many; if the OBPS is the perfect solution, then the OLPC, as the good solution, may be prevented. My position is the former: in an ideal world, where all children have the opportunity to gain a basic education irrespective of the accident of birth, giving all children laptops will be an unalloyed blessing. An ideal world, which in our case we have not got, would admit the perfect solution and no trade offs will be required. The imperfect world, which is what we have, requires we trade off the potential benefit of the few for the guaranteed benefit of the many.
Sunday, July 30, 2006
India's No to OLPC
Atanu Dey comments on India's decision to decline the $100 laptop:
Tens of millions of children don’t go to school, and of the many who do, they end up in schools that lack blackboards and in some cases even chalk. Government schools—especially in rural areas—are plagued with teacher absenteeism. The schools lack even the most rudimentary of facilities such as toilets (the lack of which is a major barrier to girl children.)
Attention and funds need to be directed to those issues first before one starts buying laptops by the millions. Fact is that we need basic education (literacy, numeracy, etc) and secondary education. These have been provided very successfully without computers around the world. Every one who went to school and became educated more than a mere 30 years ago—in the entire history of human civilization, billions of people in all—did so without having ever seen a computer. What they had was much less expensive than PCs: they had teachers and an environment conducive to learning.
Wednesday, July 19, 2006
Rural India and Reliance
Atanu Dey writes about Mukesh Ambani's initiatives:
First, he talks about creating cities. Cities are the engines of growth since it is an urbanized population which has the productive capacity to create economic wealth and thus lead to development. India’s largely rural population has to be urbanized and since the existing cities are basically incapable of absorbing the population, new cities have to be developed.
Second, he talks about transforming agriculture by raising its productivity. Building a large number of farm-supply hubs will make the supply chain for agricultural inputs more efficient. Raising agricultural productivity will not only increase production but will also release farm labor which can then migrate to the cities and produce non-agricultural goods and services.
Third, the farm output will be more efficiently brought to the market. It is estimated that around 40 percent of farm produce never reaches the consumer. Introducing efficiencies in the supply chain of farm output and retailing it efficiently will translate into lower prices for consumers and higher realized prices for the farmers. This in turn will increase farm incomes so that the remaining rural population would be able to effectively demand more non-agricultural goods and services—the same stuff that is being produced by the labor released by the farms.
This is along the lines of Irma Adelman recommended long ago: Agricultural Demand Led Industrialization, or ADLI.
Older Entries
Atanu Dey's Story [Saturday, July 1, 2006]
Microfinance in India [Friday, May 19, 2006]
Loans for Education [Tuesday, April 11, 2006]
Business in Rural India [Saturday, March 25, 2006]
Bangladesh's Iqbal Quadir [Wednesday, March 15, 2006]
n-Logue and Rural India [Saturday, December 10, 2005]
Ownership Society in India [Sunday, November 6, 2005]
Microfinance [Saturday, November 5, 2005]
Richer Rural India [Tuesday, November 1, 2005]
The Need for Education [Thursday, October 27, 2005]
Digital Divide [Sunday, October 16, 2005]
Digital TV in Rural India [Wednesday, October 5, 2005]
Solar Power [Sunday, July 24, 2005]
Atanu on Education [Sunday, July 10, 2005]
Biofuels [Sunday, May 15, 2005]
World of Good [Sunday, May 1, 2005]
Technology and Development [Saturday, April 23, 2005]
ICT4D [Tuesday, April 5, 2005]
PCs, Internet and Literacy [Wednesday, March 23, 2005]
The End of Poverty [Saturday, March 19, 2005]
Rural Development [Saturday, February 12, 2005]
A Proposal to End Poverty [Friday, February 11, 2005]
Importance of Producing Stuff [Thursday, February 10, 2005]
ITC's e-Choupal Initiative [Sunday, January 2, 2005]
Making Poverty History [Thursday, December 23, 2004]
Educating India [Wednesday, December 15, 2004]
Economics Truths [Thursday, December 9, 2004]
Human-powered Healthcare [Sunday, December 5, 2004]
India's First Rural Mall [Tuesday, October 12, 2004]
Economic Gardening [Thursday, September 30, 2004]
Atanu is Back! [Wednesday, September 1, 2004]
Economist on Prahalad [Sunday, August 22, 2004]
Kerala's Akshaya Project [Friday, August 20, 2004]
Urban-Divide Divide [Monday, August 2, 2004]
Food and Development [Friday, July 30, 2004]
Kalam's RUPCON model [Sunday, July 18, 2004]
Banking for Rural India [Wednesday, July 7, 2004]
India's Agriculture [Sunday, July 4, 2004]
Selling to the Poor [Thursday, July 1, 2004]
The Digital Village [Monday, June 28, 2004]
Copenhagen Consensus [Wednesday, June 9, 2004]
ITC's e-Choupals [Tuesday, June 8, 2004]
India's Population Problem [Wednesday, June 2, 2004]
Bridges.org [Tuesday, May 4, 2004]
Microcredit [Sunday, May 2, 2004]
Technology for the Poor [Sunday, April 25, 2004]
Wireless for Development [Tuesday, April 6, 2004]
RISC and Deeshaa [Monday, April 5, 2004]
Microfinance in India [Friday, April 2, 2004]
IT for the Next Markets [Friday, March 12, 2004]
Kids currency [Wednesday, March 10, 2004]
The Hydrogen Economy [Monday, March 1, 2004]
Microcredit in India [Tuesday, February 10, 2004]
Green Money [Monday, February 2, 2004]
Agriculture and Development [Sunday, February 1, 2004]
The Power of One [Wednesday, January 28, 2004]
Rich-Poor Digital Divide [Saturday, January 24, 2004]
ICT and MDGs [Saturday, January 3, 2004]
India as Stuff Superpower [Friday, January 2, 2004]
ITC's eChoupals [Friday, January 2, 2004]
India's Dutch Disease? [Tuesday, December 30, 2003]
India Superpower 2020 [Wednesday, December 24, 2003]
Innovations for Development [Tuesday, December 16, 2003]
New Mood of Indian Voters [Sunday, December 7, 2003]
Internet in Rural India [Friday, December 5, 2003]
ITC's Rural Hubs and Spokes [Sunday, November 30, 2003]
MDGs and Poverty [Tuesday, November 25, 2003]
India: Emerging to Surging [Friday, November 21, 2003]
ICT and Development [Wednesday, November 19, 2003]
Education and India's Poor [Monday, November 17, 2003]
RISC Document [Sunday, November 16, 2003]
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