Jaideep Prabhu, Professor of Marketing at Cambridge Judge Business School, writes on how to do more with less for more.
Over four billion people around the globe – more than half the world’s population – live outside the formal economy and face unmet needs in basic areas such as food, energy, financial services, healthcare and education. For many decades these large populations were left to the mercy of their often negligent governments or to the largesse of aid agencies. In recent years, however, various actors – public and private – have begun to develop solutions to meet the needs of these populations; these solutions are typically frugal, flexible and inclusive in nature, and often involve digital platforms, formats and devices.
The telecommunications sector has been a pioneer of such frugal and inclusive innovation. Indeed, mobile telephony has transformed the economic landscape of many countries in Latin America, Africa and Asia. Good regulatory practices and breakneck competition have led to cheap handsets and highly affordable calling rates. This in turn has led to rapid adoption; many countries around the world now boast almost 100 per cent penetration of mobile telephony. The rapid proliferation of mobile telephony is now in turn driving frugal innovation in areas such as finance, healthcare, education and government services.
In Kenya, for instance, Safaricom, a telecoms company, introduced M-Pesa, a mobile payments service, in 2007, to enable unbanked urban migrants to send money home to their families in rural areas via text message. Recipients of this “e-float” can cash the money at local corner shops acting as M-Pesa agents. M-Pesa has been a huge success in Kenya with over 25 million users and payments worth over 50 per cent of the GDP now passing through the system every year. Such services have spread to other countries such as Uganda, Tanzania, Ghana, Nigeria, Afghanistan and Bangladesh. In these countries, mobile payments services have also formed the basis for the introduction and adoption of other banking services such as savings solutions and insurance.
Moreover, mobile payments solutions like M-Pesa have enabled companies to make and sell other products to previously unbanked segments of the population. For instance, solar lighting companies were previously hindered in their ability to offer their services to rural customers in Africa because there was no easy way to collect micro-payments from such customers on an instalment plan. M-Pesa and solutions like it solve this problem. Companies like M-Kopa now install solar lighting solutions in huts in rural Kenya and allow their customers to pay off the up-front cost in instalments through micro-payments on the M-Pesa platform. Mobile payments platforms are also being used by governments to pay their employees or to deliver subsidies directly to beneficiaries. Such cashless direct bank transfers are driving financial inclusion while reducing bureaucracy, cost and corruption.
Mobile telephony is also driving a revolution in healthcare and telemedicine. So called mhealth solutions now provide health-related information and diagnostic and disease tracking services to citizens, as well as offering medical training for health workers.
Increasingly, these solutions involve medical devices that link to and leverage the computing power and connectivity of mobile phones. In 2015, for instance, Intel India launched Lifephoneplus, a device that in conjunction with a mobile app enables people to take ECG and glucose measurements at home and send this information to a doctor directly. Simprints, a Cambridge-based start-up founded by former PhD students, makes and sells a mobile device that reads the finger-prints of rural patients and converts this into text which doctors in the field can SMS to district hospitals to pull up and receive medical records in real time. Such a device and service is hugely valuable in large-scale public health programs in developing countries where doctors often go from cities into the country on day trips and rarely know the identities of the patients they serve or have access to medical records on site.
Digital devices and technologies are also revolutionising education around the world. Again, Cambridge has been at the forefront. The city’s Raspberry Pi makes basic, ultra-cheap $5 and $30 microcontroller computers that enable students to play with and learn about hardware as well as develop their coding skills. Such cheap computers have also empowered entrepreneurs to develop other education based products. For instance, Prabhu Subramanian, a former MBA from Imperial College London, has developed CoLearnr, a Raspberry Pi based device loaded with the Khan Academy software (the entire US school curriculum available free in video form on YouTube) to enable teachers and students in places without access to the Internet to consume high quality educational content.
Digital solutions are also driving change in agriculture. Farmers are often highly inventive and are constantly developing better ways of using scarce resources like water, fertiliser and seeds to improve productivity. However, these inventive ideas rarely diffuse.
Digital Green is a Delhi-based organisation set up to change this. The social enterprise has developed a vast database of videos of farmers describing their innovations in various parts of India. These videos are stored on a mobile device that can project them on a wall. Digital Green teams tour rural communities where they hold evening viewings of these films and engage in consultations with and mentoring of farmers and their families on how to adopt these ideas on their farms.
Such digital, frugal solutions are also driving how governments deliver citizens services in countries such as Uganda, Bangladesh and India. Indeed, governments are now not only doing such frugal innovation themselves, but they are also partnering with NGOs, and the private sector in order to meet the needs of more people, better, and with less resources.
Jaideep Prabhu, Professor of Marketing at Cambridge Judge Business School, has spoken on “The digital transformation of the public sector” at the Doing Business in the Age of Digital Transformation conference on 1 November 2016 in London, organised by the Executive Education division of Cambridge Judge Business School.