January 27, 2009

Developing Nations Seek Entrepreneurs

In the January/February 2009 edition of Consumer Electronics Vision, a publication of the Arlington, Virginia-based Consumer Electronics Association (CEA), you will find an article written by Gary Arlen about the role of consumer electronics in developing economies (see "Developing Nations Seek Entrepreneurs"). I continue to advocate that mobile web services create business opportunities that mutually benefit entrepreneurs in industrialized nations and end-users in developing countries. Furthermore, entrepreneurs from industrialized nations should partner with their counterparts in developing countries, therefore expanding knowledge solutions and economic development through education and job creation. Microcredit has benefited many entrepreneurs in developing economies, but entrepreneurs actively engaging these markets will promote sustainable growth resulting in financial and social benefits for all parties. (Photo courtesy of textually.org)

According to its website, Dhaka, Bangladesh-based Grameen Solutions Ltd. (GSL) "builds bridges between the need in emerging countries and the technology solutions of global companies. Our goal is to improve lives and bring economic power to people. GSL brings the benefits, comforts, and efficiencies of the latest technological capabilities to people in emerging countries and poor communities across the world and creates and enhances market opportunities for our global technology partners."

Mr. Arlen's article notes that GSL is developing "'voice sites'...in collaboration with global technology partners including IBM and Microsoft." Most software and websites use English, which creates a challenge in markets where a large majority of the populations may not have the language skills to take "full advantage of a text-driven Internet service. Part of [GSL's] approach involves figuring out how to 'bring the benefits of the Internet to the voice domain,'" explained GSL's CEO Kazi Islam. Furthermore, Mr. Islam "points out that there are about 800 million PC users worldwide, a pittance compared to the globe's 3.5 billion mobile phone customers, nearly 80 percent of who live in developing nations. He cites the penetration in his native Bangladesh, a relatively poor country, where about 30 percent of people now have mobile phones, and their ranks are growing by about 30 percent annually."

The ability to communicate easily and inexpensively provide significant value with respect to social and economic development in developing markets. During our current economic conditions, mobile opportunities will continue to flourish. Mr. Arlen interviewed Michael Fairbanks, co-founder of the S.E.VEN Fund (Social Equity Venture Fund), a Cambridge, Massachusetts-based "philanthropic foundation run by entrepreneurs, is equally enthusiastic about mobile opportunities. 'The real revolution in cell phone technology is about to occur,' says Fairbanks, citing 'the creation and diffusion of banking, health care and insurance products for those who never had them.'"

Mr. Fairbanks' claim that mobile phones allow people in poor countries connect with each other, which often leads to stabilizing commodity prices and forming markets. During my travels in Africa, I saw farmers using mobile phones, which were distributed by nonprofit organizations, to access commodity information and gain leverage against their competitors in a global market. In fact, many farmers were able to negotiate tender contracts with distributors and coordinate shipping logistics all through their mobile devices.

I agree with Mr. Arlen's focus on the problem of financial transactions in developing nations (see "Mobile Commerce Solutions"). "[Mr. Islam of GSL] points to the problem of financial transactions in Bangladesh, where 80 percent of such activity still takes place using cash. Migrants moving to the capital city of Dhaka still send funds back to their home villages, often relying on the local post office or a trusted friend to carry the cash to their families. As a result, it becomes a barrier to trade since funds cannot be used while they are in slow, physical transit."

Entrepreneurs are always looking at possible venture opportunities and developing these opportunities in poor countries will not only generate financial rewards, but provide financial capital that creates greater value beyond donations or financial grants. Microcredit has its benefits, but entrepreneurs who directly engage these challenging markets with their technical assistance will create a sustainable business model providing stronger tangible results, continuing growth and increased positive benefits.

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