Big Data Solutions Will Positively Impact 150 Million Lives over the Next Five Years, Says GSMA Report

"Mobile big data offers an opportunity to create widespread social impact in line with the United Nations Sustainable Development Goals," explains a report prepared by PricewaterhouseCoopers Australia on behalf of the GSMA. "Governments and development agencies are seeking new ways to improve how they design, implement and monitor projects through harnessing more accurate, timely and accessible information. The proliferation of mobile networks combined with new capabilities in leveraging 'mobile big data' (MBD) presents a generational opportunity to address this problem since MBD solutions already generate rich and timely insights that can now be harnessed to drive social impact."

Mobile Big Data Solutions for a Better Future outlines how advanced mobile network analytics and AI can be applied to drive societal impacts supporting the UN Sustainable Development Goals (SDGs). The report includes an analysis of five cases where mobile big data solutions could have a significant impact. A detailed methodology describing how the potential impacts have been calculated is outlined in the full report.

Access to healthcare (SDG #11)

• 60 million people could have better access to healthcare due to more informed infrastructure planning via mobile big data solutions that target health facility deployment planning.

Managing air pollution (SDG #13)

• 120,000 lives could be saved across the world’s most populated cities as a result of better-informed measures to limit air pollution, resulting in lower congestion and better transport planning.

Disaster response (SDG #13)

• More than 25,000 lives could be saved from natural disasters in major at-risk countries by 2025 as a result of mobile big data solutions being able to aid quicker evacuation from dangerous areas.

Disease prevention (SDG #3)

• Communicable diseases could be significantly reduced from spreading by targeting locations at risk of exposure through mobile big data solutions to understand population movements. This could result in 650,000 fewer cases of tuberculosis alone in the next five years.

Financial inclusion (SDG #10)

• 70 million more adults could take up financial services in countries with large 'unbanked' populations as a result of mobile big data solutions targeting groups to raise awareness, trust and confidence in digital financial services.

Image: GSMA

Lastly, the report notes: "Realizing the potential of MBD places a call to action upon stakeholders to adopt change at a local and global level, through the following steps:

• Secure commitment and encourage collaboration between public organizations, civil society, NGOs, mobile network operators and stakeholders to work together and understand how MBD solutions and capabilities can help solve problems, save lives, enhance project outcomes and reduce cost. This will involve securing commitments to MBD adoption, identifying challenges and barriers to uptake for the use of MBD to create social impact, direct and indirect, as well as encouraging mobile network operators to harness their wider mobile big data efforts to specifically create MBD sets which can be leveraged appropriately for social impact.
• Invest in and refine end to end processes in implementing organizations spanning project identification, design and execution, so that MBD solutions result in integrating insights and creating measurable impacts. This will involve identifying change initiatives in government agencies and development organizations to adopt and use MBD solutions, investing in skills and organization development and in new ways of working. Organizations will also have to learn how to measure MBD contribution to attaining the UN SDGs for 2030, and embed such measurement approaches into projects and supporting processes for project management.
• Design MBD solutions for scale so that countries and organizations can move quickly from being stimulated by inspiring examples of social impact, to achieving widespread scale through repeatable implementation in different and localized environments and circumstances. This will involve implementing agencies and mobile network operators working with others to build sustainable solutions and scale impact.
• Adopt privacy and ethics practices and frameworks to continue to promote responsible use of data for generating social impact in public projects.
• Build sustainable models for solution development and scaling, so governments, development agencies, execution partners, mobile network operators and other ICT companies can work together to implement MBD solutions which are sustainable over a long period of time and are supported by business models that encourage continued investment and innovation by all parties involved.

As explained by the GSMA, I appreciate how the "report illustrates ways in which governments and development agencies are able to harness the power of mobile big data; improving the ways in which they design, implement and monitor public projects." And I concur that "[i]f these MBD solutions are adopted at scale, they can help to tackle global challenges and deliver social impact."

Do you agree that big data solutions will positively impact 150 million lives over the next five years?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

The Global Healthcare Industry Will Experience Many Changes in 2018

My previous post focused on The Economist Intelligence Unit's (The EIU) report, Industries in 2018, that forecasts how six industry sectors (automotive, consumer goods and retail, energy, financial services, healthcare, and telecoms) will develop globally over the coming year. This post focuses on report's discussion of the healthcare industry, which asserts the continuing policy chaos in the United States, China's health reforms and the preparations for Brexit as the biggest challenges for companies.

"US attempts to overturn Obamacare will still head the agenda in 2018, but other countries may have more success with their reform plans," the report explains. "Efforts to overturn the 2010 Affordable Care Act (ACA, commonly known as Obamacare) have loomed over the US healthcare sector in 2017 and are likely to do so again in 2018. Whereas the Republicans spent much of their first year in office trying to draft and pass reforms to 'repeal and replace' Obamacare at the national level, over 2018 they will focus on dismantling the current system from the inside." The EIU asserts that "as the system crumbles, there will be increased pressure from the public and from industry to come up with viable alternatives. Individual states are already stepping into the breach."

The report notes that "what happens in the US will be vital to the global healthcare and pharmaceuticals sector over the coming year." Furthermore, The EIU "expects US healthcare spending to reach US$3.5trn, which is around 44% of the global total (based on the 60 biggest economies). Pharmaceutical spending will reach around US$444bn, or around 36% of the global total, despite efforts to rein back prices. No other market will come close: health spending in China and Japan, the nearest contenders, is less than one-sixth as high."

With respect to China, the world's most populous country will see important changes in 2018. The Chinese "government will continue with its efforts to broaden and deepen the national healthcare system. This will involve implementing the numerous reforms begun in 2017 or earlier. Two of the three public health insurance schemes, the New Rural Co-operative Medical Scheme and Urban Resident Basic Medical Insurance, are gradually being merged. Tax breaks introduced in mid-2017 will encourage more people to take out top-up private insurance."

The report importantly says,

In the meantime, China's family-doctor system will expand, and hospitals will start to adopt new management procedures. These will include new payment schemes and a double-invoice system intended to reduce hospitals' reliance on mark-ups from selling pharmaceuticals. Pressure on pharmaceutical prices will increase still further. However, other measures will be aimed at improving drug quality and speeding up the approval of innovative medicines. This follows a ruling in October 2017 allowing companies to use foreign trial data to support their applications.

It is a packed agenda, and not all of it will work. As is usual in China, many of the reforms will be done on a pilot basis in particular regions and cities, and even when the policies are supposed to be national, implementation will vary across the country. Pharmaceutical companies will have to adapt quickly to cope with the changes and to benefit from market growth, which we expect to be around 8% in local-currency terms but just 3% in US dollar terms.

Emerging markets will also experience far-reaching changes in their respective healthcare sector:

India will be starting to implement the National Health Policy it unveiled in March 2017, which aims to provide free drugs, diagnostics and emergency services to all Indians through public hospitals. Indonesia will be scurrying to meet its goal of universal coverage by 2019, while the Philippines has a similar goal for 2022. Pakistan will continue to pilot the prime minister's National Health Insurance Programme for low-income households.

Many countries in Latin America and the Middle East, as well as Russia, will be reassessing funding for healthcare as their economies recover from the effects of low global commodity prices. In Mexico, for example, the government has promised to unify public healthcare services into a universal social service, while Brazil's government is considering introducing a compulsory health insurance system. South Africa is due to release its long-awaited plans for health insurance in late 2017, although they may be delayed again.

Lastly, listed below, in its entirety, are items to watch for in 2018:

• EU regulations: Data protection rules will come into effect in May 2018, followed by rules on e-procurement in October 2018. However, the implementation of new clinical trials regulations, initially scheduled for 2018, has been delayed until 2019. The EU will also be working towards the full implementation of its 2017 Medical Devices Directive by 2020, and for in vitro diagnostics medical devices in 2022.
• Patent expiry: Generic competition looms in the US for two erectile dysfunction drugs: Pfizer’s Viagra (sildenafil) has protection until 2020 but will face competition from Teva’s copy from the end of 2017, while Eli Lilly’s Cialis (tadalafil) will lose patent protection in September 2018.
• Polio eradication: The Global Polio Eradication Initiative is likely to narrowly miss its 2018 deadline for wiping out the disease worldwide. At the end of October 2017 the only countries where the disease is still endemic—Afghanistan, Pakistan and Nigeria—reported a combined total of 12 wild polio cases this year, along with 61 vaccine-derived cases.

What changes do you predict to occur in the healthcare industry in 2018?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Internet.org: Making Internet Access Available to the Next Five Billion People for Free

In the previous post, I talk about new efforts by technology companies across a variety of sectors to bridge the digital divide by connecting billions of people whom have no access to internet-based communication services. I highlighted Mark Zuckerberg's, Founder, Chairman and Chief Executive Officer of Facebook, keynote appearance at Mobile World Congress 2014, which focused on connecting billions of people in emerging markets to the Internet by offering basic connectivity for free. "Why are the next two billion not on the internet?" he asked. "The reason is not because they don't have any money, it's because they don't know the value of having a data plan or the services they can access." There is an intrinsic value to having people worldwide connected to the internet and this blog post will discuss Internet.org in greater detail including specific efforts the organization is undertaking to connect billions of people to the internet.

According to its website, Internet.org, which was launched in 2013, "is a global partnership between technology leaders, nonprofits, local communities and experts who are working together to bring the internet to the two thirds of the world's population that doesn't have it." Possessing the goal of making internet access available to the next five billion people for free, Internet.org's founding members include Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung. The organization will explore solutions in three major opportunity areas: affordability, efficiency and business models.

With respect to affordability, "Internet.org partners will join forces to develop technology that decreases the cost of delivering data to people worldwide, and helps expand internet access in underserved communities." On efficiency, "Transmitting data—even a text message or a simple web page—requires bandwidth, something that's scarce in many parts of the world. Partners will invest in tools and software to improve data compression capabilities and make data networks and services run more efficiently." And I agree with the organization's outline on business models: "Connecting billions of people will be a massive global effort that requires ongoing innovation." Internet.org explains that "developers, mobile operators and device manufacturers will work together to introduce business models that give people more ways to go online."

The Internet.org Innovation Lab was launched earlier this year, which is a collaboration between Ericsson and Facebook that will provide developers with the ability to test their apps in real world environments at Facebook's headquarters in Menlo Park, Calif. In a press release dated February 24, 2014, Stockholm, Sweden-based Ericsson said, "The lab will help remove one of the key physical barriers that exist for bringing the Internet to everyone. Developers today typically only have access to the network environment of their physical location." Furthermore, "With consumers today operating in different network environments (2G, 3G, 4G, WiFi) on multiple mobile operating systems and a wide range of devices, the complexity involved for developers can be overwhelming. The joint innovation lab will facilitate multiple network environments for testing and optimization, all in one location."

Once the remaining five billion people are able to connect to the internet, they will have access to value-added services that will assist individuals with learning or improving English language skills; educate individuals on health, sanitation, well-being and preventable diseases; provide farmers with critical and timely information on best practices, pricing, and weather; and facilitate the growth and development of small and medium-sized enterprises.

In this video produced by Internet.org, Mr. Zuckerberg explains the plan to make basic internet services affordable so everyone with a phone can join the knowledge economy:


Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

2014 Mobile World Congress: Connecting Emerging Economies to the Mobile Internet

Attracting more than 85,000 visitors from 201 countries, the 2014 GSMA Mobile World Congress (MWC14) took place in Barcelona, Spain from Feb. 24-27, 2014. As outlined in a GSMA press release, "The four-day conference and exhibition attracted executives from the world's largest and most influential mobile operators, software companies, equipment providers, Internet companies and companies from industry sectors such as automotive, finance and healthcare, as well as government delegations from across the globe." While several themes were addressed at MWC14, this was the first year the mobile phone use and Internet connectivity in emerging economies and developing countries was a significant focus at a Mobile World Congress.

Low-cost smartphones designed specifically for emerging economies was a significant theme at MWC14. While they may not have the high-quality components installed (e.g., processors or displays), these smartphones will allow people in emerging economies to access the Internet via mobile broadband connectivity. Supporting this theme, U.S.-based Mozilla said it will launch a US$25 smartphone running its Firefox OS. Mozilla's press release said the SC6821 "redefines the entry level for smartphones in key growth markets."

Mozilla also announced that its "Firefox OS will be expanding into important new markets in 2014. Telefónica will build on the list of countries where it's selling Firefox OS phones, with eight more launching this year: Argentina, Costa Rica, Ecuador, El Salvador, Germany, Guatemala, Nicaragua and Panama. Deutsche Telekom will also add four new markets: Croatia, the Czech Republic, Macedonia and Montenegro." Importantly for app and web-content developers like ROI3, Inc., "Firefox OS devices are the first devices built entirely to open Web standards, with every feature developed as an HTML5 application."

In his keynote appearance, Mark Zuckerberg, Founder, Chairman and Chief Executive Officer of Facebook, talked about connecting billions of people in emerging markets to the Internet by offering basic connectivity for free. "Why are the next two billion not on the internet?" he asked. "The reason is not because they don't have any money, it's because they don't know the value of having a data plan or the services they can access."

Photo: Mobile World Live

Launched in August 2013, Internet.org is a global partnership, whose founding members include Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung, possessing the goal of making internet access available to the next five billion people for free. Referencing the aim of Internet.org during his keynote, Mr. Zuckerberg said, "Only 2.7 billion people have access to the Internet and it's growing more slowly than you think. The main cost is not the smartphone; it's the cost of the data access. We are really not on a path at this point to connect everyone in the world." He suggests that connecting billions to the Internet for free can be achieved within 5-10 years in two ways: (1) significantly reducing network costs to deliver data and (2) building more efficient applications to reduce data usage.

During MWC14, GSMA and Facebook, through its Internet.org partnership, announced "a joint initiative designed to connect the billions of men and women globally that currently have no access to Internet-based communications services." The press release further explains, "The joint initiative will focus on reducing the total cost of ownership (TCO) of mobile, given that mobile will be the enabling technology for the vast majority of people in developing markets." Moreover, "The activities undertaken by the GSMA and Facebook will entail working with governments in developing markets to address key factors that have an impact on affordability and availability."

With a focus on developing mLearning apps and web-content optimized for mobile phones and tablets for people in emerging economies and developing countries, it is very encouraging to see a focus on broadening Internet connectivity worldwide at MWC14. I agree with Mr. Zuckerberg when he said, "[Internet access] is really important, because connectivity is not an end in itself. It's what connectivity can bring."

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Number of Internet Users to Surpass Two Billion by End of 2010

On October 19, 2010, the eve of World Statistics Day, the Geneva, Switzerland-based International Telecommunication Union (ITU) released a report, The World in 2010: ICT facts and figures, explaining the number of Internet users worldwide doubled in the past five years and will surpass the two billion mark in 2010. There will be an estimated 226 million new Internet users in 2010, with a majority, 126 million, coming from developing countries. China is the largest Internet market in the world with more than 420 million Internet users. 

Where people are accessing the Internet is different when comparing industrialized and developing countries. For example, the number of people with Internet access at their residence increased from to 1.6 billion this year from 1.4 billion in 2009, with 65 percent of these in developed countries and only 13.5 percent in developing countries where access to the Internet in schools, at work and public locations is crucial. By the end of 2010, 71 percent of the population in industrialized nations will be online, compared to 21 percent in developing countries. Regional differences are significant: 65 percent of Europeans are on the Internet compared to only 9.6 percent of Africans.

There is a growing demand for higher-speed broadband connections to access rapidly increasing high-bandwidth content and applications on the Internet. The press release explains that the ITU, the leading United Nations agency for information and communication technology issues, “considers broadband as a catalyst for growth. Recently, ITU and UNESCO launched the Broadband Commission for Digital Development that aims to promote the adoption of broadband-friendly practices and policies worldwide. ITU Secretary-General Hamadoun Touré says, ‘Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness. It is also the most powerful tool that we have at our disposal in our race to meet the Millennium Development Goals, the deadline for which is now just five years away.’”

Moreover, according to ITU, “Over the past year, there has been strong growth in fixed broadband subscriptions. By the end of 2010, fixed broadband penetration will reach 8 percent globally. But penetration levels in developing countries remain low: 4.4 subscriptions per 100 people compared to 24.6 in developed countries.”

While high-speed Internet is still out of reach for many people in low-income countries, mobile telephony is becoming ubiquitous, with access to mobile networks now available to over 90 percent of the global population. ITU’s new data indicate that among the estimated 5.3 billion mobile subscriptions by the end of 2010, 3.8 billion will be in the developing world. Furthermore, 940 million of the 5.3 billion subscriptions will be for 3G services.

Access to mobile networks is now available to 90 percent of the world population and 80 percent of the population living in rural areas and people are moving rapidly from 2G to 3G platforms, in both developed and developing countries. In 2010, 143 countries were offering 3G services commercially, compared to 95 in 2007.

The ITU report says mobile cellular growth is slowing worldwide. In developed countries, the mobile market is reaching saturation levels with on average 116 subscriptions per 100 inhabitants at the end of 2010 and a marginal growth of 1.6% from 2009-2010. At the same time, the developing world is increasing its share of mobile subscriptions from 53 percent of total mobile subscriptions at the end of 2005 to 73 percent at the end of 2010. In the developing world, mobile cellular penetration rates will reach 68 percent at the end of 2010 - mainly driven by the Asia and Pacific region. India and China alone are expected to add over 300 million mobile subscriptions in 2010. In the African region, penetration rates will reach an estimated 41 percent at the end of 2010 (compared to 76 percent globally) leaving a significant potential for growth.

Student Loans as Development Aid

While I am a supporter of the microfinance concept, namely, the access of basic financial services such as loans, savings, money transfer services and microinsurance by underserved populations, I am critical of the application strategies employed by microfinance institutions (MFIs). I am pleased, however, to discuss the workings of an organization that is effectively administering small loans to help students in the developing world achieve a college education or vocational training.

Vittana recognizes that the students benefiting from microloans ordinarily could not receive loans to finance their education from local banks. The Seattle, Washington-based nonprofit organization partners with local microfinance organizations to establish student loan programs—often providing the only access to college loans. Through Vittana’s website, individuals are able to lend $25 and $50 at a time to individual students. Currently, Vittana, which is an Indian word for “seed,” has active partnerships in five countries: Mongolia, Nicaragua, Paraguay, Peru and Vietnam.

I had the opportunity to attend an event organized by SeaMo in November 2009 that featured Vittana’s co-founder and chief executive officer, Kushal Chakrabarti. One issue Mr. Chakrabarti discussed was the focus to provide student loans rather than scholarships. He said, “Students do not want a hand-out, they want a hand up. A loan enables them to go to school without feeling beholden.” He explained that small monthly payments provide an easy way for students (borrowers) to repay the money. In fact, many students actually begin repaying ahead of schedule, which represents their personal drive for financial responsibility.

Recognizing the impact of education, Mr. Chakrabarti said, “Education is income generating; more than microfinance (small loans for entrepreneurs).” In the developing world, a college graduate can earn 200-300 percent more than they would have otherwise. However, there are less quantifiable measurements that have an equal impact to the college graduate, their family and surrounding community. Single mothers gain self-confidence by receiving a college education or vocational training. Not only is she acquiring the skills to obtain a skilled job with a higher income, but she is becoming a role model to her children and perhaps other single mothers in the community. Moreover, communities become stronger by having some of its residents possess an education in high-valued professions such as teaching, medicine, engineering or law.

During his presentation, Mr. Chakrabarti noted that the typical borrowers are 18-25 years old, loan amounts range from $500-$1,500 and repayment periods last from 6-24 months with a successful repayment rate of 97-98 percent. While the interest rates vary from region to region, Vittana’s partners usually charge a 10-15 percent annual rate. And to mitigate the loss of the loan, most partners require that a close relative co-sign on the loan. It is rare that a student is unable to repay the loan him or herself, but in the case that the student has difficulty making a payment, a parent, grandparent, or spouse will ensure that the student repays on schedule.

It is important to note that donors providing funds (loans) to students through Vittana are not making a charitable donation; the loan will be returned to the donor upon repayment by the student. Upon repayment, the donor will have the option keep their money or make a loan to another student. How does Vittana generate revenue? Although not required, many people make a donation beyond the loan amount help Vittana cover their costs. Vittana also received direct financial support from individuals and foundations such as the Peery Foundation, the Mitchell Kapor Foundation, and the Crystal Springs Foundation.

Here is a video that highlights Vittana’s operations through testimonials of students receiving loans through this innovative application of microlending:

Gates Foundation to Help Poor People Save Money

In my blog post, Microfinance 101, I explain the different components of microfinance, which include loans, savings, money transfer services and microinsurance. From my experiences working in the developing world, microloans to help economically impoverished people climb out of poverty are the most common microfinance vehicle. While it exists in a few markets, I rarely see savings mechanisms in place to help underserved populations. Therefore, I was pleased to read that the Bill & Melinda Gates Foundation is helping “microfinance institutions (MFIs) provide the poor with safe, affordable places to save their money” by allocating $38 million in new grants, according to a press release dated January 13, 2010.

The Gates Foundation’s announcement explains that “six grants will help 18 MFIs, which currently focus on microcredit, expand their portfolios and make savings accounts available to an initial 11 million poor people across 12 countries in Africa, Asia, and Latin America over five years. The grants will create new ways for the poor to make deposits and withdrawals, expand the availability of existing savings products, and fund savings-focused marketing campaigns.”

Why is the promotion of financial savings among the world’s poor important? Citing a National Bureau of Economic Research report, the Gates Foundation announcement says “that poor households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events.” The challenge remains that very few MFIs offer “savings accounts, and more than 90 percent of the world’s poor still lack access to financial services and resort to risky, expensive, and inefficient ways to save.”

“Providing access to safe, affordable savings accounts has been a challenge because of the high costs for both banks and customers,” says the Seattle, Washington-based philanthropic organization. “For banks, the costs of physical buildings, with dedicated bank tellers, are expensive, especially in remote areas or where there is a limited number of clients with small deposits. Poor clients often live far from banks so the cost to reach a branch may exceed the amount of their deposits.”

Allocating to a diverse group of international MFIs, “the grants will use a variety of approaches to offer savings accounts to poor people. ShoreBank International, for example, will broaden its reach by sending staff on motorbikes with handheld devices to rural clients in India. Women’s World Banking will revamp its savings products to make them better fit the needs of the poor and fund marketing campaigns in the Dominican Republic. The Grameen Foundation will work with its partner MFIs to ensure they have the business systems and staff to manage emerging client savings programs.”

Protectionism on Foreign Trade Hurts Developing Nations

On May 25, 2009, The New York Times published an editorial, "Trade and Hard Times," which accurately explains the importance of supporting foreign trade and avoiding pitfalls of protectionism. The editorial says, "Today, trade is collapsing, one more casualty of the global financial crisis. That is especially bad news for countries that are dependent on trade for economic growth, including many developing nations that had nothing to do with the financial mess." I completely agree. Foreign trade is important for developing nations in getting access to outside markets for their goods. While many developing nations have a service sector that contributes to their respective gross domestic product (GDP) and provides an income for families, developing nations need access to outside markets in order to have a viable chance to truly realize GDP growth and move in a positive trajectory from developing to industrialized status. (Picture of the vocational student who made the bowl is from one of my trips to Uganda)

The Times editorial correctly explains, "Foreign trade has been a potent force for good over more than half a century. It propelled Japan's emergence from the ashes of World War II and helped it become an industrial powerhouse. It is the cornerstone of development strategies from China to Brazil. It is what links countries all over the world in a network of production that underpins global prosperity." Many industrialized countries that enjoy the benefits of a thriving economy (despite a contrary perception during our global economic recession) would not have grown from a destroyed foundation caused by conflict or natural disaster. In addition to Japan as noted above, Germany, with the financial help of the United States, Canada, and European nations, relied on foreign trade to rebuild socially and economically after World War II.

Moreover, according to the Times, "Exports from the United States declined 30 percent and imports 34 percent in the first quarter of the year from the previous three months. Imports into countries that use the euro from outside the area were down 21 percent compared with the first quarter of last year. At this rate, the World Trade Organization’s dire projection in March that global trade would decline 9 percent this year will soon start to look outright boastful. The drop in trade is spreading economic weakness across the world, as one country’s drop in imports translates into a fall in exports, and production, in another." Here in the United States, protectionism will muddle the situation further by restricting trade and reducing economic growth opportunities. Certainly the Ugandan girl pictured above can sell her goods on the local market to her neighbors and passing tourists, but the real potential lies in helping her gain access to outside markets such as Europe, Canada, and the United States.

The New York Times editorial notes that governments of the 20 biggest economies committed $250 million of trade finance over the next two years: "They should keep those pledges, and they may have to do more." While increasing funding may be necessary in the short-term, long-term solutions in achieving sustainable economic development lies within crafting a comprehensive private sector development strategy that facilitates access to markets through foreign trade. This is true in many developing nations such as Afghanistan, Iraq, and Haïti.

Will Increased Financial Support Lead to Better Accountability?

The leaders of the Group of 20 (G-20) nations concluded their conference today in London with a financial commitment of $1.1 trillion in additional loans and guarantees to finance trade and bail out troubled countries. According to a United Nations article, "The G-20 nations today also 'reaffirmed previous commitments to increase aid and help countries achieve the Millennium Development Goals,' Mr. Ban said in a statement, referring to the ambitious anti-poverty targets with a 2015 deadline."

I am not questioning the actions the world's industrialized nations to increase financial support to developing nations, but will an increase of financial support lead to better accountability of spending? Does sending more money help alleviate the problem of corruption that plagues many developing nations? What measurable and definable results should G-20 nations expect? As the world economies have become globalized, the need to help the world's poorest population takes on a different precedence. I realize there is a global economic crisis that requires quick and decisive action, but each spending package should require built-in accountability measures.

Part of this money, as explained in The New York Times, will support the International Monetary Fund, "which has emerged as a 'first responder' in this global crisis, making emergency loans to dozens of countries." The G-20's pledge triples "the resources of the Fund to $750 billion — through a mix of $500 billion in loans from countries, and a one-time issuance of $250 billion in Special Drawing Rights, the synthetic currency of the Fund, which will be parceled out to all its 185 members."

A recent World Bank article said "that economic growth in developing countries would slow sharply to 2.1 percent in 2009, a more than three percentage point decline from last year. Growth would actually decline in Central and Eastern Europe, Central Asia, and Latin America and the Caribbean. An estimated 53 million more people would be trapped in poverty this year, subsisting on less than $1.25 a day, because of the crisis. The world economy would contract by 1.7 percent this year compared to growth of 1.9 percent in 2008 – the first global decline since World War II. Global trade in goods and services would fall six percent this year, the largest decline in 80 years."

The New York Times article mentioned above addresses how some countries are seeking tightened regulations of hedge funds and other global financial institutions including those located in tax havens such as Liechtenstein and Switzerland. Tighter regulations, however, is only part of the solution and the world’s industrialized nations should expect increased transparency and accountability in how the funds are appropriated.

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.

The Financial Crisis: Implications for Developing Countries

On November 15, 2008, leaders from 20 of the world's largest economic powers (G20), which account for 85 percent of the world economy and approximately two-thirds of its population, will be meeting in Washington, D.C. to discuss the current economic crisis and possible solutions. We are in the early stages of realizing the consequences of the global financial crisis in industrialized nations, which include a rise in unemployment, increased costs of energy and food, and looming inflation problem. However, we are still quantifying the effects of the economic crisis has on emerging or developing economies. According to The World Bank Group's website, The Financial Crisis: Implications for Developing Countries, "Developing countries are now much more vulnerable, with dwindling capital flows, huge withdrawals of capital leading to losses in equity markets, and skyrocketing interest rates. GDP growth in developing countries—only recently expected to increase by 6.4 percent in 2009—is now likely to be only 4.5 percent, according to economists at the World Bank. And rich countries are now expected to contract by 0.1 percent next year." (Graphic courtesy of AFP)

Although people in developing and emerging economies are spending less, the frozen credit market is having a toll on small and mediums-sized enterprises. Having access to credit markets or additional sources of liquidity is essential to business growth. In addition, the global economic crisis is having an adverse affect on remittances to developing countries, which according to the Bank, "were larger than revenues from the most important commodity export, and in 36 countries they were larger than private and public capital inflows."

During the past few years, we have seen a spike in food and energy prices. While these prices have dropped in recent weeks, they are still significant higher compared to 2007. Furthermore, developing economies are commodity-price driven and higher prices have benefited these markets. Despite the falling prices on commodities, inflation risk remains a great problem rising to as high as five percentage points. Developing markets may soon be seeing stagflation, the economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a period of time.

According to its press release, "World Bank Group Boosts Support for Developing Countries," the Bank's International Bank for Reconstruction and Development could make new commitments of up to US$100 billion over the next three years. In 2008, the Bank's lending could almost triple to more than US$35 billion compared to US$13.5 billion in 2007. The increase in financial support would support countries facing significant budget short-falls and help sustain long-term investments. To maximize success and reduce the amount of money wasted by multiple layers of bureaucracy, corruption, and a general lack of oversight and inefficient strategic planning, donor countries should be required to create a transparent, definable, and measured growth strategy with clear accountable results.

Part of the historical challenge for the Bank is defining its purpose beyond providing financial and technical assistance to developing countries around the world. The global financial crisis is an opportunity for the Bank to serve as a negotiator between donor countries and countries receiving financial assistance. As a mediator, the Bank can strengthen is role in gathering information, forming ideas, and implementing solutions to eradicate poverty and raise the standard of living for the world's poorest people.

Equally important, however, is the need to strengthen the trade and economic relationship and close the gap between industrialized and developing nations. Whether you live in Haiti, South Africa, Spain or Canada, we live in a global society and we need global solutions. Meetings of world leaders are often more about discussions and not enough decision making, but I hope the G20 summit will facilitate turning ideas into sustainable solutions.