Digitally-enabled Development

1. Digitally-enabled Development Enterprise Case Studies Nevin Cohen October 2001

2. Developed Countries represent 86% of private consumption expenditures OECD countries captured 67% of global trade in 2000 Wealth of top 200 billionaires = $1.14 trillion 47% of world’s people live on less than $2/day 1 in 3 lack safe drinking water, 1 in 4 are illiterate, 1/5 lack health svcs. 50 poorest countries’ share of world trade declined from 4% in 1990 to 2% in 2000 Global Context Source: Gilhooly, 2001 UNDP

3. Working Hypotheses 1. Digital technologies (ICTs) contribute to economic and social development GDP per Capita vs. Telephones per Capita (1997, log scales) 5 4 3 2 1 Telephones/100, natural log 0 -1 -2 -3 -4 5 6 7 8 9 10 11 GDP/Capita, natural log Source: World Bank, 2000

4. “Structural changes in the economy, facilitated by the Internet, are reducing overall energy use." Chris Lotspeich Rocky Mountain Institute, 2000 Working Hypotheses 2. ICT-based development can break the link between economic growth and resource consumption

5. U.S. Energy Intensity, 1998 to 2020 (in thousand Btu per 1996 dollar of GDP) source: DOE, Annual Energy Outlook 2001

6. Working Hypotheses 3. ICT can improve health and environmental conditions through improved communication, education, transparency

7. Working Hypotheses 4. To achieve sufficient scale and reach, private sector investments are crucial

8. Case study research • on-site assessments of prototype ventures and novel business approaches in developing countries • document the business model • evaluate its successes, challenges, barriers,and potential for replication • document the social and environmental impacts

9. Benefits Measured • Economic benefits • creating value for the enterprise • new or enhanced sources of income and jobs • increased productivity / reduced transaction costs • Social benefits • increased human welfare and quality of life • increased transparency and participation • improved infrastructure • Health and safety assistance

10. Specific Environmental Benefits • activities that help to generate income without intensive natural resource use. • potential for improved citizen participation in environmental governance

11. Case Selection Criteria • Digital or digitally-enabled • Self-generating, scaleable, and replicable • Potential sustainability benefits • Varied geographically and by business model

12. Case Studies • Grameen Telecom - Rural Connectivity • Infocentros - Community-based Internet Cabinas • PRIDE Africa - Microloan and micro-enterprise efficiency • Educ.ar - National Student Portal • Sebrae - Small Business Services Portal • TaraHaat - Rural Internet Portal • Midas/n-Logue Communications - Rural connectivity

13. Caveats • Case study data not easily generalized • Hypothesis-refining, not hypothesis testing • Firm level, not national or global analysis • Enterprises are fairly young

14. Products • Digital Opportunity Initiative • Executive Briefing Paper • Project Clearinghouse

15. Rural Connectivity: Grameen Telecom’s Village Phones “Connectivity is productivity.” Iqbal Quadir Grameen Telecom

16. State of Telephony in Bangladesh • 97% of homes lack a telephone • 4 year waiting list • Rural-urban disparity • 80% of population is rural • 80% of phones are in 4 cities

18. Findings • Income generation for VP operators • Value for phone users of ~ 3% to 10% of their income • Improved tracking of remittances • Higher income to farmers and small business people • Access to medical, police, govt. svcs. • Improved status for women villagers

19. Foreign Worker Remittances, 1998 Source: IMF, 1999

20. Obstacles remain: • Significant infrastructure constraints created by incumbent telecom • Mobile GSM technology is expensive

21. Scaling Up Micro-finance: PRIDE Africa’s IT Strategy

22. Business Model • proprietary software systems • loan tracking, financial projections, and branch office management information • financial intermediary • aggregating loans and savings, and providing consolidated loan tracking, accounting, credit referencing, and credit/debit card processing

23. Planned “Drumnet” • Information exchange and internal market • Helps clients share experience, pool buying power, eliminate middlemen in business transactions

24. Findings • Client base of 100,000 • Average loan size of $125 reaches East Africa’s poorest • loans finance wide-ranging small businesses • trading operations • production of foodstuffs • clothing manufacturing • potential to become “poor man’s Visa

25. Community-Based Content: The Infocentros Telecenter Model

26. Business Model • Franchise 100 internet centers by 2002 • retaining 10 as regional “mother” centers • Provide or partner to create content: • courseware for cyberschools • finance apps for small businesses • training material for hospitals • b2b e-commerce portal

27. Findings Meeting or exceeding targets

28. Findings • Serving educational needs and providing cost-effective, efficient access to information • Helping small businesses to increase efficiency and profitability • Improving communication • Functioning as community hubs

29. Serving WRI’s Mission • Finding ways to transition to a less resource-intensive economy • through efficiency • by shifting to knowledge-based enterprises • Improving public access to environmental information