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EECS 294-12 An Information and Communications Technology (ICT) Framework for Developing Regions

EECS 294-12 An Information and Communications Technology (ICT) Framework for Developing Regions. Berkeley: Professor Eric Brewer, EECS Tom Kalil, Special Assistant to the Chancellor Professor Richard Newton, Dean of the College of Engineering CMU:

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EECS 294-12 An Information and Communications Technology (ICT) Framework for Developing Regions

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  1. EECS 294-12An Information and Communications Technology (ICT)Framework for Developing Regions Berkeley: Professor Eric Brewer, EECS Tom Kalil, Special Assistant to the Chancellor Professor Richard Newton, Dean of the College of Engineering CMU: Rahul Tongia, Institute For Software Research International M. Bernardine Dias, Robotics Institute Prof. Raj Reddy, Robotics Institute/Computer Science

  2. Logistics and Other Practical Stuff • EECS 294-12 (will be cross-listed at Haas for business students), 3 units • Project, 60%; Homework 20%; Class participation 20% of final grade • Written project with oral project review in last two weeks of semester • Typical class format: 1 hr of lecture, 1 hr of discussion (3rd hr reserved for use when needed) • All other details on the web site at: http://courseweb.berkeley.edu/courseweb/pub/courses/2003/FL/COMPSCI/294/012 • We will be using the Blackboard system at CMU for additional communications, etc.: www.cmu.edu/blackboard

  3. $ ROI e.g. IBM, Hitachi, Digital, Siemens, Fujitsu Product Definition Fundamental Technologies Product Implementation Markets Technologies Value Creation in Product Development ... The Way It Used to Be Source: Stan Shih, Acer, 1992

  4. $ ROI e.g. Microsoft, Sony, Acer, Cisco, Dell e.g. Xilinks, Intel, 3M Markets Technologies 15nm Value Creation in Product Development ... The Way It Is Today Disruptive Business Model Disruptive Technology Product Definition Fundamental Technologies Product Implementation Source: Stan Shih, Acer, 1992

  5. Annual Purchasing Power Parity (PPP) in $US Population In Millions 4 Billion People Earning less than $2,000/year Middle Class in developing countries Wealthy Nations 100 > $20,000 adjacentmarkets $2,000—$20,000 2,000 < $2,000 4,000 ‘The Bottom of the Pyramid’ We Can Build Large and Sustainable Businesses Based on These Markets emerging ‘mass’ markets Source: Prahalad & Hammond,Harvard Business Review, Vol. 80, Issue 9 (Sep. 2002), pp48-58

  6. The Bottom: A Brief Description • 3-4 billion people with per-capita equivalent purchasing power (PPP) less that US$2,000 per year • Could swell to 6-8 billion over the next 25 years • Most live in rural villages or urban slums and shanty towns—movement towards urbanization • Education levels are low or no-existent (especially for women) • Markets are hard to reach, disorganized, and very local in nature http://www.wri.org/meb/wrisummit/pdfs/hart.pdf

  7. Concentrated Population can be Addressed More Efficiently Growth in Megacities—An Urban Future

  8. Traditional MNC Business Model Some MNCs? Local Firms Future Opportunity? Example:An Emerging Market—India http://www.wri.org/meb/wrisummit/pdfs/hart.pdf

  9. The Bottom: Not the Same Everywhere http://www.wri.org/meb/wrisummit/pdfs/hart.pdf

  10. Example: India—Many Price Points REFRIGERATOR CARS WASHERS RICH BICYCLES CONSUMING CLASS CLIMBER Extent of benefit desired ASPIRANTS COLOR TV MIXERS B&W TV DESTITUTE AUDIO Price able to pay Source: NCAER, Millions of Households in 1999, and Rama Bijapurkar

  11. Phogenix DFX complete system for $39,900 Enterprise SME (1000)s Photo shop for $3,000 Cheap Photo shop $1,000 Entrepreneurs 100,000s Example: India—Digital Photography “Pyramid” Village Photographer Target $400 -> $200 Source: Dr. Per-Kristian Halvorsen, HP Labs

  12. Speculative Technologies Hand-writtten Email sent as bitmap Telugu and Hindi voice-enabled news retrieval system Source: Dr. Per-Kristian Halvorsen, HP Labs

  13. ICT4B—Hypothesis 1: • Current ICT projects for the Developing World are just “trickle down” first-world technology: • Too expensive • Assumes reliable infrastructure, power • Assumes IT knowledge and significant support • Assumes literacy • We can directly attack these issues

  14. ICT4B—Hypothesis 2: • Thousands of ICT projects, but: • Almost all focus on devices not infrastructure • No single project can afford to build infrastructure, but all of them would benefit. • Existing elements of infrastructure not leveraged enough! • Key Idea: We can enable low-cost infrastructure • Enhance all of the existing projects • Enable new projects that were previously intractable

  15. ICT4B—The Big Picture • Enhance and enable ICT projects: • Novel technology (direct attack) • Novel deployment/support • Support for semi- and illiterate users • Two real-world deployments (validate) • Question: Is this really true? Can new technologies really make a big difference here? Or is this market better served by a “trickle down” of existing technology and the real challenge is simply the business model aspect?

  16. ICT4B—Hypothesis 3: • There are many applications that can benefit the developing world built upon an affordable, reliable and ubiquitous ICT infrastructure. • There are sufficient productivity gains, opportunities to increase government efficiency, and health and well-being benefits to build sustainable businesses at all levels • By providing these opportunities in the developing world, we will also provide a mechanism to address such critical long-term issues as population growth, human rights, and a sustainable environment

  17. Economic ROI Capital Investment “The Digital Provide”Global Information Technology Report 2001-2002:Readiness for the Networked World(http://www.weforum.org) Economic Growth Income Gains Effective Markets Information for Economic Decisions Information and Communication Technology

  18. Tangible Economic Benefits of ICT4B • Productivity • Drives long-term standard of living • Large part of U.S. resurgence of productivity growth in 1996-2002 • How widespread would it need to be in LDCs to yield significant productivity increases? • Income generation • ICT equivalent of “Super Money Maker” irrigation pump—6-9 month payback • GrameenPhone—$170/month vs. $368 GDP/capita in Bangladesh • Outsourcing • Virtual security guards from Cape Verde • Business process outsourcing in India • But if 5 percent of developed country service jobs are contestable—only 0.24% of developing country population • “Digital diaspora” as development resource (brain drain to brain trust)

  19. Economic Benefits and Applications • Price discovery—rural farmers able to double incomes by discovering price of their crops in the capital city • Improved exports to developed country markets • Transfer of dollars from diaspora—networked diaspora as a development resource • Coordination of transportation and distribution (e.g. crops to markets) • Natural disaster mitigation—early warning of floods, monsoons, etc.

  20. Source: China Health and Nutrition Survey, 1991 Example:ICT for Improving Market Efficiencies “Price dispersion is a manifestation—and, indeed, it is the measure—of ignorance in the market” (Stigler, 1961) • Badiane and Shively (1998) studied monthly maize prices in Ghana from 1980 to 1993: “…the estimated time to fully transmit a price shock to each of two outlying markets is about four months.”

  21. Economic Benefits and Applications • Price discovery—rural farmers able to double incomes by discovering price of their crops in the capital city • Job creation (jobs like data entry that can be shifted to developing countries—inexpensive IT workforce) • Improved exports to developed country markets • Transfer of dollars from diaspora—networked diaspora as a development resource • Coordination of transportation and distribution (e.g. crops to markets) • Natural disaster mitigation—early warning of floods, monsoons, etc.

  22. ICT Empowers Women “We get our freedom from the Internet, since in our society girls are not allowed to go wherever we want…the Internet takes us out to other people, places and realities…it is our way of escaping from our closed society. It is vital to us, it gives us liberty.” A young Muslim girl from Mauritania, Global Information Technology Report 2001-2002: Readiness for the Networked World

  23. Societal ROI “The Digital Provide” Economic Growth • Smaller Families • Healthier Families • Better Education • Capitalism Thrives Income Gains Effective Markets Information for Economic Decisions Information and Communication Technology

  24. Social Benefits and Applications • A Platform for Education, Training and Consultation • Educated women have fewer children and they are healthier • Transparency: • Cost of obtaining a land title in Madhya Pradesh drops from $100 to 10 cents (reduced corruption) • GIS for location of roads, schools, power plants to reduce politicization (Bangladesh) • Internet-based disclosure • Increased pressure for compliance with environmental regulations

  25. Social Benefits and Applications • More voices (ease of publishing, many to many communication) • Honduras–all media owned by one of 10 wealthiest families • Revistazo.com provides outlet for investigative journalism • Entertainment • Developing country “communities of practice” • Preservation and global sharing of local culture

  26. Health Benefits and Applications • E-health (Health information, remote consultation using digital cameras, public health networks) • SMS “text messages” used to increase compliance for TB treatment in S. Africa: • 4 tablets 5 times/week for 6 months • Non-compliance increases drug resistance • Only 1 treatment failure in pilot of 138 patients • Very significant life and cost savings possible

  27. Example:Health benefits of ICT—River Blindness • IT used to help eradicate black fly that carries river blindness in West Africa • Network of real-time hydrological sensors, satellites, and forecasting software determined best time to spray larvicide • Protects 30 million people from infection • Freed up 100,000 square miles of land – capable of feeding 17 million people

  28. But ICT not just VOIP, Computers and Internet… • MEMS for low-cost “lab on a chip” and drug delivery • Sensors for environmental or food quality • Remote sensing for predicting crop yields and enhancing regional security • Leveraging “cyber-infrastructure” for science aimed at developing country problems

  29. ICT4B—We are Studying Five Main Application Areas • Commerce • Health • Education • Government • Location-based services • Team includes social scientists: • Professors Stephen Weber, Isha Ray, at Berkeley

  30. ICT4B—Hypothesis 4: • It will take new and very innovative approaches in ‘business models’ to make this work—this is not just about technology! • Financing deployment: Grameen Bank, Grameen Phone, Yahoo BB and DSL • Distribution channels: Intel White-Box experience? • Working with (or around) local and national governments and regulations • User and technical support models • Deployment of services, enabling and encouraging the development of applications built upon them

  31. $ ROI e.g. Microsoft, Sony, Acer, Cisco, Dell e.g. Xilinks, Intel, 3M Markets Technologies 15nm Disruptive Business Models & Implementation ... A Major Societal Opportunity Product Definition Fundamental Technologies Product Implementation Source: Stan Shih, Acer, 1992

  32. Example:Grameen Bank—Bangladesh • Owned entirely by the poor • Began in one village in 1976 • 97% of equity owned by the (women) borrowers, remainder by the government • 2.6 million borrowers (95% women), over 1,000 branches in over 42,000 villages. 12,000 staff. • Has loaned more than US$3.9B since inception • Over US$3.5B repaid with interest (98.75% recovery rate); $290M loaned in the last 12 months. • Has never accepted any charity—has always been run as a profitable social enterprise • 46.5% of Grameen borrowers have crossed the poverty line

  33. Grameen TelecomA Disruptive Societal-Scale Business Model • ‘Village Phone’ is a unique idea that provides modern telecommunication services to the poor people of Bangladesh. • So far over 26,000 loans of average US$200 have been given to buy mobile phones. • Average Phone Lady income goes up by 3-10x! • The goal is to provide telecommunication services to the 100 million rural inhabitants in the 68,000 villages in Bangladesh—the largest wireless pay phone project in the World.

  34. Societal ROI e.g. Cellular & Wireless Systems e.g. Grameen Phone Grameen Bank Markets Technologies Disruptive Business Models & Implementation ... A Major Societal Opportunity Product Definition Product Implementation Fundamental Technologies Key Idea: Can such a model be used to successfully develop and distribute other technologies and services? Source: Stan Shih, Acer, 1992

  35. Rapidly Expanding Access to Communication Networks (especially wireless) Low-Cost Electronics and Devices Intuitive and User/Task-Oriented Interfaces Peer-to-Peer (and Device-to-Device) System Architectures Precise Spatial Location (via GPS) Embedded into Every Device Sensor fusion Unique Identity Systems So Why Now? Source: John Gage, Sun Microsystems and K. C. Claffy, CAIDA, UCSD

  36. ICT4B—Hypothesis 5: • Key Idea: By developing technologies and services specifically for this market, rather than simply retargeting existing technologies, there is a disruptive opportunity • Fully-integrated, single-chip handset • Chips optimized for server farm management—introspection, power management, test, diagnosis and ‘self-repair’ • Hardware and software interaction in new and unique ways (e.g. to support privacy, security, reliability, reprovisioning and repair) • Key Idea: By co-developing devices and infrastructure, significant efficiencies can be obtained, and such development is possible in these relatively “green field” markets • New and very powerful architectural control points can and will be established by the early-movers in these markets • Given the significant pent up entrepreneurial desire in these markets, the ‘right’ technologies and services are likely to move and grow relatively quickly.

  37. Novel Technology • Device cost: 10-100 times reduction • Infrastructure cost: 10-100 times reduction • Device power: 10-100 times lower • Speech recognition for obscure languages and dialects

  38. What’s the Right Physical Network Architecture? “I took a map of India and said what if we drew 5000 circles, 40 km in radius. … Each circle covers a 100 villages, about 5000 sq kms each, on average 25000 families—100,000 people in each circle. Now that’s a viable scale at which to build [network and communication connectivity]. Out of a circle of 100,000 people I can see at least a few thousand people effectively using all these technologies … We try and build 5,000 important centers and not outfit 500,000 villages. We build it in a way that any of the 100,000 people in the centers have access, but only if they are motivated, only if they are driven, only if they are willing to work hard and if they have a good use for this that has a good ROI.” Vinod Khosla, KPCB, Stanford, 2000

  39. Three Layer Architecture Vision • Devices • 1-70 users each, $1-10 • Short range wireless (WiFi or kiosk at base-station) • Proxies (base-stations) • 100-1000 users, $200 , < $1/user • Mixed wired (where exists), wireless (WiMAX with relay), satellite • Transient storage • Data Centers • >100,000 users (more likely 1M users), < $0.10 / user • Full power, networking, persistent storage • Question: Is this really just about the communication architecture and aren’t people already deploying such systems in the developing world? Won’t this just happen anyway?

  40. Exploiting 802.11 and 802.16, and Perhaps other Wireless Technologies • Driver: coming of $5 chipsets • Mix of local coverage and long-distance links (50km), likely with relay • All IP based: Voice and Data • Multiple baseband channels? • Illegal in US, but fine for India • Novel MAC layer? Antennas?

  41. Devices • Key Idea: Co-Design Devices/Infrastructure • => 20-40x lower cost • Enables more functionality • Storage, processing, human analysis • Longer battery life • Novel low-cost OLED-based flexible displays • 10-50x cheaper, more robust • Printed using an inkjet process • Key Idea: Develop standard SoC => $1-7 per device • Looking at 1mW per device (including radio!) • Can still be very profitable!

  42. Low-cost Infrastructure • Goal: 10-100 times lower cost • Key idea:intermittent networking • Most apps do not need real-time continuous communication • Asynchronous is 10-100 times cheaper? • Feel: some spots are highly interactive (continuous speech, video), many may be more like e-mail—need to validate market here. • Novel protocols, application support

  43. Novel Deployment & Support • Key Idea: Use micro-franchise model for long term financing and rapid (viral) deployment • Grameen Phone • Remote and self-management for most things • Self-contained wireless proxies with ad hoc networking (WiMAX 802.16?) • No keyboard, monitor, etc. on proxies. • Data Centers are widely shared

  44. Summary • New approach for IT in developing regions • Novel technology, infrastructure • “Direct attack” on the key challenges and at the extremes—we’re the University! • Real deployments in the field • Enable and enhance 1,000s of projects worldwide: • Speech/communication • Access to local/regional/national/international information • Integration of sensor networks • Long term: IT for self-sufficiency, stability (it must be a viable business, not financial aid!)

  45. Reading for Week 2 • Prahalad, C K and Hammond, A, Serving the World's Poor, Profitably, Harvard Business Review, Vol. 80, Issue 9 Sep. 2002, pp48-58 • Keniston, K, Grassroots ICT Projects in India: Some Preliminary Hypotheses, ASCI Journal Of Management • Prahalad, C K and Hammond, A, What Works: Serving the Poor, Profitably - A Private Sector Strategy for Global Digital Opportunity, World Resources Institute (WRI), Markle Foundation • Please come prepared! • Available via the course web site(s)

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