Kenya Coconut Production Presentation by Dr. Lalith Perera
Africa Gathering Slides
1. Mobile Market Applications in Africa Mira Slavova 10 Sept 2009 Africa Gathering, London
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3. Suppose that it ( the visitor- avoid the question of its sex) approaches the Earth from space, equipped with a telescope that reveals social structures.
4. The firms reveal themselves as solid green areas with faint interior contours marking out divisions and departments.
5. Market transactions show as red lines connecting firms, forming a network i n the spaces between them.
6. Within firms the approaching visitor also sees pale blue lines, the lines of authority connecting bosses with various levels of workers.
7. Approaching either the US, urban China or the EC, most of the space below would be within the green areas . A lmost all of the inhabitants would be employees, hence inside the firm boundaries.
8. A message sent back home, would speak of "large green areas inter-connected by red lines." It would not likely speak of "a network of red lines connecting green spots.“
9. If the vehicle hovered over Africa, rural portions of China or India, the green areas would be much smaller . T here would be large spaces inhabited by the little black dots that we know as families , villages and communities .
10. The red lines would be fainter and sparser, because the black dots would be close to self-sufficiency, and only partially immersed in markets.
Review of technology adoption Impact on markets Economic opportunities Micro-economics, Information economics, new institutional economics, development economics Sociology of market, sociology of technology, communication Business schools and management studies departments tend to span this boundary. Information systems and operations research sub-divisions. Thereby can be explained my academic background.
What would a visitor from Mars equipped with a telescope revealing social structures see on his/ her approach to Earth? But rather conveniently, I was not the one who first came up with it. I first came across this question as a PhD student at Cambridge when I was looking at the boundaries of the firm in regards to electronic auctions. The question was first brought up and answered by Herbert Simon in a J-PART article from 1995. I think its answer is at the heart of understanding the role of mobile technology in development, its impact and its remaining future potential for impact on development, particularly in Africa.
(ITU. 2009b) In 2000, the Africa was home to 11 million mobile cellular subscriptions. By the end of 2008, there were 246 million mobile cellular subscriptions. The annual growth between 2003 and 2008 in both services in Africa has been twice that of the world. Still the fraction of African population covered by mobile signal is less than 60%.
One adoption approach Blaze a thin trail (end-to-end basic functionality) Widen the path and make it a road (add higher-level modules, modularize, validate) Road network (multiple applications using different modules) SMS SMS remains the dominating technology for now. There are some free and open source tools available that can be used to establish an SMS hub. The ability for an automatic system to provide information to (a group of) people by SMS is a very powerful tool that can deliver life-critical information in many domains (health, agriculture,…). The availability of SMS in all past and currently released phones makes it the most ubiquitously available technology. However, there are also a number of limitations to SMS. The three major ones mentioned a few times during the workshop were: Discoverability: there is no easy way to let people know what are the list of services available Text: SMS provides text-based information only, and this is an issue, particularly for illiterate people, or people literate in a language not supported by operators/handsets (very few non-latin character sets supported yet on SMS). See the content section of this report for a detailed presentation of this issue. Cost: SMS messages, compared to e.g. data services such as GPRS, are very costly (up to 1000 times more per character) for the end-user and the service provider.
The traditional vision of mobile phone uses is one consisting of business-suit-wearing executives, clutching smart phones. Individuals living at the top of the green spots, the hierarchies. In reality, the majority of mobile phones in the world today are users in developing countries. They do not live in the green patches on the world map I showed earlier. These users are completely foreign to the corporate environment and use mobiles in order to cater to their everyday information and communication needs. ITU estimates that 64% of mobile users live in developing countries, while 36% live in the developed. Expenditure (Chabossou et al. 2009) Mobile expenditure is inelastic with respect to income, ie the share of mobile expenditure of individual income increases less than 1% for each 1% increase in income. This indicates that people with higher income spend a smaller proportion of their income on mobile expenditure compared to those with less income. Average-Revenues-Per-User (ARPU) have decreased over the years, they have been compensated by an ever growing number of customers. Rural vs Urban divide Behind these impressive growth figures hides both urban and rural market expansion. (ITU. 2009b) While mobile population coverage in most African urban areas is adequate, mobile population coverage in rural areas is much lower. Nevertheless, mobile communications have made huge inroads in providing connectivity to villages and rural areas. It is estimated that there are around 400’000 localities in Africa and that of these less than three percent have a fixed line telephone connection, and less than one percent have a public Internet facility. At the same time, over 40 per cent of the rural population in the region was covered by a mobile signal in 2006.2 Sor far, the rise in mobile population coverage has come about in rural areas, largely in the absence of specific universal access and service (UAS) policies. Instead, growing competition among mobile providers has provided the impetus to increase coverage.
Measuring impact Human Development Qualitative measures Holistic approach Economic Development Quantitative measures Utilitarian approach Access to mobile information is having profound impact in otherwise unconnected societies. Its impact is far greater on the lives of people in developing countries, and Africa in particular, than on our lives. (Donner, J. 2009.) Mobiles blur the lines between livelihoods and lives, and not just among smartphone-wielding information workers. Rather, this blurring can be experienced by almost anyone engaged with work. Around the world, farmers and fishermen, artisans and day laborers, community health workers and primary school teachers are carrying handsets and using them for both productive and personal uses throughout their daily routines. (Donner, J. 2009.) “we have become increasingly able and willing to conduct business from home, take a personal call at work, and to multitask while in transit from one place to another.” (Donner, J. 2009.) Call Mix. “ For example, a survey of the call logs of 277 operators of micro and small enterprises (MSEs) in Rwanda found that roughly one third of the total calls and text massages (incoming and outgoing) were business related. The rest of the calls were chitchat or other interactions with friends and family. Similar studies, with payphones (not mobiles) in rural contexts in Africa and India, found similar skews toward personal calls, rather than business or commerce distributions.” Human development “ Human development is about much more than the rise or fall of national incomes. It is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations. Development is thus about expanding the choices people have to lead lives that they value. And it is thus about much more than economic growth, which is only a means - if a very important one - of enlarging people's choices.”
(Donner, J. 2009.) Studies by Jenson and Aker, who illustrate how mobiles improve the efficiency of markets, enforce the law of one price, reduce waste, and increase productivity. (Jensen, 2007.) For example, two of the most well-known results in economics, the First Fundamental Theorem of Welfare Economics (i.e., competitive equilibria are Pareto efficient) and the “Law of One Price” (LOP) (i.e., the price of a good should not differ between any two markets by more than the transport cost between them) rely heavily on the assumption that agents have the necessary price information to engage in optimal trade or arbitrage. These results reflect some of the most fundamental functioning of and advantages to a market economy; when goods are more highly valued on the margin in one market than another, a price differential arises and induces profit-seeking suppliers or traders to reallocate goods towards that market, reducing the price differential and increasing total welfare in the process. In reality, however, the information available to agents is often costly or incomplete, as emphasized by Stigler [1961]. On using ICTs to reduce asymmetry of information and transactions costs. The literature has largely focused on barriers to agricultural production, implicitly assuming that if the crop were produced, the farmer would receive the higher average price and hence higher average return. However, just as small farmers have lower access to capital and technical expertise, they may have imperfect access to markets for their produce. For example, small farmers in many parts of South Asia tend to sell their produce to middlemen, instead of visiting the market directly. If this reduces the flexibility of sales decisions, it can lead to inefficiency. Studies of crop production are typically unable to capture these important nuances; for example, the Government of West Bengal’s cost of cultivation study assumes that each crop is sold at the average price prevailing in the market eight weeks after the harvest. However, studies suggest that in West Bengal, small farmers of potatoes earn lower prices for their crops than large farmers do (Sarkar and Mitra (2002), Mitra and Sarkar (2003)). Their argument is that farmers lack information about daily prices of potatoes, and hence are unable to time their sales optimally. In contrast, large farmers are networked and wellinformed, and have the resources to transport their potatoes to the markets independently. As a result, they can sell their potatoes when the prices are relatively high. A central task therefore is to find innovative institutional designs to evaluate the information constraints faced by small farmers. It may be costly for a farmer to obtain daily price information on a regular basis4. He may lack the networks to access this information, or the wherewithal to verify it and distinguish correct information from rumors. But if providing broader access to information can increase returns and participation in high-value crops, this can have an important policy implication. The improvements in information and communication technologies (ICTs) in developing countries, and especially in Asia, gives a great opportunity for this to happen and could result in increased agricultural productivity, reduced transaction costs, opening of new markets, and provision of additional positive network externalities (Torero and von Braun 2006). Livelihoods Framework elements (DFID 1999): Vulnerability context : the external environment that shapes people's lives via shocks (e.g. conflict, disaster), trends (e.g. demographics, changing global prices), and seasonality. Assets : five types of capital – Human (skills, knowledge, health, ability to work); Natural (land, forests, water); Financial (income, financial savings, non-financial savings (e.g. jewellery, livestock)); Physical (infrastructure (transport, housing, water, energy, information/communications), producers goods (tools, equipment)); Social (networks, connectedness, group/organisation membership, relationships) Structures : the public, private and NGO sector organisations that deliver policy, legislation, services, goods and markets Processes : the forces shaping how organisations and individuals behave (i.e. operate and interact) Strategies : "the range and combination of activities and choices that people make/undertake in order to achieve their livelihood goals" Outcomes : what strategies achieve through use of assets via structures and processes within a context
Move of Service Functionalities from Informational, to Interactional, to Transactional. The usual story given here is about village entrepreneurs invest in a phone and users who cannot afford to own a phone pay per use of the service of the phone kiosk. Grameen’s Village Phone Operator model. Here I abstract a bit from this scenario and look at the impact of mobiles at the meso-economic level. TradeNet/ Esoko Initiatives such as Collaboration@Rural reduce the transaction costs imposed by the monitoring and meeting of the need for consumer products existing in rural areas. Collaboration@Rural collects procurement requests from spaza shop owners for the delivery of bread, thereby extending the distribution chain of the bread-makers. Potential to extend such a system to support the needs of farmers for seeds, fertilizer, consumer goods, etc. Nathan Eagle has transformed mobile devices in Africa into a platform through which users can start earning money. His service txtEagle increases incomes and productivity by taking advantage of idle time in Kenya. It is an English speaking country with a literacy rate of 75%, and 12m mobile phone subscribers. Yet unemployment rate is on the scale of 50%. Tasks include transcription (audio is transcribed to SMS), software localisation (translation of software phrases into local languages), citizen journalism (opportunity to submit stories and be compensated), voice tasks (rating audio commercials), market research (filling out surveys). Networks are seeking to monetise underused capacity during down-time. txtEagle credit is associated with M-Pesa bank accounts and can be cashed at any post office or M-Pesa retailer. Introducing opportunities in Rwanda where Village Phone Operators will enable their users to complete paid-for tasks. Using the mobile voice channel for generating income through ranking radio adds. M-Pesa: potential for financial history, credit; savings; link it to Warehouse Receipt Systems and Amagaitu (dairy co-operatives) in Uganda Safaricom (mPesa) Zain (Zap): Burkina Faso, Chad, Congo Brazaville, DR Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Sudan, Tanzania, Uganda, Zambia; Middle east MTN (Mobile Money): M-banking initiatives in Sub-Saharan Africa are generally launched by banks, telecommunication operators (telcos), by an independent entrepreneur or by any combination of the above. Besides revenue, telcos also have another motive; their clients are less likely to switch operator if they are hooked up to an operator-specific banking service. The transformational services currently launched in sub-Saharan Africa are cheaper to produce, hence cheaper to buy, and do not require expensive handsets. What really makes them inexpensive compared to conventional retail banking services is that they are not backed by bank branches, but by an agent network that clients interface with to sign up, deposit or withdraw money. (In South Africa, WIZZIT clients use ATMs for cashing out.) Prices perform their informational function when they are known or reasonably predictable. Uncertain prices produced by unpredictable shifts in a system reduce the ability of actors to respond rationally. This point is often made by economists in arguing the costs of unexpected but its implication for the choice between organizations and markets is less often noted. Nor is it often noted that many kinds of uncertainties other than price uncertainties may make coordination through organizational procedures advantageous.
In the world of mobile applications, strictly speaking the value-added is brought into being by the use of the application, rather than by ownership of the device. Exponentially more value can be added by the consecutive use of the device by many users. Multiple user accounts enable
Listing service Basic informational and interactional functionality
Lonestar locked the GRPS on the most recent SIM cards (numbers starting with 062-) in order to avoid "network overload", as stated by the company. Fortunately, Lonestar's marketing manager was very helpful in solving this problem very rapidely, so as to reduce the impact on the flow of the training activity. ARPU $3 per month Good news from Monrovia: - A V 0.2 of the mobile software was done. You can try it on your mobile (I keep it low profile til we have a serious local adoption); - LoneStar Cell is willing to support a broader launch, due to take place in a few weeks; - They will support financially the Ministry of Commerce so it can manage the service!; - LoneStar Cell will allow the app pull by SMS (so people can easily get the app on their mobile); - Keen interest by future users in the app was checked again during this mission; - We broaden the scope of the buying side, now including hotels/restaurants/military compounds; - LoneStar Cell CEO suggested to add a "job" section to the Mobile Marketplace. We may do it as it could boost usage of the other items.
Monetizing services is an issue, particularly on the Web, and micro-payment mechanisms within a mobile telecommunications context might well be an important research/standardization topic Further work on using open linked data in mobile services to leverage aggregation and cooperation is needed
Icons and widgets offer interesting and useful capabilities to leverage access to services for computer-illiterate people. Further work on how to design culturally relevant meaningful icons is needed, as well as how best to design and deploy widget-based applications Voice applications have great potential, but further work on e.g. authoring tools, and guidelines are needed Further work on how to author, deploy and access content in many languages of the world is needed Operators The availability of data services is critical for content-rich (e.g. multimedia) applications. Low-bandwidth links such as GPRS are sufficient to enable many of these types of applications and should be expanded as quickly as possible. It is essential that these links are stable and reliable, and available at low cost, for prepaid options as well as subscriptions GPRS access should be very easily configurable on all handsets Networks should be Unicode compliant, particularly for SMS transmissions, and should support the transfer of text in any language of the world Given the available income of targeted populations, it is essential for operators to work on models (e.g. active or passive networking sharing) to reduce the cost of mobile services and make then affordable for those earning less than few dollars a day. Handset Manufacturers Access to services through icons or widgets is critical to decrease the barriers for a large number of potential users. Handsets should offer an open platform for such technologies. All handsets should have at least GPRS access and a J2ME/MIDP stack or a standards-compliant browser Handsets should be extensible to support external/new character sets and to be usable in all languages of the world
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