• back
  • MOBILE TECHNOLOGY: DRIVING CHANGE AND OPPORTUNITY IN DEVELOPING COUNTRIES

  •  

    Mobile technology: Driving change and opportunity in developing countries

     

     
     
    International Trade Forum - Issue 3/2009

    ©Nokia mobile phone-based agriculture advice is providing enormous economic benefi ts in developing countries

    Mobile technology is changing the world more quickly and profoundly than any other innovation. In emerging markets the scale of uptake and the impact on local communities are too important to be ignored.

    In Kolhapur, a hub of India's lucrative textile industry, a local textile agent is using mobile technology to increase efficiency and maintain a competitive edge. Nikhil Gadhia inputs a shopkeeper's order - three bales of cotton - into his phone, then presses send. He receives a text message from the manufacturer confirming his order is being processed. This reduces the amount of paperwork and administration and enhances efficiency of the whole order, distribution and sales management process. This easy-to-use software makes communication faster and more reliable. While this is just the beginning, it reveals the potential of technology to those who work across the whole spectrum of creative industries.  

    Most of us take the convenience of using a mobile phone for granted, but for billions of people, mobile devices and services can transform their lives. A recent study reported that adding an extra ten mobile phones per 100 people in a typical developing country boosts economic growth in gross domestic product per person by 0.8 percentage points. People in emerging markets are using mobile technology in more powerful ways than those in the developed world. Their first-ever Internet experience will be on a mobile phone and services like mobile email are seeing some of their highest adoption rates in developing countries.

    In 2000 developing countries accounted for around one-quarter of the world's 700 million mobile phones. By the beginning of 2009 that share had grown to three-quarters of a total that by then had risen to over 4 billion. This has fundamentally altered the mobile telecommunications industry, with the biggest changes taking place in developing countries.

    By 2015, 83 per cent of the global population is expected to be living in emerging markets. As incomes in developing countries rise, household spending on mobile phones is growing faster than spending on energy, water or other necessities. Telecom analysts Juniper Research predict that 80 per cent or more of all new mobile phone subscribers each year will come from emerging markets.

    Increased access to mobile technology in developing countries is having a profound impact on every business sector including the creative industries. From film (see Pangea Day box), music and art to literature, digital animation and advertising - all have the potential to reap the benefits of mobile phone technology and improve the lives of people working in those sectors.

    Adapting to the challenges


    Offering consumers relevant and localized services is critical, but they must also be affordable. The total cost of ownership of mobile devices and services remains far too high in many markets and is the most significant barrier to uptake. To reach emerging markets and drive further take-up of mobile communications, services must be accessible, relevant and affordable. Therefore, the key to improving access for emerging markets lies in reducing the cost of not just the handsets, but also the other costs associated with mobile phones.

    It is also vital for telecommunications companies to recognize that every market is different. Just like the developed world, each market in developing countries is unique. Each country is governed by its own ethics and environment, so it is crucial to understand that a single approach to services and technology offerings will not suit all markets. The need to work within each to find locally relevant solutions is critical. Whether offering mobile devices with flashlights and extended battery life in regions where electricity is scarce or using durable materials for harsh climates and remote conditions, innovation and adaptability are required.

    Business solutions beyond voice


    In developing countries, new mobile technologies such as data services, mobile phone-based agriculture and business advice, health care and money transfer are providing enormous economic and development benefits. Research by the Nokia Research Centre in Africa reveals that most micro-entrepreneurs - those with up to five employees - believe that the mobile phone is the lifeline of their businesses. Micro-entrepreneurs use mobile phones a great deal for work purposes. Mobile phones play a key role in securing business deals by making users accessible, improving productivity or providing entrepreneurs with important information, simply by the fact that they can use the phone to communicate with customers and suppliers. While voice and text messaging have been the primary use, mobile technology is also being used in innovative ways beyond what could ever have been imagined just a few years ago.
     
    There is a growing appetite in the developing world for the kinds of tailored services that go beyond using voice and text. In emerging countries, email via phone is providing consumers with a digital identity for the first time. Mobile email is not the only service that could make an impact. The opportunity for mobile financial services is huge in countries where consumers do not have a bank account and mobile phone ownership exceeds bank account usage. By the end of 2009 there will be over 120 mobile money schemes in developing countries, more than double the number in 2008, according to the consultative group, Assist the Poor.

    Mobile financial services, such as the recently announced Nokia Money, offer basic financial management and payments from a mobile phone. These services are designed to encompass all of the consumer's needs without the requirement of having an existing bank account: sending money to family and friends and paying bills. Providing quick and easy access from a mobile device, mobile money is well placed to bring financial services within reach of billions of people across the developing world.

    Looking ahead in developing countries

    But what next for the emerging markets and what can businesses learn? Some mobile banking services are better developed in African countries than in advanced markets like the United States. With the adoption of mobile phones before fixed lines in developing countries, we are likely to see more of this technological leapfrogging. Evidence suggests that mobile Internet devices will be the next big trend, but factors such as cost will play a role in their adoption.
    In developing countries, traditional gender roles and differences between class means that some technology is generally the privilege of rich young men.

    In the future, as communication technologies reach previously excluded groups such as the elderly or lower earners, the digital divide will narrow and the diversity of users will increase even further.

    Emerging markets are now too important to be ignored. Countries traditionally described as "emerging" now represent half of the world's economy. Businesses and consumers should look to these markets for insights and inspiration into the opportu-nities that mobile technology can provide. The chance to make a difference to people's lives is huge and many of these markets are leading the charge for innovation.  

    When American documentary filmmaker Jehane Noujaim won the annual prize at the 2006 TED (Technology, Entertainment, Design) conference, she was granted US$ 100,000 and her wish to change the world through film. Her prize became seed funding for Pangea Day. Live broadcasts from six cities (Cairo, Kigali, London, Los Angeles, Mumbai and Rio de Janeiro) were linked to produce a four-hour programme of films, music and speakers. The entire event was broadcast in seven languages to millions of people across the globe via the Internet, television and mobile phones.

    Nokia was Pangea Day's global partner. In addition to providing financial support, Nokia sent video-enabled devices to film schools and programmes in disadvantaged areas and conflict zones, and to refugee camps run by the Office of the UN High Commissioner for Refugees. Some of the films made in these locations were included in the Pangea Day broadcast on 10 May 2008.

    Films and performances from Pangea Day are available for viewing atwww.pangeaday.org