digitally-enabled development enterprise case studies nevin cohen october 2001

Digitally-enabled Development

Enterprise Case Studies

Nevin Cohen

October 2001

Global Context

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

Source: Gilhooly, 2001 UNDP

Working Hypotheses

1.Digital technologies (ICTs) contribute to economic and social development

-4-3

-2-1

01

23

45

5 6 7 8 9 10 11

GDP/Capita, natural log

Tel

eph

on

es/1

00,

nat

ura

l lo

g

GDP per Capita vs. Telephones per Capita (1997, log scales)

Source: World Bank, 2000

Working Hypotheses

2.ICT-based development can break the link between economic growth and resource consumption

“Structural changes in the economy, facilitated by the Internet, are reducing overall energy use."

Chris LotspeichRocky Mountain Institute, 2000

U.S. Energy Intensity, 1998 to 2020 (in thousand Btu per 1996 dollar of GDP)

10.849.77

9.028.25

7.7

11.14

0

2

4

6

8

10

12

1998 1999 2005 2010 2015 2020

source: DOE, Annual Energy Outlook 2001

Working Hypotheses

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

Working Hypotheses

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

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

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

Specific Environmental Benefits

activities that help to generate income without intensive natural resource use.

potential for improved citizen participation in environmental governance

Case Selection Criteria

Digital or digitally-enabled

Self-generating, scaleable, and replicable

Potential sustainability benefits

Varied geographically and by business model

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

Caveats

Case study data not easily generalized

Hypothesis-refining, not hypothesis testing

Firm level, not national or global analysis

Enterprises are fairly young

Products

Digital Opportunity Initiative

Executive Briefing Paper

Project Clearinghouse

Rural Connectivity:

Grameen Telecom’s Village Phones

“Connectivity is productivity.” Iqbal QuadirGrameen Telecom

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

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

Foreign Worker Remittances, 1998

Worker remittances (millions US$)

Remittances as % of exports of goods & svcs.

Jordan $ 1,543 43%

Bangladesh $ 1,600 27%

Egypt $ 3,370 27%

Nicaragua $ 200 26%

India $ 9,453 21%

Source: IMF, 1999

Obstacles remain: Significant

infrastructure constraints created by incumbent telecom

Mobile GSM technology is expensive

Scaling Up Micro-finance:

PRIDE Africa’s IT Strategy

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

Planned “Drumnet”

Information exchange and internal market

Helps clients share experience, pool buying power, eliminate middlemen in business transactions

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

Community-Based Content:

The Infocentros Telecenter Model

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

Findings

Meeting or exceeding targets

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

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