leveraging ict for the bop: innovative business models in education, health, agriculture and...

Jimena BetancourtCoordinación TIS [email protected]@jimebeta

mailto:[email protected]

mailto:[email protected]

Sustainability Models

Trends & Opportunities

TIS Talks Phase 1.

Product Development oriented• Syrian Telecentre

Project• BIID N Bangladesh

Partnership oriented• ATN Brasil• Colnodo Colombia

• Social Innovation

• Social Enterprise

• ICT Business models leveraging ICT for the Base of the Pyramid

1. 2.

LucieKlarsfeld PresentationProject Manager – Hystra

At Hystra since 2009: Developing hybrid strategies for housing, education, ICT and energy sectorsPrevious work experience: Bain & Company Paris, French Embassy Bucharest, UNEP New York and UNDP Mali.Master in International Affairs from Columbia University Master of Engineering from Ecole Centrale Paris

TIS Talks, September 13, 2012

Leveraging ICT for the BOPInnovative business models in education, health, agriculture and financial services

In collaboration with

A word about Hystra

Our methodology: learning from what works to scale up proven solutions

3 types of business models emerge, each with their key challenges

In financial and agro-services, viable models serve the BoP…

… whereas only a few exist in healthcare and education

Entrepreneurship is key to starting successful services, while cross-actor and cross-sector collaboration is key to scaling

Agenda

We work with business, social and public sector pioneers to design and implement hybrid strategies, i.e. innovative business approaches that:

• are profitable, scalable and eradicate social and environmental problems

• combine insights and resources of business, public and citizen sectors.

Hystra mission

Hystra is a hybrid organization, a for-profit tool for social change

Advisory Board vets our choice of clients/ projects based on the expected social impact

Board members: Rodrigo Baggio, Valeria Budinich, Bill Drayton, Emmanuel Faber, Jay Naidoo, Muthu Velayutham

Support to leading social entrepreneurs with 5% of our man days

Open source policy: we publish all our knowledge, except confidential information developed for specific clients

Hystra vision: “Be the change we want to see in the world”

A word about Hystra


3 types of business models emerge, each with their key challenges




Agenda

11

Initial scan

280projects

15 case studies with minscale

<140 projects

1st selection: On-going projects with market-based

mechanisms

Project classification

We learn from solutions that work to craft scale-up strategies

Note: No implied hierarchy of projects, but good examples representative

of best models

Analysis on 3 criteria

Effectiveness (in solving the problem)

Financial sustainability

Scalabity and replicability

Obstacles to scale

Strategies to overcome these obstacles

Lessons learnt and recommendations

Number of projects screened:

Many projects do not have an economically viable model, limiting their lifespan and impact

Tested market-based mechanisms

Fully grant-based, “dead pilots” older than 2 years or feasibility studies

57

103

64

21

11

97

122

30

22

Case studies span 3 continentsIndia - Bangalore• Narayana

Hospital

Nigeria •

mPedigree

Uganda• CKW

Kenya• Txteagle• Mpesa

Bangladesh•

Healthline

• BBC Janala

East India• Drishtee• Ekutir

Ghana• mPedigree

• •

Esoko

MYC4

Brazil• Bradesco

India - Mumbai • FINO• Reuters Mobile

LightIndia - Nagpur• Echoupal

13

14

A word about Hystra


At this early stage, 3 types of business models emerge, each with their key challenges




Agenda

Key take-away: the potential of market-based ICT approaches for the BoP is still largely untapped

*Maximum estimates from Hystra database of 280 projects

Caveat: It is still early days!

ICT may transform your business (… or not?)

Most successful programs use ICT as an enabler, not as a driver

Users of ICT services worldwide in 2011*

(in million)

Users of ICT worldwide(in million)

… yet limited reach of ICT-based social services

Unprecedented growth of connectivity worldwide…

Sources: ITU World Telecommunication /ICT Indicators database, Hystra analysis

There are three different business models,

with different barriers to scale

Technology front-end

Technology back-end: source of information and service

Technology at local agent’s

Client organization gathering data

“Direct access”: 1-way, accessed by end-users

“Local agents”: 1-way, accessed via local agents

“Crowdsourcing”: 2-way on 2 sides of techno platform

Client /end-user

Key challenge: Creating and marketing relevant local services

Key challenge: Recruiting and training enough local agents

Key challenge: Ensuring crowdsourced data accuracy

Our study analyses the various cases by sector and by business model

Learnings for:

Analysis of sectorial outcomeAnalysis of potential of ICT to fill current value chain gaps

Identification of obstacles to scale

Cost efficiency analysis

Cross sector opportunitiesLe

arni

ngs

for:1-way

in direct access

1-way via local agents

2-way on 2 sides of techno platform

CKW txteagle

Education

Health Financial services

Agriculture and support to economic activities

Insurance via mobile

M-PESA

MYC4

mPedigreeHealthLine

BBC Janala

Reuters RMLEsoko

Drishtee (education)

eChoupaleKutirDrishtee (FMCG)

Sectors

Narayana Hrudayalaya Hospital

Business model

FINOBradesco

21

A word about Hystra






Agenda

ICT viably brings financial services to previously unbanked people, lowering risks of carrying cash and transaction costs

. See FINO case study for more details

Largest project seen: FINO

37 million users

After

Money transfers, remittances, payments

SavingsLoansInsurance

24/7 service, cheap, safe and fast

✗

Banks

MFIs

Before

Money transfers, remittances, payments

SavingsLoansInsurance

Limited availability, high costs,

long wait lines and delays

FIs

In rural development, farmers and the agro-ecosystem are ready to pay for local services with direct financial benefits

Sourcing Culti-vation

SalesChoice of

crop

Local and integrated services

Info and expert advice on weather, best agro-practices and plant health

Info on local market prices, demand and availability for inputs and outputs

Aggregation of farmers for purchase and grouped sale and direct order/sales

Data on farmers’ income and harvests, construction of credit history

Before ICT service

AfterICT service

+5 to +400% of farmers’ income

increase*

*Anecdotal evidence from cases studied for this work: CKW, eChoupal, eKutir, Esoko, RML

Largest project seen: eChoupal:

4 million users

A word about Hystra






Agenda

Market-based models in health leverage the financial interests of diverse stakeholders

ICT service Examples Payers

Consultation End-users: 3-min phone consultation ($0.2)

Integrated, optimized

management

Hospitals generating productivity gains, i.e. first screening of patients by teleconsultations free to end-users

Drug authentificatio

n

Pharma companies avoiding sales of competing fakes, i.e. drug verification message free to end-users

Largest project seen: Healthline:

3.5 million users

ICT is yet to fulfill its potential to transform education systems, with very few market-based projects to date

Attending classes

Monitoring of perfor-

mance

Training teachers

Designing curriculum and

contentLearning

Practi-cing

Classes via video-conferences (including for vocational training)

Mobile phone based courses

Pedagogy training via ICT

Designing classes on ICT

Finding class content on the web

Sharing class content

Using ICT as learning tools

Interactions with teachers through ICT

Quizzes on mobile

Accessing classes archives

Online forums

Reporting grades

Reaching students

Reporting attendance of teachers and students

Before school At school After school

LegendService provided by ICT

Not market-based

Largest project seen: BBC Janala:

6 million users

A word about Hystra






Agenda

A long trial-and-error phase has proved necessaryto start successful services

“We did lots of pilots, spending a year and a half developing just the technology.”

“This is a truly new field, no one has the answers, we can only succeed through trials and errors.”

“It requires a significant time and money investment to design an effective service for specific cultures and language speakers.”

Sources: Interviews

“We did a pilot for two years before launching RML. An entrepreneurial spirit is fundamental.”

Sara Chamberlain, BBC Janala

Amit Mehra, RML

Nathan Eagle, txteagle

Tim Vang, MYC4

Entrepreneurs on their own need time…

…as do intrapreneurs within larger organizations

Collaboration is key to scaling

Policy

Recruitment and training

Partnerships

Funding

Technology

Connectivity

Literacy

Challenges to scale faced by entrepreneurs Collaboration required

Governments, local authorities, international agencies

CSOs, aid agencies, universities

Telcos, providers of complementary products and services

Telcos, software and infrastructure companies

Governments, telcos

Sources: Entrepreneurs’ interviews, Hystra analysis

Regulations: Legislators have an important role as buyers of services enabled by ICT

Policy


Partnerships

Funding

Technology

Connectivity

Literacy

Challenges to scale quoted by entrepreneurs


Drivers for success: Legislators as promoters, first movers and buyers

Monitoring of successful programs to shape regulations helping their scale-up

Purchase of efficient systems for public health or education initiatives

Financial inclusion or national health programs ensuring minimum revenues to companies in that space

Barriers to success: Legislators as prescribers✘Regulations that limit entrepreneurs’ solutions or do not allow to import best practices from other countries

Regional initiativesCreating regional incubators for cross learnings

Harmonizing regulations

Financing, though not the main challenge, is required for both entrepreneurs and technology purchasers

Policy


Partnerships

Funding

Technology

Connectivity

Literacy

Challenges to scale quoted by entrepreneurs


1) Entrepreneurs’ needsSeed funding to develop adequate offerEquity funding (patient capital)

•To sustain operational expenses•To finance the set up of new kiosks

Shared advertising and marketing costsGrants

•To raise digital and financial literacy•To reach the very poorest

2a) Local agents’ needs“Meso loans” to finance the set up of new kiosks (in models with intermediaries)

2b) End-users’ needsMicro finance to pay for the technology (in models where end-users access technology directly)

Financing required

The full report is available on the sponsors’ websites and at www.hystra.com

Report structure:Sponsor’s ForewordHystra and Ashoka IntroductionAcknowledgements1. About this project: Methodology2. Executive summary3. The basis for ICT4D: Connectivity4. The “Direct access” model5. The “Local agent” model6. The “Crowd” model7. ICT4Financial services8. ICT4Agriculture9. ICT4Health10.ICT4Education11.Socio-economic impact of ICT4D projects12.Environmental impact of ICT4D projects13.Conclusion on findings and recommendationsAppendix

Key questions: what does it mean for you?

Do you have capabilities that could contribute to the success of some of these entrepreneurs?

Could you leverage the capabilities of some of these entrepreneurs?

Could ICT enable productivity gains for you and your stakeholders (remote access, automation of processes), to reach underserved populations?

Could you use ICT to fundamentally re-engineer your business processes (like Narayana Hrudayalaya Hospital)?

Could ICT allow you to create an entirely new business model in your industry?

Easy wins

High risk, high return

opportunities

Thanks for your attention!

TIS Talks Phase 2. • Identify potential partners to develop

distribution channels of products and services (E-health, distance education, telecomunications solutions, and others)

• .Identify solutions for network’s management based in open software applications

• .Identify solutions to lower hardware cost• .Identify partners to develop applications for

greater impact in the communities served by telecentre networks

Schedule and information:http://www.telecentre.org/sustainability/

http://community.telecentre.org/group/tis-talkshttp://www.facebook.com/telecentre.org@telecentreorg@telecentrosLAC@MiguelRaimilla@jimebeta

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