Some Observers - Emerging Futures + Technologies + Consumers

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July 4, 2010
 

SO Links: Week 26

Slow research week, but the pace is picking up. 

Filed under  //   BOP   China   Danone   food   India   infrastructure   links   mobile   science   technology  
Posted by Scott Smith 

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April 17, 2010
 

Looking To a Post-Prahalad Future

 
This morning many awoke to read the sad news that renowned management professor and development theorist CK Prahalad passed away after a brief illness. Even though his most well known work, "The Fortune at the Bottom of the Pyramid", was released in 2004, it seemed that in some ways, Prahalad's vision of a world where the poor, to paraphrase his obituary in the Times of India, are not seen as victims but as consumers in their own right, was reaching its largest audience today. In an era where so many companies in the developed world are seeking new opportunities to replace the weakening consumer markets of the West, Prahalad's enticement to create demand from, and deliver value to, people in emerging and underdeveloped markets looks very attractive. And not a few of these companies are staying in business at this stage due to the relative strength of these emerging market economies.
 
And now, many top global players followed Prahalad's advice and have poured resources into India, China, parts of Africa, Southeast Asia and Latin America in hopes of selling cars, soap, PCs, appliances and many of the trappings of "mainstream" consumer society to new buyers. Banks, NGOs and technology companies are hard at work finding ways to speed the arrival and movement of money and credit to these sectors. And local companies in these regions are rapidly developing inside tracks to serve their own markets. Ironic that the week of Prahalad's passing the Economist carries a special feature on bottom-up innovation and the success stories of companies and brands many in the West have only just become aware of. 
 
So, what comes next? What is the post-Prahalad world? As a futurist, my job is to think about these things—to observe, think, sketch and describe possible futures that may emerge, and look at possible models that aren't just extrapolations of the past, or fulfillment of management fantasies about the successful transplantation of Western strategies to other regions. To me, we are already starting to see some of the signals that outline this future: not just rising incomes and new consumers, but a fundamental shift in global power dynamics in economics, social values, technology models, and more. We are seeing a swing from acquisition to utility, from consumption to production. And the producers, creators and builders are the ones that will call the shots for some time to come. We aren't just seeing our own ideas and values with an Indian or Chinese or Brazilian name on the label. We've spent five centuries in the West creating models of commerce that reflect our deeper cultural values. Why will the next phase be any different for those people, countries and cultures that have the momentum in the next five centuries? 
 
If one believes that Prahalad's ideas have helped bring us to the edge of an era where "the other 90 percent" are the leading innovators, we need to be prepared for how those innovations differ from what's come before, with what values they will teach and shape us, and how we might find new economic and social pathways forward as our current ones increasingly falter. Prahalad's ideas have been interesting, stimulating and to some extent catalytic. It's what comes next, however, that will be really powerful.

 

Filed under  //   Africa   Asia   BOP   China   Economist   futures   India   innovation   Latin America   Prahalad   scenarios  
Posted by Scott Smith 

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February 17, 2010
 

New Tools for Understanding Lifestyles in Emerging Economies

As more organizations try to address potential opportunity in the BoP and tiers just above, many are running up against a major obstacle: understanding the lives, needs and evolution of the people who live within these economic tiers and cultures in a way that isn't just a two-dimensional set of base assumptions. Some take the easy but faulty route of just making up some cardboard cut-out descriptions of the poor, applying some basic insights taken from Prahalad or elsewhere, and rush off to reset pricing and packaging to address an income level, not a person, and then consider their work done.

Others take a more traditional approach, creating standard segmentation models based on income, other demographic data and possibly some current consumption habits. Given the targets of this segmentation—consumers whose behaviors and needs are changing as their economic, social and technological worlds evolve quickly in the modern era—are living in more connected, dynamic and globalized contexts, basic segmentation models may tell you something about where they are, but not where they are headed in the near future. They also ignore or give very sparse attention to the myriad external trends that shape these wants, needs and capabilities—the very factors driving change. 

Given new tools we've developed, we may be able to do is develop a more detailed picture of their context, consider the external factors shaping them and this context, gain insight into internal drivers, and better understand these new lifestyle archetypes our work and observations tells us are taking shape now. We've used such a tool in the past to map emerging lifestyles both at the high end (what we used to call early adopters, but who now show up all along the "use" spectrum), and among different kinds of innovators at the lower end of the economic spectrum. What it uncovered was eye-opening, showing us where new and quite unpredictable lifestyle areas are emerging, pointing us toward new product and service concepts that presume certain levels of change will take place, allowing us to do more future-forward new product ideation. 

We are interested in pointing these tools toward emerging economies to develop maps of emerging lifestyles that take us beyond the cardboard BoP personas or snapshot segmentations. Our observations, research and insights gathered to date tells us we are looking at w whole new set of technology-influenced lifestyles and contexts—across Asia to Africa and Latin America, and in particular in the "grey area" markets between the BoP and developed markets where change is happening fastest now. We can see it already from the street and media, but bigger steps need to be taken to put flesh on the frame of hypothesis.

If you are interested in joining us to launch this exploration as a sponsor or supporter, drop us a line, let us know and we can tell you more about it. Ultimately, we'd love to build a world map of these future lifestyles to see the global patterns and local differences more clearly. We are open to pilot markets where we can deploy and tune the toolset—using both primary and secondary insights—while looking to a larger exercise down the road.

Filed under  //   BOP   foresight   futures   lifestyles   personas   research   segmentation  
Posted by Scott Smith 

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January 29, 2010
 

Workshop Recap: Designing Solutions for Emerging Ecosystems

       
Click here to download:
Workshop_Recap_Designing_Solut.zip (569 KB)

Coming to the end of the week in Finland, the dust has now settled from our workshop on innovations for emerging markets this week at Aalto Design Factory (though the snow continues to fall) and there finally has been some time for reflection. First, a huge thanks goes out not only to my partner in this prototype, Niti Bhan, but to the generous team at the Design Factory and its leader, Kalevi Ekman as well. Without Niti's personality, her suggestion of the workshop, and her work within the Design Factory, none of it would have started. Without the DF team's generous support and interest, none of it would have actually happened. And from the workshop and the connections made, both human and cognitive, many positive things will surely emerge.

The Design Factory describes itself as a passion-based co-creation platform, which suited the day very well. Many people showed up in the dark Nordic morning to take part in this event because of their passion for combining design, innovation and social development. Because of this, collaborative creation of ideas was the key thread throughout the day. The blend of students, entrepreneurs, and people stepping out of their roles in private companies and government bodies—with both local values and global views—was exactly what was needed. We put the workshop here because, as Ekman pointed out before the event, Finland is uniquely positioned to leverage its skills, assets, energy, IP and unique social values to help solve serious problems and improve life elsewhere in the world. 

Niti and I took the first hour or so to describe the realizations from our respective roles and trajectories that brought us to this point—mine from the consumer culture side, hers from her field work experience and research in low income, challenging environments. Along the way, these trajectories met, and new patterns are now emerging, showing us possibilities of new ecosystems blending technology, social and cultural structures that are uniquely configured.

We were there just to set the table, however. The core of the day, and the best part of the workshop, was generated by the participants. Organized into teams, they were tasked with taking on a new unfamiliar roles, in new countries, cities and situations, and a unique set of external factors and barriers around which they needed to create a solution for a specific target user. It was fitting that took place within the Aalto Ventures Park facility, which itself is a converted workshop. With a variety of tools, materials and working styles, each created something uniquely suited to their task: water delivery systems that doubled as information networks, thoughtfully conceived community centers in conflict zones, a mobile platform for local jobs, and more. Each used the human networks already in place, and each contained multiple innovations worth considering alone. 

Given that our tendency today is to throw technology at problems in scattershot ways, most striking to me was how the groups constructed or leveraged existing networks and ecosystems giving only the lightest touch to technology—resulting in an appropriate simplicity and resilience in every solution. No hammers looking for nails, no new complexities created to suit potential capabilities, just carefully considered balance of tools and needs. If this was the only takeaway, it was a day well spent. Luckily, there was a lot more to leave with, not least a sense of momentum and whetted appetite—for us, for those who participated, and for the broader Aalto community as well.

 

Filed under  //   Aalto   BOP   BOPNet   co-creation   design   Design Factory   ecosystems   events   Finland   innovation   technology  
Posted by Scott Smith 

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November 9, 2009
 

Mobile Money Practices

Designing Services for Financial Inclusion

Jan Chipchase posted a great paper and slide deck today summarizing top-level themes in mobile money practices from Nokia's research around the world, and elaborated on some design implications of his teams' findings. 

The compelling Venn diagram from the outset is this: in 2009, there are 3.5 billion people unbanked worldwide, and 4+ billion mobile phones in people's hands on the planet (not Jan's figure, but the ITU). The crossover point is some 1.7 billion unbanked people with mobile phones by 2012. That's a huge opportunity, moreso because of what tapping a percentage of that group might unleash in terms of economic benefit than the profit to be had from enabling it.

Read on and find out more.

Filed under  //   banking   BOP   design   innovation   mobile   money   Nokia   practices   research  
Posted by Scott Smith 

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November 1, 2009
 

Resource Constraints Attracting Innovation

As I was listening to a conversation with a Cisco exec this morning on BBC, an additional take on why the lower reaches of the pyramid are becoming fertile ground for innovation around technology and new business models emerged that is counterintuitive to the way business have thought about low-income consumers before. Cisco's Chris Dedicote, who I wrote about last year for Worldchanging, talked about how the fact that consumers have little extra money to spend is precisely what is making them potential early adopters of new technologies and models like smart energy meters and new forms of mobile banking (and one could add things like low-emission city cars, upcycled materials, and on and on the list goes). 

Five years ago, that idea would have seemed strange when there were plenty of higher income consumers to be tapped with this sort of innovation. Dedicote was articulating (thankfully) a systems view which has been missing—there won't be resources or new consumers to tap unless we find ways to do more with less collectively, and help individual consumers do the same individually.  

Filed under  //   BBC   BOP   Cisco   city cars   innovation   resource constraints   smart meters   upcycling  
Posted by Scott Smith 

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October 30, 2009
 

Welcome to the BOPNet

Trying to answer a number of loosely related questions lately, an important idea has become increasingly clear: we are rapidly entering the age of the BOPNet. 

The past decade of ICT has been defined by a combination of Moore's law and the need to drive more and more data across expensively built networks, fueling behavior that wants faster processors, faster networks and richer communications and media experiences, culminating in iconic objects like iPhone, big screen laptops and an armada of bandwidth hungry applications and services. 

Meanwhile, while we obsessed over bigger, faster, more in the developed world, networks were lit in the global south, mobile subscriptions in emerging markets spiked, and better services have crept (slowly, but surely) into the previously dark corners of these markets. Most importantly, thousands of ambitious developers and entrepreneurs have been developing appropriate services, mainly in small islands, tuned to the unique needs, as well as the resource restrictions, of local environments. 

Now, as Niti pointed out recently, we are starting to see not only platforms that span multiple BOP environments grow and solidify, and metaplatforms emerge. We are experiencing the coalescing of the BOPNet. It's emergence can be defined by what you can and can't do with it. You can't reasonably apply most usage and business models from the developed markets—metrics are different, usage patterns are different, and Mbps moved and minutes used don't totally equate to value delivered. Massive infrastructure investments can't just be passed down—cents on the dollar matter. You can manage resources more carefully at the technology level. You can deliver high value utility while not demanding more bytes and bandwidth. You can mine a rich seam of opportunities, because there is now scale.

Thinking about this BOPNet, several implications come to mind:

1. The BOPNet is a separate sphere, but will be integrated with its developed world cousin. As commerce and communication flows between these two spheres increase, opportunities will exist in translating at the border.

2. Its unique characteristics will start to shape macro-level infrastructure. In much the same way developd world ICT models shape and bend physical infrastructure, from transportation to energy to commerce, the unique characteristics of the BOPNet will shape these same markets' design and function in the next few decades.

3. Innovation from the BOPNet will continue to flow uphill. The developed world is fast approaching a point where it cannot devote infinite resources to ICT. We are already learning to take innovations created to better serve the BOPNet and use them to do more with less in the developed world. This will accelerate. 

4. Technologically, over time the pyramid may begin to invert. The simple math will drive momentum in innovation to the point where the BOPNet reaches a kind of utility-parity with the top of the pyramid, particularly if the top of the pyramid continues shifting its media consumption to these networks at the cost of developing more actual utility and value. China is doing this with energy, innovating based on the need to sustain 1.4 billion inhabitants (an innovation inversion we will hereafter call "Friedman's Nightmare"). India may do this with communication networks in the same way, as may (hopefully) parts of Africa eventually. This will also mean not measuring innovation simply on the basis of dollars earnd, shareholder value created, or ads served, but more along the metrics of life improvement. Right now, I'd take FrontlineSMS, and Ushahidi over Foursquare and Spotify in that category.

More to come for sure. Stay tuned.

Filed under  //   BOP   China   India   infrastructure   innovation   media   mobile   networks   utility  
Posted by Scott Smith 

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October 16, 2009
 

Devices for Development: One WikiReader Per Child?

via thewikireader.com
This week's unveiling by Openmoko of the WikiReader, a single function handheld device containing content from Wikipedia, has garnered "oohhs" and "ahhhs" from a blogosphere typically moved to this extent only by Apple's latest designgasm or a video from TED. In a way, Wikireader somehow manages to tap both of these veins by doing very little, but perhaps doing it elegantly (the jury's still out). Taking the ubiquitous design cue from Cupertino (it's simple, sleek and touch-sensitive) and giving a nod to the open source community with its choice of crowd-fed Wikipedia, the $99 brick looks interesting enough, and cheap enough, to take a chance on.

This also happened to be a week when I am writing—slowly—on a post for Changeism on the merits of aiming slightly lower than Internet-enabled laptops to boost students in development markets, perhaps with a refitted e-reader. Then comes this little gadget, even smaller and simpler than an e-reader, and one that could literally put a dynamic encyclopedia in the rucksacks of thousands of children. Even a handful per classroom might be interesting. Battery-powered with a low-consumption processor, and not needing to be connected to a network more than a couple of times per year for updates, this level of simplicity, resilience and information rolled into one. 

It's just a thought, but one that follows along the lines of my previous post: is complexity necessary, and are their simpler tools that might solve smaller problems that are more attainable now?

 

Filed under  //   BOP   education   knowledge   open   Openmoko   simplicity   Wikipedia  
Posted by Scott Smith 

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