Lots to think about it this past week regarding business informatics. As we discussed earlier in the semester many products have been aimed at the bottom of the pyramid. However as Karnani's paper shows many of those products are not at a price point that is affordable for the poor. Major corporations are not finding a vast untapped market that they thought they would fine. Yes there are people who would like to have these products, but they cannot afford them and cannot even afford to meet their basic needs.
The product with the most potential for making a change for those at the bottom of the pyramid is the the cell phone. Corbett's article "Can the Cell Phone Help End Global Poverty," from 2008 had some great insight. During the past decade it has become much more commonplace for people to have a mobile phone, but not a land line. This is greater among the poor as they could not afford a land line, but have leapfrogged to the mobile phone. Jan Chipchase of Nokia the subject of the article has a theory "that in an increasingly transitory world, the cellphone is becoming the one fixed piece of our identity." It really is a unique identifier that I had never thought of before. Many people may share the same name, but not the same number, unless it is shared among a household or group. Even greater than this identity is the way that it can help lead people out of poverty; provide opportunities they never had before. The fact that people have devised a way to transfer money using a phone and without access to a bank is fascinating to me. Or that women have set up shop as phone operators by letting other use their phone for a nominal fee.
Still with all the promise that can come with a mobile phone the biggest barrier is still affordability. Chipchase has spent years working to find out what the needs of the customers would be. This way they can design and market a phone to the bottom of the pyramid. The product needs to be fairly simple so that it can be used by the illiterate, rugged to withstand environments that are prone to flooding, or rough handling. It also must have a long battery life to be used in places with little or no reliable power sources. Even stripped down it would be difficult to create a phone that can be afforded by people who make less than $1 a day. When this article was written in 2008 there were plans by Nokia to attempt a phone that would cost just $5. However as of 2012 the cheapest phone in the company's history was released at a cost of $21. The phone was designed with a sturdy housing and protects the keyboard against scratches and dust, has an FM radio, a flashlight, and a phonebook for up to 500 contacts. It has a standby time of 27 days and 11 hours of talk time. It is a step forward, but still well outside of the $5 target dreamed of in 2008.
Nokia was certainly headed in the right direction going out to talk to those who would be users of their product. They should consider going deeper as products that are co-created with the population that will use them have a greater chance at success. Rather than repackaging products in to single use items with the illusion of affordability they must be a real effort to create products that are needed and suited to the needs of the BOP. This is where co-creation comes in. According to the blog post Bottom of the Pyramid - A Decade of Observation co creation will be needed for future innovation as well as partnerships between multinational corporations and local businesses. The key will be research and knowing what is really needed, not just throwing a stripped down phone or a single use item the poor.
Sources:
Corbett, Sara. "Can the Cell phone Help End Global Poverty?" NY Times 13 April 2008
Ip, Melissa "Bottom of the Pyramid - A Decade of Observation" Social Enterprise Buzz 21 Jan 2013.
Kar, Naveen. "Nokia Targets the Bottom of the Pyramid with $21 Mobile Phone." Youth Googly 14 April 2012
Karnani, Aneel. "Fortune at the Bottom of the Pyramid: A Mirage" 14 July 2006. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=914518
I agree with you about the innovative ways the cell phone can be used as a great advance in helping those who are less fortunate. I had also hoped that by now Nokia had found a way to get the cost of their phones down. When you are making less than $2 a day, that $16 is huge- the phone costing ten days work. Maybe they will one day get it right, and maybe by working with those that will use the product. Jan Chipchase seems to be passionate about his work, and if there are others like him committed to aid those in poverty, frugal innovation will continue to be on the rise.
ReplyDeleteAmazing- it worked on the first try and did not delete it. Of course, that was because I copied it to my clipboard first.
ReplyDeleteIt seems to be that most of the small business / big business and IT arguments work so closely with the arguments about the digital divide and frugal engineering. The BOP that you talk about sounds like bottom-up development that we talked about early on in the semester. I agree that effective innovation has to start with cocreation, and it's only at that point that we can really start making strides to lessen poverty and narrow the digital divide.
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