Improving Lives Through Search

One of the most common questions I'm asked when I talk to people about building products and services in Indian languages is, "Why?" The unspoken thought behind the question: those who don't know English in India are dealing with more basic sorts of problems - web search is a luxury that can have only tangential impact in their lives.

I beg to differ.

One of the most powerful features of the web is the democratization of access to information. With the web, consumers can be free of value-extracting middlemen and brokers of information. With the web, consumers can reduce information asymmetry. That isn't a luxury - it's a powerful tool to improve lives.

Imagine a sick child, and parents who have no easy access to medical care. The web can yield information to understand symptoms and help parents provide basic treatment. Imagine a bright school student who attends a poorly-run and managed school that will ill-prepare her for college and the job market. If this student could access educational content online, it could transform her life prospects.

Search can improve lives. And it helps those people most who have the least access to alternative sources of information - typically those lower down in the socio-economic ladder.

One of the things I like to do is to read Google's customer testimonials from time to time. I've reproduced a few below. This isn't a pitch for Google - you can replace "Google" with the more generic "search" and the message is equally powerful.

Message from: Abigail

"Google helped me discover that my daughter's strange medical problems are part of a rare genetic syndrome that most of her doctors had never heard of. Her doctors diagnosed her after I brought them the information, and my discovery helped her cardiologist diagnose another patient with the same syndrome. Because of my daughter's new diagnosis, we have uncovered other dangerous but treatable problems that we wouldn't have known about until they caused her serious damage. So, I'm very grateful to the people at Google who made all of this possible. Thank you."

Message from: Ann

"I just wanted to let you know that Google may well have saved my life. My sons and I were walking home from having eaten out. A half block from my house, I felt this pressure building in my chest. Immediately, I thought, 'heart attack' and ran through how I'd been feeling that the day (I had been nauseated). My first thought was, 'confirm suspicions,' and immediately, upon arriving home, I went to Google and typed in 'heart attack.' I kept thinking, 'you only have minutes...' I found a site that listed symptoms. Indeed, I was having a heart attack. I was at the Albany fire station within minutes. Five baby aspirin later, and a few squirts of nitro and I was in the ambulance on my way to the hospital. The good news is, I have no residual damage. My heart is back to normal. Thank you for providing the Google search engine. I'm sure my recovery was complete because of the speed within which I was able to get help."

Message from: Laura

"Last year my daughter, who was a senior in high school, was afraid of failing her math final. I did a search on Google and came up with more than one method of explaining the formulas...She passed the final and ended up with a B in the class instead of a C. "

Shift Happens

Neat slideshow on technological and political shifts. It just won the "World's Best Presentation Contest" at SlideShare.

Survey of India's Consumer Market

McKinsey's Global Institute has just released a report on India's consumer market. There is an executive summary as well as the full report, available for free download (although you may need to register yourself to access these). The study projects the growth and changes in the composition of India's consumer markets from today through 2025. The highlights include the following projections about the market in 2025:

• India will be the fifth biggest consumer market. If India continues on its current high-growth path over the next two decades, income levels will triple, and India will climb from its position as the twelfth-largest consumer market today to become the world's fifth-largest consumer market by 2025.

• The middle class will increase tenfold. As Indian incomes rise, the shape of the country's income pyramid will also change dramatically. Over 291 million people will move from desperate poverty to a more sustainable life, and India's middle class will swell by more than ten times from its current size of 50 million to 583 million people.
  

• Marked shift away from basics towards discretionary spending. Indian spending patterns will evolve, with basic necessities such as food and apparel declining in relative importance and categories such as communications and health care growing rapidly.
  

The full report has a wealth of data that will be a useful reference for anyone interested in the Indian consumer market.

The 2007 e-Readiness Rankings

The Economist, along with IBM, has published this year's assessment of the state of information and communications technology in 70 different countries. The rankings, which have been published since 2000, measures a wide range of factors that collectively aim to measure the ability of a country to benefit from investments in information technology and communications infrastructure. The complete report is available here (it's free and you don't need a subscription to the Economist). It's an interesting read.

A couple of facts from the rankings:

• Denmark is the highest ranked, while the US and Sweden are tied for second place.
  
• The highest ranked developing countries are Estonia and Slovenia, at 28 and 29, respectively.
• Among the large developing countries, South Africa is the highest ranked at 35, followed by Turkey at 42 and Brazil at 43.
• Among the BRIC countries of Brazil, Russia, India and China, Brazil is the stand-out at 43. India, China and Russia are grouped more or less together at 54, 56 and 57 respectively.

The methodology used the generate the ranking is interesting and illustrative into what drives adoption of technology at a macro level. The rankings used the following six criteria, listed below along with their weight in the overall calculation:

• Consumer and business adoption (25%). Per capita spending on IT, levels of e-commerce activity.
• Connectivity and technological infrastructre (20%). Access, availability and cost of internet access.
• Business Environment (15%). General business climate, including political stability, taxation, labor policies and opennes to investment.
• Social and cultural environment. (15%). Literacy, training, and more generally, the "capacity" to ulitize the technology if it is available.
• Government policy and vision (15%). Government adoption of information technology, online procurement, public services online.
• Legal environment (10%). Ease of new business creation, intellectual property protection.

Interestingly, India ranks higher than China or Russia despite having a significantly poorer score for connectivity and infrastructure. It scores much higher in the legal environment and government policy and vision criteria, pushing up its overall rank.

Fight Poverty with Connectivity

The notion that large-scale handouts of aid hasn't worked to alleviate poverty is well documented. In the worst case, it enriches corrupt, autocratic kleptocracies (e.g. as it did with Mobutu in Zaire). More commonly it's simply wasted because the institutions necessary to use it are not effective, and a sort of low-grade ineffeciency and corruption takes hold. Even the biggest provider of such development aid, the World Bank, has now recognized that aid must be linked to governance to be successful (championed by Paul Wolfowitz, whose current woes do not invalidate this notion).

The basic underlying lesson, according to Iqbal Qadir, founder of GrameenPhone, is that poverty can be reduced only by empowering individuals, not governments. His own involvement in setting up a cell phone company in rural Bangladesh is testament to the individual-centered, connectivity-based model of economic development. Qadir is currently a director at the MIT Center for Developmental Entrepreneurship, which has already brought to market several innovative products for developing economies.

See below for a talk that Mr. Qadir gave at the TED conference in 2005, explaining his ideas about ending poverty through connectivity. (If you don't see the embedded video, click here).

Coda

Now that I'm moving to India in a few weeks, I find myself reflecting on the fifteen or so years I have spent in the US. When I left India in 1991, it was a country that bears little resemblance to the country I will return to next month.

The most apparent changes are the superficial ones: glitzy shopping malls (there were none in 1991) and the profusion of cable TV networks (there was no cable TV in 1991), among others. There are deeper changes too. The one that strikes me more than anything else is the sense of possibility and confidence I see in today's high school and college students. When I was in high school, the limitless possibilities that follow from rapid economic expansion was not something we really conceived of in any meaningful manner.

A nice little illustration of all this can be found in the foreign exchange situation then, and now. In 1991, right was I was getting ready to leave for the US, India's balance of payments weaknesses suddenly caused a crisis. The government was close to defaulting on its debt, and foreign exchange reserves had dropped to about three weeks worth of imports - about $6 billion. As part of a package of reforms, India moved from a fixed to a floating exchange rate, which immediately caused a severe devaluation. I remember my father being quite upset, as my education in the US suddenly became 50% more expensive than it had been a month before!
(If you're interested, you can read more about the 1991 currency crisis in this IMF paper).

Contrast that to today. For those of you who deal in India-US cross border issues, you're probably already aware of the rupee's appreciation against the dollar over the last six months. In fact, the rupee is at an at an 8-year high against the dollar.

Take a look at this exchange rate chart from Oct 06 to today:

The rupee has appreciated from 45.7 per USD in October last year, to 42.6 per USD currently. Foreign exchange reserves have ballooned to almost $200 billion today. It's a world away from 1991.

Long Lived by Design

Picking up where my last post left off, the issue of data longevity is specially important to developing economies where the process of digitizing government records and making government services available online is just beginning. The lessons to be learned from data loss from the early adopters in more developed economies should be taken to heart.

There's no question that this is a well-understood problem and many projects are tackling different aspects of it. For example, open standards such as ODF reduce the risk of unreadable data. Digitization and hosting of content by service providers offloads the problem from individual consumers to service providers who are, presumably, better suited to deal with it. At the cutting edge, there's even talk of using bacteria for long-term data storage!

My point is not that adequate steps are not being taken. My point is that product design should incorporate principles with longevity in mind. What might these principles look like? A great place to start is by looking at the Clock of the Long Now, conceived by Danny Hillis (of Thinking Machines fame). As he explains the genesis of the project:

I want to build a clock that ticks once a year. The century hand advances once every one hundred years, and the cuckoo comes out on the millennium. I want the cuckoo to come out every millennium for the next 10,000 years. If I hurry I should finish the clock in time to see the cuckoo come out for the first time.

This seemingly quirky endeavor is actually a deeply insightful way to examine our notion of time and its impact on technological progress. Hillis lays out a list of design principles for his 10,000 year clock.

• Longevity: The clock should be accurate even after 10,000 years, and must not contain valuable parts (such as jewels, expensive metals, or special alloys) that might be looted.

• Maintainability: Future generations should be able to keep the clock working, if necessary, with nothing more advanced than Bronze Age tools and materials.

• Transparency: The clock should be understandable without stopping or disassembling it; no functionality should be opaque.

• Evolvability: It should be possible to improve the clock over time.

• Scalability: To ensure that the final, large, clock will work properly, smaller prototypes must be built and tested.

These principles seem to me to be broadly applicable. If your product, software or hardware, may be used for any duration longer than five years, you would do well to consider each of these issues (adapted for your specific situation) and how you plan to address them in your product.

Peter Bamkole's MISFIT Framework

The mission statement of this blog is to examine the effects of innovation in developing economies. It's ended up becoming very focused on India, mostly because of my own background and experience. I will attempt to remedy this as much as I can and provide a broader perspective. I plan to bring in guest bloggers from Brazil, South Africa and China in the coming months. But let's start with Nigeria.

The Nigerian government has recognized the importance of entrepreneurship in their economic development, and has made its study required for all university students. Leaving aside the irony of government mandated entrepreneurship, it is a worthy cause. To promote entrepreneurship in Nigeria, the government set up an organization called Enterprise Development Services, funded by, among others, the World Bank and HP Nigeria.

Peter Bamkole, General Manager, Enterprise Development Services, was in the US recently, and spoke about the challenges of setting up the conditions to support entrepreneurship and innovation in Nigeria. It's very interesting reading, particularly his method of analyzing the conditions that negatively affect entrepreneurship. He calls it the "MISFIT" framework. It's an acronym that expands to:

• M – Market. How do you provide people access to markets and an understanding of the requirements of that market? For example, how is a small business owner in Nigeria to tackle the US market? Where does she get information about regulations, for example?

• I – Infrastructure. Lack of predictable and stable power supply; high transportation costs.

• S – Support Services. Support organizations that provide mentorship and guidance to entrepreneurs are too few and far between to provide the level of service needed.
  

• F – Finance. Lack of risk capital available to entrepreneurs. Some of this is also due to entrenched mindset of debt vs equity, since that was the only option for a long time.
  

• I – Information. As Mr. Bamkole puts it: "lack of access to information significantly reduces the motivation to venture. In the USA and other developed countries, information abounds. This in no small way helps entrepreneurs make “informed” decisions when venturing. They can research the sector/industry they are about to venture into and the best strategy to adopt, etc. Where there is no access to information, it's like venturing in the dark."

• T – Technology. The entrepreneur lacks access to the tools to drive efficiency and productivity gains.
  

The interview is worth reading and/or listening to, and the MISFIT framework applies to all developing economies to one degree or another. Good luck to you Mr. Bamkole!

50 Most Important People on the Web?

PC World has a list of the "50 Most Important People on The Web." Yes, we all know that these lists are marketing gimmicks and not serious attempts at analysis and measurement of influence. Still, it's a lot of fun to go through them. This list is interesting because it contained names I had never heard of before and because it has informative blurbs against each entry. While there will be endless quibbling about the choices in this list, there was one stark reality that leapt out at me: the lack of non-US spots on the list. I could count only five:

• #13 Henry Chon, CEO of Cyworld. The Korean site that inspired MySpace.
• #15 Niklas Zennstrom and Janus Friis, the creators of Kazaa, Skype and now Joost.
• #20 Jack Ma, COO of Alibaba.com. Business to business portal and control of Yahoo! China.
• #43 Mikko H. Hypponen, F-Secure. Finnish security maven.
• #48 Mohammed and Omar Fadhil, Iraqi bloggers. Writing about the situation in Iraq from the ground in Baghdad.

There's no question that the vast majority of content, as well as underlying infrastructure and tools, come from the United States. Even so, just 10% of the total list representing the world outside of the US seems like a very low number to me. Keep in mind that the US accounts for about 20% of all internet users and is growing slower than every other region in the world.

I'm sure the compilers of the list had no plan to consciously exclude, but I really hope to see this number increase over time.

India Poised

Some of you might be familiar with the "India Poised" ad campaign organized by the Times of India media group. It's an ambitious undertaking, and basically amounts to a nationwide call to action that consists of three points:

• Think big. Think scale.
  
• Don't ignore social inequality.
• Build an engaged civil society.

The website is an interesting combination of the positive (e.g celebrating unsung heroes) and the cautionary (e.g. underperforming sectors). They even have a slick TV ad that's worth a watch.


This is the second large scale branding/nation-building campaign I've seen out of India in the recent past. The first was meant for an external audience, the India Everywhere campaign at Davos last year, while this is targeted domestically. It's an interesting use of marketing to drive economic growth & empowerment. I wonder if there are analogues in other developing countries, and if so, how effective these campaigns tend to be.

Hardwired for the Web

I recently came across the wonderful "Hole in the Wall" project, run by Sugata Mitra, a computer scientist in New Delhi. PBS has an eight minute video segment you can watch here. It's well worth watching. Yes, the sociological implications are significant, but its also just a wonderful, heart-warming story of some impressive young kids realizing their unlimited potential.

The war for talent

If you've followed the labor market in India, you probably know that it's a red-hot market for job seekers. This is not a new phenomenon - this BusinessWeek article from 2005 talks about the issue - but it has taken on an added urgency as the shortage becomes increasingly acute. There's a huge scarcity of people with the required technical or managerial skills to fill the positions that the fast-growing knowledge industries require.. Attrition rates are high, wage inflation is sky-rocketing and poaching by rival firms is a full contact sport.

At the macro level, the only solution is to increase the supply of qualified workers. Everyone understands this, and the education sector is booming as a result of this. At the micro level, companies (at least large ones) will increasingly shoulder the burden themselves. Some already do: Infosys runs what is probably the world's largest and most sophisticated training operation. Other companies are looking to follow suit. However, attrition rates are still high at Infosys (many hires leave after their training period).

I've been involved in the dynamic first-hand. Based on what I've seen, here are three recommendations I would make to alleviate the problem, at least at the micro level.

• Select for fit. This is as much a mis-allocation problem as a supply and demand problem. What I mean is that prospective employees often don't look at "soft" but important factors such as the work environment, the dynamics of their future team etc, when making their decision. The decision is usually based on compensation and, in some engineering positions, on the programming tools used and the complexity of the problem to be solved. This is a myopic view, and can often result in dissatisfied employees that are a poor fit in the new organization. Company recruiters do not focus on the "fit" either, and hire based on skills and experience, with the same result.
• Use better recruiting metrics. Today recruiters are often able to measure "yield" - the number of hires made from a specific source, so that they can focus their efforts on the highest yielding sources. However, in an environment where attrition rates are so high, yield is not enough. Recruiters should track the progress of personnel, and add a "longevity" metric to their "yield" metrics. Better yet, try and isolate those characteristics that describe the employees that end up staying longer. Select for those characteristics, and focus on those sources that provide the most people with them. Reinforce success.
  
• Build recruiting feedback loop. In addition to isolating those characteristics that tend to be associated with success at the company, find those that don't. When people leave the company, follow a standardized exit interview process and collect the data in a form that can be analyzed (the advantage of high attrition: you'll have a lot of data!). Isolate patterns to try and determine retrospectively what could have been done differently. If there is a consistent "fit" problem, start screening for those characteristics during the interview process. If there is a consistent "dissatisfaction" problem, try and remedy it by either adjusting expectations during the recruiting process, or by changing the company's practices.
  

India is not the only country facing this problem. Its a global war for talent, and fast-growing emerging economies are the vanguard. How India and other developing economies tackle this problem will provide valuable insight to the rest of the world in how to manage and nurture talent.

Davos Update: Sunil Mittal on the "Shifting Power Equation"

Sunil Mittal, CEO of Bharti Telecom (large mobile operator in India) speaks about the power of emerging marketings in Asia and Eastern Europe.

Place thumb here for your money

Interesting article in the Financial Times about Citigroup introducing fingerprint-based ATM's in India. From the article:

"The machines will recognise account holders' thumbprints, eliminating the need for a personal identification number, and will have colour-coded screen instructions and voiceovers to help guide them through transactions."

Seems like an interesting innovation that could be extended to other developing economies as well. How serious is Citigroup about this? The article goes on to say that Citigroup currently has two such ATM's installed (in Mumbai and Hyderabad) and plans to expand to "25-35 machines within 18 months." This seems like an extraordinarily low growth target! If the new systems is not going to be material to their operations in India even in two years, what's the big deal?

C.K. Prahalad first identified the "Fortune at the bottom of the Pyramid." It's far better to treat the world's poor as consumers to be served with specific, unique needs, not with paternalistic earnestness. There's a lot of innovation still to come in the financial sector for the "unbanked" population. Microcredit. Mobile payment systems. Stored-value ("prepaid") cards. What else?

Yet another blog on innovation?

What is this blog about? Well you might ask: this blogosphere of ours is already thick with treatises on innovation. Virtual forests have been felled to explore this topic in every conceivable way and from every possible angle. Can anything, well, innovative, be said on innovation? Read on and decide for yourself.

Developing Innovation is dedicated to exploring software innovation in developing countries. I've been interested in technology adoption and software for a while. As an Indian, I've followed the technology outsourcing boom, and the creation of world class IT services companies such as Infosys and Satyam in the last decade. More recently, I've observed innovative software solutions developed in India for the local market. In many instances, the new technology is more advanced than that available in the US (e.g. in the areas of mobile and wireless). Yet, the vast majority of Indians remain unaware of technology and its potential to improve their lives. How to reconcile this "leapfrogging" adoption on one hand, and a complete lack of awareness on the other?

Is this an opportunity for software innovators to step into the breach? Or is India decades away from using technology in any broad-based manner? Are there similarities between India and other developing countries in the way technology can be built and used? Can those synergies be leveraged to go after ever-larger markets if your own market is too small for you to grow? The answer to all the questions, I believe, is a resounding YES. I think it is an opportunity: a very large opportunity. Here are a couple of reasons why (and I'll expand on these in future posts):

• High Growth: Emerging economies are undergoing higher rates of growth than they have in 50 years.
• Demographics: Developing countries are generally younger and more open to technological innovation.
• Greenfield Opportunity: Current software investment in most emerging economies is negligible.
• Local requirements: In many cases, the requirements for software products in the developing world are substantially different than those in the developed world. Not just product features, but also pricing and delivery models.