Tuesday
December 30
2014

Tomohiro Hamakawa

5 Success Factors for Technology Distribution and Adoption in the Last Mile

Editor’s note: As part of our Most Influential Post of 2014 contest, we are re-publishing the articles that attracted the most reads. This article was the most-viewed for July. To see the full list of the most popular posts in 2014 and to vote for your favorite, click here.

How can innovative technologies be distributed and adopted at scale in the last mile?

This is a key question driving activities of many social enterprises and nonprofits aiming to leverage the power of innovative products designed for the poor. Kopernik, a nonprofit headquartered in Indonesia where I am a project manager, has been trying to answer this question for the past four years. In connecting solar lights, water filters, clean cookstoves and other simple technologies with more than 190,000 people to date, we have learned some important lessons. Recently, we have consolidated our observations into five key factors that serve as guiding principles in our work today – factors we hope will be useful for other enterprises hoping to make market inroads.

Factor 1: Activating a local network of trust

In introducing new technology, a stranger to a community achieves very little. This becomes even more important when reaching remote villages where the social fabric is traditionally tight and strangers stand out. Understanding this social dynamic, we have worked to identify organizations that have existing networks in the local area and work closely with them. Such entities can range from community-based organizations, cooperatives, savings and loans groups, schools, churches, to even mom-and-pop shops. (We work with local merchants, train them, and make them “tech kiosks” which sell products like solar lights, water filters and clean cook stoves.)

The type of partner organization depends on the local context. For example, on the Mentawai Islands of West Sumatra, Kopernik collaborates with a small kiosk willing to serve as a retailer of life-changing technologies, rather than trying to create a distribution mechanism from scratch. This is effective not only in reaching potential users, but also in ensuring the sustainability of operations.

Factor 2: Lowering financial barriers

In addition to activating a trusted network on the ground, lowering financial barriers is critical in delivering and catering to consumers in the last mile. Families relying on subsistence and semi-subsistence farming and fishing are highly price-sensitive given their low cash income. Based on dozens of needs and impact assessments conducted, we’ve learned that willingness to purchase new technology is dependent on the offered price, even if a product has clear long-term economic benefits.

In a project in East Java, for example, this approach involves using philanthropic money in the form of subsidies to reach the last mile. Specifically, we harness individual donors and corporate grants to finance the upfront cost of products, shipping and marketing. The products are sold to last mile communities at as close to retail price as possible (i.e. no price subsidies), but revenues are reinvested in the purchase and delivery of additional products in the same community or other geographies. (For more information, please click here.) In addition, lowering financial barriers not only involves setting appropriate prices, but requires flexible payment options. Kopernik allows installment payments in most projects and surveys local practices in the project-planning phase to tap into existing platforms.

Factor 3: Riding the technology adoption wave

In addition to approaching last mile communities through a trusted network with lowered financial barriers, we’ve learned that technology adoption takes time. Technology adoption does not happen through a one-off, dissipating wave; a gentle yet persistent effort needs to be sustained to convince people of the benefits of the technologies and the trustworthiness of the technology promoters.

The well-known Everett Rogers Technology Adoption Lifecycle Curve segments a bell-shaped curve into innovators, early adopters, early majority, late majority and laggards. The theory behind this curve is that once a critical mass of innovators and early adopters become favorable consumers of a product, the early and late majorities as well as the laggards naturally follow suit, ensuring widespread adoption. Based on our experiences, this theory also holds true in last mile communities.

Factor 4: Focusing on tangible benefits

Many of the simple, life-changing technologies available in the market bring multiple benefits to users. Solar lanterns, for example, not only leapfrog one of the key needs that comes with a lack of electricity, but are also cheaper in the long run and are safer than kerosene lamps. This is what makes these products truly innovative.

In marketing these innovations, however, Kopernik has learned that the most tangible benefits need to be most strongly communicated. Tangible benefits usually mean monetary benefits for people living in poverty in the last mile. Oftentimes, a single, simple message is more powerful than trying to communicate multiple, abstract messages at once.

Factor 5: Staying engaged, showing commitment

The final factor in delivering and ensuring uptake of technology in the last mile is to demonstrate commitment through continued engagement. Whether it’s through local partners or on its own, we ensure the target communities gain access to technologies and continue to have access to them despite the geographical distances.

One way to ensure sustainability is to train local people in last mile communities who can help others with maintenance of technologies (i.e. “training of trainers,” to use an international development jargon). In a remote community in East Nusa Tenggara, Kopernik’s local partner did exactly this while promoting local sales of fuel-efficient stoves, water filters and solar lanterns. Empowering local people with simple maintenance techniques resulted in a much higher sales volume compared to similar communities that did not conduct the same maintenance training.

Putting five factors into practice

Kopernik has learned that these five factors are indispensable in ensuring that innovative technologies reach and benefit consumers in the last mile. We’ve also learned that, despite the general theory of technology adoption, no two communities are the same, and each may require a somewhat tailored approach.

We hope to see more distribution success stories shared, so that financially sustainable supply chains can be scaled up to the benefit of technology producers, distributors and last-mile consumers alike.

For more examples and explanations of the five success factors, please access and download the full report here.

Tomohiro Hamakawa is a project manager at Kopernik where he manages consulting projects within the organization’s advisory service arm.

Categories
Energy, Entrepreneurship
Tags
consumer products, entrepreneurship, renewable energy, retail, social enterprise