Saturday
January 2
2010

Bryan Farris

Why You Should Be More Focused on Data Access at the BoP

“Knowledge is power”

Sir Francis Bacon

The Power of Data
After the industrial revolution, the global economy shifted from the production of physical goods to the provision of services. However, the digital age has ushered in a new focus: the data economy.

Businesses are sparking up left and right to find efficient ways of gathering data, storing it or distributing it. At the 2010 Kellogg Marketing Conference, the keynote speaker, Stephen Baker, a BusinessWeek writer, said “Data is changing our jobs and businesses, and it’s also changing our lives.”

There is little doubt that data is the future and that businesses which make information available (think Google) will grow, while those without access to data will suffer.

The Knowledge Gap
It appears as if, once again, developing countries (and especially the poor within those countries) will be left behind. It happened before in the manufacturing revolution and it seems that the information age is no different.

Though data applications tend to be designed to be useful for large businesses in developed countries, many could be used in the developing world—if one has a computer and access to the internet. For the base of the pyramid, that is enough to be prohibitive.

Access to information and news enables businesses to optimize their operations, learn from each other and prepare for what is to come. Customer data can help a business improve the way it relates to its patrons. Market data takes power away from middlemen and enhances a business’s ability to plan for the future.

The Future is in Your Hands(et)
It is critical that social entrepreneurs find a way to make data and useful analytics more readily available for BoP businesses and individuals. Fortunately, the poor have made this possible by purchasing mobile phones, which is why mobile phone banking has become so popular.

In a paper titled, “Measuring the Information Society”, the International Telecommunication Union wrote “In the developing world, mobile phones have revolutionized telecommunication and have reached an estimated average 49.5 per cent penetration rate at the end of 2008 – from close to zero only ten years ago. This is not only faster than any other technology in the past, but the mobile phone is also the single most widespread [information and communication technology] today.”

Clearly, any hope we have of making information readily accessible at the BoP must be achieved via mobile phones. Some companies have started to do this, though I believe there is much ground to cover. Current applications tend to be focused on providing information to small-scale farmers (see an article recently featured in NextBillion’s news feed about China-mobile’s efforts to make information available to farmers: http://www.bbc.co.uk/news/business-12010549).

For a more technical analysis of the issue as it relates to small-scale farmers, please read “Getting Prices Right: Mobile Phone Diffusion, Market Efficiency and Inequality” which describes why access to information in one market can be detrimental for other markets.

It is my perspective that developed countries have access to information today and without significant effort to build mobile applications that deliver information to the BoP, the knowledge gap will lead to an increased income gap.

Call to Action
To help improve quality of life for the world’s poorest, one must extend access to basic products and services, as Acumen Fund’s investees do. To help people climb out of poverty, one must provide access to finance and jobs. Access to information can help with both.

My challenge to you: find a way to transform mobile phones at the BoP from a simple call and text message device into a compass; one that points the poor in a direction towards a better life.

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