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With a bit of imagination, technologies can be made cheap enough for the poor, but investors needed, finds Kafil Yamin
[JAKARTA] Texting is great if you are literate. But for those who cannot read and write it is a useless feature of a piece of technology — the mobile phone — that is otherwise beautifully pro-poor.
Romdoul Kim, who works for the nongovernmental organisation Innovative Support To Emergencies, Diseases and Disasters [InSTEDD] in Cambodia, would muse on this problem as she witnessed its consequences: the poor could not benefit from the flow of information that could otherwise have been passing between health workers and patients in her area.
The solution, Romdoul told a conference earlier this year in Jakarta, Indonesia, was GeoChat, a facility that turns the spoken word into the written word and allows information to be gathered on subjects ranging from disease outbreaks to rural businesses.
GeoChat is an example of a technology that has been tweaked and adapted so it can reach the poorest people — those who inhabit the "base of the pyramid", or BoP.
A huge market
The four billion people worldwide who live on less than US$4 a day still have only limited access to science and technology, according to ‘Nurturing the Enterprising BoP: Cases from the PBSP Business Advisory Program’, a book produced by iBoP Asia, a non-governmental organisation jointly established by the Ateneo de Manila University in the Philippines and Canada’s International Development Research Center (IDRC).
Nearly three quarters of that four billion are living in Asia, making up four fifths of the region’s population, says iBoP Asia, which promotes research on science and technological (S&T) innovations for just these people.
Their technological marginalisation arises from their inability to access quality education, healthcare, housing — and bank credit for their entrepreneurial activities. Science and technology have, unfortunately, not improved this access.
The base of the pyramid, a term coined by C.K. Prahalad and Stuart L. Hart in their 2002 article ‘The Fortune at the Bottom of the Pyramid’, published in the magazine strategy+business, is, they argue, a promising market science and technology products.
The idea has caught the imagination of several South-East Asian countries and has become a regional initiative, with Indonesia, Malaysia, the Philippines, Thailand and Vietnam pushing their scientists and businesspeople to come up with creative innovations for the poor.
Key to the idea is that governments must be involved, funding scientists to do the research and encouraging businesses to invest. Meanwhile, businesses must learn to recognise where a huge number of tiny profits could add up to one big one.
Without these lures for investors, inventions such as the Mindanao wind turbine are not going to get anywhere.
Under iBoP Asia, the Philippines’ nonprofit organisation Tri-People Concern for Peace, Progress and Development of Mindanao (Tricom) is developing low-cost wind turbines for Mindanao island. Rather than rotating like a windmill, the rotor shaft runs vertically, so the turbines can be stacked, and they can power motors used for milling, pumping and weaving.
Wind turbine for Mindanao: it can power motors used for milling, pumping and weaving
The model was developed by Randell Espina of the Ateneo de Davao University in the Philippines and has shown promising results but, despite such dynamism, scientists say that the initiative will not become a reality without business investment.
Allen Hammond, co-author of the World Resources Institute and International Finance Corporation report ‘The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid’, says that, by stimulating commerce and development at the bottom of the economic pyramid, multinationals could radically improve the lives of billions of people and help create a more stable, less dangerous world.
And to achieve this goal they need not spearhead global social development initiatives for charitable purposes: "They need only act in their own self-interest," he says.
Hammond says that the vast market presented by the bottom four billion — around US$5 trillion according to the iBoP Asia report — remains largely untapped.
"The reluctance to invest is easy to understand, but it is based on outdated assumptions of the developing world," he maintains.
"Although individual incomes may be low, the aggregate buying power of poor communities is actually quite large, representing a substantial market in many countries for what some might consider luxury goods such as satellite television and phone services."
Governments say they have been working hard to foster interest in this approach. Indonesia says it almost doubled the S&T budget from one trillion Indonesian rupiah (US$110 million) in 2009 to 1.9 trillion rupiah (US$210 million) in 2010 in an effort to develop pro-poor technology.
Andrianto Handojo, chairman of Indonesia’s National Research Council, describes the thrust of Indonesia’s science policy as being "pro-poor, pro-food, green, health- and marine-related technology".
"The development of S&T has to be dedicated to the goal of poverty alleviation," Handojo says.
Similarly, Thailand’s National Science and Technology Development Agency (NSTDA) urges its business circles to develop biotechnology for food, biodiversity and healthcare, and to make its country a hub for biotechnology.
"We are doing biotechnology-related research now, and we are pretty sure this research can turn into real business," says Sakarindr Bhumiratana, president of NSTDA.
In an effort to stimulate investment in this field of research, the Thai government offered investors an eight-year tax exemption; followed by halving tax for a further five years and zero duty for importing machinery.
In Vietnam, minister of science and technology Hoang Van Phong says that the government is preparing a mechanism and a financial policy aimed at driving investment in S&T development.
He called on businesses to invest in S&T "for Vietnam’s socioeconomic development".
Meanwhile, the government of the Philippines says it has issued a regulation to promote the establishment of Barangay Micro Business Enterprises (BMBEs) — sub-district level organisations that provide incentives and benefits for business enterprises investing in rural technology development.
Reinvention is enough
Crucially, promoters of innovation for the BoP are saying it is not necessary to make radically new inventions — sometimes the innovation is to tweak an existing technology in the right way so it is perfectly adapted for the poor.
Ari Purbayanto, for example, a professor of marine resources at Bogor Agricultural University, told the March meeting about his fish meat−bone separator machine. He was inspired by the copious fish remains discarded by fishermen, an action that was wasting natural resources and polluting the marine ecosystem.
The machine he invented is able to sort fish meat from bone and cook it to a pulp which can become a constituent of various food products, giving remarkable financial benefits to fishermen.
Ari admits that the separator is not a new technology. But what is new is its simplicity and affordability. To achieve this, he made several modifications to an existing technology.
Technology-free zone? iBoP aims to bring him cheap, appropriate kit.
"Fishermen can purchase it at 20 million Indonesian rupiah (US$2,200), much lower than the foreign machine which can cost around 50 million rupiah (US$5,500)," he told the meeting.
Datin Nur Wahidah Wong Abdullah, under secretary of the Innovation and Commercialization Division of the Malaysian Ministry of Science, Technology and Innovation, believes that investment in pro-poor technology is sound and brings quick returns.
"In many cases, scientists just modify the existing technology to meet real demand," she said. "They need no big investment, and works are done quickly."
Kafil Yamin is a freelance science and technology journalist living in Jakarta.