EECS 294-12
An Information and Communications
Technology (ICT)
Framework for Developing Regions
Berkeley:
Professor Eric Brewer, EECS
Tom Kalil, Special Assistant to the Chancellor
Professor Richard Newton, Dean of the College of Engineering
CMU:
Rahul Tongia, Institute For Software Research International
M. Bernardine Dias, Robotics Institute
Prof. Raj Reddy, Robotics Institute/Computer Science
Logistics and Other Practical Stuff
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EECS 294-12 (will be cross-listed at Haas for business students), 3
units
Project, 60%; Homework 20%; Class participation 20% of final
grade
Written project with oral project review in last two weeks of
semester
Typical class format: 1 hr of lecture, 1 hr of discussion (3rd hr
reserved for use when needed)
All other details on the web site at:
http://courseweb.berkeley.edu/courseweb/pub/courses/2003/FL/COMPSCI/294/012
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We will be using the Blackboard system at CMU for additional
communications, etc.: www.cmu.edu/blackboard
Value Creation in Product Development
... The Way It Used to Be
$ ROI
e.g. IBM, Hitachi, Digital,
Siemens, Fujitsu
Product
Definition
Markets
Product
Implementation
Fundamental
Technologies
Technologies
Source: Stan Shih, Acer, 1992
Value Creation in Product Development
... The Way It Is Today
$ ROI
e.g. Microsoft, Sony,
Acer, Cisco, Dell
Disruptive
Business Model
Product
Definition
e.g. Xilinks,
Intel, 3M
Disruptive
Technology
Product
Implementation
Fundamental
Technologies
15nm
Markets
Technologies
Source: Stan Shih, Acer, 1992
‘The Bottom of the Pyramid’
Annual Purchasing Power
Parity (PPP) in $US
> $20,000
Population
In Millions
Wealthy
Nations
adjacent
markets
100
We Can Build Large and Sustainable
Businesses Based
on These Markets
‘mass’ markets
$2,000—$20,000
Middle Class
in developing
emerging
countries
2,000
< $2,000
4,000
4 Billion People
Earning less than $2,000/year
Source: Prahalad & Hammond, Harvard Business Review, Vol. 80, Issue 9 (Sep. 2002), pp48-58
The Bottom: A Brief Description
3-4 billion people with per-capita equivalent purchasing
power (PPP) less that US$2,000 per year
 Could swell to 6-8 billion over the next 25 years
 Most live in rural villages or urban slums and shanty
towns—movement towards urbanization
 Education levels are low or no-existent (especially for
women)
 Markets are hard to reach, disorganized, and very local
in nature
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http://www.wri.org/meb/wrisummit/pdfs/hart.pdf
Growth in Megacities—An Urban Future
Concentrated Population can be Addressed More Efficiently
Example:
An Emerging Market—India
Traditional MNC
Business Model
Some MNCs?
Local Firms
Future
Opportunity?
http://www.wri.org/meb/wrisummit/pdfs/hart.pdf
The Bottom: Not the Same Everywhere
http://www.wri.org/meb/wrisummit/pdfs/hart.pdf
Example: India—Many Price Points
Extent of benefit desired
RICH
CLIMBER
CONSUMING
CLASS
ASPIRANTS
DESTITUTE
Price able to pay
Source: NCAER, Millions of Households in 1999,
and Rama Bijapurkar
Example: India—Digital Photography
“Pyramid”
Phogenix DFX
complete system for
$39,900
Photo shop for $3,000
Enterprise
SME (1000)s
Cheap Photo shop $1,000
Entrepreneurs
100,000s
Village Photographer
Target $400 -> $200
Source: Dr. Per-Kristian Halvorsen, HP Labs
Speculative
Technologies
Hand-writtten Email sent as bitmap
Telugu and Hindi voice-enabled
news retrieval system
Source: Dr. Per-Kristian Halvorsen, HP Labs
ICT4B—Hypothesis 1:
 Current ICT projects for the Developing World
are just “trickle down” first-world technology:
 Too
expensive
 Assumes reliable infrastructure, power
 Assumes IT knowledge and significant support
 Assumes literacy
 We can directly attack these issues
ICT4B—Hypothesis 2:
 Thousands of ICT projects, but:
 Almost
all focus on devices not infrastructure
 No single project can afford to build infrastructure,
but all of them would benefit.
 Existing elements of infrastructure not leveraged
enough!
 Key Idea: We can enable low-cost infrastructure
 Enhance
all of the existing projects
 Enable new projects that were previously intractable
ICT4B—The Big Picture
 Enhance and enable ICT projects:
 Novel
technology (direct attack)
 Novel deployment/support
 Support for semi- and illiterate users
 Two real-world deployments (validate)
 Question: Is this really true? Can new
technologies really make a big difference here?
Or is this market better served by a “trickle down”
of existing technology and the real challenge is
simply the business model aspect?
ICT4B—Hypothesis 3:
There are many applications that can benefit the
developing world built upon an affordable, reliable and
ubiquitous ICT infrastructure.
 There are sufficient productivity gains, opportunities to
increase government efficiency, and health and wellbeing benefits to build sustainable businesses at all
levels
 By providing these opportunities in the developing
world, we will also provide a mechanism to address
such critical long-term issues as population growth,
human rights, and a sustainable environment
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“The Digital Provide”
Global Information Technology Report 2001-2002:
Readiness for the Networked World (http://www.weforum.org)
Economic
Growth
Economic
ROI
Income Gains
Capital
Investment
Effective Markets
Information for Economic
Decisions
Information and Communication
Technology
Tangible Economic Benefits of ICT4B
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Productivity
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Income generation
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ICT equivalent of “Super Money Maker” irrigation pump—6-9 month payback
GrameenPhone—$170/month vs. $368 GDP/capita in Bangladesh
Outsourcing
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Drives long-term standard of living
Large part of U.S. resurgence of productivity growth in 1996-2002
How widespread would it need to be in LDCs to yield significant productivity
increases?
Virtual security guards from Cape Verde
Business process outsourcing in India
But if 5 percent of developed country service jobs are contestable—only 0.24%
of developing country population
“Digital diaspora” as development resource (brain drain to brain trust)
Economic Benefits and Applications
 Price discovery—rural
farmers able to double
incomes by discovering price of their crops in the
capital city
 Improved exports to developed country markets
 Transfer of dollars from diaspora—networked
diaspora as a development resource
 Coordination of transportation and distribution
(e.g. crops to markets)
 Natural disaster mitigation—early warning of
floods, monsoons, etc.
Example:
ICT for Improving Market Efficiencies
“Price dispersion is a manifestation—and, indeed, it is
the measure—of ignorance in the market” (Stigler, 1961)
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Badiane and Shively (1998)
studied monthly maize prices
in Ghana from 1980 to 1993:
“…the estimated time to fully
transmit a price shock to
each of two outlying markets
is about four months.”
Source: China Health and Nutrition Survey, 1991
Economic Benefits and Applications
 Price discovery—rural farmers able to double incomes
by discovering price of their crops in the capital city
 Job creation (jobs like data entry that can be shifted to
developing countries—inexpensive IT workforce)
 Improved exports to developed country markets
 Transfer of dollars from diaspora—networked diaspora
as a development resource
 Coordination of transportation and distribution (e.g.
crops to markets)
 Natural disaster mitigation—early warning of floods,
monsoons, etc.
ICT Empowers Women
“We get our freedom from the
Internet, since in our society girls
are not allowed to go wherever we
want…the Internet takes us out to
other people, places and
realities…it is our way of escaping
from our closed society. It is vital to
us, it gives us liberty.”
A young Muslim girl from Mauritania, Global
Information Technology Report 2001-2002: Readiness for
the Networked World
“The Digital Provide”
Societal
ROI
Economic
Growth
Income Gains
Effective Markets
Information for Economic
Decisions
Information and Communication
Technology
 Smaller Families
 Healthier Families
 Better Education
 Capitalism Thrives
Social Benefits and Applications
 A Platform for Education, Training and Consultation
 Educated
healthier
women have fewer children and they are
 Transparency:
 Cost of obtaining a land title in Madhya Pradesh drops from
$100 to 10 cents (reduced corruption)
 GIS for location of roads, schools, power plants to reduce
politicization (Bangladesh)
 Internet-based disclosure
 Increased pressure for compliance with environmental
regulations
Social Benefits and Applications
 More voices (ease of publishing, many to many
communication)
 Honduras–all
media owned by one of 10 wealthiest
families
 Revistazo.com provides outlet for investigative journalism
 Entertainment
 Developing country “communities of practice”
 Preservation and global sharing of local culture
Health Benefits and Applications
 E-health (Health information, remote consultation
using digital cameras, public health networks)
 SMS “text messages” used to increase
compliance for TB treatment in S. Africa:
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tablets 5 times/week for 6 months
 Non-compliance increases drug resistance
 Only 1 treatment failure in pilot of 138 patients
 Very significant life and cost savings possible
Example:
Health benefits of ICT—River Blindness
 IT used to help eradicate black fly that carries
river blindness in West Africa
 Network of real-time hydrological sensors,
satellites, and forecasting software determined
best time to spray larvicide
 Protects 30 million people from infection
 Freed up 100,000 square miles of land –
capable of feeding 17 million people
But ICT not just VOIP, Computers and
Internet…
 MEMS for low-cost “lab on a chip” and drug
delivery
 Sensors for environmental or food quality
 Remote sensing for predicting crop yields and
enhancing regional security
 Leveraging “cyber-infrastructure” for science
aimed at developing country problems
ICT4B—We are Studying Five Main
Application Areas
 Commerce
 Health
 Education
 Government
 Location-based services
 Team includes social scientists:
 Professors
Stephen Weber, Isha Ray, at Berkeley
ICT4B—Hypothesis 4:
 It will take new and very innovative approaches
in ‘business models’ to make this work—this is
not just about technology!
 Financing
deployment: Grameen Bank, Grameen
Phone, Yahoo BB and DSL
 Distribution channels: Intel White-Box experience?
 Working with (or around) local and national
governments and regulations
 User and technical support models
 Deployment of services, enabling and encouraging
the development of applications built upon them
Disruptive Business Models & Implementation
... A Major Societal Opportunity
$ ROI
e.g. Microsoft, Sony,
Acer, Cisco, Dell
Product
Definition
e.g. Xilinks,
Intel, 3M
Product
Implementation
Fundamental
Technologies
15nm
Markets
Technologies
Source: Stan Shih, Acer, 1992
Example:
Grameen Bank—Bangladesh
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Owned entirely by the poor
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Began in one village in 1976
97% of equity owned by the (women) borrowers, remainder
by the government
2.6 million borrowers (95% women), over 1,000 branches in
over 42,000 villages. 12,000 staff.
Has loaned more than US$3.9B since inception
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Over US$3.5B repaid with interest (98.75% recovery rate);
$290M loaned in the last 12 months.
Has never accepted any charity—has always been run
as a profitable social enterprise
 46.5% of Grameen borrowers have crossed the poverty
line
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Grameen Telecom
A Disruptive Societal-Scale Business Model
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‘Village Phone’ is a unique idea that
provides modern telecommunication
services to the poor people of Bangladesh.
So far over 26,000 loans of average
US$200 have been given to buy mobile
phones.
Average Phone Lady income goes up by 310x!
The goal is to provide telecommunication
services to the 100 million rural inhabitants
in the 68,000 villages in Bangladesh—the
largest wireless pay phone project in the
World.
Disruptive Business Models & Implementation
Societal
ROI
... A Major Societal Opportunity
e.g. Grameen
Phone
Product
Definition
Markets
e.g. Cellular
Grameen Bank
Product
Implementation
& Wireless
Systems
Fundamental
Technologies
Technologies
Key Idea: Can such a model be used to successfully develop
and distribute other technologies and services?
Source: Stan Shih, Acer, 1992
So Why Now?
 Rapidly Expanding Access to Communication Networks
(especially wireless)
 Low-Cost Electronics and Devices
 Intuitive and User/Task-Oriented Interfaces
 Peer-to-Peer (and Device-to-Device) System
Architectures
 Precise Spatial Location (via GPS) Embedded into Every
Device
 Sensor fusion
 Unique Identity Systems
Source: John Gage, Sun Microsystems and K. C. Claffy, CAIDA, UCSD
ICT4B—Hypothesis 5:
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Key Idea: By developing technologies and services specifically
for this market, rather than simply retargeting existing
technologies, there is a disruptive opportunity
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Fully-integrated, single-chip handset
Chips optimized for server farm management—introspection, power
management, test, diagnosis and ‘self-repair’
Hardware and software interaction in new and unique ways (e.g. to
support privacy, security, reliability, reprovisioning and repair)
Key Idea: By co-developing devices and infrastructure,
significant efficiencies can be obtained, and such development is
possible in these relatively “green field” markets
New and very powerful architectural control points can and will
be established by the early-movers in these markets
Given the significant pent up entrepreneurial desire in these
markets, the ‘right’ technologies and services are likely to move
and grow relatively quickly.
Novel Technology
 Device cost: 10-100 times reduction
 Infrastructure cost: 10-100 times reduction
 Device power: 10-100 times lower
 Speech recognition for obscure languages and
dialects
What’s the Right Physical Network
Architecture?
“I took a map of India and said what if we drew 5000 circles, 40 km
in radius. … Each circle covers a 100 villages, about 5000 sq kms
each, on average 25000 families—100,000 people in each circle.
Now that’s a viable scale at which to build [network and
communication connectivity]. Out of a circle of 100,000 people I can
see at least a few thousand people effectively using all these
technologies … We try and build 5,000 important centers and not
outfit 500,000 villages. We build it in a way that any of the 100,000
people in the centers have access, but only if they are motivated,
only if they are driven, only if they are willing to work hard and if
they have a good use for this that has a good ROI.”
Vinod Khosla, KPCB, Stanford, 2000
Three Layer Architecture Vision
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Devices
 1-70 users each, $1-10
 Short range wireless (WiFi or kiosk at base-station)
Proxies (base-stations)
 100-1000 users, $200 , < $1/user
 Mixed wired (where exists), wireless (WiMAX with relay),
satellite
 Transient storage
Data Centers
 >100,000 users (more likely 1M users), < $0.10 / user
 Full power, networking, persistent storage
Question: Is this really just about the communication
architecture and aren’t people already deploying such systems in
the developing world? Won’t this just happen anyway?
Exploiting 802.11 and 802.16, and
Perhaps other Wireless Technologies
 Driver: coming of $5 chipsets
 Mix of local coverage and long-distance links
(50km), likely with relay
 All IP based: Voice and Data
 Multiple baseband channels?
 Illegal
in US, but fine for India
 Novel MAC layer? Antennas?
Devices
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Key Idea: Co-Design Devices/Infrastructure
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Novel low-cost OLED-based flexible displays
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=> 20-40x lower cost
Enables more functionality
Storage, processing, human analysis
Longer battery life
10-50x cheaper, more robust
Printed using an inkjet process
Key Idea: Develop standard SoC => $1-7 per device
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Looking at 1mW per device (including radio!)
Can still be very profitable!
Low-cost Infrastructure
Goal: 10-100 times lower cost
 Key idea: intermittent networking
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Most apps do not need real-time continuous communication
Asynchronous is 10-100 times cheaper?
Feel: some spots are highly interactive (continuous
speech, video), many may be more like e-mail—need to
validate market here.
 Novel protocols, application support
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Novel Deployment & Support
 Key Idea: Use micro-franchise model for long
term financing and rapid (viral) deployment
 Grameen
Phone
 Remote and self-management for most things
 Self-contained wireless proxies with ad hoc
networking (WiMAX 802.16?)
 No keyboard, monitor, etc. on proxies.
 Data Centers are widely shared
Summary
New approach for IT in developing regions
 Novel technology, infrastructure
 “Direct attack” on the key challenges and at the
extremes—we’re the University!
 Real deployments in the field
 Enable and enhance 1,000s of projects worldwide:
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Speech/communication
Access to local/regional/national/international information
Integration of sensor networks
Long term: IT for self-sufficiency, stability
(it must be a viable business, not financial aid!)
Reading for Week 2
Prahalad, C K and Hammond, A, Serving the World's
Poor, Profitably, Harvard Business Review, Vol. 80,
Issue 9 Sep. 2002, pp48-58
 Keniston, K, Grassroots ICT Projects in India: Some
Preliminary Hypotheses, ASCI Journal Of Management
 Prahalad, C K and Hammond, A, What Works: Serving
the Poor, Profitably - A Private Sector Strategy for
Global Digital Opportunity, World Resources Institute
(WRI), Markle Foundation
 Please come prepared!
 Available via the course web site(s)
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