The “How” and “Who” of Emerging Market Tech Uptake
The dynamics of technology are changing rapidly in emerging markets, but leaders don’t necessarily agree on all the details.
To a great extent, technology drives economic development. Few would dispute that statement, but it’s hard to predict—or sometimes even imagine—the magnitude of that impact. Travelling back just five years, for example, it would be difficult to foresee how a newly launched micro-blogging platform called Twitter would transform the knowledge economy and political process—and not just in rich countries, but all across the globe. Yet the ability to accurately predict how to successfully implement—and adopt—an emergent technology for development would allow developing countries to leapfrog otherwise coequal competition on some social and economic metrics, especially in health care, literacy, and education.
To understand how technologies become disruptive and who drives them, our organizations, Accenture Development Partnerships and NetHope, started with a simple question: What are the next steps for technology in the developing world? We began our research earlier this year and surveyed four important stakeholder groups—non-governmental organizations (NGOs), private sector firms, foundations, and government officials—to find the answer.
In total, our team engaged with nearly 300 private sector executives operating in emerging markets (across 13 geographies); leaders from 25 leading international NGOs; and more than 20 thought leaders from business, government, and the development sectors. Our working assumption was straightforward: Developing countries will likely continue to see major growth opportunities for technology (broadly defined) in the coming year. In 2001, there were fewer than 25 million mobile phones in Africa; now there are more than 650 million (an increase of 2,500 percent). This exceeds the number of mobile phones in both the United States and the European Union. Asia now has 2.8 billion mobile subscriptions, and by 2014, this number is expected to surpass 3 billion—serious growth.
But how do executives interpret these large gains in mobile technology usage?
To understand, we asked them who or what they saw as the principle “driver of change” in emerging markets’ technology uptake. We also asked them to specify whether they saw these change agents as multinational technology companies or smaller firms, locally based and organically part of emerging markets. The majority of business leaders in North America think that local consumers, and small and medium enterprises (SMEs), not large tech firms, will lead the technology revolution in the developing world; executives from all other geographical regions think that international technology firms (usually based in developed countries) will drive the change.
The most important factors in fostering successful uptake of technology in emerging markets were another area of disparity. The majority of business leaders in Africa said that local customer knowledge (for example, those with specific knowledge of the logistical challenges faced by farmers or entrepreneurs) was the biggest driver of growth while North American and South American executives placed more importance on innovative and efficient supply chains.
A common theme throughout our conservations was the importance of tailoring a solution to a specific market versus expecting successful models to have the same results everywhere. With literacy, for example, first finding out if (and how well) your end user can read should inform your solution—but this kind of research is often overlooked.
Interestingly, 52 percent of NGO respondents said that traditional, low-cost, proven technologies like radios are still the most effective tool for reaching end users in the developing world. In Kenya, for example, more than 85 percent of the population has access to radio broadcasts at home, while only 60 percent own a mobile phone. In Uganda, 96 percent of the population listens to the radio on a weekly basis, but only 39 percent has access to mobile phones.
Even with these numbers, private sector executives see text messaging as a valuable technological development, and almost 40 percent of them report that they would invest in mobile-based apps to reach new customers and improve supply-chains in emerging markets over the next 5 years (an increase of nearly 10 percent over organizations currently investing in SMS and application technology).
GlaxoSmithKline (GSK) and mobile operator Vodafone Group are partnering on a text messaging initiative that helps vaccinate children in Africa against common infectious diseases—for example, healthcare facilities can report vaccination stock levels by text. “The great thing about mobile technology in Africa is you can skip levels of innovation and cut to the latest ones,” says Duncan Learmouth, head of GSK’s Developing Countries Unit. Our research echoes that same sentiment: 70 percent of respondents said that circumventing poor infrastructure was one of the most important benefits of rolling out mobile technology in the developing world.
Infrastructure growth means booming new technology markets and related opportunities. Global technology firms have caught on to the fact regional and local companies in emerging markets will bring competition, but they may be able to develop solutions that harness the power of local consumers and local knowledge to create competitive innovations we’ve hardly dreamed of in home markets to stay on top.
Read the first three in-depth papers in the new series on technology and development by Accenture and NetHope.