The ID team spends a lot of time discussing and studying the mobile technology industry. The driving force behind our focus on mobile technology in emerging markets has been the explosive growth of mobile phone penetration rates and the potential for mobile transaction systems to reduce poverty.
Our most popular post on this blog is “Mobile Phones at the Base of the Pyramid: Accessibility and Affordability” published in June 2010. In that post, we outlined why mobile phones matter, citing examples of connectivity and mobile access increasing income at the bottom of the pyramid. Since then, we’ve narrowed down our focus even more. Every day we learn about new mobile transaction systems and applications that change the way people at the base of the pyramid live and work.
Over the past few years we have learned that the key to mobile transaction systems is the exchange. As Dr. Harish Hande, founder of SELCO-India and the winner of the 2011 Ramon Magsaysay Award said in his keynote speech at ForSe2011, the poor must be “asset creators”. It’s not just about selling to the BoP, it’s about letting them sell to us as well. This means that when we drive products, information, thoughts, and opinions to the BoP, we should allow the flow to be reciprocated. Everything that flows “down” must flow back “up” for a sustainable cycle. This includes money, information, and social capital.
In that 2010 post, we also looked at the demonstrated market growth for mobile phones. We consistently monitor the penetration rates of mobile phones in emerging markets. The World BankDatabase is a reliable resource, currently offering data through 2009. Based on that data, we projected the penetration rates for 2010 and 2011(using a conservative diminishing returns formula for the falling year-on-year growth averages). The chart below shows the number of mobile phone subscribers per 100 people in Latin America & the Caribbean, India, and Sub-Saharan Africa. We compared these three emerging market regions with the United States, the European Union, and the world as a whole.
Even at slowing growth rates and our conservative estimates, we can see that access to mobile technology in the developing world has increased tremendously over the past decade. Now, social entrepreneurs are leveraging these high penetration rates to create businesses and wealth that enable sustainable development. Muhammad Yunus, Nobel Peace Prize winner and founder of Grameen Bank, famously said: ”When you get a mobile phone it is almost like having a card to get out of poverty in a couple of years.” There are a variety of tools, applications, and services that mobile technology provides to empower the BoP and, here at ID, we strive to understand each of them.
Over the next few weeks, we will post the different examples of mobile transaction systems and the ways they empower the world’s poorest citizens by creating exchanges. Up first on the agenda is Mobile Money Transactions, check back next week for the first examples.
Update: