An Information and Communications Technology ICT Framework for

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 ® ® 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 (3 rd hr reserved for use when needed) All other details on the web site at: ® http: //courseweb. berkeley. edu/courseweb/pub/courses/2003/FL/COM PSCI/294/012 ® We will be using the Blackboard system at CMU for additional communications, etc. : www. cmu. edu/blackboard

Value Creation in Product Develop. . . The Way It Used to Be $ ROI e. g. IBM, Hitachi, Digital, Siemens, Fujitsu Product Definition Markets Product Implementation Fundamental Technologies Source: Stan Shih, Acer,

Value Creation in Product Developm. . . The Way It Is Today $ ROI e. g. Microsoft, Sony, Acer, Cisco, Dell Disruptive Business Model Product Definition e. g. Xilinks, Intel, 3 M Disruptive Technology Product Implementation Fundamental Technologies 15 nm Markets Technologies Source: Stan Shih, Acer,

‘The Bottom of the Pyramid’ Annual Purchasing Power Parity (PPP) in $US > $20, 000 $2, 000—$20, 000 Wealthy Nations adjacent markets Middle Class in developing countries Population In Millions 100 2, 000 We Can Build Large and Sustainabl Sustainab emerging Businesses Based markets These Marke on ‘mass’ < $2, 000 4 Billion People Earning less than $2, 000/year Source: Prahalad & Hammond, Harvard Business Review, Vol. 80, Issue 9 (Sep. 20

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 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 OR E IG FR T RA WA RE Extent of benefit desired RS E SH S AR C RICH ES CL Y BIC CONSUMING CLASS CLIMBER ASPIRANTS R LO TV CO W B& RS IXE M TV DESTITUTE IO D AU 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 Enterprise SME (1000)s Photo shop for $3, 000 Cheap Photo shop $1, 000 Entrepreneurs 100, 000 s Village Photographer Target $400 -> $200 Source: Dr. Per-Kristian Halvorsen,

Speculative Technologies Hand-writtten Email sent as bitmap Telugu and Hindi voice-enabled news retrieval system Source: Dr. Per-Kristian Halvorsen,

ICT 4 B—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

ICT 4 B—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

ICT 4 B—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?

ICT 4 B—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 well-being 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

“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 ICT 4 B ® Productivity ® ® Income generation ® ® ® ICT equivalent of “Super Money Maker” irrigation pump— 6 -9 month payback Grameen. Phone—$170/month vs. $368 GDP/capita in Bangladesh Outsourcing ® ® 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)

ICT for Improving Market Efficiencies “Price dispersion is a manifestation—and, indeed the measure—of ignorance in the market” (Stigle ® 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

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,

“The Digital Provide” Societal ROI Economic Growth Income Gains v Smaller Families v Healthier Famili v Better Education v Capitalism Thriv Effective Markets Information for Economic Decisions Information and Communication Technology

Social Benefits and Applications ® A Platform for Education, Training and Consultation ® Educated women have fewer children and they are healthier ® 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: ® 4 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

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

ICT 4 B—We are Studying Five Main Application Areas ® Commerce ® Health ® Education ® Government ® Location-based services ® Team includes social scientists: ® Professors Berkeley Stephen Weber, Isha Ray, at

ICT 4 B—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

Disruptive Business Models & Impleme. . . A Major Societal Opportunity $ ROI e. g. Microsoft, Sony, Acer, Cisco, Dell Product Definition e. g. Xilinks, Intel, 3 M Product Implementation Fundamental Technologies 15 nm Markets Technologies Source: Stan Shih, Acer,

Example: Grameen Bank—Bangladesh ® Owned entirely by the poor ® 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. 9 B sinception ® Over US$3. 5 B repaid with interest (98. 75% recovery rate); $290 M 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

Grameen Telecom A Disruptive Societal-Scale Business Model ‘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 3 -10 x! ® 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 ®

Disruptive Business Models & Impleme Societal ROI . . . A Major Societal Opportunity e. g. Grameen Phone Product Definition Markets e. g. Cellular Grameen Bank Product Implementation & Wireless Systems Fundamental Technologies Key Idea: Can such a model be used to successfully develop and distribute other technologies and services? Source: Stan Shih, Acer,

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

ICT 4 B—Hypothesis 5: ® Key Idea: By developing technologies and services specifically for this market, rather than simply retargeting existing technologies, there is a disruptive opportunity ® ® ® 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 ®

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 ® ® Devices ® 1 -70 users each, $1 -10 ® Short range wireless (Wi. Fi or kiosk at basestation) Proxies (base-stations) ® 100 -1000 users, $200 , < $1/user ® Mixed wired (where exists), wireless (Wi. MAX with relay), satellite ® Transient storage Data Centers ® >100, 000 users (more likely 1 M 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

Exploiting 802. 11 and 802. 16, and Perhaps other Wireless Technologies ® Driver: coming of $5 chipsets ® Mix of local coverage and long-distance links (50 km), likely with relay ® All IP based: Voice and Data ® Multiple baseband channels? ® Illegal in US, but fine for India ® Novel MAC layer? Antennas?

Devices ® Key Idea: Co-Design Devices/Infrastructure => 20 -40 x lower cost ® Enables more functionality ® Storage, processing, human analysis ® Longer battery life ® ® Novel low-cost OLED-based flexible displays 10 -50 x cheaper, more robust ® Printed using an inkjet process ® ® Key Idea: Develop standard So. C => $1 -7 per device Looking at 1 m. W per device (including radio!) ® Can still be very profitable! ®

Low-cost Infrastructure ® Goal: 10 -100 times lower cost ® Key idea: intermittent networking 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

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 (Wi. MAX 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, 000 s of projects worldwide: Speech/communication ® Access to local/regional/national/international information ® Integration of sensor networks ® ® Long term: IT for self-sufficiency, stability

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, pp 48 -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)