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Developing World, Developing Businesses

Wired has a good article today on increasing efforts to build business models and ideas for the developing world that don't simply mimic existing American/European practices.

In Africa, there is a huge demand for simple technologies that can be used by people who lack access to banks, phone lines, credit cards and computers that Westerners take for granted. Living in the only country on this continent that has a modern infrastructure -- even while most of its citizens remain firmly entrenched in poverty -- South African entrepreneurs are in a unique position to develop and deliver these products to Africa's poor, says Raven Naidoo, a founder of Radian, a small technology-consulting firm.

"South Africa is a testing ground but also a huge market," he says. "Typically in South Africa people have targeted the high end of the market, but it's a small high end. At the lower level the return might be lower, but there's a volume gain."

"That market out there is two-thirds of the world's population," says Alan Levin, Naidoo's business partner. "No one else is capable of seeing it the way we do, or putting solutions together the way we do."

Businesses cited as examples include "Wizzy Digital Courier" (which uses its own open source applications to archive email and web requests from computers without internet access -- typically those in remote schools -- onto inexpensive USB flash storage devices, rush the stored data to connected computers via milk truck couriers, then return the results the next day) and Fundamo (which allows mobile phone users to make payments via their wireless connection rather than having to use a credit card). And while Wizzy solves an infrastructure problem that will diminish over time as more locations get net access, Fundamo actually implements something that hasn't taken off in the West due to the abundance of the older credit systems:

Levin, of Radian, says the success of Fundamo in Zambia illustrates the changing mind-set among South African tech entrepreneurs, who in the past have struggled to sell their products in saturated Western markets instead of looking to their own backyards.

"These new technologies are taking on very quickly in the developing world, and allowing for a kind of leapfrog effect," he says. "While the First World countries are still in the credit card phase, this turns cell phone companies into banks."

"Leapfrog effect"... hmm... where have we heard that term before?


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