azeem.azhar

CK Prahalad, who I had the fortune of working for in 2004, argued that developing markets were a great source of innovation because the constraints of less-well-educated consumers, inadequate infrastructure and low disposable incomes, concentrated the mind of the inventor. This sandbox became the mother of invention.

This idea has been developed further by the likes of John Seely Brown and John Hagel in what they term ‘innovation blowback’

1. Netbooks: Far from being cheap, dumbed down laptops, these are becoming highly optimised fit for purpose devices, a new class in themselves. Established device manufacturers have overshot the needs of a large part of the market (just as Chistensen describes in the Innovators Solution), the result a set of lower-specified devices which better meet the requirements of a growing subset of consumers. Wired has an excellent article on how this all started with the OLPC for the developing world.
2. Reuse and recycling. Over the past 20 yrs Westerners have slowly woken up to the importance of recycling. Recycling is a fact of life in developingh countries where everything that is recyclable or be re-used, is. In Dharavi, Asia’s largest ‘slum’ and the scene of Slumdog Millionaire, nearly 200,000 people are involved in the recycling business.
3. Sharing vs ownership: Car sharing schemes, private jets and even handbags and sunglasses are starting to take off in the US and Europe as we learn the importance of capital efficiency and sweating our assets. But in developing countries, all assets are sweated and worked hard. Someone who owns a car does not leave it idle 20 hours a day, but shares it (for a fee) with their neighbours.
4. Mobile payments. In London, you can at last pay for your street parking with your mobile phone. In Philipines, Smart Communications pioneered electronic sales of airtime, while Mpesa in Kenya launched microtransactions via the mobile phone in 2007. According to Wired, 30% of Kenyan’s use MPesa as a payment mechanism.
5. Microcredit and group lending: Microcredit took off under the aegis of Mohammed Younus and the Grameen Bank in Bangladesh. One of its innovations was the use of lending groups to better manage the risk of default; the other was providing line-of-sight of the debtors activities. While microcredit in the developed world hasn’t yet had the same impact, we are seeing similarities in the design of services like Prosper and Zopa.

Finally, how about emerging transplantees? What products or services are being developed for developing markets that could make as much sense in developed ones?

Hashcache is a web-cache and proxy service being developed at Princeton University which seeks to improve internet access in developing markets. Dollar for dollar it is ten times cheaper than traditional Web caching, so the economics make as much sense in the UK or US as they do in India or Pakistan.

What other examples of innovation crossing boundaries are there? I’ve wondered about Wimax, where the largest roll-out is in Pakistan; I’ve also thought about low-cost, compact modular cars which India is pioneering; and even music-business models, where Western markets are moving to a free to listen-to, free-to-own model rather like in China; as well as xenotransplantation. Any tips appreciated.

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