The M in Future
The future role of mobile phones in changing the world and a blueprint for what needs to change to make this reality.
The story of mobile phones as a force for good is akin to that of a child prodigy who has somehow not reached the heights anticipated. Among proponents of mobiles, there is a sense of pride in what has been achieved. But there is also a sense of unfulfilled hopes. At this point, there are too few commercially viable applications – beyond basic voice and SMS -- that also demonstrably do good. The same success stories – incredible as they are – are repeated time and again. “Where are the next M-Pesas?” asked one telco executive we interviewed. Innovations that promise to transform the future seem perpetually stuck just there – in the future.
Obstacles to impact
Our research highlights five obstacles that have held back the full power of mobiles to do good:
1. Too narrow definitions of “core”
Part of the challenge is inherent in any innovation. Innovations, almost by definition, involve taking concepts from one context, and applying them in another (often very different) context. They may not fit existing definitions of industry boundaries. Yet as industries evolve and mature, boundaries become more firmly defined in the minds of decision makers within them. The core takes shape based on habit and history. For this reason, they can languish without attention or resources from industry incumbents, whose habits and history direct them to their existing core, and within existing boundaries.
The world of mobile phones has changed dramatically in the last few years. Industries have converged. In the developed world, entrants such as Apple and Google from other industries, have created thriving ecosystems on mobile platforms such as the Apple App Store and the Google Play Store. These platforms connect players from across industry and geographic boundaries to users via their mobiles Though notable exceptions do exist, top decision makers too often define their core business narrowly, in a manner that is past-focused and based on historical precedent rather than in a manner that is future focused and based on a vision of what could be.
2. Too few platforms
Whether in healthcare, agriculture, commerce, or social services in general, there exist numerous initiatives around the world that seek to do good via mobiles. The challenge at this stage is not a surfeit of people or ideas. The challenge is that these initiatives, people, and ideas tend to exist in isolation, and rarely reach critical mass by themselves. There are too few platforms that bring users together with those who have solutions to their needs. Potential users – even those who are relatively educated or motivated to engage – find it impractical and tedious to remember multiple numbers and procedures to access the various mobile applications offered to them.
In developed countries, the proliferation of smartphones has been associated with the development of application platforms (such as the Apple and the Google stores) that host applications, and offer payment processing systems, standardised user interfaces and security features. Current users have the ability to rate apps, which in turn makes it easier for new users to search for and learn about app quality from other users. Such platforms are far less pervasive in the developing world.
Even in the developed world, the very popularity of the Apple and Google application platforms makes them unwieldy and difficult to navigate. For example, there are more than 13,000 consumer healthcare applications on the iPhone alone (according to Mobile Health News). “There are in this country, the UK, very many different proprietary solutions being offered by telecommunications professionals,” notes Ted Bianco of the Wellcome Trust. “None of those systems will talk to each other and all believe they’re trying to carve out their own commercial space. The reason for the lack of progress is a very parochial view is being taken by many of the players.”
3. Too much emphasis on current constraints
The reality of developing countries is that basic phones with simple voice and text capabilities are all that are accessible to a vast majority of individuals. Broadband enabled smartphones – with their capabilities to enable far greater information sharing, and to do so in a simple and intuitive way - are out of the reach of most. The proportion of projects that make use of broadband or location-based information is limited “The academic community is still stuck on SMS, and so is the NGO community, because that’s how you get money from funding agencies. You give a basic idea and somebody will give you $1 million to do things,” says Kanav Kahol, himself a former academic, and now a team leader at the Public Health Foundation of India.
In recent months, however, smartphones have been taking off in developing countries in an unprecedented manner. Handset prices have gone down substantially, and in proportional terms, data access prices have gone down even further. The Google mobile platform is gaining triple digit growth in developing countries (Although the poor still cannot afford smartphones as consumers, entrepreneurs in several countries are now making use of smartphones to offer services for the poor.
Interestingly, our review indicates that among mobile-based services designed to do good in developing countries, those that were also created in developing countries (i.e., those for which the primary design and entrepreneurial inputs for development come from developing country sources) are far more likely to go beyond basic SMS services than those originating in developed countries
The path to impact at scale for mobile data and broadband in emerging markets is unlikely to be a superhighway that connects directly to the most desperate poor. It is only when prices improve and products become simpler and more accessible that other segments adopt them.
4. Too much impatience
“This is a business with very low barriers to entry. Anyone with a mobile phone and some knowledge can get into it,” reflects Amit Mehra of RML. “As a result, there are lots of players launching services. But the challenge lies in sustaining the enterprise or initiative long enough to create a profitable business model.
“One big challenge which is fundamental to the construct of these ‘social’ initiatives is the need for patient capital. You are trying to solve something which is inherently difficult and, therefore, will take much longer than a start-up would normally take. For social enterprise initiatives, you need the governance and incentives that ensure a potent combination of patient capital and impatient management!”
The bad news is that the quest for large returns can blind corporations to the potential that could exist in projects. Ambitious executives who expect to do a short stint in a particular job before moving on to bigger tasks are leery of pursuing ideas that have long gestation periods. Promising ideas could be rejected because the commercial model is not yet fully formed, and it is hard to quantify the timing of large-scale returns.
M-Pesa, the phenomenally successful mobile money service in East Africa, was initially viewed with some scepticism within Vodafone, in part because it was not judged as meeting normal return expectations. As Michael Joseph, Director of Mobile Money at Vodafone notes: “Mobile phone companies launch new products like ring back tones or whatever it is, and they want a return in six months. They want a return, they want to see this thing is going to pay for itself very soon. M-Pesa will not begin to pay for itself for at least two years, and as soon as you start to focus on profit then it's the end of your success. I've told this to CEOs around the world when I speak publicly. If you start to look at profit and you say profit and M-Pesa in the same sentence, you're doomed. For a mobile phone company it's a product that increases customer loyalty. We never set out to make money from it, we set out to break even. That was the plan – we made money by accident.”
The pressure for quick returns is not unique to large corporations. Start-ups are perennially under pressure to generate cash flows and meet payroll and expenses. Indeed, many start-ups perish in the so-called “valley of death” after they have made their initial investments, and before the returns to these investments manifest themselves.
Governments are also not immune to impatience. “People want single answers and big, quick impacts, and that's the trouble with the world of policy,” says Diane Coyle, author of The Economics of Enough: How to Run the Economy as if the Future Matters. “I came across this Chinese proverb that you can't make a seedling grow by pulling it up, and in a sense, you just have to be patient, and some of the smaller enterprises may, over time, grow into bigger ones, and scale up that way.”
Funding agencies are susceptible to the exigencies of political terms and funding timetables. Politicians are eager to show returns before their terms are up. Projects funded under a particular agenda may suddenly find themselves orphaned when priorities shift and individual champions move on.
5. Weak supporting infrastructure
Much of the societal impact of mobiles over the last twenty years has been in helping those without access to infrastructure overcome the limitations of their circumstances. When roads and land-lines were poor or unavailable, mobiles created connections that allowed information to be shared, and commerce to be conducted. When banking was difficult or unavailable, mobiles facilitated financial inclusion. When electricity was sporadic or unavailable, mobile companies built gasoline powered base-stations, and entrepreneurs offered phone charging services for a fee. When institutions were weak or stacked against the average citizen, social activists used mobiles to engage in collective action. In general, mobiles have had their impact despite (or because of) poor infrastructure.
But weaknesses in the supporting infrastructure are increasingly a drag on the incremental impact of mobiles. “The impact of mobiles very much depends on having other infrastructure lined up,” emphasises Diane Coyle.
As MS Swaminathan, a leading scientist and member of India’s parliament notes: “The mobile is a friend – it is not an exploitative technology like, say, some forms of biotechnology. I have never heard any resentment against mobiles. It is one technology that is always welcome.”
However, governments tend to be complex entities with many decision makers and differing legacies and priorities across them. For mobiles to have a pervasive impact, they will necessarily have to touch areas of government far beyond telecommunications ministries.
For example, innovations that bring together communications and financial services, or communications and healthcare will necessarily involve not just one, but two or more regulatory frameworks. The regulatory regimes are often very different, and sometimes contradictory. Despite the good intentions of many in government, innovators who wish to have impact at scale face a daunting task dealing with these regulatory regimes.
6. Too many anecdotes, too few rigorous studies on user demand, commercial viability, and long-term social impact
Despite some promising efforts, and despite the research described in the paper that accompanies this one, it is fair to say that much of the existing evidence on the societal impact of mobiles is based on macro-level analyses, or on scattered case studies that do not meet scientific standards for rigour.
But impact is not easy to show, and showing it requires some planning. As Ken Banks, founder of Frontline SMS notes: “I’ve been in mobile for ten years now and people are still trying to figure out how you measure impact. One of the big challenges that mobile development faces is actually trying to figure out what the impact actually is. Many times projects don’t actually know their specific impact partly because there’s not been any baseline information collected before they started. So of course when they measure something afterwards they don’t quite know what they’re comparing it to, and there are a number of different factors that may feed into a particular result.”
The evidence that does exist is overwhelmingly based on first generation mobile applications (which rely on voice or SMS messages), and not on second generation applications such as those that involve mobile broadband. Moreover, the applications that have been examined by most studies so far have generally failed to attain scale. Indeed, few studies have included corporate actors that have the resources to drive impact at scale. Almost none have examined the long-term social impact of mobile-based interventions, even though many of these interventions are only likely to have an impact in the long-term.
The obstacles noted, while daunting and systemic, are not insurmountable. You can read our recommendations here.
This special report is in association with the Vodafone Foundation.
