Santa Clara University

STS Nexus

The Accenture Economic Development Award

Alexander J. Field

Introduction

                The Economic Development Panel evaluated 52 applications this year, focusing its attention in particular on issues of the impact of the innovation and its potential replicability in other environments.  All told, we considered applications from a total of 24 different countries.    The largest number (15) came from individuals or organizations headquartered in the United States, although many of these involved projects focused on improving conditions in the developing world.  The second largest source of applications (8) was India, followed by Australia (4).

After vigorous discussion involving difficult choices, the panel selected five Laureates, distinguished by their variety and the creative ways in which they have used technology to benefit humanity.  Our honorees range from an improved method for catching rats in India, to an initiative to bring mobile phone service to villages in Uganda, to the use of Web-casts and video-conferencing to link indigenous entrepreneurs to potential lenders in Australia, to a much cheaper system of drip irrigation in India, and finally to a new cropping system in Nigeria that results in a 300 percent increase in gross yields.  

 

The Laureates

Center for Development of Disadvantaged People, Chennai, India

For most people in the developed world killing rats is not a high priority.  But in developing areas of the world control of rodent populations is a major issue, not simply because they carry diseases that can afflict both humans and animals, but, also, and perhaps even more importantly, because they compete with humans and their livestock for limited food resources.  In India, tens of thousands of individuals make their living catching and killing rats.  They do so using primitive technologies that damage their health, damage the environment, and don’t work terribly well.

The traditional technology utilizes an earthen pot with a mouth and another smaller opening.  The rat catcher stuffs straw into the mouth, lights the straw, and then uses his lungs to blow through the other opening, forcing smoke into the rat’s burrow.  If done successfully, the rat suffocates, but the method is not much kinder to the rat catcher.  He frequently burns his hands and lips on the hot pot, sears his eyes from the heat, and inhales smoke which damages his lungs and can produce heart problems.  Much of the smoke escapes, contributing to an already serious rural air pollution problem.  Often the ceramic pot breaks.

                The Center for Development of Disadvantaged People’s contribution has been to design a new device—easily manufactured locally—that addresses each of these problems.  The use of steel rather than clay prevents breakage.  A hand operated blower completely eliminates reliance on lung pressure to force air into the burrow.  Wooden handles allow the catcher to move the device without risking burns.  The basic system of killing rats remains the same, however, so no additional training is needed.

                Rat catchers are paid by farmers according to the number of rodents they catch.  The device was initially tested with 248 individuals, whose incomes and success catching rats was monitored.  Armed with these devices, monthly income of rat catchers doubled because of the increased efficiency of their work, and the health hazards were virtually eliminated.  Based on these results, the World Bank awarded the organization a Development Marketplace International Award, and provided funds to distribute 1,500 of the devices for free. 

                The rat problem in agricultural fields in India is described by one reference as “enormous.”  The device represents a genuine advance—not something that is being simultaneously improvised in a number of countries.  Yet it offers considerable opportunity for replicability since the problem addressed is common in many developing nations. 

More information on the Centre for Development of Disadvantaged People can be found at: www.cddponline.org/technology.htm 

 

Grameen Foundation USAGrameen Technology Center, Seattle, Washington, U.S.

Mobile phone technology has allowed a number of countries, such as former members of the Soviet bloc, to move rapidly to twenty first century levels of telecommunication service.  Under the old planned economies, investments in traditional land line infrastructure lagged behind Western levels. Mobile phone technology, because it saves capital, has allowed a certain leapfrogging—avoiding the need for the types of massive catch-up infrastructural investment that might otherwise have been required.  But in poorer countries, particularly in rural areas, income levels are too low to support this kind of diffusion, because most people can’t afford the cost of an individual phone and subscription.

                An innovative public-private partnership between Grameen Foundation USA and the telecommunciations company, MTN Uganda, is succeeding in extending inexpensive telecom service to the rural poor of Uganda. The problem in Uganda is not cell phone coverage per se, which extends throughout much of the rural area.  It is that individual mobile phone service is beyond the reach of the majority of rural residents.  In the country as a whole, there are only 1.72 telephones per 1,000 residents, and most of these are owned by urban residents.  The few affluent individuals in rural areas sometimes “rent” their phones out, but at exorbitant rates.  Eighty-six percent of the country is rural, and it is here where most of the 35 percent of the country that is poor is concentrated. 

                The mobile phone initiative involves a public-private partnership that harnesses individual incentives and entrepreneurship in a creative way.  Individual women in poor rural villages obtain a microcredit loan.  They use this to purchase a Village Phone business.  The package includes a GSM mobile phone, a power source for recharging (automobile battery or solar panel), a Yagi Antenna (which when mounted to a pole or tree branch and connected to the phone improves its performance), marketing materials, and SIM cards providing the entrepreneurs with access to discounted airtime from MTN Uganda.   Serving now as “Village Phone Operators ” these individuals are in a position to resell phone services to other rural residents, at rates far cheaper than in the past, yet high enough to provide a sufficient margin to enable repayment of the microfinance loan.

                The basic idea of using village phone operators to extend mobile service to rural areas of developing countries is not new. The Grameen Foundation has been wildly successful in Bangladesh, seeding villages with 50,000 phone operators, mostly female, whose income is three times the national average, and who now link these isolated villages with the outside world.  But until this initiative the Bangladesh success has not been replicated in any other country.  The Ugandan market is less dense and much smaller, and a major innovation here is the partnering both with micro-credit institutions and with a private mobile phone operator.  The use of prepaid SIM cards has enabled a substantial reduction in the number of individuals required to administer this program.  The integration with microfinance lending institutions, which have good knowledge of local conditions and creditworthy individuals, has been key in identifying potentially successful entrepreneurs.  Since automated billing software enables reporting of data on usage of each mobile phone, it is an easy matter for lenders to monitor the performance of each entrepreneur.  And the system has been quite successful.  The average village phone is used six times more frequently than the average phone owned strictly for private use.

                The immediate goal of this initiative is to disseminate mobile service to rural communities in Uganda.  Four hundred village phone operators are already in business and their  numbers are increasing at the rate of 60 per month.  Phone service, previously available only from affluent mobile phone subscribers who would sell some of their service at monopoly rates, is now far cheaper. 

                There are two main types of benefits.  The first is strictly economic.  Residents who have better (cheaper) access to information on prices elsewhere find themselves in a superior bargaining position in their dealings with middlemen who buy their produce and sell city produced goods.  And opportunities to serve as a village phone operator in themselves offer a source of income and a route out of poverty.  The second type of benefit is less directly measurable, but the ability inexpensively to maintain contact with friends and family has an important positive effect on the quality of life.

                The Foundation has paid special attention to documenting and validating the success of this model within Uganda.  Its longer run objective is to disseminate the knowledge gained to both the international development and the commercial telecommunications communities as a means of creating a world-wide village phone movement.

More information can be found at: http://www.tech.gfusa.org

 

Indigenous Stock Exchange, Mossman, North Queensland, Australia

                The judging panel received a number of applications involving innovative uses of information technology to improve the operation of markets.  We were particularly impressed by the efforts of The Indigenous Stock Exchange (ISX) in Australia.  Most of the applications reviewed involved attempts to improve the performance of commodity markets.  A distinctive feature of this effort is that it is aimed at improving the operation of capital markets.

                Australia’s indigenous communities are often remote and inaccessible—from the financial centers a site visit typically requires a plane ride of two to three hours and up to a day of travel over rough roads in a four wheel drive vehicle.   These conditions create obstacles to lending through commercial channels, and perhaps as a consequence, almost all of the development funds for these communities have traditionally come from government or philanthropic sources. 

                ISX is based on the premise that members of these communities have potentially profitable projects that could be funded by commercial banks or venture capital if the projects could be adequately vetted.  The idea here is to use Web casts and video conferencing to bring the surplus and deficit units together and enable mutually beneficial agreements to be struck.  

                Although the technology used varies somewhat depending upon the location, the basic format is to begin with a Web cast in which potential funders in the urban centers can see short presentations of business plans from up to 40 indigenous community entrepreneurs.  Descriptions of these projects are made available online for lenders to examine prior to the Web cast.  The presentations themselves are edited and made available subsequently on CDROM for lenders who were not able to listen to the live transmission.  The presentations are followed by a videoconference in which lenders and potential borrowers can talk back and forth with each other directly. The technology is coordinated by the Outback Digital Network, which is owned by five indigenous communities, and is able to provide conferencing services of very high quality.

                The panel expressed some concern that the initiative was still at a relatively early stage of development, but judged it sufficiently creative and unusual to warrant recognition.  The initiators have had to overcome deep skepticism, particularly among government officials, who sometimes expressed the view that it would be impossible to surface even one business prospect worthy of funding.  To date ISX has organized three trading floors, and over 90 businesses have been registered and given presentations.  The organizers of this initiative recognize that not all business presentations will be funded, but subsequent to the most recent event, 10 businesses succeeded in doing so.  Even for those businesses that do not receive immediate funding, the discipline and focus required in preparing a business plan and making a pitch can be a valuable benefit in itself.

                To validate effectiveness, the initiators have prepared a report after each event, and data on funding success will soon be made available online in real time. The goal isto create 1000 indigenous businesses by 2008.

More information on The ISX can be found at: http://www.isx.org.au

 

International Development Enterprises-International, Lakewood, Colorado, U.S.

                A problem for many farmers in developing countries is that conventional drip irrigation systems are expensive and have a minimum efficient scale which is far larger than the typical smallholder’s plot. International Development Enterprises-International has developed a micro-irrigation technology that cuts the cost of drip irrigation by 80 percent.  It can be used on very small plots (as few as 200 sq. ft) and easily scaled up to a system watering five acres.  The Easy Drip system uses flat tubing for its lateral runs, and requires 60-70 percent less water than conventional drip systems. The system can be gravity-fed from water stored in a metal cistern.  Water soluble fertilizer can be added to the drip, if desired. The cost is $160 per acre, and the system is designed to provide net returns that insure payback within a year.  Other advantages include freeing agricultural workers, usually women, from most of the burden of hand carrying water for irrigation purposes.

                The plastic tubing can be easily manufactured locally through simple methods of extrusion and injection molding.  The systems are sold as ready to use kits and self installed by farmers.  In the first three years after its introduction, 100,000 of these irrigation systems have been purchased by smallholders in India, Nepal, Sri Lanka, and Zimbabwe.  The system has wide applicability in India and Africa, particularly in regions of irregular rainfall.

                Many of the applications received by the economic development panel over the past four years, and a number of those honored, have, like this one, involved water.  This is not surprising.  About one out of five people in the world today earns less than a dollar a day, and three fourths of them, or 180 million families, live in rural areas where the chief occupation is agriculture.  The most accessible route out of poverty for these individuals involves increased agricultural earnings, which usually requires shifting to higher value, labor intensive crops.  Here the most critical constraint is water, and thus the importance, particularly in semiarid regions, of irrigation.  Drip irrigation is the gold standard, in terms of husbanding water resources and fostering rapid plant growth.  By dramatically reducing the cost of drip irrigation, International Development Enterprises-International brings this technology to a far larger fraction of the rural agricultural population.

                More information on Easy Drip and International Development Enterprises-International can be found at: http://www.ide-international.org

 

Dr. Bir Bahadur Singh, Kano, Nigeria

Since the dawn of agriculture with the Neolithic revolution 12,000 years ago, productivity advance has been threatened by soil depletion and benefited by improved methods for mixing crops and intensifying land use.  A thousand years ago the shift from a two field to a three field rotation in Europe increased the amount of land under cultivation at any time, introduced nitrogen fixing legumes which restored some of the fertility depleted by cereal crops, produced greater quantities of fodder which resulted in more manure and a virtuous circle of fertility enhancement, and spread peak agricultural labor demands more evenly across the year.  These changes laid the foundation for rising incomes and population expansion up until the eve of the Great Plague in the fourteenth century.

                In the twenty-first century, the issues of food security, soil depletion, and intensification of land use are still with us.   Dr. Bir Bahadur Singh has developed an improved cropping system for savannah regions of Nigeria.  The system is based first of all on developing improved varieties of cowpeas—an indigenous high protein nitrogen fixing legume.  The objective has been to generate plants yielding high quality food and fodder and at the same time resistant to disease, worms, and parasitic weeds.  These improved varieties are then used in a cropping system that intensifies land use and more effectively integrates arable with pastoral activity.  The system intersperses four rows of cowpeas  with two rows of cereals.  This replaces the traditional planting of one row of cereal interspersed with one row of legumes.  The plants are harvested at different times, spreading peak labor requirements across the year, and the non-edible portions of the cowpea plant are fed to cattle as fodder, which produce manure, further replenishing soil fertility. 

                These innovations result in a 300 percent increase in productivity and gross income.  The nitrogen fixing quality of the cowpeas and the increased manure applications reduce the need for commercial fertilizer.  And the shift in crop balance toward legumes makes economic sense given the relative surpluses of grain and shortages of legumes in world markets.  Nigeria currently imports over 400,000 tons of cowpeas a year; this initiative has the potential to reduce this dependence. The system is easily adaptable to other low rainfall regions of the West African savannah.

More information on the strategic seed reserves project can be found at: http://www.iita.org/crop/cowpea.htm

 

Conclusion

It is perhaps not accidental that every one of our Laureates involves an initiative to improve the life of people in rural agricultural communities in some way.  It is not accidental because it is in these areas where we find the bulk of the world’s poor and so that is where we have the greatest potential to use technology to benefit humanity.  Each of the five Laureates for the Accenture Economic Development Award evidenced both impact on economic development and replicability in multiple implementations in rural agricultural communities.  We do not wish to discourage applications with a more developed economy focus—and the panel has honored a number of such applications in the past.  But work from developing countries was predominant among this year’s applications and our Laureates.

 

 

The Panel

Alexander J. Field, Chair, Michel and Mary Orradre Professor of Economics, Santa Clara University

 

Linda Kamas, Associate Professor of Economics, Santa Clara University

 

Brooke Partridge, Director, Market and Business Development, Emerging Market Solutions, Hewlett-Packard Company

 

Drew Starbird, Associate Professor of Operations Management and Information

Systems, Santa Clara University

 

Reiji Sano, Lifetime Honorary Member of Matsushita Electric Industrial Co. Japan, Distinguished Visiting Fellow, Center for Science, Technology, and Society,

Santa Clara University

 

Shahid Firoz, Former Vice Chairman, Economic Development Council,

Karachi, Pakistan

About the author

alexander field

Alexander J. Field

Alexander J. Field is the Michel and Mary Orradre Professor of Economics at Santa Clara University. A member of Phi Beta Kappa and Beta Gamma Sigma, his research and teaching interests include American and European economic history, macroeconomics, and the economics of technological and institutional change. His latest article, “The Most Technologically Progressive Decade of the Century,” appeared in the September 2003 American Economic Review. Professor Field’s administrative positions at Santa Clara University have included chair of the economics department, associate dean and acting dean of the Business School, acting Academic Vice President, and member of the school’s Board of Trustees. Professor Field received his A.B. from Harvard University (1970), his Master of Science from the London School of Economics (1971) and his Ph.D. from the University of California, Berkeley (1974). He taught previously at Stanford University.

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