Which comes first, the problem or the solution? In the world of high tech, the answer may be, oddly enough, the solution.
In many cases we don’t realize what uses we can cover with a new technology until it has already become established for other reasons. Smartphones are great for sharing status reports on Facebook and passing along new video links to our friends. But if you want to see them stretch their wings, look at what’s happening in the developing world.
Much of Latin America, for example, is scantily digitized, with small family businesses on street corners operating on a cash basis even as they sell huge numbers of products. Point-of-sales tools are scarce to nonexistent in many areas and the recording method is more likely to be a pencil and notebook than a cash register.
A company called Frogtek is producing point of sales applications that run on smartphones instead of more expensive PCs, fed by an external bar code reader that connects to the phone through a wireless connection.
At a jump, these small retailers move into the world of inventory tracking and digital services to make better buying decisions and gain insights into where their business can grow, while big suppliers like Procter and Gamble suddenly get a window on how micro-retailers are doing.
One company’s software highlights an impressive truth: Smartphones will see a 22.5 percent market expansion this year driven largely by emerging markets not only to our south but in Indonesia, China and India. Market analyst Canalys sees untapped potential in all the developing markets, with a projected compound growth rate in smartphones much higher than the U.S. or western Europe.
Changes in Africa
No region highlights the change in model better than Africa. There a Seattle-based firm called Slimtrader is leveraging smartphones in a novel direction.
On a continent where Net-connected computers can be scarce, Slimtrader has set up interactive databases for buying products and services that operate through SMS, the short message service we use when sending a text to a friend.
A prospective customer can search a retailer’s inventory with a text message and then buy the product using the same methods.
With all of Africa’s enormous economic problems, it’s a fact that the continent had a 2008 GDP of $1.6 trillion, roughly equal to Brazil or Russia’s, and almost 700 million mobile phone subscribers. In countries where buying essentials often means standing in line and paying by cash, Slimtrader transactions can make a difference, allowing people to tap funds from credit or debit cards or accounts with their cell-phone company.
The tools are catching on: Slimtrader has been managing e-ticket sales for Nigerian airline Aero since 2010, and ferry services between Kampala, Uganda and Tanzania across Lake Victoria are now using the system, with timetables and ticket booking made available through SMS messaging.
No wonder, then, that Slimtrader is joined by companies like Umuntu Media, a Namibian firm that creates websites aimed at providing local content and business opportunities. Local notices move through text messages that connect buyers and sellers, operating with a micropayment system created to provide incentives for mobile transactions.
Or consider Kenya, where a mobile banking system called M-Pesa now handles 30 percent of the country’s GDP, winning the plaudits of no less a figure than Microsoft’s Bill Gates.
The emerging infrastructure was developed by Vodafone to let users manage credit by sending text messages.
What’s happening here is that wireless technologies are being leveraged in ways we might not have anticipated in areas where businesses operate without the benefit of basic business metrics, while scattered through towns and villages across the continent. Keep your eye on emerging markets like these – they’re showing us how fast technology can evolve to support micro-business models that can, in turn, bolster local economies.
Paul A. Gilster is the author of several books on technology. Reach him at firstname.lastname@example.org.