DIODE General

Chat as an Interface for Underserved Communities

The platform economy largely relies on smartphones to distribute work to workers (who are typically conceived of as independent ‘entrepreneurs’). In the India, many platform economy workers come from low income communities from the auto rickshaw drivers on Ola and Uber to the delivery riders of Swiggy and Zomato. In parallel to the growing platform economy, smartphone penetration has rapidly increased in low income communities in India (at least in the cities) – due to extremely cheap data and the increasing availability of economy handsets. WhatsApp is a major driver of smartphone adoption (O’Neill et al, 2016). In ICTD how to provide services – for work, health, education – to underserved communities in an appropriate way is an ongoing question. The increasing use of smartphones as a tool for work and community raises new possibilities when thinking about ICTD services. In our research, we meet plenty of auto rickshaw drivers with low or no literacy but who competently use Ola/Uber to get work and WhatsApp to maintain connectivity with their network: sharing greetings and other memes, or using voice messaging.

The almost ubiquity of chat amongst smartphone users raises exciting possibilities for thinking about chat as an interface to a whole variety of services and information designed for, with and by underserved communities.

To illustrate I will share some reflections from our recent experiences designing a FinTech service for auto-rickshaw drivers. In particular why we moved from a smartphone application to using chat as an interface. The FinTech service, Prayana, has been designed to give auto-rickshaw drivers information on how they are progressing through loans they have taken out to buy their auto-rickshaws. This service is part of an ecosystem consisting most importantly of people – field agents, drivers, back office staff and community organisers – supported by technology which helps provide timely information, accessible to those with low literacy by making use of iconography, colour coding, visualisations and numbers. The Fintech service provides information, motivators and nudges on loan progress  direct to the drivers as well as to the field agents who help manage their loans. In the field agents version it also provides workflow support for the agents.

For the drivers app we originally designed a stand-alone Android application, but our experiences with the stand-alone field agents app we had deployed in 2017 raised serious questions about the sustainability of a standalone application. The field agents app required intense development effort just to keep it running: in the 12 months after deployment of the ‘stable’ version  we released 39 versions and recorded over 900 crashes! Pretty much whenever Android updated something would break. How would our partners, Three Wheels United (TWU), a small social enterprise start-up with limited technical resources, manage to sustain it once the research was done? Let alone develop the new features necessary to keep the application in line with their rapidly growing business? Worse still, whilst we could control what phones the field agents use for their work, we have no such control over the drivers phones which consisted of a wide range of handsets and versions of android. Even building a standalone app that can work consistently across such a variety of phones is a difficult task.  Finally, a standalone app would be yet another interface for drivers to learn and in our iterative tests, even as we simplified and improved the design, this remained a barrier for many drivers.

User test of Prayana with Auto-Rickshaw Drivers in Chitradurga, India

We had been doing research in another project on how Kaizala, Microsoft’s chat app for work in emerging markets, was being adapted used by resource-constrained and innovative young enterprises to support their workflows (McGregor et al., 2019). Could this provide the solution we were looking for? The advantages of Kaizala is it works on a wide variety of Android phones, including most low end ones. Further the Kaizala team takes care of ensuring it works with new Android versions. Equally important is Kaizala’s easily programmable APIs meaning virtually anything can be built on top of it and even low resource organisations should be able to build new screens and update existing ones. And finally, the chat metaphor is easy to understand and use since the vast majority of smartphone users in India use WhatsApp. We therefore built Prayana on top of Kaizala. We used Kaizala’s backend APIs for message delivery to tailor the information delivered to each driver based on their loan performance. Visual messages are triggered to appear in the chat stream at different points in the loan, e.g. when a payment is due, has been made, or a driver is falling behind or has paid off a certain amount of their loan. Clicking on these messages opens a screen, known as a card, which gives more details about the loan in a colour-coded, visual and numeric way.

Drivers found the chat interface easy to use

The custom cards gave us a blank canvas and complete control over the way we represented information. In user tests we found that chat worked much better than we hoped and drivers had an almost instant grasp of the interface. Even though we used the same screens as we had in the standalone app, drivers understood more in this chat-based interface and were much more confident about using it. Even drivers who could not read and write understood some of the information in each card! This was very positive and an improvement on previous versions. On the downside the setup was complicated, as drivers often had never used Play Store, or did not know their passwords, and we had to set up gmail accounts for many drivers – even though they will likely never use nor need email. Some drivers did not have enough space on their phone for the app – which is likely to remain a barrier to adoption. Despite the downsides this seemed like a major improvement on a standalone app and the chat-based drivers app was deployed in January 2019.

We believe our experiences have a much wider applicability and we are currently excited about the idea of chat as an interface to underserved communities. Building on top of chat greatly reduces the barriers to building new services and apps, can be done by anyone with HTML skills and reduces the barriers for end-users adoption. We can imagine all sorts of services from healthcare to career development, from community action to workers platforms. The opportunities are immense, in India at least, where smartphone penetration is rapidly increasing even amongst low income communities. We believe chat may be a great interface to workers in the digital economy.


O’Neill, Jacki, Kentaro Toyama, Jay Chen, Berthel Tate, and Aysha Siddique (2016) The increasing sophistication of mobile media sharing in lower-middle-class Bangalore. In Proceedings of the Eighth International Conference on Information and Communication Technologies and Development. ACM, 2016.

McGregor, Moira, Bidwell, Nicola J., Sarangapani, Vidya, Appavoo, Jonathan and O’Neill, Jacki (2019) Talking about Chat at Work in the Global South: an Ethnographic Study of Chat Use in India and Kenya. In Proceedings of CHI, ACM, 2019

Jacki O’Neill, 21/03/2019

Digital Economy

Using Digital Advances to Develop African Scholars of Business and Management

Arguably the best way to find out how well the digital economy can support development is to try and use it for that purpose. That is what I did when I in 2013 redesigned the doctoral programme of the Gordon Institute of Business Science (GIBS) of the University of Pretoria in South Africa to follow a blended learning design.

Most of the well-regarded PhD programmes in the world assume that students will be on campus and working on the PhD full-time. Universities need to obtain resources to pay a stipend to their PhD students so that students can support themselves. The PhD students benefit from the time to immerse themselves in the topic, but importantly also from being part of a community of people with similar interests.  

Unfortunately, this scenario does not describe doctoral training in Africa. Many academics in wider Africa do not have PhDs, and although that increases the demand for supervision, it also means that there is a real lack of local supervisory capacity. The few available supervisors are typically overloaded, and work in isolation from what scholars elsewhere are doing.

It is also virtually unheard-of that PhDs on the African continent are pursued full-time; there simply are not enough resources to pay for PhD studies. This is not only because of the direct costs of paying stipends, but also the opportunity cost of taking skilled people (even if only temporarily) out of a system where resources generally and specifically skills are scarce. Faculty in these locations have a heavy teaching load, and often assume responsibilities beyond what would be expected from faculty elsewhere. Committees are a bane in the life of all working professionals, but giving pastoral (and sometimes practical) care to often desperately poor students, and advising government representatives at various levels are additional tasks that devour the time of African lecturers at nominally “junior” positions.

The faculty members at African universities have typically been star students who were asked to assume lecturing duties as soon as they had completed a Masters degree. By the time they realise the importance of getting a PhD, they are professionally deeply embedded in their universities. Although they can resign and pursue a PhD elsewhere, going abroad for a PhD is disruptive from a personal perspective. Many faculty members are responsible for older family members and often also young families. Having to live far away from the people of whom they need to take care and/or having to fund expenses in expensive countries often deter faculty from seeking doctoral studies abroad. 

From a practical perspective, a PhD is needed for promotion in the academic system. More substantively, the research training that is part of a PhD allows people to rigorously examine and make sense of their world. The lack of trained scholars who are from and in Africa contributes to a vicious cycle where only very limited knowledge can emerge from a context that desperately needs a better understanding of its challenges.

But these concerns seem manageable when we take seriously the potential of recent digital developments. The promise of digital is that supervisors and students need not be physically in the same space, that communities can span multiple countries, and that libraries are as far away as a keyboard.

It was with this in mind that I redesigned the doctoral programme at GIBS to be a blended learning programme. There were on-campus sessions for a week every two months, but in the interim students had to deliver a substantial body of work online.

I used the logic of a conference in designing the programme. The on-campus sessions were filled with the energy and engagement that characterise a typical conference, while the “real work” happened before and after then. In between the on-campus sessions, students had to submit work where they showed that they had read and engaged with key texts. Given how important peer review is in the scholarly process, we expected of them to share their work with their peers – and assessed how well they reviewed the work of other PhD students, as well as how well they responded to others’ comments. In a few cases, we expected of students to work in small groups.

Most of the on-campus sessions served to further develop the work that had been delivered in the interim. Students presented (and were given feedback on) their work in progress. They in-person debated the work that they had read beforehand. They sometimes skipped class to sit and work through a knotty problem that had emerged earlier in the week so that they could benefit from the input of the group. And each on-campus had a session with an explicitly social purpose to help strengthen the support networks that kept students going through the multiple demands of the PhD, work and family.

The design works. In 2016, 2017 and 2018 respectively the number of doctoral graduates grew from three to six to thirteen. A number of them won awards – for example, the 2017 overall winner of the best dissertation from an emerging economy for the international Production and Operations Managements Society, and the Emerald award for best the doctoral study in Leadership and Organization Development. Thanks to a grant of the IDRC, we were able to support academics from wider Africa. For the four who have already graduated, it is gratifying to see how the PhD is helping their careers take off. 

But it would be wrong to ascribe the success of the design to its digital component. Not only because every successful intervention has to have multiple elements, but also because the digital element was perhaps the least reliable of all.

For PhD students who need to read (and before then, download) a mass of material, having reliable internet access is essential. For PhD students who engage with their faculty and fellow students through an online portal it is non-negotiable. Internet access exists across Africa, but it is not entirely reliable.

One Kenyan student found that her church had reliable internet, and developed the habit of taking her laptop to church to make sure that she was up to date with her online work. Another Kenyan student who was a development worker who occasionally had to go to Sudan, would simply disappear from view for weeks at a time. The fellow students of a Nigerian student were surprised when he dropped out of a conference meeting without a word of notice, but decided to continue. He showed up again ten minutes later: The power had gone off. He needed to get the generator going and then reboot the router before he could rejoin his fellow students.

Faculty had similar experiences with students from wider Africa, but faculty cannot afford to be as laissez faire as students can. Very soon it was decided that synchronous modes of conversation were simply too risky. Electronic connectedness worked well enough as long as one did not expect immediate responses. And there was a new manifestation of “the dog ate my homework”: Connectivity seemed to disappear just as students needed to submit their work. Of course we could not be sure, but it often seemed as if the less diligent the student, the less reliable the internet… It took some effort before we had developed internal processes that honoured the process of learning as well as the students who were battling with often-unreliable internet access.

Although the learning platform seemed to work well enough – there were outages, but they were planned and outages were clearly communicated – very little student activity happened on the site. Eventually we figured out what was happening: Students had created whatsapp groups and were actively connecting through those groups.

Of course, whatsapp was also made possible by digitisation. It was not purpose-built for learning, and the students’ whatsapp groups exclude faculty. (Yes, we were explicitly told that we are not welcome – that part of the purpose of those groups was to complain about us!) Who knows what happens in those groups. As faculty, we observe what appears to be epidemics of odd methodological decisions, and suspect that the origins of those epidemics can be traced back to a whatsapp conversation.

But what we cannot deny is that there is a community of new scholars who would not have existed without the internet. We know that students are able to get better supervision than they would have been able to get in their home countries, and we know that they feel agentic enough to craft a way of staying connected that makes sense to them.

As faculty, we have had to learn. We still do not know how to accurately estimate the “teaching time” for an online class. Shaky supervisory relationships tend to falter across distance, and we have learnt that managing the delicate balance between challenge and support is harder across space.

It has been possible to train people so that they are prepared for the process of knowledge creation, even when they continue to work and support family in less developed countries. The digital tools did not always work as expected, and in the end, the process worked because the students and faculty were resourceful and able to come up with solutions to technical and other problems along the way. PhD students are not the typical intended beneficiaries of a digitising economy in a developing country. It is hardly surprising that intellectually gifted and motivated people were able to overcome the technical challenges that stood in their way.

But it matters that the intellectual centre of gravity of a region is inside the region. A region where knowledge always comes “from elsewhere” is unlikely to develop. The evolution of digital tools and acceptance of digital practices had resulted in it being possible to – from inside Africa – train a growing cohort of scholars who are trying to make sense of business and management in Africa. There can be no doubt that in that instance, digital’s development potential was realised.

Digital Economy, Digital Enterprise

Surviving in the Digital Era – Business Models of Digital Enterprises in a Developing Economy

A new paper on Digital Business Models of Digital Enterprises in a Developing Economy has been published by the DIODE Ghana Team.

This study aims to explore the business models and strategies of digital enterprises in a developing economy context to understand the nature of their operations, as well as their survival tactics. A review of literature on digital enterprise models led to the adaptation of a 16 business model archetype for analyzing digital enterprises in Ghana. Using a critical realism perspective, survey data from a sample of 91 digital enterprises were used for the study.

The findings suggest that among human, physical and intangible assets, financial assets were the least used assets in the operations of the digital enterprises. This stems from the fact that the online financial business sector is still in its nascent stages in most developing economies. The findings further suggest that all digital enterprises leverage accessible and low-cost social networking services as part of their operations and use them as an avenue to engage with their target customers. The findings from this study provide guidelines to entrepreneurs who wish to venture into the digital ecosystem of Ghana, particularly with regard to the economic, financial and technological factors that enable digital enterprises to survive in the competitive digital economy.


The findings also suggest that it is important for governments to realize that there is an increasing rise in digital enterprises in the developing economies and these enterprises are creating jobs and providing business solutions locally that would hitherto be sought from developed economies. There is therefore the need for the requisite legal infrastructure and financial support that will cushion these enterprises from the fierce competitions that stagnate their growth.

The study provides a mapping of the digital business models of Ghanaian digital enterprises. This knowledge is arguably the first of its kind in the context of a developing economy. Hence, it serves as a stepping-stone for future studies to explore other areas in the digital economy, especially from a developing economy perspective.

Access Publication:

Eric AnsongRichard Boateng, (2019) “Surviving in the digital era – business models of digital enterprises in a developing economy”, Digital Policy, Regulation and Governance

Digital Economy

Questions about Digital Policies in Organizations

There are several types of IT/IS policies which govern the appropriate and acceptable use of information technologies in organizations. However, in the age of new digital business models and the upsurge of the digital economy, is there a need for specific policies to address the recent trends?

Questions we might need to ask include:

  • Is there any recent research on the digital policies in organizations?
  • What categories of policies will enable organizations to efficiently take advantage of opportunities in the digital economy? And how will these policies differ across industries/sectors?
  • What digital policies (micro, meso and macro-level) will enable organizations to positively impact on development needs in their communities and countries?

In effect, how do organizational policies catch up with the rapid growth and changes in the digital economy?


Digital Enterprise

From Silicon Valley to Silicon Savannah? Tech Hubs in the Global South

by Yingqin Zheng & Andrea Jimenez Cisneros

For decades, as an ICT4D intervention, telecentres have been built across many regions in the global south, with the aim to bridge the digital divide and bring socio-economic benefits to local communities. The result is mixed to say the least. Many telecentres were not sustainable due to a number of reasons.

In recent years an upgraded and “sexier” version of telecentres, tech hubs, have been rapidly diffusing in the global south. In 2018, GSMA reported 442 tech hubs in Africa and 565 in Asia Pacific (Giuliani 2018).  They are spaces that not only provide co-working space and Internet connection, but also claim to foster collaboration, entrepreneurship and innovation. This is a model that seems to have stemmed from industrialised regions and diffused to developing countries, as part of the digital and mobile boom, and promise to produce ‘local innovations by local people’ (Afrilabs). GIZ’s 2013 report describes this movement as “from Silicon Valley to Silicon Savannah”, indicating the high expectation projected to Tech Hubs to boost innovation and economic growth.

Zheng Tech Hubs

Source: Giuliani (2018)

Many hubs are designed to mirror their Western counterparts. iHub in Kenya, one of the oldest and most prominent hubs in Africa got the inspiration from “successful co-working spaces across the world”, and “the team went to work transforming the sterile office block into an interactive hive. They threw bright green paint on the walls, installed a snappy Internet connection, and imported a slick Italian espresso machine” (Sanderson 2015, p.6).

Although there is plenty of research in organisational studies that argues materiality of physical space shapes human behaviour and organisational practices, our research which compares a Tech Hub in central London with one in Lusaka (Jimenez & Zheng 2016, 2017) shows that the physical design of the hub may not be directly related to how the space is used by the members and what value is generated from it. Members in the London hub, a global chain boasting extensive networks of entrepreneurs, greatly appreciate the aesthetics and design of the hub as a co-working space, but there is limited sense of a collaborative work.  As one member stated: “[f]or shared workspace I think it’s a great place, apart from the intention of trying to get people to collaborate which I don’t think it happens that much.” It was found that despite the open design of the space, strict rules are applied on how segments of the space are used thereby imposing a structured, disciplined order in the Hub.

In contrast, the Lusaka hub, while at the time not being able to afford to become a franchise of the London hub, is located in a standard office space with compartmentalised rooms and rigid walls. Yet there is a higher level of interaction and collaboration among members, improvisation and serendipity in their activities, and a stronger sense of community and identity. One member commented:

 “So you find people around here could really help you. If I ask him how do I go about with this because sometimes I am stuck, people come and help me.

Nevertheless, while the Lusaka hub had an innovative and learning culture and clearly was highly valued by local entrepreneurs, it struggled to show evidence of market-based innovation success.

In contrast, another study on Tech Hubs in central Manila shows that while it physically resembles the colourful, open design of coworking spaces in the West and provides high speed Internet that is not widely available in the Philippines, the membership fee to use these spaces were not affordable to local entrepreneurs (Tintiangko & Soriano 2018). They therefore become spaces for international expats and local elites, in effect excluding the grassroots entrepreneurs who could benefit from the hubs the most.

So far, we only have some broad ideas of the emerging landscape of Tech Hubs across the globe (Friederici 2018), and limited understanding beyond selective in-depth case studies (Sambuli & Whitt 2017, Haikin 2018, Littlewood & Kimbuyu 2018) of what actually happens in the Tech Hubs, the impact they may have on local community and how they evolve over time. We believe that behind the homogeneous branding of Tech Hubs all over the world as “spaces for innovation”, there are almost certainly heterogeneous modes of enactment of the spaces that give rise to multiple, or limited, values to local communities.


Friederici, N. (2018) Grounding the dream of African Innovation Hubs: two cases in Kigali. Journal of Developmental Entrepreneurship, 23(2)

GIZ (2013) From Silicon Valley to Silicon Savannah, GIZ, Bonn

Giuliani, D. (2018) 1000 tech hubs are powering ecosystems in Asia Pacific and Africa, Mobile for Development (GSMA), 20 Mar

Haikin, M. (2018) Voices of the Silicon Savannah: Key Challenges facing Kenya’s Social-Tech Ecosystem – Views from Within.

Jimenez, A. & Zheng, Y. (2017) A spatial perspective of innovation and development: innovation hubs in Zambia and the UK. In P. J. Choudrie J., Islam M., Wahid F., Bass J., ed. Information and Communication Technologies for Development. ICT4D 2017. Springer, 12-14.

Jimenez, C. & Zheng, Y. (2016) A capabilities approach to innovation: a case study of a technology and innovation hub in Zambia, paper presented at Twenty-Fourth European Conference on Information Systems (ECIS), Istanbul, 12-15 Jun.

Littlewood, D.C. & Kiyumbu, W.L. (2018) “Hub” organisations in Kenya: What are they? What do they do? And what is their potential?, Technological Forecasting and Social Change, 131, 276–285.

Sanderson, O. (2015) On Hubs, BRCKs, and Boxes:The Emergence of Kenya’s Innovation and Technology Ecosystem, Tufts University, Medford, MA.

Sambuli, N. & Whitt, J.P. (2017) Technology Innovation Hubs and Policy Engagement, Making All Voices Count Research Report, IDS, Brighton, UK

Tintiangko, J.T. &  & Soriano, C.R.R. (2018) Coworking spaces in the global South: local articulations and imaginaries, paper presented at 68th Annual International Communication Association Conference, Prague, 24-28 May

Digital Enterprise

Incentivizing Digital Entrepreneurs in India: Policies and Practices

The IT/ITES sector in India has been driven mainly by large vendors in urban areas and most revenue is generated from, in and around, the metropolitan areas of Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune. In recent years both State and Central governments are promoting IT outsourcing for start-ups and other social enterprises by providing seed funding and other incentives for starting IT/BPO/ITES companies away from these metros/cities, in Tier 2 and Tier 3 towns and villages.

Way back in 2009, the State Government of Karnataka, pioneered a rural BPO policy by funding entrepreneurs to set up enterprises in rural areas and provide employment to disadvantaged youth. This policy was said to be an exemplar given its focus on rural outreach and for its effort to bridge the digital divide. The initial strategy was to give subsidy of Rs. 4,000,000 (approx. US$ 60,000) to companies to set up 100-seater units which would employ rural unemployed youth.  However, out of the 31 companies that applied for this programme, only about 13 of the bigger players commenced operations while many smaller players who had received the initial funding could not sustain their operations. A revised rural BPO policy was drafted in 2014 with the aim of supporting smaller social enterprises and NGOs by lowering the criteria for entry.  It was envisaged that entrepreneurs would be permitted to apply to enter the market with a minimum number of 30 seats/employees and would receive a subsidy of Rs. 2,000,000 (approx. US$ 30,000) over a period of three years.  The plan was that this subsidy would be tagged to the number of employees hired measured in terms of Provident Fund[1] contributions made by the rural BPO.

Realities on the Ground

Together with a colleague from the LSE, Dr. Shirin Madon, we conducted a longitudinal study for a period of approximately six years at three such rural BPO centres that were set up with State funding (Madon and Ranjini, 2016). Entrepreneurs whom we met felt that it was an excellent opportunity and that there was immense potential to deliver on par with global standards, so long as some of their problems were addressed by the government. Similarly, employees too were very optimistic about their prospects and growth. As one visually-impaired employee trained in a rural BPO that focusses on differently-abled youth who later went to secure a permanent job in a nationalised bank said:

‘I am very happy to say that it was because of the training at Samarthanam (rural BPO) that I realised that I will be able to work and stand on my own.  Samarthanam not just gave me job training and taught me how to handle customers, but it gave me the confidence that I can do anything and achieve anything’.

A team leader from another rural BPO centre commented:

‘Since Simply Grameen had established its centre in Maddur, for the first time we girls have the possibility of getting employment locally which is culturally acceptable by the household.  I worked in Bangalore before joining here and it was a harsh existence working for an urban BPO both in terms of the high cost of living and because of the lack of a social support network for women’. 

Despite the close proximity of the centre to Bengaluru, attrition rates at another rural BPO had been held constant at 8% per annum.  When probing as to why this was so, the Centre Manager there remarked:

Employees valued the prospect of combining the opportunities they were obtaining from RuralShores with pre-existing household income sources from agriculture.  In particular, employees found that they were less reliant on local money lenders as it became easier to obtain personal loans from banks as a result of their formal employment with RuralShores’.

We analysed the implication of this policy initiative beyond revenue and profit generation or number of people employed. For the young men and women who work here at these BPOs it has had a huge impact on their careers and lives. Many lessons can be learnt from the Karnataka Government’s RBPO policy initiative, although it has been discontinued. Below is a summary of our analysis:

Benefits to Employers and Employees

Reduced operational costs The operational costs like real estate rentals, transportation, and facilities management are substantially lower compared to urban centres. This is an important factor for enterprises to move out of urban localities.
Language Most of the employees have multi-lingual and vernacular language capabilities that is an asset in penetrating regional and rural markets. For example for banks and telecom companies.
Reverse migration Most of the employees prefer to work closer home as it facilitates their involvement in household activities and agriculture
Training Employees value the training they receive in their respective domain as well as training in soft skills and communication.
Formal employment Employees perceive regular income in a firm increases their status in society
Career development Career growth, clear career path and goals is a motivating factor. Opportunity and encouragement to pursue higher and distance education.
Cost of living Since cost of living is comparatively less than urban areas, lesser salary is acceptable
Financial benefits Insurance and Provident Fund benefits. Access to loans from banks
Gains for Women Proximity of employment has enabled women to join workforce, particularly for those who could not migrate to cities. Split shift enables women to balance domestic chores and child care.
Other benefits Study leave, and opportunity to live with family and parents and work-life balance

 Challenges and demands by entrepreneurs

Criteria for entry Some say eligibility requirements for entering into Government schemes is high and cannot be met by small players and rural start-ups.
Developing talent pool and training Although the workforce is engaged and committed, training them on-the-job for specific tasks takes time and huge effort
Attrition Attrition is comparatively low, however, it is still a matter of concern
Electricity Use of generators due to long power cuts increases operational costs. There is a demand that the government should support ongoing expenses through monthly subsidies for electricity.
Connectivity Entrepreneurs demand reduction in tariff for telephone and internet.
Infrastructure Roads, transportation and other basic services indirectly affect the functioning of these centres.
Handholding Initial years is a challenge with limited projects and not so well-trained workforce. Entrepreneurs suggest that the government should consider sub-contracting its own e-governance and related projects to these centres.
Ease of doing business Since many companies failed despite receiving funding, evaluation by government agencies and paper work increased.
Other challenges Availability of skilled labour pool, their retention, sustainability and scalability remain a huge challenge

India BPO Promotion Scheme

While the Karnataka State policy explicitly incentivized setting up of enterprises in backward taluks (rural sub-districts) and for socio-economically and physically disadvantaged groups in order to redress regional imbalances, this central scheme has shifted the focus to more developed taluks and smaller cities. The Government of India’s Ministry of Electronics & Information Technology has recently floated an all-India BPO Promotion Scheme providing incentives for small to medium organisations in both towns and rural areas to commence operations. The scheme provides financial support up to Rs. 1lakh/seat in the form of Viability Gap Funding, with special incentive for units providing employment to women, persons with disability and for units providing employment beyond the target. With a total budget outlay of Rs 493 crores (approximately 70 million USD) the scheme has a target to provide a total of 48,300 seats. As on November 2018, about 45,480 seats have been allocated to different states (, 2018). Following is the data on number of enterprises that have commenced operations in different States and seats distribution based on population % as per 2011 Census of India.

State Number of Enterprises Number of Seats
Andhra Pradesh 22 5660
Bihar 10 2,110
Chandigarh 1 100
Chattisgarh 2 200
Gujarat 1 500
Himachal Pradesh 3 250
Jammu and Kashmir 7 350
Jharkhand 4 850
Karnataka 5 700
Kerala 1 100
Madhya Pradesh 4 1000
Maharashtra 9 2430
Odisha 13 1601
Puducherry 1 100
Punjab 6 1700
Rajasthan 3 400
Tamil Nadu 23 3600
Telangana 2 400
Uttarakhand 3 300
Uttar Pradesh 9 2480
West Bengal 1 100
Data as on 22 September 2018. Compiled by Ranjini C.R. Source:


Our exploratory study was situated in a single region and now with this pan India scheme there are opportunities for researchers to examine broader themes and conduct comparative analysis.

To conclude, incentivizing BPOs presents an opportunity for peripheral regions to benefit from IT outsourcing activity. However, it is crucial to extend support beyond seed funding such as subsidies and handholding in the initial years. Well established players can also support new entrepreneurs though their CSR activities, mentoring and by sub-contracting work.

(This paper published in Information Systems Journal provides further details about our study.)


Madon and Ranjini (2018) Impact Sourcing in India: Trends and Implications, Information Systems Journal, pp 1-16.

Madon and Ranjini (2016) The Rural BPO Sector in India: Encouraging Inclusive Growth Through Entrepreneurship in Nicholson B, Babin R, Lacity M., ed. Socially Responsible Outsourcing. Global Sourcing with Social Impact. Palgrave Macmillan., 2018

[1] This is a term used to mean pension fund

Digital Economy

Challenges and Opportunities of the Digital Economy in Indonesia

This article was originally published in Medium.

Indonesia aims to become the biggest digital economy nation in ASEAN by aiming to reach 130 million US$ of e-commerce transaction in 2020. This may sound ambitious, but the fact that a majority of Indonesians are digitally oriented makes the government strongly believe that the target can be achieved. The latest data from Asosiasi Penyedia Jasa Internet Indonesia (APJII) and We Are Social revealed that there are 143,26 million internet users in Indonesia in 2017, and a majority of them use mobile devices to access the internet. Moreover, the total number of mobile connection has exceeded the Indonesian populations, with each citizen have approximately 2 to 3 SIM cards.

What are the underlying factors that drive this enormous growth? I would argue that there are at least four factors:

  1. Technological advancement particularly in the telecommunication sector. Initially, we can only use a mobile phone for voice call and SMS. These days, both services are not popular anymore as people prefer to use instant messaging and Voice over Internet Protocol (VoIP). This also applies for the handset that we use today, as it becomes smarter and capable of doing a wide range of tasks compared to a classical feature phone.
  2. Increase coverage of a mobile network. There is a fierce competition among operators to become the best in the country through massive infrastructure deployment. As a result, more and more people now have an access to the internet.
  3. Price of ICT is getting cheaper. There is a price war between each operator by lowering the price of internet services in order to maximize network utilization. Also, we can easily find a high-quality smartphone with an affordable price. As a result, telecommunication is not a luxury good anymore.
  4. Social media and instant messaging as “killer apps”. The introduction of Blackberry Messenger (BBM), Facebook and Twitter in Indonesia played a key role in boosting data penetration in the country.

Despite the growing trends of digital in Indonesia, we still face a significant challenge in narrowing the digital divide. Around 77 per cent of internet users are centred in Java and Sumatra, and less than half of citizens in eastern part of the country do not have access to the internet. As a result, Indonesia still lags behind our neighbour countries like Thailand and Malaysia when it comes to global indexes such as Networked Readiness Index (NRI) or GSMA Mobile Connectivity Index.

The digital divide in Indonesia (Source: Open Signal)

The development impact of the digital economy

The aforementioned infrastructure challenges apparently do not hamper the promising growth of the digital economy in Indonesia. At the time of writing, Indonesia has nearly 2,000 start-ups and only behind USA, India, UK and Canada. Interestingly, the majority of those start-ups are led by “millennials” that are passionate to create social impact by harnessing the power of digital technologies. This can be seen from how Nadiem Makarim is successfully growing Go-Jek to empower not only “ojek” drivers but also SMEs and consumers. Go-Pay, mobile wallet system developed by Go-Jek, even contributes in promoting financial inclusion in Indonesia. Another example is evident from how William Tanuwijaya initiates Tokopedia as a platform to enables everyone in starting their own business for free. Both Go-Jek and Tokopedia, together with Traveloka and Bukalapak, are known as start-up unicorn in Indonesia.

So, how does the digital economy contribute to economic growth?

Admittedly, the contribution of the ICT sector to GDP in Indonesia is still not significant with only 7.2 per cent. However, the GDP growth from this sector is the highest compared to other sectors with 10 per cent of GDP growth. In fact, this number is much higher than average GDP growth of Indonesia that only reached 5 per cent.

In other report published by Oxford Economics (2016) revealed that by 2020 every one per cent increase in mobile penetration can contribute in creating additional 640 million US$ to Indonesia’s GDP as well as opening up 10,700 additional job opportunities. Hence, it is no surprise that the government has put significant attention to the digital economy sector.

Speaking of the digital economy, there are at least three emerging trends that are currently happening: on-demand services, financial technology, and e-commerce.

  1. On-demand services. It is impossible to talk about this sector without mentioning Go-Jek, one of the most influential tech start-up in Indonesia. They not only managed to revolutionalize “ojek”, but they also successfully influence behavioural change in our society. Essentially, they facilitate almost everything on-demand, from logistics, food delivery, car wash, and even beauty services. They are now in the process of preparing their own streaming service, which could cement Go-Jek’s position in providing anything that Indonesians need.
  2. Financial technology. There is a clear challenge in bringing financial services to everyone in Indonesia. Only about one in three adults in Indonesia have access to financial services. In this regard, Financial Technology (Fintech) played an important role not only as an enabler for the digital economy but also promoting financial inclusion through technology. This is evident particularly within the case of a peer-to-peer lending platform that enables small business to get access to financial capital. Another example is how the mobile payment serves as a mean to promote a cashless society in Indonesia.
  3. E-commerce. More than 8 million Indonesians loved to shop online, and the numbers are expected to increase in the near future. This is driven by both consumptive and online behaviour of Indonesians as well as the increasing market reach thanks to social media and technology. As a result, many stores are now trying to sell their products through both online and offline channel. People can now buy almost anything easily through their smartphone without having to go to the actual stores, and we can receive our products within hours with the help of instant courier. In the future, we can expect further innovation such as an unmanned store that will transform the way we shop.


Indonesia has a great potential to become the biggest digital economy nation in ASEAN, even in the world. But, achieving this target requires various stakeholders involved to overcome the following challenges:

  1. Narrowing the digital divide. Infrastructure is an important enabler in maximizing the benefit of the digital economy, so the government must ensure that everyone can have an equal access to technology. Palapa Ring project is a great starting point, and the quality of our infrastructure will surely get better by the time the project is finished in 2019. But the infrastructure deployment cannot stop there and should focus on providing access to rural areas in Indonesia.
  2. Digital talent. There is still a mismatch between the supply of university graduates and the demand from tech start-up. This leads to talent war, in which many start-ups have to compete in securing high-quality talents that are lacking in the market. Hence, a collaboration between industry and academia is important to ensure the production of high-quality digital talent that meets the needs of the digital industry.
  3. Regulations. It is no secret that regulations are always behind technological advancement, as can we see from the case of Go-Jek and Grab. What we need is a guiding principle in designing regulations for those emerging technology. It should be designed in such a way that it will not hamper creativity and innovation in tackling societal challenges. Several cybersecurity issues should be taken into account, particularly about consumer protection of personal data.