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 Governancehttps://doi.org/10.1108/DPRG-08-2018-0046

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.

References

Friederici, N. (2018) Grounding the dream of African Innovation Hubs: two cases in Kigali. Journal of Developmental Entrepreneurship, 23(2) https://doi.org/10.1142/S1084946718500127

GIZ (2013) From Silicon Valley to Silicon Savannah, GIZ, Bonn https://10innovations.alumniportal.com/technology-hubs/from-silicon-valley-to-silicon-savannah.html

Giuliani, D. (2018) 1000 tech hubs are powering ecosystems in Asia Pacific and Africa, Mobile for Development (GSMA), 20 Mar https://www.gsma.com/mobilefordevelopment/programme/ecosystem-accelerator/1000-tech-hubs-are-powering-ecosystems-in-asia-pacific-and-africa/

Haikin, M. (2018) Voices of the Silicon Savannah: Key Challenges facing Kenya’s Social-Tech Ecosystem – Views from Within. https://matthaikin.com/2018/10/08/voices-of-the-silicon-savannah-released/

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. https://www.sciencedirect.com/science/article/pii/S0040162517313173

Sanderson, O. (2015) On Hubs, BRCKs, and Boxes:The Emergence of Kenya’s Innovation and Technology Ecosystem, Tufts University, Medford, MA. https://dl.tufts.edu/catalog/tufts:sd.0000269

Sambuli, N. & Whitt, J.P. (2017) Technology Innovation Hubs and Policy Engagement, Making All Voices Count Research Report, IDS, Brighton, UK https://www.makingallvoicescount.org/publication/technology-innovation-hubs-policy-engagement/

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 (Meity.gov.in/IBPS, 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: https://ibps.stpi.in/unitlists.php

Conclusion

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.)

References

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.

Meity.gov.in/IBPS, 2018

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

Digital Economy, Digital Enterprise, Digital Labour

Report from the Philippine Impact Sourcing Conference (PISCON)

The government of the Philippines through its Department of Information and Communications Technology (DICT) conducted the second Philippine Impact Sourcing Conference (PISCON) in Cebu 3rd and 4th of May 2018.

A main objective of the conference was to celebrate the implementation of the Rural Impact Sourcing Technical Training (RISTT) program which DICT conducted across 26 different locations in 2017. More than 600 delegates were present, with a mix of local government officials and people from the online outsourcing business in the country. DICT plan to increase the number of locations for RISTT to 65 for 2018. According to DICT undersecretary Monchito Ibrahim, there has now been a shift among the local government officials, and while DICT previously had to push for them to help host training in particular locations, it is now the local government that come to DICT and ask if they can be one of the locations for such training.

While it can be debated whether such training is impact sourcing in the purest sense of the term (see this previous DIODE blog post), there is no doubt that this training has had an impact on individuals and that new (out)sourcing jobs have been created.

In some locations, a number of the trainees went together and started their own corporations. Two such examples are Narra Digital Solutions in Zamboanga City and DigiWorkz Carmona in Carmona, Cavite.

Zamboanga City is at the southernmost part of Mindanao, a region that is currently under martial law. As recently as 2013 there was a military conflict in the city. Two mothers, who previously had to leave their children to their extended family due to work responsibilities, together with their trainer, started Narra Digital Solutions. Their main target is to do IT jobs for local companies in the Zamboanga region. Also, they do advocacy and teach others, in particular, other single mothers, to do digital work. Previously there were few such opportunities in the area, which meant that the mothers had to leave the children with their family and go to places like Manila to work. By either working from home or an office close to home, they can now take care of their children and earn money at the same time. According to the founders, they can see how their children have a better life than they had before.

DigiWorkz was started by some of the trainees, in close cooperation with the local government in Carmona. The government helped with infrastructure and a building where the cooperative now work. Like Narra Digital Solutions, DigiWorkz also primarily work with local customers and have the ambition of helping to digitalize all local business in the area by 2020. One such business is Wellvise. Having got their website designed by DigiWorkz they are now able to attract customers from wider areas.

These are just two examples of how the trainees have used the skill they got during the training to create sustainable local jobs in their region. While previous research about impact sourcing has focused primarily on the customer, the impact sourcing vendor, and impact sourcing workers, the role of the government has not got that much attention. Further, the connection between training and small impact sourcing start-ups has hardly been researched at all.

Looking into how the creation of such smaller impact sourcing companies has an impact in the local society is part of my current doctoral project where I explore the wider impact of new forms of digital work at the Philippines. You can follow the project on my Facebook page.

Enzo and Jehan 1

Lorenzo Dupa (left) from DigiWorkz Carmona and Jehann Forro from Narra Digital Solutions discuss their experiences during PISCON

Digital Enterprise, Digital Labour

Digital Social Entrepreneurship in India

India is now a great place for high-tech start-ups [1]. A bullish consumer market means exciting new opportunities for entrepreneurs. But not all fledgling high-tech enterprises in India are fixated on encouraging hyper-consumption and serving the entertainment needs of a growing middle class. Some have a much different orientation and claim to operate from a heightened sense of social conscience, if you will. They are engaged in what may be termed as digital social entrepreneurship (DSE) – the entrepreneurial work of social ventures whose business models rely primarily on digital technologies. This group of entrepreneurs swear by mainstream business school lexicon, but paradoxically profit maximization is not their aim. Rather, they are driven by the desire to do social good and the power and reach of digital technologies is central to their quest. Working with PhD students and colleagues I have been fortunate to have got the opportunity to study some fascinating and inspiring cases of DSE in India [2, 3, 4]. These organizations are working to address seemingly intractable and complex problems such as financial exclusion, limited access to quality health care and outward migration from rural areas. Our ongoing research projects illuminate several interesting dimensions of the DSE phenomenon in India.

Background and entrepreneurial motivation

In many respects, DSE in India owes a lot to the dramatic growth of the Indian information technology (IT) industry since the mid-1990s. The technological capabilities underpinning most cases of DSE can be traced back to a founder’s distinguished stint in the IT industry. From a motivational standpoint, we find that DSE typically originates from the founders’ quest for a higher purpose in life and their profound sense of empathy with those that seem to have reaped little or no gains from globalization. Perhaps unsurprisingly given their IT background, such entrepreneurs have a ‘digital core’ in their ventures.

Digital infrastructure in India is rapidly outpacing the institutional infrastructure. Thus, despite possessing superb and advanced digital capabilities the goals of DSE often needs to be recalibrated and rearticulated to align with the interests of a bewildering array of formidable state and non-state actors. All things being equal the ability to orchestrate non-market strategies can become the single most determining factor for success. Thus the prospects of DSE, at least in the foreseeable future, seem to hinge on the skilful entrepreneurial navigation of the non-digital elements.

Juxtaposition of commerce and conscience can lead to conflicts. Hybrid business models are known to create ideological rifts within senior management teams: ‘Should we take money from investor A when we know they don’t invest to generate social impact? Will such an investment compromise our social mission?’

It can also become increasingly difficult to retain the commitment of an otherwise competent workforce to a grand social mission and they may turn to more lucrative jobs elsewhere in the market. In this sense, ‘social’ encoding and imprinting can be a particularly precarious achievement in many cases of DSE.

Developmental impacts of DSE

Documenting ‘impact’ needs patience and creativity. It is also not always clear what impact means in the DSE context. Should we be looking purely at economic impacts? In analysing impacts, how do we account for improved life-chances of beneficiaries? There is an urgent need for longitudinal field research, which will serve to both showcase outcomes of DSE as well as convince potential investors that their money will be put to good use.

A closing thought: Since society prefers altruistic performances to commercial ones, many digital entrepreneurs may retrospectively overstate their original intended commitment to social good (e.g. Facebook?). After all, stories often become grander and morally righteous in their retelling! However, before dismissing such performances as lacking credibility it is worth remembering that all entrepreneurship will (through job creation) almost certainly have a positive social and developmental impact [5]. This insight should not threaten the idea of DSE, but should help us better understand its limits and trajectories.

[1] https://www.weforum.org/agenda/2016/10/india-startup-boom-in-charts/

[2] Sandeep, M.S. and Ravishankar, M.N. (2013) The other India – Emergence of rural sourcingProfessional Outsourcing, Spring(12), pp.14-20.

[3] Sandeep, M.S. and Ravishankar, M.N. (in press) Sociocultural transitions and developmental impacts in the digital economy of impact sourcingInformation Systems Journal, DOI: 10.1111/isj.12149

[4] Masiero, S. and Ravishankar, M.N. (2017) Digital technologies and pro-poor finance in India. In The Proceedings of the Aston India Centre for Applied Research Conference, Birmingham, UK. Winner of the Best Paper Award for Innovative Research.

[5] https://yourstory.com/2014/11/impact-of-startups/

Digital Economy, Digital Enterprise

Enter Digital Enterprises in Africa

Digital technologies like Internet applications and mobile phones are changing the nature of work, business and organisations. Their extensive embeddedness in the economic exchange of goods and services is also creating digital economies – a phenomenon with growing importance. The digital economy is “that part of economic output derived solely or primarily from digital technologies with a business model based on digital goods or services”. For the global South in particular, the digital economy even though usually only accounting for 3 percent to 4 percent of gross domestic product (GDP), has a much larger impact when firms use it to spur competition and productivity in traditional sectors, such as retail, banking, and manufacturing. Available statistics suggest that the mobile ecosystem alone contributed US$8.3 billion to the Nigerian economy and 7% of Mali’s GDP consists of its digital industry (da Silva, 2014). Despite these successes, the region is yet to catch up with the bigger benefits the global North enjoys from the digital economy.

Synthesising Available Evidence
To have a deeper understanding of the digital economy in the global South (specifically Africa), available evidence was gathered and synthesised as part of DIODE Network activities. Unfortunately, the synthesis had to rely mostly on practice-based literature due to the scarcity of academic research on the digital economy of Africa. Such a synthesis was also important to uncover areas that need further research. Guided by the narrow definition of the digital economy, the synthesis focused on the activities of enterprises in telecommunications, digital services, software and IT consulting, hardware manufacture, information services, platform economy, gig economy, and sharing economy. Available evidence suggests countries like South Africa, Nigeria, Kenya and Ghana are quite advanced in the digital economy. Their advancement reflects their level of development and abounding availability of digital enterprise activities. Encouragingly, other countries with some investments from established players in the global North, are also making efforts to catch up.

Areas for New Research
Overall, five main themes emerged as areas that need new research efforts. First, there is need to undertake studies that trace value creation amongst various forms of digital enterprises. Second, there is need to study the career trajectories of people who engage in the various aspects of digital enterprises – especially the gig economy; in order to understand the factors determining their involvement. Third, there is need to undertake periodic and regular research to find out the motivations of the companies that want digital presence and mobile apps developed for them, and the development impact of their decisions on those who work on such requests especially if they are gig workers. Fourth, there is need to undertake country and cross-country case studies of the various platform and digital enterprise issues, to generate lessons and best practices for countries that are now picking up. Fifth, one big question that remains unanswered relates to knowing who exactly is benefiting from the digital economy in Africa, therefore it would be interesting to know the true beneficiaries, and also the coping mechanisms of the losers.

In summary, there is a paucity of academic research on digital enterprises in Africa. In order to end this paucity, more research needs to be conducted around this phenomenon in the global South. Such research could begin with the areas derived and discussed in this synthesis study.

Read More in the Synthesis Study here:

Boateng, R., Budu, J., Mbrokoh, A.S. Ansong, E., Boateng, S.L. & Anderson, A.B. (2017). Digital Enterprises in Africa: A Synthesis of Current Evidence, Paper 2. DIODE Network, University of Manchester.

Text Reference

da Silva, I. S. (2014). Mali Digital Plan 2020 to reorganise economy. Retrieved from http://www.biztechafrica.com/article/mali-digital-plan-2020-reorganise-economy/9327/

Picture Reference

Ansip, A. (2017). Heading to Nigeria, EU Commission and Its Priorities, Retrieved 23 November 2017 from https://ec.europa.eu/commission/commissioners/2014-2019/ansip/blog/heading-nigeria_en

Digital Economy, Digital Enterprise, DIODE General

Open data platforms and development in Latin America

There is increasing excitement about the developmental effects that data released in open format could bring to the global south. The so called open data—data released in digital format, publicly available for anyone to use—promise to contribute to key development goals, such as economic growth, job creation, inclusion and access to public services. To illustrate the economic potential, McKinsey estimated in 2013 that the economic value of open data could reach between $1 and $3 trillion per year. Although these figures remain highly speculative, the rationale is that by using or re-using open data, new products and business can be created, innovation can be spurred, and productive processes can be optimised to achieve gains in productivity. That includes governments and public organisations. Open data can help improving the delivery and quality of public services and can contribute to the efficiency of internal operations. Equally important, open data is seen as central means to increase transparency, fight corruption, as well as promote inclusion and civic participation. The latter has been particularly acknowledged in the commitments that governments endorse when joining the global Open Government Partnership.

Open data in Latin America

As a region, Latin America has moved comparatively quickly in embracing open data initiatives. Mexico, Uruguay and Brazil lead the table among the developing world and are amongst the top 18 best performing countries in the 2016 Open Data Barometer, a global ranking led by the World Wide Web Foundation that ranks countries according to the publication and readiness of key government datasets and evidence of its impact. In addition, the region has now five countries within the top 20 of the 2017 Open Data Index—a survey coordinated by the Open Knowledge Foundation that measures the state of open government data around the world.

The commercial, for profit approach of open data has yet to take off in Latin America. More often, what is found in the region is a growing open data ecosystem that is moving forward an agenda of accountability, innovation and participation. The region holds its own Open Data Conference (AbreLatam/ConDatos) annually since 2013. The annual meet up has strengthened regional communities that use open data to offer tangible solutions in areas of public health, government transparency, transportation and urban planning. A self-reported survey gathered in Abrelatam reveals 196 projects from 135 organisations in these areas.

The ecosystem in Latin America means that different actors have contributed to unlock the value of open data in the region. Governments are important ones—they build open data platforms that form the supply side of the data value chain. But the realisation of the value of these platforms lie on the applications and services that are built on top of the data. The city of Buenos Aires, for example, used hackathons and apps competitions to engage developers and start-ups to co-create new services. In Montevideo, the municipality partnered with the civil society organisation DATA to run a platform called Por Mi Barrio, developed based on the UK’s FixMyStreet initiative. Por Mi Barrio helps people to report street problems like broken street lights or potholes and link it to the municipality to fix them. NGOs and local activist are, thus, another crucial actor in the ecosystem. Ciudadano Inteligente in Chile and SocialTIC in Mexico, both promote transparency, inclusion and citizen participation through open data and the use of new informational technologies. Journalists also contribute to open up government data for accountability purposes. Argentine newspaper La Nación and its data division LNData won the Data Journalism Award for their work on opening up unstructured, closed and opaque data from Argentina’s Senate expenses in times of no freedom of information laws and controversies surrounding media access to government information. In Peru, the organization Convoca opened up public data to help users understand the behaviour of extractive industries in Peru and its impact on people’s lives. The project, called Excesos sin Castigo (“Excesses Unpunished”) won the Data Journalism Award in 2016.

Research into open data platforms and their ecosystem

Despite the anecdotal evidence, the mechanisms through which open data can scale and harness developmental goals have not yet been clearly established. My current programme of research examines how open government data fosters innovation and enables economic and social development in Latin America. One of my ongoing projects, jointly with my colleague Ben Eaton, studies empirically how engagement with open government data platforms unfolds in Buenos Aires, Mexico City and Montevideo. In specific terms, we ask how the installed base (the actors in the ecosystem) is mobilised in open data platforms. Drawing from literature on digital platforms, we aim to understand the context, formation, grow and functioning of the installed base, and to offer insights on the ways actors interact to use and generate value from these platforms. The results of this work will be ready in 2018, so watch this space for research insights and policy implications.