Mobile Use by Micro & Small Enterprises

Posted by sharakarasic on Oct 31, 2008

On day two of MobileActive ’08 in Johannesburg, I attended Mobile Use By Micro and Small Enterprises (MSEs) by Jonathan Donner of the Technology for Emerging Markets Group, Microsoft Research India.

Donner explained that Microsoft Research conducts long-term research and development – it’s not tied directly to products. Its goals are to understand potential technology users in developing countries, and to adapt and design technology that contributes to social and economic development of poor communities.

Donners’ research focus was on tiny informal businesses with fewer than five employees. These businesses are post-agriculture and post-family farm. Example types of businesses that Donner examined include basket weaving, fruit stands, food sellers, and informal pipe fittings manufacturing.

Donner studied how mobiles have had a positive impact both in Kigali, Rwanda in 2002-2004, and Bangalore and Hyderabad, India from 2005-2007.

He found “information needs very different than those of my colleagues in Redmond.”

Donnner went on to give examples of the positive impact of mobiles. Innocent, a neighborhood baker, makes samosas in Kigali. He doesn’t own a stove or an oven, but owns a mobile. And with his mobile he can go beyond samosa and take orders for Chicago wedding cakes.

Chicago Wedding Cakes
He now owns a house. His mobile has replaced his journeys, broadened his markets, and connects him with buyers and sellers. He couldn’t even get a landline because he needed credit.

Afsa, a hair braider in Kigali, got a mobile phone and it tripled her business in a week. Clients gave her number to more prospects. She went from three clients per week to eight-twelve per week. She saved for months to buy her phone. She has an emergency fund saved in case her mobile is stolen.

The mobile phone lets these small business owners do what they do more effectively and make more money.

Donner mentioned that in a study of Kerala fishermen, Robert Jensen measured the price of fish before and after cell towers were put up. The result was that the price became less variable. So now households can pay less for fish because less is wasted, and the fisherman can count on a certain price.

Donner added that “there’s not much selling baskets on eBay” – most transactions of micro and small businesses in the developing world are local and trust-based.

Donner gave an example of visiting a scrap business in India. Their information system is a notebook, which works fine for them. According to Donner, they run on communication, not information. They don’t need any fancy technology. They don’t need a computer – but they had been missing a way to move voice faster then they can walk.

After getting a mobile phone, the scrap business owners could take a lunch break without missing a sale. In Donner’s words, “they increased the metabolism of their environment.”

In most SME’s, Donner continued, personal behaviors are interlaced with business behaviors. For example, out of ten calls, 1/3 may be business related. Mobiles are used simultaneously for business and social reasons. Information systems are extensions of the personal.

Donner summed up what he learned from his research by stressing that voice is the killer app. Existing SME’s in the developing world do better with mobile phones. Mobiles have amplification effects rather than transformative effects.

What’s next in terms of business applications for MSE’s? According to Donner, the key will be strengthening external communication. For example, inventory management by suppliers; financial services and m-banking; customer relation management; and advertising. Supply chain, banking, and advertising technologies for MSE’s are the future.

Donner stressed that SME’s want loans, and m-banking is important because it offers a record of transactions that can become credit history for those who have not had a credit record. Donner also cited the growing importance of the ‘presence web’ – that one person can be a point on digital maps via his mobile number and SMS. That breaks down the barriers between “internetland and mobileland.”

Finally, Donner said that we have to line up technology with social practices. For example, he asked SME’s in Bangalore whether they would use SMS to remind people of balances. Many thought SMS was not right to use because it was too impersonal.

Mobile Use by Micro & Small Enterprises, Wedding Cakes and more
Digital Customization: Mobile Wedding venues in Chicago are offering apps or mobile-responsive websites where couples can customize their venue layout, pick décor themes, and even select lighting moods.
This level of customization ensures the couple can envision and shape their special day in real-time.

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