Tuesday, December 30, 2014

The digital divide

One the one side we have the digital haves with their ipads, iphones and wearable technologies. On the other side we have the digital have not’s in many parts of the world like Africa, India, China, and Latin America who are struggling for the basic necessities of life like food, clothing and shelter. In most of the countries less than 10% of the population own most of the wealth while most of the remaining population struggle with a tough daily existence. We are told that this gap will widen further with people who have access to digital technologies having more opportunities to improve their standard of living compared to those that don’t.

It is refreshing to hear about success stories like M-Pesa (Mobile money transfer and payments), Grameen Bank (Micro Lending) and about the potential fortune to be made at the bottom of the Pyramid (C K Prahalad). The bottom of the pyramid consist of 4 billion potential consumers waiting for products and services like M Pesa and Grameen Bank. They aspire to a better standard of living same as any anyone else.

As we have seen from many of the case studies on internet companies like Google, Facebook they have been able to make money on the internet only by doing innovative things like using two sided markets (one side gets products and services for free while the other side pays), Freemium model (you give the product or service for free till you get enough customers on your platform, then you charge a nominal price to make money). Many of these innovations can be very relevant to create business models that are viable and sustainable in Bottom of the Pyramid markets.

I personally hope that digital technologies even though they may increase the gap between the digital haves and have not’s, can at the same time help us to create a world where every person on the planet has access to the basic necessities of food, clothing and shelter. This can only happen with more and more innovations at the Bottom of the Pyramid. If we can have an innovative encyclopedia like Wikipedia which has defied all economic theory and which is growing and thriving on voluntary contributions from its users, we can all be optimistic about our digital future.

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