The development of appropriate technology in Emerging Markets

Distinct challenges face developing countries, both rapidly industrializing large nations and the more slowly developing nations burdened by persistent poverty. In places where the institutions that enable an entrepreneurial society are weak or absent, the priorities for innovation measurement are not on science-based innovation but rather on such fundamentals as the time and cost required to start a business.

In many developing countries, starting a business is fraught with expensive and time-consuming red tape. While all the paperwork for starting a corporation in the United States can be complete in a day, according to the World Bank it takes 153 days in Mozambique to incorporate and register a firm, 151 days in Indonesia, and 40 days in El Salvador. That must change. Understanding and, importantly, measuring the challenges that face entrepreneurs in different parts of the world is a start.

Emerging Markets are very different from other developed markets in the diversity of the user needs, motivations and the business environment dynamics. A strong understanding of user needs (social, cultural, economic) and the business ecologies along with powerful technical insights is essential for success in these markets.

Net private capital flows to the major emerging markets fell from $169 billion in 2000 to $132 billion in 2001 .The growth of trade slowed and the trend in real commodity prices relative to manufactured goods prices shows no sign of improving. As a result, growth of real gross domestic product (GDP) in developing countries was forecast to increase by 1.3% in 2001, down from 3.8% growth in 2000 . Poverty remains endemic, almost a quarter of the population in emerging markets lived on less than $1 per day in 1999, while 28% of the world’s children under five years of age are malnourished. HIV/AIDS incidence is increasing 36 million people were affected around the world in 2000, with the majority living in Southern Africa and South and East Asia. Over 1 billion people worldwide do not have access to safe water sources.

However, there are some encouraging statistics. The economies of Central and Eastern Europe were spared most of the upheaval of 2001’s global slowdown, with GDP growth rates averaging 5%. Further, the situation for emerging markets as a whole improved in 2002, with private capital flows expected to recover rising to $160 billion. Many developing countries are on track to achieve one of the Millennium Development Goals: universal primary education by 2015 and some are significantly reducing infant and under-five mortality.

Moreover, the needs of a world which will soon have to accommodate 8 billion people, where environmental resources will be under greater stress, while new health and security risks emerge, and issues of equity and access to resources, technology and markets will grow in importance.

In this emerging market context, the development of appropriate technology points out a unique business opportunity to provide a technological solution to daily challenges. According to Paul Polak , a billion poor people need:

• A $2 pair of eyeglasses.
• A $5 household water filter
• A $15 computer for people who can’t read
• A $100 house with real market value
• A $10 solar lantern

The role of grassroots inventors, entrepreneurs and business managers is essential. Not only developing appropriate technology but also creating business which satisfies the needs of world’s poor.

Every entrepreneur knows that a great idea does not guarantee success, it must be sold. Similarly, appropriate, pro-poor technologies will have only limited impact unless they are effectively marketed.

The practical problem is to understand how to market appropriate technologies that enhance smallholder productivity and mainly improve the livelihoods of poor (in a global vision: profits, people and planet). Usually, it is not sufficient to merely scale down technologies that are suitable for more well-off consumers. Technologies must be rethought and reengineered from a poor perspective. It includes that these technologies should be accepted by society.