By David South, Development Challenges, South-South Solutions
SOUTH-SOUTH CASE STUDY
The growing digital economy in the global South is giving rise to a new generation of entrepreneurs and innovators.
A University of California paper by Naazneen Barma found explosive potential in poorer countries to innovate, and challenged the view of developing countries as passive market places for products innovated in the industrialized world. She said that “in terms of their market power and their production and innovation possibilities, emerging economies are positioned to increase their presence in the digital era … poor consumers are increasingly driving modular innovation in production technologies, business models, organizational management, and marketing and distributional strategies.”
It has been estimated that the number of people with equivalent to US $10,000 in annual income will double to 2 billion by 2015, creating hundreds of millions of new consumers for digital products.
Two cutting-edge innovators from Brazil are tapping into this growing market. Both FunStation and Zeebo have developed technology specifically wrapped around the needs of Southern consumers and are growing across the South as a result.
FunStation’s (http://www.funstation.com.br/blog.php) simple motto – “Touch – Get – Enjoy” – hides a savvy technological innovation aimed at the growing army of digital downloaders on the march across the South. Sao Paulo’s FunStation entertainment kiosk system serves up video, audiobooks, songs, and ringtones to mobile phones and MP3 (http://en.wikipedia.org/wiki/MP3) players. Customers just need to plug into one of the large futuristic white kiosks, scroll through the choices, select what they want, pay and download. By going to the kiosk, customers avoid the need to download from the internet, which can take a lot of time depending on the connection and bandwidth. The kiosk is speedy, with 14 musical tracks downloaded to a device in 10 seconds.
Apart from the convenience and speed of the kiosks, they also have other benefits: customers do not need to register with a download site like iTunes on the internet. This means they do not have to run the risks of giving away bank details or other personal information.
Customers buy something called a Funcard which is similar to a pre-pay phone plastic phone card, with a PIN number. Cards are sold with values ranging from US $2 to US $50. The user just punches the number into the kiosk to pay for the download.
The kiosks are being located in high-traffic places like festivals, airports, universities, retail shopping centres and transport systems.
Founded in 2007, the company is a partnership between Bruno de Marchi, 35, computer science student Armando Perico, 24, and 60-year-old Marcos Maynard. The company already has the rights to sell half a million items and has 55 kiosks operating in Brazil, mostly in the country’s north. “People are poorer in those places,”de Marchi told Monocle magazine. “Usually they have an MP3 player but no computer.”
The FunStations have also been successful outside of Brazil: 50 kiosks were sold to Mexico in March. It is launching in Chile later this year and in the United States in 2011. Always evolving, the business is also working with the University of Lugano in Switzerland to develop new software and keep the kiosks fresh and lively.
Another Brazilian technology pioneer is Zeebo (http://www.zeeboinc.com). The brainchild of Reinaldo Normand, 34, Zeebo is a game-playing console that doesn’t require a CD or DVD, or connection to landline internet. It downloads games directly from remote servers using wireless 3G technology (http://en.wikipedia.org/wiki/3G) embedded in the console. It exploits the fast-growing penetration of mobile phone wireless networks across the South to download the games on the consoles.
It has its eyes firmly on the global South’s rising middle-class families, who will use the consoles for game-playing and educational applications. It is currently available in Mexico and Brazil and is preparing to roll out across Asia. Normand studied at Tectoy S.A. in Sao Paulo, Brazil, and is a life-long gamer, entrepreneur, journalist and forward thinker. He conceived of a new 3D system for the developing world and contacted American company Qualcomm. He partnered with Mike Yuen at Qualcomm in San Diego, California, who was exploring new forms of gaming using innovative technologies.
As Zeebo’s mission states, it is “tailored specifically to the economics and market realities of emerging economies. The Zeebo system fills an enormous unmet need in these regions. At the same time it opens an immense new market for interactive content and products.”
Normand is ambitious and wants to reach a vast market of 340 million Chinese families. “By 2011, I want to close deals in China to manufacture televisions with this technology built in, therefore entering the homes of millions of families,” he told Monocle.
Zeebo makes some games for the console and also buys in other games from big-name game makers like Electronic Arts and Activision. The games are downloaded from the internet using a 3G mobile chip already built in to the consoles. The games are priced between US $5 and US $13.
The Zeebo system will roll out to China, the US and India in 2011, and Eastern Europe in 2012.
- Afrinnovator: Is about telling the stories of African start-ups, African innovation, African made technology, African tech entrepreneurship and entrepreneurs. Their mission is to ‘Put Africa on the Map’ by covering these kinds of stories from all over Africa. As their website says, “if we don’t tell our own story, who will tell it for us?” Website: http://afrinnovator.com
- AfricaUnsigned: This African alternative way of producing African music started this year. Unsigned artists record their music, funded by fans. Music fans from all over the world listen to the selection of artists, pick their favorite(s) and chip in a minimum of $1 dollar to the recording of a professional EP. The music is then distributed to the fans who backed the artist and sold on all major online stores (incl. Amazon & iTunes). Website: www.AfricaUnsigned.com
- TechMasai: Pan-African start-up news and reviews. Website: www.techmasai.com
- The Emerging Economies in the Digital Era: Market Places, Market Players, and Market Makers by Naazneen Barma, University of California. Website: http://tinyurl.com/3xjf2ps
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