Posts Tagged ‘international development’

The Mobile as a Post Industrial Platform for Social and Economic Development: Top 3 Trends in Africa

Source: CHI2007 “Reach Beyond” http://www.chi2007.org/attend/plenaries.php

Just over a decade ago, in San Jose, California, I was invited to speak as the Closing Plenary for the CHI 2007 25th Anniversary Conference. The theme was “Reach Beyond”, as this was the 25th Anniversary conference of the Computer Human Interaction society, and as the closing plenary, I was tasked with articulating the vision for the next 25 years of man machine interfaces. This was in May 2007, mere weeks before the launch of the iPhone. That’s important to note, because Apple’s little phone transformed the world of humans interfacing with computers in its own way. You must remember that back then we didn’t really send texts in the United States, and the mobile and it’s role in society had nowhere near the transformational impact it was having in the developing world. mPesa had just begun to catch attention in Kenya – particularly the Central Bank’s – and there were no such thing as apps or smartphones. This is the background and context in which I gave my talk, which sank without a trace in the history of impactful communication ;p

It was in April 2006, that I first wrote about the mobile phone as a post industrial platform, and as a driver for innovation, in its own right. Two snippets:

One of the recurring patterns I’ve been seeing of late is how mobile phones – not just the handset, but the system as a whole, have become drivers of innovation in emerging economies.
[…]
Not just in India or China; this phenomena of the handphone – freed from the shackles of state sponsored infrastructure required for landlines in the majority of these developing nations – has demonstrated its effect in improving the micro economy and providing opportunities for the entrepreneurially minded in hitherto backward regions around the world.

Today, 11 years and 4 months later, I would like to highlight the undeniable impact of the mobile platform in Africa’s development story by introducing the top 3 trends that are sweeping across the continent (and capturing global imagination) very briefly in 3 paragraphs below:

  1. Fintech solutions – Whether its mobile money transfers, instant mobile loans, or cross border payments and more complex back-end solutions; the financial services industry is being disrupted by the mobile platform, on smartphones and on feature phones. Mobile technology is rapidly becoming the default solution delivery system for the last mile of money in sub Saharan Africa.
  2. Solar power – This in turn is accelerating the rapid adoption of small solar systems for domestic energy needs in offgrid locations; a new pay as you use or “prepaid” solution for acquiring solar powered products and for charging can be seen to be launched in a yet another African country every month it seems. My favourite example is the solar powered cold room lockers that one can rent via micro mobile payments. In another year, I expect that one could replace the word “solar” with utilities, with the visible increase in solutions for potable water, and a plethora of government services shift online to the platform.
  3. Agritech – From the very basic “farmer information systems”, agritech is rapidly evolving to more nuanced and complex solution delivery via the ubiquitous phone. Whether its using the smartphone capabilities to identify the army worm pest infesting the fields, or decision support systems that let you choose the ideal species of tree to plant, given soil and drought conditions, agritech is a newly emergent megatrend on the mobile for African agriculture.

And the future, the next ten years? What will 2027 or 28 bring about? And, will we still be using the handheld device we have in our pockets right now? I can’t see it yet, but my gut tells me that easy access to powerful computing within reach of each and every one of us is something that will only be transformed but not replaced.

A theoretical approach to Value for Money in aid & development: Optimizing research and design for ‘best fit’ iterative programming

Last year, I briefly touched upon this concept as an approach to cost effective programme design that was still flexible enough to provide room for iteration for best fit.

Today, I want to explore the concept further to evaluate its potential as a framework for incorporating the concurrent shift in development thinking towards Value for Money (DFID) principles, in addition to designing for best fit.

Value for Money as a Process Driver

Value for Money (VfM) is not the same as traditional monitoring and evaluation which seeks to measure impact of a project, and occurs usually after the fact. In many large scale projects, this may not happen until years after inception.

Instead, VfM is defined by the UK’s National Audit Office as ‘the optimal use of resources to achieve intended outcomes’, which in turn, the DFID document contextualizes for their aid programming investments as “We maximise the impact of each pound spent to improve poor people’s lives.”

If this applies to all investments in aid related programme development, then it follows that it must also apply to earliest stage of discovery and exploration that leads to problem framing i.e. the necessary groundwork to write a comprehensive and inclusive design brief for future programming.

Thus, the conceptual approach that I introduced at the beginning of this post, which is taken from the discipline of Operations Research, and seeks to solve the challenge framed so – what is the optimal solution that minimizes resources (inputs) for maximum outputs (value creation) – fits as a potential framework that can theoretically apply from the earliest stages of implementing development strategy, even before inception of any related projects, including early stage research and feasibility studies. After all, the function of Linear Programming is optimization.

Note: Here I will only consider the theoretical aspects from the point of view of programme design research and development, and not the mathematics. That will have to wait until I have gathered enough data for validation.

Design Research for Programme Design Purposes

In this context, the primary function of such an exploratory project is to identify the opportunity spaces for interventions that would together form an integrated programme designed to effect some sort of positive change in the ecosystem within which it would be implemented, and offer a wider (more inclusive) range of cross-cutting benefits.

In the language of product development, we are attempting to build a working prototype. We cannot build and test first prototypes to see if they work, directly, because our room for failure is much less spacious for experimenting with aid related programming, ethically speaking. This is not a laboratory environment but the real world with enough challenges and adversity already existent.

Programmes are not the same as consumer products, nor are they meant to be designed and tested in isolation before being launched for pilot testing in the market. Their very nature is such that innocent people are involved from the start, often with a history of skepticism regarding any number of well meant donor funded projects aimed at improving their lives. This changes the stringency of the early stage requirements for design planning.

At the same time, the nature of the task is such that no first prototype can be expected to be the final design. So, from the very beginning, what we must do is set the objective of the outcome as a Minimal Working Prototype (MWP) that meets all the criteria for an optimal solution, and NOT a Minimal Viable Product (which may or may not work wholly as intended until tested in the field for iteration.)

That is, the first implementation of the iterative programme design must fall within the bounds of the solution space – that which is represented by the shaded area in the diagram above.

The Optimal Solution is the Iterative Programme Design

Thus, what we must be able to do at the end of the discovery phase of research necessary to write the design brief, is tightly constrain the boundary conditions for the solution space within which the MWP can then be iterated. This minimizes the risk of utter failure, and maximizes the chances of discovering the best fit, and all of this within the definitions of Value for Money and it’s guidelines.

There are numerous ways to set the goals for optimization – one can minimize resources and maximize constraints, or minimize risk and maximize return on resources invested. These will guide our testing of this framework in field conditions to validate the robustness of this theoretical approach.

In this way, we can constrain our efforts to discover best fit within predefined limits of tolerance, while retaining the flexibility to adapt to changing real world circumstances and progressive transformation of operating conditions.

Best fit, then, becomes less a matter of experimentation without boundary conditions and more a discovery of which of the many right answers – if we take the entire shaded area as containing “right answers” to the problem at hand – help us meet the goals of intervention in the complex adaptive system in an optimal manner.

The point to note from this conceptual framework is that there is never any ONE right answer, so much as the answer will be that which we discover to the question “What is needed right now for us to meet our goals, given these changes since we last looked at the system?”

It is this aspect that loads the burden of a successful outcome on the front end of the entire research and development process, given that framing the problem correctly at the outset is what drives the research planning and steers the discovery process in the direction of relevant criteria, conditions, constraints, and user needs that will not only form the bounds of our solution space, but also act as waymarkers for monitoring change and evaluating its progression.

Systemic design thinking and complex adaptive systems

Going back to first principles has been a refreshing exercise. Even as our work has taken us into some wholly new places, there’s comfort in knowing that others have thought deeply about the concepts, though not in our context. I’m a firm believer in not re-inventing the wheel. Consider it a working prototype to be tested in a new environment, rather like I’ve been doing with Vijay Kumar’s innovation methods.

Here’s the context of the thinking I’d been doing on iterative programming for complex, adaptive systems – that is, taking on the wicked problem space of international development where the operating environment is rather greatly different from the predictable regularity of the developed world:

People-centered systems design thinking for complexity
Pivoting from “best practice” to “best fit”: An interdisciplinary perspective (Intro)
An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools (Part 1)
Enabling development’s paradigm shift from ‘best practice’ to ‘best fit’(Part 2)

Thus, it was with pleasure that I dived into exploring Peter Jones’ publications on social transformation. Two, especially, caught my attention.
The first lays the groundwork in the work of bringing together the two disciplines – systems thinking and design.  From the abstract of his Systemic Design Principles for Complex Social Systems:

Systems theory and design thinking both share a common orientation to the desired outcomes of complex problems, which is to effect highly-leveraged, well-reasoned, and preferred changes in situations of concern.Systems thinking (resulting from its theoretical bias) promotes the understanding of complex problem situations independently of solutions, and demonstrates an analytical bias. Design disciplines demonstrate an action-oriented or generative bias toward creative solutions, but design often ignores deep understanding as irrelevant to future-oriented change.While many practitioners believe there to be compatibility between design and systems theory,the literature shows very few examples of their resolution in theoretical explanation or first principles. This work presents a reasoned attempt to reconcile the shared essential principles common to both fundamental systems theories and design theories, based on meta-analyses and a synthesis of shared principles. An argument developed on current and historical scholarly perspectives is illuminated by relevant complex system cases demonstrating the shared principles. While primarily oriented to complex social systems, the shared systemic design principles apply to all complex design outcomes, product and service systems, information systems, and social organizational systems.

And once I noted there was a bit of an overlap between the references I’d drawn on for my initial exploration of design planning as the discipline from which to source methods to address the challenge of complex, adaptive systems as currently explored in the development space, I was relieved to see that I was on the right path for our own theoretical evolution.

This paper is a great starting point for our methods development for the context of the informal sector in the East Africa, particularly outside the urban centers. And, a second paper by Jones – Design Research Methods in Systemic Design validates many of our assumptions while working with only the methods and systems thinking from one school of thought – the Institute of Design’s philosophy and approach.

In future blogposts, I will attempt to triangulate the thinking from all of these disciplines – design planning, human centered design, systems thinking, and international development. There’s a paper I’m hoping to write by the Autumn, if all goes well and the abstract accepted for a conference at the end of the year.

UNDP’s 2017 Report: Universalism and Human Development

Though I’ve often deconstructed a variety of reports released by private sector actors like management consultancies, and public sector institutions like the UNCTAD or World Bank, I’ve never been moved to write about them here on the blog.

Last night, using the twitter hashtag #UNDP2017, I went through their recently released 2017 issue of the Human Development Report (their hashtag, #HDR2017*) and was rather surprised by their decision to take an unusual approach to the topic.

Unlike the majority of the reports I’ve seen till now, which tend to segregate regions by geography or continent or income (lesser developing countries, for instance, or sub Saharan Africa), this was the first time I’d seen such a holistic and inclusive approach to humanity’s development.

In fact, it was the first time I’d come across the concept of “universalism”. Almost a planetary focus, one might say, on the intertwined future of our common humanity, now mostly interconnected through this world wide web.

Here are a few more bits from the report to whet your appetite, though I do suggest taking a look through it yourself.

While things are improving, there are far too many marginalized groups of which the largest segment of humanity is women, especially those of us who were born in the formerly-known-as-developing world.

Though I must say that the skills the UNDP’s report writing team selects as necessary for our emerging future is one that can be mastered by anyone, regardless of culture, gender or education.

*You can see why I picked my own hashtag for easier readability

It’s way past the time to consider the Informal Economy as a distinct commercial environment

Brand stickers on avocados displayed for sale on a highway, Kenya. April 2013

Regardless of continent, it is now high time we accepted the informal economy (unformal or unrecognised or unorganized sectors) as a commercial operating environment in its own right.

The continued oversight is rapidly coalescing into a gaping void of hiccups and failures, by large companies, non profit institutions, and startups, alike. This issue goes far beyond “understanding the informal” or recognizing the fulltime professional status of the service providers that I’ve written about before.

It’s about the problems created by continuing to assume every individual is poverty stricken and struggling to make a livelihood simply because a significant portion of their commercial activity operates outside what is rarely defined but is assumed to be the formal, structured economy held up as the pinnacle of economic development.

It’s why academics can barely conceal their flabbergasted surprise that a person has a better quality of life, and a reasonably viable revenue stream in [gasp] informal market trading, or even agricultural work.

It’s why @pesa_africa questions the continued transplantation of e-commerce business models directly from Seattle to subSahara given that they’ve tended to wither on the vines.

It’s why market women and traders pay the price of daily harassment and abuse by those given authority over their peace of mind.

And, it’s also why the freshest produce gets to you first thing in the morning in Nairobi or Cotonou or Kinshasa.

This is not meant to be a paean to the hardworking women and men who keep the engines of commerce and trade humming in the harshest of environments with scarce resources and inadequate infrastructure.

It’s the first step in acknowledging yet another holdover from a colonial past that decades later still hampers and hinders the social and economic development that should have happened by now, by all rights.

It’s also the necessary counterpart to the recognition of agency required for design interventions to succeed once donor funding ends.

This theme is consistently covered in this blog in the category Biashara Economics and hashtag #biasharaeconomics

The importance of user agency for good design in the humanitarian and development context

humancenteredThis is a topic that has come up so often on Twitter that I thought to write it out once and for all. A link would be ever so much easier to argue with than to make the case for recognizing the agency of the end user – whether an intended customer or beneficiary – of an innovation.

At some point, I’ll get around to writing a much longer version with citations and links to contemporary research in iterative programming for complex, adaptive systems i.e. the ecosystem intended as the target recipient for the implementation of a socio-economic development program or project. For now, this short version will do.

The late John Heskett, professor in Design Planning and Market Forces at the Institute of Design, IIT, Chicago, once said in the classroom (notes, Spring 2003) that an invention could not be considered to be an innovation until it had been embraced by the end user. Witness the difference in adoption between Apple’s iPod and the Segway human transporter.

This metric of success for the novel – be it a product or a service, or even a business model such as the prepaid/pay as you go means of using mobile phones – requires that the customer (the end user or the beneficiary, as the case may be) be given the opportunity to choose, that is, to make a decision on whether to adopt, adapt, or reject the innovation in question.

In order to choose, and to decide, the user for whom such systems are designed must then be imbued with agency, rather than be considered passive recipients of the innovation.

This respect and recognition of the recipient’s agency forms the core of our work in innovation planning and concept design inspired by primary research in the informal markets of rural and urban sub Saharan Africa, South Asia, and the ASEAN. It has been informed by more than a decade of practical knowledge from experience in the field.

And it is this recognition of agency, which is that which empowers, that provides the foundation for our processes and systems, our methods and tools, and thus, our learning and teaching of how to think differently across the bridge of disparity, and inspires conceptual design of holistic solutions.

Without explicit acknowledgement of the individual’s agency or recognition of the diversity of circumstances, abilities, and aspirations in a community, any designs meant to effect positive change will remain lifeless attempts to intervene from the outside. Witness the number of pilots that fail to scale, or programmes that remain unsustained once external funding ends.

Part 2: Enabling development’s paradigm shift from ‘best practice’ to ‘best fit’

Workshop I_end user in sight during evaluation

Programming in International Development jumps directly into the Design phase of the projects. This is the root of the challenge they face now as they seek to change the paradigm away from ‘best practice’ to putting the end users at the center of their strategies, with ‘best fit’. I identified this problem in the Autumn of 2012 whilst delving into the internal project development processes with civil servants at the Netherlands Ministries of Foreign Affairs and Economy during a customized internal workshop.

It should be mentioned at this point that while Robert Chambers has extensively promoted the participatory approach, there were issues in the process that were explored during our work, and can be covered in a separate article. Participatory design is not synonymous with user centered design, and neither approach includes a robust methodology for assessing the landscape of the operating environment in conjuction with solution development for ‘best fit’, particularly in the developing world context.

Before we can jump into the design of a project or programme – whether with or without the participation of the end users/beneficiaries, we need a structured approach to grasping the context of the challenge. Without a map of the landscape of the ‘wicked problem’, one cannot navigate the complexity (1). This so called landscape map of the ecosystem in which the development project will be introduced, should not only include understanding the people and their operating environment, but identify and frame the touchpoints for the design of ‘best fit’ interventions.

That is, there’s a need for framing the problem in a manner such that the outcome narrows down the solution space i.e. delineating the boundaries for ‘best fit’ prior to the inception of the design process. In the field of design, these boundary conditions can be known as design criteria and constraints, along with filters for assessing optimal solutions at the conceptual stage from the plurality available.

UCSD

These first three steps in the process BEFORE jumping into design are collectively known as Design Planning, and their outcome minimizes the wasteful experimentation of ‘suits to try’ for ‘best fit’ as the design phase begins with the ‘measurements’ necessary for a ‘bespoke suit’ tailored to fit, to stretch the analogy. Bespoke tailors do not expect their carefully measured suit to fit their client on the first try, and usually one returns two or three times for the final fitting. Similarly, customized programming may require tweaks and can be considered a working prototype (a pilot program, for instance, prior to scaling) where the kinks are worked out together with the participants.

This will require work upfront at the start of the multi-year programmes. There are no silver bullets to addressing complexity.

 

(1) Part 1: An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools

An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools

This post follows on from the previous one which introduced the concept of a ‘best fit’ approach to the ‘wicked problems’ in development. There I posited that consumer facing private enterprises looking at the African market would benefit from considering Development’s thought-leadership in this regard, given their experience in the challenging operating environments of the developing world.

I also noted that while the ‘best fit’ concept was a welcome paradigm shift for addressing complexity, the siloed thinking common to academia left far too many gaps in their approach and process.

In this post, I will begin to explore the seminal thinking (1) at the intersection of business and design  – also known as innovation planning – for methods and tools to address complexity in a holistic way, all the while keeping in mind that we need to ensure the end users (the rural poor, the people, or the beneficiaries) are at the center of the strategy (Chambers 1988).

Where is the gap?

A careful review of the working paper provides evidence that the challenge faced by international development practitioners when considering a ‘best fit’ approach to programme design is the lack of a robust methodology proven to take one from A to B. Here, we can think of point A as their original ‘best practice’ paradigm, and the attendant methods learnt through study and experience. Point B would be a validated process, with an accompanying toolkit, for applying the ‘best fit’ approach. One can confidently say a How To Handbook is missing, and the siloed thinking creates the barrier to developing one within the field.

What is the challenge?

While Ramalingam et al (2014) recognize the need for tools and processes from other disciplines more familiar with complex systems, one can gather a sense that they don’t know where to start. One cannot simply throw various methods and tools at problems, like spaghetti on the wall, to see which sticks. Even in mathematics, formulae are carefully selected based on the variables available, and the answer to be calculated. One doesn’t blindly throw data at all the available equations hoping to discover the one that fits the problem statement.

This challenge is better articulated in Matt Andrew’s blogpost which posits that the ‘best fit’ approach to policy and programme design is akin to choosing a new suit of clothes. The implication is one must try many different suits in order to discover the ‘best fit’. This is wasteful and time consuming.

What can people centred innovation planning offer?

First, the fundamental premise of human centered design firmly focuses the outcome of the processes on the context and needs of the end users. This orientation offers design a headstart in considering Robert Chambers’ emphasis on putting people first. The entire discipline is eminently suited to take on this challenge for international development, in an empathetic and holistic manner.

Second, addressing complex systems designed for human interaction is another key facet of the field of design, particularly the specializations that deal with computer human interaction of all types. This means there is a vast body of work created over decades meant to consider exactly this point.

Third, rather than wasting time and money on “trying on different suits” for ‘best fit’, there are proven approaches developed to minimize the failure rate of innovations introduced in the consumer market, and maximize the adoption rate by the end users. In particular, the areas of design thinking, design planning and design innovation have years of expertise in considering exactly this.

Finally, for development policies, and programmes to provide value for money, and sustainable, beneficial outcomes for their target audience, they must be designed such that they are viable, feasible, and desirable. This requires a holistic approach to solution development integrating elements from more than just one discipline, whether its design or development.

The philosophy of the methodology required to leap from “We must pivot to ‘best fit'” to bridging the gap of knowledge of “How to map the wicked problem and assess the context for programming” will be covered in the next article.

 

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Strategy as a Wicked Problem by John Camillus (HBR 2008)
Living with Complexity by Don Norman (MIT Press 2010) Chapter 1 PDF
A Short Grandiose Theory of Design by Jay Doblin (STA Design Journal 1987)
Wicked Problems in Design Thinking by Richard Buchanan (Design Issues, 1992)

Pivoting from “best practice” to “best fit”: An interdisciplinary perspective

There has been an evolution in thinking about development practice. Buckley and Ward (2015) found a broad consensus for a shift from a ‘best-practice paradigm’ (Chambers 2011) to one of ‘best fit’ — that is, development interventions that are ‘optimally adapted’ to the socioeconomic, political and ecological context at any given moment (Ramalingam et al. 2014: 3).

While the private sector’s approach to consumer marketing and product innovation offers much to improve the success rates of government policy and development programming, there are lessons from development’s thought leadership that offer global brands a strategic advantage when considering the frontier markets on the African continent.

One of these is the pivot away from the ‘best practice paradigm’ – Robert Chambers anticipated the contemporary concept of design thinking in his lifetime’s body of work – to design for ‘best fit‘, an approach to crafting solutions to ‘wicked problems’ embraced recently by the UK’s DFID. Indeed, the UNECA’s recently released Transformative Industrial Policy for Africa explicitly mentions the need for industrial policy designed for ‘best fit’.

Corporate strategy consulting tends to rely on the ‘best practice paradigm’, and this is demonstrated in the slew of analysis and reports by large firms, and boutiques. While the African continent’s markets are still considered nascent, this approach may pass scrutiny, but as the South Africans are discovering to their cost, their own legacy of ‘best practices’ are not always fit for purpose further north of the SADC.

What can we take away from the field of development research?

Ramalingam et al’s abstract for their working paper “From best practice to best fit: understanding and navigating wicked problems in international development” starts with,

The methods of complex systems research are increasingly being used and valued by international development organisations. These approaches enable a shift away from existing tools and business processes that reinforce a focus on static, simple and linear problems. The evidence is that these methods can help development partners better navigate the complex, dynamic realities they face on a day-to-day basis.

However, scanning their references shows gaps that emerge from siloed thinking natural to narrowly focused academic research. Businesses of all stripes daily navigate complex, dynamic realities with greater vulnerability.  An interdisciplinary perspective, as espoused by Aalto University, would thus encourage the consideration of adding a soupçon of Business and Design, to the Engineering, prior to synthesizing the key elements of ‘best fit’ for new market entry strategy, viz.,

Strategy as a Wicked Problem by John Camillus (HBR 2008)
Living with Complexity by Don Norman (MIT Press 2010) Chapter 1 PDF
A Short Grandiose Theory of Design by Jay Doblin (STA Design Journal 1987)
Wicked Problems in Design Thinking by Richard Buchanan (Design Issues, 1992)

As we can see, business, and then design, both have given much thought to this space now being touched upon by development researchers and theorists. This will be the topic of the next post, what lessons my teachers might have to share with the practice of development. For now, we’ll consider the value inherent in their explorations of the subject matter.

Development’s value to the practice of business strategy and innovation (design) planning lies in its deep and decades long experience in developing countries. As Ha-Joon Chang et al state:

Insofar as most African economies look rather similar to each other economically, it is not because they are in the same continent but because all economies – in whichever continent they are – at low levels of development look rather similar to each other, due to the lack of specialisation and diversification in the production structure, which then leads to high degrees of homogeneity in occupational structures, social organisations, and lifestyles.

What the Development industry brings to the table is experience in operating in the challenging operating environments of the erstwhile third world, especially among the lower income segments of the population, and outside of the population dense conurbations. Only a handful of consumer facing global brands have anywhere near this type of experience, and that too from the profit maximization point of view. Emerging market consumer firms, hyper local startups, and others in the distribution chain with such ground level expertise in traditional markets tend to keep their strategies close to their chests and their trusted relationship networks even closer.

Till now, ‘best practice’ as conventionally approached by private sector and social enterprises keen on addressing these untapped opportunities has been to partner logically with local NGOs for local expertise. But the last mile of customer experience has always struggled to translate itself from thinking of satisfying demanding consumers to resonating with established mindsets of passive beneficiaries. This has had its own problems.

So, what does ‘best fit’ mean, then, in this context?

Matt Andrews, at the Harvard Kennedy School, thinks of it as choosing a new suit of clothes. However, this description I’ll hold on to for the next post as it contains the problem statement that our interdisciplinary methods are designed to address.

Ramalingam et al’s original version with authors’ formatting:

‘Best fit’, a concept stemming from governance efforts, describes aid programmes that are optimally adapted to the political, social and economic context. Such programmes can take advantage of a plurality of possible solutions, which can be deployed flexibly. They often work at multiple levels simultaneously – from community to national and even global policy levels – in order to facilitate and bring about change.

Businesses contemplating the African consumer market would do well to take such a holistic approach to their market entry strategies, and the design of products, services, and business models. Adapting to the complexity and challenges inherent in the developing world’s operating environment for ‘best fit’ becomes even more critical for successfully bridging the disparities of context.

This shift in orientation requires questioning the dominant logic of existing corporate best practices, and, instead, a willingness to explore, discover, and experiment with crafting wholly new approaches to sustainable business practice, on multiple levels simultaneously. They have the advantage of proven and robust methods and tools from the disciplines of design and business, requiring only a little tweaking of the lenses. Understanding customer needs should already be in their DNA.

 

 

 

 

NB: Interdisciplinarity involves the combining of two or more academic disciplines into one activity (e.g., a research project). It is about creating something new by crossing boundaries, and thinking across them.

The formal sector and economic development: A lesson from marketing

Pursuing the thoughts introduced in the previous post further, I looked up the original reference on “formalization of the informal sector”1.

Alan Gelb, et al. 2009. “To Formalize or Not to Formalize? Comparisons of Microenterprise Data from Southern and East Africa.” CGD Working Paper 175

“…in East Africa, weak enforcement of tax payment and no significant difference in access to services between formal and  informal firms means that these variables do not explain the allocation of firms across the informal-formal divide.

We conclude that in countries with weak business environments, informal firms are just as likely as formal firms to increase their productivity as they grow.

Thus,  interventions to increase productivity and lower the cost of formality may be helpful.”

The question comes back to what is the benefit of formalizing when the costs associated with it do not offer any additional services, such as reliable electricity, for instance, that offset the investment.

Formality only becomes a barrier when new market opportunities require paperwork – a formal sector customer, or a chance to export.

“…improvements in the business environment in East Africa are potentially more valuable in changing the balance of benefits and costs from formalization, and so encouraging small firms to formalize and grow.”

Really, what seems to be the case is that instead of pushing individual entrepreneurs to formalize, it is their operating environment that must be tweaked in order to attract them towards formalization. As long as there’s little difference between the formal and informal sectors of the economy, there is no incentive to invest in the relatively expensive and cumbersome process.

The key insight here is that the current day efforts to push towards formalization, must instead transform into a pull towards formality.

If indeed we’re now seeing the end-users as customers of our services, then we must market the benefits in order to attract them. This has implications for the durability, and thus, sustainability of programs and initiatives, beyond the life of the project.

With the nuanced shift in perspective offered by Gelb et al, we can also see the role that human centered design can play in this journey. Who better to identify what customers’ need and want?

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