By Monica Fernandez Alvarez de Lugo, OMJ at IDB and Lucie Klarsfeld, Hystra.
In the past year, MIT and NASA have been working hard to make broadband connectivity available on the moon. The results have been so positive that your connectivity on the moon is actually better than in many countries on Earth, including the United States. And this same year, Mark Zuckerberg, founder of Facebook, created internet.org, with the goal of providing connectivity to every single person around the world.
Broadband has proven to not only increase economic development, but also to have a positive impact on the productivity of private firms. And while aliens could greatly benefit from improved connectivity, here on earth we still have a long way to go. Today, around five billion people still lack access to connectivity. A great effort from both the public and the private sectors is needed to overcome this gap, by developing the necessary infrastructure and providing access, in particular to those companies targeting the people at the base of the socioeconomic pyramid (BOP), so that each one can take advantage of these benefits.
The Broadband Effect: Enhancing Market-based Solutions for the Base of the Pyramid, a new study by the Inter-American Development Bank (IDB) and prepared by Hystra, makes the case for broadband adoption and more efficient and productive value chains serving the BOP. The report presents impressive results that show how broadband has allowed new business models to develop, ones that are more effective and efficient accessing the BOP, and then creating and distributing goods and services to that population.
Through a deep dive into eight case studies in countries including Mexico, India, and Kenya, the study presents important conclusions on how businesses are leveraging broadband connectivity to better include the BOP in their economic value chains as clients, producers, or employees. For example, Bridge International Academies has become the world’s largest chain of nursery and primary schools, delivering high-quality education at low cost. It currently serves 80,000 students and employs 2,700 teachers in 259 academies. Bridge aims to break even in 2016 and to operate in at least four countries serving 4.5 million pupils by 2022.
In Mexico, Barared has invested in broadband infrastructure with Wi-Fi antennas in order to set up service booths equipped with tablets and located in mom-and-pop shops, providing low-cost telecommunications, financial transactions and other services to the BOP. Narayana Health, a group of private hospitals in India, leverages ICT and broadband to increase its efficiency and provide quality healthcare at affordable prices.
Three findings stand out from the report:
The report is a must-read for those interested in learning more about broadband and how it can benefit the BOP. It makes the case that broadband is a determinant tool to improve and leverage current and potential business models looking to serve the BOP and that a proactive public policy is necessary in order to set in motion broadband penetration.
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