201711

Data for inclusive business

November 2017 Blog Series

How many people live in Kibera?

For a long time, Kibera was considered the biggest slum not only in Nairobi, but in all of Africa, with allegedly over 1 million inhabitants. The 2009 Kenya Population and Housing Census counted 170.070 inhabitants. In 2010, UN Habitat estimated Kibera’s population at 500.000 to 700.000. Such is the quality of data for many, if not most low-income markets in developing countries. If we don’t even know how many people live in a certain area, imagine how little we understand about their incomes, spending patterns, or consumer preferences. Low-income markets remain dark data-wise.

What can artificial intelligence (AI) do for market research?

AI provides algorithms to automatically identify relevant information on the internet and analyze its content for specific uses. It enables enterprises to make better informed business decisions and develop services or products that exactly meet the needs of their target group. It can complement or even save businesses costly and time-intensive market research.

Why do we need BoP market data?

Companies and investors still cite the lack of market data as one of the major impediments to investing in low-income markets. Without a solid understanding of the income and spending patterns, preferences and challenges of the low-income target group, it is difficult to calculate a robust business case, find the appropriate price point, or identify the best market segment. As a result, companies either stay away from the market, or face high upfront costs for market research that they may not be able to recuperate if they don’t find the expected market demand.

Without data, investing becomes a gamble.

Companies and entrepreneurs building new business in low-income markets usually collect their own data via surveys. This is expensive, and usually leads to poor quality of data because respondents often answer strategically, or do not understand the question or do not know the answer. The best way to find out whether a product will be bought and for what price is to sell it, leaving entrepreneurs reliant on a costly and lengthy trial-and-error approach. Business plan calculations for revenues are pure guesswork at this stage. Not only the entrepreneurs, also the investors know this. Besides “patient investors”, who are sometimes not even expecting to get their money back, capital for early stage entrepreneurs is extremely limited. In the absence of reliable numbers, investors understandably want to see a solid financial track record of multiple years before they provide equity or even debt capital.

Accurate, deep and up-to-data data could unleash investment in low-income markets.

And the good news is: this data is already being collected. Off-grid energy providers measure when energy is used and on which devices. They also receive payments from their customer’s mobile phones and hence know who can pay reliably, and who can’t. Mobile money operators register billions of transactions by low-income customers, receiving salaries, paying for water, buying soap, or sending money to relatives. Mobile money service MPESA processes 6 billion transactions in 2016.

In addition, public organizations like the World Bank or national governments commission hundreds of reports each year that highlight earnings, spending and consumption patterns of people living at the BoP. This data, however, is often difficult to access and too high-level. Combining the data sets of public and private players would make the BoP market a lot more transparent and accessible for companies and investors.

AI can digest the available “big data” into useful market information.

By combining different sources of data and analyzing it using smart algorithms, we can now create much more reliable data on an ongoing basis. This requires collaboration between the various organizations providing data as well as artificial intelligence experts. Ideally, investors come in at an early stage to specify their demand for data.

First steps: providing access to AI tools

The ii2030 initiative on improving BoP market data brings together energy companies, donors and investors to seize this opportunity. In a first step, it will create a platform that makes existing AI-based tools for data collection and analysis available to companies and investors. Are you interested in joining this initiative? Do you know relevant tool, or are you already using some? We are looking forward to hearing from you!

This blog is a part of the November 2017 series on data for inclusive business.

Read the full series for insights on how the data revolution could affect inclusive business. Will it bring an end to the uncertainty of business in Base of Pyramid markets? Can it straddle the development-business divide? Will the data drive spurred by the Sustainable Development Goals be useful to inclusive business?

Blog post

Africa’s Three Largest BOP Markets

In Kenya, BoP households account for 1 in 5 of every dollar spent, and almost a quarter of this is spent on food and beverage. These and other insights on the shape and spending of BoP consumers are shared by Euromonitor International, based on their…
Table of contents

graphic summary

GRAPHIC SUMMARY

A visual summary of the key topics and insights relevant for inclusive business entrepreneurs when it comes to data. Learn more about these aspects by reading this edition! The illustration was developed by Christopher Malapitan, a visual practitioner…

editorial

Data, data everywhere... But what does it mean for inclusive business?

Data, data everywhere, but what does it mean for inclusive business? Our Editor in Chief Caroline Ashley introduces this series in her overview blog, outlining the key trends in access to data and its usability for businesses operating at the base of the pyramid.

Caroline Ashley

feature story

Want to know more about Kibera? Artificial Intelligence can help

170,000 or 700,000? Which figure best represents the population size of the slum Kibera in Nairobi? Without data, how can these households be understood in terms of their needs and market power? Endeva’s Christina Tewes-Gradl explores the huge potential of the data revolution to unleash investment at the BoP.

Christina Tewes-Gradl

Africa’s Three Largest BOP Markets

In Kenya, BoP households account for 1 in 5 of every dollar spent, and almost a quarter of this is spent on food and beverage. These and other insights on the shape and spending of BoP consumers are shared by Euromonitor International, based on their interrogation of multiple data sources, combined with modelling and forecasting.

Spreadsheets are where data go to die

Big data on smallholder farming is already emerging in high-value sectors. The potential across smallholders is huge, with possible gains for businesses and farmers alike. BoP expert Karen Smith outlines those gains and how a new business, Smallholdr, provides a new data-based system for supply chain management and upgrading.

Planting the seed for an integrated precision farming platform for smallholders

At Endeva’s Inclusive Innovation Factory ii2030, pioneers from the agriculture sector discussed how technology can provide solutions for precision agriculture. Building on the model of e-Kutir, Christina Tewes-Gradl presents innovative ideas on how smallholders can access data and business opportunites.

A mobile approach to collecting fishy data – a case study

Wild fish catch from Lake Victoria has dropped significantly to half of what it was. A mobile-based survey confirms the slump. TTC explains this mobile tool, and how it has helped a public private partnership invest in aquaculture.

Data Sharing for Sustainable Development Should Not be a One-Way Street

Data and collaboration provide new opportunities for action and impact. This is as true for business as for others. Claire Melamed, leading Global Partnership for Sustainable Development Data, outlines the data revolution in development with examples of how companies are tuning in.

Fighting hidden hunger with data

Data on food fortification saves lives argues the Global Alliance for Improved Nutrition (GAIN). Investing in food fortification has a return on investment of 30:1, saves lives, and prevents long-term sickness. Yet, under-investment prevails. Good data won't build political will overnight but is a step towards better planning and investment. GAIN’s Global Fortification Data Exchange (GFDx) was launched to do just that.

Data for a changing world — satellites for sustainability

Ellen Stofan, former Chief Scientist of NASA, explains how huge reams of data from space are being tapped to help governments, business and citizens to manage resources in the face of climate change.

Open tools and data are quintessential to inform decision-making in the energy field

Lack of data about household energy use and poverty levels is holding back necessary investment and planning decisions in the renewable energy sector. Dimitrios Mentis and Sanjoy Sanyal share how geospatial information system (GIS) datasets and visualised maps are being used to close this gap.

Where do you get your data from? 

Looking for useful data? These are our suggestions on open data sources, toolkits and an introduction on how to apply big data to help you dive into the data that is out there.

Good data, bad side-effects

Mere access to data will not lead to a better world warns Andreas Pawelke from the World Wide Web Foundation. Too much data is accessible to only a few people. So instead of investing in ever-bigger data, investment is needed in new legal frameworks, local data capacities, and requirements to share data.

How to use customer centricity to meet data collection needs

Making data collection less of a burden and more of an opportunity for its investees is a key objective of the Department for International Development (DFID) Impact Programme. Here, they share the first case study in their Deep Dive series that shows how gathering customer-centric data enabled a Ghanaian animal feed business to understand their value to BoP consumers and scale their business.

We are lacking initiatives that identify and convey the stories of impact hidden in the data

In this interview, Gayan Peiris, Digital Strategist of the United Nations Sustainable Development Goals Action Campaign, explains the importance of using global data sources wisely to identify the needs of local communities and showcase ‘real’ progress made.

Interview: Dr. Consulta, improving services through customer feedback

Dr Consulta is a Brazilian business rapidly expanding its chain of clinics. The company is focussed on keeping costs low so that their prices are 20% of typical private competitors. So why are they investing time and effort in customer feedback? Product manager Jorge Tung tells us why and explains how to do it efficiently.

Editor's Choice, November 2017: Our World in Data, and in darn good visuals too

This month, Caroline Ashley did not pick a typical publication as the Editor’s Choice, but a website that is all about data. Find out what it makes Our World in Data so special and unique that you should not miss it.