Digitalisation for inclusive business: a recipe for inclusion or further marginalisation?
Preliminary research insights indicate that while digitalisation has the power to connect low-income markets to knowledge and spur innovation at the BoP, the risk for further marginalisation must also be taken seriously.
With growing interest in digitalisation in Western economies, my colleagues at Jacobs University and I set out to answer an important question: How can digital technologies have a transformative role in developing economies to address fundamental societal challenges? We conducted several studies in an attempt to map contributions and limitations of digitalisation for inclusive business efforts in Base of the Pyramid (BOP) markets. While there is still more work to be done to explore this nascent field, here are some of our preliminary insights:
Digitalisation can help address issues that result from rural isolation.
This is especially important for the healthcare sector, where by leveraging high-speed internet and mobile technology infrastructure, rural remote communities can benefit from low-cost consultation and access to diagnostic care. In addition, digital technologies can enable companies to expand their service portfolio without significantly altering their current cost structures. This can be seen in the case of e-healthcare providers Sevamob or iKure, where offerings for diagnoses and treatments are also considerably cheaper than conventional ones. The data collection and aggregation potential also enables improved performance measurement, leading to decision-making about doctors specialties and medicinal needs, such as vaccinations. Outside of the healthcare sector, cost-efficient digital technology can help overcome local barriers related to infrastructure, telecommunication and power shortages. For example, the use of digital technologies enables Mimosa TEK to reach a large number of farmers in remote areas because data processing takes place through a cloud system. By providing new approaches to overcome local constraints, digital business models create value, not only for local BOP communities and firms, but for a wider range of actors across the value chain.
Digital technologies can provide improved access to knowledge, enabling better-informed decision-making for the BOP and new value propositions.
Specifically, digitalisation in low-income markets can “close the knowledge gap small scale producers have with respect to their price fixing mechanisms, risk hedging and direct trade with responsible buyers around the globe,” as one social entrepreneur explained. Moreover, providing information and access to knowledge in remote locations enables a two-way exchange between the companies and their consumers. As such, information empowerment of the BoP can further function as a source of innovation for new products, as a firm acquires new information about the farmers’ needs and buying behaviour. This leads to the creation and offering of new, innovative, and socially transformative value propositions. For example, the use of artificial intelligence enables Sevamob to provide new value propositions to both patients and doctors, namely detecting fungal infections at point-of-care, web-based training, impact measurement and accurate and timely data on health outcomes. Moreover, the real time collection of medical data creates opportunities to provide value propositions for other stakeholders, including governments and hospitals, through reports which show the statistics for given demographic groups in terms of prevalent diseases, symptoms and risks.
Digitalisation runs the risk of excluding those who are already marginalised.
For those with lower digital literacy or for those without access to electricity, mobile devices, or other enabling infrastructure, digitalised solutions are not always intuitive or accessible. This means there is danger with the loss of human interaction. In fact, our case study analysis reveals that especially in the healthcare sector, where patients may still prefer traditional face-to-face consultations, e-healthcare providers combine digital offerings with local capacity-building efforts. For example, iKure’s unique value proposition is the combination between advanced technology and trained rural community health workers, which can address local social and cultural contexts. Similarly, Sevamob offers a mix of digital and traditional offerings. At this stage, this blend of in-person and digital offerings is essential to ensure digitalisation empowers, rather than further marginalises, those in low-income communities who cannot yet access global knowledge centres.