challenges of sustainability

Challenges of Challenges of SustainabilitySustainability

Kentaro ToyamaKentaro ToyamaAssistant Managing Director Assistant Managing Director

Microsoft Research IndiaMicrosoft Research India

ADBI - CPSC Regional Joint Workshop on ADBI - CPSC Regional Joint Workshop on Managing Sustainable e-Community CentersManaging Sustainable e-Community Centers

May 3-10, 2005 Agra, IndiaMay 3-10, 2005 Agra, India

OutlineOutline

BackgroundBackground

Current statusCurrent status– Rural PC kiosks in IndiaRural PC kiosks in India

Why is sustainability so difficult?Why is sustainability so difficult?

Suggestions and recommendationsSuggestions and recommendations

OutlineOutline

BackgroundBackground

Current statusCurrent status– Rural PC kiosks in IndiaRural PC kiosks in India

Why is sustainability so difficult?Why is sustainability so difficult?

Suggestions and recommendationsSuggestions and recommendations

Why do we care?Why do we care?

Microsoft Research IndiaMicrosoft Research India

– Microsoft: Microsoft: positive impact and long-term positive impact and long-term growth of worldwide economygrowth of worldwide economy

– Microsoft Research (MSR):Microsoft Research (MSR): scientific research scientific research and long-term possibilities of new technologyand long-term possibilities of new technology

– MSR India, Technology for Emerging Markets MSR India, Technology for Emerging Markets group:group: applications of computing for applications of computing for underserved underserved Social science research and technical innovationSocial science research and technical innovation

Data sources:Data sources: Extensive kiosk surveysExtensive kiosk surveys

– 300 kiosks, 1 year so far, 4 300 kiosks, 1 year so far, 4 times each, 5 customers, 1 times each, 5 customers, 1 operator per kioskoperator per kiosk

Ethnographic studiesEthnographic studies– Longitudinal kiosk life-cycleLongitudinal kiosk life-cycle

In-depth interviews with In-depth interviews with kiosk agencieskiosk agencies– At least six organizationsAt least six organizations

Over 30 site visits in India Over 30 site visits in India and Africaand Africa

Discussions with third-party Discussions with third-party observersobservers

Literature in journals, Literature in journals, books, web sites, books, web sites, whitepaperswhitepapers

What we’ve looked at so What we’ve looked at so far…far…

Kiosk projects:Kiosk projects: n-Loguen-Logue DrishteeDrishtee ITC e-choupalITC e-choupal TARAhaatTARAhaat MSSRFMSSRF Dhan / SARIDhan / SARI AkshayaAkshaya World CorpsWorld Corps Others…Others…

What we’ve looked at so What we’ve looked at so far…far…

DefinitionsDefinitions

““Kiosk”Kiosk”– Rural center with PC as the focus of Rural center with PC as the focus of

servicesservices– Socio-economic improvement as a goalSocio-economic improvement as a goal

““Sustainable”Sustainable”– Self-sustaining, as a businessSelf-sustaining, as a business

(valid only for the duration of this presentation)

OutlineOutline

BackgroundBackground

Current statusCurrent status– Rural PC kiosks in IndiaRural PC kiosks in India

Why is sustainability so difficult?Why is sustainability so difficult?

Suggestions and recommendationsSuggestions and recommendations

PrefacePreface

This presentation points out weaknesses in the sub-This presentation points out weaknesses in the sub-goals, approaches, or results of kiosk projects, goals, approaches, or results of kiosk projects, but…but…

None of it is meant as a criticism of the project None of it is meant as a criticism of the project agencies or the people who work with them, almost agencies or the people who work with them, almost all of whom are dedicated and deeply devoted to all of whom are dedicated and deeply devoted to development. They should be lauded for having development. They should be lauded for having had the courage to try these experiments.had the courage to try these experiments.

The real problems are not due to approach or The real problems are not due to approach or implementation; they are fundamentally embedded implementation; they are fundamentally embedded in a fact that we could never have known without in a fact that we could never have known without these experiments. these experiments.

Srinivasan, Janaki (2004)The Effects of e-Governance Implementation on Women:

A Study of the Sustainable Access in Rural India (SARI) Project, Madurai.Masters Thesis, Indian Institute of Information Technology.

Kiosk in Tamil Nadu

Vigyan Ashram monthly report (Nov

2004)

Rural kiosk in Retawadi village, Maharashtra12-year-old boy taking typing lessons

Kiosk run by print shop owner near

Sirsa, HaryanaProud father of kiosk owner

Internal e-mail

Various published articles

Sustainability is nearly impossible!Sustainability is nearly impossible!

Kumar, Richa (2004). eChoupals: A Study on the Financial Sustainability of

Village Internet Centers in Rural Madhya Pradesh. Information Technologies and International Development. 1(3):45-73.

When sustainable, IT is not When sustainable, IT is not centralcentral

For a rural PC kiosk with social For a rural PC kiosk with social development goals, sustainability as development goals, sustainability as an independent business is nearly an independent business is nearly impossible!impossible!

OutlineOutline

BackgroundBackground

Current statusCurrent status– Rural PC kiosks in IndiaRural PC kiosks in India

Why is sustainability so difficultWhy is sustainability so difficult??

Suggestions and recommendationsSuggestions and recommendations

Value for CostValue for Cost

Some enterprises Some enterprises sustain even in the sustain even in the poorest areas…poorest areas…

– Petty shopPetty shop– ConstructionConstruction– TailorTailor

Value is clear; cost Value is clear; cost is locally is locally appropriate.appropriate.

PC Value?PC Value? E-mail?E-mail?

– Incremental improvement over postal serviceIncremental improvement over postal service VoIP?VoIP?

– Incremental improvement over pay phoneIncremental improvement over pay phone Games?Games?

– Incremental improvement over physical recreationIncremental improvement over physical recreation Telemedicine?Telemedicine?

– Incremental improvement over visit to townIncremental improvement over visit to town E-Government?E-Government?

– Incremental improvement over visit to townIncremental improvement over visit to town Job search online?Job search online?

– Incremental improvement over newspaper adsIncremental improvement over newspaper ads ……

Total: Rs. 10750 (US$

240)

Disk: Rs. 2500

Power supply: Rs. 800

Memory: Rs. 1000 for 128MB

Processor: Rs. 1650

Other silicon: Rs. 2500

CRT display: Rs. 2000

Keyboard/mouse: Rs. 300

PC Costt(absolute minimum)

Other Data on Low-Cost PCsOther Data on Low-Cost PCs

PC Costs Dwarfed by Other PC Costs Dwarfed by Other CostsCosts

Advertised break-even Advertised break-even points:points:

n-Loguen-LogueRs. 3500 / mo.Rs. 3500 / mo.

DrishteeDrishteeRs. 5000 / mo.Rs. 5000 / mo.

TARAhaatTARAhaatRs. 12000 / mo.Rs. 12000 / mo.

In healthy Tamil Nadu In healthy Tamil Nadu village (poorest making village (poorest making 150% national per cap. 150% national per cap. GDP):GDP):

Petty shop gross Petty shop gross revenuerevenue

Rs. 5000-8000 / Rs. 5000-8000 / mo.mo.

Rough estimates on monthly costs

Difficult to Break EvenDifficult to Break Even

Dhawan, Vivek (2004)Critical Success Factors for Rural ICT Projects in India,

Masters Thesis, IIT-Bombay

Even surviving kiosks are Even surviving kiosks are supported by other businesssupported by other business

0

1000

2000

3000

4000

5000

6000

In Rs.

AgriLabour

Business Farming Govt. job Pettytrader

Pvt.job Retired Shopow ner

Workingstudent

UnskilledLabour

MONTHLY HOUSEHOLD INCOME vs. KIOSK INCOME

Monthly Household Income

Kiosk Income

Microsoft kiosk survey (2005)

Villages that can Villages that can sustain a connected sustain a connected

PCPCIncomeIncome

Literacy &Literacy &educationeducation

Knowledge-Knowledge-based needsbased needs

InfrastructureInfrastructure

Economies Economies of scaleof scale

Villages that Villages that cannotcannot sustain a connected sustain a connected

PCPC

Villages that can Villages that can sustain a connected sustain a connected

PCPC

IncomeIncome

Literacy &Literacy &educationeducation

Knowledge-Knowledge-based needsbased needs

InfrastructureInfrastructure

Economies Economies of scaleof scale

Villages that Villages that cannotcannot sustain a connected sustain a connected

PCPC

Tweaking Tweaking technologtechnology y means…means…

Still unreached!

Exactly where socio-economic development Exactly where socio-economic development is most needed, local economies are not is most needed, local economies are not large enough to sustain a kiosk as an large enough to sustain a kiosk as an independent business.independent business.

– There are some businesses not all rural villages can There are some businesses not all rural villages can sustain, sustain, e.g.e.g., a movie cinema., a movie cinema.

– IncrementalIncremental value of PC-based services often not worth value of PC-based services often not worth the cost.the cost.

– Internet cafes open spontaneously when economy is Internet cafes open spontaneously when economy is large enough.large enough.

The Real Digital DivideThe EconomistMar 10th 2005

This does This does not not mean…!!!mean…!!! A particular rural PC kiosk can’t be A particular rural PC kiosk can’t be

sustainable as a business.sustainable as a business. PCs have no value in rural areas.PCs have no value in rural areas. Investing in rural PCs is a bad idea.Investing in rural PCs is a bad idea. Sustainability wasn’t a worthwhile goal Sustainability wasn’t a worthwhile goal

until now.until now. Sustainability isn’t achievable in larger Sustainability isn’t achievable in larger

rural areas.rural areas. Sustainability still isn’t a worthwhile goal Sustainability still isn’t a worthwhile goal

for a kiosk operator or agency.for a kiosk operator or agency. Rural PC efforts won’t succeed with Rural PC efforts won’t succeed with

adequate donor/government support. adequate donor/government support.

OutlineOutline

BackgroundBackground

Current statusCurrent status– Rural PC centers in IndiaRural PC centers in India

Why is sustainability so difficult?Why is sustainability so difficult?

Suggestions and recommendationsSuggestions and recommendations

Villages that can Villages that can sustain a connected sustain a connected

PCPC

Villages that Villages that cannotcannot sustain a connected sustain a connected

PCPC

IncomeIncome

Literacy &Literacy &educationeducation

Knowledge-Knowledge-based needsbased needs

InfrastructureInfrastructure

Economies Economies of scaleof scale

Focus on Focus on DevelopmentDevelopment

At least, they’re better off!

SuggestionsSuggestions

Just some ideas for experimentation: Relax focus on financial self-Relax focus on financial self-

sustainabilitysustainability Start with “CT”Start with “CT” Do server side firstDo server side first Work through cybercafesWork through cybercafes Try “featherweight” computingTry “featherweight” computing Bait and switch with ITBait and switch with IT

Relax Focus on Self-Relax Focus on Self-Sustainability Sustainability

– Public libraries serve as e-Public libraries serve as e-community centers.community centers. Funded by government Funded by government

and NGOs!and NGOs!

Public-private sector Public-private sector partnershipspartnerships

– E.g., school computer lab E.g., school computer lab as after-school kiosk?as after-school kiosk?

– E.g., village E.g., village administrative office as administrative office as weekend e-community weekend e-community center?center?

There are no “rural kiosks” in America.There are no “rural kiosks” in America.

Start with “CT”Start with “CT” Take Grameen’s Village Take Grameen’s Village

Phone modelPhone model– Start with mobile shared-Start with mobile shared-

access phoneaccess phone– Build capacity for Build capacity for

entrepreneurentrepreneur Then, add community Then, add community

centrecentre– Establish physical baseEstablish physical base– Start accounting Start accounting

classes?classes?– Buy IT hardware?Buy IT hardware?– Continue upgrading…Continue upgrading…

Do Server Side FirstDo Server Side First

Ensure back-end is built firstEnsure back-end is built first– If it doesn’t work for wealthy urban users…If it doesn’t work for wealthy urban users…

E-government servicesE-government services Online bill paymentOnline bill payment Commercial services onlineCommercial services online TelemedicineTelemedicine

– Why would it work for poor rural?Why would it work for poor rural?

Then, value of Internet easier to Then, value of Internet easier to demonstrate to villagersdemonstrate to villagers

Work through CybercafesWork through Cybercafes Where Internet cafes exist, sustainability is established.Where Internet cafes exist, sustainability is established.

Options:Options:

– Coax entrepreneur to Coax entrepreneur to hold classes, etc.hold classes, etc.

– Rent space/time from Rent space/time from entrepreneurentrepreneur

– Provide compelling Provide compelling content for content for entrepreneurentrepreneur

– Another possibility for Another possibility for public-private sector public-private sector partnershippartnership

Try “Featherweight” Try “Featherweight” ComputingComputing

PC might not be necessary.PC might not be necessary.

Try other forms Try other forms of “computing”of “computing”– Leapfrog Leap Leapfrog Leap

Pad for hygiene Pad for hygiene educationeducation

– IIT-Madras IIT-Madras phone/e-mail phone/e-mail devicedevice

– Smartphone Smartphone applicationsapplications

Bait and Switch with ITBait and Switch with IT Let PC attract attentionLet PC attract attention

Then, pile-on profitable Then, pile-on profitable community activitiescommunity activities– Cooking classesCooking classes– Sewing classesSewing classes– English classesEnglish classes– Entrepreneurship classesEntrepreneurship classes

If PC is actually used, If PC is actually used, great!great!

Not Quite SolutionsNot Quite Solutions Multi-tiered franchise hierarchyMulti-tiered franchise hierarchy

– May be necessary, but does not contribute to sustainabilityMay be necessary, but does not contribute to sustainability– Solves organizational issues; adds as many financial Solves organizational issues; adds as many financial

burdens as it solves burdens as it solves New technologyNew technology

– May be necessary, but does not contribute to sustainabilityMay be necessary, but does not contribute to sustainability– E.g., connectivity by wireless networks – rarely cheaper E.g., connectivity by wireless networks – rarely cheaper

than alternativesthan alternatives Local language content Local language content

– Definitely necessary, but does not contribute to Definitely necessary, but does not contribute to sustainabilitysustainability

– Who will generate fresh content? Who will generate fresh content? Rural BPORural BPO

– Not necessary, and does not contribute to sustainabilityNot necessary, and does not contribute to sustainability– Difficult to beat urban economics of scaleDifficult to beat urban economics of scale

What NOT to DoWhat NOT to Do

– As a donor/funder, As a donor/funder, don’t demand scale don’t demand scale and don’t fund and don’t fund scaling, unless pilots scaling, unless pilots are are bullet-proofbullet-proof

– As an implementer, As an implementer, if it doesn’t work for if it doesn’t work for 10 centers, why 10 centers, why should it work for should it work for 100,000?100,000?

Don’t put quantity before qualityDon’t put quantity before quality

What to DoWhat to Do

Define clear Define clear developmentdevelopment goals goals

Focus on kiosk Focus on kiosk operator trainingoperator training– Most important Most important

factor in success of factor in success of kioskkiosk

– Education will last, Education will last, even if kiosk closeseven if kiosk closes

Involve community; Involve community; listen to communitylisten to community

SummarySummary For a rural PC kiosk with social For a rural PC kiosk with social

development goals, sustainability as an development goals, sustainability as an independent business is nearly impossible.independent business is nearly impossible.

Exactly where socio-economic Exactly where socio-economic development is most needed, local development is most needed, local economies are not large enough to sustain economies are not large enough to sustain a kiosk as an independent business.a kiosk as an independent business.

Focus on the community; make sure IT is Focus on the community; make sure IT is in service of larger goal; don’t rush to in service of larger goal; don’t rush to scale.scale.

Thank you!Thank you!

kentoy@microsoft.comhttp://research.microsoft.com/india