There are over one billion Internet users worldwide according to a list from Wikipedia. Every day thousand of people joining social networks such as Facebook. How can these social networks be used to boost business? Are there differences between countries or regions how such social networks work? Mark Davies from Esoko, explains intriguing thoughts from his work in Ghana on market information systems through mobile phones.

The next billion

It is not easy to get figures, but the ones existing might come as a surprise to some. The largest social network in China, QQ has over 300 million active members. According to Appfrica, South Africa has 1.1 million Facebook members, Morocco 369,000, Tunisia 279,000, Nigeria 220,000, Kenya 150,000,and Mauritius 60,000.  Here are more details on social networks worldwide. The key role will be around mobile phones as the main way to access and interact in online social networks. According to research from Frost & Sullivan and Colibria, mobile social networks will grow ten fold to over 500 million users in Latin America and Africa in the next five years.

Culture and impact

But what happens in this social networks is what we know little about. What are the impact of such networks and their potentials beyond pure leisure exchange? This question has made me thought for a while and wonder what is the role of different cultures in such communities. For Anand Giridharadas, Facebook becomes an Indian village. Back at the ICT observatory I had an interesting discussion with Mark Davies around these questions, which I have recorded and transcribed below.

Christian: Hello Mark. We attended the last day of the ICT Observatory. We’ve had very interesting discussions the past days, and I would like to ask you, or discuss with you, the topic about social networks in Africa. Especially, you already mentioned that in your project, you really want to go in that direction using mobiles and the web for farmers, and to bring farmers and traders together. What do you think is the role of these networks and their potentials for the future?

Mark Davies: Well, I think it’s really interesting that we’ve been through a period of three or four years, where networks seem to be one of the most compelling and interesting uses of the web, or the web 2.0. We’ve experience FaceBook, Twitter, and these other, MySpace.

Sitting in Africa, where we’re working in Africa, and we’re working in commerce and trade, it’s all about social networks. You’re trading with individuals that you know, this is perhaps a friends, or an associate, or somebody within your village. There is some identity that you can associate with them, and there is an element of trust.

So it’s just intriguing to consider, if we took some of those principals of FaceBook, of Twitter, of MySpace, and we used it in a environment where, actually, social networks are even stringer. Does that mean that they are more or less appropriate? I think that’s what’s fascinating us.

Certainly in the case of European trade, or me as a businessman in America, I didn’t need to know the person that I was trading with. I working within legislative framework I was working where standards and grades existed, and we knew who and what we were trading.

In Africa, if you’re trading something, how do you insure that you get paid? How do you insure that the item that you’re trading is what you’ve agreed upon? How do you insure that these things are what they say they are? You use networks as a way to reinforce, in this informal sector, that kind of commence and trade.

I think that’s where we’re looking at using technology to reinforce those networks, and make it easier for you to extend your networks beyond, perhaps, the geography or immediate linkages that you currently experience.

Christian: So that would mean the physical presence, the face-to-face exchange, is very important. To which extent do you think it is possible to do something over the Internet, when it comes to something as serious as trader and business-to-business solutions through mobile phones?

Mark Davies: Well I don’t think you do trade over the web, I don’t think that’s what happens. But I think it’s about “how do you exploit some of your social capitol using the web?” I don’t think that means everything suddenly happens on the web, I don’t think that we’re going to see e-commerce anytime soon.

But how do I connect to somebody who might be in a different village, further away? If somebody has said that they have a product that I’m interested in, how can I use some networking tool to get closer to that person, to establish some identity or some reputation?

Perhaps I might find somebody that I already know in their community. And I can ask them “do you know so-and-so? Are they trustworthy? Can I send them the money before they send me the product?” I think that’s the way.

It’s a little more complex, it’s about minimizing risk. You’re using social networking, you’re using technology to minimize your risk. Not to replace complete transactional activities, which will still be, if not face-to-face, it will be mouth-to-mouth. You will be negotiating, you will be arguing, you will be qualifying the deal.

But you can certainly use technology to use society, and used linkages as ways of minimizing your risk. In the same way how Grameen, with finance and loans, has leveraged your community, your network to create social pressure on you to pay back during certain periods, or on certain dates. In the same way, we can use social networks to create peer pressure so that you’re not abusing a trade or commerce relationship, in a similar way, with a stranger.

Christian: Very interesting. You also told me that you, for implementation, that you think about reputation. The keyword is reputation. Can you imagine something like eBay for rating and reputation? To which extent could that work? Especially, also, what could be the role of mobile phones then?

Mark Davies: Well, I think that people trade in Africa based on reputation. They know that “I may not even get the best price from this person, but I know that I will get paid, and I know that I will paid quickly.” These are the sorts of reputations that are important when you are choosing “who might I trade with?”

So the fact is that I think people in Africa, more or less, are simply not digitized. They don’t exist in a database. They have have a SIM card. Do they have a phone number? Yes. Do they have a postal address, or in they in a electoral register? These thing are beginning, but in effect, they aren’t accessible. You can’t find a profile to find out whether this person has abused previous trading relationships or not.

So I think, that as we profile people and put them into these databases, and digitize communities, we can associate content, observations, and commentary about them that can help other people interact with them. And again, reduce their risk. Now whether, in the simplest form, that might mean “are you allowing that community to rank and rate an individual?” We don’t know.

It’s, I think, a very dangerous games to be in. Because people may have all kinds of reasons why they might want to rank you and rate you, that are not particularly objective. So I think we need to think very carefully about who can rank who, under what circumstances. How can we keep it objective? Do we have particular agents, or brokers, that have greater weighting, or ranking, to their own ranking of other individuals?

But very simply, you could see a system whereby I, on a mobile phone, could enter the could enter the mobile phone of the person I’m trading with, and just establish “does the person exist? Are they on a system somewhere? How long have they been on that system? If they’ve been on it for three weeks, can I trust them? And if they’ve been on for three years, maybe there’s some more credibility there. And can you tell me how many complaints have been approved by brokers within that platforms, so that I can see that there is quite some risk with doing a trade with this person?”

So very much like eBay. 73 percent score, because 300 people have ranked this person and had a positive experience. That introduction of reputation into markets in Africa, will have a profound impact on expanding circles of trade.

Christian: That means, of course, more sales for products, and more…

Mark Davies: Yes, I think it’s not only about trying to push product our of Africa, to the rest of the world. It’s within Africa, it’s within the sub-regions. It’s between Ghana and Burkina, that we find trade breaking down because there are barriers of language, barriers of trust, barriers of regulation.

A great deal of thinking is being emphasized on “how do we create inter-regional trade, so that the wealth can be rationed within these African communities? That we can increase production, that we can increase demand within national consumer populations?”

As such, I think these tools, and these technologies, can play a very important role in facilitating that, and allowing cross-border trade with people that you might not have traded with before. Even if it just means “how do I convert a price into my currency?” In northern regions of Ghana, where you’re trying to understand what the price is in Burkina, it’s in French and it’s in CFR, in their currency.

So it’s very difficult to kind of compare. “Should I go a few extra kilometer, and buy or sell that product.” Technology can be used, and it will be on the mobile, to breakdown those kinds of barriers or language and currency, so that you can judge for you self what is the opportunity that is presented.

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According to the latest statistics from the New York Times and the World Bank, the African continent is lagging behind in mobile phone subscribers and Internet users. However, African countries have one of the highest quota of mobile phone subscribers. The rate of subscribers varies a lot –between 724 in South Africa to 32 in Rwanda per 1. 000 inhabitants. But what do these figures say when so little is known about the creative use of mobile phones? Let alone the business sprung up through a single mobile phone in a village.

Recently, some interesting published blog posts and articles showed the innovative use of mobile phones and their “communication breakthrough” for economical boost and social change.

Mobile reporters in Africa
Ben, from Voices of Africa, has already hinted me about this initiative, while White African has also posted about it. Mobile reporters can now potentially report from all corners of Africa. The project is a cooperation between skoeps.com (a Dutch mobile reporting portal) and the Africa Interactive Media Foundation. Most articles have a “blogging character,” deliver intriguing stories, and report about all kinds of topics. Mobile phones are used to write the articles by using an additional keyboard, to film material, and lastly to send from every GPRS available. It is amazing to see how mobile phones are used to film interviews, give the impressions through photos, and write stories. One example is Kenya: Clean water is luxury for slums.

Mobile financing in Zimbabwe
The pioneering concept of mobile financing came first from Kenya. But for awhile now, Mukuru.com has been bridging the diaspora with its friends and family in Zimbabwe. Under scarce circumstances in Zimbabwe, Mukuru.com allows to transfer money over mobile phones. For instance, gas fuelling can be paid over the Internet from anywhere to anybody with a mobile phone in Zimbabwe, then the petrol station owner gets his money back through vouchers. “Africans in general have pioneered the use of cellphones to transfer value by using airtime as a virtual currency.”

Rwanda health sector
Mobile phones to tackle HIV in Rwanda. An interesting citation of how mobile phones can be used for reliable data transfer in the health sector.

Healthcare facilities often lack the appropriate supplies, reliable Internet connections, and have a limited ability to track patients or the spread of HIV across the country. With Phones-for-Health, health workers in the field can use software on their mobile phones to submit critical health information directly into central computer systems, allowing health officials and service providers to view, analyse and respond to this vital data immediately writes Manasee Wagh in Biotech360.

Critical health data and information can be delivered throughout the country in no other way more efficient than this. From the New York Times, “In Rwanda, the system started being used to track H.I.V./AIDS patients two years ago and now connects 75 percent of the country’s 340 clinics, covering a total of 32,000 patients.” All Africa and Herald Tribune also wrote about it. Starting in Rwanda in 2008, the project shall be extended to six more countries.

West Africa Agric Trade Network
This network, also called TradeNet, is a sophisticated market information system for efficient trading. It connects sellers and buyers over the mobile phone via sms with necessary information about prices and crops, and offers new markets in four different languages.

“Users can request prices which are provided in real-time on the network from many market enumerators that are active throughout 380 markets spread across the continent.” (Mobile Africa)

This gives farmers a better income while production is more orientated on demand. The Economist talks already of a Pan-African market based on mobile phones, and first hand experiences can be seen by Prince Deh from GINKS, who did a video interview about the usage for that portal. Ethan Zuckermann discusses in his post the further research being done to forecast prices and needs for commodities.

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I have already written before about the concept of open source, but this time I want to highlight the potential of free and open source software (FOSS). I attended a while ago an interesting presentation on free and open source software by Andrea Götzke and Balthas Seibold. What I found most interesting about the presentation were the manifold effects of FOSS:

• Economy
  Cost savings from purchasing software. The market barrier is low for new businesses, but the overall added value is higher because the software can be developed locally. With services for hardware and the web, FOSS offers local employment and development of software and generates though more income locally.
• Education
  FOSS offers universal access. The freedom to study the code of software. In Venezuela, for example, FOSS gave access to education because the whole infrastructure is much cheaper there and own training capacity was built. FOSS can act as a free knowledge transfer and create human capital e.g. through software development. It, therefore, can lead to a “brain gain”. FOSS allows and needs a complete different approach of collaborative work project with high value on common learning.
• Culture
  The development and usage of FOSS can contribute to the country cultural heritage. Own developed software products can be better adapted to local needs and offered in many languages. Own software solutions open new venues of knowledge sharing and learning.
• Law
  Open source software is freely available and guarantees legal security. FOSS offers a sustainable technological independence.

Free Open Source Software represents certain values – sharing, collaborating, community and social development. These values have deep roots in human nature and could be found in all societies at all times. They believe this model – developing software by a community of peer reviewed activists, participants, employees and gifting the results back into the community to be further developed by others thus extending the cycle – could be extended to economic and social development in Africa. It is in this context that the FOSS model emerges as a powerful model for African development. From Brenda Zulu

Challenges

• For a high reliability on FOSS, a critical community is needed, which constantly tests and changes the source code. It needs open culture, which is not always prevailing.
• Proprietary software is also available illegally and cheap, so it offers no incentive to switch to FOSS.
• In many countries the FOSS community is very small and the interaction in a network needs the web and therefore connectivity, which is often not available.
• Much has been done in translating software, therefore many web software is available in different languages. But that is not the case with document material.
• In many countries a whole training infrastructure has to be build to switch to open source software. For example, the Venezuelan Government decided to adopt open source some years ago, and build with it many resources, own training and development infrastructure.

I often got the feedback from practitioners that it also depends on the needs of each particular case. Proprietary software can be a better solution or is anyway the only one available. I am sure I missed many points and factors, but I will continue later on with that topic.

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Sun Microsystems’ blogging approach changes the company’s communication and knowledge management. In wikinomics I encountered Johan Schwartz, the CEO of Sun, with his unusual approach of not being him the only one blogging but also his colleagues, whom he encourages to blog publicly about their work and anything else they are interested in. His concept has an outcome of about 3000 bloggers (around 10% of all employees).

The Sun blogger Jörg Moellenkamp did an interesting presentation last April during the re-publica conference. He explained enthusiastically how he communicates directly with his clients or other programmers, and how ‘direct communication’ improved his personal learning. Beside of a policy, the basic limited rule for blogging at Sun is: don’t tell secrets. This evokes the question: “Have you ever had a situation where a blogger posted something they shouldn’t have?“, which Linda Skrocki answered in her blog. In other words Sun has shaped its own blogosphere with almost 70.000 articles mainly in the realm of its work – as a provider for network computing infrastructure solutions.

I think this blogging approach offers a combination of internal and external knowledge management offering all sorts of community of practice. Blogs contribute to codify tacit knowledge and connect people inside and outside the organization. It also offers a different concept for customer relationship management.

I asked Möllenkamp if this approach is limited to the software industry or even those ones with an open source concept? He answered that it is rather Sun’s unique culture, being it very open and putting a high level of trust in its staff. I wonder how this model could be applied to other industries or even non-governmental organizations (NGOs)? It could certainly enhance the accountability of NGOs and even more important, give opportunity to a real multiple networking for an organization in order to make their work more creative and effective. And as Allison Fine argues in her book Momentum: Igniting Social Change in the Connected it would make members or sympathizers participants for social change.

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Recently I finished reading the book Wikinomics. I wondered whether it is just another buzzword or if it contributes to the discussion of how the Internet changes our world. In any case the authors left some answers open to be written by the readers themselves.

After reading the introduction I was fascinated to read how Dan Tapscott and Anthony Williams link different developments from the last year together and describe its implications. They argue that virtual networks, collaboration through the Internet, and the open source concept will have increasing influence on businesses, organizations and science. Those companies, which do not open up to these changes will have decisive competitive disadvantages in the future. The authors underpin their thesis with many interesting examples like Procter&Gamble’s approach to cooperate in research via innocentive.com, or a gold-mining firm, that got striking results by a innovative contest over the Internet to find new exploring methods.

“Just as collaborative tools and applications are reshaping enterprises, the new Web will forever change the way scientist publish, manage data and collaborate across institutional boundaries.”

The way the new web will change science is manifold. A key will be open access, so “the world is your research department.” An outcome will be rapid diffusion of best-practice techniques and standards, the availability of just-in-time expertise and increasingly horizontal and distributed models of research and innovation. An interesting example is how young scientists design open-source at NASA. But I wonder how developing countries have opportunities to participate in this process?

“Peer producers apply open source principles to create products made of bits – from operating systems to encyclopedias.”

Through crowd sourcing or commons based peer production new products will be developed collaboratively over the web. In my opinion this peer to peer approach is a serious alternative to traditional business models. Open source promotes this approach and is already extended to videos, music or design. The organization  for social entrepreneurs, Ashoka coined the phrase open sourcing of social change (but to have a copyright on that phrase is quite counterintuitive).

In my opinion the open source concept and the need of companies and organizations to open themselves are going hand in hand. Both are horizontal mostly bottom-up driven processes. Both indicate the need to share knowledge in an open manner. In particular the difficulty of dealing with complex problems, an overload of information and increasing competition pushes us to engage and collaborate in open networks.

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Fair trade coffee is widely known and successful, but what about fair trade computers? This was the question of a session at the re-publica conference back in April with Frithjof Schmidt (member of the European parliament) and Andrea Manhart from the Ökoinstitut in Freiburg (ecological institute).

The labour conditions of workers, who manufacture notebooks in China are burdensome. Environmental problems of the production process are widespread as well. “A price raised of 30 euros would significantly improve these conditions,” says Andreas Manhart in a pioneer study (German) titled “Social implications of laptop production.” Other interesting findings from the study were:

• Despite rising commodity costs, laptop prices have fallen continuously throughout the last years. Production has been changed to locations such as China.
• Almost all laptop brands are produced by eleven Taiwanese firms, like Qanta, Compal or Wistron, who have the right manufacturing knowledge.
• The cost of labour is not higher than 30 euro per laptop.
• The ongoing competition between laptop sellers reduced the profit margin to 3% in average.

NGOs give now more emphasis to the problem of toxic waste. Greenpeace started a campaign with a green electronic guide ranking of laptops. As a consequence to ngo lobbying Apple announced last week “a greener apple” campaign, which promises more recycling efforts and the removing of toxic chemicals . The two blogs greenguy and being the change have a coverage on that.

But a fair trade approach also includes the social implication of laptop production. Its goal is to protect labour rights and guarantee environmental regulated production. A recent survey in Germany showed that many consumers are willing to buy fair trade laptops. Interestingly, A. Manhart said that a certification process does not necessarily bring the solution because it is impossible to monitor the widely distributed value-chain of laptop production especially in China.

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