1

A section of the larger 50 BREAKTHROUGHS report

© 2014 LIGTT, Institute for Globally Transformative Technologies, Lawrence Berkeley National Lab.
All Rights Reserved.
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Berkeley National Lab. The conclusions expressed in this work are of the authors, and do not
necessarily reflect the views of LIGTT’s partners, funders, or the Lawrence Berkeley National Lab, or
the University of California.

LIGTT does not guarantee the accuracy of the data included in this work. The boundaries, colors,
denominations, and other information shown on any maps in this work do not imply any judgment
on part of LIGTT concerning the legal status of any territory or the endorsement or acceptance of
such boundaries.

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Attribution—Please cite this work as follows: LIGTT, 2014. 50 Breakthroughs: Critical Scientific and
Technological Advances Needed for Sustainable Global Development. LBNL Institute for Globally
Transformative Technologies, Berkeley, CA, USA.

http://www.ligtt.org/

2
 NOTES ON METHODOLOGY AND LAYOUT

Traditionally studies focused on future-facing topics have relied on surveys of experts, using approaches
like the Delphi Method1, a structured iterative process of interviews and reviews. Early in our study, we
discovered two challenges with such a process. First, the absence of a broad, credible evidence base
about what works has led to entrenched opinions. Second, such an approach would likely have led to a
laundry list of 50 technologies or devices, rather than to a robust problem analysis which logically leads
to the breakthroughs required—agnostic to specific technologies.

Hence, this study employs a six-part approach to reach its conclusions:

1 Describe and analyze the 5-10 most important contextual facts about the specific problem.

2 Identify the key challenges, which have kept effective solutions from becoming a reality.

3 Identify, based on input from recognized topic-specific experts, the most promising
interventions to overcome those hurdles.

4 Determine the dependence of each of these interventions on: policy reforms, infrastructure
development, education and human capital development, behavior change, access to user finance, an
innovative business model, and finally, a new breakthrough technology.

5 We focus on interventions with a significant dependence on a breakthrough technology, and identify

the important parameters the technology needs to fulfill. Based on the underlying technical challenges,
we then estimate the time-to-market by when these breakthroughs may become deployable products.

6 Finally, we identify the most important hurdles to sustainable, large-scale deployment, based on many
of the factors listed above (e.g., policy reforms, etc.), and score the difficulty of deployment on a 5-point
scale: simple, feasible, complex, challenging, and extremely challenging. The purpose of this final
analysis is to encourage technologists and funders to understand these challenges before making major
investments in their work.

Each chapter is divided into three parts: Core Facts and Analysis, Key Challenges, and Scientific and
Technological Breakthroughs. The 5-point scale and the complexity we ascribe to each of the factors and
constraints relevant to the deployment of a particular technology are illustrated in Table A. The lowest
score (feasible) is reserved for cases when the particular constraint is not relevant to deployment;
the constraint is given the highest score (extremely challenging) if it can be a serious bottleneck to
deployment. The aggregate score reflects the overall degree of difficulty, considering the collective
weight of the individual constraints. The methodology is clearly subjective. Exhibit A is a sample of how
we have illustrated the difficulty of deployment for each breakthrough across the study. This particular
sample highlights a CHALLENGING breakthrough.

1 A structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts who anonymously reply to
questionnaires and subsequently receive feedback in the form of a statistical representation of the ‘group response’, after which the process repeats itself. The Delphi method
is based on the assumption that group judgments are more valid than individual judgments. It was originally developed by the RAND Corporation in the 1950’s to forecast the
impact of technology on warfare.
3
Table A

Extremely
Simple Feasible Complex Challenging
Challenging

Policies Minimal role of Low role of Regulated Highly regulated Highly regulated
policy/regulation policy/regulation market with market with and
supportive policy changes controversial
policies required changes
required

Infrastructure Minimal need Dependent on Requires some Requires Requires major

for infrastructure existing improvements moderate improvements
infrastructure to existing improvements to infrastructure
infrastructure to infrastructure
Infrastructure

Human Minimal need Low-moderate Moderate Requires high Requires

capital for human need for human need to train a level of training national scale
capital capital limited number for large training
development development of people numbers of programs
people

Access to Financing Limited financing Moderate Significant Significant

user finance not required required financing financing financing
needed, viable required, limited required, no
mechanisms mechanisms identified
available available mechanism

Behavior No behavior Minimal Moderate Major behavior Significant

change change required behavior change behavior change change behavior change
required required with required, needed on daily
evidence of
potentially on basis, changes
behavior change
being viable daily basis contrary to
cultural norms

Existing Strong existing Existing Moderate Low demand , Extremely low

demand demand demand demand needs to be built demand or not a
perceived need

Market Highly concentrated Fairly concentrated Moderate Fragmented Highly fragmented,

market or well market and/or well fragmentation of market, weak challenging to
fragmentation/
defined channels defined channels customers, distribution reach customers
Distribution under-developed channels
channels channels

Clear deployment Deployment Deployment Deployment No identified

Business
models existing model in process model(s) being model(s) being deployment model,
model at scale of scaling tested major hurdles
tested, major
innovation identified
hurdles
outstanding

4
Exhibit A

Breakthrough – Difficulty of deployment

Extremely
Challenging

Challenging

Complex

Feasible

Simple

Policies Infrastructure Human Access to Behavior Existing Market Business model

capital user finance change demand fragmentation/ innovation
Distribution
channels

Low role of policy / Requires high level Moderate behavior

regulation of training for large change required with Fragmented market,
numbers of people evidence of behavior weak distribution
change being viable channels

Requires some Moderate financing Moderate demand Deployment model(s)

improvements to existing needed, viable being tested, major
infrastructure mechanisms identified hurdles outstanding

5
DIGITAL INCLUSION

The ‘digital divide’ (the converse of ‘digital inclusion’) has traditionally been defined as the gap in access
to the Internet, mobile phones, and other types of information and communication technologies (ICT),
between wealthier societies and their less wealthy counterparts. Digital divides exist between economic
strata within an individual country, as well as between countries. However, the nature of these two
types of digital divide vary dramatically. While the traditional definition may be very appropriate
for a wealthy country, a different definition is needed for characterizing the digital divide between
industrialized countries and developing countries.
In the developing country context, ICT enabled services have to compensate major gaps in physical
infrastructure, public and private institutions, and technical human capital. For example, telemedicine
is proving to be a valuable ICT enabled service for connecting rural clinics (which typically do not have
qualified clinicians) to physicians in urban areas, for remote consultation. Hence, the definition of
digital inclusion, especially in context of developing countries, needs to go beyond merely access to
the Internet and mobile phones, and include access to a broad range of ICT enabled services and tools
required for human development.
The proliferation of mobile technology has laid a strong platform for the adoption of an increasing
array of ICT enabled services. However, to achieve true digital inclusion, a number of gaps need to
be addressed. These include the cost of smartphones that are currently on the market, very sparse

6
last-mile broadband connectivity in rural and remote areas, a lack of data about—and ID systems for—
citizens and businesses, and an absence of ‘Internet of Things’ (IoT) devices. We believe that 4 specific
breakthroughs will be critical for achieving digital inclusion, especially for low income populations.

A new generation of wireless broadband network technologies that radically cut the cost of
expanding coverage to rural areas

Affordable (under $50) smartphones that support full-fledged Internet services, and need limited
electricity to charge

Biometric ID systems, linking birth registry, land title registry, financial services, education history,
medical history, and other information critical for ICT enabled services

A new generation of ‘Internet of Things’ (IoT) devices, which enable newer types of services, and
compensate for gaps in infrastructure, effective institutions, and human capital

7
Recent years have witnessed a truly remarkable
digital revolution in developing countries.
However, low income populations in the
developing world need a much broader range
of ICT enabled services than their counterparts
in industrialized countries, to compensate
for the lack of strong institutions, physical
infrastructure, and human capital deficits. Until
devices to enable these services are developed
(and the corresponding ICT enabled services
actually provided) these populations cannot be
considered ‘digitally included’. By this expanded
definition, there is a long way to go before we
achieve broad, global digital inclusion.

CORE FACTS AND ANALYSIS

‘Digital inclusion’, or conversely, ‘the digital divide’ has a number of definitions in common and
institutional parlance. For example, The Oxford English Dictionary defines it as, “The gulf between those
who have ready access to current digital technology (especially computers and the Internet) and those
who do not; also, the social or educational inequality resulting from this.” Stanford University uses a
US country-specific definition: “The growing gap between the underprivileged members of society,
especially the poor, rural, elderly, and handicapped portion of the population who do not have access
to computers or the internet; and the wealthy, middle-class, and young Americans living in urban
and suburban areas who have access.” And the OECD defines it as, “The gap between individuals,
households, businesses and geographic areas at different socio-economic levels with regard to both
their opportunities to access information and communication technologies (ICTs) and to their use of
the Internet for a wide variety of activities.” Others have simply used measures like mobile phone
penetration or Internet access.
Within this context, a population can be considered ‘digitally included’ if they have affordable
access to the same ICT products and ICT enabled services as their wealthier counterparts in their
own country, or in other countries. In industrialized countries, dramatic changes and innovations in
information and communication technologies in the last 30 years have revolutionized the very way
people live, work, and access services. In developing countries too, recent years have seen a remarkable
increase in ICT penetration, and in particular, mobile phones. Today, even very poor individuals can
speak with relatives who may have migrated long distances, and get targeted bits of information
hitherto completely unavailable to them. Such widespread access to mobile phones has paved the
way for a host of services, specifically for low income populations, that were previously almost entirely
unavailable to them. Examples like M-Pesa, Kenya’s by-now famous ‘mobile money’ service, have leap-
frogged western modes of financial transaction for a vast majority of unbanked people.
However, such access—being able to own a mobile phone or another ICT device and use a few
successful ICT enabled platforms like M-Pesa—is an insufficient measure of digital inclusion.

8
 Digital inclusion needs to be defined differently for the developing country
1
context, to account for the critical role of ICT in compensating for gaps in
institutions, infrastructure, and human capital

Most definitions of digital inclusion focus on the relative gap between the digital haves and the have-
nots, rather than on the specific ICT needs of low income populations, and whether or not those
needs have been met. While it is clear that long-term sustainable development is unlikely without
fundamental structural improvements, new ICT enabled tools are a critical interim bridge.
Low income countries are that way because they lack the essential pillars of development:
strong institutions, robust infrastructure, and a depth and breadth of human capital. In healthcare,
for example, these gaps manifest themselves as the absence of physicians and nurses, and a dearth
of equipped and functioning clinics. In high income countries, there is a doctor for every 300 people
on average, whereas in sub-Saharan Africa there is 1 for every 5,000 people. Similarly, when it comes
to education in lower income countries, there are significant gaps in the number of trained teachers,
adequately equipped school buildings, suitable tools for instruction, and accountability to outcomes.
In the face of such structural gaps, telemedicine tools can help patients in rural areas remotely consult
with trained physicians, and online education videos (e.g., the Khan Academy) can provide quality
instruction to those who can access them. Such examples are beginning to demonstrate the ability of
ICT to compensate for structural gaps, at least partially.
Any meaningful definition of ‘digital inclusion’, therefore needs to be in terms of whether the full
range of such devices, and tools and services that help alleviate key human development challenges,
are available to those who need them. Table 1 describes some of the major structural gaps developing
countries face, and promising ICT enabled levers that constitute digital inclusion.

9
 Examples of ICT enabled services to improve human development in low income countries

Area of human Key gaps for low income populations Examples of ICT devices, and ICT
development and countries (current or historical) enabled tools and services required
for digital inclusion

Acute lack of adequately trained physicians, Telemedicine tools for remote consultation
nurses and other clinicians, especially in rural with better trained physicians in urban areas
areas
Point-of-care diagnostic devices enabled by
Sparse lab infrastructure for conducting reliable smartphones and other ICT devices, to reduce
diagnostics reliance on high levels of clinical expertise
Health Weak patient-clinician linkages and entrenched SMS-based reminder apps
behavior patterns, which limits treatment
compliance Biometric patient IDs for tracking health
Limited accurate data on patient health and metrics at the individual, community and
epidemiological trends population levels

Smallholder farmers do not have access to true Mobile phone-based services for weather
market prices, weather forecasts, and other forecasts market prices, contact information for
Agricultural critical information dealers and other value chain partners, etc.
development Agriculture ministries have limited capacity for Video-based extension services, delivered to
quality extension services farmer groups, with call-in for Q&A

Acute lack of brick-and-mortar banks in rural Mobile money services like remittances
areas
Financial
Limited mechanisms for remittances, or other
services forms of money transfer to distant locations

Teachers have very limited training Remote video content and instruction
Most schools are not adequately equipped with
instruction tools Digital textbooks, with interactive content,
Education customized for local context
Limited access to up-to-date books

High cost and complexity of managing small- Distributed utility management tools
Electricity, scale utilities for rural populations
Mobile phone-based billing/payment systems
water, and Limited mechanisms for billing and collection
other utilities of payments

Limited accountability to citizens, and limited Digital reporting platforms to name-and

Miscellaneous citizen voice in providing feedback -shame unresponsive public servants
public services Limited access to critical public services (e.g., Citizen reporting for disaster response
rapid response police, or protection/rescue)

Table1 : Current definitions of digital inclusion do not focus on the specific needs of low income
populations. While long-term sustainable development cannot happen without structural changes, ICT
devices and ICT enabled services are a critical interim bridge

2 The structural foundation for ICT connectivity is the Public Switched

Telephone Network (PSTN), originally built for fixed line phones, and
gradually expanding to become a ‘network of networks’

The infrastructure for ICT connectivity is based on a global ‘network of networks’ called the Public
Switched Telephone Network (PSTN). The network began in industrialized countries, many decades ago,
with a plumbing of copper wires used for the early generation of fixed line telephones, carrying only
analog signals. The PSTN has since evolved into a ‘network of networks,’ with new types and layers of

10
cables added with each passing generation of technologies. Today, it combines the old copper wires
with coaxial cables (the original delivery mechanism for cable TV), extremely fast underground and
undersea fiber-optic cables, wireless cellular towers, and even satellites. The combined network delivers
information and media streams—now digitized—over long distances, seamlessly bridging one kind of
networking mechanism (copper, coaxial, fiber-optic, wireless or satellite) with another (Kushnick, 2013).
Exhibit 1 shows the schema for the PSTN. Core or backbone networks typically have high
bandwidth and interconnect distant regions (e.g., between cities or countries), edge networks provide
last-mile access (e.g., to individual homes within a residential area), and the backhaul connects edge
and backbone networks. In the evolution of the PSTN, two major inflection points have dramatically
increased information flow and access, the range and quality of ICT enabled services, the ease of
accessing them, and the scale at which they are used.

11
An illustration of the PSTN as it is today

End user
Cellular
mobile
users
Last mile
Fixed access
broadband,
Edge Cellular base
cable users networks
station

Internet/cable Edge

Backhaul
service provider network

Bac
kbo
ne

Edge
network

Exhibit 1: A simplified schema that shows the organization of the Public Switched Telephone Network
(PSTN) today, as a conglomeration of diverse networks. Edge networks are closer to clusters of habitation,
while backbone networks connect edge networks across cities, countries and continents.

The Internet and Worldwide Web, as the primary vehicles for data exchange around the world
Till the 1980s, various precursors of the Internet (e.g., the ARPANET) were used exclusively by a small
number of government and research institutions, over the PSTN. The advent of the Internet protocol
suite (TCP/IP)1 allowed consumers and businesses to engage in email and other limited transactions.
In the 1990s, the introduction of the Worldwide Web (WWW)2 allowed users to freely publish—and
make accessible to everyone else on the Internet—information about themselves and their services,
using rich media. Conversely, it also allowed any Internet user to access content published by other
Internet users. This caused a true explosion in how information is shared and consumed, which was
difficult to imagine earlier. Eventually cloud computing made it possible to provide services remotely,
in a distributed, seamless fashion to deliver feature-rich applications and Software As A Service (SAAS).
Along the way, the advent of search engines led to the phenomenon that became Google. The Internet,
as we know it today, is not run by any one company. It is managed by all its participants to collectively
self-regulate via non-profit organizations like ICANN (the Internet Corporation for Assigned Names and
Numbers), which oversees assignment of unique identifiers on the Internet (The Internet Society, 2014)
(A.M. Turing Award, 2014) (PC Magazine, 2014).
A key feature of the Internet is its resilience. Information can be re-routed across multiple paths
(over the various member networks, which collectively enable strong redundancies) until it reaches
its destination. In effect, the Internet is never ‘down’. The Internet is now the primary vehicle for data

1 TCP/IP together allow information to be routed repeatedly across multiple paths until it reaches the destination anywhere on the PSTN. The Internet Protocol (IP) is a standard,
simple and open protocol which allows any computing device to send messages over the network. Service providers can use the Transmission Control Protocol (TCP) for

2
end-to-end transmission reliability. This, combined with the redundancy afforded by the large number of member networks, makes the Internet highly resilient.
The Worldwide Web is based on a system of globally unique identifiers for digital resources on the Internet (UDI, URL, and URI), an easy-to-use publishing language (HTML)
12
and a protocol to allow for links to dynamic content (HTTP). Together, these make it easy for people to publish content on the Internet using a standard web browser.
exchange around the world, and a platform for an infinite range and number of services, with very low
barriers to entry. Anybody can provide or use services with relative ease. This makes the Internet a
tremendous equalizer, and an unmatched platform for development.

The development of mobile telephony, to obviate the need for dense networks of underground cables
at the last mile
Until recently, telephone networks, especially in developing countries, were controlled by public sector
monopolies. Installation of land-line phones often took several months (sometimes years), and their
reliability after installation was questionable at best. Only a small portion of the population in the
developing world had these telephones. Market liberalization eroded stifling monopolies, brought
competition and large injections of capital, and resulted in massive tariff reductions. Quick, cost-
effective deployment of cellular networks, combined with newer, cheaper backhaul and backbone
technologies, drove the leapfrog effect in developing countries from fixed line to cellular services. The
pre-paid business model innovation combined with cheap handsets made mobile telephony ubiquitous
and accessible to a wide swath of users who could not have dreamt of owning a fixed landline before.
Over the last decade dramatic advances in mobile phone technology—with respect to bandwidth,
reliability and cost—have made communication a reality for populations hitherto cut off from the rest
of the world.
The 1st generation networks or 1G, developed in the 1980s, used analog signals for voice calls
with bulky and expensive ‘brick’ phones. Wireless radio channels were restricted to one call at a time,
limiting the calls each cell could support. Signals could be intercepted by anyone with a radio scanner
tuned in to the right frequency. By the 1990s, digital signals and improved networking protocols to
enable multiple channels of communication led to 2G systems, with radically better network utilization,
more security, and data services (e.g., SMS, multimedia messaging, mobile Internet, international and
satellite roaming). Later, 2G improvements such as EDGE and GPRS increased data speeds even more.
The early part of the new millennium saw the introduction of 3G networks, with even higher data
speeds, better spectral efficiency, energy efficient transmissions, and data encryption. This allowed
sophisticated, secure and data-intensive services such as Voice over IP (VoIP), video conferencing, and
financial transactions. As of 2014, advanced 3G and 4G networks are achieving faster transmission
speeds than most high-speed cable Internet services (Telcoantennas, 2014).
Through the combination of Internet and mobile enabled services, the move to information-
based economies and widespread liberalization of telecom has allowed information to flow freely and
cheaply between different types of networks, as well as between distant networks. The same service
can thus be provided in a network-agnostic manner in the PSTN (e.g., the Internet can be accessed via
mobile phones, and phone calls can be made using the Internet and computers). This is a result of the
digitalization of all kinds of information, where both voice and video is sent as data, using the Internet
Protocol as the universal lingua franca for connecting disparate networks.
In every region of the world, mobile phones are outstripping fixed line phones as the default.
As Exhibit 2 shows, there are 92.6 mobile phone subscriptions per 100 people around the world,
compared to 16.2 fixed phone lines. In developing regions, this difference is more pronounced (World
Bank, 2014). It is estimated that 130 million new mobile subscribers will come on board year after year
until 2017, with South Asia and sub-Saharan Africa experiencing annual growth rates of almost 20%. Of
course, businesses in data-intensive industries will still require fiber cables for reliable, high bandwidth
access.

13
 Fixed line phones vs mobile subscriptions

Fixed phone lines per 100 people Mobile subscriptions per 100 people

125.2 123.9
114.5
110.2

97.6
93.8 92.6

70.7
66.0

42.7 43.0
34.7

20.4 18.0 16.3 16.2

2.4 1.2

East Asia & Europe & European Latin America Middle East North South Asia sub-Saharan World average
the Pacific Central Asia Union & & America Africa
the Caribbean North Africa

Exhibit 2: Mobile networks are much more ubiquitous than fixed phone networks, reaching close to
universal coverage in some developing countries.

3 Despite the overall increase in mobile subscriptions, low income rural

populations still lack access to both mobile and broadband services

The promising statistics on the growth of mobile phone subscriptions can inspire misplaced confidence.
To begin with, it is important to acknowledge that subscriptions in South Asia and sub-Saharan Africa
are still significantly lower than other parts of the world (Exhibit 2). Second, phone subscriptions are
much more expensive to users in developing countries than in wealthier countries, relative to incomes
(Exhibit 3). Third, rural populations don’t have the same access as their urban counterparts, partly due
to lower network coverage, and partly because they are poorer. Exhibit 4 shows coverage rates for
India, Ghana and South Africa; it also shows that rural users are much more likely to share a phone than
urban users. Similarly, Malawi has a coverage rate of 94%, but only 21% of the population has a mobile
phone (GSMA, 2014) (GSMA, 2013) (Indexmundi, 2014). Finally, most of the networks in developing
countries are 2G, especially in rural areas; broadband (3G or better) networks are usually restricted to
urban areas. Hence, mobile broadband penetration is only 22% in Asia, and 11% in sub-Saharan Africa
(Exhibit 5) (ITU, 2013).

14
The price of mobile broadband services

Price as a % of GNI per capita

Industrialized countries World average Developing countries

16%

11% 11%

8%

1% 1%

Post-paid Pre-paid
handset handset

Exhibit 3: The price of mobile broadband as a proportion of Gross National Income per capita is higher in
developing countries, which makes it less affordable to low income populations.

Mobile coverage and use in rural vs. urban areas

Population with access to GSM coverage Active subscriber penetration in South Africa

Urban Rural 100%

No phone 14% 22%
63% 62%
Share a phone 25%
39%
40%
32% 30%
61%
20% Own a phone
39%

India Ghana South Africa Urban Rural

Exhibit 4: Rural mobile coverage and use of cell phones is disproportionately low, especially in developing
countries. Also, a significant number of people in rural areas share phones.

15
 Global mobile broadband penetration

46%

68%

19%
22%

48%

11%

Exhibit 5: Mobile broadband penetration is very low in Africa, particularly sub-Saharan Africa. It is also low
in South Asia. Broadband (3G or better) networks are usually restricted to urban areas.
Please note that this map combines data for Asia and Oceania, which is dominated by the statistics from
larger countries like India, China, etc.

4 Only smartphones (and tablets) have the necessary capabilities to

support the services and applications needed for true digital inclusion

Just as computers evolved from bulky desktops to laptops, and eventually tablets, mobile phones
have simultaneously evolved to become smaller, lighter and more like computers in their capabilities.
There are several categories of mobile phones: at one end of the spectrum are inexpensive and
simple basic phones; at the other end are smartphones, essentially pocket-sized computers with
touchscreens, designed to support full-fledged Internet services by exploiting the broadband capacity
of 3G+ networks. In between the two ends of the spectrum, are feature phones. Smartphones offer a
fundamentally different set of capabilities than basic phones and feature phones. There are 3 essential
dimensions along which the capabilities of these devices are different.

User and data collection interface

These interfaces determine how the user interacts with the device. Basic phones typically have a
number pad, on which the number buttons can be used—with some inconvenience—to enter letters
of the alphabet when texting. Most of today’s basic phones also have a still camera. Feature phones
have keypads (which incorporate the full range of alphanumeric characters), or touchscreens to allow
users to select which application they wish to launch. Many feature phones also have video cameras.
Smartphones have a range of interfaces: touchscreens, voice-activated control and ports for freely
exchanging data with other computing devices. Some even have inbuilt thumbprint and face scanners
for security.

16
Processing power, storage capacity, and a platform for installing new applications (‘apps’)
These capabilities collectively determine a device’s breadth of functionality. Basic phones do not really
have a processor and cannot support data-rich applications, being limited to only voice or SMS. Feature
phones typically come with a number of essential functions (such as address book, calendar, calculator,
and alarm clock), and users can download only limited additional applications, if any. Smartphones, on
the other hand, have processors, operating systems and storage capacities comparable to computers
of the recent past. These phones work quite like small, general purpose computers which a broad
range of powerful functions including email, music and videos playback, GPS-enabled maps, document
and image processing, and can support any of the thousands of applications developed by a whole
ecosystems of app developers, which the user can download at will. Indeed, beyond the basic functions
like voice calls, texting and email, it is possible that the same brand of smartphone is used so differently
by two users that they might as well be two different devices altogether. This capability of smartphones
to be programmed and hyper-customized to the needs or whims of each user, sets them apart from any
handheld consumer device ever developed in the past.

Modes of wireless communication

These modes determine the ways in which the device can transmit and receive wireless data. All
mobile phones use ultra high frequency (UHF) radio signals (also used for over-the-air TV broadcasting)
for communication with phone towers. Whereas basic phones are limited to a single mode of
communication in that range, smartphones use a number of other modes, such as Bluetooth (for
bilateral communication with another Bluetooth-enabled device, for distances up to 150-200 feet) and
Wi-Fi (for connecting to Internet hubs within a distance of 50-100 feet). Many smartphones are also
equipped with RFID (radio frequency identification, for communication with uniquely tagged objects or
devices), and near-field communication (NFC, a variant of RFID) also used in ‘smartcards’ at shopping
checkout stations within a few inches from the user. Feature phones tend be closer to basic phones in
their modes of communication.
Recently, affordable high-end feature phones have been introduced to the market, with many
features hitherto supported only by smartphones. This has led some to conclude that feature phones
can spearhead digital inclusion (GSMA, 2013). However, feature phones by definition still have one
fundamental design constraint relative to smartphones. Their operating logic—firmware—is burnt
into the hardware, and can therefore vary from one model to another even with the same brand. This
makes it harder for developers to make the same app work with different types of phones. On the
other hand, the operating logic of smartphones is software (i.e., an operating system like in computers),
and virtually all the smartphones in the world operate on a very small number of operating systems—
Google’s open-platform Android and Apple’s proprietary iOS. This means that as long as software
developers can write apps compatible with those operating systems, they will be usable on virtually all
smartphones.
Referring back to Table 1, the types of ICT-enabled services low income populations need in
order to be truly digitally included, simply cannot be provided through basic or feature phones. Only
smartphones (and tablets, which for all practical purposes, are large smartphones) have the required
capabilities, especially the ability to support a broad range of apps custom-developed for the needs
and demands of specific communities and market segments. Therefore, even as the explosive growth
of mobile, SMS- and voice-based services are being celebrated as milestones, we believe real digital
inclusion cannot be achieved without smartphones. Currently, because of the prices of even the least
expensive smartphones, basic phones and feature phones comprise the majority of devices low income
populations use to access ICT in developing countries (Exhibit 6 and Exhibit 7).

17
Penetration of ICT devices in the developing world
46%

2% Tablet

5% PC
38% 38%
1% 1%
1%
33% 4% 8% Smartphones
5%
30% 3% 3%
2%
26% 3%
2%
2%
1%

Basic and feature

31% 31% phones
28%
30%
23% 25%

2007 2008 2009 2010 2011 2012

Exhibit 6: Fewer than 50% of people in the developing world use phones and computers. Of them, most
use basic phones and feature phones.

Cost of smartphones vs. feature phones and basic phones

2014 unsubsidized retail price (US $)

High-end smartphone (Samsung Galaxy S5) $867

Low-end smartphone (Nokia Lumia 525) $159

High-end feature phone (Nokia Asha 501) $81

Basic phone (Nokia 220) $46

Exhibit 7: Smartphones are 2 to 10 times more expensive than high-end feature phones, and significantly
more expensive than basic phones.

18
 A citizen ID system is a critical enabler of accountable services, and of broader
5
digital inclusion

In industrialized countries, governments and businesses alike collect an extraordinary amount of

information about individuals: birth, educational history, income, financial transactions, residential
history, ownership of property, taxes, a myriad of other aspects of life, and even death. The ID validates
that an individual, in fact, exists, and people are who they claim to be. The information linked to IDs
is used to provide a range of public and private services, and for participation in the broader social
and economic system. Indeed, in the typical industrialized country, it is hard to imagine any citizen or
business functioning without a primary or derivative ID for even a day, and the importance of individual
IDs cannot be overstated. With the ever-increasing volume of data collected, services are promising
to become hyper-customized to an individual’s very particular needs and wants. (Of course, recent
revelations like the Snowden leaks and the various hacking scandals have demonstrated the risks of
having that much data collected and digitized).
The need for some form of ID has been recognized by the governments of developing countries
as well (where, as discussed later in this section, formal ID systems are weak, if present at all), and
have led to a range of Know Your Customer (KYC)3 requirements. In India, for example, recognizing the
challenges faced by the very poor in verifying their identity, the Reserve Bank of India began allowing
alternative methods of verification. Similarly, Kenya’s national ID system helped significantly with KYC
requirements, believed to have been critical to the rapid growth of M-Pesa (Oyebode, 2013) (Jentzsch,
2009). Exhibit 8 illustrates the correlation between the existence of a national ID system and population
with bank accounts.
While ID systems can be a key enabler of many of the services identified in Table 1, the lack of
robust ID systems can have devastating consequences for the poor, and considerably impact a country’s
economy. For example, India’s public distribution system (PDS), one of the largest food distribution
programs in the world is reportedly laden with fraud and corruption. According to the 2008 Planning
Commission report, more than 36% of food grains intended for poor households were sold to non-poor
households, and 58% of subsidized grains did not reach beneficiaries. The primary reason is thought to
be corruption, perpetuated by the lack of identification of real beneficiaries. The economic costs of such
fraud and corruption is massive, given that all of India’s subsidy programs together amount to 14% of
India’s GDP (Zelazny, 2012).
In the broader context of global development, the absence of insightful information about
particular population segments can lead to uninformed decisions based on broad generalizations about
‘the global poor’. It would then become a case of assuming that the 2 billion low income people in
developing countries constitute one monolithic population, rather than an amalgam of many complex
and different population segments.

3 Know Your Customer (KYC) requirements are mandated by the Central Bank of a country, and include information that must be collected and authenticated to validate an
individuals’ ID before bringing them on board as customers with a bank account for using financial services. In India, KYC-verified customers who had been with a bank
for more than 6 months could recommend another person to become a customer by certifying their photograph and address.
19
 Example of the relationship between national ID systems and population with bank accounts

Unidentified population (% of total population) Bank account holders (% of adult population)

97%

42%

31%
24%

12%
5%

Tanzania Pakistan Cameroon

Did not have national ID Had national ID card Had national ID card
card system until 2013 system since the 1950s system since the 1990s

Exhibit 8: Having a national ID appears to significantly improve access to financial services (Jentzsch, 2009).

6 The ‘Internet of Things’ paradigm is enlarging the scope of ICT

enabled services

The new paradigm of the Internet of Things (IoT) has led to a plethora of applications in industrialized
countries, where remote and traditionally disconnected objects like thermostats, coffee makers,
cars, and even light bulbs and animals, are integrated through wireless sensors into internet-based
applications running on phones, tablets and computers. Not all such applications are lifestyle oriented
though. Examples of current and proposed IoT solutions that help address specific critical needs
include: remote monitoring of patient cardiac activity via real-time data transmitted by implanted
pacemakers and stints (Govindrajan, 2011); accelerometers (already used in smartphones to adjust
screen display orientation) to detect when elderly people fall, and remotely warn relatives or caregivers
(Livescience, 2013); satellites and ground sensors that can send information about crops, weather
and soil conditions to farmers, to refine fertilizer application and other agronomic activities; making
irrigation more efficient by monitoring leaks (McKinsey, 2010). By enabling the use of large volumes of
wide-ranging, highly specific, accurate and real-time data in ICT solutions in an automated and radically
less expensive manner, IoT solutions can also address the seemingly intractable challenge of collecting
information in resource-constrained environments.

20
 KEY CHALLENGES
Digital inclusion in the context of global development is still far from being a reality. Given the full
potential of existing ICT tools and what needs to happen to further human development, the ‘Mobile
for Development’ (M4D) movement has had negligible impact. Most existing solutions are bespoke,
designed for specific user segments, rather than scaled across markets. This has led to a proliferation
of incremental, duplicated services (GSMA, 2013). Additionally, even these few existing solutions are
typically developed by individuals and companies from industrialized markets, who have limited insights
into user needs and constraints in low income settings. There is clearly a stark lack of local ICT capacity in
most developing countries. Unfortunately, there are a number of other major hurdles as well.

1 The cost of expanding coverage of wireless networks to rural areas is very high

Despite the explosion of mobile networks, a sharp urban-rural divide remains. Even when they are within
the network, coverage in rural areas remains spotty and is typically not broadband. To provide sufficient
bandwidth to a last mile channel for end users, transmission needs to support high throughput of traffic.
This requires high-efficiency modulation i.e., high signal-to-noise ratios in conveying a message signal such
as a bit stream, inside another signal that can be physically transmitted. Distance is a significant limiting
factor for this. The farther the transmitting node from the end user, the lower its effective bandwidth
will be. Since rural areas are less densely populated than urban areas, they need a larger number of base
stations to serve the same number of people. This requires more equipment (towers, servers, telephony
switches) and longer backhaul connections, which leads to higher capital and operating costs. Another
challenge is the need for electricity. Rural areas in developing countries are typically off-grid, and diesel
and batteries are more expensive than grid power. These factors increase the cost of expanding network
coverage to rural areas (where economics are weaker to begin with), and exacerbate the rural-urban digital
divide (GSMA, 2013) (Scientific American, 2013).
Not surprisingly then, network sites are concentrated in areas that are on-grid, and mobile
penetration in developing countries is almost double in urban areas compared to rural areas (Exhibit 9).

Network coverage in on-grid vs. off-grid areas

Network sites on the electricity grid Network power for off-grid sites

100% 4% 2% 100%
0ff-grid 10% 12% Green power
31% 41%
31% 40% 24X7 Diesel generator
28%

90%
0n-grid
69%
65%
59% 60% 58% Diesel generator-battery hybrid

Kenya Tanzania Uganda Kenya Tanzania Uganda

Exhibit 9: Mobile networks sites are very sparse in areas that are off-grid and where mobile towers are
powered mostly by diesel generators and batteries. Renewable energy solutions are yet to take off.

21
2 Smartphones are not affordable for low income consumers (although prices appear to be
dropping rapidly)

Many factors contribute to the retail price of smartphones. The cost of manufacturing is only one. Still,
examining the bill-of-materials (BOM) is instructive on the challenges involved in making them affordable.
As Exhibit 10 shows, the BOM for a hypothetical average4 smartphone (Nomura Equity Research, 2012) is
highly fragmented: of the total BOM of $130, no single component costs over $20, and most cost less than
$10. Hence, it will be difficult to dramatically reduce the overall manufacturing cost.
Please note that this data is from 2012, and will soon be out-of-date considering the ever-falling
cost of IT components. For example, the price of the 16GB internal flash memory, the most expensive
component cited in Exhibit 10, dropped from $19.20 in 2011 to $10.40 in 2012 (IHS Technology,
2012). Modularization in manufacturing (e.g., off-the-shelf chipsets and turn-key systems including
phone designs and chips preloaded with Android and other software, offered by large chip makers like
MediaTek and Spreadtrum) has significantly reduced costs. Tradeoffs in components like cameras, LCD
screens and batteries have reduced costs further. Finally Google’s free Android operating system has
been a significant driver of the proliferation of less expensive smartphones across brands. As of early
2014, there have been some media reports of Chinese vendors manufacturing low-end smartphones for
$40 (MIT Technology Review, 2013); around the same time, Mozilla announced a $25 smartphone for
emerging markets, seemingly the same model which retails for $70 in the US (BBC, 2014). However, the
functionality and usability of these lower cost smartphones is yet to be seen.

Illustrative bill-of-materials for an average smartphone

Total: $130 $43 $39 $10 $11 $12 $10 $5

Other Lens
1% 1%
DRAM (Memory)
6%
Power

Digital compass, GPS, Image sensors, Accelerometer, Wi-Fi

Mgmt.
2%
Touch screen and panel
5%
Applications Processor
12% Power Baseband Processor
Amplifier
2%

Camera
Module
7%

NAND FLASH (Memory) Display Battery

15% 14% 4%

Core processing Display Camera Power Other Radio Audio &

33% 30% 8% 8% wireless function circuit board
& sensors 8% 2%
9%

Exhibit 10: Components for processing applications (processors and memory chips), and for display (glass
and touchscreen parts) are the most expensive parts of the average smartphone.
4 Note that the most advanced smartphones on the market likely use much more sophisticated and expensive components.

22
 Institutions to develop and oversee reliable ID systems are weak or non-existent in developing
3
countries

In a country like the US, a consortium of agencies—the Department of Motor Vehicles, the municipal
birth registry, the passport agency, the Social Security Administration, and others—collectively ensure that
citizens are part of the formal state system. The first official ID—a birth certificate—is issued shortly after
a child is born, on the strength of the parents’ ID. Such institutions are weak in developing countries, and
usually do not reach low income or rural populations. As a result, only 44% of children in sub-Saharan Africa
are registered today, with rates going as low as 3% in countries like Somalia. Globally, almost 50 million
births are not registered (UNICEF, 2010).
While technology for expanding robust national ID systems exist, and are not a barrier per se,
there are practical barriers such as the lack of funding or political will on part of the government, a lack
of awareness or interest on the part of citizens, and the logistical complexity of bootstrapping such a
system in which the majority of people do not have any proof of their identity.

23
 SCIENTIFIC AND TECHNOLOGICAL
BREAKTHROUGHS
Digital inclusion, by definition, is about access to technologies, and the services those technologies
enable. In developing countries, ICT and ICT enabled services can go a long way in compensating for
gaps in physical infrastructure, institutions and human capital. The proliferation of mobile phones and
Breakthrough 1

the Internet, and the services they have enabled, bodes well for the potential impact of true digital
inclusion on broader human development. We believe that 4 breakthroughs—two of which are broad
and systemic—can pave the way for true digital inclusion for low income populations.

A new generation of wireless broadband network technologies that radically cut the
cost of expanding coverage to rural areas

In developing countries, networks—wired or wireless—are largely missing in rural areas, or are lacking
the bandwidth to support the full breadth of essential ICT enabled services. The network economics of
conventional cellular technologies that work for urban areas—typically densely populated—do not translate
well to rural areas. With existing technologies, setting up adequate infrastructure requires more towers, base
stations, backhaul, and electricity (through the grid or off-grid options like diesel generators) for people living
in rural areas, than for the same number of people in an urban area. Network technologies that allow greater
spans of the network, and can operate wirelessly over large distances (with equipment that costs less and is
less energy-intensive), can radically improve the economics of rural broadband coverage.
Instead of the current mobile network paradigm (i.e., blanket coverage with many small, adjacent
cells, each supported by a base station), one approach is to use a tiered networking model with inexpensive,
low-power and limited-range devices. In such a system, smartphones connect via Wi-Fi or cellular radio to
nearby network access points powered by off-grid electricity. These access points can then connect to a
macro station (directly or via intermediate repeater sites) over frequencies from unlicensed/unused portions
of the radio spectrum (i.e., ‘white space’), such as the frequencies usually reserved for TV or ISM (industrial,
scientific and medical) communication (Pietrosemoli & Zennaro, 2013). The macro cell station, in turn, can
connect via broadband to the nearest available PSTN node. Recent trials in Cape Town have demonstrated
that such technology can successfully deliver broadband access. Similar trials have now been launched in
Tanzania and Kenya (Google, 2013) (Microsoft, 2013). However, the technology for operating networks using
this backhaul is in early stages, and the necessary equipment is still sub-scale. In addition, very few countries
allow the legal use of ‘white space’ for commercial use.
An alternative for the backhaul is to use low and medium altitude (LEO and MEO) non-geostationary
satellites that constantly move in fixed orbits around the earth. However, a large number of such satellites
will be required to provide continuous coverage. Although LEO and MEO services are increasingly becoming
commercially available, they are still too expensive to be feasible at scale. Yet another approach is to use
aerial equipment in the stratosphere—such as the Google ‘loons’, which use balloons—at altitudes of
18-27 km to provide Internet to rural areas via radio links. Facebook is also experimenting with solar-
powered drones at altitudes of 20 km to provide data at speeds at par with fiber optic cables using infrared
lasers (MIT Technology Review, 2014).
The various technologies that can make wireless broadband a reality in low income rural areas, are in
different stages of development: modified Wi-Fi is already commercially available; LEO and MEO satellite
services are rapidly emerging but still 3-5 years from becoming a realistic option; and aerial backhaul systems
could be ready in 1-3 years.
Even as such technologies are becoming market-ready, there will be a number of deployment

24
 challenges. Many countries have regulatory constraints on the use of the radio frequency spectrum.
Commercial wireless services providers need operating licenses from the country’s regulatory authority,
unless they use unlicensed bands, on which there is no protection from interference from other users.
Acquiring licenses to use a particular band needs significant technical expertise, time and money, and leasing
spectrum from existing carriers can be cumbersome. Regardless of which technology is used, there is clear
need for developing enough infrastructure. In addition, even as the technologies are being developed, there
are no proven business models. Therefore, deployment will be CHALLENGING.

Breakthrough 1 - Difficulty of deployment

Extremely
Challenging

Challenging
Complex

Feasible

Simple

Policies Infrastructure Human Access to Behavior Existing Market Business model

capital user finance change demand fragmentation/ innovation
Distribution
channels

Highly regulated No behavior change

required Moderate fragmen-
market with policy Low-moderate need for tation of customers,
changes required human capital under-developed
development channels
Deployment model(s)
Requires moderate being tested; major
improvements to Existing demand
Limited financing hurdles outstanding
infrastructure required

Affordable (under $50) smartphones that support full-fledged Internet services and need
limited electricity to charge
Breakthrough 2

To be ‘digitally included’, low income populations in developing countries need a fundamentally different
set of ICT tools and services, compared with their counterparts in industrialized countries. These services
will vary from one user segment to the next, as will language and other aspects of information sharing
and service delivery. The ideal device (i.e., a mobile phone) needs to accommodate a high degree of
customizability, and should be able to access services and rich information which can be delivered only over
the Internet. Only smartphones—rather than basic or feature phones—have the platform capabilities to
accommodate this. Access to affordable smartphones will create a virtuous cycle in developing countries—
much like the creation of the Worldwide Web did in industrialized countries—by dramatically increasing
users’ access to many different types of services. This, in turn, will lead to a jump in the sources and types of
available applications and information.
Low income users often cannot afford even basic phones. For example, even in South Africa, a middle
income country, fewer than 40% of rural consumers own phones. Smartphones, currently costing anywhere
from 3 to 20 times as much, are not a realistic option. It stands to reason, therefore, that smartphones will
have to cost considerably less than $50 (the current retail price of the average basic phone) to be affordable.
The biggest challenge in reducing the cost of smartphones is that there are many components and the cost—

25
 instead of being concentrated among a few—is fragmented across many components.
Recently, there have been a number of announcements about affordable smartphones: Mozilla has
already announced the sale of $25 smartphones (although a similar model appears to be retailing for $70 in
the US). There have also been reports of Chinese manufacturers releasing smartphones for $40 (BBC, 2014)
(MIT Technology Review, 2013). Google’s open-interface Android operating system, combined with increased
modularization of the underlying hardware, has been a significant driver of the proliferation of such cheaper
devices. Also, in keeping with Moore’s Law, prices for key components like flash memory and lithium-ion
batteries are falling steeply (IEA-ETSAP & IRENA, 2012). As such, inexpensive smartphones are likely within
2 years of being market-ready. Once introduced, we do not anticipate many deployment challenges, given
the dramatic increases in market penetration of mobile phones. Complementary services such as broadband
coverage, data rates, and mobile apps, will influence deployment, as will access to electricity to charge the
devices. All in all, there appears to be very strong market pull for affordable smartphones. Therefore, we
believe deployment will likely be FEASIBLE.

Breakthrough 2 - Difficulty of deployment

Extremely
Challenging

Challenging

Complex

Feasible

Simple

Policies Infrastructure Human Access to Behavior Existing Market Business model

capital user finance change demand fragmentation/ innovation
Distribution
channels

No need for additional Minimal behavior

Minimal role of human capital Fairly concentrated market
policy/ regulation change required
development and/or well defined channels

Requires some Limited financing required

improvements Strong existing Clear deployment models
to existing demand existing at scale
infrastructure

Biometric ID systems, linking birth registry, land title registry, financial services,
education history, medical history, and other information critical for ICT enabled
services
Breakthrough 3

Individuals born in industrialized countries have formal IDs, which are linked to a range of services vital to
their wellbeing and empowerment, and are an intrinsic part of their day-to-day lives. This system ensures
that all citizens are counted, that their voices are heard, and that they receive the public services they are
entitled to.
While some developing countries have some systems for issuing IDs for their citizens, these are not
mandatory. As a result, these IDs are neither issued until applied for nor used widely, especially in rural areas.
In the absence of IDs for individuals and businesses, and in the absence of a system of services linked to IDs,
citizens of those countries continue to live in informal economies. They cannot easily establish citizenship or
legal title of land or property, cannot access loans and other formal mechanisms of finance, and if repressive

26
governments so wish, the fact that they ever even existed can be denied. In addition, few small businesses
have any legal standing, independent of their owner. Investing in business growth then becomes either a
personal risk for the owner or depends solely on trust between the owner and an investor. In other words,
the absence of IDs is a fundamental barrier to economic and human development.
Industrialized countries have a network of functioning institutions—birth registries, passport agencies,
national ID etc.—which rely on each other’s validation to grant IDs. Such an institutional framework is
missing in developing countries, especially for the rural poor. With only a minority of the citizens holding
any form of valid ID, developing countries have to ‘bootstrap’ systems. India’s recently launched Aadhar—a
unique identification system—is an example of one such large-scale program, in which virtually the entire
population of the country is being registered with unique IDs (UIDAI, 2014). Similarly, Rwanda has also
embarked on an ambitious national ID program. There appears to be a growing chorus of voices in favor of
such systems (World Economic Forum, 2012) (Yudhoyono, et al., 2013).
ID is established using a combination of three (or more) modes: something one can carry (e.g., a
plastic card), something one knows (e.g., a password), or something physically intrinsic and unique to each
individual (i.e., a biometric such as fingerprints, iris, or face). The more the modes of identification, the
more robust the authentication will be, but it also increases the complexity and cost of enrollment and
authentication. A key factor in scaling the Aadhar system is its fingerprint biometric. Biometric-based ID
systems are generally accurate, scalable and relatively fraud-proof, they can be digitized, and individuals
no longer have to carry any documents which can be lost, stolen, damaged or forged. There are, however,
differences in the various types of biometrics with respect to cost and accuracy. Fingerprints, for example,
have higher false positive rates than iris scans but are less expensive and less intrusive. Facial recognition, on
the other hand, has not proved reliable yet under imperfect lighting and other complicated conditions.
While biometric sensors and data management systems for health records, land registry etc. exist, there
are no integrated systems that tie, for example, a unique biometric identifier to a GPS-mapped land parceling
and registry system, nor are there systems that tie someone’s educational or health histories to their ID.
While all the components are already available, creating robust integrated systems will take considerable
work. Given the initiatives underway in countries like India and Rwanda, it is likely that a reasonably
integrated system will be in place within the next 2-3 years. The challenge will be in creating a system of
software components that can be replicated by other countries.
It is important to note that there are serious and legitimate concerns about mandatory ID systems, and
about biometric IDs in particular. Digitized systems make it possible for governments and other powerful
parties to easily access large volumes of information about citizens and communities. This opens the door for
easy abuse of this information. By enabling surveillance of targeted individuals and communities, biometric
ID systems can aid the creation of police states. The more integrated the ID systems are with other aspects of
life, the easier surveillance becomes. One can imagine the dangers of a system which has facial recognition,
GPS-based tracking of mobile phones, and any data on ethnic or religious identity. Integration of personal
information also exposes people to hacking and theft of personal information. It will be very important that
stringent international standards—with respect to protection of privacy and civil rights, as well as for data
security—are in place before such systems are deployed. As of early 2014, most industrialized countries
lacked comprehensive laws about biometric data, and most African and Asian countries did not meet
international criteria that are considered to be adequate for hosting and protecting data (Scientific American,
2013) (ITU, 2012). In fact, as of early 2014, India’s Aadhar system was not formally recognized by its laws or
courts, and remained a parastatal effort.
Beyond the significant regulatory constraints, a national biometric ID system will require the installation
of large numbers of biometric sensors, other hardware, and related software, which will link the various
system components. It will also take considerable behavior change to implement. Finally, the logistical
challenges involved in reaching remote populations will be daunting. Considering these hurdles, deployment
will be EXTREMELY CHALLENGING.

27
 Breakthrough 3 - Difficulty of deployment

Extremely
Challenging

Challenging

Complex

Feasible

Simple

Policies Infrastructure Human Access to Behavior Existing Market Business model

capital user finance change demand fragmentation/ innovation
Distribution
channels

Highly regulated and Requires high level of Significant behavior

training for large Highly fragmented,
controversial changes change needed on daily challenging to reach
required numbers of people basis, changes contrary customers
to cultural norms

Requires major improvements to Financing not required Extremely low Deployment models
infrastructure demand or not a being tested
perceived need

A new generation of ‘Internet of Things’ (IoT) devices, which enable newer types of
services, and compensate for gaps in infrastructure, effective institutions, and human
capital

The Internet of Things (IoT) paradigm is about a vast array of distributed actuators, devices and
Breakthrough 4

sensors embedded into objects used in day-to-day life, to monitor the performance of people and
objects, improve the performance of appliances, and provide a range of new services to individuals
and institutions. In developing countries, the absence robust infrastructure, effective institutions
and reliable human capital, increases the dependence on IoT devices and corresponding ICT enabled
services. Examples of such services include:

Health: Point-of-care diagnostic devices that can use cloud computing and smartphones for rapid
analysis, and access a patient’s medical records using biometric systems.

Agriculture: Location-based agronomy and extension tools for activities like determining soil condition
and identifying pests and pathogens.

In these early years of the IoT paradigm, there is a yawning gap between what is technically possible and
what is commercially available, even in industrialized countries, and more so in developing countries. Specific
timelines for market readiness will vary by the type of device; some are already on the market, some could
be a decade away.
Deployment challenges will also vary by the type of solution and service. Some common challenges are:
Technology fragmentation, lack of standards and interoperability, lack of standardized hardware and
software components that are optimized for specific uses and easy to integrate.
Availability of supporting infrastructure and devices.
Availability of complementary products and services.

28
 Need for behavior change and imperfect understanding of behaviors, needs and incentives.
Complexity and cost of operations and maintenance.
First entry cost and need for and availability of consumer financing.
Regulations, which are still evolving even in industrialized countries.
Need for—and ease of—customization and configurability.
Absent or underdeveloped distribution channels.
Weak market institutions that increase the cost and complexity of doing business, as well as weak
public institutions for security and privacy protection.

Considering the above, deployment will be EXTREMELY CHALLENGING.

Breakthrough 4 - Difficulty of deployment

Extremely
Challenging

Challenging

Complex

Feasible

Simple

Policies Infrastructure Human Access to Behavior Existing Market Business model

capital user finance change demand fragmentation/ innovation
Distribution
channels

Highly regulated Requires high level of Major behavior change

training for large Highly fragmented,
market with policy required, potentially on
numbers of people challenging to reach
changes required daily basis customers

Requires major improvements to Moderate financing Low demand, needs No identified deployment
infrastructure needed, viable mechanisms to be built model, major hurdles
identified identified.

29
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