World Bank senior official says technology has the potential to eliminate poverty in our lifetime

By Andrew Patterson

In a first world country like New Zealand it’s difficult to comprehend the impact mobile phone technology is having on developing regions in the world, particularly Africa.

One recent estimate predicts that every person in Africa, on a per head basis, will have a mobile phone within the next five years.

This remarkable technological transformation the continent has undergone in the last decade is unprecedented globally.

In 2002 Africa had around 49 million mobile users. Today that figure exceeds 500 million, an increase of more than 1000% while a further 120 million people now have access to the internet with mobile being the number one means by which people are able to get online.

Africa today leads the world in mobile banking technology.

Around 10,000 people a day register with the mobile banking platform M-Pesa (M for mobile while pesa is Swahili for money) and it’s estimated 11% of Kenya’s GDP is now transacted through the M-Pesa service.

This is all music to the ears of the World Bank.

The relatively low profile global agency in this part of the world has set itself ambitious twin goals to end extreme poverty within a generation and to boost shared prosperity. It’s more immediate goal however is for no more than 3% of the world’s population to be living in extreme poverty by 2030.

In New Zealand recently to address delegates at this year’s CIO Summit, Chis Vein, The World Bank’s Chief Innovation Officer for Global ICT development is confident that both goals can be met in our lifetime.

A new approach

However, change starts at the top as they say, and in his former role as Deputy Chief Technology Officer at the White House he oversaw huge shifts in the impact technology has today in both decision making and strategy.

“President Obama is actually the fourth president that I worked for. My first was Ronald Reagan in 1981, and then George Bush the first, followed by Bill Clinton, before I returned to join President Obama in 2008 after taking a little time off.”

“When we think about technology, the world has certainly changed hugely over that period, particularly from a media perspective. They used to talk about news ending at close of business, and then you had a free period before the next day. These days everything is 24/7. You have to be aware, you have to be on, you have to be ready, and you have to be willing to manoeuvre and solve problems literally 24/7. I think that is both a change in and of itself, but it's also been enabled by technology.”

“I think the Obama Administration has very successfully understood those changes, and incorporated that approach into its very DNA. Certainly if you look at the election and what his team did it was absolutely brilliant in terms of understanding data and how to use it to understand the behaviour of voters. You also look at what he's done with his staff. My boss when I was there, the Chief Technology Officer (CTO) of the United States, actually reports directly to President Obama. The Chief Information Officer, interestingly enough, does not.”

“The role of CTO is actually a new position under the Obama administration. It's really intended to figure out how technology can be used almost at every piece of policy, every piece of legislation, every action. It incorporates the transformative power of technology, at least the potential of it, into everything that goes across the President's desk. So it is reflective of the very nature of technology and society in that it is core to everything we do.

Understanding data and embracing technology

It seems Obama is possibly the first U.S. president in the modern era to fully embrace and be entirely comfortable with harnessing the power of technology and more importantly to use it to create value.

“It certainly makes it both challenging and absolutely one of the most fascinating jobs is to be working in that environment. One of the things that the Obama administration has very much supported is this idea of actually releasing government data. The belief here is that there is so much value locked up in databases and old filing cabinets, to use that analogy, and if that information and data could be released, and other people could use it, other entrepreneurs, other government organisations, in fact really anybody, then amazing things can happen.”

“His very first day on the job, one of the first actions he did, was actually sign an executive order asking that the government be opened up, and giving direction to other agencies to instruct individual agencies on how to open up. Over six years now, we've seen amazing changes in the business community.”

“For example, insurance companies taking open data and changing their business model, or Walgreens, which is an American pharmaceutical company, changing how they look at where the pharmacist is located. Rather than having them in the back of the business, putting them front and centre and letting them download personally identifiable safe and secure data, so that the consumer can have that data, can talk with the pharmacist right there in front, and make decisions. That is all because we've allowed that data to be free, and allowed other people to take and create value with it.”

However, could events in recent weeks in the U.S. that has seen the release of sensitive information on spying activities by whistle-blower Edward Snowden, who is now seeking political asylum, lead to a change in thinking on this approach?

“I think the current situation, however it unfolds, confirms that government is different from private sector. But when government starts thinking about how to be entrepreneurial, how to unlock the value and enable others to create new businesses and products or services that it has to be very thoughtfully done. My personal belief is that this current development is more about policy decisions than freeing up data and making it available for entrepreneurs and other people to use. Without a doubt it, it needs to be thoughtfully done and carefully done. I think crises like this are not necessarily bad things, but they are actually good reminders about what we really need to pay attention to.”

Innovation and hackathons

Innovation has become a key driver within The World Bank (WTB) so much so that even new age events such as hackathons now feature prominently in its thinking.

“Hackathons started off a few years ago, as this opportunity to get a bunch of people together, and talk, sit around, and create some things and see what happens. Over time the model has evolved, and become much more organised and much more mature. One of the things we've done at TWB is embrace the concept and realise that the hackathon is a tool that has multiple layers of effectiveness. By releasing data, bringing people together, either hacking at home, or coming to a place and hacking together, creates some synergies, some great ideas, and some prototypes for applications. Often however, it just stops right there. What we're trying to do is change that model, keep that energy going, and keep those steps happening."

“A good example of that is what we've done now in areas like water and sanitation. We’re using the hackathon to not only come up with an application at the end, but actually using it to educate and inform the institution itself. In this case, we used it to show how we really often start solving problems because we think we know the answer.”

“In development, that's long been a criticism of organisations like TWB that they're very paternalistic, that they dictate, and they don't listen. A hackathon is a wonderful opportunity to address that issue and hopefully change that presumption. It allows many more people enabled by technology to participate, have their say, and create interesting and accurate problem statements that would never have been possible if we simply told people what to do.”

“It's been a really amazing journey over the last year and a half with the hackathons, and I think what the Bank has learned is that the hackathon is a good thing, that it can be very effective in both understanding the needs of our customers, whether they be the individual citizen or the country, but also exposing us to many more options of solutions, and how we can actually start addressing the problems that we have been facing for so long. The insanity of course, as Albert Einstein famously pointed out, is trying to solve problems the same way over and over again. What we're trying to do is break that cycle of thinking."

Driving innovation

So what’s driving this new found innovation and how does a large organisation like The World Bank actually drive and manage its innovation process in a way that captures value?

“The ideas that we're talking about today are not new. Technology professionals over the years have talked about this. Technology is actually getting to the point of maturity, where we can actually do all of those Star Trek things that Gene Roddenberry thought of back in the 60s. We're now getting to that point. So the maturity of technology I think is definitely one thing."

“Secondly, there is the recognition that you can't just keep solving problems the same old way. If we're going to solve some of these problems, we're going to need to think differently. Innovation I think is the latest buzzword, but I think it’s starting to be overused somewhat. But simply taking advantage of all the changes that have taken place and applying them and thinking through them slightly differently is what’s driving the innovation process.”

“Then there’s the youth aspect driven by Gen Y. The younger generation, as we know, are far more comfortable with technology and harnessing its power and don't understand people of my generation and why we have difficulty with it. I think as they move increasingly into the workforce, they are bringing that openness, that sense of fearlessness when it comes to technology, and they're teaching us how to really embrace it.”

Technology being embraced in the third world

A case in point that highlights the success of this approach has been the development of a mobile technology platform in Africa called Esoko. It allows farmers to find the best price locally for their crops rather than having to accept the price being offered by the local buyer; effectively creating a more competitive market place.

“Esoko actually means e-marketplace in Swahili. The idea here is that data is useless unless you do something with it and it’s used for some specific purpose. Often those purposes are known only to the user, the person who is living and dealing with crises and challenges in their day-to-day life. Interestingly enough, agriculture is one of those areas that we don't focus on enough, but it is one of the largest markets for this type of innovation.”

“What's happening is that people are understanding that with a simple SMS phone, they can take data feeds from different types of places and can actually create applications that are specifically designed for farmers to understand their soil capacity for growing, what crops will grow, what price they will get, as well as creating applications that provide wonderful decision-making tools for farmers.”

“I often use the example with Esoko of the woman I met in one rural village I visited who was able to understand that the price being offered in her own community was far less than that being offered in the next community a few miles away. Simply by having access to that information on her mobile she was able to say ‘no’ to the local offer and ‘yes’ to the competing other, and actually leverage that income. That's what it's all about; creating economic value through the use of technology to drive better outcomes for people.”

Maintaining the pace in the future

Starting the process of openness is one thing but continuing it is another and governments and vested interests don’t always give up control easily. There’s also the need for a high degree of co-ordination required across a range of stakeholders, many of which are not always in agreement. So potentially maintaining this momentum is going to be the real challenge for organisation like TWB. However Vein believe there are learnings that other organisations, particularly governments, can take on board.

“I do hope we can continue down this path but ultimately it all depends on whether governments are ready to put the work in with the community to create the ecosystem in order to take that data and turn it into economic value. You can't just release it. It's not a case of when you release it they will come. Firstly, you need to understand the value of data. Then you need to know enough of your entrepreneurial community to invite them in, to take a look at that data, to entice them to take it and build something with it. And when they do, to exploit that in a positive way and celebrate the success and use it to get more people involved. You just repeat that cycle over and over again.

“I would argue one of the reasons the Obama administration has been really successful in this regard is that they've dedicated people and resources consistently over six years now in order to do that. If we had not done that I don't think we would see the amazing transformation in the business community that has occurred as a result. It remains to be seen what will actually happen out of this, but I think all indications are that this is being embedded into the DNA of government, and increasingly it's being embedded into the DNA of the business community. I just can’t see that stopping because there's now real momentum that will keep it going well into the future.”

KEY FACTS

· 188 member countries have committed themselves to US$205.4 billion of subscribed capital (paid in capital + callable capital)

· The largest five shareholders are: US (16.51%), Japan (9.72%), Germany (4.84%), France (4.33%), and the UK (4.33%)

· Lending is limited to sovereigns or sovereign guaranteed projects

· Only countries with at least US$1,195 of annual per capita income are eligible
 (Poorer countries receive concessional financing from a separate entity within The World Bank Group)

· Currently, the five largest country exposures are to China, Brazil, Turkey, India, and Indonesia