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Lack of access to computers and Internet connectivity prevents the many benefits of information and communication technology (ICT) from reaching more than 4 billion people worldwide〞benefits that include substantial social and economic development opportunities. Looking ahead to the next decade, many of HP's new markets and customers will come from the 80 - 90% of people currently excluded from these opportunities.
HP is committed to increasing access to ICT worldwide and closing what is referred to as the 'digital divide.' We pursue this through an initiative called 'e-inclusion.' HP's e-inclusion initiative seeks to empower individuals and communities and to apply technology to accelerate economic development. Our experience has proven that HP's technology products and solutions can accelerate the development of societies and economies when applied to areas such as medicine, entrepreneurship, agriculture, banking, distance learning, commerce, and cultural preservation.
Structuring our e-inclusion work to advance social and economic development also accelerates the achievement of our long-term business goals. By empowering people in developing communities, we enhance our own competitiveness 每 creating innovations we would not have thought of otherwise, discovering talent we never would have found, and spurring revenue growth as we devise new solutions and business models to serve emerging markets.
HP's e-inclusion efforts have evolved over the last four years as we have recognized that aligning e-inclusion to HP's business objectives allows us to have an even greater impact. What began as a broad effort to apply technology to closing the digital divide, has become focused largely on using ICT to accelerate enterprise and entrepreneurship, and thereby stimulate economic growth.
Our e-inclusion strategy is grounded in collaboration with the international development community and governments to realize the power of ICT to stimulate economic growth. We also engage in on-the-ground research and development with communities to explore how ICT can improve their lives, and we co-invent solutions to address their needs. With an understanding of how the private sector can stimulate economic growth and knowledge gained through interaction with these communities, we are pursuing projects worldwide to incubate new products, solutions and business models for underserved communities. Ultimately, our goal is to leverage what we've learned from each of these projects to scale and replicate specific programs globally that will have the greatest impact on social and economic development.
Global collaboration. HP believes that the private sector has a role to play in poverty alleviation and economic growth in underserved communities. Thus, collaborating with multilateral organizations like the United Nations, governments and development agencies is a key foundation of our e-inclusion work. HP participated actively in the United Nations ICT Task Force to assess and explore the role technology might play to improve the effectiveness and impact of economic development efforts globally. HP also led a working group on business enterprise and entrepreneurship.
This working group launched or supported the continued development of three organizations 每 the Microfinance Development Team, Enablis and GlobalGiving. See the Innovate and assess section for additional details.
HP also participated in the United Nations Development Programme's Commission on the Private Sector and Development and with the creation of the report〞Unleashing Entrepreneurship: Making Business Work for the Poor. The conclusions drawn from this report influenced HP's decision to scale and replicate a program focused on accelerating entrepreneurship and enterprise development through technology.
Local research and development. To understand how technology can impact individuals' daily lives, HP works deeply with a few communities that have limited exposure to technology to create new products and solutions specifically for their needs. These engagements last at least three years, allowing HP to listen, experiment and learn. We apply a myriad of business techniques to understand the critical issues within the community and gain agreement across multiple constituencies to prioritize and develop solutions to meet those needs. These projects provide an invaluable foundation of knowledge for the company and function as test beds for new products and solutions that may be leveraged to assist additional communities. HP has two signature programs in this area, Digital Villages and i-communities.
Digital Villages are HP's first major e-inclusion projects. They are designed to help underserved U.S. communities use technology for learning, working and community building. There are three U.S. Digital Village projects: East Baltimore, Maryland; East Palo Alto, California; and the Southern California Tribal Community. In 2004, HP and its program partners celebrated the third anniversaries of the Baltimore Digital Village and Southern California Tribal Digital Village. Building on a foundation of committed leadership, solid infrastructure, and networks of dedicated private and public partners, HP's Digital Villages are positioned to continue as sustainable ventures after our initial support ends.
Baltimore Digital Village 每 To date, more than 5,000 residents have used HP-sponsored community technology centers to learn computer skills and receive job training. Through the program, 185 Baltimore teachers have integrated technology into their classrooms, and students now have access to 400 new computers, increasing their achievements in social studies, science and math. Three hundred residents have received home computers through the program, helping parents stay connected to their children's schools and helping citizens access health and city service information.
Southern California Tribal Digital Village 每 HP's Tribal Digital Village connects thousands of Native Americans across Southern California using more than 1,000 new computers in over 50 sites, including 20 computer labs. Tribal members created audio and video materials for projects related to education, history, language and culture, and use Internet-based video conferencing for distance learning. The Tribal Digital Village launched two technology businesses that provide jobs for Native Americans throughout the region and generate income for the 18 community tribes affiliated with the Digital Village. A portion of profits will fund ongoing tribal community development.
East Palo Alto Digital Village 每 In Northern California, this Digital Village demonstrates the sustainability of HP's approach to technology integration in an underserved community. The program has secured more than $500,000 in additional investments since the HP funding relationship concluded nearly two years ago, supporting new technology training programs and broadband access for community nonprofit organizations.
HP i-communities are development initiatives in emerging markets led in partnership with local government, non-governmental and community organizations. HP i-communities use ICT to promote sustainable social and economic development. Specific ICT solutions focus on increasing literacy, promoting entrepreneurship and job creation, and providing access to government, healthcare and education services.
Targeted communities benefit and develop economically and HP learns to compete in these markets. As an example, HP introduced a multi-user desktop solution that enables more productivity with a limited budget (see ).
HP currently supports i-communities in Kuppam, India, in Mogalakwena, South Africa, and in Houston, Texas. During our three-year commitment, HP has worked closely with public and private organizations to create relevant, sustainable initiatives and to ensure a smooth transition to community ownership in 2005-2006.
The Kuppam HP i-community in Andra Pradesh, India marked its second anniversary in 2004. With expanded products and services offered at 13 Community Information Centers, more than 15,000 citizens have accessed e-government, education, healthcare, agriculture or small-business information and services by using an on-line community portal. This i-community also launched a new class of women entrepreneurs known as Village Photographers (see below).
In 2004, HP deployed two additional Mobile Solution Centers. These vans provide health and information services to more than 12,000 people in 150 outlying villages each month. Among the services delivered, farmers received help to identify and address crop problems and citizens gained access to vision testing and remote access to medical practitioners.
The Kuppam i-community expanded its Literacy Testing Solution to assist with the regional government's 100% literacy goal. This software tool uses a voice and graphical interface to rapidly assess and improve literacy levels. The Government of Andhra Pradesh is exploring replicating this solution statewide.
The Mogalakwena HP i-community in South Africa celebrated its second anniversary in 2004. Since its founding in a government-donated college building in the province of Mokopane, HP and key government and private partners have established three training centers and 23 Community Access Points across Limpopo Province. To date, more than 54,000 households have benefited directly or indirectly from i-community programs and services and more than 3,500 residents have been trained in programs ranging from PC literacy to advanced technology and entrepreneurship skills.
HP expanded the Community Computer Camps (C3) program in 2004, offering week-long basic computer skills training to more than 800 students 每 ages 13 to 74 每 at 13 public venues. In 2004, 100 local students entered a year-long ICT skills training program in partnership with the Information Services, Electronics and Telecommunications Technologies Sector Education Training Authority (ISETT SETA). Participants will receive nationally recognized qualifications and can expect improved job prospects upon graduation in February 2005.
Other 2004 highlights include the launch of an Open Source Center offering the world's first International Computer Driver's License (ICDL) for Linux, the establishment of a fully functioning ICT support call center staffed by local students, and the creation of a Digital Culture Center where local talent can become "Digital Stars." Case Study: Classroom computing at lower costs
HP's most significant response in 2004 to access and pricing demands in emerging markets is the HP Multi-user 441 Desktop Solution. The HP 441 每 'four users for one PC' 每 includes one Linux-based CPU with four keyboards, four monitors, four mice and four graphics and audio cards. The solution accommodates four simultaneous, independent users and includes a bundle of more than 70 Open Source, educational and office software applications, as well as HP support services. The unique configuration allows for a cost savings of 30% to 50% on acquisition, and up to 60% on total cost of ownership 每 a significant savings for schools and small businesses in emerging markets.
Designed to meet the needs of the education and small business markets in South Africa, the HP 441 was piloted at the Mogalakwena i-community and was officially launched there in March, 2004. By committing resources to deep engagements like the i-communities and by developing solutions like the HP 441 that meet the access and price concerns of emerging market customers, HP aspires to better understand customers and ultimately to grow these markets by delivering community-relevant ICT solutions.
Innovate and assess
As a result of our participation in global development discussions and our learning from local research and development, HP is currently piloting several programs around the world. Our goal is to increase access to technology, education and enterprise development resources while expanding our understanding of how ICT can improve the effectiveness and impact of economic development. Through this process we gain valuable experience in transferring knowledge and skills across country boundaries and learn which solutions have the greatest impact. As there is no single roadmap for economic development, we are pursuing multiple approaches through our UNICT initiatives, our Micro Enterprise Development Program, various information access and skills-building projects and through new products, solutions and business models that are piloted in these projects and our i-communities.
Microfinance Development Initiative. A challenge that the financial services industry faces today is how to aggressively scale microfinance. In 2003, a team of eight public and private sector organizations, convened and led by HP and funded primarily by the US Agency for International Development, began addressing the following questions:
What would scale for microfinance look like?
How can technology help achieve that level of scale?
How can lessons from our work inform a vision for the financial future of the poor?
The result of our inquiry was the development and deployment of a Remote Transaction System (RTS). This combination of off-the-shelf hardware and a newly developed software application was tested and implemented in three microfinance institutions in Uganda. The RTS provides individuals improved access to financial services. It is expected to lower transaction costs for microfinance institutions and to help them reach more rural clients. The pilot, which started in January 2004, is scheduled to conclude in 2005.
HP's goal is to help catalyze the industry and deepen our understanding of the services and delivery systems required to reach the rural poor in a sustainable way. When this project concludes in 2005, HP and its partners will share this knowledge and help the microfinance industry to access and deploy the RTS more broadly.
Enablis. In 2002, as members of the G8 Digital Opportunities Task Force, HP, Accenture, and Telesystem proposed the creation of Enablis, which was subsequently launched through a Can$10 million grant from the Government of Canada.
Enablis is a commercial, nonprofit organization created to drive measurable economic development and to build self-sustaining small and medium-sized enterprises (SMEs). The organization is based on the belief that the intelligent application of ICT enables entrepreneurs to develop stronger, more sustainable business models that benefit the local economy.
Enablis provides solutions to hasten the adoption of ICT and realize SMEs' ICT-based business models. It provides loan financing, business and technical support and policy advisory services directly or through a network that includes large corporations, governments, non-governmental organizations, financial institutions, enterprise support organizations, development experts and other entrepreneurs.
HP, Accenture, and Telesystem continue to provide resources, skills and guidance to Enablis, and after successfully piloting Enablis in South Africa, we hope to expand its work to other countries.
GlobalGiving. In 2001, HP provided seed money to GlobalGiving, an on-line marketplace for international philanthropy. GlobalGiving enables individual donors to connect to grassroots social, economic development, and environmental projects around the world. To grow its donor base, GlobalGiving is partnering with corporations and other institutions to enable their employees and customers to give directly to projects of interest. Projects are vetted and posted by a reputable group of organizations dedicated to supporting the efforts of social entrepreneurs.
Since launch, more than 2,599 donations have been made to 443 projects, providing $1,159,257 in funding to social entrepreneurs worldwide, creating a new source of funding for the remarkable individuals working to change their communities and the world for the better.
Micro Enterprise Development Program. More than half of all new jobs are created in the small business sector, and this number is much higher in developing countries1. Technology can play a crucial role in stimulating economic growth in underserved communities and helping low-income individuals, families, and micro businesses realize economic self-sufficiency.
Building on our key learnings from the Digital Villages, HP launched the HP Micro Enterprise Development Program in 2002. This program supports U.S. nonprofit micro enterprise development agencies in low-income communities to promote economic growth through training, technical assistance and small loans.
In 2003, HP granted $2.5 million to nine U.S. micro enterprise development organizations. These organizations served more than 3,200 entrepreneurs, roughly half of whom were at or below the poverty level, using technology provided by HP. In 2004, we granted $3.5 million to 17 U.S. micro enterprise development organizations. Overall, HP currently supports micro enterprise development in 25 cities in 19 states.
Micro enterprise clients of grantees are increasingly demonstrating the value of technology to very small businesses - from the caterer who now uses an online inventory control system to reduce food waste to the print shop owner who advanced his business using a new HP large format printer. Clients have cut costs and increased revenue, allowing them to hire additional employees.
As a result of HP's support, micro enterprise development organizations reported increased staff productivity and morale, improved data management and communications, and expanded outreach capacity.
1See International Labour Organization's World Employment Report 1998-99 (http://www.ilo.org/public/english/bureau/inf/magazine/27/crisis.htm) Stakeholder perspective
How is HP doing?
HP has shown real leadership in bringing innovation to micro enterprise programs for the world's poor. "Convener", "honest broker", "solution provider", "development partner" -- these are all roles that HP has played so well in the Uganda pilot activity. Leading with people, technology and passion, their most valuable assets, is what has made the difference.
How would you like to see HP to improve in this area?
Lasting change requires sustained commitment. HP has made an important initial investment in stepping up to this challenge. Staying power is needed to scale up, mainstream and really make a difference.
Holly Wise
Director, Global Development Alliance Secretariat
US Agency for International Development
Information access and skills building. These capacity-building projects invest in technology infrastructure and skills development to catalyze economic and social development in underserved communities. Based on the success of ICT job skill training, entrepreneurial development and K-18 education programs in the Digital Villages and i-communities, similar targeted projects were launched in other communities to expand our impact. Integral to project success is strong leadership and capacity building of the hosting organization to ensure long-term sustainability.
Digital Community Centers provide ICT infrastructure to underserved communities. Each center reflects a high level of partnership between government, business, public service organizations and HP, and each partner plays a key role by sharing expertise, resources, and accountability. Our goal is to build leadership and information technology capabilities within underserved communities and to pilot sustainable models for economic growth.
HP has ten Digital Community Centers: Ghana, South Africa, France, Ireland, Hungary, Russia, Ukraine, Jordan, Northern Ireland, and Senegal. In 2004, the Centers in Russia, Ukraine and Jordan were officially opened by community leaders.
HP's Digital Garage in S?o Paulo, Brazil, merges technology and music to help underprivileged youth develop creativity, tolerance, work skills and responsibility through technology. In a facility equipped with computers, servers, printers, scanners and software provided by HP, local youths aged 14 to 24 每 accompanied by a team of teachers, a sound engineer, webmaster, video-maker, psychologist and volunteer workers 每 develop their own projects. More than 90 young people participated in the Digital Garage program in 2004, and more than 400 since the program was launched.
Magic Johnson/HP Inventor Centers are a partnership between HP and the Magic Johnson Foundation to offer training, skills development and access to on-line services. Twenty centers in 17 cities in 13 states and Washington, DC are based at nonprofit organizations and housing developments in urban communities across the United States. With grants totaling nearly $1.4 million, the centers have provided training and services to more than 32,000 youth, adults and seniors.
HP's Cisco Networking Academy Sponsorship is a partnership between Cisco Systems and educational, business, government and community organizations. The initiative prepares students for the 21st century workplace with courses on the latest in information technology. Courses are taught at more than 10,000 locations in 159 countries and more than 500,000 high school and college students have enrolled. HP sponsors the HP IT Essentials I (PC hardware and software) and HP IT Essentials II (network operating systems) curricula. These HP courses are currently offered in more than 2,000 academy locations with an enrollment of more than 26,000 students.
New products and solutions. Less than 20% of the global population can afford to buy our products; we have an opportunity to develop products and services with business models targeted to the rest of the world. HP recognizes the potential of emerging markets, both for business growth and for the benefit of all people who are eager to embrace and leverage the opportunities of the digital age. A critical aspect of our work in the India and South Africa i-communities and HP Labs India is to co-invent new products, solutions and business models specifically for these emerging markets. Once piloted, these products and solutions undergo a vigorous business case analysis to determine feasibility and potential for commercialization.
Mobile Photo Studio Solution. HP developed a solar-powered mobile photography kit in Kuppam, India. The solution and associated ownership models are currently being piloted and evaluated for the ability to replicate in other emerging markets (see ).
HP Multi-user 441 Desktop Solution. HP developed the Linux-powered HP Multi-user 441 Desktop Solution, designed to provide increased access to technology at minimum cost for developing countries. The solution is currently being piloted in South Africa in the education and small business market and we are evaluating product demand in other emerging markets (see ).
Mobile Entertainment Program. HP launched a 'mobile entertainment' program in Kuppam, India that allows a local entrepreneur to rent or purchase locally produced movies and movie screening equipment from HP to provide entertainment to the community for a small fee. The business model allows the entrepreneur to quickly cover expenses and generate profit.
The Digital Stars of Mokopane (D-Naledi t1sa Mokkies). In South Africa, aspiring musicians, poets and writers pay a small fee to make digital audio and video recordings of their performances. Their recordings are linked to a web site that provides contestants a chance to be selected as one of the region's top pop idols. These digital culture programs feature a pay-per-use pricing model that will make multimedia solutions more accessible to emerging market customers.
Remote Transaction System. This product combines off-the-shelf hardware and a newly developed software application to improve individuals' access to financial services. It is expected to lower the transaction costs for microfinance institutions and to help them reach more rural clients. Three microfinance institutions in Uganda are currently piloting the product, which will be evaluated for broader use by microfinance institutions worldwide.
Other innovations. HP Labs India has developed extremely low-cost fingerprint authentication technology, voice-based technologies that allow illiterate people to access public services by phone, and a low-cost appliance that sends handwritten e-mail.
Case Study: Entrepreneurial women take their profession to the next level
In 2004, HP expanded its Mobile Photo Studio project in Kuppam, India. Introduced in 2002, the project provides local women with a lightweight solar-powered digital camera and printer to take government ID photos. The women rent the equipment from HP and in many cases have doubled their family's monthly income.
The women, known as 'Village Photographers,' took advantage of additional HP training to expand their businesses. One photographed a dangerous intersection and sold the story to a local newspaper, prompting the government to pave the road and add covered bus shelters. Others capture social events, such as weddings and community celebrations, charging a small price for mementos and family portraits. Another Village Photographer uses photos of finished saris as a marketing tool for her door-to-door clothing business.
There are now 18 Village Photographers in Kuppam. The group is establishing a fund that other young women can draw on to launch their own small businesses. Scale and replicate
HP's goal for our e-inclusion work is to leverage what we've learned and globally replicate those programs, products and solutions that will have the greatest impact on social and economic development.
Based on what we've learned from our Digital Villages, i-communities, Microfinance initiative, U.S. Micro Enterprise Development Program, the Digital Community Centers, and UNDP task force involvement, we will focus our next major global program on entrepreneurship and the acceleration of micro enterprise growth.
Through this new initiative, HP will seek to advance the use of technology in micro enterprise development programs to improve the efficiency, effectiveness and sustainability of micro enterprises in underserved communities worldwide. HP will focus not only on providing technology to micro enterprises, but also on training micro enterprises to use technology to build and grow their businesses.
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