|THE MIDDLE EAST COULD BE A CRADLE OF INNOVATION|
Aruba, October 18, 2012 - We in the West tend to think of innovation as the next, new, shiny, tech, globally-accepted thing. But in emerging growth markets, new access to even existing technologies (e.g., higher-speed broadband, mobile phones, smart devices), can lead to fresh and surprising thinking about local and regional problems, and one day these over-looked corners of the globe may produce world-class innovations as a result.
Since Africans were never tethered to landlines, innovation has been astounding. Kenya's M-Pesa, for example, allows customers to withdraw and deposit money via text message. The company is now one of the largest mobile cash-transaction companies in the world — roughly 20% of the country's GDP passes through it. The growth doesn't stop there. With hundreds of thousands of cell towers providing reception to the most rural corners of the world, mobile providers have been compelled to build their own power generators. As a result, they've spawned entire ecosystems of entrepreneurs who are using the excess electricity to power local towns and build community charging stations. And thanks to "social entrepreneurs," people with little voice are using mobile technology to report crime and corruption to authorities while holding the "powers that be" accountable — which was impossible even a few years ago.
Long before the Arab uprising in 2010 — and uninhibited by uncertainty and instability today — Middle East entrepreneurs have used innovation to overcome challenges and to find new opportunities for growth. As suggested in a recent post here on HBR, the Arab world alone represents a large and hungry consumer market. So it's no surprise that companies in the region are finding innovative ways to reach consumers. In the face of country-by-country regulatory complexity, Aramex, the region's largest logistics company, created Shop and Ship, which allows customers to order products from nearly any e-tailer in the U.S. and China and eventually the Middle East. It's a seamless process. Aramex receives the ordered goods at its facilities, takes care of all the bureaucratic headaches, and then delivers the goods right to the shopper.
Other e-commerce companies are overcoming obstacles in innovative ways as well. With only two million credit card users in the Middle East, and even fewer comfortable using their cards online, and with well over 60% of package deliveries paid COD, payment services create as much friction as regulatory concerns. But innovators such as CashU have created safe gateways (e.g., cash cards) for buyers who are weary about shopping online and on mobile devices.
Read more/source: http://blogs.hbr.org/cs/2012/10/the_middle_east_could_be_a_cra.html