What Mobile Telephones Mean to Rwandan Entrepreneurs

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The Information Environment of Micro-Businesses
in Urban India and Africa 1 June 2006 Jonathan
Donner Microsoft Research India
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What kinds of businesses are we talking about?

• Micro-businesses (5 or fewer employees) are the
  most common kind of businesses in the developing
  world
• 90 million households in India alone (40m
  non-agricultural)
• 15 million Indian retail shops lt500 Sq feet (The
  Economist 5.15.06)
• Most are relatively unproductive and struggle to
  survive
• Their communication and information needs are
  radically different from formal businesses in
  developed economies
• We seek a better understanding of how these
  businesses use ICTs.

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The Information Environment of Micro-Businesses
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Methods Study in Progress

• Hybrid Qualitative and Quantitative approach
• Builds on rapid and remote ethnography techniques
  by Whitney and Kelkar (Illinois Institute of
  Design)
• Target non-agricultural urban microenterprises
• 40 cases complete by mid-June

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The routine

• Many interview subjects learned their business
  from family or friends
• Long workdays are common - 12 or more hours, 6 or
  7 days a week.
• Many are on their feet most of the day
• Take-home earnings vary with size and type of
  business
• Many businesses are at home or on the street

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Wheres the register?
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Lots of other ICTs
No office, but plenty of paper
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Mobile Phones

• 13 cases so far -- 2 with mobile, 2 w/landline
• Top 3 reasons for not owning
• Its not necessary
• I cant afford it
• I cant learn how to use it (illiteracy)
• Public phones and shared/family mobiles reduce
  the need to purchase

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Internet/PCs

• 13 cases so far -- 0 own a PC or visit public
  kiosks
• Top reasons for not owning
• Its not necessary
• I cant afford it
• I cant learn how to use it (illiteracy)
• 3 of 13 had not heard of the internet at all
• Dont associate the internet and PCs with
  businesses of their small size and limited
  complexity.
• One wants his children to use PCs

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Contrasting PCs/Internet and Mobiles (some
implications)

• Mobiles - local and informal
• Internet - distant and formal
• Slater Kwami, (2005). Embeddedness and escape
  Internet and mobile use as poverty reduction
  strategies in Ghana
• http//www.isrg.info/ISRGWorkingPaper4.pdf

Where would a PC fit?
Mediated personal activities (photography,
instant messages, maps, music and video) might be
more appealing than productivity tools.
Size of business as proxy for internet need/appeal
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• Part II
• So what happens when microentrepreneurs purchase
  a mobile phone?
• Findings from Rwanda

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Previous research on microentrepreneurs and
mobile phones

• ICTs and SMEs
• Duncombe and Heeks (Botswana)
• Micros and Mobiles
• Molony (Tanzania)
• Vodafone (Africa)
• Other
• Geertz on the Bazaar
• Fafchamps
• Mead and Leidholm

• Phones are the information-related technology
  that has done the most to reduce costs, increase
  income and reduce uncertainty and risk.
• Phones support the current reality of informal
  information systems, they can help extend social
  and business networks, and they clearly
  substitute for journeys and, in some cases, for
  brokers, traders and other business
  intermediaries.
• They therefore work with the grain of
  informality yet at the same time help to eat into
  the problems of insularity that can run
  alongside.
• Phones also meet the priority information needs
  of this group of communication rather than
  processing of information
• Duncombe and Heeks (2001) Information and
  Communication Technologies and Small Enterprise
  in Africa Lessons from Botswana.

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Afsa, a hair braider

• Moved to Kigali alone, after losing her family in
  the Rwandan genocide
• Saved for months to buy the phone, so that
  clients could give her number to more prospects
• Mobile helped her business grow from 3 clients a
  week to 8-12 per week (each client pays 10)
• Plans to open her own salon
• Has an emergency fund saved in case mobile is
  stolen
• Also calls her cousins in Gisenyi.
• When I got the mobile, I began to see braiding
  as a business as work and could see a future

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Innocent, the neighborhood baker

• Makes samosas and cakes for clients around
  Kigali, Rwanda
• Started business with minimal capital uses a
  borrowed stove
• With the mobile, has expanded his customer base
• 30 of his clients are now outside Kigali, and
  can only contact him using the mobile
• He has increased his income and recently moved
  into a bigger house
• I want to be the McDonalds of Baking

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Whom do they calland why? 2/3 of calls are
personal, 1/3 business
Call partners (n1817)
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What happens when a microentrepreneur gets a
mobile phone?
Estimated Probability that a Call Partner is New
to a Users Network (Among Kigali
Microentrepreneurs, 2004)
Notes Estimates from logistic regression,
N1019 185 mobile-only owners and 92 mobile and
landline owners. Regression controls for size
of business, year purchased mobile, age,
gender, and education
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Synthesis The Information Environment of
Micro-Businesses

• Long-term goal a framework to represent distinct
  patterns of how micro-businesses approach
  communication and information processing

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• Thank You!
• Jonathan Donner
• jdonner_at_microsoft.com
• http//research.microsoft.com/jdonner/

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References

• Donner, J. (2004). Microentrepreneurs and
  mobiles An exploration of the uses of mobile
  phones by small business owners in Rwanda.
  Information Technologies for International
  Development, 2(1), 1-21.
• Duncombe, R., Heeks, R. (2002). Enterprise
  across the digital divide Information systems
  and rural microenterprise in Botswana. Journal of
  International Development, 14(1), 61-74.
• Fafchamps, M. (1994). Industrial structure and
  microenterprises in Africa. Journal of Developing
  Areas, 29(1), 1-30.
• Geertz, C. (1978). The bazaar economy
  Information and search in peasant marketing.
  American Economic Review, 68(2), 28-32.
• Mead, D. C., Leidholm, C. (1998). The dynamics
  of micro and small enterprises in developing
  countries. World Development, 26(1), 61-74.
• Molony, T. S. J. (2005). Food, carvings and
  shelter The adoption and appropriation of
  information and communication technologies in
  Tanzanian micro and small enterprises.
  Unpublished Dissertation, The University of
  Edinburgh, Edinburgh.
• Vodafone. (2005). Africa The impact of mobile
  phones. Retrieved March 9, 2005, from
  http//www.vodafone.com/assets/files/en/AIMP_09032
  005.pdf
• Whitney, P., Kelkar, A. (2004). Designing for
  the base of the pyramid. Design Management
  Review, 15(4), 41-47.