Sustainable Development using Big data and Cloud Computing
Big data and cloud computing are likened and equated to the “Industrial Revolution” in terms of technological innovations, structural change, and the sources of economic growth.
The uses of these technologies by businesses, governments, non-government organizations, and consumers are rapidly increasing in the developing world.
This blog shows how Big Data and cloud technologies implement the 2030 Agenda for Sustainable Development. In this blog, we review factors that are driving the Sustainable Development of Big Data and cloud industries in the developing world with examples.
Advancing on the capability of developing countries to take an active part in the Big Data and cloud ecosystems will, therefore, become increasingly important for accelerating progress in various targets, whether related to fighting hunger, mitigating climate change, improving health and education, or boosting productivity.
For example, an intriguing application of Big Data and the cloud has been in improving water supply availability and reliability. The deployment of Big Data and the cloud has greatly empowered customers and forced water providers to be more accountable, efficient, and transparent.
Tools and applications have been built to improve the performance of government agencies, water aid groups, and other actors as well as to provide information directly to end customers.
Various approaches have been used by a number of organizations involved in improving the water supply situation in the Global South. Some of them include the following.
In cities with irregular and intermittent water supplies, the startup company NextDrop utilizes data gathered from cellphone users to predict when water would be available.
Utility employees call NextDrop’s voice response system when they open water valves. The system sends a text message to local residents 30–60 minutes before water delivery.
Residents are contacted randomly by the system to verify the accuracy of the information that valve men provide. Updates from utility employees are used to generate Google Maps-based streaming visual data, which can be tracked by engineers to know valve status in real-time.
The NGO Water for People uses Google’s data-tracking technology to assess the real-time performances and functioning of its water supply projects.
Its cellphone-based app Field Level Operations Water (FLOW) helps to monitor the performance of water projects by providing a way to collect, manage, analyze, and display geographically referenced data. For instance, individuals on the ground can report information about broken water pumps.
Mobile devices are used to collect data and photos from water distribution points. They are then uploaded to a dashboard for real-time analysis. Data can be collected even in the absence of mobile connection.
In such cases, information is automatically transmitted when the devices are connected. The data collected this way are combined with visual map-based reporting tools. As of 2015, over 200 organizations including UNICEF and Millennium Water Alliance were reported to use FLOW.
The use of Big Data and cloud solutions provide an opportunity to leapfrog and overcome barriers related to information and communications technology (ICT) infrastructure and use.
The advantages of Big Data and cloud solutions can be enhanced further by combining them with other technologies and tools such as mobile phones and mapping applications to facilitate the flow of information in a diverse range of economic activities.
We present a framework for evaluating the attractiveness of Big Data and the cloud with reference to the evolving needs, capabilities, and competitive positions of developing countries.
Local Entrepreneurial Activities
Local entrepreneurial activities have helped cloud Sustainable Development. Innovation centers, such as Kenya’s iHub, have brought together software developers and entrepreneurs. South Africa’s Integr and MTN, and Zimbabwe’s Twenty Third Century Systems have launched cloud offerings in Sub- Saharan Africa.
MTN Nigeria, Globacom, Airtel Nigeria, and Etisalat Nigeria have also invested in data centers. These companies are deploying next-generation networks (NGN) and Business Intelligence (BI) software tools. For instance, Globacom was reported to spend US$1.25 billion to build an Internet Protocol (IP) network.
MTN is reported to spend over US$1 billion annually on its network. Likewise, Airtel and Etisalat spent over US$3 billion to improve their networks in order to make them useful for Big Data. As data volume expands, telecom operators can mine consumer data to enhance operational efficiency and increase revenue.
In July 2015, China’s Huawei started work on a 4,000 km fiber optic cable project, which is expected to connect Guinea and other West African countries by 2017. The cable will have seventy-seven exchange points.
All these Sustainable Developments are likely to have a major impact on the use of Big Data and the cloud in SSA economies. SSA’s homegrown data center industry has been growing rapidly. Countries such as South Africa are reported to have some high-quality data centers.
The director of the Ugandan Internet eXchange Point noted that while it was more attractive to host SSA-oriented data services in Europe or North America than in Africa in the past, it is becoming increasingly attractive to host the services in Africa.
Philanthropic and Charitable Causes
Funding from philanthropic and charitable sources have also helped enrich the Big Data and cloud ecosystems. One notable example of such activities is Vital Signs, which is a system that provides near real-time data and diagnostic tools in order to help relevant stakeholders inform agricultural decisions and monitor outcomes.
The system was launched in Africa with a grant provided by the Bill & Melinda Gates Foundation to Conservation International. This program is launched in several SSA economies in order to collect and integrate data on agriculture, ecosystems, and human well-being.
As of early 2016, Vital Signs research teams began collecting data in Tanzania, Ghana, Kenya, Rwanda, and Uganda. Some of the researchers conduct household surveys that deal with diver topics, such as nutrition, farming practices, and collection of water and fuelwood.
Other researchers collect data on the landscape. For instance, soil samples are sent to Nairobi- based World Agroforestry Centre lab to analyze the composition and measure organic carbon contents.
The diameter, height, and canopy of trees are measured in order to calculate the amount of above-ground carbon held by forests.
Measurements from satellite imagery are used to study land- cover changes such as the conversion of forest to farmland. Using a tablet, Vital Signs researchers upload the information to a cloud-based data management and analysis system.
The raw data are then translated into indicators and maps for decision makers such as government agencies, civil society organizations, and farmer cooperatives.
Vital Signs and the Tanzania Ministry of Agriculture, Food Security and Cooperatives (MAFC) have formed a partnership to develop an implementation strategy for Climate Smart Agriculture (CSA).
Note that CSA is defined by the United Nations’ Food and Agriculture Organization (FAO) as agriculture that can lead to a reduction in greenhouse gas emissions (GHGs) and an increase in agricultural adaptation and productivity.
These measures can strengthen national food security and achieve various Sustainable Development Goals.
A Low Degree of Digitization
In 2012, the Internet’s contribution to Africa’s GDP was estimated at 1.1 percent compared to emerging economies’ average of 1.9 percent and developed economies’ average of 3.7 percent.
Unsurprisingly, most SSA economies have been unable to realize the benefits of modern ICTs. For instance, being able to accurately count the number of children is the first step toward realizing the benefit of Big Data and the cloud in health care. Many SSA economies have a notoriously poor record, even in registering the children born.
Estimates suggest that only 44 percent of children under five years of age in SSA economies have been registered. The proportions are even lower in rural areas. In Eastern and Southern Africa, the proportion is reported to be 38 percent and it is estimated to be as low as 3 percent in Somalia.
Many people living in slums in countries such as Nigeria cannot provide birth certificates or utility bills required by banks. Financial institutions have imposed these oppressively burdensome requirements in order to prevent money laundering.
The adverse effects of low digitization are felt across all economic activities, for instance, due to the low digital- payment penetration, only cash payments are accepted in most transactions.
Consumers, banks, and governments in SSA economies thus suffer from the high costs associated with transactions on a cash basis. These include extra costs and inefficiencies that can result from manual acceptance of cash, record keeping, counting, storing, physical security, and transportation.
Regulatory and Human Resources
Regulatory barriers often act as an inhibitor in the diffusion of Big Data and the cloud in SSA economies. For instance, Liquid needed to negotiate for two years in order to receive the permits required for taking its cable South Africa’s Limpopo to Zimbabwe.
According to the Business Software Alliance, South Africa ranked twentieth out of twenty-four economies analyzed in 2013 in cloud-related regulations.
Other Sub-Saharan African economies are far behind. Only twenty- four countries were included in the study and South Africa was the only SSA economy included.
Other Sub- Saharan African economies were not ranked in the study but they are further behind. Sub-Saharan Africa economies thus must strengthen regulations and train human resources.
Primary sectors remain dominant in most LDCs. This sector, however, is a laggard sector in the adoption of new technologies. For instance, according to Wolfgang von Loeper, a former farmer, and the founder of the MySmartFarm app, the average African smallholder farmer produces only a quarter to half of the productive potential.
This low productivity of smallholder farmers is attributable to their low rate of adoption of modern technologies.
For instance, the Indian Big Data and cloud market for agriculture—despite some signs of progress— remains relatively backward compared to some other developing countries. The agricultural sector in India has not received the attention that it needs and deserves.
For instance, fruits and vegetables worth US$2 billion are wasted annually in India due to the lack of supply chain management and cold storage facilities. The agricultural sector is characterized by extremely low investments in modern ICTs.
For instance, in 2015, US$6 billion was invested in tech start-ups, of which agriculture start-ups attracted less than 1 percent of the total.
Several benefits have been identified that Big Data and the cloud can offer to the primary sector. For instance, just like in computer chips and other sophisticated industries, sensors in primary industries such as agriculture, oil and gas, and pulp and paper can be used to take detailed readings on process conditions.
Based on the readings, automatic adjustments can be made in order to reduce waste, downtime, and human interventions. According to Monsanto, the world’s biggest seed company, tailoring information and advice to farmers could increase annual worldwide crop production by about US$20 billion.
In the oil and gas sector, conditions of machines and equipment can be monitored, which can result in more effective maintenance and inspection based on industry as well as historical and real-time data.
Early warnings from sensor data can help replace planned maintenance with preventive maintenance, which can reduce downtime. Instant information from oil wells can provide information to make timely decisions on underperforming wells.
Detection of anomalies while drilling as well as during operation can lead to more effective decisions for cost savings.
Nonetheless, the transformative potential of Big Data and the cloud has not yet been realized in the primary sectors. For instance, an observation is that the oil and gas industry is not among the early adopters of digital technologies. BCG’s Grant McCabe, who is the team leader for “next-generation mining” noted: “There is enormous slack in many mining systems.
Surveying of potential oil drilling sites involves monitoring seismic waves moving through the earth. At a spot being surveyed, the patterns are examined to see if the waves are distorted as they pass through oil or gas.
In the past, a few thousand readings were taken at a potential drilling site. Advancements in Big Data analytics and other technologies have made it possible to increase the number of readings to more than one million.
This increases the accuracy of images of sites. Shell uses fiber optic cables to analyze the data generated by sensors. The data is transferred to its cloud servers, maintained by AWS.
Data from a potential oil field is compared with thousands of other sites around the world in order to make more accurate recommendations regarding the sites to drill. Production forecasting, which entails estimating the likely output of a reservoir, determines the resources that should be spent on collecting it.
Data- led decisions to allow operators to have more confidence regarding the efficiency with which oil can be extracted. Shell also uses Big Data to ensure that machines are working properly, which minimizes breakdowns and failure.
This is especially important as oil drilling machines operate in adverse conditions for long periods of time, which increases the probability of wear and damage. The machines are fitted with sensors, which collect data about various performance indicators.
Some Big Data- and Cloud-Based Applications in the Primary Sector
A number of different Big Data- and cloud-based applications have been developed and deployed in the primary sector of developing countries.
As noted above, tools such as Maine's “Enterprise Knowledge Graph” allows data analysts, business analysts, data scientists, and enterprise architects in an organization to collaborate.
Apps have also been developed for the forestry and fishing sector. Global Fishing Watch uses data and mapping to deal with environmental problems such as deforestation, illegal waste dumping, and oil spills.
The Pew Charitable Trust’s Eyes on the Seas project combines satellite data, fishing vessel, and other information to help authorities monitor fishing activity.
Likewise, Global Forest Watch uses a wide variety of data to spot illegal logging or other activities that damage forest resources. Public platforms such as Global Fishing Watch enable anyone to act as a watchdog and to report environmental crimes.
Such activities can press companies to engage in appropriate behavior and governments to pass and enforce environmental laws.
By checking AIS data used in tracking ships and vessel traffic services, it can be ensured that fishing ships do not enter banned or restricted areas.
The data can be used to improve knowledge about illegal fishing. According to the United States National Oceanic and Atmospheric Administration, 40 percent of the catch in some fisheries are illegal, unreported, or unregulated (IUU).
While activist organizations such as Global Fishing Watch are taking initiatives to track environmental offenses, they face a number of difficulties. For instance, vessels may turn off their AIS transmitters.
Buyers, however, could force fishing companies to become more compliant by insisting that their fish comes from vessels that have their transmitters operational at all times, thus being transparent about where they are fishing.
Relevant Policy- and Decision-Makers’ Interest in Big Data and the Cloud
Developing countries’ policy and decision makers in primary sectors have put Big Data and the cloud high on their organizational and national developmental agenda. They are gaining a better understanding of the transformative potential of Big Data and the cloud.
EDUCATION AND R&D
In recent years, this trend has changed. According to Markets and Markets, the global cloud computing market in education will grow from US$5.05 billion in 2014 to US$12.38 billion by 2019.
Big Data and the cloud are playing the central role in R&D and educational system in developing countries.
For instance, South Korea’s Ministry of Education, Science and Technology are implementing a program that will turn the nation’s classrooms paperless by 2015. This program will provide each student with a tablet and access to textbooks and other educational materials from a cloud computing system.
Before proceeding further, it is important to note that the conventional learning environments suffer from several limitations such as the lack of immediate feedback to students, the requirement for teachers to spend many hours grading routine assignments, and failure to take advantage of digital resources in order to improve the learning process.
A complaint that is often made is also that there are a number of drawbacks in the system of recruiting, training, supervising, and monitoring teachers in developing countries.
There is arguably the lack of proactivity of teachers to show students how to improve comprehension. It is also argued that the education system is mainly input driven.
The management of the education system at best focuses exclusively on logistical targets such as money spent and construction of schools. There is often no environment to provide support or incentives to produce high learning achievement.
Other challenges that have affected the quality of education in developing counties include a high rate of teacher absenteeism, the role of political patronage in the hiring of teachers, low technical quality, and the ineffectiveness of teacher training.
The upshot of these tendencies is that a large proportion of children and youths in developing countries are deprived of educational opportunities. For instance, in Africa, thirty million children fail to attend primary school education.
Some of the above-mentioned problems can be addressed by Big Data- and cloud-based learning solutions. For instance, Bridge International Academy, which provides e-learning solutions claimed that its tools have reduced unexcused teacher absenteeism to less than 1 percent. Technology use would lead to better monitoring and control.
If a teacher fails to sign into the tablet, Bridge can call the teacher to find out the reason. Data-driven approaches make it possible to analyze learning in real-time and offer systematic feedback to students as well as to teachers.
Big Data and the cloud have also facilitated R&D activities in developing countries. For instance, thanks to the cloud, it has been possible to have supercomputer power to access educational resources and to analyze data on disease spread pattern and climate changes. Likewise, Yahoo! has collaborated with the Indian Institute of Technology Madras (IIT-Madras).
It established a Grid Computing Lab, which allows researchers to access and conduct research on Big Data and cloud computing.
To take another example, scientists at University of Washington’s Center for Infectious Disease Research and India’s Goa Medical College used cloud computing and Big Data to conduct research into factors that make some malaria cases severe and life-threatening.
The research team analyzed data on sixty patients using advanced computing techniques to find relevant patterns. The project analyzed fifty parasite binding proteins and additional variables for each of the patients. Finding patterns in a large number of variables required the use of machine learning and other computing techniques.
Big Data- and Cloud-Based E-Learning Tools and Systems
Imported as well as locally developed Big Data- and cloud-based e-learning tools and systems are rapidly transforming developing countries’ educational landscapes.
Big Data and the cloud are being deployed at all levels of educational situations. In this section, we briefly review some of the e-learning tools and the organizations involved in developing them.
These activities are automated and centralized through the Academy Manager’s smartphone application and the Teachers’ tablet application.
DreamBox uses game technologies and immersive math courseware in order to make learning more fun and interesting. Algorithms adapt the learning experience to a student’s needs.
Brilliant | Math and science done right to make it possible for talented students in mathematics and physics to learn at their own speed. Its global massive online open courses (MOOCs) use social networks, videos, and community interactions to offer university-level classes.
Eneza Education has developed a mobile platform, which utilizes Big Data and the cloud to offer students access to quizzes, mini-lessons, and other educational contents. For instance, a student who wants to take a math quiz texts a code. The system texts back the student with math topics based on the national curriculum.
The student selects the topic and is then texted back with five multiple-choice questions. After the student finishes the quiz, the system provides feedback on the answers. Eneza also allows users to search Wikipedia using SMS. Students can also ask a teacher questions. Teachers can monitor their students’ performance through their accounts.
Schools can pay US$180 annually to have access to student data and teaching resources. Parents can get similar accounts for about US$15/year. Using the Eneza platform, students, teachers, parents, and school leaders can communicate with each other.
Some of the key challenges faced by Eneza in rural areas include the lack of devices and the difficulties of establishing and maintaining relationships with mobile network operators.
As of 2013, thanks to a partnership with Safaricom, the cost of taking a five-question test was three Kenyan shillings (about US$0.03). Before the partnership, the cost was twenty Kenyan shillings (about US$0.23).
Eneza wants to reduce the costs of its services to students. The company is developing other revenue streams such as selling data via subscription to schools, the government, and other stakeholders, interested in knowing students’ performance.
Coursera is a MOOC platform, which provides cloud-based education by offering courses in science, math, medicine, and other areas. The goal is to help students gain market-relevant IT skills.
The World Bank’s New Economy Skills for Africa Program (NESAP- ICT) and Tanzania’s Commission for Science and Technology (COSTECH) partnered with Coursera to launch an initiative to incorporate Coursera offerings to pilot the Youth Employment Accelerator Program Initiative.
In 2013, as part of its Global Learning Hubs program, the US Department of State’s Bureau of Educational and Cultural Affairs facilitated discussion to offer Coursera courses on a number of subjects in over thirty countries including China, India, Tunisia, Georgia, and Bolivia.
In June 2016, Coursera and the Indian School of Business (ISB) announced the launch of four courses on “Financial Markets and Investment Strategy.” The ISB had offered on Coursera’s MOOCs platform for the first time in 2014.
As of 2015, 40 percent of students who took Coursera classes were from emerging economies, which included 9 percent from Latin America and 4 percent from Africa.
Advance Learning Interactive Systems Online (ALISON)
ALISON provides cloud-based learning solutions. As of mid-2016, ALISON had 1.5 million users in Africa, and half a million were active every month.54 ALISON earns about 60 percent of revenue through certification and 40 percent by advertising.
In order to address the skills gaps, the Mountain View, California- based online education company Udacity works with companies such as Google, Facebook, Amazon, Github, and Cloudera to design courses.
Most of Udacity’s courses were created with at least one company’s help. Companies also offer material as well as experts to help build courses and provide internship opportunities for students.
They also give Udacity funding and resources. For example, Google gave Udacity US$4 million to create its Android Nanodegree program, which teaches “tools, principles, and patterns that underlie all Android development.”
Udacity entered into India in 2015. As of mid- 2015, India was Udacity’s second largest market in terms of the number of students. The company was enrolling at least 27,000 students in India every month.
India’s Flipkart has a partnership with Udacity to hire graduates based on capabilities built through, Nanodegree program. In 2016, Flipkart hired three students without in-person interviews based on their Nanodegree projects and Udacity profiles.
Big Data and Cloud Computing in R&D
A number of notable observations are reported regarding the use of Big Data and the cloud in R&D activities. Big Data and the cloud have strongly stimulated and facilitated R&D in the developing world. Here we briefly illustrate and summarize the use of Big Data and the cloud in two key developing countries: Brazil and South Africa.
Brazil’s universities and research institutes are using the public as well as private cloud services. As of 2015, the Brazilian research and education network Rede Nacional de Ensino e Pesquisa (RNP), which is Brazil’s academic Internet backbone, connected about 350 public and private universities and research institutions through a national backbone.
RNP’s data center also hosts its partner institutions’ applications including a web portal offering access to a large number of international scientific journals.
A number of organizations have been established to deploy Big Data in research activities. The Nelson Mandela Metropolitan University launched the new Centre for Broadband Communication in order to conduct research around fiber optic data transport for the SKA.
Also, the Consortium for Advanced Research Training in Africa has worked with Google to develop a virtual research platform, letting nine university partners, four research institutes, and eight partners in North America, Europe, and Australia collaborate on research, manage application processes, submit online assignments, attend webinars, and participate in discussion forums.
Medical research is being combined into huge searchable databases, which make it easier to assess and compare results.
By looking at databases with related prescription dosages, environmental patterns, and age-related trends, physicians can accurately pinpoint the most likely causes of a health problem such as a drug, weather, and humidity, or animal migration patterns.
Key Drivers of Big Data and Cloud Deployment in E-Learning and R&D
A number of forces and trends have given rise to rapid deployment of Big Data and the cloud in e-learning and R&D activities. Here, we discuss some of the key driving factors.
Some governments have launched programs to facilitate access to Big Data- and cloud-based education to the broader public. One such program is Rwanda’s one digital ID per child program. The goal of the program is to provide access to digital education content via Office 365.
Local Innovations and Entrepreneurial Efforts
Local entrepreneurial firms have been among the driving forces behind the digitization of educational activities in developing countries. BRCK is a high-profile example of a successful technology firm focusing on the education sector based in developing countries. BRCK is one of the first consumer electronics companies in Kenya.
As of 2015, BRCK had sold over 2,500 devices in fifty-four countries. As of March 2016, Kio Kits had been sold in schools in Kenya, Tanzania, and the Solomon Islands. There were also orders coming in from Sudan.
Transnational Companies’ Efforts
Multinational companies’ efforts correlate with the Sustainable Development and deployment of Big Data and the cloud in R&D and educational activities in the developing world. In April 2016, Google announced its plan and commitment to training one million Africans in digital skills.
Google supports Livity Africa to run two training programs: (1) Digify Bytes aims to provide young people with digital skills; and (2) Digify Pro is a three- month program aimed at digital specialists.
As of April 2016, the programs had been launched in Nigeria, Kenya, and South Africa. Google has also launched Home, which is an online-learning portal containing a wide range of digital skills courses that are available to anyone in Africa for free.
IBM has launched similar initiatives in Africa. In 2015, IBM announced a plan to expand its Africa Technical Academy and Africa University Program and invest US$60 million by 2017 to bridge the skills gap for technical talent in Africa. The goal of the program is to provide IT professionals with advanced skills in analytics, cloud, and Big Data technologies.
The training and certification programs are expected to benefit 1,000 faculty members and 35,000 students in eighty universities in more than twenty African countries by 2017.
In Kenya, for instance, IBM has partnered with the Kenya Education Network (KENET) in order to deliver advanced hands-on certification courses to faculty members and students in fifty universities.
IBM also has similar initiatives in other countries. For instance, universities in China, Qatar, Turkey, and other developing countries have participated in the IBM Cloud Academy, which allows access to a range of educational resources.
Education and R&D
Hewlett-Packard Laboratories in India has developed a cloud-based personalized education delivery system. It provides an online school hosting service, where a virtual school can be created using the infrastructure (servers, storage, communication, and e-learning software). Its facilities include audio/video sessions or online chats.
Vietnam started collaborations with IBM in 2007. In 2008, the US-based IT services company Computer Sciences Corporation (CSC) and Vietnam’s First Consulting Group Vietnam merged. CSC developed its Vietnamese operation as a center for cloud operational and support services.
The University of Information Technology, a member of Vietnam National University, is using IBM PureFlex System, IBM Tivoli Service Delivery Manager, and IBM Workload Deployer to build a Smarter Computing IT infrastructure that hosts the university’s virtual campus and deploys virtual education services.
The cloud is used to link government agencies, universities, private- sector research, start-ups, and other organizations.
As a final example, the Netherlands- based technology company Philips has teamed up with the Chinese Society of Cardiology to build the China National Cardiovascular Data Repository. Philips is also reported to be working on other databases in China.
International organizations are also a driving force behind the adoption of Big Data and the cloud in e-learning and R&D. The United Nations Educational, Scientific, and Cultural Organization (UNESCO) and HP’s “brain gain” initiatives entail cloud use to connect students with researchers abroad.
International collaborations and Sustainable Development of research capacity are some of the initiatives underway in developing countries to overcome resource challenges. For instance, CLR’s EKA supercomputer, which was the world’s fourth fastest in March 2009, was used for joint cloud research with Yahoo.
Discussion and Concluding Comments
Big Data and the cloud are likely to address some of the challenges related to education and R&D in developing countries. A number of encouraging signs have emerged to suggest that Big Data and the cloud can transform the R&D and educational systems in developing countries.
E-learning tools such as Kio Kit epitomize the evolving role that Big Data and the cloud can play in enhancing educational outcomes.
The above discussion suggests that the uses of Big Data and cloud in education are driven by philanthropic and charitable causes as well as motivated by profit-oriented behaviors. Various platforms used have different levels of sophistication of technologies.
Some platforms have been developed specifically for the developing world while others have been exported to developing countries following successful implementation in industrialized countries.
The above said, Big Data- and cloud-based learning solutions currently have a number of drawbacks and limitations. It is argued that teachers are “barely trained, unqualified, poorly paid.”
Students do not have access to their own tablets. Teachers are expected to all read the scripts aloud word-for-word and the contents are delivered on the tablet at the same time in each school every day. This “teacher turned- robot” would not be tolerated in most schools in most developed countries.
Kio Kit and Eneza are based on less sophisticated technological solutions, which are well-suited in the context of LDCs. In a developing country, a company's success depends on its ability to reduce costs.
For instance, Eneza is exploring a number of revenue streams in order to reduce the costs of student access. In addition, the systems need to consider the unique situations facing developing countries. For instance, the Kio Kit is a drop, dust, and water resistant.
A less discussed benefit is that the availability of a complete digital record of students’ achievement and performance significantly reduces the time to hire and recruit for potential employers.
For instance, Flipkart’s hiring decisions were based solely on the candidates’ Nanodegree projects and Udacity profile. In this way, Flipkart has eliminated the in-person interview for well-qualified students in Udacity’s Nanodegree program.
Prior theory and empirical research on the diffusion and adoption of e-commerce argue that firms based in developing economies face more barriers and obstacles to e-commerce utilization than those in industrialized countries.
Big Data and the cloud have been touted as a key mechanism for leveling the playing field for firms in developing economies, especially SMEs.
A key benefit of the cloud is that it helps to cut IT costs. The cloud also allows firms to benefit from a number of technologies without requiring deep knowledge and expertise about the technologies’ underlying principles and concepts.
This means that firms can focus on their core businesses instead of being impeded by technical difficulties and obstacles.
Such benefits are of special value to firms in developing economies due to a number of economic, technological, and cognitive barriers they face in acquiring and using e-commerce technologies.
Most SMEs are not in a position to buy servers and storage and hire the IT staff to support them.
The key activities associated with e-commerce such as designing websites, using search engine optimization techniques, managing email marketing campaigns, and inventory management and hiring data engineers to capture complex data requirements are prohibitively expensive to build in-house for SMEs, and even for large enterprises in developing economies.
Thanks to the cloud, firms in developing economies are in a position to provide more sophisticated e-commerce-related functionalities and capabilities, complex features, and user interfaces. For instance, multi-channel e-commerce platforms provided by CSPs such as ChannelAdvisor help to synchronize a retailer’s e-commerce channels and its marketing strategy.
It also helps the retailer to expand to additional channels and take the e-commerce channel to the next level. Likewise, the Chinese company Alibaba’s AliCloud provides e-retailers with analytical data about website activities and predictions for indicators such as future sales and the products that are likely to be in high demand in the next period.
Unsurprisingly Big Data- and cloud-based e-commerce activities are diffusing rapidly in developing economies, and serving a wide range of users and geographic areas thereby contributing to bottom lines of e-commerce firms.
Consider China, the world’s largest online retail market, in which e-commerce accounted for more than 13 percent of total retail sales of consumer goods in 2016.
A McKinsey Quarterly article asserted that e-commerce penetration in top-tier cities is reported to be about 90 percent of Internet users.
Unsurprisingly, there has been a rapid growth of data related to a number of indicators such as online shoppers, stock keeping unit (SKU) of products, response to price changes, promotional performance, and purchase habits of online shoppers. China’s major e-commerce players are using this data to build models in order to increase customer spending and retention.
For example, Big Data can help segment and identify customer groups at different life stages and target offerings in order to increase sales. Some e- retailers are also reported to be using machine learning to make decisions related to product lines and promotional activities.
In some developing economies, Big Data- and cloud-based e-commerce activities are expanding from Tier 1 cities to smaller cities and villages. For instance, the Indian e-retailer http://Jabong.com, which uses cloud offerings from Oracle, Adobe, and other CSPs, receives 60 percent of its revenues from smaller towns.
In 2012, Alibaba announced that its cloud-based app, Alipay, had established a rural business unit to reach non- e-commerce users in third- and fourth-tier cities and in rural areas.
The evolution of cloud-based e-commerce has been a key driving force behind the rapid growth of the cloud industry and market in some developing economies. For instance, in Brazil, e-commerce firms, especially those exhibiting big seasonal variations in demands, have been among the early adopters of the cloud.
In India, companies such as http://MakeMyTrip.com and Book my show are using Big Data and the cloud to provide e-commerce offerings to benefit from the country’s rapidly expanding e-commerce market.
For instance, Flipkart is reported to analyze twenty- five million rows of inventory data every day in order to make data-driven decisions. Big Data tools are reported to help e-commerce companies such as Snapdeal and HomeShop18 to generate 30–40 percent of their orders.
The rapid diffusion of cloud-based e-commerce activities in developing economies is also associated with and facilitated by global CSPs’ entry into these economies. Firms in these economies are using e-commerce apps developed by global CSPs such as Google, Microsoft, Amazon, and Dell.
For instance, the Indian online store Flipkart’s cloud infrastructure is built on Dell PowerEdge servers. Another Indian retailer, Zovi, uses cloud apps of Google, AWS, and GitHub. Likewise, as of September 2014, over 2,000 Chinese e-commerce companies.
Regarding established foreign CSPs’ entry in developing economies, it is worth noting that they offer more sophisticated applications and services compared to local CSPs. In order to illustrate this, let’s compare AWS and Alibaba’s cloud offerings.
According to Alibaba’s filing with the US SEC for an IPO, its cloud was capable of handling 3.6 million transactions per minute in 2014. On the other hand, Amazon’s data storage system reportedly handled 1.5 million requests per second in 2013.
Likewise, as of August 2014, whereas Alibaba had only three Big Data centers in China and a smaller one in Hong Kong, AWS had twenty-five big and fifty-two smaller data centers worldwide.18 Local CSPs such as Alibaba, on the other hand, are more effective in providing cloud-based solutions suitable for local needs.
This blog assesses the roles of Big Data and the cloud in stimulating the e-commerce markets in developing economies and their potential in overcoming various e-commerce barriers in developing economies.
Specifically, we focus on Big Data and the cloud’s roles in overcoming economic, socio-political, and cognitive barriers, which are identified as key hurdles in firms’ and consumers’ e-commerce adoption in developing economies.
Following the OECD, we define an e-commerce transaction as the sale or purchase of products over the Internet or broad computer-mediated networks.
Some Examples of Big Data- and Cloud-Based E-Commerce Applications Deployed in Developing Economies
Key features of the cloud have made it an attractive choice for offering e-commerce solutions by domestic and foreign companies to serve the developing economies.
Zovi, a Bangalore India- based e-retailer, uses Google’s cloud application for communication and document storage and AWS for the application (e.g., relationship-marketing software, chat, email, browsing, e-banking, security applications) and analytics (e.g., tools that allow the company to personalize services and product recommendations).
For codes that drive the platform/ storefront, it uses the free open source hosting platform GitHub.
The company's Chief Technology Officer (CTO) noted that it made more sense financially and operationally to invest resources on the core business of software development rather than on hardware infrastructure and required maintenance.
He further noted that AWS deployment helped the company avoid spending US$1 million in initial capital expenses for hardware.
Foreign multinationals operating in developing economies have also used the cloud to offer their products online. In 2012, the French cosmetics company Clarins launched an e-commerce site in Demandware. Before that, the company had sold its products through other outlets.
According to Laurent Malaveille, executive vice-president for global digital, CRM and e-commerce, a cloud-based e-commerce platform can effectively outsource the system’s day-to-day technical operations.
The company’s e-commerce group got more time to focus on key features such as the loyalty program that is linked to the company’s success in online sales. The company reported a double-digit sales growth on its Chinese site in the first six months after the launch.
The Supply Side: Providers of Big Data- and Cloud-Based E-Commerce Solutions and Infrastructures in Developing Economies
As mentioned earlier, global CSPs’ entry has been a key factor in stimulating cloud-based e-commerce in developing economies. Microsoft’s Azure platform
During peak business days, our site may be hard to access for online shoppers. Without the cloud service, we would have to spend lots of money and time to install new servers, and many of them would be idle for normal days when we don’t have sales. Azure helps us save the cost of buying servers, and expands our site access capability only when we need it.
As a further example, Brazil’s e-commerce website platform Shop Delivery, which allows businesses to create and run their own online store, uses Microsoft's Azure.
Canada’s Shopify offers cloud-based POS software for brick-and-mortar retailers (e.g., a cash register to input products, tally costs, and conduct financial transactions, communicate with inventory levels, etc.) as well as to e-retailers.
For e-retailers, it offers site templates that can be customized, integrated shopping carts, search engine optimization (SEO) feature, email marketing, inventory management, and analytics.
Users also gain from the m-Commerce shopping cart, payment gateways to authorize credit card payments and social media integration. In July 2013, Shopify teamed up with Singapore’s SingTel to offer e-commerce solutions in Asia.
Shopify started offering localized e-commerce solutions in India, Indonesia, and Malaysia. About 1,000 new stores were created in the last week of August 2013 on Shopify in India.
GS-based technology companies are evolving rapidly and are playing key roles in the Sustainable Development of Big Data- and cloud-based e-commerce. Alibaba, which is now the world’s largest e-commerce company, is among the most high profile companies in developing economies with significant operations in cloud-based e-commerce activities.
It has been taking a number of initiatives to become a one-stop shop for SMEs conducting business online.
It provides services such as online marketplaces, back-end e-commerce merchant services, and its own cloud-computing e-commerce platform.30 As of September 2014, its e-commerce platform offered traditional features such as online storefronts and an order management system.
The company is planning to augment the depth of its offerings by expanding features to support online merchants. In August 2014, AliCloud introduced a data mining and analytics product known as Open Data Processing Service (ODPS), which provides e-retailers with analytical data about website activities.
The users of the service are required to pay about US$100 per month. When merchants enter sales data, the ODPS algorithm scans them and provides predictions for indicators such as future sales and the products that are likely to be in high demand in the next period.
Alibaba’s cloud computing business unit has also launched Aliyun Search, which will help users to research various brands and products in order to make buying decisions. Alibaba’s cloud unit also specializes in data management which involves e-commerce data mining and processing to customization.
Suggestions from Aliyun Search are reportedly based on buying behavior and the results are presented based on an e-commerce point of view.
Experts say that Alibaba is in the best competitive position to develop an e-commerce-oriented search engine since it can combine Yahoo’s search algorithm with purchasing insights from Taobao and ETao.
Note that Alibaba’s Taobao is China’s largest e-commerce platform and ETao is a comparison shopping engine, which reportedly had over a billion product listings and more than 5,000 B2C and group buying websites.
The cloud-based app, Alipay Wallet, allows users to link Alipay accounts to local bank accounts. Users can also transfer money into it from a prepaid account. In this way, it facilitates online payment services in e-commerce.
In August 2014, Alipay Wallet announced that it had released more than sixty new APIs for third-party developers in order to build online storefronts.
This means that online storefronts can integrate Alipay’s under-lying programming functions into their applications, which is expected to make it easier and faster for the merchants to develop Alipay Wallet virtual storefronts.
Alipay started recruiting merchants for its wallet app in June 2014. In two months, it recruited over 1,000 merchants. Retailers who set up in-app store-fronts can sell and market products to Alipay Wallet users and gain access to data analytic tools that allow them to personalize product recommendations.
Another visible Chinese e-commerce company is JD.com, Inc. It uses Big Data to keep inventories low and speeds up delivery.
It also employs sophisticated Big Data-based models to run financing for customers. JD.com, Inc. has formed a partnership with Tencent to integrate e-commerce into the WeChat app.
Based on what a user is buying and searching at JD.com, Inc., Tencent can send coupons in real-time. JD.com, Inc. has also made heavy investments in the IoT.
Its 3 System Fridge has sensors on every shelf and an internal camera. It registers the time and date when food items are stored inside.
The data is fed to a smart screen on the fridge’s front side, which alerts when an expiry date is coming close. It can also order the next grocery list from JD.com, Inc. based on the fridge’s contents.
As of mid-2016, JD.com, Inc. was working with the Joy Link platform, which connects a 3 System Fridge with the consumer’s digital devices. The internal camera can be accessed from a smart device’s app.
A consumer thus can check the fridge’s contents even when they are away from home and order groceries. The smart screen on the front also provides opportunities for advertising for e-marketers.
The Delhi-based customer segmentation and marketing automation platform Betaout offers a SaaS-based offering for e-commerce companies. It provides real-time data and machine learning to segment customers, which can help e-commerce companies retain customers, increase conversions, and personalize user engagement.
Another example of an e-commerce solution developed in developing economies is uafrica.com. It provides a platform to build a cloud-based e-commerce site. Its initial offerings included basic online store-front services.
The company plans to expand to additional services related to payments, logistics, and marketing supports and then to a multi-channel selling solution.
An important feature of uafrica.com/ basic product offering is the ability to trade via mobile devices.
As another example, in 2014, Nigeria’s Delivery Science launched a SaaS-based model which provides automated proof-of-delivery, intelligent transportation management, and inventory management to facilitate firms’ e-commerce activities. Delivery science’s Big Data applications help e-commerce and logistics businesses track and manage deliveries.
Its proof-of-deliver product has been updated to integrate services such as simple transport management, point-of-sale, and inventory management and allocation of products.
India’s Wipro offers cloud-based e-commerce solutions, including omnichannel B2B & B2C e-commerce, platform transformations, and marketplace implementation. Note that an omnichannel strategy involves supporting all channels with a holistic view of customer experience.
Omni-channel interactions are integrated and connected, and aim to provide rich customer experiences across devices, channels, time, and context.
DISCUSSION, IMPLICATIONS, AND CONCLUSION
The analysis suggests that Big data and the cloud have a disruptive and transformative potential for developing countries. It has pointed to a large number of applications that in different ways can support the implementation of many Sustainable Development Goals.
At the same time, benefits cannot be taken for granted and various risks will also emerge as more and more economic activities shift online.
For developing countries to seize the full benefits from Big data and the cloud, they, therefore, need to address a range of policy challenges, and effective support will be required from the international community.
The Sustainable Development and deployment of Big data and cloud computing solutions across key industries and economies in the global South show strikingly diverse patterns. Some organizations such as China’s Alibaba have developed and deployed sophisticated and well-engineered Big data and cloud systems.
However, the majority of the uses in the developing world need low- cost solutions that fit their specific needs as well as economic and infrastructural contexts.
The uses of Big data and the cloud in most developing countries have so far focused on only a few economic sectors. Put differently, the adoption of Big data and cloud tools in these economies is far from widespread and from being effectively integrated into the broader economic sectors.
For instance, in China, the three Internet giants Alibaba, Baidu, and Tencent are believed to have the same level of caliber and skills in Big data as Western technology companies.
However, many of China’s other industries are lagging behind. Observers have noted that telecommunications, banks, governments, and medical institutions are far from harnessing the full power of Big data.
The integration of Big data, the cloud, and mobile computing technologies offer particular promise for facilitating economic productivity and social development in developing economies.
The Mifapro and other cases highlighted in this blog show that they can play a key role in promoting the well-being of disadvantaged groups, improve the functioning of markets for agricultural produce, and affect the allocation of resources.
Enhanced availability of information can also help to better evaluate the risks and uncertainties for various market participants.
Big data and the Cloud in Developing Countries in Relation to Innovation and Technological Progress
Many business and government policy initiatives directed toward improving innovation performance in Big data and the cloud areas have been launched by the private sector and national governments in developing economies.
As a result, some emerging economies are already evolving as hotbeds of innovation in these areas, perhaps most notably in China.
But excellence is also visible elsewhere. Some SSA-based firms are impressive in their ability to bring together innovations involving local capacity building. In a 2011 survey of the world’s top experts on Internet-related innovations, 7 percent viewed Africa as “the most innovative place for Internet-related technology.”
The corresponding proportions for other regions and economies were: Europe: 4 percent; China: 4 percent; India: 7 percent; and the Pacific Rim: 5 percent.
The experts viewed Africa’s Internet-related innovations as: “On-the-ground solutions designed by communities for communities.”2 India’s relatively poor R&D and innovation performance has led some experts to argue that entrepreneurial activities in the Indian ICT and offshoring industry have a “hollow ring.”
An Economist article notes: “India makes drugs, but copies almost all of the compounds; it writes software, but rarely owns the result . . . [it has] flourished, but mostly on the back of other countries’ technology.”
In view of the prominent roles of some Indian technology firms in the global arena, they have shown less impressive performance in generating innovative solutions to solve local problems.
This points to a general observation made by the United Nations, that developing countries should give due attention to leverage their indigenous ICT and especially software industries to serve local development needs and demands.
Foreign multinationals are also helping to stimulate and facilitate innovation in developing countries. For example, IBM built its forty-first global Innovation Center in Kenya’s Nairobi in 2013, which is first such Center in East Africa.
A key focus of the Center is on mobile and cloud technologies to solve local and global challenges, such as traffic congestion and better energy management.
As of early 2016, IBM Research Africa had about thirty-five specialists in Kenya in diverse fields such as computer sciences, engineering, and environmental science. In addition, the Nairobi lab had thirty- five software developers and trainees from local universities.
Innovations in privacy and security are focusing on smartphones and wearable devices. For instance, HID Global, which manufactures access control cards that are used to open doors in offices and hotel rooms, has teamed up with chipmaker NXP Semiconductors to expand the technology to work with smartphones and wearables (e.g., Apple Watches and Android Wear).
Due to privacy concerns, HID’s platform will allow individuals to decide the amount of information shared.
For example, a police officer can be given access to more detailed data than a liquor store worker that merely wants to verify a customer’s age. The owner sends it from his/her smartphone.
The company is pushing several Big data projects including digitization of Nigeria’s entire vehicle ownership system. The goal is to put the country’s more than fifty million cars onto a database that is accessible by a smartphone.
Big data- and cloud-based tools such as Sproxil’s MPA system can realize economies of scope by providing services in other sectors.
For instance, manufacturers have started using Sproxil’s MPA system to eliminate counterfeit products. A survey conducted by Schneider Electric showed that counterfeit electrical products account for 40–80 percent of their markets in African countries.
Some of the most counterfeited electrical products include sockets, cables, switches, and extension cords. In 2012, Nigeria’s hair- and skin-care product manufacturers and the Swiss company O’tentika started a collaboration with Sproxil, and East African Cables also employs Sproxil’s systems to fight counterfeits.
Challenges and Obstacles Associated with Big data and the Cloud
There are a number of challenges to overcome in the deployment of Big data and the cloud in the developing world.
Changing Skills Requirement
A major concern for harnessing the full potential of Big data and the cloud is the lack of relevant skills, knowledge, expertise, and experience.
In a survey conducted by the online recruitment website Monster Jobs - Job Search, Career Advice & Hiring Resources, 68 percent of employers in the Middle East and India believed that it was “extremely difficult” or “difficult” to hire talent for technology.
In another survey by Accenture among Indian enterprises, 53 percent of the respondents cited the lack of talent to be a key challenge in Big data and cloud deployment.
McKinsey estimates that India will need 200,000 data scientists in the near future. Snapdeal.com said that the company has not been able to find the coders and other Big data manpower it needs.
The company recognizes the need for world-wide recruitment for experienced programmers dealing with Big data, cloud computing, and the software for interacting with customers and suppliers.
Snapdeal was hiring cloud specialists from the United States as well as considering establishing a software development center in the USA, and buying firms there in order to capture the needed manpower.
According to the Internet & Mobile Association of India, there were 50,000–70,000 mobile developers in India in 2015. It is estimated that twenty million developers will be needed by 2020.
Skill deficits for Big data and the cloud often reflect broader problems of low educational quality, achievement, and standards. For instance, the inability of Vietnamese universities to train the next generation of highly- skilled workers has been a significant roadblock in this context.
Likewise, according to UNESCO, only 6 percent of Africa’s young people are enrolled in higher educational institutions compared to the global average of 26 percent.
A large number of organizations in Africa have had limited experience in data cleansing or standardization. There is thus a general lack of skills in the advanced techniques and technologies required for Big data. South Arica is estimated to require at least 200 data scientists to participate in the SKA alone.
High Data Creation and Data Access Costs
High costs are a major obstacle for consumers to engage in activities that generate data. Consider South Africa. Consumers with an income of R3,000 (US$225) a month, which is significantly above the national minimum wage, needed to work around eighteen hours in order to afford a 500 MB data plan.
Thus, even if consumers can afford smartphones, they often cannot afford to use them other than “dumb” phones.19 At the 2016 price level, only a quarter of Indonesians and 22 percent of Chinese could afford data consumption of 500 MB per month.20 From a pure cost perspective, in order to get everyone online, data prices need to fall by 90 percent or more.
As of 2016, developing economies had only seventy-seven Internet exchange points compared to 134 in the developed economies. North America with a population of 350 million had eighty-five IXPs compared to eight in South Asia with a population of 1,760 million.
Resistance from Vested Interests
Resistance from some powerful actors, who derive their market position and authority by controlling or selectively sharing access to information, can be a huge obstacle. Increasing access to data and information can threaten such actors’ current sense of power and authority.
Consider the lack of disclosure of data related to soil pollution in China. Between 2006 and 2010, China’s Ministry of Environmental Protection (MEP) and the Ministry of Land and Resources
Discussion, Implications, and Conclusion
(MLR) conducted surveys of soil pollution in China. A 2014 report indicated that 16 percent of about 10,000 testing points failed to meet the specified standards. Analysts argued that there are significantly more polluted sites than the testing points covered by the surveys.
One estimate suggested that China has between 300,000 and 500,000 polluted sites, or thirty to fifty times higher than the number of testing points covered in the surveys.
Implications for Technology Marketers
There are a number of implications for technology marketers and technology entrepreneurs.
Involving Relevant Stakeholders
It is important to identify broader relevant stakeholders, especially users, and increase their involvement in the design process. For instance, the experiences of mobile cloud-based e-learning in SSA economies indicate that teachers can play a crucial role in designing, developing, and implementing education-related technologies.
Likewise, in the Sustainable Development of healthcare applications, collaboration with end-users such as health facility staff, community health workers, or community leaders is essential to inform program design and improve implementation in the local context.
Considering Technologically Unsavvy and Less Savvy Users
In formulating policies and designing Big data- and cloud-based mobile computing solutions tailored to the needs of developing countries, it is helpful to consider the extent to which end- users are technologically savvy or less savvy. The cloud-based systems used in developing countries need to be technically as simple as possible.
In the MADEX system, for instance, pressing the send button is the only action that is required to be taken by midwives in order to send monthly reports. Likewise, an entrepreneur making a sale using Lula is required to press only a few buttons.
Involvement and Mobilization of Local Talent and Resources
The successful initiatives in Big data- and cloud-based mobile computing solutions in developing countries are mainly indigenously triggered, albeit often with the involvement of foreign companies. They are also oriented towards the active involvement of local communities and the mobilization of local entrepreneurial resources.
Regarding the benefits of Android phones over low-cost feature phones, the director of ICT innovation at the Grameen Foundation noted that the open source nature of Android allowed Grameen to hire its own developers to customize the phones.
The customization enabled an improved use of power and to make applications usable when the phones are not connected to a network.
A related point is that Big data- and cloud-related products and services offered in developing markets must recognize—at least in the short run—the local technological reality, such as low bandwidth and mobile-driven digitization.
Finally, the diffusion of Big data- and cloud-based mobile computing solutions is an issue that has policy implications for enhancing agricultural productivity and food security, creating rural employment and reducing poverty.
Big data- and Cloud-Related Innovations from the South for the South
Some innovations in Big data- and cloud-based mobile computing are from the South (developing countries) for the South, an encouraging trend in the new geography of global innovations.
As discussed earlier, a number of developing world-based technology companies such as Alibaba, Tencent, Green Dreams, and DataDyne have developed unique Big data- and cloud-based apps for the developing world.
In September 2011, Novatium services had over 40,000 users in India. Ericsson’s principal target groups for the applications are emerging markets, where most consumers cannot afford a PC. In developed markets, the company focuses mainly on young consumers.
As mentioned, Big data- and cloud-based mobile computing solutions hold a special appeal for developing countries. Such solutions provide the best opportunity to overcome barriers related to ICT infrastructures and level the playing field for MSMEs.
A number of philanthropic foundations’ support for these technologies have facilitated the diffusion of Big data- and cloud-based mobile computing solutions in developing economies.
Governments have a critical role to play in order to overcome barriers related to skills shortages, information gaps, poorly functioning markets, and inadequate infrastructures by adopting and implementing relevant policies, laws, and regulations. Such mechanisms are also needed to accelerate the Sustainable Development of the Big data and cloud industry and market.
Investor-friendly policies such as tax incentives, subsidized credits, infrastructure investment, market deregulation, and special startup programs can help attract Big data and cloud companies.
The Internet & Mobile Association of India (IAMAI) called for new tax incentives for locating data centers in a country: direct corporate tax rates and indirect sales taxes.
China’s Guizhou province (blog 1) also illustrates this point. Favorable policies are elevating Guizhou from being one of the most backward provinces to a prominent Big data hub. The province’s per capita GDP in 2015 was less than two-thirds of the national average. Guizhou offers various tax breaks and grants to technology firms.
Big data enterprises that meet certain requirements are exempt from corporate income tax for the first two years and benefit from a 50 percent corporate income tax reduction for the following three years.
The province also offers housing allowances to attract Big data talent. Companies can register in the Guizhou province, without setting up physical facilities.
In 2014, the governments of Guizhou province, Guiyang City, and Gui’an New District agreed to work together to allocate at least 100 million CNY annually during 2014–2016 to develop the Big data industry. In 2016, the Guizhou province announced plans to invest a further 100 billion yuan to develop the Big data and cloud sectors.
What is viewed as a disadvantage for an economy can actually be an advantage in the Big data era? For instance, the Taiwanese manufacturer Foxconn took advantage of Guizhou’s cool weather to establish an air- conditioning-free data center inside a cave located on a mountain in the province.
In light of rapid technological change, developing countries need to manage privacy and security matters in Big data and the cloud by issuing forward-looking regulations that manage risks associated with the evolution of new technologies.
For instance, an estimate by Gartner suggested that IoT security will account for 20 percent of annual security budgets by 2020 compared to less than 1 percent in 2015.
As was highlighted above, many governments in developing countries need to strengthen their legal and regulatory framework in the field of data protection and privacy.
Chinese companies such as Huawei, Alibaba Group, and ZTE have emerged as challengers to global cloud providers such as IBM, Amazon, and HP, initially in their domestic market but also internationally.
This phenomenon fits well with the theory of kaleidoscopic comparative advantage, which argues that “the nature of comparative advantage is becoming thin, volatile, and kaleidoscopic and is creating vulnerabilities for industries, firms, and workers.”
In the least developed economies, the potential opportunities and benefits have been limited by weak forward and backward linkages. Unsurprisingly, global IT companies have been slow to enter into these economies.
When they enter and intensify their activities, however, mechanisms such as labor mobility and stimulation of knowledge and technology transfer and other spillover effects may help local firms develop their capabilities—if they have a certain basic level of absorptive capacity.
Some applications of Big data and the cloud can help create a virtuous circle, which can act to positively reinforce the further Sustainable Development of the cloud industry. In Vietnam, cloud computing is being used to develop education programs, which would help further strengthen backward linkages.
Nonetheless, the overriding reality is that in developing economies, only a small proportion of organizations and firms are currently positioned to take advantage of advanced technologies such as Big data and the cloud.
IT-intensive industries (e.g., software development in China) or those dealing with IT-enabled processes (e.g., offshoring sectors in South Africa) are benefiting more from Big data and the cloud than most other economic sectors.
With improved connectivity and awareness, however, Big data and the cloud are likely to gain momentum in the developing world.
Big data- and cloud-based business models are still evolving. For local and global cloud providers, success in developing economies hinges on having business models that focus on affordability and consider the unique needs and capabilities of small-scale consumers (including MSMEs).
Governments in the developing world can collaborate with domestic and foreign cloud players to support the development of software and other products appropriate for local needs.
Cloud-related innovations and business models that leverage existing infrastructure and technologies in novel ways undoubtedly have potential benefits. Perhaps the greatest barrier for the adoption and effective utilization of the cloud in the developing world is the low PC penetration and a limited as well as expensive bandwidth.
This will favor the mobile-based cloud solutions in low-income countries. First, a cell phone capable of running a browser can already access mobile clouds.
Low-cost phone users can thus tap into applications that are currently accessible only through smartphones. Second, consumers in the developing world are using increasingly sophisticated devices.
Not long ago, there were very few applications available for developing world-based users such as China Mobile’s BigCloud platform and Salesforce’s “offline PDA.”45 Now, cloud-based mobile applications are becoming increasingly pervasive, which are set to transform the way mobile phones are used in the developing world.
Lessons and Implications
Big data and the cloud in most developing countries are still at an early stage of development.
Rather than viewing these technologies as a self- contained phenomenon, they must be seen against the backdrop of economic and institutional realities.
In theory, there are many possible uses of Big data and the cloud and several channels and mechanisms through which developing economies may benefit.
In practice, however, serious problems stand in the way of implementation and practical gains. Big data- and cloud-based innovations and business models are yet far from inclusive of SMEs in the global South, especially in the least developed, small nations.
Currently, Big data and cloud usage have been shallow, narrow, and vanishingly small in most developing economies. Small developing economies lack the infrastructure and economies of scale for wide and deep cloud adoption. It would thus be unreasonable to expect that the cloud would help the developing world catch up with the West in one big leap.
However, as economic and institutional factors improve, Big data and the cloud offer a possible avenue towards bridging the digital divide. The developing world thus should seek to exploit the opportunities afforded by the cloud while minimizing the associated risks to allow access to advanced IT infrastructure, data centers, and applications, and protect sensitive information.
Some potential impacts of the cloud in the developing world include productivity gains, the development of innovative services (e.g., personalized insurance), efficient supply chain management, implementation of B2B e-commerce, and the Sustainable Development of a skilled workforce. We argued that the cloud might erode the comparative advantage of incumbents.
While some developing world-based companies such as Alibaba and Zoho have challenged industrialized world-based multinational companies, in the present context, cases like those are extreme.
Future Research Implications
Before concluding, we suggest several potentially fruitful avenues for future research. First, in terms of geographic focus, we limited our analysis to a few major economies. For instance, some of the most high-profile and interesting Big data projects in the primary sector are being undertaken in Vietnam.
In the future, conceptual and empirical work scholars need to compare and contrast the cloud and Big data development processes in developing economies not considered in this blog.
In this blog, we reviewed several Big data and cloud-based solutions that have been developed locally as well as in the developed world.
The second area of future research might be to compare locally developed Big data and cloud solutions with those developed in the industrialized world in terms of a number of parameters such as costs and performance.
Barriers to E-Commerce in Developing Economies
As noted earlier, prior research has identified e-commerce barriers in terms of three forms of negative feedback systems: economic, socio-political, and cognitive.
GS-based firms face a number of economic barriers, such as the high costs of ICT infrastructure, equipment, and operation and the lack of purchasing power.
Prior research suggests that firms which use technologies that are more web-compatible and with a higher number and variety of web functionalities are more likely to adopt e-commerce. A larger proportion of firms in developing economies than in more industrialized countries lack such technologies.
In Africa, the lack of viable payment systems is considered to be a bigger hurdle than the lack of connectivity. There are also problems associated with the lack of economies of scale in small developing countries.
Slow Internet diffusion in developing countries can be attributed to market and infrastructural factors controlling the availability of ICTs. A large proportion of the population in many developing economies also lacks the basic prerequisites to Internet use.
Due to the above barriers e-commerce provides, in developing economies they are exploring alternative business models.
A large proportion of e-commerce in Asian economies such as China, Indonesia, and India takes place on a cash on delivery (CoD) basis. The CoD system, however, has some major drawbacks, especially from the businesses’ perspective.
In Indonesia, for instance, it is a common practice for customers to cancel their purchases after the products are delivered.
In other cases, customers order more than one unit of the same product (e.g., in different sizes, and colors), then choose the one they like after the products are delivered.
Socio-political barriers can be explained in terms of formal and informal institutions. They often tend to be more difficult and time- consuming to overcome than technological barriers.
The literature provides abundant evidence that legal barriers are among major hindrances to e-commerce in the developing world.
A survey conducted among Brazilian consumers indicated that the low e-commerce adoption rate was related to government regulations such as concern about privacy and security, lack of business laws for e-commerce, inadequate legal protection for Internet purchases, and concern over Internet taxation.
Likewise, in China, the lack of institutional trust due to the weak rule of laws was a major barrier to e-commerce.
Cognitive factors are related to the mental maps of individuals and organizational decision makers. Some analysts argue that cognitive barriers are more serious than other categories of barriers in developing countries. Many effects such as inadequate awareness, knowledge, skills, and confidence serve as cognitive feed-backs.
In developing countries, organizations’ human, business, and technological resources, a lack of awareness and understanding of potential opportunities, risk aversion, and inertia often lead to a negative cognitive assessment of e-commerce. Businesses are also concerned about handling demands during peak-load periods.
A final consideration with cognitive barriers is related to general and computer illiteracy and a lack of English language skills.
Discussion and Concluding Comments
While some of the barriers to e-commerce highlighted above could be mitigated through the use of clouds (e.g., the lack of human, business, and technological resources, the low level of computer illiteracy, etc.), other barriers (e.g., the lack of credit card, the lack of awareness and understanding of potential e-commerce opportunities), require broader efforts to overcome.
Some socio-political measures (e.g., by the Brazilian government and India’s NASSCOM) taken to facilitate the Sustainable Development of the cloud industry and market are likely to have positive effects on e-commerce.
Nonetheless, other sets of measures taken by national governments to protect economic and national security concerns, which are associated with the cloud’s radical and disruptive nature, are likely to have adverse effects on the healthy competition and may limit the choices available to businesses.
Buyers and sellers are thus likely to face different types of socio-political barriers to engage in e-commerce activities.
Reduction in control over customer experience and concerns regarding security in the cloud should also be taken into account to assess the potential of cloud-based e-commerce solutions.
Overall, the cloud has increased the confidence and capability and improved the competitiveness of firms in developing economies, especially of SMEs, to engage in e-commerce activities.
Cloud-based e-commerce infrastructures and applications, as well as retail solutions such as POS systems, are less expensive, which is especially important for SMEs. Another key benefit is that thanks to the cloud, businesses are less concerned about fulfilling demands during the peak data flow periods.
The experiences of economies such as China and India indicate that cloud-based e-commerce solutions provided by local and global CSPs have enriched the e-commerce ecosystems of these economies.
These CSPs’ cloud offerings have increased the breadth and depth of e-commerce offerings and have made it convenient and attractive for both buyers and sellers to engage in e-commerce activities.
In a further attempt to improve the ease with which firms can adopt cloud-based e-commerce, offerings by local and foreign companies are being bundled as solutions.