Digital Ecosystem

Digital Ecosystem

Making the Digital Revolution Work Better for Development. But Slowly.

Digital Ecosystem

Making the Digital Revolution Work Better for Development. But Slowly.

By Anna Ferracuti, Knowledge Management Consultant UNCDF-MM4P, Brussels
November 21 , 2017

Speakers panel at the Policy Insight conference ‘Making the Digital Revolution Work Better, Faster for Development”.

Brussels, BELGIUM - 

Two weeks ago, Friends of Europe organized a stimulating conference called ‘Making the Digital Revolution Work Better, Faster for Development’ and my main takeaway was that there’s nothing fast about it.

Two of the three panelists embodied two great examples of policy steering digitization, although with a different touch and context of course: India (G Subraiman, Tata) and Estonia (Jüri Sailenthal, Ministry of Foreign Affairs). The third panelist, Dana Schurmans, gave voice to a global youth who’s missing the digital ride because of different variables, almost as she was whispering that policy should take the time to look out of the window.    

Now take countries like Nepal, squeezed between India and China, Myanmar, whose population never had a touch-tone before the touch-screen, and Senegal, with its regional regulatory body (BCEAO). I guess we could say these countries should get inspired by India and, at the same time, learn from Estonia. But whatever it takes, how long?

Don’t get me wrong, I don’t want to demoralize anyone. Wait, read and tell me what you think.

Estonia: an incredible e-story

If you google ‘Estonia digital’ like I did, the first 2 results will resemble the following:

When Japan was looking for an example to develop MyNumber, their digital ID programme, the country turned to Estonia. The first e-resident of Estonia is a British journalist and the first person to apply for and be granted e-residency through the standard process is from the United States.

The e-Residency allows anyone anywhere with EUR100, from the Japanese president to yourself, to become an official e-Estonian and register your startup in 15-20 minutes. Even if you have never stepped foot in this icy Northern-European country and you hate black pudding.

Beyond residency, the blockchain technology developed by the Estonians, and operational since 2012, is now being used by NATO, U.S. Department of Defense and the European Union to ensure cyber security.

Estonia 26 years back…

After the implosion of the Soviet Union in 1991, the Republic of Estonia was on its knees, and an aid recipient country. Estonians didn’t have anything, and to rebuild their lives, they were given the equivalent of EUR10 each. The Estonian every-man didn’t have internet or a device to access it, they seemed stuck with the Soviet legacy. But they caught up with style.

Estonia 1994-2003

In 1994, the government passed the Information Policy and the Personal Data Protection Act. In 1996, they launched the Tiger Leap project, which brought internet and computers to schools, libraries and labs in both urban and rural areas. By 1997, 97% of Estonian schools were online. In rural areas, the young people had two kinds of leisure activities: sport and computer classes. People where educated to the modern technology from their young age to the Mr. ‘I, Daniel Blake’.

But bridging the digital divide was not enough for this small country. In 1997, Estonia launched e-Governance, in 2000 e-Tax. In 2001, the e-ID programme was combined with the X-Road, a secure data exchange system where each party shares information to offer services that are accessible through the e-ID.

In 2003, Skype was founded in Tallinn.

Estonia 2003-today

Skype launched a ‘Skype effect’ that made everyone believe that they could also make it as Estonians. And when Microsoft bought Skype in 2011, the Skype effect was money reinvested into Estonian startups, and foreign investors also investing in Estonian startups.

On the policy and regulation side, the digital roadmap didn’t slow down but added I-Voting (2005), Public Safety or e-Police (2007), Blockchain (2008), e-Health (2008) and e-Residency (2014). During this technology race, paper remained the comfy alternative. But when people tried the digital way, and saw that the digital system worked and was enforced top-down, they never went back.

Today, Estonia ranks third in Europe for the number of startups per capita, and most of the funders don’t come from Tallinn but from the rural areas.  Estonia also ranks first in the OECD PISA test and one every 10 students decides to study IT every year.

Then why don’t other EU countries embrace the Estonian way and be cool? Jüri Seilenthal commented that “other countries are very receptive on one-on-one but the problem is changing. The country has to want [change] and invest on it. [This includes] changing the legal infrastructure and the mindset of people”.

Was this change ‘Fast for Development’? For development for sure, being Estonian wasn’t cool in 1991 but it is cool now. But I’m not sure whether fast government actions are enough to claim that Estonia’s digital (r)evolution was fast, considering that we’re talking about a 26-year timeframe, one generation. And we should acknowledge that these actions were the expression of a spot-on long-term strategy.

Now that I’ve made you fall in love with Estonia, I want to go back to what Dana Schurmans said.

Youth and the digital divide

Dana Schurmans said that youth doesn’t have a preordained position in the digital divide. My parents think that I can fix their digital or electronic mistakes just because I’m young, like I was born with microchips or something.

If the Estonian government hadn’t considered access to internet as a fundamental right such as food and water, if the country hadn’t invested in computers and connectivity in every library, in IT classes and in an e-school system. If Estonians hadn’t invested in their youth, then do you think that I could have cited the rankings on startups per capita, PISA, and talked about Estonia at all? Maybe I wouldn’t have had Skype pinned on my pc taskbar.

One note on India, because I can’t not talk about India at all. And as at the beginning I said that Japan was looking at Estonia for the digital ID, I’ll do justice to the Asian Tiger now by saying that Japan is fluttering its eyelashes to Indian IT engineers. Does it come as a surprise? Indian IT engineers are among the best in class globally. Side question: where did they learn from? I mean, did they go to school in Mumbai or Karad?

Maybe education, literacy, skills development, however you want to call it, isn’t the must have to start the digital engine because someone else in the world may cover for you. But my takeaway from this conference was that every country that wants a sustained digital re-imagination needs to have a human capital that keeps the engine running and spikes the revs.

Cultivating a tech-savvy human capital is not fast

Maybe I superficially decided not to think through the ‘faster-than-what’ part - and please tell me if I’m wrong - but cultivating this tech-savvy human capital is a long-term investment that requires a clear vision at the government level, structural regulatory changes and a mindset shift. We’re then talking about something fun-da-men-tally slow. 

For more information, please contact
Anna Ferracuti
Knowledge Management Consultant, UNCDF-MM4P in Brussels
Additional Information
Anna Ferracuti
Knowledge Management Consultant, UNCDF-MM4P in Brussels

Creating a digital ecosystem for dairy farmers in Uganda

Digital Ecosystem

Creating a digital ecosystem for dairy farmers in Uganda

By Naomi de Groot, MM4P Knowledge Management Consultant in Uganda
August 30 , 2017

Godfrey and his wife.

Nabitanga, UGANDA - 

Meet Godfrey. Godfrey and his wife are dairy farmers in a small town in central Uganda. Together they own six cows and about thirty goats. His wife mainly looks after the goats, which are sold for meat and Godfrey looks after their cows.

These six cows give a little less than ten litres of milk a day. Every morning, Godfrey takes the milk to the Nabitanga Dairy Cooperative (see location). Here, milk from about 120 smallholder farmers is collected every day, which is then sold to a larger milk company that processes, packs and distributes the milk. Since a few months, these milk farmers can receive the money for their milk digitally on their mobile phones. Godfrey was one of the first farmers who signed up for this.

In ongoing efforts to introduce bulk digital payments in agricultural value chains across the country, UNCDF is also collaborating with players in the dairy industry. Such as dairy cooperatives for example, who collect milk from smallholder farmers, which is then sold to larger dairy companies.

“I used to get paid in cash. Every two weeks someone from the cooperative would call me and tell me that my money was ready for pick up. I would then get a boda-boda (local motorcycle taxi) to take me to Nabitanga, which is about three miles away. A round trip that costs me UGX 10,000 (around USD 2,75). Just to collect my payment of around UGX 100,000”,Godfrey explains.

Now that he gets paid digitally on his mobile money account, Godfrey explains that it offers him a lot of advantages:

  • the privacy that receiving his payment on his mobile phone gives him. No one else in line can hear or see how much he is paid;
  • the fact that he doesn’t have to spend money for transport just to collect his payment;
  • he no longer has to worry about his safety when travelling with a large sum of money;
  • and the cooperative also doesn’t have to worry about their security measures when it is payday, which is normally a big burden as there is no local police station.

Godfrey also explains how he spends his income. This information is crucial to develop improvements to the digital payments eco-system, such as digital school fee payments and merchant transactions.

“Generally, I spend money on groceries, school fees for our four children, the agro vet, clothes and for medicine when someone is ill. And I also try to save some money on my mobile money account. I like saving money on my phone because I can easily access it in case of an emergency.”

UNCDF is currently exploring opportunities to create a more compelling eco-system for digital payments in Nabitanga. This includes introduction of mobile money merchant payments at the agro input store, the local boda-boda repair shop and the pharmacy amongst others. This way people can keep their money on their phone account and there is less need for withdrawals, and thus reduces the cost that comes with cash-outs. Godfrey, however, says that he doesn’t mind the cash-out fees as these outweigh the benefits for him.

“Receiving my pay on my phone works perfectly for me. There are no big challenges. I can easily send some money to family or pay school fees to the head-master directly. Mobile money is mobile, it keeps moving with you, it travels with you”.

The UNCDF pilot of testing digital bulk payments in the dairy value chain will run for the next months. During this project UNCDF also supports the dairy cooperative in digitizing their administration and accounting system. More about this activity will be shared in the months to come.

For more information, please contact
Naomi de Groot
KM Consultant, Uganda
Additional Information
Naomi de Groot
KM Consultant, Uganda
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