Whew, I think this was one of the most intense and contentious Technology Salons yet! After an hour of lively discussion around what “sustainability” and “scale” means to information and communication technology programs, we were just starting to pull back the layers around the topics.
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Sustainability Means Many Things
We quickly found that there were many definitions of sustainability and scale. Maybe too many, as these terms differed wildly across implementers and donors. It was even suggested that in the realm of ICT, development has an unbroken string of failures since none of the projects have scaled to the extent of mobile phones.
Before we cast out the entire body of work to date, much of ICT4D is done as experimentation – there is an expectation of failure while we figure out models that would work. At least we have mobile phones to show that there are ICT models that can scale, sustainably.
Donor Funding is a Sustainable Model
Mobile phones also show that beneficiaries must pay for at least a portion of ICT services. This both validates the service and makes it responsive to the beneficiaries. But they do not need to pay for all of it. In many cases, long-term external funding from donors, government, foundations, etc, can be the cornerstone of a sustainable program.
Great examples of this are in the education and health field. Universal primary education is a public good in many countries – paid in full by government entities which themselves can be funded indirectly by beneficiaries (taxes) or external funders (multi-lateral donors).
In the health field, health information is often created and supplied via free-to-beneficiary models supported by donors. And before anyone thinks donor funding isn’t sustainable, there are multiple countries that are in their third or fourth decade of multi-billion dollar multi-lateral donor agreements.
Different Time Horizons for Sustainability
Which brings us to time horizons. In development, we are often looking at projects with a three-year funding commitment, while in domestic private industry, three years is considered the initial start-up phase, with five years the usual time horizon for profitability. In the developing world, even successful organizations like Kick Start, consider 10 years a more reasonable break even benchmark.
So there is a gap between this pilot/start up phase, and a self-sustaining business model, that isn’t bridged by current financing. Donors are reluctant to fund “on-going operating costs”, yet venture capitol sees development investments as too risky, and development financing organizations rarely see above microfinance or below multi-million dollar financing.
Add to that gap, the reality that donor project requests don’t give much guidance around what they consider sustainability to be in their given time horizon, nor do many donor staff have the training to evaluate what models would be sustainable anyway, and implementers are often left to create fantasy sustainability plans and financing.
Sustainability Changes Over Time
In sustainability plans, there is also often the expectation that sustainable business models do not change, or if they do, they should always go from a donor or publicly supported program to one privately funded. In education, its often the opposite.
Educational innovations, like computers in classrooms, start with private schools which are funded through parental school fees. Then, once the benefit of that innovation is considered a basic necessity for a quality education, the government is expected to scale it up to all public schools.
It was suggested that while education and healthcare could be public goods, industries like finance or telecoms didn’t need public support. Then we were reminded of the recent troubles in the financial sector, and its billions in bailout funds handled by Central Banks around the world. In addition, Universal Service Funds helped spur innovation in rural telecoms that have come back to benefit all users.
How Do We Scale, Sustainably?
While we didn’t answer this question today, we did agree that the market works in the developing world. Mobile phones prove that if there is beer money, there is money for information and communication technologies. People will find a way to pay for what they consider necessities. Our challenge is to keep innovating, and nurturing that innovation, until we find another model that scales – lest ICT become a one-hit mobile wonder.
At least we can celebrate one small step towards scale – the Technology Salon is now replicated with Mobile Active’s the NYC Mobile Tech Salon. And like any good model, we’ve adapted to the local conditions – they’re meeting in the evenings, over beer, instead of the morning over donuts. Next, a San Franciscan conversation.