One laptop to change the world

Ian Howard, Schulich School of Business, 30 March 2008

he has a dream...

the “movement of recorded music ... is about to become the instantaneous and inexpensive”

Negroponte, 1995

a disruptive technology

According to Christiansen:

disruptive technologies offer “a different package of attributes valued only in emerging markets

remote from, and unimportant to, the mainstream.”

source: Wikipedia

evolution of disruptionJan 2005 – OLPC project officially begins at World Economic ForumWorking Prototype WSIS Nov 2005Oct 2007 – Uruguay orders 100,000 unitsNov 2007 – OLPC begins mass productionJan 3rd 2008 – Intel quitsJan 5th 2008 – Give one get one laptops begin to be sent to Cambodia, Nepal...CES Jan 7th 2008 – Asus eeePC, Intel ...

1. the big push vs. pull development debate

2. the fortune at the BOP debate

A disruption in two camps

Debate 1: Push vs. Pull

Sachs Easterly

vs.

Debate 1: Push vs. Pull

Big Push

Utopianism

Planners

neo-colonialists

Non-Interventionist/

Pull

Pessimistic

Seekers

SimplisticSachs’s ... conviction [is] that Africa can be saved with $75 billion a year in Western aid. ... In Easterly’s opinion, the present generation of white philanthropists is no more likely than earlier ones to succeed in a self-appointed (and at times unwittingly imperial) mission of enlightening the Dark Continent. source: Economist's View

vs.

Debate 1: Push vs. Pull

“our breathtaking opportunity {is to} spread the benefits of technology... to all parts of the world...”

a quote taken by Easterly from Sachs' book The End of Poverty

is a $100 laptop affordable for the poor?

will they ever buy it?

(or will someone buy it for them?)

(or are cell phones the answer?)

Debate 2: is there a fortune at the bottom of the pyramid?

Prahalad's Principles for BOP Products:

1) Price

2) Hybrid

3) Scalable and Transportable

Prahalad's Principles for BOP Products:

4) Resource conservative

5) Functionality over form

6) Process innovations are just as critical as product innovations.

Prahalad's Principles for BOP Products:

7) Deskilling work is critical

8) Education of customers on product usage is key

9) Resilient and durable

10) Appropriate interfaces

Prahalad's Principles for BOP Products:

11) Innovations must reach the consumer (urban and rural)

12) Platform approach so that it can be added to and adapted quickly

Nov 2007: a $180 laptop is born

and Intel reacts with a $280 laptop

and ASUS with a $400 laptop...

is there a fortune at the bottom?

162,000 XOs have been sold since November!

(to US and Canadian consumers)

ASUS expects to sell over 5 million units worldwide (but not to the poor)

There is a fortune at the middle and top of the pyramid

Competition is good.

Two models have emerged, a commercial “pull” model that is attempting to straddle markets (Intel,

ASUS) – middle of pyramid

vs.

A “big push” market that is attempting to create a “blue ocean” (OLPC) – bottom of pyramid

The OLPC has certainly caused a disruption, but perhaps not the one that

Negroponte had wanted.

Is OLPC a BOP product?