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What Silicon Valley can learn from Chile about making better apps

Correction: A previous version of this story cited the Plasma Water Sanitation System as being able to process 35 gallons of water in five minutes. The system installed in Fundo San Jose processes 35 liters of water in that time. This version has been corrected.

Contributor, Innovations

How many of the hundreds of thousands of mobile phone applications seek to do truly great things, such as lift people out of poverty or improve health care for the poor?

The App Economy, to date, has largely touched the lives of those living in the developed world. This is due, in part, to the high cost of smart phones but also because app development has lacked real vision and purpose. I have found that Silicon Valley, generally speaking, doesn’t build apps to save the world or lift people out of poverty. It builds them to sell Angry Bird t-shirts and generate lots of virtual currency.

Vivek Wadhwa is a fellow at Rock Center for Corporate Governance at Stanford University, director of research at Center for Entrepreneurship and Research Commercialization at Duke, and distinguished fellow at Singularity University. His past appointments include Harvard Law School, University of California Berkeley, and Emory University. View Archive

The folks at Centro de Innovación in Santiago, Chile, aim to change that.

I met Julian Ugarte, an Industrial designer, and his team during a recent trip to South America, and I was blown away by what they are trying to do. On March 22, Ugarte and Centro de Innovación launched a contest with Movistar — a mobile subsidiary of Telefonica — and TechoLab, a non-profit subsidiary of Un Techo para mi País (UTPMP) — a pan-Latin American NGO that dispatches youth volunteers on projects to eradicate the extreme poverty that affects tens of millions in Latin America. A $10,000 prize will be given to each of the creators of the best three apps that address problems facing the millions of people living at the bottom of the pyramid (BoP).

The UTPMP builds houses, provides clean water, and gives the poor tools and technologies to improve their lot in life. UTPMP executive director Javier Zulueta told me that his team, with the help of more than 400,000 volunteers, had constructed 78,000 transitional houses in Latin America and completed numerous other anti-poverty projects. An important aspect of these projects is that the volunteers seek to include the poor in the development process by encouraging them to contribute to and guide the projects benefiting their communities. In other words, UTPMP seeks not only to give them a fish but also a fish hook and pole, metaphorically speaking, to become more self-sufficient.

Zulueta said that UTPMP had inaugurated Centro de Innovación three years ago, to develop innovative new products, services and business for those most in need. Here’s the rub. The Center seeks to do this by treating these impoverished households as customers of real economic value rather than as charity cases needing a handout.

Last year, Ugarte’s team partnered with Alfredo Zolezzi, Chief Innovation Officer of Chile Advanced Innovation Center, to test a revolutionary pint-sized Plasma Water Sanitation System that his company was developing. This can purify 35 liters of water in five minutes using only the power required to light a 100 watt bulb. If the system can be mass produced for less than $100, as Zolezzi believes, and the output passes the lab tests to which it is being subjected, it has the potential to provide clean, safe water to billions in the developing world. The slum dwellers that I met in Santiago told me that they would routinely get sick and have to go to the hospital because of the bacteria in the water they used. Since the test unit was installed, no one in their community had gotten ill from a water-related disease, according to Rosa Reyes, community leader of the Fundo San Jose shantytown.

To promote open innovation, the Center launched Techolab, which functions as a distributed idea and business incubator that pools the collective brainpower of 9,000 registrants to identify and then nurture disruptive ideas. The best ideas get prize money as well as coaching from experienced scientists, product developers and technologists. Techolab takes a 5 percent stake in the companies. It is like Silicon Valley’s Y Combinator, but for those at the bottom of the socioeconomic pyramid.

Every three months, Techolab launches a competition aimed at solving a specific challenge and seeks to raise the quality of life for the poor. The first contest, run last year in partnership with the Chilean government, sought concepts to improve education, health care, and job opportunities. TechoLab registrants floated nearly 800 ideas and three winners got $60,000 to launch their projects. Subsequent contests have tackled other core quality-of-life issues. Meanwhile, UTPMP has also been working with Movistar on a project to afford high-speed Internet access to 1 million people considered part of the BoP cohort. Claudio Muñoz Zúñiga, CEO of Telefoinca Chile, told me that he believes this will greatly improve the lives of these people by linking towns and health care professionals in distant cities and empowering curious children to teach each other hard subjects.

Here’s where the threads come together: A contest soliciting ideas for applications that can run easily on simple computing platforms such as smart phones and cheap tablets because -- let’s face it -- the poor aren’t going to be buying MacBook Pros any time soon. Naturally, the 1 million households will be a perfect test market for these applications, which, by the way, should be businesses capable of making real profits. Some of the ideas that have rolled in, according to Ugarte, are already very interesting including a Groupon for simple staples, a ride-sharing application for short-term carpooling that can function on everything from simple mobile phones to full-blown smartphones, and a high-quality, easy ranking system for patients to grade doctors in the public health hospitals.

Granted, all of these ideas have likely been tried or are out there in the existing app economy. But none of them could function under the types of constraints we see at the BoP—namely, extremely low margins and extremely high efficiency. And, equally important, with access to the Internet, the people founding these companies, or their children, will increasingly come from the BoP themselves. And with their intimate knowledge of the cultural aspects of life at the BoP and the social mores and feelings of that market, this new generation of non-traditional innovators could well do a better job helping their brethren than the traditional hand out. Not to mention, they can do so using the vehicle of modern technology, fulfilling the true promise of the app store to serve those most in need.

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