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Mobile phone technology presents endless opportunities for innovation especially in emerging economies says Professor Michael Barrett, citing the success of M-Pesa in Africa as an example

A leading authority on information systems and innovation has praised a mobile phone-based solution that offers financial access for populations that have no bank accounts in emerging economies.

Professor Michael Barrett of Cambridge Judge Business School has been studying the application called M-Pesa (‘M’ for mobile and ‘Pesa’ a Swahili word for money), developed by Sagentia in Cambridge and Vodafone.

Professor Barrett’s interest over the last few years has been in the use of technology to support emerging or developing countries. He says he was particularly attracted to the M-Pesa initiative by the way in which a very large company, Vodafone, with an interesting corporate social responsibility (CSR) initiative, partnered with a small Silicon Fen company, Sagentia, to deploy and further partner with Kenya’s Safaricom mobile network.

“Two thirds of GDP (gross domestic product) is in services these days. Many large companies are looking at ways to grow through services and I was interested in the question of how large companies get the support of small companies to deploy and grow services in emerging economies so meeting needs of people in these economies and perhaps, overtime, not just be a CSR initiative but grow into a real business unit.”

He added that with minorities of the populations in Kenya and other parts of Africa having access to bank accounts there was huge potential to access the financial system.

“The opportunities are endless especially with a mobile-based technology. A platform that allows for lead users to discover new applications but also to take it on and, in a network effect, develop new businesses around the platform on their own, improvising, experimenting and creating.

“In Africa and other parts of the developing world there’s a lot of creativity – necessity is the mother of invention – where there is need, there will be a thriving, interesting and creative way of developing new innovations.”

Michael Barrett is Professor of Information Systems & Innovation Studies at Cambridge Judge Business School. His case study is ‘M-PESA Power: Leveraging Service Innovation in Emerging Economies’ (EECH no. 911-007-1), which was co-authored by Hyun-Seung Kim and Karl Prince.