How Can Resource Routing Use Existing Networks To Redistribute People And Goods For Greater Efficiency?

Jeremy Kirshbaum

In Uncategorized Posted October 27, 2016

Co-authored with Tessa Finlev, Research Director at Institute for the Future

This post originally appeared at iAfrikan.com, an excellent media brand that produces content, podcasts, events and publications about Afrika’s burgeoning science, technology and innovation sectors and how they affect culture, business and day to day life on the continent.

In Ghana, the distinctive honk of the ‘Fanice bike’ is nearly inescapable. In any transit station, market, or busy roadside you can expect to see young men riding them, calling out to the surrounding crowds. The product they sell – soft serve ice cream in a bag with the word ‘Fanice’ emblazoned across the front – is produced and distributed by Fan Milk and is enormously popular. It is cheap, delicious, and very, very easy to find.

The success of Fan Milk, however, is too great to be explained by the quality of its product alone. After all, inexpensive ice cream in convenient packaging is an intelligent (and tasty) innovation, but not exactly impossible to replicate. Fan Milk’s secret lies in its business model, which takes advantage of what most outside companies point to as a problem in sub-Saharan Africa – densely crowded markets and entrenched interpersonal networks.

Anyone can sell Fanice with zero down payment and without buying the product wholesale. There are depots near any market that ‘lend’ out Fanice and bikes to sellers, who then pay a flat fee for every bag of the frozen treat sold. A guarantor system makes this model possible – anyone who takes out a bike has to have someone vouch for their reliability. The system is very effective. In fact, according to Reuters, the market value of Fan Milk Ltd. in Ghana in 2013 was US$337 million.

Fan Milk is not a new company. They have been operating in West Africa for over 50 years, starting with Nigeria in 1960. Yet Fan Milk, with its ubiquitous supply, is an early signal of what we at IFTF call ‘resource routing’. Resource routing can be defined as the physical version of information routing on the Internet. Resource routing uses information technologies and networks to map where resources are located and needed, and develops ways to efficiently send them to fulfill demand at just the right time. This can include routing anything from employment to food to products to water.

Another more recent example of a resource routing business model can be seen in the launch of MTN, a South Africa-based telecom company, in Nigeria in 2001. Nigeria is an attractive new market for many companies, with its huge population and rising incomes. Despite a bumpy start, Nigeria is currently one of MTN’s biggest markets. When MTN first entered Nigeria, they tried to sell structured monthly plans paired with a device, as is typical in the United States or United Kingdom. The plan crashed and burned, so MTN went back to the drawing board.

When they re-launched they just sold airtime. No device, no plan, just airtime by the minute sold on scratch cards. The cards are sold wholesale at a discount to resellers, who set up small shops and kiosks throughout markets and transit depots in remote villages and within crowded inner-city housing. Without any centralized planning on the part of MTN, their airtime is distributed throughout the country to the places where people want it most. And this is what we mean by resource routing: sending the things we need to the people and places they are needed.

Neither of these examples of resource routing is surprising to someone who lives in, or has visited West Africa, and it probably looks similar to any number of corporate models across the continent. In fact, these models are not new at all; when a farmer travels to a market with more food than they can sell themselves, they sell it in batches to people who then go throughout the market sell the product to their own networks.

The fact that there aren’t many national-level structures for distribution has put Africa ahead of the resource routing game. As Jim Judson, the Managing Director of PZ Cussons Ghana, a pan-African consumer goods and appliances company, said during the Economist Summit in Ghana in 2013, “In West Africa, it’s not really about a country strategy, it’s about a city strategy.” This is true in part because of the comparatively fragmented supply chain and distribution network.

Although he was talking about West Africa specifically, it is a statement probably true of any place without strong centralized infrastructure or large multinational retailers. In the United States, Europe, and many parts of Southeast Asia and China, distributing goods and resources is a matter of contacting a single massive retailer or wholesaler, who then distributes the good throughout a wide geographic area. The retailer or distributor (or both) takes a cut or buys at a reduced price. However, in West Africa, and similar places, anyone trying to sell goods deals with thousands of independent retailers, usually without the help of a centralized distributor.

Today’s new resource routing technologies are an outgrowth of these models that use existing networks of people and goods and redistribute them for greater efficiency or scale. They are much more than peer-to-peer; the most effective ones usually have a central entity that interacts with groups of people or individuals, and actively facilitates their interaction with other networks in order to mobilize resources across fractured economic landscapes. This leveraging of personal networks in a coordinated way is what distinguishes services in sub-Saharan Africa.

In many ways, sub-Saharan Africa is already at the forefront of successful resource routing. The mix of dense urban spaces, poor infrastructures, and fractured economic landscapes has forced much of sub-Saharan Africa to figure out how to work effectively in a chaotic, low- infrastructure environment. Today, there is a massive opportunity for business in sub-Saharan Africa to become global leaders in resource routing. As a rising global population constrains resources and makes maintaining existing infrastructure more difficult, these techniques and models will be increasingly useful on a global scale.

The same strategies that Fanice, PZ Cussons, and MTN developed to sell goods in the region are at the base of the technology-enabled future of resource routing that will focus on distributing needed resources, not just selling products. New resource routing technologies.

The Perspective from 2012, Catalysts for Change Future Zone of Innovation

Back in 2012 it was clear that resource routing could have an outsized affect on poverty alleviation. After analyzing more than 18,000 game inputs from the Catalysts for Change game, Institute for the Future titled the eighth Zone of Future Innovation, Resource Routing.

Many players focused on the intersection of pervasive mobile technology, growing availability of the Internet, and the opportunity this provides to harness the power of the crowd. The idea was that through crowdsourcing and peer-to-peer networks, platforms could be developed to map existing natural and human resources, and then send those resources to where they are needed.

Over the past three years, this vision has begun to be borne out. Today, the most successful innovations are still SMS-based. The Internet holds enormous potential, but the first prerequisite is sufficient bandwidth, and the prerequisite to that is infrastructure. Because investments in the physical infrastructure needed for broadband Internet have fallen short, many useful tech-based tools still rely on SMS capabilities.

There are some clues as to where the future of resource routing is headed. As William Gibson said, ‘the future is already here, it is just not evenly distributed.’ Although no one can predict the future, by looking for current signals of change, we can get clues as to what may be coming next.

One such signal is Hei Julor, by SOFTtribe in Ghana. Hei Julor uses simple SMS technology to enhance security by leveraging community resources. To sign up, a customer pays an affordable monthly subscription of 15 cedis (about 5 dollars). Each subscriber to Hei Julor receives a unique phone number. In the event that there is an intruder in their home, the subscriber can send a blank text or call to the number, which triggers a series of reactions. First, it alerts ten neighbors in the vicinity that there is an incident, and informs them of the location. Second, an announcement begins broadcasting on a local radio station to bring further attention to the area. Finally, a private security company (which an individual subscriber could not necessarily afford) is dispatched to the scene. This makes theft deterrence easy and affordable for thousands of Ghanaians, with nothing more than SMS and some coordination on the part of SOFTtribe.

Another such signal is M-Farm. M-Farm was founded by three Kenyan women during a startup competition at the iHub, Nairobi’s innovation hub. According to their website, M-Farm is a ‘transparency tool’. Through M-Farm, a farmer can find out the latest wholesale market prices in 5 different markets through SMS, allowing for much better planning for farmers who live far from markets. In addition, farmers can sign up to sell their goods through M-Farm, and M-Farm helps match them with buyers. This process of matching is a really important step for effective resource routing. Imagine you’re a potato farmer and through M-Farm find out that prices are really good in a big market that’s an entire days travel away. By the time you’re able to bring your product to market, chances are high that it will already be flooded with potatoes and the price has dropped. For resource routing to reach its peak effectiveness, we have to be able to send resources at the very time they are needed.

Both M-Farm and Hei Julor serve very different purposes, yet they both use mobile technology to create and leverage networks for greater collective gain. There are many other examples of similar services. Esoko in Ghana, for example, provides a call center for farmers to access crop pricing information, as well as mobile applications for monitoring tools, marketing solutions, and advisory services.

Manobi in Senegal provides mobile SMS applications for sanitation and transport fleet optimization. Their sanitation services use a system to coordinate between households, waste collectors, and waste treatment plants so that households can easily communicate where waste is, and transport and treatment organizations can more efficiently manage waste disposal. Manobi uses similar technology to optimize transportation fleets, efficiently sending vehicles where they are needed. They use simple GPS transponders to track vehicles and goods, structured communication systems through SMS, and simple Internet interfaces so that dispatchers can easily use incoming information. Even M-Pesa’s mobile money transfer system in Kenya is a tool for resource routing.

We can see clear movement toward the Resource Routing Innovation Zone from the 2012 Catalyst for Change game. They foresaw a world in which crowdsourcing and peer-to-peer networks could possibly satisfy resource needs without central control or planning. And we see proliferation of efforts to more effectively route resources. But how far have we come with actually mapping the resources we have so that we can more effectively route them where they are needed?

Save the Elephants uses Google Earth, satellites, and GSM collars to track elephant movements in an attempt to prevent poaching. The Great Elephant Census is working to count every single elephant alive so we can know exactly how many there are and where they are. Global Forest Watch monitors forest landscapes worldwide in near real-time with the help of cutting-edge algorithms (that) harness the power of satellite technology and cloud computing to identity where trees are growing and disappearing. They couple their high tech efforts with crowdsourced and local stories of deforestation to build an accurate picture of tree locations.

Mapping global and local resources is a growing area of interest; being able to do so will unlock a new set of capabilities to address dwindling resources and equality of access. It will also unlock a new debate around ethics and power if we begin mapping, routing, and redirecting global resources across borders, disrupting current sovereignty norms that equate power with control of a specific geographic area.

Over the next few years, we will see resource routing mature and evolve. Products and services that use technology to facilitate existing human networks to create simple distribution and mapping solutions will flourish. New satellite and sensor technologies will allow us to better map our resources. As broadband matures, and technologies like mesh networking become more stable, we’ll also level up our capacity to have truly decentralized networks without any central organizing structure, government or otherwise, involved in mapping and routing of resources. Self-directed coordination like the Fanice seller, which has moved to coordination of networks through a central entity like with the companies and organizations named above, will move back to self-directed coordination.

For example, Village Telco is an early MESH network signal. They are creating an easy mesh network plugin for mobile phones so that people can connect within a village without a telecom infrastructure. MESH networks allow people to communicate phone-to-phone without having to access a cell tower, possibly eliminating the entire need for much expensive telecom and broadband infrastructure.

Even for financial transactions, cryptography could allow for easy transfers of value between people without relying on a central bank. Cryptographic technology (a la Bitcoin) is currently limited by clunky interfaces, the need for broadband access, and unstable value in virtual currencies. But as broadband access becomes faster, and the technology becomes easier to use, the ability to transfer money without fees will make it a clear win for adoption. Without the constraints of central banks and rigid currency exchange practices, cryptography opens up the door for entirely new ways to routing resources, possibly eliminating many financial bottlenecks.

Kitiwa in Ghana is already trying to get ahead of this curve by providing a Ghanaian cedi-to-bitcoin exchange. Kitiwa realized there was a need for bitcoin because of the difficulty of using PayPal in Ghana. They have already processed over US$90,000.00 in transactions. A testimonial on their website illustrates the possible uses: ‘I wanted to buy a domain name, but VISA wouldn’t process my order because I was in Ghana. I bought bitcoins on Kitiwa, and paid for the domain name through Namecheap. Thanks, Kitiwa!’

As you can see, resource routing has a broad and fuzzy future. It supposes a world in which we are able to map all our resources and send resources to where they are needed. But what resources do we map? Who decides? What tools are we using to map, and to send? How do we coordinate ourselves? We’ve seen examples of resource mapping through basic SMS functions all the way to expensive satellites. We’ve seen examples of sending, or routing, resources to the people who need them through low-tech bicycle based social networks all the way to cryptography technologies.

As we move farther into a world of resource routing we’ll have some tough questions to answers. Who determines who needs what? Is a personal desire to have something enough? How do we distribute natural resources in a fair way? How much centralization might be needed?

In the coming decades, the ethics of resource routing will take center stage as we begin to challenge current power structures and open up space for new forms of control and distribution. If used well, technology has the potential to help route resources effectively to those who need it most, in spite of infrastructure barriers, but we’ll face many possible conflicts along the way.