Summary

Over the past decade, information and communication technologies have created many new opportunities to include the BoP in economic value chains as customers, producers, entrepreneurs, or employees. A variety of private sector-led ICT initiatives involving the BoP, mostly in Asia and Africa, have achieved profitability while providing social and economic returns along the value chain. Such projects, often directly linked to income-generating activities for the BOP, have also demonstrated that this segment of the population is ready to pay for access to connectivity in general and broadband in particular.

In this context, the Inter-American Development Bank commissioned this study to understand how organizations can leverage broadband to better integrate the BoP in economic value chains. The objective is to show how the adoption of broadband communication technologies enhances productivity and competitiveness of market-based projects affecting the BoP in Latin America and the Caribbean.

This report analyzes 8 such cases in depth, highlighting their internal and external success factors, and draws key lessons for policymakers. The case studies will hopefully inspire companies and policymakers to replicate their models or more generally invest in broadband infrastructure, to help bridge the digital, social, and economic divide in Latin America and the Caribbean.

Key Insights

The case studies in this report are representative of the market-based approaches in the following three business models: direct-to-consumer, local agent and optimized internal process, which share some key success factors in terms of the design and delivery of a successful and affordable value proposition to their BOP clients. 

  1. Pre-testing:  before commercial launch, these businesses test all aspects of their service with end-users to ensure that the service is fully reliable from day one and to holistically answer their client’s concerns

  2. Use of technology. the models leverage technology to continuously improve services for end-users by standardizing processes, while constantly monitoring inputs and outputs and systematically acting on feedback

  3. Adaptation to infrastructure. the business models adapt the service to the available broadband infrastructure

Socio-economic Benefits of Broadband for the BOP

  1. Providing BOP end-users with better information and connection to the world

  2. Empowering BOP intermediaries, employees, and entrepreneurs. By providing support for complex tasks, broadband allows for hiring and training lower-skilled BoP workers

  3. Making inclusive businesses more efficient and hence allows them to better serve poorer customers

  4. Driving macroeconomic trends delivering social and economic benefits to the BoP

Lessons Learned for Policymakers to promote broadband-enabled businesses at the BoP

  1. Facilitating access to broadband infrastructure for businesses that serve the BoP

  2. Creating an enabling environment for BOP businesses that leverage broadband

  3. Providing direct support for the replication and scale-up of broadband-enabled businesses that serve the BOP