Big Data Can Transform the Global South’s Growing Cities
Thursday, July 2, 2015 at 4:34AM 
The coming years will see a major new force dominating development: Big Data. The term refers to the vast quantities of digital data being generated as a result of the proliferation of mobile phones, the Internet and social media across the global South – a so-called ‘data deluge’ (UN Global Pulse). It is an historically unprecedented surge in data, much of it coming from some of the poorest places on the planet and being gathered in real time.
Big Data will have a profound impact on how the cities of the future develop, and will re-shape the way the challenges and problems of human development are handled.
Estimates by Cisco (cisco.com) foresee 10 billion mobile Internet-enabled devices around the world by 2016. With the world population topping 7.3 billion by then, that will work out to 1.4 devices per person.
Some estimates say 90 per cent of the digital data ever generated in the world has been produced in the past two years. It is also estimated that available digital data will increase by 40 per cent every year (UN Global Pulse). This digital transformation is being accompanied by another trend: the largest migration in human history from rural to semi-urban and urban areas.
This presents an unprecedented opportunity to make this rapid urbanization and social change smarter and more responsive to human needs, and to avoid the failures of the past, from over-crowding to crime, disease, pollution, unemployment and poverty. Some believe data collection can radically alter development by flagging up problems quickly, giving cities the chance to respond and correct negative trends before they get out of control. In short, to build in resilience by way of digital technology.
The latest region to see rapid industrialization and urbanization has been Asia – in particular China, a country that since the 1980s has simultaneously lifted the largest number of people in world history out of poverty and undertaken the biggest migration ever from rural to urban areas.
And now Africa is beginning to follow in Asia’s wake.
Unlike previous waves of industrialization and urbanization, Africa’s transformation is occurring in the age of the mobile phone, the Internet, personal computers and miniature electronic devices capable of more computing power than the computers used during the Apollo space programme (http://www.nasa.gov/audience/foreducators/diypodcast/rocket-evolution-index-diy.html). This changes the game significantly.
This 21st-century approach to urban growth is at its most sophisticated, and utopian, in so-called “smart cities.” These are built-from-scratch cities that use the “Internet of Things”, where everything, from lamp posts to garbage bins to roads are embedded with microchips and radio frequency transmitters (RFID chips) (http://en.wikipedia.org/wiki/Radio-frequency_identification) to communicate data in real time. By analyzing this data, cities can be responsive to human needs and mitigate problems – improving waste collection and traffic management, reducing crime and pollution. Services can be customized to residents’ needs and liberate them to spend more time on things that matter such as their own health, family, work and hobbies. Examples of these cities include Tianjin Eco-city (tianjinecocity.gov.sg) in China, Masdar (masdar.ae) in Abu Dhabi in the United Arab Emirates and Songdo International Business District (songdo.com) in the Republic of Korea.
These experimental smart cities are springing up in the East, and it will be the East – as well as Africa – that will see most of the action going forward. As the global management consulting firm McKinsey noted in its report Urban World: Mapping the Economic Power of Cities: “Over the next 15 years, the center of gravity of the urban world will move south and, even more decisively, east.”
Cities in the global South will be generating the new prosperity of the 21st century. And it is widely accepted that people living in cities have the potential to become very efficient economically while rapidly driving prosperity higher.
The McKinsey report says that “by 2025, developing-region cities of the City 600 (a list gathered by McKinsey) will be home to an estimated 235 million middle-class households earning more than (US) $20,000 a year at purchasing power parity (PPP).
“Emerging-market mega-and middleweight cities together – 423 of them are included in the City 600 – are likely to contribute more than 45 percent of global growth from 2007 to 2025 (http://www.mckinsey.com/insights/urbanization/urban_world).”
The world’s future prosperity is going to be found in the urban, the digitally connected, and the middle class.
Tracking all this digital change is the UN Global Pulse. UN Global Pulse (unglobalpulse.org) was started by Secretary-General Ban Ki-moon in 2009 with a mandate to study these changes and build expertise in applying Big Data to global development. UN Global Pulse functions as a network of innovation labs where research on Big Data for development is conceived and coordinated. It partners with experts from UN agencies, governments, academia, and the private sector to research, develop, and mainstream approaches for applying real-time digital data to 21st-century development challenges.
Unlike major technological trends of the past, this one is not restricted to the industrialized, developed world. Through the spread of mobile phone technology, billions of people are now using a device that constantly collects digital data, even in the poorest places on earth.
From an international development perspective, Big Data has five characteristics, according to UN Global Pulse: it is digitally generated, passively produced by people interacting with digital services, automatically collected, can be geographically or temporally traced and can be continuously analyzed in real time.
Sources of Big Data include chatter from social networks, web server logs, traffic flow sensors, satellite imagery, telemetry from vehicles and financial market data.
The key to using Big Data is combining datasets and then contrasting them in lots of different ways and doing it very quickly. The purpose? Better decision-making, based on an understanding of what is really happening on the ground.
This data exceeds the capability of existing database software. It is either too much, or comes in too quickly, or can’t be handled using current software technology. Tackling this problem is creating a whole new wave of opportunities for those working in information technology.
As technology and processing power continue to improve, the cost of wrestling with this data and putting it to use is coming down.
The data can be analyzed for patterns and hidden information that before would have been too difficult to gather. This approach has been used by big companies such as WalMart (walmart.com), but it has cost them a large amount of money and time.
Pioneers in Big Data include search engine Google, email and search provider Yahoo, online shopping service Amazon and social media service Facebook. Many supermarkets use Big Data to analyze the way customers behave when they are shopping, combining it with their social and geographical data.
But new developments in hardware, cloud architecture, and open-source software mean Big Data processing is more accessible, including for small start-ups, who can just rent the capacity required on a cloud-based service (http://en.wikipedia.org/wiki/Cloud_computing).
In the past, governments and planners had a ready excuse as to why they could not keep on top of ballooning urban populations and the chaos they brought. They could just throw up their hands and say “We do not know who these people are or what to do about them!”
This excuse does not work in the age of the mobile phone. It is now relatively easy to deploy the power of the networked computing inside mobile phones to map urban slums and identify the needs of the people there. Parse that data, and you have an accurate account of what is happening in the slum – all in real-time.
Making sense of all this information is creating its own new industries as innovators, entrepreneurs and companies step forward to chart this brave new world.
Historically, significant improvements in human development have occurred only after large-scale gathering of data and information on the actual living conditions of the population. For example, prototypes of today’s infographics (http://en.wikipedia.org/wiki/Infographic) – informative visual representations of complex data – were created during the great attempts at tackling poverty and disease in Europe in the 19th century. Today’s masters of this technique include the Swedish doctor, academic and statistician Hans Rosling (gapminder.org), whose dynamic infographics are renowned for changing people’s perceptions of global problems.
UN Global Pulse notes “much of the data used to track progress toward the Millennium Development Goals (MDGs) dates back to 2008 or earlier and doesn’t take into account the more recent economic crisis.
“While this may feed a perception that there is a scarcity of information about the wellbeing of populations, the opposite is in fact true. Thanks to the digital revolution, there is an ocean of data, being continuously generated in both developed and developing nations, that did not exist even a few years ago.”
UN Global Pulse believes Big Data can be used to protect social development gains when crises strike. Rather than undoing decades of good development work and human development achievements, Big Data can help to create agile responses to crisis as it happens.
UN Global Pulse believes the same data, tools and analytics used by business can be turned to help the public sector understand “where people are losing the fight against hunger, poverty and disease, and to plan or evaluate a response.”
By David South, Development Challenges, South-South Solutions
Published: June 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
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By David South, David South, South-South Cooperation, South-South Solutions, UNOSSC, big data, cities, digital, global South, innovation, innovator, urban in Agenda 21, Cities, Data, David South Consulting, Development Challenges, South-South Solutions, Digital, GSSD Expo, Global South-South Development Expo, ICT4D, Internet, Media, Northeast Asia, Solutions, South-South Cooperation, Southern Innovator Magazine, Trade, UN Innovator Stories, UNDP, UNDP Innovator Stories, UNOSSC, United Nations, Wireless, Youth Indian Business Model Makes Green Energy Affordable
Thursday, July 2, 2015 at 4:30AM
The technology already exists to provide renewable energy and electricity to all the world’s poor. The trick is finding a way to pay for it and to make it sustainable. Many innovators are experimenting with business models to reach the so-called Bottom of the Pyramid (BOP) cohort, and the 1.2 billion poorest people in the world who do not have access to electricity (World Bank) (http://tinyurl.com/n9p3f5x). A further 2.8 billion have to rely on wood or other biomass materials to cook and heat their homes.
The International Energy Agency (iea.org) believes US $48 trillion of investment will be needed between now and 2035 to make sure energy capacity matches rapid population growth.
In the influential book The Fortune at the Bottom of the Pyramid (http://www.amazon.co.uk/Fortune-Bottom-Pyramid-Eradicating-Poverty/dp/8177587765), the late professor C.K. Prahalad (http://en.wikipedia.org/wiki/C._K._Prahalad) advocated seeing the poor as people with needs and assets: consumers who just need the right goods and services designed for them. It was a change from thinking only of the world’s wealthier populations as consumers, and revealed a market worth billions waiting to be tapped.
Energy is key to development and improvements to living standards. Yet energy poverty plagues much of the global South, especially in Africa and particularly in rural areas.
The World Bank has identified 20 countries in developing Asia and sub-Saharan Africa which will require a massive effort to expand access to electricity and safe cooking methods for poor households.
Around 80 per cent of the people without modern energy live in rural areas. While progress has been made since 1990 in expanding access to energy, it has failed to keep pace with population growth. According to the World Bank, the pace of expansion will have to double to meet the 100 percent access target set for 2030.
To avoid increasing global carbon emissions while achieving this goal, many are looking to renewable energy sources and technologies to reach these last groups of people.
As pointed out by the Institute of Development Studies (http://www.ids.ac.uk/news/can-renewable-electricity-reduce-poverty), “The global threat posed by climate change means that we also face the pressing need to use less carbon in existing energy systems. Making progress on both energy poverty and decarbonization requires a sharp increase in renewable electricity production, both on and off-grid.”
The institute identified four necessary factors for access to renewable energy to benefit poor people.
1. Once electricity is generated, it needs to be reliably fed into the system.
2. This additional supply must be made accessible, and affordable, for poor people.
3. Increased electricity consumption then needs to translate into poverty reduction.
4. Increased electricity supply can indirectly reduce poverty by boosting economic growth.
India’s Simpa Networks (simpanetworks.com), started in 2011, has a business model it believes will do the trick. Simpa has developed a clever way to increase access to home solar power systems for the poor, by allowing customers to purchase the system in gradual “rental” payments over time. The customers eventually come to own the power system outright, and from then on to generate electricity for free. Since the payments are small and incremental, it suddenly becomes within the realm of poor households to afford modern solar energy systems.
This is called the “Progressive Purchase Pricing Model” – similar to “prepaid”, “pay as you go” and “installment plan” models. Under this model, customers make a 10 percent down payment and receive the home solar system. The customer then buys a time-specific amount of energy for between US $1 and US $10 with their mobile phone. The orange lock box on the power system has a keypad on the front. When a code is punched in, it releases electricity (http://simpanetworks.com/our-solution/).
In increments, while the customer purchases energy for home use they also eat away at the cost of the system, until eventually it is paid off, usually at a total of US $300. Systems have an expected life span of 10 years.
With few cash resources, poor households usually are not capable of saving enough cash to purchase a full energy system for their home. Instead, they rely on buying kerosene for lamps or using battery-powered torches and lamps when they can afford it.
In 2012, Simpa teamed up with SELCO India (http://www.selco-india.com/) – a social enterprise providing sustainable energy solutions and services to households – to sell 1,000 home solar power systems, expanding to 5,000 systems in 2013, according to a case study from not-for-profit Synergie pour l’Echange et la Valorisation des Entrepreneurs d’Avenir (SEVEA) (sevea-asso.org). The goal is to reach 25,000 units sold by the end of 2014, proving this business model can scale. Ultimately, Simpa wishes to mega-scale its approach and reach 1 million households over the next five years.
Simpa believes take-up will be quick because this model reduces risk, both for the seller and for the bank that may loan the cash for the 10 per cent down payment. Simpa acts as a go-between for the system sellers such as SELCO and the banks. Simpa believe this business model reduces the risk of non-payment or loan default and has the right incentives in place to encourage the customer to hang in and keep making payments until they own the system outright. Customers enjoy the benefits of clean energy 24/7 from day one and can see clearly the connection between the energy they receive and the small payments they make. For those who default from paying, the system is taken from their home.
When the system was piloted in Karnataka, India, all loans were successfully repaid.
Simpa Networks is a venture capital-backed technology company. It hopes its approach will attract investors, particularly social investors, seeking a low-risk investment in helping expand energy access.
By David South, Development Challenges, South-South Solutions
Published: June 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Follow @SouthSouth1
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African Hotel Boom Bringing in New Investment and Creating Jobs
Thursday, July 2, 2015 at 4:21AM
Africa is experiencing a boom not seen for decades. The IMF forecasts economic growth in sub-Saharan Africa of 6 per cent in 2014, compared to global growth of 3.6 per cent.
And this boom is getting an additional jolt of support from the world’s multinational hotel chains. January 2014 saw Africa’s largest hotel chain bought by global giant Marriott (marriott.com). For decades major global multinationals shied away from Africa, but today they are battling to get a place in Africa’s fast-growing economies and to serve the growing middle classes.
Marriott is leading the way by investing US $1.5 billion in 25 new hotels equalling 5,000 rooms. To boost capacity further, Marriott is taking over South Africa’s Protea group (proteahotels.com) and its 116 African hotels.
“We have 25 Marriott brand hotels under construction in seven countries in Africa that will come on stream over the next four years,” Alex Kyriakidis, the chain’s president for the Middle East and Africa, told Bloomberg (bloomberg.com).
The new hotels “are going to bring us into Benin, Gabon, Ghana, Ethiopia and Mauritius. With our existing hotels plus those in the pipeline and those Protea operates today, we will be in 16 countries in Africa by 2017.”
Bloomberg calls what Africa is experiencing the “fastest pace of hotel development in the world”.
“Our mission here is to grow, grow, grow,” according to Kyriakidis.
Meanwhile, a further boost is coming from the US $5 billion Angolan sovereign wealth fund, Fundo Soberano de Angola (fundosoberano.ao/language/en/). It will be investing in hotels and commercial infrastructure in sub-Saharan Africa, according to Bloomberg. This could include 50 sub-Saharan African hotels in the next three years.
“We believe there’s a lot of investment interest in Africa,” said Chairman Jose Filomeno dos Santos. “It has a lot of mineral potential, almost a commodity hub. We believe this interest will remain there for the coming years.”
Little thought is given to the role hotels play in development, yet they are a critical development tool for any country wishing to move up the economic ladder. As the quality of hotels improves, they tend to become key gathering and meeting places. Conferences and seminars can act as catalysts for change, attracting people from around the world. When quality hotels are in place, then the top-drawer global conferences will come to town, in turn bringing new tourist income for local businesses.
Anyone who has stayed in a hotel in Africa knows that standards are variable: the pool with dirty water, the power cuts, the food hygiene standards that might not match what people are used to at home. This is what international hotel chains can change. Not only do they demand the highest standards in their own establishments, they also push up standards at local competitors, as all of them battle for the attention of visitors.
Africa has been overlooked by the large global hotel chains and brands since the end of the colonial period in the 1960s and 70s. Africa was considered too poor, too chaotic, too dangerous and too much hard work for it to be worth the effort.
But now the tune has changed. With Africa’s population over a billion, and many of the continent’s economies experiencing rapid growth while also urbanizing, conditions are fortuitous for the hotel trade.
The situation has changed in the last decade, for a variety of reasons: debt relief, a rise in commodity prices, expanding trade and investment with China and the global South, and a growing middle class — all slowing the growth of poverty. Africa is still notorious for under-investment in infrastructure and has a long way to go to catch up to the fast-moving economies of Asia. But greater optimism is leading to greater real investment. And the world’s large hotel brands are the latest to join in the rush to Africa.
Large chains including Four Seasons, Ritz-Carlton, Hyatt and Kempinski hope to open 300 new hotels in Africa over the next five years. The number of hotel beds is set to increase by 30 per cent by 2018.
Four Seasons Safari Lodge Serengeti in Tanzania (http://www.fourseasons.com/serengeti/) is the first investment in Africa by the Canadian brand. Four Seasons is known for its luxury, upmarket city hotels and has kept with this tradition by building the largest and most luxurious safari lodge ever built in Africa.
This is having a knock-on effect on African hotel operators. The surge in investment is giving these local operators the right incentives to create African brands and to raise their game.
Nairobi in Kenya has become something of a test market for high-end boutique hotels. Already a city benefiting from its status as an international development hub, home to many agencies including the UN Environment Programme’s sprawling and verdant headquarters (unep.org), it has also become a corporate headquarters for Africa and has a large U.S. presence (nairobi.usembassy.gov). This means lots of people coming to the city to do business and attend events, creating a market for better quality accommodation.
The Kenyan-owned, 156-room Sankara Nairobi Hotel (sankara.com) boasts of having the best wine list in Africa and claims to be a five-star hotel. It also capitalizes on being close to the international airport and the UN’s Nairobi headquarters.
“There’s an appetite for something local that’s different and, for the first time, there’s the confidence and funding to bankroll new developments,” said Sankara Hotel Group director Rohan Patel to Wallpaper Magazine. “Africans don’t want a theme-park African hotel, with prints of ‘the big five’ on the wall. That’s condescending. Nor do they want a New York-style hotel. They’ve probably been to New York. They want modern, connected Africa.”
Elsewhere in Nairobi, the Kenyan-owned Tribe Hotel (tribe-hotel.com) is looking to expand to meet growing market demand.
“The market for new, authentic, yet modern African hotels is growing,” manager Michael Flint, who previously ran New York’s Ritz-Carlton, told Wallpaper.
“We’ve been so successful here we are building a new 187-room hotel in Nairobi. We’ve taken over a boutique hotel called Westhouse (westhouse.co.ke). And we’re looking to expand further, with properties at the airport and on the coast. Who knows what will be next? Tribe will be a mini empire.”
In Rwanda’s capital Kigali, the Rwanda Marriott has ambitious plans. Rwanda was ripped apart by ethnic genocide in the 1990s that killed an estimated 500,000 to 1 million people (http://en.wikipedia.org/wiki/Rwandan_Genocide). Now, the country’s economy is booming and its hotels are getting an upgrade.
The Akilah Institute for Women (akilahinstitute.org) in Kigali has been helping in training women for the hotel sector. They sent trainees to Dubai and Doha to learn how to do hotel service the Marriott way.
Starwood (starwoodhotels.com), a competitor to Marriott, is hoping to grow its African hotel investment by 30 per cent as well. It will be done through the Sheraton, Aloft, Le Meridien, St Regis and Four Points brands. The first St Regis has already opened in Mauritius.
Neil George, Starwood’s head of African development, believes “Africa is the final frontier. It’s adventurous.
“I would rather arrive in Kinshasa and work out how to do a hotel there than do it in Frankfurt,” he told Wallpaper.
The Hyatt (hyatt.com) brand is now running the Hyatt Kilimanjaro Hotel in Dar es Salaam (http://daressalaam.kilimanjaro.hyatt.com/en/hotel/home.html), Tanzania. Peter Norman, Hyatt’s African head, is working on opening a Park Hyatt in Zanzibar (http://zanzibar.park.hyatt.com/en/hotel/home.html) and another Hyatt Regency (http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-newsArticle&ID=1863203&highlight=) will open in Arusha and a further 140-room Hyatt in Senegal (http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-newsArticle&ID=1863204&highlight=).
The 200-room Villa Rosa Kempinski in Nairobi (http://www.kempinski.com/en/nairobi/hotel-villa-rosa/welcome/), boasting an outdoor heated pool, and the Olare Mara Kempinski (http://www.kempinski.com/en/masai-mara/olare-mara/welcome/) luxury camp in the Maasai Mara will also be joined by projects in Ghana and Equatorial Guinea.
Kempinski also has properties in Chad and the Congo, has bought the Hotel des Mille Collines (https://www.millecollines.net/) in Kigali and aims to operate 20 hotels across sub-Saharan Africa.
British entrepreneur Richard Branson has the Mahali Mzuri in the Maasai Mara and it is seen as a stylish role model for other hotels. The local landowners and herdsmen have been included in the business, benefiting from the hotel and helping to preserve the local ecosystem.
EasyHotel (http://www.easyhotel.com/news/2011/africa0.html), a low budget hotelier, is also rapidly expanding across southern Africa.
By David South, Development Challenges, South-South Solutions
Published: May 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Follow @SouthSouth1
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China’s Outsourced Airliner Development Model
Thursday, July 2, 2015 at 4:19AM
Many emerging-market countries in the global South have built up substantial foreign currency reserves. Much of this has been a response to past foreign currency crises, particularly the Asian Crisis in the late 1990s (http://en.wikipedia.org/wiki/1997_Asian_financial_crisis).
But what to do with this often vast wealth? How should it be used to improve economies, human development and people’s lives?
China — whose foreign currency reserves reportedly total US $3.7 trillion — is showing one approach, using the wealth to build industrial capability in sectors traditionally associated with more developed countries, such as aircraft manufacturing.
China is seeking to build a commercial airliner able to compete with the sector’s longstanding giants, Boeing and Airbus. To ensure it can do it to the highest global standards, it is outsourcing much of the parts manufacturing to the best around the world, while keeping the overall design and assembly in China.
Comac, or Commercial Aircraft Corporation of China, Ltd. (http://english.comac.cc/products/ca/pi/), is located outside Shanghai, China’s rapidly growing global business hub. The modern Comac factory is working on building China’s first commercial airliner, the C919. It is also making a smaller jet, the ARJ21.
Comac calls the outsourcing method an “airframer supplier” model. Suppliers provide the components, and Comac designs and assembles the plane.
Countries making the parts include the United States, France, Ireland, the United Kingdom, Austria, Switzerland and Japan.
Comac’s dream is to graduate to the top tier of global aircraft manufacturers alongside Boeing and Airbus, which together account for 70 per cent of the global commercial airliner market (Fortune).
At present, this is just an aspiration, with a detailed life-sized plastic model of the C919 – right down to the intricacies of the cockpit instrument panels — all there is to show for the project.
Founded in 2008, Comac ambitiously aims to be making and selling commercial airliners within a decade. State-owned Comac is an amalgamation of various aviation companies, as previous efforts to make a commercial airliner in China had failed. China has invested US $3 billion in the venture.
The name, C919, breaks down as C for China, 9 because it sounds similar to the Chinese word for forever, and 19 because it will carry 190 passengers.
The idea is to target the city-to-city aircraft market which is dominated by Boeing’s 737 and Airbus’s A320.
China saw huge aviation growth in the first decade of the 21st century, and is expecting that trend to continue. The country is on track to surpass the United States for airline-passenger traffic by 2032 and is already the world’s second largest market (Fortune).
To feed this fast-growing market, China will need an estimated 5,580 new planes by 2032, costing US $780 billion in today’s prices (Boeing).
China has decided, rather than committing this vast investment to purchasing all the aircraft from overseas manufacturers, to instead use this wealth to build a competitive aircraft manufacturing industry to rival the big leaders. This would create jobs in the country and create a multiplier effect as airline industry investment helps the domestic economy.
China already has years of experience manufacturing aircraft parts for foreign companies. Comac makes the tail section of Boeing’s 737, as well as manufacturing cargo door frames for the Airbus’ A320.
More importantly, since 2009 China has assembled A320s for Airbus under license in Tianjin — 130 of them to date (http://www.airbus.com/company/worldwide-presence/airbus-in-china/).
The C919 is similar in some ways to the Airbus A320. They have similar dimensions and are made from similar materials. Comac has hired over 100 foreign experts to help with the project, to ensure quality control meets global standards.
By trying to compete with the world’s best, China is entering a very competitive and complex marketplace. The complexity of modern aircraft (an average of 4 million parts in a typical commercial airliner) means there is no room for mistakes or cutting corners. And this is where China has to change its reputation. The country has experienced several high-profile manufacturing failures due to corner-cutting and corruption. These have included tainted milk products, poorly constructed buildings that collapsed, and high-speed train crashes.
The C919 is an opportunity to show high standards and high quality can be the norm in Chinese manufacturing.
In the 1970s, China designed and built the Y-10 (http://en.wikipedia.org/wiki/Shanghai_Y-10) in Shanghai, modeled on Boeing’s 707. But it was a failed programme, shut down after the plane flew once.
Those behind the new plane acknowledge that this is a learning experience for China: “Comac must learn how to walk first before running,” Comac chairman Jin Zhuanglong told Fortune magazine.
“I’ve always maintained the point that we won’t be a big challenge for Airbus or Boeing in the short term,” said Jin, who used to work in China’s satellite and spacecraft industry. “But in terms of some single product, we might be competitive.”
There’s no doubt that China needs planes. China will have constructed 80 new airports between 2011 and 2015 (China Daily). It has already received 1,000 Airbus planes for domestic carriers, quickly bringing fleets to international standards.
State-owned airlines, including China Air, China Southern and China Eastern, dominate 80 per cent of flights. All stand to be a ready market for the C919, which will sell for around US $75 million – US $10 million less than the next generation Boeing 737 and the Airbus A320 (Fortune).
Ireland-based budget airline Ryanair is considering being the first Western airline to purchase the C919.
Ryanair CEO Michael O’Leary is confident people will fly on a Chinese-made plane: “Ninety-nine percent of my passengers don’t know what kind of aircraft they are getting on,” O’Leary told Fortune. “You trust the Chinese to make computers and medical devices, and the question is, Would you get on a Chinese aircraft? Of course!”
Brazil has shown it is possible. The Embraer (embraer.com) aircraft company, based in São José dos Campos, is now a US $6 billion a year success story that has won the public’s trust.
Comac’s C919 project is a risk, but the rewards could be enormous.
By David South, Development Challenges, South-South Solutions
Published: May 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Follow @SouthSouth1
Google Books: https://books.google.co.uk/books?id=NhQ9BQAAQBAJ&dq=development+challenges+may+2014&source=gbs_navlinks_s
Slideshare: http://www.slideshare.net/DavidSouth1/may-2014-development-challenges
Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s
This work is licensed under a
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Brazilian Design for New Urban, Middle-Class World
Thursday, July 2, 2015 at 4:12AM
Countries across the global South are experiencing rapid urbanization as people move to cities for better economic opportunities — and this massive social change is creating new business opportunities. Those who recognize how fundamentally people’s lifestyles are changing will be those who will benefit from this big shift in populations.
Finding ways to live well in urban areas will be critical to determining whether this move repeats past urban failures — from the favelas of Brazil to the slums of India — or introduces a new way of living that is exciting and colorful. Design and designers will be critical to this change.
One young design company in Brazil, Sao Paulo-based furniture studio NUUN (nuun.nu), is attempting to resolve a dilemma common across the rapidly urbanizing global South: How to create a design aesthetic that fits with the new way of living and being?
The company consists of designer and founder João Eulálio Kaarah and architects Renato Périgo and Carolina Sverner.
Périgo specializes in furniture and interior design, while Carolina Sverner worked with respected Japanese architect, Shigeru Ban (shigerubanarchitects.com), who is well known for designing buildings and houses made from paper and for creating easy-to-build homes for people after a disaster has struck (http://www.ted.com/talks/shigeru_ban_emergency_shelters_made_from_paper).
A collaboration among upcoming artists, designers and architects, NUUN tries to infuse its designs with a sense of “brazilianness”. Brazilianness is a modern aesthetic, made for modern lifestyles in the new urban landscape, that draws on aspects of Brazil’s culture and environment.
The young studio’s first collection of furniture offers simplicity. Called Eos, it tries to blend urban cosmopolitanism with raw nature. Brazil is known for its jam-packed urban cities as well as its vast expanse of Amazon rainforest. In practice, NUUN’s look is a mix of contrasts redolent of what used to be called brutalism: concrete mixed with glass, steel, wood and semi-precious gems. NUUN takes inspiration from NASA’s Earth Observation System (EOS): the collection vibes off of space satellites, antennae and the dry soil of the backwoods. NUUN says that “despite its Martian features, [the collection] is as Brazilian as it comes”. There is the modular Panorama sofa (http://nuun.nu/products/panorama) in five colors, capable of being re-shaped to fit a variety of living arrangements. A glass-topped coffee table with a concrete base and a side table with a carbon steel metallic structure to complement the sofa.
Elsewhere in the world of Brazilian design, footwear brand Grendene S.A. (http://ri.grendene.com.br/EN/Company/Profile) has become one of the world’s largest producers of footwear and made one of its founders a billionaire. And Grendene has boosted its international success by turning to another Brazilian success: supermodel Gisele Bündchen (giselebündchen.com.br).
Grendene began in 1971 and owns various successful shoe brands, including Melissa (melissa.com.br/en/), Grendha, Ilhabela, Zaxy, Cartago, Ipanema, Pega Forte, Grendene Kids and Grendene Baby.
It has six industrial zones with 13 footwear factories and can produce 240 million pairs of shoes a year. It undertakes all areas of production— from making its own moulds for the shoes to creating PVC (polyvinyl chloride) (http://en.wikipedia.org/wiki/Polyvinyl_chloride) – and handles its own distribution.
While Grendene is already a well-known shoe brand in Brazil, it wanted to expand its presence overseas to increase profits. Named after the two brothers who founded the company, Alexandre Grendene Bartelle and Pedro Grendene Bartelle, Grendene started working with supermodel Gisele Bündchen in 2002 to help her launch her own line of affordable flip-flops, iPanema (ipanemaflipflops.co.uk). The brightly colored sandals with elaborate patterns became an instant success.
But do celebrity endorsements really work? In the case of Bündchen and Grendene, the answer is yes. According to Forbes, 25 million pairs of the flip-flops and sandals are sold every year, accounting for 60 per cent of Grendene’s annual exports of about US $250 million.
Brazil was able to produce 864 million pairs of shoes in 2012, up 5.5 per cent from 2011.
Of these, 113 million pairs were exported to the United States, Argentina and France.
Brazil, like many other countries, has had to work out how it could compete with cheaper shoe imports from China. The strategy it chose was to target the growing number of middle-class people both in Brazil and elsewhere, as well as the high end of the market.
In 1979, Grendene created the Melissa brand, which has now become a coveted style leader. It collaborates with top design names such as Karl Lagerfeld and architect Zaha Hadid.
Making a partnership with Bündchen is part of the company’s strategy to reach higher-income buyers.
And it is working: Grendene increased its export revenue by 50 per cent in 2013.
Co-founder Alexandre Grendene Bartelle became a billionaire according to Forbes World’s Billionaires list and is worth US $1.4 billion. He owns 41 per cent of Grendene S.A. and close to 40 per cent of the Dell Anno brand.
This is a critical lesson for manufacturers in the global South. Grendene had achieved strong market dominance at home, and was already benefiting from growing wealth among Brazil’s middle classes. But it was the overseas market that had the potential to clinch even more profits for the company.
Bündchen’s high brand profile has enabled the company to compete head-to-head with the well-known Brazilian flip-flop brand, Havaianas (havaianas-store.com).
Another modern design leader owned by Grendene, Dell Anno (lojasdellanno.com.br), is a maker of modernist cabinets and furniture.
Dell Anno only use wood from renewable forest sources, to protect and preserve the Amazon and other native forests. Dell Anno tries to recycle as much as possible: up to 80 per cent of the water used in manufacturing is recycled, and byproducts from the production process such as a sawdust, wood, plastic and cardboard are also reused.
Dell Anno makes a full range of furniture for kitchens, bedrooms, closets, home theatres, home offices, service areas, restrooms and commercial environments. Dell Anno uses research and development to study trends and advise customers on the best options. The brand offers its staff training to help standardize customer service, and also has an excellent blog covering developments in modern design around the world (http://www.lojasdellanno.com.br/blog/).
By David South, Development Challenges, South-South Solutions
Published: May 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Follow @SouthSouth1
Google Books: https://books.google.co.uk/books?id=NhQ9BQAAQBAJ&dq=development+challenges+may+2014&source=gbs_navlinks_s
Slideshare: http://www.slideshare.net/DavidSouth1/may-2014-development-challenges
Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s
Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s
This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
