Global South Experiencing Transportation Revolution

Away from the news headlines, a quiet revolution has been taking place in public transportation across the global South. As cities have expanded and grown, they have also been putting in place public transport systems to help people get around and get to work.

One proven, efficient way to move large numbers of people quickly through dense urban areas is to use underground subway or metro systems. Subway systems have a profound effect on local economies and wealth creation. They allow people to quickly cover distances that may once have meant hours stuck in traffic. Once people can move around a city quickly and over large distances, they can change how they work, shop, enjoy themselves. It allows people living in poor outlying neighbourhoods to travel to jobs in the city centre, improving their income prospects.

As many countries in the global South have enjoyed healthy growth rates despite the global economic crisis, and with the global financial system being flooded with stimulus funds to spur growth, the resources have become available to invest in expensive and long-term public transport solutions such as metro systems. Another factor is the scale of urbanization in the global South, which is driving governments to turn to new solutions that will help in avoiding the mistakes made in the past.

The world’s first urban underground railway system was built in 19th-century London, England. It was the product of a country that had been experiencing rapid, large-scale industrialization and urbanization unseen before in human history. Since then, the now 150-year-old London Underground (http://www.tfl.gov.uk/modalpages/2625.aspx) has acted as the arteries coursing through the city’s economic body, criss-crossing the city and delivering millions of people to work and play every day. It is now impossible to imagine Britain’s economy functioning without this efficiency tool.

Now, as the global South engages in the greatest urbanization project in human history, more cities are turning to underground metro systems to keep people, and the economy, moving. Lessons have been learned from the first generation of global South cities, which expanded rapidly in the 1960s, 1970s and 1980s. Many became quickly clogged in traffic and cloaked in pollution, and saw economic opportunity and social mobility slowed down as a consequence.

Three of the biggest metro systems in the world are now in China – Beijing, Shanghai and Guangzhou (The Economist). Beijing (http://www.explorebj.com/metro/) has a metro system stretching 442 kilometres and is used every day by 5.97 million people. By 2020, Beijing is hoping to boast 1,000 kilometres of metro network in the city. In Shanghai (http://www.shmetro.com/EnglishPage/EnglishPage.jsp), the 423 kilometre metro system carries 5.16 million people every day, while Guangzhou (http://www.gzmtr.com/en/) carries 4.49 million people a day.

From the 1960s, the building of metros increased around the world. More than 190 cities now have metro systems. In China, Suzhou (http://www.livingsu.com/guide_detail.asp?id=7), Kunming (http://www.urbanrail.net/as/cn/kunming/kunming.htm) and Hangzhou (http://www.urbanrail.net/as/cn/hang/hangzhou.htm) opened metro systems in 2012. Elsewhere in the global South, Lima in Peru and Algiers (http://www.metroalger-dz.com/) in Algeria recently acquired new metro systems. This means Africa now has two cities with metro systems – Algiers and Cairo in Egypt.

In India, Bangalore opened a metro system two years ago and Mumbai is close to finishing its metro. Bhopal and Jaipur also plan to build metros. In Brazil, the metros in Sao Paulo and Rio de Janeiro are being expanded and new systems are being built in Salvador and Cuiaba. In the Gulf states of the Middle East, Dubai (http://dubaimetro.eu/) opened a system in 2009 and Mecca (http://meccametro.com/) in Saudi Arabia in 2010. Abu Dhabi, Doha, Riyadh and Kuwait City are also working on building metro systems.

Paraguay’s capital, Asuncion, is working on one, as is Kathmandu in Nepal. Jakarta in Indonesia has attempted to build an underground metro several times and is now trying to getting one built.

But how are many of these countries funding this splurge on metro systems? According to Roland Berger Strategy Consultants (rolandberger.co.uk), global government stimulus programmes to fight the current financial crisis have increased available funding for rail systems. There are also increased resources available for transport solutions that avoid the high pollution rates that come with automobiles.

According to Mass Transit Magazine, China is using domestic consumption and increasing urbanization to spur economic growth and is hoping to increase investment in metro systems in the country by 10 per cent per year.

The target is to spend 280 billion yuan to 290 billion yuan (US $44.91 to US $46.51 billion) on metro systems in 2013, up from 260 billion yuan in 2012.

The knock-on economic boost will be felt by domestic businesses as trains and train systems are purchased. It is estimated sales of Chinese-made trains will go from 10.9 billion yuan in 2012 to 28 billion yuan by 2017.

All this new building will expand the country’s metro lines by 846 kilometres in 24 cities.

Ten Chinese cities are expecting soon to receive permission to begin work on building new metro systems: Xian, Tianjin, Chongqing, Chengdu, Hangzhou, Ningbo, Kunming, Tsingdao, Wuxi and Dongguan.

In 2013, 12 Chinese cities will complete new metro systems including Harbin, Changsha, Ningbo and Zhengzhou.

If this trend continues and expands, then the future cities of the global South could be modern, urban places that raise living standards, while avoiding damaging human health with environmental pollution and over-crowding and social exclusion.

By David South, Development Challenges, South-South Solutions

Published: February 2013

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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Virtual Supermarket Shopping Takes off in China

 

An ingenious use of technological innovation and savvy trend-spotting is radically transforming the way people do their grocery shopping in China. Busy urban dwellers with time-poor lifestyles can now do their grocery shopping as they pass through Shanghai’s subway system and have their weekly shopping delivered to their home.

The country has experienced breakneck economic growth in the past 15 years, heading towards becoming the world’s largest economy. Much of this growth and new wealth has come from the transformation of China into the world’s manufacturing and exporting hub. But this also leaves an urban population of very busy people who need time-saving solutions to improve their quality of life.

China’s premier Wen Jiabao has now pledged to aid the world economy during the current economic crisis by boosting domestic Chinese consumption. And this new focus on consumption will open up opportunities for entrepreneurs.

“I believe China’s economy can achieve longer-term, better-quality growth. This will be our new contribution to strong, sustainable global growth,” he told the Wall Street Journal.

And a big part of the boost in domestic consumption will come from modern retailers and supermarkets. Supermarkets were almost non-existent in China before the 1990s. The country sold food in a mix of small shops, open-air markets and through wholesale networks. It was a complex system overlaid with government bodies, marketing boards, brokers, wholesalers, distributors and government-licensed and government-run shops and vendors.

But this has radically changed as the country has moved to a modern retail system. Chinese cities now boast modern supermarkets, convenience stores, hypermarkets and warehouse clubs. There was just one modern supermarket in the country in 1990; by 2003, there were 60,000 (Chinese Chain Store and Franchise Association).

The supermarket model offers many benefits to anyone looking to sell products in the Chinese marketplace. Supermarkets are very competitive with each other and are always looking for new angles and new products to get the edge and win over new consumers. If they offer new tastes and variety, the chances are high they will attract more customers.

Supermarkets tend to offer a greater variety of food products than traditional markets. They are also cleaner, the quality control is better and more standardised, there is no need to haggle over prices and measurements and units for products are clearly labelled and controlled.

But supermarkets can also be criticized for monopolizing distribution networks, hurting small farmers by driving down prices and destroying independent retailers unable to compete with the economies of scale supermarkets can bring to bear.

In Shanghai - a city that has long been a retail pioneer in China- the Yihaodian online grocery company (http://www.yihaodian.com/product/index.do?merchant=1) is radically altering how people buy food by using “virtual supermarkets” in subway stations.

It is a convergence of several technological innovations to make something even better.

Shoppers download an app – or application – on to their mobile phones. This allows them to interact with large LED screens (http://en.wikipedia.org/wiki/LED_display) in subway stations which display images of products – from soap to noodle soup to nuts – just like in a catalogue. The shopper scrolls through the products and finds what they want to buy. Beside the images are barcodes. The shopper scans the product barcode with the phone and Yihaodian then delivers the products straight to their home within hours.

It is a very convenient service for busy workers trying to juggle the many demands of daily life.

The Yihaodian system is based on a similar technology pioneered in South Korea.

Yihaodian is riding a wave of growth for the company because of its innovative approach. It has seen sales rise by 28 percent each month and it hopes to make Euro 325 million (US $443 million) in 2011, four times its 2010 revenues. Proof of the value of investing in innovation.

Yihaodian is also showing how clever it is to offer a new way of doing things. It is pioneering a new business model while also recognising the reality of people’s busy lives in modern urban environments. Lily Yu, director of the company’s wireless application department, says it is about something bigger than just profits. “Changing people’s lifestyles is what we are striving for,” she told Monocle magazine.

Yu, founder of the Wireless Application Department at Yihaodian, joined the company in 2010 and leads the team to develop and introduce this technology and new way of buying products.

The only question remaining is this: how long before all retail will follow Yu’s lead?

By David South, Development Challenges, South-South Solutions

Published: November 2011

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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Putting Quality and Design at the Centre of Chinese Fashion

Awareness of the sourcing of materials for fashion has been on the rise in the past decade. Concerns about how the global fashion industry functions and its impact on the environment have given rise to savvy retailers who take care over the sourcing of their materials and the working conditions of their employees. Consumers have shown a willingness to pay a little more to know that a garment is sustainably produced and has the lowest possible impact on the environment.

The global textile industry is the second biggest consumer of water in the world. The dyeing processes used by these manufacturers do extensive damage to the water table that is used for drinking water.

In China, there have been violent demonstrations over working conditions and increasing concern over the health consequences of many modern manufacturing methods. In order to get change, new business models need to emerge, and consumers and customers need to be educated and to demand better-quality, low- or non-polluting products.

One business has accomplished something remarkable: it has succeeded in producing high-quality, ethically sourced products while also employing vulnerable people who have significant care duties and need a flexible and understanding employer.

NuoMi (http://www.nuomishanghai.com) has three stores and a store/design studio in Shanghai, China. NuoMi means “sticky rice” in Mandarin (http://en.wikipedia.org/wiki/Mandarin_Chinese). It was founded by Filipino fashion designer Bonita Lim, a mother of four, who uses her business to help single mothers and the less fortunate.

NuoMi is also pioneering sustainable and green goods for the Chinese market. This is unusual in a country more known for its sweatshop, low-wage manufacturing industries that have propelled the country into an economic powerhouse.

NuoMi sells women’s clothing made from sustainable sources while creating jobs for people from disadvantaged communities. There are organic cotton, bamboo, silk and wool garments, and no artificial dyes or synthetic materials are used.

The design team works on colourful knitwear, dresses and baby clothes. They also offer a custom order service.

“When I was 13 or 14 years old, I dreamed of building a special company that could help people who have trouble finding a job,” Lim told the Global Times.

“I called the name of my brand NuoMi, which is (the) Chinese name for sticky rice … Our company works like sticky rice; we support and love each other.”

Born in the Philippines and educated in Canada, Lim had become frustrated while working with the Filipino government and wanted to help the poor. She started NuoMi in 2006 in Shanghai, a city booming as China’s economy continues to grow. It is also a city with a population with long-standing sophisticated consumer tastes. Shanghai had been home to various foreign concessions before the Communists took power and its population was exposed to foreign languages, cultures and tastes.

Lim became a single mother after she divorced, and this experience made her sympathetic to how hard life is for single mothers. Drawing on her passion for fashion, she hired a designer to work with her on designing a line of clothing.

“I was surprised that many of my friends really liked my designs, so they asked me to design clothes for them and introduced some clients to me,” Lim told Global Times. “I tried to design and sell clothes abroad. I got a lot of good feedback, but it exhausted me so I decided to work in Shanghai.”

Despite starting out as a hobby, the business had built a network of 20 clients. It had become impossible to just do it part-time so she formalised the business as NuoMi.  She began hiring single mothers in prison in the Philippines and designed clothing that could be easily made by them.

“Those single mothers in prison were very anxious because they had no way to help their children. Most of them committed crimes because they needed money for their kids,” Lim said.

By 2008 she had built a professional design team and now had 60 clients. With the brand NuoMi growing, she opened its first store. This has grown to four stores in Shanghai. Most of the company’s workforce is now in Shanghai but they are still people living in a vulnerable situation.

Nuomi’s newly opened store in 2008 carried a spring and summer collection of long dresses made from bamboo, cotton and soya. These fabrics were chosen for their breathability in the hot, steamy Shanghai weather.

One of the employees is 52-year-old Zhu Linfang, who takes care of a stroke-damaged father and a mother with liver cancer. “I was introduced through a friend. They paid me more than other companies. At my age almost no company wants to hire me, but working for NuoMi, I earn between 2,000 yuan (US $300) and 3,000 yuan per month,” she said.

Other employees look after ill children and have care duties that occupy much of their time. They do sewing and make toys for NuoMi.

Lim takes the time to train the employees to make sure they can do the work to a high standard.

“I tried to design products that were both suitable for them to make and could be sold in the market,” she said.

NuoMi also sells environmentally friendly glycerine soaps in flavours from mango to chocolate, jewellery made from recycled industrial materials and bathwear, pillows, and purses. The stores even carry matching mother-daughter and father-son clothing.

Wisely, service is offered in Chinese and English to customers – Shanghai is a popular destination for tourists. NuoMi is clearly a trail-blazer and a business to watch.

By David South, Development Challenges, South-South Solutions

Published: October 2011

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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