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In a time of great flux, no conversation in Egypt can avoid the inevitable: What’s next? Unsurprisingly, opinions differ widely on what’s to come as well as the level of agency average citizens will have in determining the future.

Yesterday, we traveled to El-Mahalla El-Kubra. Across Egypt, the city is known as a hub for political dissent, largely driven by its well organized labour groups and civic organizations. Finding ourselves at the heart of a lively and complex national debate, we thought we would share some of the voices we heard on the topic of change.

Chief, Democratic Front Party (Mahalla Chapter): “Change is afoot.”

Egypt’s Democratic Front Party has been among the key organizers of the recent revolution. They credit their coalition of youthful organizers with the change that has occurred, and have tasked themselves leaders in creating the Egypt of tomorrow. While the DFP has many items on its agenda, of pressing importance is bringing knowledge of participatory governance to Egypt’s poorest citizens. Education on voters’ rights and responsibilities ahead of September’s planned elections will be critically important to an inclusive democratic transition.

While the Chief of DFP’s Mahalla Chapter believes the revolution would not have been possible without online organizing — “Facebook opened the door, it started the conversation” — he said digital tactics still don’t reach most Egyptians. Thus, his party will continue to rely on its membership (roughly 7,000 strong), on their social networks, and on ‘old’ tactics such as door-to-door canvassing to educate and organize citizens.

In this time of change, he is frustrated by continuing demonstrations across Egypt and feels that their organizers are shortsighted. “Now is not the time for individual group protests,” he insists. “It is the time for universal reform. Now is the time to work for things that meet everyone’s needs.”

65-Year-Old Grain Farmer in Kaisaria: “Change? Maybe.”

Having worked the same land for over 50 years, a farmer we spoke with in the rural village of Kaisaria, just outside Malhalla, was cautiously hopeful for meaningful change in the times ahead.

In the last seven years, the cost of renting his land has increased by 25 times, subsidies for pesticides have dried up while prices have risen fourfold due to corruption, and the NGO representing local farmers has since been shut down and replaced by a government-run body. Though the group is tasked with overseeing rural agricultural issues, Sayed says it is aligned with rich land owners and deaf to the needs of farmers like him. “I’m a simple man. All I need are pesticides at an affordable price and rent that still leaves me enough profit for my family to eat.”

When asked how he and farmers like him might insert their voices into the reform process, he shakes his head: “How can I get my voice heard when I can’t even afford the bus to Mahalla, just 15 minutes away? I’ve heard of the internet, I’ve heard of Facebook, but they are not for me. I can’t read, I don’t use a mobile phone, and now they say I must use Facebook to talk to the government? No, I have very basic needs. Why can’t I have simple needs met through simple means? People like me can’t affect change; we just have to wait and see if events work out positively for us. Insha’Allah.”

Deputy Chief, Muslim Brotherhood (Mahalla Chapter): “We will bring about change.”

Long used by the Mubarak government and certain Western forces as a bogeyman, our time here has shown that the Muslim Brotherhood is a powerful force for good in Egyptian society. With a significant percentage of all functioning civil society groups tied to the Brotherhood, their services for the working class have filled a critical gap left by a negligent government.

Having been forced to operate as an underground group for decades, the Brotherhood has an impressive level of organization and discipline, both necessary to operating in a country in flux. El-Mahalla has long been a stronghold for the Brotherhood, and we spoke with the chapter’s Number Two about what his organization has planned for the period ahead.

“We are better prepared than other opposition groups to make our presence felt,” he said. Yet rather than race to the top of the future electoral ballot, he said “the Brotherhood is happy to take our time, and to let others have the chance to organize effective political entities.” Whether shrewd politics, or honest opinion, if this tactic holds true in the coming months, the blossoming Egyptian political scene will benefit.

As the Brotherhood is “now able to operate in the open, with more contact with the people,” Egyptians should have greater access to the critical social services this group has long provided.

Director + Various Organizers, Centre for Trade Union and Worker Services: “Change? Hasn’t happened yet.”

“Mubarak is gone with the wind.” The surly, heavyset man raises his eyebrows at us, and repeats his joke. “Mubarak. Is. Gone. With. The Wind.” He shoots us another pointed look. We laugh heartily. “But,” he continues, “let us be clear: There has not been a revolution. Now is the time to negotiate for our revolution.”

The leaders of Mahalla’s primary labour organizing group, CTUWS, have long been working for substantive socioeconomic reform and have correspondingly endured imprisonment and harassment for years. These hardened activists see the current period as a rare window where rapid social change is finally possible. They do not, however, think the changing times require changing tactics. Distributing flyers and coordinating mass strikes through personal networks, and largely without any technology, are the most effective tools for change, say CTUWS, both now and in the future. .” The group dismisses digital strategies: “The people we work for aren’t connected, so we don’t need to be either.” The only technology they use is SMS to coordinate with labour leaders across the country.

“In other countries, you can talk and negotiate with the government for your demands. Here, and especially now, talking will get us nowhere. We need to first get the military’s attention through mass demonstrations,” they insisted. “Only then will they give us a spot at the negotiation table

Journalist, Dostor: “Change is complex.”

We were joined in El-Mahalla by a reserved but passionate local journalist, who writes for the widely respected online newspaper, Dostor. Mohamed is a quiet young man, until the conversation turns to politics, and then he comes alive with the fire of an activist who has known the wrong end of a National Security truncheon.

It was Mohamed’s credibility, and leadership among a diverse array of groups in Mahalla that allowed us to travel so widely and speak with so many different voices. While little known to the West, thanks in large part to his modesty and aversion to spotlight of any kind, Mohamed was a critical organizer of the April 6 opposition movement, bringing together the disparate opposition groups, some of who we’ve covered above. In every conversation, he never fails to chime in at the critical moment with an observation on what it would take for Egypt to thrive in the coming years.

Mohamed believes end to emergency law, a complete change to the culture of the National Security forces, and economic opportunity for the working classes will serve as starting points in a long, hard road to a new governance landscape. It is complex, he says, but entirely possible.

With additional reporting from Zack Brisson and Mostafa Kashef.

How are new communication technologies redefining the form and function of governance? How can we mature these tools to more effectively enhance service delivery, improve the outputs of policymaking, and expand access to the political process?

On Monday, we were privileged to host ‘Citizen 2.0: Social Media and the Future of Participatory Government’ to discuss these topics and, as it turned out, quite a bit more. Recognizing that ‘open government’ and ‘Gov 2.0’ have yet to reach their full potential in practical applications, our expert panel and highly engaged audience sought to articulate why this was and what we can do to realize the opportunities ahead. From the nature of participatory government to issues of digital divide and access to education, we discussed how to evolve a governance system that isn’t just different, but better.

Citizen 2.0 panelists: (L to R) Tom Lee, Katherine Maher, Marci Harris, Ryan Brack, Nancy Scola, and moderator Zack Brisson.
 

Each panelist brought a uniqueand important perspective. Nancy Scola of Personal Democracy Forum’s techPresident began with a strong philosophic overview of the current state of the open government movement. She reminded us that our forms of government have always been a human experiment, and encouraged risk-taking in seeking improved models of civic relations. A transcript of Nancy’s thoughtful presentation can be found here.

Ryan Brack of the New York City Department of Education joined us as our government representative. A recognized ‘super-user’ of new communications tools within the Bloomberg administration, he brought a unique perspective on government’s changing role in the new information landscape. Despite the challenges of being on the receiving end of a ‘communications firehose’, Ryan discussed City’s various efforts to better filter, manage, and thus respond to incoming citizen inputs.

For any tool to drive substantive improvements, it must be easily adoptable by those it targets. This is a point Marci Harris knows well. A former Congressional staffer, Marci has now launched POPVOX, a platform to expand public engagement in the congressional policymaking process. Advised by Tim O’Reilly, POPVOX improves citizen to legislature interactions by ensuring civic input is collected and heard in those critical windows when it can have the greatest impact.

Looking abroad, Katherine Maher of the National Democratic Institute reminded us that many of the most exciting ways technology is changing governance are happening outside the US, and are not particularly high-tech. Katherine’s work in using information and communication technologies to improve civil society has taken her through Africa, the Middle East, and Asia, often using the most basic mobile and radio technologies. Her perspective was timely, given recent events in North Africa and the Middle East.

Tom Lee of Sunlight Labs rounded out the panel. A respected leader in theopen government community, Tom addressed some of the challenges this community faces in trying to move Gov 2.0 forward. He reminded us that sophisticated technology won’t be able to solve many of the biggest problems with representative government. Rather, poor education and lack of access to information will need to beaddressed through other means if traditionally marginalized groups are to gain greater political representation.

Our panel painted a rich picture of the challenges and limitations facing the use of new media in government. The second half of the event focused on developing solutions to address these challenges. Panthea led our group, roughly 100 strong, through ‘Product in a Box’, an exercise that works to generate concrete ideas for products and services.

Ryan Brack of the NYC Department of Education joins the Citizen 2.0 Education product group for the ‘Product in a Box’ exercise.
 

Panelists and audience alike worked in groups focused on predetermined and audience-selected themes such as healthcare, political engagement, and urban social services. It was great to see Ryan, from NYC’s Department of Education, working with the Education group on ideas his department could implement to improve their work. Likewise, at the Policymaking table, Marci received some impassioned opinions on how products such as POPVOX could better meet citizen needs.

Here’s a small sample of some of the concepts put forward:

Urban Decider | The urban social services team mocked up a product to allow citizens to ‘argue with your neighbor, constructively’. Users can submit, view, discuss, and vote on issues by neighborhood via a web platform. Through social media integration, they can also share issues, discuss issues in greater depth, and input into public cost/benefit analyses. Those seeking to get more engaged can also find out, donate to, or volunteer with featured organizations working on the particular issue. Developed by two urban planners, two community organizers, and a software developer, Urban Decider allows communities to input and gain greater context on their shared concerns.

Wait Wait… Do Tell Me! | This ingenious product would help citizens find the ‘lull in the line’ by analyzing real-time usage data for popular government services. Based on real-time analytics collected from government departments such as the DMV, citizens can access the latest information (via web, SMS, a hotline, or a mobile app) on the lowest-traffic days and times for particular services. Citizens can also schedule appointments via the service, and their activity would help agencies more accurately anticipate demand and plan resources (ie. staffing) accordingly.

Help’d | This idea was for a rating and feedback system (a la popular consumer review site Yelp) for government agencies, directly linked to citizen-submitted support tickets. Users can track their submitted issues (or subscribe to others they care about) at each step of the process, rate government service at each step of the resolution process, and evaluate overall satisfaction with the relevant agencies. Aggregated citizen feedback then helps government assess where improvements are needed in their workflows, allowing for more granular process transparency and overall accountability.

Creating a dream government product at Citizen 2.0.
 

Those involved in designing the governance systems of the future would do well to consider both the challenges raised by the panelists and the needs and visions revealed by the product concepts. In thinking through how to address the issues articulated, we at Reboot have found it useful to identify several ‘platform requirements’ for future governance systems: trust, accountability, efficiency, (some) transparency, accessibility, feedback and authority. While seemingly obvious, careful consideration of each requirement — and of the interplay and tension between them — is necessary to improve the transactions between citizens and the institutions that serve them.

Though each service or offering will necessitate a different recipe of the above traits, getting each mix right will enable services, programs, and systems that are inclusive, sustainable, and self-improving. You can read a bit more about our thinking on this topic here.

Merrick Schaefer of UNICEF Innovation presents his group’s product idea.
 

All told, it was an insightful discussion. We’re thankful to our panelists and attendees for their enthusiastic contributions. In the weeks ahead, we will be distilling and packaging the ideas into a set of publications that will be available here on theReboot.org.

One final note: We had promised a video archive of the event. Unfortunately, the Social Media Week broadcast partner, Livestream, lost some of the recordings due to a technical workflow issue — sadly, our file was one of them. Sincere apologies for this.

All photos courtesy of Martha Bixby who graciously volunteered to photograph the event.

(Click image to see full size.)

Three years ago, Concern Worldwide became the world’s first organization to use mobile banking to transfer cash in an international development context. In the wake of the 2008 Kenyan elections, Concern used M-PESA in a targeted response to the food security crisis that arose. Families whose livelihoods had been severely compromised in the post-election violence received virtual cash via their mobile phones, redeemable at any M-PESA agent nationwide. Since then, digital solutions have been used for emergency cash transfers in Niger, for food vouchers for Iraqi refugees in Syria, and for cash-for-work programs in the Philippines. Indeed, mobile platforms can decrease the risks, costs, and logistical challenges—both for governments and citizens—associated with cash delivery, while improving accountability, efficiency, and programme sustainability.

And social protection is but one area where mobile banking can support development efforts. Public health is another. Menekse Gencer of mPay Connect has explored the latent synergies between mobile health and mobile financial services to improve access to and amplify the impact of both. Gencer notes that the two sectors share common user bases, infrastructure, business elements, and policy concerns. “These common elements,” she writes, “if addressed cross-sector, will benefit each by reducing costs that would otherwise be independently borne, thus improving services overall.”

There is also immense opportunity for mobile banking to help development organizations reduce administrative costs, burdens, and risks associated with financial management and transfer. Given the scale of development operations worldwide, even minor efficiency improvements throughout the system can, in aggregate, have immense effect.

Today, however, we will focus on social protection programmes to illustrate the benefits of integrating mobile banking.

Opportunities to Improve Social Protection

Mobile banking can support quick-impact initiatives such as food security and household cash transfer programmes. Not all programmes are well-suited to mobile integration, however, case-by-case assessments must be made and in most cases, it’s likely that mobile would be used to supplement—not replace—existing, non-digital platforms.

A key challenge facing cash transfer programmes is the security of cash as it is physically counted and transported. Mobile banking largely eliminates this risk as accounting and transfer are digitized. Development organizations can make a bulk payment to the mobile operator, who then takes responsibility for the funds from the time it enters its system to the time it reaches beneficiaries.

In giving them agency to decide what to feed their families and how to invest in their livelihoods. cash transfers can empower recipients. Unlike food transfers or material donations, they benefit local economies and communities’ self-dignity. Cash transfers done via mobile can have a doubly empowering effect by introducing beneficiaries to new tools, or by advancing their technological aptitudes. By requiring recipients engage in a novel, technological process to access support, beneficiaries become active participants in their own development rather than passive recipients of aid.

Benefits for programmes and operations

In addition to supporting larger poverty reduction efforts, mobile banking can bolster development programmes in a few specific ways:

1. Increased reach—specially in rural, hard-to-reach, or insecure areas—through a ready-built network.

Both mobile and banking networks require vast and relatively dense coverage to succeed. In developing mobile banking systems, operators thus invest heavily in building sizable technological and human networks and in ensuring adequate agent penetration across geographies. Even in rural and insecure areas, mobile operators generally have greater presence compared to government or other commercial services.

By leveraging operators’ existing networks, development organizations can increase programme reach by orders of magnitude and rapidly so. Safaricom’s M-PESA in Kenya, for example, currently boasts roughly 20,000 agents countrywide, latest figures from Zain’s Zap service in Uganda puts it at approximately 4,000 agents. Such ready-built infrastructure can be leveraged to extend critical support in times of need, even to those hardest-to-reach.

UNICEF Uganda, for example, is already exploring this model with Uganda Telecom, which has trained mobile agents to process birth registrations nationwide.

2. Greater transparency and accountability.

By tracking the flow of money from donors to implementing partners to beneficiaries, mobile banking can increase accountability in aid. Using mobile also decreases the number of middlemen handling cash, thus reducing opportunities for leakage. Combined, this enables more rigorous, accurate monitoring and evaluation and responsible programmatic and budgeting decisions in the future.

Digital tracking can also verify whether transferred funds were used for their intended purpose, and in accordance with funding stipulations. And as mobile payments and cash transfers become increasingly common, tracking downstream expenditures via mobile will only get easier.

3. Improved programme sustainability through diversified funding.

User payment for some services, where appropriate, would diversify programme funding sources and decrease reliance on funders and development organizations. Increased financial independence is critical if development programmes are to scale and become sustainable.

Though user fees would, in most cases, remain heavily subsidized, partial funding by direct user contributions would alleviate donor responsibility. There is also growing evidence that charging nominal user fees—rather than having them entirely covered by aid— increases services’ perceived value, leading to greater motivation to participate and improved programme compliance.

4. Ability to link monitoring and evaluation (M&E) across platforms and programmes to enable agile programming.

Automated real-time usage statistics, custom-configured to programming and M&E needs, will allow for the adaptation of programming based on the latest evidence. There is an opportunity, through mobile, to develop advanced history tracking and analytics engines to collect, process, analyze, and act upon large volumes of layered beneficiary and programme data from disparate sources.

Multiple linked mobile programmes would allow for detailed, trans-programme tracking. Development organizations could then observe correlations between beneficiary behaviours, incentive schemes, and other programmes. If relationships are found — ie. up to X cash transfers leads to Y improved malnutrition outcomes; beyond X, the funds are used for other means — organizations immediately adjust programmes to maximize positive outcomes and build stronger social safety nets.

4. Expanded opportunities for developing local capacities.

Integrating systems common in the local environment increases the likelihood that smaller civic groups (that may not otherwise be able to process Big Aid support) can participate in the develop of their own communities. This facilitates smaller scale trials and programmes with more diverse partners, which can increase local ownership of community development and increase funds directly reaching impoverished communities.

5. Improved morale for on-the-ground partners, staff, and extension workers through immediate, performance-based remuneration.

Mobile money can deliver service- or performance-based incentives for NGOs’ partners and extension workers. Immediate payment — rather than having to wait weeks or even months — improves the morale of those on the ground which can, in turn, positively impact response time and overall quality of programmes and services delivered.

6. Decreased time and cost burden in processing funds.

Using mobile to support funds transfers can decrease administrative burden in processing manual forms, and costs in funds transfer. Mobile payments and remittances typically reduce costs by 50 to 70 percent compared with traditional delivery models such as banks or Western Union. They are also more secure, more trackable, and faster than indigenous options such as the hawala model found in parts of MENA and South and Central Asia.

7. Decreased risks associated with cash.

Using mobile transfer to pay partners, staff, and extensions workers, and to disburse funds to beneficiaries, decreases the risks—on all sides—associated with carrying cash. Even if a mobile phone is lost, funds are easily recovered from any mobile device, agent, or operator branch simply by entering in the user’s account details and password.

Broader Effects: Achieving Development Aims

In addition to direct benefits for themselves, their partners, and their beneficiaries, development organizations looking to integrate mobile banking into their operations can also help stimulate the global mobile banking market, a secondary but important effect. Greater adoption of mobile banking can ultimately serve development’s larger aims of reducing poverty, tackling inequity, and achieving sustainable growth.

Early movers in mobile banking can help define whether and how the industry serves development aims. They will also gain critical knowledge and influence that will serve them well into the future, as services are increasingly delivered via mobile. And as mobile banking evolves, governments will require guidance on how the industry can support their economic and social development goals. To provide such support, development organizations first first-hand need experience in leveraging mobile banking.

Many challenges lay ahead for mobile banking, and there is a pool of unanswered legal, regulatory, and operational questions. Security both of the platform and of user data is of great concern, as are associated privacy and fraud risks. Despite such challenges, it would be unwise for development organizations to neglect mobile banking. With significant potential to reduce poverty while directly supporting their programmes, organizations should assume a proactive role in optimizing market forces for social change. The private sector is certainly eager to move fast to realize mobile banking’s immense financial potential. As a high-growth sector, operators seek partners to help them realize mobile banking’s potential.

This is an opportunity for development organizations to align with mobile operators’ core businesses, rather than with their corporate social responsibility arms—as has traditionally been the case—which have significantly less power and influence. Though mobile banking is experiencing early growing pains, ultimately, the alignment of corporate and development interests points to a promising win-win opportunity. By strategically integrating mobile banking into its core programming, the development industry also supports market mechanisms that improve the livelihoods of the poor.

What does the future of society look like? It’s an audacious question, and one apt to stop many of you from reading further. Yet despite the derision it may welcome, let us remember that productive consideration of this question has brought us many of our most enshrined ideas, from thinkers such as Confucius, Plato, and Sartre. Our clients, through the work they do, ponder this same question in operational contexts every day.

Throughout history, passionate citizens have endeavored to improve and redefine the nature of society. The rate of change possible in our modern day, however, largely outstrips previous generations. Our new tools are intrinsically additive, and are increasing the opportunities, replicability, and scalability for social change. While techno-utopianism is admittedly dangerous, the ability to fly across the globe in a day, visit the moon, access a vast and ever expanding library of human knowledge from digitized biology to the chemical formula for nuclear energy are indeed changing our societal complexion. The present challenge is to steer change towards constructive rather than deleterious ends.

Society 2.0: Platform Requirements

From Theory to Practice

So how do we get there?

Tangible improvements are occurring in governance services, systems, and platforms. An improved future doesn’t require a great leap forward; rather, it will come from incremental progress and innovative hybrids that move us forward one step at a time. Improved access to clean water for even one village that previously lived without is better than the failed pursuit of a clean water system for an entire country. We must be utilitarian in our approach.

Academics and theoreticians working in governance reform, participatory politics, and e-democracy are developing critical frameworks to help us understand current systems of political organization at a conceptual level. There remains a demand for more constructed understanding of the needs of individual citizens, the ‘users’ of Society 2.0. Only by marrying conceptual understandings of governance with practical knowledge of human capacities and behaviour can we create a realistic, working map to move forward.

Institutions that hold primary responsibility for directing governance systems must fundamentally change their cultures. Society 2.0 will be constructed through an unending series of changes to the way we live. Many changes pursued in this transition will prove to be wrong, misguided, or damaging. This is inevitable, and not necessarily a bad thing. So long as we have mechanisms to document and learn from them, we will benefit from our missteps. Unfortunately, most government institutions are extremely failure-averse and are therefore poor at innovation. This must change. Management and incentive structures, as a start, must orient bureaucracies to embrace experimentation.

Stepping into an unknown future is fraught with complexity, and requires equal parts awareness of the social and natural sciences, information and communication technologies, and political and cultural realities. Those capable of wielding these forces can be thought of as ‘governance engineers’. Many such engineers can be found in the groups that shape society. They must work within their own organizations and with others to build an effective and worthy Society 2.0.

* We recognize that the term ‘2.0’ is often used as a catchy add-on to the latest social science topic du jour. It is overused and often misplaced. And while the shift occurring in our civilization is leading us more to version 3000.0 than 2.0, the well-known suffix immediately draws forth theories we all know and understand. We hope you’ll excuse our use of it herein. Suggestions for an alternative vocabulary are welcome.

I had the privilege of engaging in a five-way Twitter debate today with some of the smartest people I know in the open government community. Clay Johnson, Tom Lee, Alex Howard, and Javaun Moradi are all working, in their own ways, to develop a coherent, cohesive, and inclusive vision for the future operating system of American democracy.

Despite the limitations of the medium, we managed to have a substantive conversation about the role of crowdsourcing in the process of collecting public comment on government policies and regulations. The conversation was prompted by the sharing of a blog post by Anil Dash on the White House’s recent ExpertNet initiative.

Administered by the US General Services Administration, ExpertNet is itself a crowd-run effort, intended to tap some of the web’s brightest minds in formulating the needs and functionality of a new platform for collecting citizen expertise. I had tried to engage with this platform myself, but found it frustrating and, in many ways, a solution pointed at the wrong problem. Further discussion of that topic, however, is fodder for another day.

Much more interesting to me was the philosophic debate that emerged between the players mentioned above. Quickly, we all gathered in somewhat different corners despite our shared goal of a more participatory government.

This is unsurprising, as the nature of representative democracy is a tricky one; certainly our forebears required much discussion to reach consensus.

To my mind, the critical issues came down along the following lines:

* Issues around the digital divide and around inclusion of marginalized populations in relation to new participatory government efforts.

* Whether crowdsourcing is indeed a viable or effective tool for policy planning and public input into the political process.

* Whether the government should turn to existing communities when looking for expertise, or develop its own methods of tapping expertise directly.

I’ll refrain from attributing points of view to any of the participants, as the medium of debate provides too much room for misinterpretation. The conversation has, however, been captured here.

In my view, and likely in those of my colleagues, the above issues aren’t binary. Most situations don’t break down as an ‘either/or’ but are usually much more circular in their reality. That caveat in place, I’ll do my best to articulate my opinion on each of the points above.

Regarding the digital divide, there’s no doubt that, as Tom put it, “…digital divide and education remain practical barriers to participation.” Tackling those problems goes beyond just governance reform and into the very values we hold as a society. Massive education reform has to be at the heart of any substantive efforts to improve the long-term prospects of the American experiment. All of our work at Reboot is predicated on the belief that the services of the future must be designed with the constraints of education and access in mind so they are as inclusive as possible. This is a consideration that’s not going away any time soon, so we never let ourselves or our clients forget it.

The issue of crowdsourcing is a bit woolier. It was repeatedly pointed out that crowdsourcing is often just a way of enabling a relatively limited and elite demographic of connected techies to take part in, or even take advantage of the political process. That’s true to a point, and will likely remain so for some time. And while I agree that promoting the views of certain demographics isn’t necessarily a path to improved political participation, the more people we can successfully empower — even if they are, for the time being, a select population — the less centralized and more distributed power will become.

Finally, and perhaps most directly related to the issue of the White House’s ExpertNet effort, is whether the government should even be in the business of creating new platforms for citizen engagement rather than going to the places that citizens are already gathering (Quora was repeatedly mentioned). In my view, it’s imperative that the government embrace new methods of engaging with citizens. But to be truly transformed in their function, government agencies require platforms, mechanisms, and processes that are customized to the unique cultural, political, and policy constraints that define the way each bureaucracy creates and delivers critical services. This isn’t to say that government-specific platforms should not be closely integrated with existing communities; rather, it’s just to emphasize that if these new methods of engagement aren’t closely mapped to the workflows and process that government bodies depend on operationally, they will never be effectively utilized.

Why erect barriers to adoption? User experience designers aim to optimize experience for end-users to ensure that products can gain usage, and ultimately loyalty. We need to have government experience designers to optimize the experience for the users within government agencies trying to affect change. By optimizing their experience in using these new engagement platforms, it ensures they will try, use, and ultimately stick with these platforms.

This point also raises what may have been my biggest overall frustration with ExpertNet. I applaud the effort to create a new platform for civic participation. But I found it lacking in discussion on how this eventual tool would fit into the organizational workflows that would ultimately take advantage of it. As great as new engagement tools can be, if they’re not fulfilling, enabling, or expanding on an identifiable organizational need, their capacity for change is ultimately limited.

All of these conversations are important and ones we need to continue. Creating future forms of government won’t be easy or straightforward. It took several thousand years to create the forms of representational government that are most prevalent in the West today. I’ll grant that our new tools are likely to demand a faster pace of change, but the evolution is still going to come in bits and spurts. Only by working together to define an operational vision of participatory government can a community of practitioners and concerned citizens help define what our future society looks like in terms of how power is allocated, resources are distributed, and decisions are made. Here at Reboot, we hope to be a part of that conversation in the years ahead. To that end, we’ll also have some exciting news next week about an opportunity to do just that.

Financial inclusion in China:
What will it take?

The birthplace of both paper money and Maoism, China has a long, complex history with capital. Known for both the novelty and the sophistication with which it has managed its resources — from shells to bronze coins to ‘socialism with Chinese characteristics’ — China recognized early on that value, once tangibly captured and fungible, holds immense power in shaping and moving society.

Today, China is poised to begin another era of financial innovation. In October 2010, state-owned China Mobile — the world’s largest mobile network operator — acquired a 20 percent stake in the Shanghai Pudong Development Bank, also government controlled. The operator is expected to launch a range of mobile financial services (MFS) nationally this year, and industry watchers predict a dramatic take-off in mobile payments in the near-term. Given that progress in mobile banking across markets is often stifled by inefficiencies between regulator, operator, and service provider, China’s integration of the three is intriguing and opens up new possibilities. In addition, with mobile penetration high (64 percent and growing) and bank card penetration relatively low, as well as accumulated experience from various recent pilots, 2011 indeed looks promising for MFS growth in China.

With the rise of mobile banking, there is great opportunity to extend financial inclusion to the country’s poorest citizens. Yet history reveals the fruits of China’s economic ascendancy have often been unequally distributed and many have been left behind in the strides of progress. Rapid and rupturing reform has in fact exacerbated domestic inequality.

Though it boasts the world’s fastest growing group of millionaires — between 2008 and 2009, the number climbed 31 percent to 477,000 people — over 60 percent of China’s rural households live without access to financial services. Poverty alleviation schemes have yielded mixed and uneven outcomes, likewise with financial inclusion programs. Focusing on high-margin, low-risk markets, China’s four largest banks have shuttered a combined 30,000 branches in poor and rural regions over the last few years; rural credit operators have followed suit.

Will mobile banking help improve the lives of China’s rural poor? It’s too soon to tell. Technology is often touted as an equalizing force, yet the effects of digital revolutions are never equally distributed. While second-generation banking has the potential to bring financial inclusion to the masses, there is no guarantee new products will be designed with this goal in mind nor even that the best-intentioned offerings will be accepted, trusted, or used. Especially around matters relating to money, people are naturally and universally cautious.

Introducing New Market Concepts

Despite this, China’s recent history shows some examples of new market models that successfully leveraged old concepts to win over consumers.

For much of the 20th century, individual monetary transactions in China were either explicitly planned or subject to tight government supervision. Restrictions on currency meant citizens had limited agency in buying, selling, or trading resources. Thirty years of reform later, China today offers its citizens dramatic new opportunities to hold, save, or invest their money, but such opportunities are seldom intuitive to or instinctively welcomed by users. New transactional models — and not just in mobile banking — often demand mental shifts in their users. Especially in a cash economy like China, going digital can be difficult for consumers to swallow. Thus, service providers are using established infrastructure and cultural norms to sensitize the market and to achieve the requisite buy-in. Three examples follow:

Banking:

The Chinese government leveraged longstanding social and logistical infrastructure to promote banking to its citizens. To introduce the masses to new ways of using and managing money, Beijing developed tailored value propositions for specific demographics/interests and ported trust from existing systems over to new ones. Founded in 1951, the state-owned Agricultural Bank of China began as a targeted appeal to the majority professional tribe (rural farmers); the bank both understood and was able to support specialized farm operations. It has since evolved into one of China’s ‘Big Four’ banks and boasts the largest consumer base in the world (320 million retail clients, with profiles that extend well beyond farmers). More recently, in 2007, the Chinese government leveraged its most accessed network — 37,000 post offices nationwide — to create the China Postal Savings Bank (CPSB). Building upon the trust in and familiarity with the postal system, even in the rural areas, Beijing introduced banking to a new group of China’s previously unbanked. The tactic proved a success, with CPSB achieving 10 percent market share in three short years and now ranking fifth among China’s commercial banks.

Online Shopping:

CTrip is a successful Chinese website that facilitates online travel purchases. While credit card payment is accepted, for customers wary of electronic payment in such large sums, CTrip deploys service agents to mutually agreed upon locations, ranging from the customers’ homes to airports, to collect payment and to hand over receipts and printed e-tickets. While issuing physical e-tickets seems gratuitous (confirmed, easily retrievable bookings are available in the airlines’ systems), the formality is nevertheless important for consumers new to online service models and who may lack the tools (ie. mobile web, printer) to be comfortable ‘going digital’. CTrip assuages concerns around electronic transactions by exchanging hard cash for hard tickets in person. The company also builds upon common practices for money exchange (by using bike couriers to transfer cash) and for communication (by using Skype as a customer service channel). Incrementally and taken in sum, these tactics build trust for an unfamiliar digital system.

Peer to Peer Learning:

In 2006, after years of lobbying from the private sector, China established a individual credit registry. Previously, individual credit risk (ie. for credit card applications) was determined manually, which partly explains why credit card penetration in 2005 was less than 1 percent. Instead of waiting for the official registry to evolve its sophistication, coverage, and reliability, market models have found unconventional ways to mitigate transactional risk. Qifang is an online peer-to-peer lending platform for student loans. It leverages social pressure to ensure debt repayment from and to its users, thus establishing trust for P2P lending. Borrowers register with not just their own national ID card but also those of their parents, and are asked to provide details on their hometown, school, and family. In a country where ‘face’ and family honour are of utmost importance, Qifang hedges against nonpayment by making default and delinquency rates publicly available and linking such data to borrowers’ hometowns, schools, and families.By understanding and using cultural and behavioural norms, the company has created trusted new transaction mechanisms and developed the market for P2P lending. Two years after launch, Qifang had facilitated approximately 3,000 loans with no defaults to date.

All three are examples of taking advantage of well-understood and proven social dynamics; they illustrate innovation in practice. New ventures must use deep contextual understanding and existing market and social infrastructure to establish credibility, gain currency, and achieve adoption.

The average standard of living in China has risen dramatically over the last 30 years. While improvements in livelihoods have not been evenly distributed, the advent of mobile banking presents a significant opportunity to serve the country’s most marginalized. Such an opportunity will only be realized through enabling policies and judicious service design that focuses on the needs of users. With Beijing’s steadfast commitment to poverty reduction, it is likely to have the former covered; many questions, however, remain about the latter. How will China’s MFS systems serve the needs of those 200 million-plus citizens that live on less than $1 a day? How will the systems accommodate the universal fault lines between rural and urban, poor and non-poor, and young and old? No matter how it plays out, mobile banking developments in China will prove instructive for other markets.

While the country’s approach to government-corporate relationships is unique, if China Mobile is successful, other markets — several have comparable means, though through differing mechanisms — may explore creative ways to yoke critical stakeholders. But as the three examples above illustrate, neither utility nor technology alone will suffice in realizing mobile banking’s success. Beijing and its corporate partners would do well to fully understand the unique user attitudes and behaviours that will drive or impede the adoption of new financial products. For mobile banking, or any consumer service, to be successful, existing social norms and infrastructure must be leveraged. Only then will these new tools and systems realize their promise in serving those with the most to gain.

Cities have critical information needs.

To reach their potential, communities require efficient information exchange among multiple stakeholders. But with communication channels increasingly fragmented, individual entities struggle to get their information to the right audiences in a timely manner.

This creates a reality where citizens’ expertise, labor, and capital are infrequently used, let alone optimized, in serving the needs of their communities. There are several reasons for this. One is a lack of meaningful opportunities to engage on issues that serve citizens’ self interest — people find it hard to understand how to make a difference in the issues they’re interested in. Even if citizens do try and input on a certain issue, there is often a lack of feedback. Without worthwhile returns on investment, the chances of future civic engagement drop. Finally, there is a lack of information on how to self-organize to solve civic problems, and few resources to turn enthusiasm into meaningful action.

On the other side of the coin, the delivery of public services is also an inefficient process. Knowledge about public services often exists in many sources, each one of them incomplete. This makes it difficult for citizens with little time or content literacy to access the services they need. A central authority on accessing public services could help.

There is also a third element to this equation. Civic institutions like school boards, political offices, and public trust companies also face like challenges. They spend their scarce resources promoting their services to citizens with highly fragmented collective attention. Collecting community input is time consuming, and often yields too few results or the least productive individuals engaging with the process. Public leaders lack independent information on the performance of the bureaucracies they manage, which reduce accountability and thus effectiveness.

Likewise, civil society groups such as faith communities and advocacy groups have difficulty finding citizens that can support them in their community service needs. They’re out there, they’re just tough to find because there are no widely recognized central channels to facilitate the exchange. There’s little ability to match the self-interest of citizens with opportunities to improve civic life. When innovative new services or programs are proposed, there’s little way to efficiently seek support from community members with a personal stake in seeing these programs succeed. An effective information exchange mechanism could create a long-tail market mechanism that helps niche groups find support from and for the niche interests they serve.

One possible solution

To address these challenges, we recently put forward the idea of a new Civic Information Exchange, facilitated and curated by local public broadcasters. Leveraging the credibility, reach, and resources of local public media, the Exchange would be a trusted, reliable, and moderated environment for the information transactions of local communities. As the key hub for civic discourse, the Exchange could serve as a transformational model to address the current information shortcomings of communities. The image above is graphic that breaks it down.

Public service providers would use the Exchange to market their services and solicit moderated public feedback and ratings on service delivery. Civil society groups, utilizing the Exchange’s wide distribution, could better match their resource needs with the citizens who have a vested stake in their success. By better aligning these ‘long tail’ opportunities, the Exchange will inspire new models for community funding of local projects that serve the public interest. Recognizing that public sector budgets are ever-shrinking, this would also allow local leaders to turn to the public to fund innovative approaches to solving local governance problems.

Public broadcasters are uniquely qualified to serve as conveners, facilitators, and managers of the Exchange. Public broadcasters already enjoy strong levels of brand credibility in local communities. Carried over to the Exchange, this would provide the necessary levels of trust to encourage civic participation. The editorial experience of public broadcasters would allow them to sift through the range of data coming through the Exchange; public media can curate and promote information worthy of public action or comment. Similarly, their deep connections to local populations would help broadcasters spot and surface community needs. Finally, their built-in mass distribution capacity provides access to a large enough sample of communities’ populations to make the Exchange a relevant marketplace for civic information transactions.

The media landscape will continue to shift, and it will be increasingly harder for small public media organizations to retain and grow audiences with only traditional news, information, and entertainment content. They will need editorial models that are more closely aligned with the unmet needs of the communities they serve. Playing the role of facilitator, moderator, and host to the Exchange is just such a vision for public broadcasters.

By effectively linking disaggregated interests and providing long-tail opportunity matching, the Civic Information Exchange model has the potential to revitalize communities, empower citizens to self-organize for civic problem solving, increase accountability of public institutions, and encourage new innovation through improved funding models.

Many of the world’s poorest live without access to basic banking services such as savings, insurance, payment services, and basic credit. Those in the developed world often take these services for granted without realizing their contributions to secure, productive livelihoods. Savings allow us to decrease our risk in handling cash and insurance allows us to protect against economic shocks; payment services help us save time that can be spent in more productive ways and basic credit allows us to use current assets to capitalize on future opportunities.

Half the global population, however, lives without such services, or at least without such services as enjoyed by the majority of the developed world. The percentage of households that are financially excluded increases to 80 percent when looking at Africa. Traditionally unattractive to commercial banks, low-income populations are forced to seek out service providers in alternative, unregulated markets, often at great financial burden and opportunity cost to themselves. It is not uncommon for loan sharks to charge up to 60 percent interest on a short-term loan; or for a person to take valuable time away from work, travel far distances, and wait in long lines just to pay a basic utility bill. Lack of access to primary financial instruments contributes to the marginalization of those already most vulnerable and exacerbates the cycle of poverty.

Though financial inclusion is gaining momentum in policy circles — taken in sum and especially in the developing world — government attention to the topic varies widely. There is great opportunity to do better, and innovative groups worldwide are eschewing traditional bureaucratic channels to fast-track financial inclusion through alternative means.

Mobile Solutions

Enter the mobile phone. Ubiquitous — over 5 billion subscriptions to date — and largely affordable, many have touted the little communications device that could as the antidote to financial discrimination. And not without reason: in 2007, Safaricom launched M-PESA, mobile banking’s first large-scale success story. A digital way to send cash and make payments, the service today boasts 12 million users — a growing number of whom use it for savings as well — and is well-integrated into Kenyan society. M-PESA’s success has inspired others to try and replicate its model elsewhere — GSMA’s mobile money deployment tracker counts 96 live mobile money deployments, and 91 planned (as of November 5, 2010) — and mobile microinsurance is gaining traction.

Why was M-PESA so successful? Because it offered a faster, more effective way of meeting people’s needs. A more effective way, that is, in the country of Kenya in the year 2007. So why is it that three years on, in discussions on mobile money opportunities in countries the world over, many still herald M-PESA as the innovative model to aspire to?

Those that advocate this miss the point. Those that try to do this even more so. In the drive to replicate proven models, we often forget to ask if comparable problems and contexts — indeed, the preconditions for a solution’s success — even exist in the new environment. (Hint: By and large, they don’t.) The ‘me-too’ approach to innovation is why mobile banking has seen many pilots but few scalable models for success. A recent GSMA survey of five mobile money deployments globally found that only one had a healthy active user rate (60 percent) while the rest fell under 30 percent, with one coming in at 10 percent.

I’m not the first to bemoan mobile banking’s lack of innovation. Mark Pickens and Sarah Rotman at CGAP, Bill Maurer at the Institute for Money, Technology and Financial Inclusion, Olga Morawczynski at Grameen Foundation, among others, all have put it more eloquently than I. They have asked for greater creativity in the design of mobile financial services. I agree, and I believe the process begins with a deeper understanding of both the environments we are working in and the people we are serving. This understanding is often realized through design research, a practice that, in this space, seems more conspicuous in its absence. Operators and service providers generally overlook this step, citing the fact that they’re from the market in question or that they’ve already done market research as justification. What they don’t realize is that existing knowledge can actually work against them — content with their assumed understanding of the environment and the users (“I know what this market needs”), operators miss out on opportunities for true, constructive innovation.

Asking the Right Questions

Let’s get something straight: what the unbanked want is not To Be Banked; they don’t strive ‘to be financially included’. For all the supposed benefits of these systems, the poor do get them, just through other, indigenous means that were developed in line with their own values. People made do long before Innovation Arrived. Did they create optimal solutions? No, but they developed solutions that were good enough and that then became trusted. And we must first understand these homegrown solutions and the role that they play in users’ lives before we can begin to offer them ‘better’.

Take the concept of security, which mobile banking provides in the form of digital savings. Objectively, mobile accounts are more secure than carrying around large sums of cash. But security isn’t always objectively measured and assessed; security is a state of mind.

Drawing on a recent mobile banking field study in Afghanistan, I ask you to consider the experience of the average Afghan day labourer. He lives in a one-room mud-hut home on the outskirts of Kabul with three generations of his family. Being illiterate severely limits the types of work he can do. On the days that he is able to find work, he earns Afs 180 (USD 4) which he then promptly takes to the market to buy food for his family. Whatever he doesn’t spend, he gives to his wife to put in their emergency fund, a small tin hidden in a clothes-pile at home. The tin is currently, and usually, empty. He has heard of the banks that have come to his country in recent years and sees their giant, gated structures springing up all over town, though is unsure of their function. For him, what is more secure?

Option 1: Walking into a gleaming building where he is unable to read the signage around him; handing his cash to a person who takes it ‘for safekeeping’ and assures him that the money is now accessible through the device he shares with three friends; and then walking out of the building with just a phone, minus the wad of cash he had when he walked in.

Leaving aside for a minute the practicality of such a system for him, what is the impact of that psychological sense of lost?

Option 2: A cotton undershirt with a zippered pocket, widely available in the bazaars of Kabul for a mere Afs 20 (USD 0.44). The fact that the labourer can, at all times, physically touch and immediately acccess his money — it just feels right. Compare this to a mobile banking experience for the newly initiated. If his money were to disappear — and, as the recent Kabul Bank scare proved, this is of popular concern — he might not know until it was too late. He has a constant, niggling suspicion that it might, so he dials in to check on his money three times a day. What is the toll on him? Cognitive surety can’t be undervalued.

So let’s move away from ‘innovative’ and ‘revolutionary’, and towards a sincere commitment to understanding those we are working for. From their perspective — whether end-users, agents, or any number of stakeholders along the chain — innovation is not a selling point. Cold, hard innovation doesn’t do anything. Value in Afghanistan, a country of constant flux, derives from tradition, from longevity, from a service provider that has proven they are able and willing to stick around and weather the storms with their users. And especially in matters of money, people don’t want the shiny and slick. They want the systems that have served their fathers, their grandfathers, and their fathers before them.

The Opportunity in G2P

According to CGAP, 170 million people globally receive regular payments from their governments — whether social support or salaries and pensions — yet less than a quarter of these land in a traditional bank account. There is thus great potential in G2P (government-to-person) transfers to help lead the financially marginalized into formal financial structures.

And the opportunity is not lost on forward-thinking governments and organizations, who are using electronic delivery to improve social and emergency services, with mixed success. Among the pioneers are the governments of South Africa, Brazil, Russia, and Mexico, and organizations such as Concern Worldwide and the World Food Programme, all who have experimented with electronic benefit cards or mobile money platforms. Digital solutions have been used to dispense emergency funds for families affected by post-election violence in Kenya, for food vouchers for Iraqi refugees, and for cash-for-work programs in post-disaster reconstruction in the Philippines. Done right, these new models can decrease the risks, costs, and logistical challenges — both for governments and beneficiaries — associated with cash delivery.

Through social transfer payments, there is immense opportunity to rethink how we frame and design for financial inclusion. But before plunging into technical analyses, regulatory powwows, and grand marketing visions, let’s make sure we’ve mastered the basics: user understanding. Only by correctly diagnosing user needs can we then conceptualize products and services that meet those needs, in ways that are more effective than the status quo and just as (if not more) comfortable for the user. Because habit is as formidable an opponent as any.

And, lest we forget, mobile banking systems rely on self-motivated, human networks to function; thus, ‘users’ in this context refer to all that effect the system, all throughout the system. Mobile money agents, government forces, and other implementation stakeholders cannot be afterthoughts — all are critical in passing the benefits of mobile finance down the chain. To ensure these benefits reach their intended beneficiaries, we must design for ancillary users, for their needs and ambitions, as well.

There is no one-size-fits-all in mobile banking; rather than mimicing past ‘innovation’, let’s develop bespoke solutions that respect the diversity of users, of cultures, and of markets.

Adapted from a recent talk at the G2P Payments Conference in Washington, DC.

I recently appeared on the Arabic language news network al-Hurra to talk about the role of the media in interfaith dialogue. With current tensions between American foreign policy and the Muslim world at an all-time high, it’s no surprise that the US government funded network takes an interest in the topic.

There was a common assumption underlying all the questions I was asked. The proposition was that our ever expanding and globally interconnected media ecosystem is fostering interfaith dialogue and understanding. This is certainly an optimistic pronouncement coming from those with an interest in seeing reality as such. Unfortunately, our current media have failed to deliver on this promise.

The reality of today is that people often dig deeper into their established and preferred worldview. MoveOn.org co-founder Eli Pariser has coined the term “filter bubbles” to describe our increased tendency to ignore content that challenges our opinions. Using newly possible online filters to block out dissonant views—whether intentionally or not—we are able to stay within our comfortable bubble-view of the world. This phenomenon, however, is hardly new, and media commentators from the age of McLuhan onward have bemoaned this human tendency. To be fair, there have always been media consumers who seek out opinions that challenge the boundaries of their worldview, but this group is a minority.

My fear, and frustration, is that the majority of us are happy to remain inside our bubbles. This inclination is made ever easier by the constricting algorithms that control our access to information. Our tendency to use search terms that reflect our opinions has allowed Google to become the most biased news outlet around. (Try googling both “women’s choice” and “right to life” to see this in action). Moving forward, automated systems reliant on natural language processing will dominate how we access, share, and become aware of information. Think of the micro-targeting approach of Google Adwords, or the small ads in your Gmail inbox. Content providers will increasingly use similar technology to suggest to you content you’re more likely to click on.

In this near-future where people are fed information cherry-picked from their expressed biases, the promise of users exploring content that challenges their beliefs and boundaries seems weak. Applying this equation to the challenge of discussing interfaith issues, and we see that expanded media offerings aren’t apt to change ingrained cultural attitudes any time soon.

Beyond the challenges of self-mediated filters, there’s a deeper perniciousness inside the belief that a changing media landscape holds the key to improved interfaith dialogue. By hanging our hopes on new tools to change society, we take the responsibility off our own persons. In almost every action in our daily lives, we are active participants in the creation of culture. We must first look to these personal moments — each one a choice — to proactively produce change. As tools only amplify human intent, we must first forge this intention in ourselves before we can achieve the expanded dialogue we seek.

Yes, our rapidly evolving media hold the promise of new opportunities for discourse, debate, and understanding. Yet the longer we rely on expanded media opportunities — rather than meaningful personal change — to bridge our cultural chasms, the longer our real divides will remain.