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January 25, 2019

Platform Practices

January 25, 2019

Our guiding concept for this research is the underlying belief, drawing on decades of social science research, that people are not passive users of complex digital technologies like platforms. Instead, they actively participates in appropriation, adaptation, and adoption.1

Our lens for analyzing platforms

FiDA has designed a lens to explore the impact of platforms on financial and economic inclusion.2 The term platform is used a lot, in different ways by different institutions. Based on our review of the multidisciplinary literature, we see platforms as mechanisms for hosting interaction and exchange between third parties in which the host (a) facilitates value creation (financial or otherwise) and (b) takes a share of that value but (c) doesn’t completely control the scope of interactions or their outcomes.

There are two main platform flavors. Innovation platforms, like operating systems or developer tools, emerge when an institution invites others to use its code or other assets to encourage further innovation in the provision of products and services. Windows and Android are great examples of innovation platforms. Meanwhile, transaction platforms create multi-sided markets by hosting interactions that match buyers and sellers. Transaction platforms are proliferating and touch every sector of the economy. eBay’s marketplace, Google’s paid search, Facebook’s ad market, and AirBnb’s homestays are all examples of transaction platforms. In 2018 and 2019, much of FiDA’s research focuses on transaction platforms.

It can be helpful to further differentiate transaction platforms by the types of transactions they facilitate:

  • E-commerce: online marketplaces where third parties sell goods to consumers. All transactions are processed through the website host.
  • Online work: also called online outsourcing, refers to the contracting of workers or providers to supply services or perform tasks via Internet-based marketplaces. Two major segments include microwork and online freelancing.
  • Offline-to-online: connecting buyers and traditional service providers (delivery, domestic work, taxi, etc.) that previously transacted offline.
  • Attention: platforms that treat a potential consumer’s attention as a resource or asset.
  • Data: hosted marketplaces where data providers offer data sets for a price, and data consumers can purchase or subscribe and use data for research, modelling, or analysis.

Across all these industries and kinds of exchange, transaction platforms transform markets in at least four ways: 1) aggregation and distribution, 2) transaction facilitation 3) credibility enhancement and 4) information analysis and advice. These four elements are both a “menu” for designing business models and user experiences—not all platforms offer all functions in the same ways—and a means of evaluating the impact of a platform’s entry into a market. Through these elements, platforms alter markets and can impact the prospects for success of buyers and sellers participating in it. Looking at the impact of platforms through these features enables us to develop a deeper understanding of how platforms may, or may not, create new avenues to prosperity and financial inclusion.

An interaction, not just an impact

So yes, technologies have remarkable power to shape or “impact” livelihoods. The choices that platform companies make about which people to allow to transact, how to feature goods or services on the site, which types of transactions to support, how to maintain credibility, etc. combine to create the user experience. Platforms set the rules of the game.3 Or, if you prefer the highfalutin language of media and technology studies, platforms create the affordances and constraints that govern the behavior of those on the platform.4

At the same time, people adapt. They adopt. They appropriate. For as long as there have been technologies, there have been user reactions to them. Social conventions emerge, like deciding to say “hello” when picking up the phone, or, lately, deciding not to make phone calls at all. Sometimes these adaptations become products or features; like hashtags on social media, or missed calls in India and sub-Saharan Africa. Users invent and create new ways to get the most out of whatever affordances and constraints technologies provide them, and technologies, in turn, adapt to those adaptations.5

This study focuses on that process of adaptation and appropriation. We are eager to understand the digital literacies, scripts, and emergent strategies that people have developed about what works, and what doesn’t, as they tried to bend the platforms to make the most of them, to prosper in the digital age. Some of this comes down to simply finding new ways to find more and better customers, or lower-cost suppliers, or better employees online. The classic challenges of running a business are completely recognizable in the new digital era. People still have to combine labor and raw materials and sell something for more than it costs to make. But one level down, playing out in the new digitized markets hosted or facilitated by the platforms, the scripts that work, the strategies that pay off, the ways in which platforms can be harnessed for livelihoods are brand-new and demand our scrutiny and understanding.

If we are to build or shape platforms that promote greater economic inclusion, and more broad-based prosperity and value creation, we need to understand how they are being used, and what gaps may exist where practices can be turned into products and services so that the cycle of innovation, adaptation, and re-innovation can continue.

Related Literature

This is our general theory of the case: that documenting user practices—focused on adaptation appropriation, and adoption—will allow us to see important patterns and developments as micro-entrepreneurs adjust their livelihood strategies to meet the new realities presented by the digitization of their markets by the platforms. But we’re not the first or the only researchers to be exploring this topic. Our work is inspired by and in dialogue with several studies that came before, including some of the following:

  • The FiBR project, a collaboration between Bankable Frontiers Associates and the Mastercard Foundation, and a FiDA portfolio partner, has been exploring the space recently, looking at the practices that Tanzanian small enterprises are using as they move retail online.6 For example, they spoke to a merchant, who explained “I use Whatsapp to build a relationship and trust with my customers. Before sending a package, I take a picture, upload on the platform and then send it.” How did she learn that this works? Do her customers expect the photos? If they don’t yet, will they? It’s a tiny thing, this quote, but the subtlety of building trust by using images and messaging is a digital literacy that is hard to teach, but undoubtedly important to her success.
  • Slavova and Karanasios have used a practices lens to look at the interplay between shifting “institutional logics” and hybridized individual informal practices as Ghana’s agricultural sectors adapt to increasing levels of digitization. The paper covers a great deal of ground and is more deeply engaged with theory than we can be in this study, but its focus on the ‘interaction modalities” offered by variable ICTs, available for different tasks at different times, helps link the macro and micro levels of the puzzle quite nicely, and is a good example of the power of the affordances/practices/appropriation lens.7
  • Wyche, Forte, and Schoenebeck cover some related questions in their study of how micro-entrepreneurs and the self-employed “hustle online” in the slums of Nairobi, using Facebook’s personal pages (not dedicated business pages) not only for socializing or entertainment, but also to advance livelihood schemes based on self-promotion and finding market niches.89 These are patterns that Bajpai, Larson, and Mehta call online “identity work” related to livelihoods.10 The personal pages and newsfeed of Facebook are not built for job searches or to advertise small businesses. How and why have they been appropriated in this way? And how do the people who use the platform in this way know it will work? These stories reflect how some Facebook users are turning to the app to look for jobs. Additionally, as many as two million female homemakers in India are reselling lifestyle and clothing products through Facebook and WhatsApp by obtaining the items from local suppliers who have goods in bulk and then charging a 15 to 20% commission.11
  • It’s not just Facebook. In India, a woman living in Manipur reflected that other apps are increasing her knowledge in her sector, “I watch how to make hand embroidery and how to use new machines on YouTube.”12
  • Maunder and Donner found similar patterns of identity work, including misrepresentation and status climbing/signaling, on job boards in Cape Town. What are, in essence, the emergent platform practices to support a livelihood via a Facebook page, or to upskill by watching YouTube, or try one’s luck on the online job boards?
  • Of course, the use of platforms is not universal among informal workers and micro-entrepreneurs; entrenched class constructions and gender norms13 still influence uptake and use. For instance, in a study conducted across Peru, South Africa, and India, Chen suggests that while organizations that advocate for informal workers are beginning to use ICTs in their work and organizing, individual informal workers primarily use simple mobile phones. Chen reminds us that there were limits to using ICTs as many informal workers did not have the device needed to access the internet—smartphones or computers—and many lack the necessary literacies to use the services. Among the handful in the study sample who do use the Internet, the usage is primarily restricted to the instant messaging app WhatsApp, which allows them to communicate with customers.14
  • Another study in Kenya highlights class distinctions in job platform use: young people described LinkedIn as a platform for professional networking and looking for jobs, targeted to higher-income people who already have formal employment, whereas for low-income young adults, in the Habari neighborhood, Facebook has taken up some of the functions associated with LinkedIn.15

Literacy is only part of the story

We choose the word “practices” because it encompasses literacy without being limited to it. Without a doubt, digital literacy, entrepreneurial literacy, and financial literacy are all important contributors to running a successful business online. But there is a craft—a context specificity to finding livelihood strategies that work for a given market in a given geography, with a given set of competitors—that is more than simply having the skills to put together a profile or create an Excel spreadsheet. The idea of situated practice is broader than literacy, but it should not diminish the important role that literacies will play in supporting inclusive livelihoods.

Some practices are quite specialized. For example, Venter documents emerging skills and tricks designers need to develop to use low-end mobile and shared computers to break into digital design in Cape Town. Practices also include some intuitions, like how to understand the algorithms that drive visibility on platforms.16 Donner and Maunder found a form of search engine optimization, demonstrated by jobseekers in Khayelitsha, a former Township area of Cape Town, who discovered they could have more success by listing their locations as prosperous neighborhoods like Sea Point or Clifton than their own neighborhoods.17

By focusing on “platform practices”, linking behaviors to the same four platform functions we described above, we can connect top-down design affordances to bottom-up adjustments and appropriation. Moreover, we can document the cycles of adaptation and evolution that drive innovation, and will, in turn, recommend how designers and product managers can better serve the micro-entrepreneur segment in Kenya and beyond.

 

  1. François Bar, Matthew S. Weber, and Francis Pisani, “Mobile Technology Appropriation in a Distant Mirror: Baroquization, Creolization, and Cannibalism,” New Media & Society, February 5, 2016, 1461444816629474, https://doi.org/10.1177/1461444816629474.

  2. Marissa Dean and Jonathan Donner, “How Can Platforms Improve Financial Inclusion in Africa?,” FiDA Medium Channel, September 10, 2018, https://medium.com/fida-partnership/how-can-platforms-improve-financial-inclusion-in-africa-33b088473c8.

  3. Jean-Charles Rochet and Jean Tirole, “Platform Competition in Two-Sided Markets,” Journal of the European Economic Association 1, no. 4 (2003): 990–1029, https://onlinelibrary.wiley.com/doi/abs/10.1162/154247603322493212; Dean and Donner, “How Can Platforms Improve Financial Inclusion in Africa?”; Christopher Foster et al., “Digital Control in Value Chains: Challenges of Connectivity for East African Firms,” Economic Geography 94, no. 1 (January 1, 2018): 68–86, https://doi.org/10.1080/00130095.2017.1350104.

  4. Donald A. Norman, The Design of Everyday Things, 1st Basic paperback. (New York: Basic Books, 2002), https://openlibrary.org/books/OL3702614M.opds.

  5. Wanda J. Orlikowski, “The Duality of Technology: Rethinking the Concept of Technology in Organizations,” Organization Science 3, no. 3 (August 1, 1992): 398–427, https://doi.org/10.1287/orsc.3.3.398.

  6. FIBR Project, “Superplatforms: How Will Merchants Benefit from E-Commerce in Africa?,” 2018, https://superplatforms.tumblr.com/.

  7. Mira Slavova and Stan Karanasios, “When Institutional Logics Meet Information and Communication Technologies: Examining Hybrid Information Practices in Ghana’s Agriculture,” Journal of the Association for Information Systems 19, no. 9 (2018): 4, https://aisel.aisnet.org/jais/vol19/iss9/4/.

  8. Susan P. Wyche, Andrea Forte, and Sarita Yardi Schoenebeck, “Hustling Online: Understanding Consolidated Facebook Use in an Informal Settlement in Nairobi,” in Proceedings of the SIGCHI Conference on Human Factors in Computing Systems, CHI ’13 (New York, NY, USA: ACM, 2013), 2823–32, https://doi.org/10.1145/2470654.2481391.

  9. Jonathan Donner and Andrew Maunder, “Beyond the Phone Number: Challenges of Representing Informal Microenterprise on the Internet,” in Living inside Mobile Social Information, ed. James E. Katz (Dayton, Ohio: Greyden Press, 2014), 159–92.

  10. K. Bajpai, J. B. Larson, and K. Mehta, “Like a Hustler: Aligning Intervention Design with Informal Labor Practices,” Of the Sixth International Conference on …, 2013, https://dl.acm.org/citation.cfm?id=2516624.

  11. Digbijay Mishra, “Homemakers Generate $9b in Sales through WhatsApp, Facebook: Report,” The Times of India, June 1, 2017, https://timesofindia.indiatimes.com/business/india-business/homemakers-generate-9b-in-sales-through-whatsapp-facebook-report/articleshow/58936563.cms.

  12. S. K. Chinmayi and Rohini Lakshané, “Of Sieges and Shutdowns,” 2018, http://thebachchaoproject.org/wp-content/uploads/Of_Sieges_and_Shutdowns_2018_06_The_Bachchao_Project.pdf.

  13. Savita Bailur and Silvia Masiero, “Women’s Income Generation through Mobile Internet: A Study of Focus Group Data from Ghana, Kenya, and Uganda,” Gender, Technology and Development 21, no. 1–2 (May 4, 2017): 77–98, https://doi.org/10.1080/09718524.2017.1385312.

  14. Martha A. Chen, “Technology, Informal Workers and Cities: Insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru),” Environment and Urbanization 28, no. 2 (October 1, 2016): 405–22, https://doi.org/10.1177/0956247816655986.

  15. Piia Jäntti, “The Usage of Social Media among Young Adults Living in Nairobi, Kenya: Only Entertainment or Contributions to Societal Change?,” 2015, https://jyx.jyu.fi/handle/123456789/45684.

  16. Erin Klawitter and Eszter Hargittai, “‘It’s Like Learning a Whole Other Language:’ The Role of Algorithmic Skills in the Curation of Creative Goods,” International Journal of Communication Systems 12 (2018): 21, http://ijoc.org/index.php/ijoc/article/view/7864.

  17. Donner and Maunder, “Beyond the Phone Number: Challenges of Representing Informal Microenterprise on the Internet.”

MSEs and ICTs

January 25, 2019

To get a sense of how microenterprises use technologies and what we know about the impact of technologies on the livelihoods of microenterprises, it’s best to stop thinking about “a mobile phone”. This is difficult because the mobile handset is the ubiquitous game changer. It’s the device/technology that has done the most to open new possibilities to the microenterprise market segment. Moreover, micro-entrepreneurs were among the earliest adopters of mobile phones in many emerging markets and were quick to see their value.

But what is the value? Because the mobile handset is many things, we’ve  outlined its discrete functions:

  • The value of a phone call is the oldest and most demonstrable. Phone calls substitute for journeys allowing people to exchange information and coordinate activities at a distance. This has direct implications for productivity and the creation of functioning markets wherein everybody knows the going price for their products.1 Mobile technologies “leapfrogged” fixed line installations in the developing world due to better economics: it is less expensive (for both the telco and the user) to add connections to a mobile network than to dig/string new fixed lines to homes and businesses.
  • The value of a mobile phone call is newer. Whereas landlines allow people to call places, mobile’s allow people to call people. This is a remarkable, newer advantage for small enterprises without a fixed place of business—such as people who work on call or travel to job sites.2
  • Mobile phones, even basic ones, allow for text messaging and, more recently, for IP-based chat like WhatsApp or Facebook messenger. Asynchronous, text-based messaging is a cost-effective complement to the requirements of a person-to-person phone call. Micro-entrepreneurs can use these channels incredibly effectively to cultivate and maintain business ties over  distance, to signal that products or services are ready for delivery or for sale, and to exchange all kinds of information about the markets in which they participate.3
  • Mobile phones, even mid-range ones, grant access to the Internet and the World Wide Web. The web is a source for business information. It’s better in big languages than small, better for some markets than others, but there’s no doubt that having access to Google, YouTube, Wikipedia, and more puts a lot more information in the hands of micro-entrepreneurs. It also increases the visibility/discoverability of many businesses to potential customers.
  • A litany of business services now run on apps—everything from small-scale accounting and inventory management to translation services and design tools. Not every business needs every app, but almost every business can benefit from one or two apps that have been tailored for a given sector.4 For example, TechnoServe’s Smart Duka program helps shopkeepers in Kenya manage inventory and recordkeeping.5
  • Mobile money and digital financial services offer a distinct and important set of functionality to MSMEs6—in some geographies more than others.
  • Relatively recently, we have seen the emergence of specialty apps and websites, or sometimes even simply text messages, that create virtual marketplaces.7 These are the platforms creating new markets for buying and selling.
  • And don’t forget the flashlight, or the radio, or the camera. Each little addition to the suite of tools available on a mobile handset can serve micro-entrepreneurs.

Of course, not all microenterprises can take advantage of all technologies in the same way. The various services described above (phone calls, asynchronous messaging, findability, information processing and storage, information and training, business services, and digital marketplaces/platforms) are useful in different combinations in different industry sectors. What makes sense for the motorcycle repair specialist (who may need a mobile phone to be on-call all the time) might not make sense for an accountant (who needs a spreadsheet, a mouse, and a bigger screen). What’s best for retail isn’t best for a wholesaler or a middleman.

Similarly, differences in skills/literacies, attitudes, and approaches to technology mean that not everybody will make use of the same tools as effectively.8 “Situated practices” match learned, yet informal craft to specific, complex contexts,9 often via side hustles that defy easy categorization into single livelihoods.10 To fail to account for this is to fail to appreciate the ways in which technologies don’t “impact” people so much as people react to and use technologies. We will explore some of this in the practices and digital literacies sections elsewhere in the report.

For all of the reasons discussed above, when one claims that “a phone” helps “a business”, it’s important to ask “how?” and “which business?” Indeed, the evidence for how the various functions of the mobile phone are impacting the landscapes for inclusive participation in marketplaces is mixed. So far, middlemen don’t seem to have disappeared so much as shifted. So too, mobile phones don’t seem to help people start new businesses so much as they help people run their existing businesses more effectively.11 But given the scope of this topic, these technologies being used in a myriad of ways by hundreds of millions of people around the world, the evidence is still fairly scarce and inconclusive.12

All told, it’s clear why we need to revisit ICT use by micro-entrepreneurs: to reflect on the arrival of the platform era. As good as it is, the research we have hasn’t done enough to demonstrate the impact of these new technologies, especially these new online marketplaces, on the livelihoods of small enterprises. Just because we know how a small business makes phone calls, sends text messages, or keeps its books digitally doesn’t mean that we know how successful that business will be in navigating new online, platformitized markets, mediated by algorithms and inscrutable processes, filled with opportunity but rife with new forms of competition. Although we can draw on scores of studies that illustrate how basic mobile telephony has done more to amplify existing business structures than to transform them, these studies are not really applicable to an era when almost any business can use WhatsApp, put up a Facebook page, browse Instagram for design ideas, or even set up a virtual shop on a trading platform. This study explores how platforms (Google, Facebook, Alibaba, etc.) create new models for (and avenues to) financial inclusion, and is thus among a much smaller set of precursors13 to what we hope will become a broad line of inquiry.

 

  • Bajpai, K., J. B. Larson, and K. Mehta. “Like a Hustler: Aligning Intervention Design with Informal Labor Practices.” Of the Sixth International Conference on …, 2013. https://dl.acm.org/citation.cfm?id=2516624.
  • Bakos, Yannis. “The Emerging Role of Electronic Marketplaces on the Internet.” Communications of the ACM 41, no. 8 (August 1998): 35–42. https://doi.org/10.1145/280324.280330.
  • Chen, Martha A. “Technology, Informal Workers and Cities: Insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru).” Environment and Urbanization 28, no. 2 (October 1, 2016): 405–22. https://doi.org/10.1177/0956247816655986.
  • Donner, Jonathan. After Access: Inclusion, Development, and a More Mobile Internet. MIT Press, 2015.
  • ———. “Mobile-Based Livelihood Services in Africa: Pilots and Early Deployments.” In Communication Technologies in Latin America and Africa: A Multidisciplinary Perspective, edited by M. Fernández-Ardèvol and A. Ros, 37–58. Barcelona: IN3, 2009. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.205.2894&rep=rep1&type=pdf.
  • Donner, Jonathan, and Marcela X. Escobari. “A Review of Evidence on Mobile Use by Micro and Small Enterprises in Developing Countries.” Journal of International Development 22, no. 5 (2010): 641–58. https://doi.org/10.1002/jid.1717.
  • FIBR. “Superplatforms: How Will Merchants Benefit from E-Commerce in Africa?,” 2018. https://superplatforms.tumblr.com/.
  • Higgins, Dylan, Jake Kendall, and Ben Lyon. “Mobile Money Usage Patterns of Kenyan Small and Medium Enterprises.” Innovations: Technology, Governance, Globalization 7, no. 2 (April 1, 2012): 67–81. https://doi.org/10.1162/INOV_a_00129.
  • Ilavarasan, Vigneswara, and Albert Otieno. “Tiny Impact of ICTs and Paucity of Rigorous Causal Studies: A Systematic Review of Urban MSMEs in the Developing World.” Information Technologies and International Development 14 (2018).
  • Islam, Md. Mazharul, Essam M. Habes, and Md. Mahmudul Alam. “The Usage and Social Capital of Mobile Phones and Their Effect on the Performance of Microenterprise: An Empirical Study.” Technological Forecasting and Social Change 132 (July 1, 2018): 156–64. https://doi.org/10.1016/j.techfore.2018.01.029.
  • Jensen, Robert. “The Digital Provide.” The Quarterly Journal of Economics 122, no. 3 (2007): 879–924. https://doi.org/10.1162/qjec.2009.124.4.ix.
  • Muthoni Mwaura, Grace. “The Side-Hustle: Diversified Livelihoods of Kenyan Educated Young Farmers.” IDS Bulletin 47, no. 3 (May 31, 2017). https://doi.org/10.19088/1968-2017.126.
  • Saunders, Robert J., Jeremy J. Warford, and Björn Wellenieus. Telecommunications and Economic Development. 2nd ed. Baltimore, MD: Johns Hopkins University Press, 1994.
  • Waweru, Alice. “Helping the Digital Revolution Reach the Corner Store: Piloting Mobile Solutions for Micro-Retailers.” Next Billion, January 2019. https://nextbillion.net/digital-solutions-for-micro-retailers/.
  • Wyche, Susan P., Andrea Forte, and Sarita Yardi Schoenebeck. “Hustling Online: Understanding Consolidated Facebook Use in an Informal Settlement in Nairobi.” In Proceedings of the SIGCHI Conference on Human Factors in Computing Systems, 2823–32. CHI ’13. New York, NY, USA: ACM, 2013. https://doi.org/10.1145/2470654.2481391.

  1. Robert J. Saunders, Jeremy J. Warford, and Björn Wellenieus, Telecommunications and Economic Development, 2nd ed. (Baltimore, MD: Johns Hopkins University Press, 1994); Robert Jensen, “The Digital Provide,” The Quarterly Journal of Economics 122, no. 3 (2007): 879–924, https://doi.org/10.1162/qjec.2009.124.4.ix.

  2. Martha A. Chen, “Technology, Informal Workers and Cities: Insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru),” Environment and Urbanization 28, no. 2 (October 1, 2016): 405–22, https://doi.org/10.1177/0956247816655986; Jonathan Donner, After Access: Inclusion, Development, and a More Mobile Internet (MIT Press, 2015); Md Mazharul Islam, Essam M. Habes, and Md Mahmudul Alam, “The Usage and Social Capital of Mobile Phones and Their Effect on the Performance of Microenterprise: An Empirical Study,” Technological Forecasting and Social Change 132 (July 1, 2018): 156–64, https://doi.org/10.1016/j.techfore.2018.01.029.

  3. Chen, “Technology, Informal Workers and Cities: Insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru).”

  4. Jonathan Donner, “Mobile-Based Livelihood Services in Africa: Pilots and Early Deployments,” in Communication Technologies in Latin America and Africa: A Multidisciplinary Perspective, ed. M. Fernández-Ardèvol and A. Ros (Barcelona: IN3, 2009), 37–58, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.205.2894&rep=rep1&type=pdf.

  5. Alice Waweru, “Helping the Digital Revolution Reach the Corner Store: Piloting Mobile Solutions for Micro-Retailers,” Next Billion, January 2019, https://nextbillion.net/digital-solutions-for-micro-retailers/.

  6. Dylan Higgins, Jake Kendall, and Ben Lyon, “Mobile Money Usage Patterns of Kenyan Small and Medium Enterprises,” Innovations: Technology, Governance, Globalization 7, no. 2 (April 1, 2012): 67–81, https://doi.org/10.1162/INOV_a_00129.

  7. Yannis Bakos, “The Emerging Role of Electronic Marketplaces on the Internet,” Communications of the ACM 41, no. 8 (August 1998): 35–42, https://doi.org/10.1145/280324.280330.

  8. Chen, “Technology, Informal Workers and Cities: Insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru).”

  9. K. Bajpai, J. B. Larson, and K. Mehta, “Like a Hustler: Aligning Intervention Design with Informal Labor Practices,” Of the Sixth International Conference on …, 2013, https://dl.acm.org/citation.cfm?id=2516624.

  10. Grace Muthoni Mwaura, “The Side-Hustle: Diversified Livelihoods of Kenyan Educated Young Farmers,” IDS Bulletin 47, no. 3 (May 31, 2017), https://doi.org/10.19088/1968-2017.126; Susan P. Wyche, Andrea Forte, and Sarita Yardi Schoenebeck, “Hustling Online: Understanding Consolidated Facebook Use in an Informal Settlement in Nairobi,” in Proceedings of the SIGCHI Conference on Human Factors in Computing Systems, CHI ’13 (New York, NY, USA: ACM, 2013), 2823–32, https://doi.org/10.1145/2470654.2481391.

  11. Jonathan Donner and Marcela X. Escobari, “A Review of Evidence on Mobile Use by Micro and Small Enterprises in Developing Countries,” Journal of International Development 22, no. 5 (2010): 641–58, https://doi.org/10.1002/jid.1717.

  12. Vigneswara Ilavarasan and Albert Otieno, “Tiny Impact of ICTs and Paucity of Rigorous Causal Studies: A Systematic Review of Urban MSMEs in the Developing World,” Information Technologies and International Development 14 (2018).

  13. FIBR, “Superplatforms: How Will Merchants Benefit from E-Commerce in Africa?,” 2018, https://superplatforms.tumblr.com/. Wyche, Forte, and Yardi Schoenebeck, “Hustling Online: Understanding Consolidated Facebook Use in an Informal Settlement in Nairobi.”

Interview Methods

January 25, 2019

This research project is based on semi-structured interviews with 27 micro-entrepreneurs. In this note, we will describe how we selected them, how we interviewed them, and how we analyzed the results.

Sample selection

Like most qualitative research, our sample was purposive rather than strictly representative 1. This approach allowed us to identify a wider range of experiences and themes. This qualitative work will be paired with a representative, quantitative sample of micro-entrepreneurs in 2019.

That said, we were guided by the “2016 Micro, Small, and Medium Enterprises (MSME) Survey” issued by the Kenya National Bureau of statistics 2. This report suggests there are 7.07 million non-agricultural enterprises with fewer than 10 employees in Kenya, the bulk of which are sole proprietorships, or businesses consisting of a single employee. The top categories for MSMEs are retail trade and apparel. Roughly 81% of microenterprises are informal, meaning they do not maintain a registry with the registrar of companies.

We began with a baseline to mirror this distribution, but then reallocated some of the interviewees away from the retail field. Our final distribution looks like this:

  • Wholesale/Retail (e.g., retail trade, auto mechanics, wholesale trade): 9
  • Accommodation & Food Services (e.g., hotels, bakers, food delivery): 5
  • Service activities (e.g., computer repair, sports activities): 5
  • Manufacturing (e.g., apparel, food products, fabricated metal products): 3
  • Other (transportation, financial and insurance activities, education): 4

We worked with a Kenyan researcher and recruiter to identify prospective interview candidates. Interviewees received 2000 KSH (22 USD) as an honorarium for participation. The goals and methods of the study were fully explained at the time of recruiting and again at the interview. Participants indicated informed consent via a signed document. Participants also agreed, separately, to include their photograph or not in the study. All of the participants’ names have been changed, apart from the five persons who agreed to have their videos. and details about their businesses, on this microsite.

Study design

For the interviews, an experienced researcher was paired with an enumerator/translator to capture data. The interview was a mix of semi-structured and open-ended questions about each entrepreneur’s history with their business(es), their current operation(s), and aspirations for the future.

Additionally, about half the interview was conducted using a “digital day” reconstruction/elicitation technique. In one sense, this is as simple as asking people what they did yesterday. However, Caribou Digital has modified the basic technique to fit mobile-centric and mobile-only users in the global South 3.

Here is an example of a completed digital day from the study:

And the digital version:

Analysis

Analysis proceeded along two tracks: one structured, one more inductive.

The structured component mapped key platform practices to the “FiDA platformization lens” 4. That lens identifies four core functions of marketplace platforms for fragmented, inefficient markets in the global South: convocation, aggregation, and gatekeeping; transaction support; credibility and governance; and ancillary value creation via data aggregation. We scanned interview notes for the platform practices—that is, the user behaviors carried out in reaction to platform functionality—corresponding to each of these four elements, which are discussed in the four “platform practices” sections linked above.

The inductive component of our analysis allowed for the fact that not everything we observed fit cleanly into one of these four categories. Through our discussions on the research team (Nagula, Schiff, and Donner), we identified two main themes of “blurring” which required further discussion: “tech and touch” and “the digital side hustle”. We wrote an essay on each of these blurring themes.  

The final set of essays, “takeaways”, merges the results/observations uncovered in the deductive and inductive essays to translate these observations into potential actions linked to specific stakeholders in the broader community: policymakers, technologists/product planners, and researchers.

 

  1. Dorothy Horsburgh, “Evaluation of Qualitative Research,” Journal of Clinical Nursing 12, no. 2 (March 1, 2003): 307–12.

  2. Kenya National Bureau of Statistics , “2016 Micro, Small and Medium Enterprises (MSME) Survey Basic Report” (KNBS, March 2017). https://www.knbs.or.ke/2016-micro-small-and-medium-enterprises-msme-survey-basic-report-2/.

  3. Savita Bailur et al., “Digital Lives in Ghana, Kenya and Uganda” (Caribou Digital, December 2015). http://cariboudigital.net/wp-content/uploads/2015/12/Caribou-Digital-Digital-Lives-in-Ghana-Kenya-and-Uganda.pdf

  4. Marissa Dean and Jonathan Donner, “How Can Platforms Improve Financial Inclusion in Africa?,” FiDA Medium Channel, September 10, 2018. https://medium.com/fida-partnership/how-can-platforms-improve-financial-inclusion-in-africa-33b088473c8

What’s an MSE?

November 30, 2018

(Note, we shared an earlier version of this post on Medium.)

Apart from agriculture, Micro, Small, and Medium Enterprises (MSMEs) are the greatest source of employment in much of sub-Saharan Africa. Long a focus of interest to the development community1, as digitization transforms the nature of work — from gig economies to international supply chains — the links between MSMEs and information and communication technologies (ICTs) are increasingly important.

We’d like to share the results of an exercise we conducted to help focus our research. It’s basically a 2×2, but in this case we think it’s durable and useful to share.

The first dimension in our table is the size of the firms in question. In our discussions, we found that the definition of MSME was quite broad; accordingly, we distinguish ‘Micro’ from ‘Small and Medium.’ However, there is no hard and fast rule for drawing this line. Some countries define microenterprises as firms with <10 employees, others draw the line at <5 employees. For sub-Saharan Africa, where firm sizes tend to be smaller (and the majority of firms are sole proprietorships), we think the <5 delineation makes more sense.

Firms with fewer than five employees — both sole proprietorships and microenterprises—are the most common type of enterprises. Many are informal, and most struggle to grow. Microfinance rose as a community of practice specifically to address the needs of these tiny businesses. The literature on microenterprises, their use of ICTs, and their challenges is now quite robust.

By contrast, Small and Medium Enterprises(SMEs) are usually formal, registered businesses that pay taxes. These firms also face challenges vis-a-vis financial services, but they are not so much challenges of access as of suitability or affordability — loan terms might be too short, bank fees too high, etc.

The second dimension refers to the nature of the enterprises’ relationships to the digital economy. As Duncombe and Heeks have explained, there’s a key distinction between small firms that benefit from ICTs and small firms that produce ICTs. We see a durable conceptual split between “the broader economy,” which benefits from and is being transformed by digitization, and the subset of firms with “digital DNA”, which are making the products, delivering the services, and writing the code that underpins that digitization.

A related but distinct category of firms are the platforms themselves — the handful of multinational superplatforms as well as a larger set of local and regional electronic marketplaces — that are transforming sectors of the economy in real time. This is what we mean by “the platform era”: platform logic has become central to the ways in which digitization and the internet are changing economies, and this platformization is a major theme for our work in the year ahead. Our typology is more clear if we place platforms in a different section of our framework.

The result is a 2×2 with a modified adjunct for the platforms themselves. As you can see, the research topics that emerge are distinct enough to clarify the most relevant research questions:

  • Box 1 involves the largest number of firms in any economy. Here we are dealing with the struggle of the everyday, how firms—from small restaurants and fix-it shops to retail establishments—might utilize national and global platforms in new ways. Research here would explore how the traditional clients of microfinance institutions are adapting to the platform era. So, in this project, we focus on the ways in which micro-entrepreneurs appropriate social media and the personal Internet to fit their needs, even when the lines between the entrepreneur and their enterprise are blurred.
  • Box 2 is quite different in that in this case some platforms are providing new opportunities for small-scale economic organizations with “digital DNA” to offer products and services in entirely new ways. The best, and perhaps most controversial, example of this might be gig work whereby individual proprietors or small firms utilize the infrastructures of labor platforms to earn livings in the cloud, mediated completely by the platform.
  • Box 3 involves a country’s established, formal SME class. How are these firms adapting to the platform era? Thanks to digitization a host of innovations, from inventory and product management to advertising and financing, can be offered at lower cost and higher value to these firms. How, precisely, are platforms involved with these new offerings?
  • Box 4 involves digital startups: the stuff of businesses coming out of accelerator programs and preparing to take off. Many digital startups write the software or design the new hardware that is customizing the global Internet and other digital technologies for African markets. There’s a great deal of enthusiasm around these businesses, but the research necessary  to understand a digital startup differs from the research needed to understand the motorcycle repair shop down the street. Both are enterprises but, structurally, they occupy very different places, both in terms of their local economies and their international visibility.
  • Box 5 is our floating adjunct to the 2×2, an acknowledgment that the platforms themselves deserve and require significant scrutiny. From Jumia to Sendy to WhatsApp for business, the terrain of platform-related digital services is shifting and expanding. Insight2impact, together with Research ICT Africa have identified over 280 platforms active in sub-Saharan Africa.2

All in all, there’s a lot of work to be done. The point of this post is to sensitize readers to the importance of a bit of specificity regarding terms so that a generalized enthusiasm for platforms and/or MSMEs does not get in the way of refined research questions that can uncover new insights. Our work, in this project, focuses mostly on “Box 1” with a bit of “Box 2” (the side hustle) mixed in.

 

  1. Richard Duncombe and Richard Heeks, “Enterprise across the Digital Divide: Information Systems and Rural Microenterprise in Botswana,” Journal of International Development 14, no. 1 (January 2002): 61–74, https://doi.org/10.1002/jid.869; Donald C. Mead and Carl Liedholm, “The Dynamics of Micro and Small Enterprises in Developing Countries,” World Development 26, no. 1 (January 1, 1998): 61–74, https://doi.org/10.1016/S0305-750X(97)10010-9.

  2. Insight2impact Facility and Research ICT Africa, “African Digital Platforms and the Future of Digital Financial Services,” i2ifacility.org, accessed December 27, 2018, http://i2ifacility.org/insights/articles/african-digital-platforms-and-the-future-of-digital-financial-services.

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