Institute for Business in the Global Context

Where the World of Business Meets the World

Month: October 2017

Digital Solutions Can Help Even the Poorest Nations Prosper

Fast economic growth is the best way to reduce poverty. A recent Tufts University study found that digitization is one of the biggest drivers of a nation’s economic success. The report argues that that economic growth is mostly achieved by careful policy-setting—in other words, it’s best driven by government.

Of 60 countries the report measured, Bangladesh received the lowest score for its digital technologies. But the south Asian nation has no intention of staying in last place: It is in eighth place in the world for the pace of its technological advancement. That’s because of an ambitious approach to the digital economy.

Read the full piece, featuring our Digital Planet work, in WIRED

MIB Candidate Adi on his Summer Internship as a Banker

Originally post on the Fletcher admissions blog, a home for lots of great content from the Fletcher community!!

At one point during my first year at Fletcher, someone told me that, in the end, everything was going to be o.k.  Everyone will do something during the summer break, be it an internship, research, writing, or catching up with old friends and family for two or three months.  As much as I wanted to believe that, I couldn’t help but get a little nervous when it was a couple of weeks after the last final of the spring semester, summer had officially started, and there was still no official offer letter for a summer internship.  I even flew back home to Indonesia, not knowing whether I was going to intern at all during the next few months, or just plain relax (or maybe start writing my capstone).

Adi (in the red shirt) and the CCB team at Citi Indonesia

Then the moment I had been waiting for finally arrived.  I was offered a spot in the Global Consumer Summer Associate batch at Citigroup’s Jakarta office.  While extremely relieved, I also came to realize that now the hard work would start.  This would be my first exposure to working at a global corporation, first time at a financial institution, in an industry far away from my previous professional background.  I was put on the Commercial Lending team.  My role was to support the business analysis and marketing staff in the division.  My main deliverable was an official guide for new employees of Citi Commercial Bank (CCB).  This meant that I had to learn how CCB operates, understand the complete business process down to the individual roles of each person on the team, and package all this information into a guidebook that would be easily digestible to a newcomer.

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Student Research: Demonetization gave a push towards digital payments – But is India ready to do away with cash?

by Raunak Mittal (MALD 2018)

Demonetization, a bold move executed by the current government in India took everyone by surprise. Good or bad, it is one of the biggest policy decision taken by an economy as large as India in the recent past. The aspects that interest me in this big policy decision are the effects of this move towards the digitization of finance, including digital payments and alternative lending.

There has been a focus on alternative modes of credit lending ,not just in developing economies but also in the developed economies like the US. As part of my ongoing research, I had the opportunity to talk with the founders and leaders of alternative lending startups like Numerated, DistilledAnalytics, Branch.co and Entrepreneurial Finance Lab in the US. However, for getting a closer look on what is happening in India post the biggest strike on cash, I continued my research with the help of IBGC by visiting India during in August 2017. My research plan was two-fold: to meet startups that are operating in the space of digital finance or alternative lending; and to observe the change in people’s behavior in dealing with day-to-day transactions nine months post-demonetization.

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Ig-Nobel Mistakes

Wiping out 86 per cent of a country’s currency is rarely a “good start” on anything. In a country where, according to recent analyses of income-tax probes, the cash component of undeclared wealth is estimated to be only about six per cent, leaving an economy virtually cashless is certainly not a good place to end up. If Thaler had studied the data on the Indian economy he might have realised that the policy instrument he had supported was aimed at the wrong target: The currency of corruption is mostly in non-cash assets.

Read the full piece from Dean Chakravorti in The Indian Express

Will the US Get Left in the Digital Dust?

“We identified many hot spots around the world where these changes are happening rapidly and other spots where momentum has slowed,” the authors of the Digital Evolution Index said. “Two years on, depending on where we live, we continue to move at different speeds toward the digital planet.”

Read the full piece on DEI 17, featuring quotes from Dean Chakravorti in VOA News

The “Smart Society” of the Future Doesn’t Look Like Science Fiction

by Bhaskar Chakravorti and Ravi Shankar Chaturvedi

What is a “smart” society? While flights of imagination from science-fiction writers, filmmakers, and techno-futurists involve things like flying cars and teleportation, in practice smart technology is making inroads in a piecemeal fashion, often in rather banal circumstances. In Chicago, for example, predictive analytics is improving health inspections schedules in restaurants, while in Boston city officials are collaborating with Waze, the traffic navigation app company, combining its data with inputs from street cameras and sensors to improve road conditions across the city. A city-state such as Singapore has a more holistic idea of a “smart nation,” where the vision includes initiatives from self-driving vehicles to cashless and contactless payments, robotics and assistive technologies, data-empowered urban environments, and technology-enabled homes.

More broadly, we might define a smart society as one where digital technology, thoughtfully deployed by governments, can improve on three broad outcomes: the well-being of citizens, the strength of the economy, and the effectiveness of institutions.

The potential for technologies to enable smart societies is rising. For example, internet-of-things sensor applications are envisioned to deliver a wide range of services, from smart water to industrial controls to e-health. The market for smart technologies is predicted to be worth up to $1.6 trillion by 2020, and $3.5 trillion by 2026. Surely, given the size of the opportunity, increasing interest among governments and policy makers, and the explosion of relevant technologies, we can start to understand what smart societies are  and establish standards and ideals to aim for.

Read the full piece in the Harvard Business Review

After the Wall Street crash of 2008, Fabian Olarte (MIB ’11) found himself seeking a new career path. He decided there was no better place to do so than at The Fletcher School, and is grateful for the warm, helpful community he found at the school: “A lot of people helped me get my job and helped me advance in my career, and I’m doing the same for them.”

Britain’s Digital Advantage

No wonder then that there is much anxiety among Brexit-watchers about the UK making a clean break and rejecting the ‘four freedoms’ that EU members enjoy − free movement of people, goods, capital and services. I would argue that there is a fifth freedom that negotiators ought to keep in their sights, one that may hold the key to re-balancing the terms of Brexit. This freedom has to do with the free movement of data.

Data matters because it is the fuel − and exhaust − of a critical part of the overall economy: the digital economy.

When one considers the digital economies of the UK and that of the EU, the latter would be losing a genuine star if barriers to UK-EU data flows were to be erected.

Read the full piece from Dean Chakravorti on the Chatham House website

New from Prof. Kim Wilson – “Migration’s Middlemen and How to Pay Them”

by Kim Wilson, CEME Senior Fellow

Posted originally by the Center for Financial Inclusion

How do refugees finance their journeys and which expenses need financing? This was the question that a team of us at Fletcher set out to answer in our study “The Financial Journey of Refugees.” We studied the routes and financial challenges of more than 100 refugees in Greece, Jordan and Turkey, between July 2016 and April 2017. The refugees we interviewed had traveled from South Asia, Central Asia, the Middle East, East Africa and West Africa.

Regardless of their country of origin, with the exception of Syria, a refugee’s biggest expense was the cost of hiring a smuggler. Smuggling expenses ran about 85 percent of the total cost of the journey. The smuggler’s fee included important services: travel by air or overland, depending on the refugee’s budget, guide services across borders, payment of bribes at border crossings, and documentation falsification expenses. Smuggling prices varied widely by country of origin (some borders being porous, others sealed tight), by how deluxe a trip was (air versus ground), by numbers of borders crossed (affecting the number of falsified IDs required). To give an example, journeying overland from Afghanistan through Pakistan, Iran, and Turkey to Greece might cost $7,500 per person, a price that went up or down based on shifting rules and border crackdowns. Traveling from Eritrea to Greece might cost the same amount. Traveling from Syria to Turkey could cost as little as $500.

The price of the journey was one factor in a traveler’s safety – the higher the cost, the better the traveling modes, and the safer the travel. While what refugees paid their smuggler was important, how they paid them was equally important. Did the refugee pre-pay the kingpin smuggler in advance of the journey? Did she post-pay him after arriving safely in Greece or Germany? Did she pay leg by leg? All these strategies were in play and we outline them in our report summary and they are detailed by the refugees themselves in a Compendium of Field Notes. Below we describe two of many strategies.

Strategy 1: Guarantee Scheme via a Financial Third Party

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