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What does HP mean by e-inclusion?
e-inclusion is HP's vision of empowering and enabling all the world's people to access the social and economic opportunities of the digital age.
What is HP's e-inclusion initiative?
Working with a range of local and global partners, HP is developing and delivering sustainable information solutions targeted at the four billion people with very low incomes in the developing world. Target regions include Africa, Asia, Central and Eastern Europe, Latin America and the Middle East.
How is this program different from what other companies are doing to bridge the digital divide?
e-inclusion complements but is distinct from ongoing digital divide efforts by other companies. We see three clear differences between HP's vision and other initiatives to bridge the digital divide in the developing world:
1. People first-While the Internet and other advances make our vision possible, the initiative is more about people than it is about technology. It's about people having access to information and social and economic opportunities.
2. Partnership-HP recognizes the need for extensive partnerships and participation in an ecosystem, not just unilateral action. Our aim is to help create a global ecosystem of companies, governments, development agencies, non-profit organizations and individuals.
3. Sustainability-e-inclusion is focused on sustainability in all its dimensions. If the solution is not sustainable, it's not a solution. Economically self-sustaining solutions offer fair value to all participants. They don't die out when the donations dry up. Sustainable solutions respect culture and preserve and enhance the environment.
All e-inclusion projects, including our so-called "Digital
Villages," are based on these three principles.
What is HP's motivation for undertaking this?
There are four key reasons:
1. To establish HP as a leader in an exciting new technology growth area that also demonstrates our character and commitment to social contribution.
2. To create significant revenue and profit growth over time through the creation of new markets, products and services.
3. To provide a showcase to the world of our capabilities in terms of devices, infrastructure and services.
4. To enhance current HP business opportunities in emerging markets
How can you justify this to your investors?
Over time we expect that this initiative will lead to the creation of significant new markets that will drive growth in revenue and profit. In the meantime, HP is benefiting in other ways-by establishing new partnerships and positions for the future, by strengthening our position in emerging economies for traditional products and services and by showcasing our technologies in compelling, high-volume applications.
Isn't this just another way to make money off of poorer nations?
Most technology companies are focused on products and services that meet the needs of the top two or three hundred million of the world's six billion people. Through e-inclusion, HP is focusing its efforts on providing sustainable solutions that address the needs of four billion of the world's poorest individuals. We are working to invent or integrate relevant information solutions that will bring tangible economic and social benefits to the poor and meet their top priority needs such as healthcare, education, employment, access to markets and access to credit.
Is this a philanthropic initiative?
HP has a long history of corporate philanthropy designed to give more and more people access to technology. This tradition will continue. At the same time, HP is moving e-inclusion from a citizenship objective to a business priority. Philanthropy is important, but it cannot fully address the scale of the challenge. That is why we see the need for a new sustainable business approach that provides fair value to all and builds on itself. There will be some discounted and donated products made available to qualifying agencies, but these will be on a limited basis.
How does the e-inclusion business unit differ from the business units HP has already established in regional markets?
The new business unit is chartered to spearhead HP's e-inclusion business strategy and drive it through our existing sales force and business units across the company worldwide. The initiative draws on and contributes to all the many strengths of HP: e-services, including devices and infrastructure, self-sustaining internet-enabled business models, HP's global sales and operations presence and HP's brand strength among both business and consumers. Essentially, it will affect the entire breadth and depth of our company.
How many people are involved? how big is the investment?
While we are not releasing specific information about investment levels, this is a multi-year commitment that is involving business units across HP and many partner organizations. Our investments range from HP laboratories research projects that one day will result in breakthrough products and services to sales programs that pay back almost immediately.
Why does HP see a significant business opportunity for the future and market potential in doing business with the world's four billion poor people?
The Old Economy (where 85 percent of the wealth is concentrated in 20 percent of the population) is about selling goods to the well off and giving a little away to the poor. In the Old Economy, it's foolhardy to run a business either by selling to people to people who have no money or by giving things away. The New Economy (also called the Information Services Economy) is about using human capital to create and exchange value. And this human capital is distributed fairly evenly across the population.
e-inclusion is about developing new, sustainable ways to create and share value. For example, if the incomes of the world's poor (defined as less than $2 per day) were increased by $1 per day, this would account for over $1 trillion in economic growth per year. The opportunities for wealth creation through information services are many and varied.
Can you give me some examples?
Here are three:
1. Agriculture-Just over half of the world's population derives their primary income from farming. Agriculture has a large information services component, including crop selection, choice and procurement of supplies, weather information, risk management and crop price information. Improved access to relevant information services will boost farmers' income significantly. The same is true in small-scale fishing and production.
2. Education and health care-Expenditures on education and health care in developing nations (largely public sector) were over $300 billion last year. Both education and health care have a large information services component. There are numerous breakthrough ideas out there in terms of more efficient delivery chains, but most initiatives are small and fragmented and in any case do not reach the rural poor, where most people live.
3. Financial services-The poor have historically had little or no access to financial services, including credit, savings and risk-management products. The Internet enables advances in this area by virtue of its low transaction costs, product bundling opportunities and extreme reach.
How will HP capture value in the creation of this huge new market?
1. By being the first mover among major IT companies. We are forming early partnerships with leading product and content developers as well as progressive governments.
2. By creating an efficient e-inclusion Services Marketplace and an ecosystem of partners who own and/or access it. The Services Marketplace will connect people and organizations around the world to social services and to markets for labor, goods and capital.
3. By bringing connectivity solutions to market that are designed for the special needs of developing countries. These will likely include solar-powered, satellite-connected kiosks and telecenters for villages; rugged, easy-to-use, low-cost appliances that are largely funded by the content that flows through them; and social adoption frameworks and business models that support the sustainable deployment and maintenance of such solutions.
What are the envisaged revenue streams for e-inclusion?
One model is to sell appropriate products, e-services and solutions for use in development programs for the poor. These would be sold primarily to development agencies, public sector customers, companies and non-governmenal organizations. We also see a big opportunity for value-added services in e-government consulting.
A second emerging model involves the creation of value-added, Internet-enabled products and services developed in league with partners. Profits from such products and services would be shared by all parties. Potential revenue streams would include transaction fees, commissions and charges for use of online marketplace services. HP would receive a small percentage on a high volume of transactions.
Although this is not a primary focus, a third possible revenue stream would come from advertising or sponsorships. We are also seeing collateral sales in hardware and services, Internet infrastructure and peripheral products. Telecenter designers are also standardizing on HP hardware. These developments are not the primary focus of e-inclusion but they are beneficial, nevertheless.
How are villages selected and solutions identified?
The projects that you see in the "engagements around the globe" section of the e-inclusion Web site are those in which e-inclusion or its partners are involved.
Solutions are identified through our contacts and partnerships with companies, governments, development agencies, non-profit organizations and individuals.