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When you grow up in a developing country
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like India, as I did,
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you instantly learn to get more value
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from limited resources
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and find creative ways to reuse
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what you already have.
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Take Mansou Prajipati[??],
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a potter in India.
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He has created a fridge
made entirely of clay
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that consumes no electricity.
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He can keep fruits and vegetables
fresh for many days.
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That's a cool invention, literally.
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In Africa, if you run out of
your cell phone battery, don't panic.
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You will find some
resourceful entrepreneurs
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who can recharge your cell phone
using the bicycles.
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And since we are in South America,
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let's go to Lima in Peru,
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a region with high humidity
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and receives only one inch
of rainfall each year.
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An engineer in college in Lima
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designed a giant advertising billboard
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that absorbs air humidity
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and converts it into purified water,
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generating over 90 liters
of water every day.
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The Peruvians are amazing.
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They can literally create
water out of thin air.
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For the past seven years,
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I have met and studied
hundreds of entrepreneurs
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in India, China, Africa,
and South America,
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and they keep amazing me.
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Many of them did not go to school.
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They don't invent stuff
in big R&D labs.
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The street is the lab.
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Why do they do that?
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Because they don't have the kind
of basic resources we take for granted,
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like capital, energy,
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and basic services,
like health care, education,
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are also scarce in those regions.
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When external resources are scarce,
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you have to go within yourself
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to tap the most abundant resource,
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human ingenuity, and use that ingenuity
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to find clever ways to solve problems
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with limited resources.
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In India, we call it Jugaad.
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Jugaad is a Hindi word
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that means an improvised fix,
a clever solution borne in adversity.
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Jugaad solutions are not
sophisticated or perfect,
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but they create more value at lower cost.
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For me, the entrepreneurs
who will create Jugaad solutions
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are like alchemists.
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They can magically transform
adversity into opportunity,
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and turn something of less value
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into something of high value.
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In other words, they mastered the art
of doing more with less,
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which is the essence of frugal innovation.
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Frugal innovation is the ability
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to create more economic and social value
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using fewer resources.
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Frugal innovation is not about making do:
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it's about making things better.
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Now, I want to show you how,
across emerging markets,
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entrepreneurs and companies
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are adopting frugal innovation
on a larger scale
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to cost-effectively deliver
health care, energy,
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to billions of people
who may have little income
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but very high aspirations.
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Let's first go to China,
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where the country's largest
IEP service provider, NewSoft,
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has developed a telemedicine solution
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to help doctors in cities
remotely treat old an poor patients
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in Chinese villages.
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This solution is based on
simple-to-use medical devices
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that less-qualified health workers
like nurses can use in rural clinics.
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China desperately needs
these frugal medical solutions,
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because by 2050, it will be home
to over half a billion senior citizens.
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Now, let's go to Kenya,
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a country where half the population
uses M-PESA, the mobile payment solution.
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This is a great solution
for the African continent,
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because 80 percent of Africans
don't have a bank account,
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but what is exciting is that M-PESA
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is now becoming the source
of other disruptive business models
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in sectors like energy.
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Take M-KOPA, the home solar solution
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that comes literally in a box
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that has a solar rooftop panel,
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three LED lights,
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a solar radio, and a cell phone charger.
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The whole kit, though, costs 200 dollars,
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which is too expensive for most Kenyans,
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and this is where mobile telephony
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can make the solution more affordable.
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Today, you can buy this kit by making
an initial deposit of just 35 dollars,
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and then pay off the rest by making
a daily micro-payment of 45 cents
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using your mobile phone.
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Once you've made 365 micro-payments,
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the system is unlocked,
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and you own the product
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and you start receiving
clean, free electricity.
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This is an amazing solution for Kenya,
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where 70 percent of the people
live off the grid.
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This shows that, with frugal innovation,
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what matters is that you take what is
most abundant, mobile connectivity,
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to deal with what is scarce,
which is energy.
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With frugal innovation, the Global South
is actually catching up and some cases
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even leap-frogging the North.
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Instead of building expensive hospitals,
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China is using telemedicine
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to cost-effectively treat
millions of patients,
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and Africa, instead of building
banks and electricity grids,
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is going straight to mobile payments
and distributed clean energy.
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Frugal innovation is diametrically opposed
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to the way we innovate in the North.
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I live in Silicon Valley,
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where we keep chasing
the next big technology thing.
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Think of the iPhone 5, 6, then 7, 8.
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Companies in the West spend
billions of dollars investing in R&D,
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and use tons of natural resources
to create ever more complex products,
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to differentiate their brands
from competition,
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and they charge customers
more money for new features.
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So the conventional
business model in the West
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is more for more,
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but sadly, this more for more model
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is running out of gas, for three reasons.
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First, a big portion
of customers in the West
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because of the diminishing
purchasing power,
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can no longer afford
these expensive products.
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Second, we are running out of
natural water and oil.
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In California, where I live,
water scarcity is becoming a big problem.
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And third, most importantly,
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because the growing income disparity
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between the rich and the middle class
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in the West,
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there is a big disconnect
between existing products and services
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and basic needs of customers.
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Do you know that today,
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there are over 70 million Americans
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today who are underbanked,
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because existing banking services
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are not designed to address
their basic needs.
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So the prolonged economic crisis
in the West is making people think
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that they are about to lose
the high standard of living
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and face deprivation.
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I believe that the only way we can sustain
growth and prosperity in the West
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is if we learn to do more with less.
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The good news is,
that's starting to happen.
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Several Western companies
are now adopting frugal innovation
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to create affordable products
for Western consumers.
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Let me give you two examples.
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When I first saw this building,
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I told myself it's some kind
of post-modern house.
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Actually, it's a small manufacturing plant
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set up by Grameen Danone, a joint venture
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between Grameen Bank of Muhammad Yunus
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and the food multinational Danone
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to make high quality yogurt in Bangladesh.
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This factory is 10 percent the size
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of existing Danone factories
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and cost much less to build.
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I guess you can call it
a low fat factory.
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Now this factory, unlike Western factories
that are highly automated,
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relies a lot on mannered processes
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in order to generate jobs
for local communities.
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Danone was so inspired by this model
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that combines economic sufficiency
and social sustainability,
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they are planning to roll it out
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in other parts of the world as well.
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Now, when you see this example,
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you might be thinking, "Well,
frugal innovation is like low tech."
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Actually, no.
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Frugal innovation is also
about making high tech
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more affordable and more
accessible to more people.
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Let me give you an example.
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In China, the R&D engineers
of Siemens Healthcare
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have designed a CT scanner
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that is easy enough to be used
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by less qualified health workers,
like nurses and technicians.
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This device can scan
more patients on a daily basis,
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and yet consumes less energy,
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which is great for hospitals,
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but it's also great for patients
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because it reduces the cost
of treatment by 30 percent
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and radiation dosage by up to 60 percent.
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This solution was initially designed
for the Chinese market,
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but now it's selling like hotcakes
in the U.S. and Europe,
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where hospitals are pressured
to deliver quality care at lower cost.
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But the frugal innovation revolution
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in the West is actually led
by creative entrepreneurs
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who are coming up with amazing solutions
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to address basic needs
in the U.S. and Europe.
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Let me quickly give you
three examples of start-ups
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that personally inspire me.
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The first one happens to be launched
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by my neighbor in Silicon Valley.
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It's called G-Drive.
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They make actually these wireless sensors
designed like plastic rulers
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that farmers can stick
in different parts of the field
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and start collecting detailed
information like soil conditions.
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This dynamic data allows farmers
to optimize use of water energy
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while improving quality
of the products and the yields,
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which is a great solution for California,
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that faces major water shortage.
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It pays for itself within one year.
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Second example is Be-Bound,
also in Silicon Valley,
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that enables you
to connect to the Internet
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even if no-bandwidth areas
where there's no Wifi or 3G or 4G.
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How do they do that?
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They simply use SMS, a basic technology,
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but it happens to be the most reliable
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and most widely available
around the world.
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Three billion people today
with cell phones
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can't access the Internet.
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This solution can connect them
to the Internet in a frugal way.
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And in France, there is
a startup calle Compte Nickel
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which is revolutionizing
the banking sector.
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It allows thousands of people
to walk into a mom-and-pop store
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and in just five minutes activate
the service that gives them two products:
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an international bank account number
and an international debit card.
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They charge a flat annual maintenance fee
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of just 20 Euros.
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That means you can do
all banking transactions
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-- send and receive money,
pay with your debit card --
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all with no additional charge.
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This is what I call low-cost banking
without the bank.
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Amazingly, 75 percent of the customers
using this service are middle class French
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who can't afford high banking fees.
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Now, I talked about frugal innovation,
initially pioneered in the South,
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now being adopted in the North.
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Ultimately, we would like to see
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developed countries
and developing countries
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come together and co-create
frugal solutions
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that benefit the entire humanity.
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The exciting news is
that's starting to happen.
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Let's go to Nairobi to find that out.
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Nairobi has horrendous traffic jams.
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When I first saw them, I told myself,
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"Holy cow."
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Literally, because you have to dodge cows
as well when you drive in Nairobi.
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To ease the situation,
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the engineers at IBMLab in Kenya
Retired user
At 07:49 the question mark is missing
There's a typo at 11:34: it says "calle" instead of "called".