Why has the fashion industry been allowed to get away with murder? A rethinking of the UK clothing retail industry.

The industry of focus

The UK high street fashion industry is famously competitive. Brands including H&M, Zara and Primark battle it out for a share of the UK’s approximately €60 billion in annual clothing expenditure (Fashion United, 2013). Such brands champion a way of working termed ‘fast fashion’ – a system in which high street chains have as many as 52 micro-seasons a year, with new trends hitting the shelves weekly, rather than at the commencement of one of the four climactic seasons (Whitehead, 2014). This system makes retailers dependent on lightning-quick supplier production cycles. Critics comment that clothing is ‘designed to fall apart’ – encouraging consumers to shop for new clothes on an ever more frequent basis, with their cast –offs becoming waste in landfills (ibid.). In addition, the low cost clothing provided by many high street brands (notably Primark – where a pair of jeans can be bought for under ₤10) encourages merchandisers to scour manufacturers in low-wage developing countries for the lowest costs.

The challenge at hand

Affordable, accessible fashion has come at an ugly cost for garment industry factory workers in countries including China, India and Bangladesh. Criticism of the fashion industry has long focussed on the inadequate protection given to garment factory workers. For example, reports of pay below the minimum wage, physical abuse and child labour in Nike subcontractors’ factories abounded throughout the 1990s (Nisen, 2013).

However, the collapse of the Rana Plaza factory in Bangladesh in 2013, killing 1137 people, has brought issues of worker safety and compensation back into public focus (Institute for Global Labour and Human Rights, 2014). Workers were reportedly forced to enter the building, using threats, despite their protests regarding structural instability (ibid.).  Inditex, Primark and others have been connected to factories operating in the Rana Plaza building (Clean Clothes Campaign, 2015). The owner of Rana Plaza, Sohel Hana, was found to be quite obviously at fault, and remains in prison (ibid.). However, UK high street stores are not free from blame for this incident. Why were they subcontracting to a factory owner who was infringing on human rights? Furthermore, wages paid to workers were found to be as low as 12 US cents per hour in some cases – were UK retailers subcontracting to the factory aware of this, and if not, why not? In addition, it is often the unfeasible demands placed on factories by the retailers themselves that encourage poor treatment of workers – factory owners push for longer hours and lower wages in order to meet the demands of their customers, who have multiple alternative suppliers across the globe if the factory cannot meet their cost and timing demands.

Indeed, high street UK chains are quick to point out that they do not own the factories in their supply chains, and are often not the dominant client of a factory they use (Boffey, 2013). Nevertheless, incidents like Rana Plaza have real implications for business – both in terms of public perception and the regulation that repeated incidents of this nature may necessitate. This paper will serve as a discussion of the reconstruction of value chains that must occur within the UK fashion industry. The discussion will include the criticism that has been levelled at incumbent high street brands, the changes implemented by some of these brands, an overview of a disruptive set of system builders, and recommendations on actions that must be taken by two particular stakeholders if a new system is to emerge.

Criticism of incumbents is broad in its scope. It is difficult to justify how powerful UK retailers can take no responsibility for the conditions in supplier’s factories, particularly as it is these chains that benefit from workers being paid a low living wage and inadequate attention being paid to health and safety. In a competitive market – an estimate of 5000-6000 factories in Bangladesh produce clothing for the export market (Labowitz and Baumann-Paulee, 2014) – factory owners are well aware that they do not hold negotiation power, and increases in costs will result in the defection of their customers.

Moreover, the ‘fast fashion’ phenomenon that places such high demands on suppliers is only fractionally a result of the demands of shoppers. High street brands have taken an active role in building consumer expectation and demand for weekly refreshes of their shelves. By increasing the frequency of deliveries to store they have gradually worked to shift consumers expectations as to how often new styles will be in store, and how much time consumers have to purchase these styles before they are removed. In the case of Zara, small runs are produced that sell out more quickly (Ferdows, Dominguez-Machuca and Lewis, 2003). This serves to deliberately increase consumers’ feeling of urgency when they shop. For the UK high street, the shortened lifespan of the items in consumers’ wardrobes is big business.

Moves towards change

Labour Behind the Label (LBTL), in its ‘Tailored Wages’ report, ranks retailers based on the actions that they have taken to address worker compensation that is below a living wage (rather than a minimum wage) (2014). Marks and Spencer, Spanish brand Inditex (who own Zara, Massimo Dutti and Berschka amongst other brands), German brand Switcher (Germany) and Tchibo (United Arab Emirates) came out tops in the report , falling into the category ‘On the Way – Work started to increase wages, but not enough yet’ (Labour Behind the Label, 2014).

What are these brands doing differently? Marks and Spencer term their social responsibility initiative ‘Plan A’. Under this banner they have implemented initiatives including training 391 000 workers in their ‘roles, responsibilities and rights’, with an aim to reach half a million workers with their training programme by 2015 (ibid.). In addition, the retailer has committed to assuring a living wage for supply chain workers in Bangladesh and Sri Lanka by 2015, with more countries to follow. LBTL comment, however, that Marks and Spencer did not disclose to them their definition of a living wage. These steps do not guarantee a clean bill of health for Marks and Spencer yet – and they have not set a target for this aim – but represent significant change when we acknowledge that as an organisation with over ₤10.3 billion in group revenue, M&S currently have influence on worker conditions of a breadth (though likely not a depth) that niche ‘ethical’ brands can so far only dream of.

In addition, many retail houses have signed up to the Accord on Fire and Building Safety in Bangladesh – ‘an independent, legally binding agreement between brands and trade unions designed to work towards a safe and healthy Bangladeshi Ready-Made Garment Industry’ (Accord On Fire and Building Safety in Bangladesh, 2015).  It is acknowledged to be a step forward in improving worker safety in Bangladesh as it is so far the only agreement to have legal teeth (Kenway, 2015). Even if effective, however, this agreement only covers one of the many developing nation manufacturing countries facing these types of challenges, and does not address wages.

The builders of a new system

Thankfully, a revolution in the fashion industry is not left to a class of rather laggard incumbents. A new cohort of retailers has emerged in the UK that focuses on the social (and environmental) impact of their operations from start to finish. People Tree is likely the best known of these. Founded by Safia Minney over 20 years ago, People Tree states that they go a step beyond ‘ethical fashion’ and ‘corporate social responsibility, to ‘only using artisans and producers who work to Fair Trade standards’ (People Tree, 2014). People Tree works closely with their suppliers, even offering them financial assistance to grow their operations.  An example is Saidpur enterprises in Northern Bangladesh, which was originally founded to provide employment to refugees. Saidpur offer employee benefits including a loans service, profit share and legal and medical aid options (People Tree, 2012).

Safia Minney’s insightful 2008 Guardian article comments on difficulties in defining ethical trade – noting that it must be defined in terms of ‘what it isn’t rather than what it is’ and that what it isn’t includes demands of short lead times and playing manufacturers of clothing off of one another in order to generate shorter lead times and lower prices (Minney, 2008).

Seelos and Mair (2008) comment that building a system at the bottom of the pyramid means that resources may be difficult to acquire and must therefore be developed, which can push value creation out. Minney (2008) describes a situation where partnering directly with small, rural clothing producers has required that People Tree develop capacity in these partners, including coaching them on the types of clothing styles and fits desired by Western consumers. She also notes that creating a brand that is 100% fair trade requires revolutionary actions including paying a portion of wages upfront, and sacrificing the short turnaround times propagated by the high street (ibid.).  This results in cash flow challenges and difficulty in attracting investors who are willing to wait longer for their returns to be realised (ibid.). Of course, these types of challenges have necessary impact on the ability of such brands to scale. For these brands, ‘rethinking business’ has ultimately involved sacrificing margins for the sake of the livelihoods of workers in their supply chains.

Conclusions and recommendations

The violation of the rights of workers in clothing industry supply chains is a global and intractable problem. It is certain that the true extent of this problem remains hidden. Addressing the issue successfully will require action from several parties. Below, recommendations for action will be made for two of these parties: the UK government and the new class of system changers in the UK fashion industry.

1. The UK Government.

Global Labour Rights note that in the US in 2000, new imports legislation for the US clothing industry was passed within a matter of days after cat and dog fur was found to be used for the lining of coats sold in a New York Burlington Coat Factory store, and question why swift and decisive legislative action of this sort cannot be taken to prevent the importing of clothing made in conditions which violate human rights (Global Labour Rights, 2014). Legal action against companies found to be benefiting from the exploitation of factory workers – regardless of whether they own these factories or not – may be what is required to incentivise the high street to rethink their supply chains. To date, limited consumer protests, negative press and even legally binding agreements between alliance members have not been enough. If every organisation in the UK must use suppliers who pay a living wage, can guarantee health and safety and do not make use of child labour, the pressure will be there for factories in developing nations to ensure that these standards are met. Furthermore, local authorities in developing nations then become incentivised to enforce adherence to regulation – whereas it could be argued that governments of manufacturing nations are currently not incentivised to protect workers because any rise in costs may lead to the defection of UK retailers to another manufacturing country. For a country like Bangladesh, in which 4 million women alone are employed by the clothing manufacturing industry (in a country of 31 million households) factories losing clients as powerful as UK high street retailers would be devastating. This is not to say that local governments are free from responsibility even now, only that real protection of human rights will most likely require purchasing nations to build in necessary legal provisions and partner with their developing nation counterparts to create change.

This may increase costs across the board in the fashion industry,  but the consumer is unlikely to suffer in any real sense of the word – given that Oxfam estimate that the 9513 garments are thrown into landfills every five minutes in the UK, it is quite apparent that  clothing purchases are only rarely necessity buys (Gray, 2012). Of course, for the retailers themselves, increases in costs are likely to require cutbacks in other areas – perhaps including staff. I would argue, however, that the protection of the incomes of workers in the developed world cannot be upheld at the expense of millions working for just a few dollars a day, in often life threatening conditions.

It is worth noting here that independent bodies (e.g. the Ethical Trade Initiative) and other system builders lobbying for change must coalesce to carefully craft a change narrative that is compelling to those with the power to enact reform (Ganz, 2009).

2. System changers

Those, like People Tree, who have the vision and the ability to guarantee the fair treatment of the workers in their supply chain in developing nations face one major challenge – scale.
Is it possible for such brands to become the Primarks and H&Ms of tomorrow? Lucy Shea, CEO of sustainable communications firm Futerra, speaking at the Source Summit for Ethical Fashion, argues that it is the inability of ethical fashion houses to convince consumers of their desirability (as Kate Moss once did for second-hand clothing), that prevents scale. She also notes that sustainable choices in abundance are required if consumers are to be satisfied by ‘ethical’ fashion offerings alone (ibid.)

However, perhaps scale of individual ethical fashion houses is not the most helpful end goal to pursue. Perhaps replication of a social innovation by multiple parties, rather than growth of one initiative into a behemoth which cannot maintain control over its supply chain, is what is required to assure the protection of worker rights. Dees, Andersen and Wei-Skillern (2004) comment that the first step for social entrepreneurs in scaling innovation is to define what the key innovation is – is it an organisational form,  a specific program, or a set of principles? Successful social enterprises in the clothing retail space must define what their core capability is before determining exactly what they want to scale.  For example, an organisation like People Tree may choose to found affiliate or subsidiary organisations, leveraging off the group’s capabilities but with their own autonomy and manufacturing partners. Alternatively, they may partner with other organisations to help them to replicate People Tree’s supplier partnership programs. Finally, they could disseminate the principles they uphold – but the history of ‘greenwashing’ in the fashion industry indicates that this type of initiative, unless accompanied by stringent standards that are audited, with consequences for non-compliance, lends itself to misappropriation by brands who do not truly share the values of the founding brand.

Closing thought

‘Rethinking’ value chains in clothing retail is critical if the human rights of factory workers in developing countries are to be protected. This may require revisiting both the legislative framework and concepts of what effective scale of social enterprises in this space might look like. 

References: Articles and Cases

Baldwin, C. (2015). Retailers urged to cough up Rana Plaza compensation. [online] Retail-week.com. Available at: http://www.retail-week.com/topics/policy/retailers-urged-to-cough-up-rana-plaza-compensation/5073331.article [Accessed 28 Mar. 2015].

Boffey, D. (2013). Topshop among clothing stores told to help improve foreign factories. [online] the Guardian. Available at: http://www.theguardian.com/fashion/2013/jun/01/minister-fashion-stores-improve-factory-conditions [Accessed 28 Mar. 2015].

Clean Clothes Campaign, (2015). Compensation is long overdue. [online] Clean Clothes Campaign. Available at: http://www.cleanclothes.org/ranaplaza [Accessed 28 Mar. 2015].

Dees, J.G., Battle Anderson, B. and Wei-Skillern, J.(2004). Scaling Social Impact: Strategies for Spreading Social Innovations. Stanford Social Innovation Review, 1(4), pp. 24-32.

Fashion United, (2015). Facts and Figures in the UK fashion industry. [online] Fashionunited.co.uk. Available at: http://www.fashionunited.co.uk/facts-and-figures-in-the-uk-fashion-industry [Accessed 28 Mar. 2015].

Ferdows, K., Dominguez-Machuca, J. and Lewis, M. (2003). Zara, Case Centre Case # 603-002-1

Ganz, M. (2009) Leading Change:  Leadership, Organization, and Social Movements. In Nohria, N. & Khurana, R. (eds.) Handbook of Leadership Theory and Practice: an HBS centennial colloquium on advancing leadership, Harvard Business School Press: Boston, Mass., pp. 509-550.

Gray, L. (2012). Clothes join rubbish of our throwaway society. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/news/earth/earthnews/9301326/Clothes-join-rubbish-of-our-throwaway-society.html [Accessed 28 Mar. 2015].

Institute for Global Labour and Human Rights, (2015). Factory Collapse in Bangladesh. [online] http://www.globallabourrights.org. Available at: http://www.globallabourrights.org/campaigns/factory-collapse-in-bangladesh [Accessed 28 Mar. 2015].

Kenway, E. (2013). A toothless alliance for the dead of Bangladesh. [online] Sustainable Business Toolkit. Available at: http://www.sustainablebusinesstoolkit.com/alliance-for-bangladeshi-worker-safety/ [Accessed 28 Mar. 2015].

Labowitz, S. and Baumann-Paulee, D. (2015). Business as usual is not an option. [online] stern.nyu.edu. Available at: http://www.stern.nyu.edu/sites/default/files/assets/documents/con_047408.pdf [Accessed 30 Mar. 2015].

Mair, J., & Seelos, C. (2007) ‘Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View’, Academy of Management Practice, 21(4):49-63.

Marks & Spencer, (2015). Key Facts. [online] Corporate.marksandspencer.com. Available at: http://corporate.marksandspencer.com/investors/key-facts [Accessed 28 Mar. 2015].

Minney, S. (2008). Fair trade is a slow process. [online] the Guardian. Available at: http://www.theguardian.com/lifeandstyle/2008/jul/22/peopletree [Accessed 28 Mar. 2015].

Nisen, M. (2013). How Nike Solved Its Sweatshop Problem. [online] Business Insider. Available at: http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5?IR=T [Accessed 28 Mar. 2015].

Oliver, E. (2013). Source Summit: Ethical Fashion is Sexy, Now it Needs Scale. [online] Ecofashionworld.com. Available at: http://www.ecofashionworld.com/Events/Source-Summit-Ethical-Fashion-is-Sexy-Now-it-needs-Scale.html [Accessed 28 Mar. 2015].

People Tree, (2015). Saidpur Enterprises. [online] Peopletree.co.uk. Available at: http://www.peopletree.co.uk/about-us/who-makes-our-products/action-bag [Accessed 28 Mar. 2015].

People Tree, (2015). Who Makes Our Products. [online] Peopletree.co.uk. Available at: http://www.peopletree.co.uk/about-us/who-makes-our-products [Accessed 28 Mar. 2015].

Whitehead, S. (2015). 5 Truths the Fast Fashion Industry Doesn’t Want You to Know. [online] The Huffington Post. Available at: http://www.huffingtonpost.com/shannon-whitehead/5-truths-the-fast-fashion_b_5690575.html [Accessed 28 Mar. 2015].

References: Images

Retail Prophet, (2013). Rana Plaza site. [image] Available at: http://www.retailprophet.com/uncategorized/rana-plaza-120-days-later/ [Accessed 28 Mar. 2015].

Health, Wealth and the Internet of Everything

Introduction

‘The future is here, it is just unevenly distributed’ – William Gibson, 1984, Neuromancer.

I began researching this discussion piece with the intention of laying out how the newly popularised term ‘The Internet of Everything’ (IoE) can be defined, and then finding evidence to support my hypothesis that the IoE does not yet have a place in the developing world’s public sector . I planned to argue that this is a sector that should focus on execution rather than innovation. This hypothesis was fundamentally flawed. In many cases, the public sector has already failed to meet the needs of the most marginalised. The time for the luxury of incremental improvements in execution has passed. To be sure, my investigation did not reveal any fact that disputes the idea that this sector is not ready for the type of change the tools of the IoE will bring. I found, however, significant evidence to suggest that businesses should dive in, in spite of and because of this frightening lag in innovation. The opportunity for business to leverage tools like big data analysis and networked objects to address chronic market failures in the public sector in emerging markets is too great to be ignored– both in terms of the financial and social value that can be created.

As such, this discussion will briefly explore a definition of the Internet of Everything, and the implications of the innovations this term describes for capitalism in a broad sense.  The discussion will then move to consider the emerging uses of the tools described by the term the ‘Internet of Everything’ in public health, honing in on how least developed communities might benefit from these tools as applied to this sector, and using South Africa as a case study. However, the challenge at hand for businesses should not be underestimated, and recommendations will be made for the perspective that business must take if they are to be successful in capturing the true value of the IoE for healthcare in low-income areas in South Africa.

Definitions

A helpful definition for the ‘Internet of Things’ (as opposed to ‘Everything’) is provided by McKinsey and Company , who describe it as ‘sensors and actuators embedded in physical objects—from roadways to pacemakers…linked through wired and wireless networks…these networks churn out huge volumes of data that flow to computers for analysis.’ Cisco was the first to differentiate between an Internet of Things and an Internet of Everything. Dave Evans, Chief Futurist at Cisco, states that the difference lies in an intersection of four dimensions – people (as objects for advanced monitoring and providers of passive feedback), data (the proliferation of statistics that can be generated by a new generation of networked objects), process (using networked tools to create efficiencies in processes like supply chains) and things (the networked objects in question) (2014). Evans notes that it is the intersection of these dimensions that is the key to the opportunity created by the Internet of Everything (2014). This more holistic view is helpful to the discussion below, as each of these four dimensions will be considered in order to understand the value of the IoE in a specific context.

Don’t you know, you’re talking about a revolution…

What exactly is it about the Internet of Everything which leads to talk of a transformation in the way we work and live? The possibilities will vary by application and industry, but I will demarcate several general categories of application below, with examples from different industries – as I find that concrete illustrations are most helpful when trying to make sense of such nascent innovations. I will not claim that the categories below are exhaustive – even if that were the aim of this discussion, the scope of this field and its lack of maturity tend to disable one from making these type of universal statements.

Firstly, the Internet of everything will enable individual and population needs to be identified more precisely, creating the opportunity for companies to create products that better meet these needs. The reason for this is simple – the IoE enables the revelation of information about our needs that we could not communicate even if we wanted to – because we are not aware of it. This principle applies to any kind of device which can infer what the consumer needs through sensory functionality – from wearables which indicate that the movement you have completed during the day is insufficient for your weight loss goals, to refrigerators which determine what is expired or running low and place orders with Tesco or Waitrose on your behalf. The analysis of the vast, admittedly messy datasets which are outputs of the tools of the IoE also enables the identification of new relationships, through a focus on identifying correlations between variables which no-one may have hypothesised to be related (Mayer-Schönberger and Cukier, 2013).

Secondly, the Internet of everything will improve organisational ability to maximise the efficiency of processes. McKinsey and Company (2014) point out that the field of business process efficiency is a major beneficiary of networked sensory devices. Indeed, a key premise of Statistical Process Control (Shapiro, 2013) is the ongoing monitoring of processes for deviations from specified control limits, rather than post-production inspection. It is conceivable that sensors placed at critical process points will reduce the cost and increase the efficiency of such monitoring. In their white paper ‘Optimizing Manufacturing with the Internet of Things’, Intel (2014) describe a successful ‘Internet of Things’ pilot which includes the use of machine sensors in transmitting data relevant to process performance (as well as enabling predictive maintenance, an example of which will be described below). Of course, the success of these types of initiatives is premised on the capable analysis of the data such tools can produce – further support for the holistic definition provided by Evans (2014).

In addition, the Internet of everything will integrate what was once separated. This idea is epitomised by Smart Cities – such as Barcelona and (a little surprisingly) Milton Keynes, Buckinghamshire. By digitising public services including waste management, transport, public health and education, public servants find themselves able to centralise a wealth of data across traditionally separated service delivery departments and to put this data to good use in improving the overall experience of citizens (MK Smart, 2014). The British Government’s Department for Innovation, Business and Skills describes elements of the integration enabled by such projects; ‘(smarter approaches include) a recognition that service delivery is improved by being citizen centric: this involves placing the citizen’s needs at the forefront, sharing management information to provide a coherent service, rather than operating in a multiplicity of service silos (for example, sharing changes of address more effectively), and offering internet service delivery where possible (at a fraction of the face to face cost)’ (2013) .What is particularly exciting is that the MK:Smart programme in Milton Keynes is making the data that they do collect – termed market intelligence – available to new businesses, stimulating both private sector innovation and the optimisation of public service delivery.

Finally, the Internet of Everything will optimise decision making and resource allocation in ways which have previously not been possible. An example is that of optimisation of maintenance of infrastructure. Chambers and Elfrink (2014) highlight the efficiencies that can be achieved by replacing traditional water pipes with ‘smart’ alternatives – enabling the replacement or repair not of all pipes (after some arbitrarily selected period of time, or after the occurrence of an adverse event) but of only those pipes which have signalled that they need maintenance.

Progress of the Internet of Everything in catalysing positive change in healthcare

As new and as raw as this technology is, a growing cohort of start-up organisations is already bringing viable health-related IoE products to market. The most cited example is the rapid uptake of sensor- based tools for tracking individual health information. Use of such products as the ‘Jawbone’ fitness tracker to monitor and provide feedback on individual activity levels, for example, is already widespread.

Steele and Clarke (2013) outline some more advanced and interesting possibilities, including vital signs sensors, and blood constituent sensors – each providing opportunities for early diagnosis and more efficient monitoring of patient wellbeing. These authors outline key differences between surveyed patient data and the data enabled by an internet of everything, namely, information that is real-time, more detailed, captured electronically and anonymously, with larger participant numbers and direct measurement rather than human response.

The use of networked products to improve health outcomes for marginalised groups is also on the rise. The Financial Times (2014) profile Lively, a US start-up who is addressing the health needs of elderly people living alone. Their technology makes use of sensors attached to everyday, frequently used objects like phones or medication bottles, to send messages to the adult children of the elderly when abnormalities in routine are identified.

While it is too soon to make sweeping judgments on what these early innovations could translate into in the long run, particularly as this is a field that is characterised by dependence on network externalities, examples like these do awaken our imagination as to what the IoE could mean for population-level health services.

The IoE in South African health – an opportunity for courageous first movers

In the developed world, healthcare is a sector which has emerged as an early frontrunner in adoption of the tools of the IoE. It cannot, of course, be assumed that such innovations will seamlessly translate into a developing nation context, particularly in rural settings. Let us look now at South Africa as a case in point. This setting has been selected due to its alignment with the author’s area of expertise, but it should be noted that many of the observations below are true not only of South Africa’s health system, but of those of sub-Saharan African countries.

In South Africa, 20% of the population have access to private medical care. The remaining 80% are reliant on a dramatically understaffed and under-resourced public sector – only 30% of doctors serve in the public sector (World Health Organisation, 2010). This is exacerbated in rural areas, which are disproportionately served by this already small workforce. In addition, rural-dwelling South Africans may need to travel many kilometres to their nearest health facility, at great personal cost and effort. Products embodying the IoE, if able to reduce costs of care while increasing access and quality, will be invaluable to the people served by this sector. Several unmet health service needs of the most marginalised that might be addressed by IoE-type innovations are explored below – using Evans’ four dimensions as a framework for discussion.

Data

It was stated in the first part of this discussion that the information provided by the tools of the IoE will enable improved decision making, and more effective allocation of resources. This is most important in environments where critical resources are scarce. It is also a capability which has not been developed by existing players in the space. Overburdened South African public facilities with inadequately trained administrative staff can barely track the number of people seen in each department. There are also scenarios in which misreporting such statistics is unintentionally incentivised. By using sensors to track movement of patients in different areas of the hospital or clinic, objective statistics about the specific types and number of cases each facility is facing will enable improved decisions to be made about what that facility needs in terms of human and material resources. This example links in to the process dimension of the IoE too, when we consider improvement activities like the optimisation of patient flow and how such an activity can be supported by accurate, detailed real time data. It should be noted that if business were to work to create this type of a market, this would in many cases amount to technological leapfrogging – given that there are health facilities in rural areas which still rely on antiquated paper –based patient records.

People

South Africa has adopted a community health worker model on a broad scale – deploying home based carers with basic health service training to rove between an assigned set of households in an under-resourced community. Activities include early diagnosis of HIV/AIDS and monitoring of prescription adherence. This model aims to increase access to primary care for the most marginalised, minimising costs that they incur in accessing care (such as travel) and reducing the burden on struggling health facilities. This programme opens up a myriad of opportunities for business to offer products which embrace the innovative use of networked objects and big data analysis. The sheer scale and complexity of the operation means that its viability is far more conceivable if community health workers are provided with objective patient information by wearables. In addition, the depth of information that can be obtained about populations currently underserved by the public health system provides opportunities for new insights about population level health in rural areas. Furthermore, a challenge of the community health worker model is the monitoring of the performance of the health workers. Wearables may enable the effective tracking, at least, of which households the workers have visited and the amount of time they have spent at each.

Process

Evans (2014) focuses in on process as another dimension of the IoE – and indeed, it is success within the realm of process improvement which may define the success or failure of the products of the IoE in bringing transformative change to the South African public health sector. Here, again, lies an opportunity for tech firms to offer products that will help to solve one of this sector’s wicked problems. Let us consider medical equipment maintenance as an illustration. The Lancet reported in 2014 that at least 40% of medical equipment in developing countries is out of service, for reasons including a lack of trained personnel to maintain the equipment, weaknesses in procurement systems and inadequate budgets for maintenance of equipment. The IoE may produce innovations that address such issues as maintenance and training costs by design – provided that contextual nuances are taken into account by research and development teams. An example is provided by California’s Varian Medical Systems, who has reduced repair times of some types of networked medical equipment by as much as 50%, by conducting maintenance remotely (Isaacs, C, 2014). Such a product, if implemented successfully, would be revolutionary for developing nation public health. There is however, a challenge – the health facilities that will benefit most from remote equipment maintenance are those in rural areas. These areas, of course often have no connectivity at all. For these locations, internet everywhere would currently be more useful than the Internet of Everything. Of course, global internet access figures are increasing. McKinsey report that 1.8 billion people have come online since 2004. The distribution of this increase in users, however, is disproportionate – ‘About 75 percent of the offline population is concentrated in 20 countries and is disproportionately rural, low income, elderly, illiterate, and female.’ Connectivity in South Africa in particular is on the rise – Google reported a 25% increase in internet users between 2010 and 2011 (Mail and Guardian, 2012), but the spread of coverage will be slower in rural areas. Businesses seeking to take advantage of opportunities to launch products that rely on uninterrupted connectivity will have to consider the limitations this poses – and indeed, if there is an opportunity for them to partner with organisations who are working to bring internet to lower income areas in South Africa, or even to integrate vertically into this space.

Things

Understaffed facilities result in lengthy queuing and shortened consultation times per patient. This adversely impacts the quality of care that medical personnel can provide their patients. This is another area where the intersection of networked ‘things’ and human action can improve public service delivery. If doctors did not have to extract information from patients through dialogue and multiple tests in order to make a diagnosis, this element of the consultation process would achieve considerable efficiency gains. Wearable-collected data which could be used by medical professionals to extract concisely summarised key indicators immediately would save critical time and solve problems of language barriers (South Africa has 11 official languages) – even more critical in a country which is heavily reliant on a foreign doctor population (Mail and Guardian, 2014).

A new perspective for technology companies

The South African public health system is an example of the struggles of government and civil society organisations in bringing effective care to the most marginalised. However, the inefficiencies of the system, and the existing costs of obtaining care, are such that business is well positioned to step in.

With this is mind, I would propose a framework of questions to be used by international and South African firms seeking to seize opportunities to use the Internet of Everything for social good in a financially sustainable manner.

1. Who will pay for this product, and how? Where products offer benefits that can only be realised at a population or even hospital level, government and existing funded programmes are potential customers, particularly if major cost efficiencies can be proven. Products which can benefit individuals in the short term may need to rely on innovative financing models (such as pay-as-you go or micro-loan initiatives) if individuals in marginalised groups are to be able to pay.
2. Who will use this? Firms will be required to design products that are intuitive enough to be used by those with limited prior experience of any kind of technology Or, at least, products that are not dependent on the knowhow of the direct users, but only on the knowhow of those who access the collected data (if these are different groups). Firms who seek to create impact in the most underserved, rural areas will need to consider if users (including medical personnel in facilities) have access to the supporting infrastructure required ( for example, a computer on which to download the data of a networked device, or even internet connection at all)?
3. How will we get this product to end users? Have we adequately considered the distribution challenges posed by rural settings in developing countries? Is this a strong capability of our firm or potential partners?
4. Who will fix this product? Are there enough of these people? South Africa has a well-recognised shortage of engineering skills– have we considered how we may need to develop a product support offering if the long-term effectiveness of our innovation is to be ensured?
5. Who will ensure the security of this product? Start-ups who offer tech product based solutions in low-income communities often underestimate the risk that possession of such high value items can pose to individual users.
6. Who will analyse the data outputs of this product? Are there enough of these people? Again, a dearth of appropriate skills may result in a proliferation of information that no-one knows how to use. This, of course, may create opportunities for linked service offerings by firms.
7. What will be done with this information? Even if valuable insights can be derived from the data collected, are the institutional powers in the environment prepared for the change to the status quo that these new insights may demand? How can we influence this?

It is evident from the above that firms (whether global or local) who seek to be first movers in this space will face complexities which will likely only be solved by the development of comprehensive networks of partnerships. Such an approach has the desirable side-effect of making first movers’ competitive advantage more difficult to replicate.

It is conceivable that South African public health may in fact benefit from the innovations of the Internet of Everything more than it has from certain preceding medical technologies, precisely because of the reduced reliance of the tools of the IoE on proximate, skilled human resources. However, a holistic perspective is required that takes real consideration of the practical challenges in implementing tech solutions to social problems in the developing world. Without this, for those in marginalised communities who can benefit the most, the ‘Internet of Everything’ may very well amount to nothing at all.

References

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