The last decade has seen exponential increases in the impact of digital technologies the world over, changing how people interact with their government, conduct commerce and communicate with each other. But the range of digital products, including software, core mobile services and data, is not equal across boundaries. Low- and middle-income countries (L/MICs) have fewer digital products available, and those that are available are typically more expensive and of lower quality. Market barriers and lower demand prevent high-quality products from being available at scale and at accessible, predictable prices.
We believe that new financing mechanisms, such as pooled procurement and advance market commitments, can de-risk markets to incentivize new private-sector entrants to supply digital technology products aimed at reaching the underserved. The vaccine sector got this right with adjacent innovations to accelerate lifesaving products. In the late 20th century, global health programs faced the challenge of stagnating penetration of vaccines in low-income markets. Millions of children were dying needlessly because existing vaccines were not making it to everyone who needed them. Through decades of concerted efforts by governments, multilaterals, donors and private-sector firms, demand in low-income markets was aggregated and procurement was pooled to accelerate market introduction. This ultimately led to the formation of the Global Alliance for Vaccines and Immunization (Gavi), which today solves a market failure, not a product failure, and gets lifesaving vaccines to the populations that need them.
The solutions were not new product innovations but rather market-shaping tools, including an advanced market commitment (AMC), which transformed the reach, quality and governance of vaccine availability and removed the 10- to 20-year lag time in getting vaccines to market in less developed countries. It took 30 years of work but has yielded unprecedented success. When vaccines reached 277 million children in low- and middle-income countries between 2011 and 2015, more than 4 million childhood deaths were prevented.
We believe some of the innovative financing mechanisms deployed to address market failures for vaccines may help solve similar challenges in accessing digital products in L/MICs today. Observed similarities in the dynamics of the vaccine and digital markets prompted DIAL, the Tableau Foundation and PATH to investigate historic vaccine market failures and their solutions to see what lessons might apply to digital markets. The paper, Financing Digital Markets: What Vaccines Can Tell Us About Scaling Digital Technologies in Low- and Middle-Income Countries – is being released around the 2018 Global Digital Health Forum – represents our initial research into the problem and suggests possible avenues that the multilateral community can take to test this thinking.
DIAL plans to explore these lessons further through efforts to aggregate demand for core mobile services. We will use this market model in 2019 to determine if it can be extended to software and data platforms, looking carefully at the model already developed by USAID for aggregating broadband internet. Furthermore, the Tableau Foundation and PATH are using their pilot, Visualize No Malaria, to test how to develop a pooled procurement mechanism in one country with one donor. These 2019 experiments will validate or nullify if a similar analogue to pooled procurement is possible for technology.
Please join us in this exploration. We welcome your ideas, experiences and assistance as we move forward to tackle market failures in accessing digital technology around the world.
Kate Wilson is CEO of the Digital Impact Alliance. Follow her at @DIAL_Kate
