Coefficient Development

Recall the term coefficient from middle-school algebra. It’s one of those things people can’t really define, but they know it when they see it. Here’s a refresher: In the equation x (a + b), “x” is the coefficient. It’s the multiplier. It, and the things it multiplies, are often variables.

We’re beginning to see more examples of what could be called “coefficient development” – the combination of industry verticals and cross-cutting variables (financial services, agriculture, health, education, gender, climate change, urbanization) with multipliers like mobile broadband, infrastructure, and good policies, governance, and leadership. This complexity may present challenges for organizations that specialize in specific industries or focus areas. Plenty of development organizations know health, or education, or agriculture, but the groups that focus on these areas are often siloed within the organization, or ill-equipped to address underlying or systemic technology problems. Technology companies bring incredible resources and talent to the table, but may lack a thorough understanding of health, education, or agricultural systems, particularly in rural areas of developing countries. Governments are in the best position to put it all together, but even the most skillful leaders need more resources and greater capacity at the national, state, and local levels. In short, no single organization is able to combine all these industries and their underlying technology systems into effective, comprehensive, multi-sector programs.

The concept of coefficient development therefore highlights the need for strong partnerships. The private sector provides talent and industry expertise in exchange for earnings and growth opportunities. The government creates an enabling legal and regulatory environment to deliver better public services. And development organizations provide funding and capacity support for greater impact.  Vital Wave is a part of many such partnerships, most recently in Uganda. Since 2013, the company has worked with USAID, the Bill & Melinda Gates foundation, UNCDF, local MNOs, payment aggregators, and others to steadily and painstakingly build the digital payments ecosystem in the country. According to Leah Gatt, Vital Wave’s Director of Research, “It was important to go into rural areas, because that’s where most people live in Uganda, and because understanding the agriculture sector is critical. We had to know the needs of farmers to work with aggregators on a platform that could capture very specific data on coffee production – right down to weight and moisture levels in coffee beans.” The result was an online platform for coffee buyers, who could shift from cash to digital payments based on accurate measures of a farmer’s production. As the use cases for digital payments multiply, MNOs have more incentive to expand coverage in rural areas and offer additional products and services (e.g., savings, loans, insurance). And the government has more incentive to create a regulatory environment that supports these innovations. Like the algebraic term from which it’s derived, coefficient development is hard to define, but you know it when you see it.

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