September 28, 2011 - 09:00AM
The following is the output of the real-time captioning taken during the Sixth Meeting of the IGF, in Nairobi, Kenya. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.
>>JONATHAN ZUCK: Just one more housekeeping announcement. The workshop, 136-137, the Dynamic Coalition on Accessibility and Disability, Best Practices, Mainstreaming, is now in Conference Room 1, which is across the patio. And the fourth session of the VCAD is at 12:30 to 2:00 in Room 4. So if you are in the wrong room, that's where that is taking place now.
And again, I encourage everyone to move toward the front. This session is designed as a roundtable, and somehow the roundtable is going to be a figment of our imagination, I think, in some measure but I am really hoping this an interaction session, as a kind of anecdote for the six hours of speeches yesterday. So let's try to make it as interactive as we can. And we will get started in a couple of minutes as soon as the translators come online.
>>JONATHAN ZUCK: We're ready to try again. Thanks for waiting until 9:30 so we can get started with translators in place, hopefully in place. My name is Jonathan Zuck and I am the president of the Association for Competitive Technology, or ACT, and we are a trade association based in Brussels, and we have about 4,000 small and medium-sized I.T. companies as members.
And so we represent their interests around the world, in various legislatures and assemblies, and also through various programs work to educate entrepreneurs and make them better business people, because very often in the I.T. industry, if you know a lot about programming, you don't necessarily know a lot about business.
And so learning a little bit about business itself has been a part of our mission.
Today's workshop is about entrepreneurship and innovation. And we're calling it an intergenerational dialogue, because the topic and the role of youth in entrepreneurship and in the Internet governance has become an increasingly pervasive topic. And so we have some youthful representation here on the panel, and -- but I think with some interesting perspectives, because there are a number of youthful entrepreneurs that want to be just thought of as entrepreneurs and not youthful ones, and so it's a challenge sometimes to be -- to get that designation.
One of the interesting things. When I travel the world and talk to entrepreneurs around the world and ask them what kind of challenges they face to building their small business in whatever their local environment, their local country, there's a pervasive feeling that the problems they face are unique, and that they don't exist anywhere else.
I remember we were doing some focus groups in Europe, and of course they were saying but in the United States they don't have any of these problems because in Silicon Valley, there are venture capitalists handing out money on street corners. So they don't face any of these problems. And of course if you ask entrepreneurs in the United States, they say they have some of the same problems.
And so while every country, every jurisdiction is different, a lot of what we are trying to do is figure out what's common to small businesses and to entrepreneurs, and what it is they need to succeed and what being an entrepreneur is like and what it is to innovate.
And I think find being the similarities in terms of their needs is more important, I think, in many respects, than finding the differences.
So that's why we have brought together this roundtable, which is part of a pilot project which is an IGF fellowship program, which is designed to bring entrepreneurs from around the world to participate in the Internet Governance Forum. Because small businesses are discussed all the time at this conference, and -- but often by NGOs, academics, and many who have never actually run a small business. And so actually having entrepreneurs to discuss these topics I think can add some real value to the conversations that take place here about creating an environment conducive to innovation and entrepreneurship.
I was doing a little research and found a Swahili expression, "penye niya, pana njiya," which we have heard in other cultures as "if there's a will, there's a way." And I think some respects that's the credo of the entrepreneur. It's about finding that crack in the wall and finding a place for the water to go that a big company might not otherwise try to explore, that might be too risky, et cetera, that a small, agile business is able to capitalize on. And nowhere is that more true than here in Kenya where the rise in mobile technology has led to an explosion in mobile application development, for getting financial transfers around the country to trade money even into rural areas, distributed banking is happening, applications to get information, health information, et cetera, like MedKenya are all incredible innovations that are happening here in Kenya because people see a small problem and try to solve it, more often than not with mobile computing.
And so that's something that has really started a frenzy here in Kenya and in this entire region of Africa, and that's very exciting. We have some mobile developers here today.
So without further ado, what I would like us to have the entrepreneurs that have come from around the world to just introduce themselves a little bit, and tell you who they are. And then I will ask them a couple of questions. But then what I would really like to do is just open this for discussion and talking about what kind of environment is most conducive to entrepreneurship and innovation, because I think it's a goal shared by cultures around the world.
So why don't we just start here with you, Damir.
>>DAMIR TOMICIC: My name is Damir Tomicic. I am coming from Germany and I run an I.T. company called Axinom, a company that produces software. We build software for the Internet. We support our customers in finding new ways how to use Internet, how to improve their businesses, and we use innovation as a driving vehicle behind our business. To grow our business and to help our customers together to explore new chances and to explore new possibilities.
>>MIKE SAX: Good morning. My name is Mike Sax, and I was born in Belgium. And in my early twenties, I really wanted to start a software company. But this was before the Internet, and so I felt it was really difficult to do that in Europe because Belgium is a small country and it's hard to reach the customers that I was targeting. I was, you know, targeting a certain niche of people.
So I decided to move to the U.S., because I would have access to one single market, and they would speak one language, and they would have one currency, and I could place one advertisement that reaches all those people, and there would be no barriers or hesitation for customers to only buy products from somebody in their own country or who would speak their own language.
If I would have to start a company, if I was again 20 and start a company, I would not have moved to the U.S. today because of the Internet, because things have become so much simpler for a small business to be successful. We can reach a lot of people. We don't -- if we're building software or other intellectual property, we don't have to ship physical products.
And so the opportunity to reach people, to create new solutions is much bigger for small businesses today than it was 20 years ago. And one of the things that really I noticed when I got here was that there was a lot of energy and a lot of enthusiasm and a lot of hope about the future. And I think that hope is absolutely justified.
And the opportunities that were created by the Internet for a company like me and Europe, so I wouldn't have to move today, are absolutely true here, and there's another factor in that people in Kenya are able to build solutions for situations that are very different here than they are in other parts of the world.
So having a developed banking system and having a lot of infrastructure, with phone companies with land lines can be something that actually slows down innovation because there's no barrier to overcome.
And so creating wireless payment systems and essentially leapfrogging certain technologies that are more prevalent in other parts of the country becomes an opportunity for innovation. And I actually envy, on some level, the people here in Kenya for the opportunity you could have, creating a business and building something new. So it's very exciting to be here, and I share all the hope and the enthusiasm that I have noticed when I got here.
>>REMI CARON: Good morning, my name is Remi Caron. I am from the Netherlands. I own a consultancy firm in the Netherlands where we specialize in cloud solutions and help companies define a strategy for their products to be cloudified, so to speak. And we have been doing this for a couple years, and I have got some interesting stories that I would like to share with you if there is interest in that direction.
>>ALI HAMED: My name is Ali Hamed. I am from the United States. This past year, I first got my -- I got my first experiences in entrepreneurship.
I come from a pretty lucky environment in the sense that I am in an area where innovation is absolutely encouraged.
The education system I come from challenges the way we think, in a way that not many people realize. A lot of people criticize the United States education system for not testing as high as it used to, et cetera. But one thing that we do is we challenge really well. We challenge people to think differently. And I think that's very important.
And one thing that I hear a lot is that that may not happen as much everywhere else in the world.
Is he I think I, too, am pretty excited when I see the energy in this country. And I hope that, you know, as I begin my career, I'm able to also see people challenging the ways they think with that energy.
>>JASER ELMORSY: Good morning, and thank you for welcoming me on this panel. My name is Jaser Elmorsy. I run a software development company in Egypt, have been running for many years now. And I also consult for the U.N. at the Austrian headquarter.
I am very excited to be here not just because of all the reasons my colleagues on the panel mentioned, but also because having an African company, it's my chance to touch with you on the points that African businesses are having troubles with in connection to the Internet and to the worldwide community.
Those are very specific things that effect us that need to be pointed out, and it's our chance to voice up on that.
Also, on the other hand, for me personally, it's a good place to take back your points and give them back as a feedback to the U.N. in Austria where, as I said, I am -- I consult a lot and can give them and forward your voice there.
>>EVAN BURFIELD: My name is Evan Burfield. I am the founder and chairman of Synteractive, and we build collaborative applications in the cloud for large enterprises and governments. And some of our kind of signature solutions we have built are things like recovery.gov in the United States, which is designed to make government spending in America more transparent and more accountable and help to cut down on fraud, waste and abuse. And one of the things that's been fascinating to me just so far in the time I have been in Kenya is to hear how many other projects like that are going on around the world, you know, in different ways. Trying to use technology, trying to use collaboration to help improve government and improve people's lives.
You know, and my interest in being here is really to kind of learn and listen as much as I can to a lot of issues within IGF, but then also to share the perspective of somebody who is really trying to kind of build applications that can be applicable around the world and struggles at times with some of the different fragmentation of regulatory regimes that can hinder our ability to kind of bring some of the stuff we may be doing in America out to other parts of the world and vice versa.
>>JONATHAN ZUCK: So I thought as a way just to kick off this conversation that I would have folks just share some stories of challenges that they have encountered in building their businesses. After their stories perhaps you can share some stories and get some discussion going.
So Damir, why don't you begin.
>>DAMIR TOMICIC: Thank you very much. I am coming from Germany. Germany is in Europe and, as you heard, for some reason, I don't know why, Germany is performing well. There are some other European countries struggling these days, but Germany is doing quite well. So you can imagine, coming from such great economy, my life should be very, very simple. We are doing well. There are lots of companies. They are investing. Business is that easy. Well, that's just partly true.
So of course it's easier to find new customers and to improve your business. On the other side, in such market, the competition is pretty high. We compete with hundreds and thousands of companies who try to do the same as we are.
And not every customer is performing well in such economies, because the business is changing.
One example I would like to share with you is the company, that's the post. The main business is sending letters and packages. In Germany and in Europe, young people are not sending printed letters anymore. They don't write. They send just an e-mail. But e-mail is free. So my customer is having difficulties with the business which is getting smaller and smaller over time.
Well, there are tons of people who are still sending letters, who are not on the Internet like the grandma is still having fun in getting a letter from grandparents, but the business outcome, business perspective for the customer is not very good.
So they were searching for ways how to improve business, and we as an SME were asked to help to provide an innovation.
So we thought about what are young people doing these days. Like, for example, I'm not that young, but I'm here, and I have lots of relatives who are not on the Internet. But I would love to share some experiences from Kenya with them.
I can upload the photos to Facebook and send them and e-mail saying, "Look at my photos on Facebook," but they are not on the Internet. What should I do?
So we thought it would be pretty nice idea if you could somehow print those pictures and send them as a real letter. And it will be very cool if you could somehow even create a small postcards, write some text and send the letters to the relatives who are not connected to the Internet.
So we did that. We built an application, pushed onto Facebook, and it was a huge success.
Customers really happy, because this was a new opportunity. This is the innovation. There's something new. And they see the business can be transformed into something for the future that bears a huge potential for them. That was the first step.
And then we got an e-mail. "Do you know that I was on this picture? Who allowed you to send this picture, to print it?" And, you know, I'm coming from Germany and Germans are very picky on privacy. And I am on a picture in Kenya and my colleagues are also on the picture, I should actually ask them for permission to send those pictures to my grandma.
And I'm married with a French woman, so my parents-in-law are in France. If I am sending this to France, I am breaking different laws.
And you can name it. So many countries, so many different changes to so many different laws. We should transform from a software development company to a consulting company for law issues in different markets. This is not our business.
This is something that really makes our life very, very difficult. It makes innovation difficult, and it makes the life of our customer who was very happy at the beginning not that happy anymore.
So this is something, as my request and that's my reason to be here to share the issues with you and to ask for help, to simplify our life and life of our customer, and somehow simplifying all those processes and help us create a new innovation, new application that will help customers all over the world and small- and medium-size enterprises to bring more innovation and better future for all of us.
>>MIKE SAX: So one story I would like to share is about the first mobile app that my company developed. We decided to build check out this mobile applications market and build a simple app. And within a few weeks, it had over a million users.
And so this was -- It astounded me that a very small company with very limited resources can build something and suddenly have a million customers or a million people using that product. That is new today. That did not exist, really, ten years ago. And the most important part of that is that geography doesn't really matter for that anymore. That app could have been developed anywhere in the world.
So it's important to keep in mind when evaluating opportunities that geography, on the one hand, doesn't matter, because you can be anywhere and create something and offer it to everybody.
And at the same time, being aware of the cultural and economic differences between different regions can give you a competitive advantage that other people don't have when they are targeting a certain audience.
And so when evaluating opportunities, the combination of those two things can really become a recipe for success.
>>REMI CARON: So the story I would like to share with you is around the project that we have done in storing data about livestock. So there was a Dutch entrepreneur who came up with a solution to store data on livestock, like blood pressure, temperature and so forth. And it turns out that we store about 200 megabytes of data per year per individual animal. So if do you the numbers and you take this project on a global scale, and let's same low, let's go for ten million pieces of livestock that will be monitored, whereby you save 200 megabytes of data a year, you are looking at 20 petabytes really easily. I don't know about you but I don't know any database system that will actually cope with that in a real normal way. And aside of that, where do I get the hardware to actually host a solution of that magnitude. And if I do find the hardware and the capital to actually do all of that, where do I find a DBA that will be happy to maintain a database of that size? I personally don't know any DBA that would like to do that.
So the answer to this problem was let's host the data in the cloud; right? There's plenty of hard disks available. There's plenty of table storage and other all kinds of technologies that we can use to actually store the data of this size, so the problem seems to be over.
Not quite. Because after we decided to actually store the data in the cloud, we ran into some regulatory issues in the individual member states. In the EU in this case, where they have regulations in place that if you store data of anything that's living and breathing inside a certain country, that the data should reside on the server inside the country.
Therefore, we ran the risk of getting penalties in various countries when we try to export that data into the cloud.
So one of the challenges that we faced and are still facing today, actually, is that when you go to the EU in this case and you try to figure out what the regulations are in the different member states, it turns out that there's nobody who can really tell you what the regulations are in, let's say, Spain, Italy, Germany, the Netherlands. The Netherlands I know. That's where we are from. We don't really care; right?
But it turns out to be that in Germany, in Italy, and in Luxembourg they have a different regime to this. So if you go to the EU, in my case, I didn't really find the answer on all the individual member states. So the when is what are you going to do? Are you going to go to every individual country and figure it out yourself, which is a tedious process and will slow down your -- the rollout of your application and, therefore, your revenue stream? Or are you going to take the risk and just do it and see what happens afterwards?
So this is one of the issues in a bigger project that we have been involved in. And -- Well, this is the story I wanted to share with you.
>>ALI HAMED: So for me, one of the biggest problems I had, having a small business, is getting credibility from users. The biggest way, I think, to get credibility is having a lot of people, you know, a lot of users, a lot of consumers. You need everybody at once; you know, especially if it's a news-oriented platform. People trust something that everyone else is reading.
But a big problem with that is how, especially with a small budget, especially when you are new, how do you get everyone there all at once. A lot of this is understanding who is using your site, who is using your product.
And so then as soon as you start trying to understand who it is that you are targeting, now you are starting to deal with privacy issues.
But what is private to one person versus another person? How far can you go?
We always hear about people care about their privacy but don't really act on it. Maybe because privacy isn't really something that's concrete. It's defined by each person. And so as soon as we start trying to define privacy itself and as soon as we start trying to regulate that too hard, it makes it a lot more difficult for -- at least in my experience, to understand who we are really trying to reach out to.
So I think it's more defining a value of all individuals, which is pretty tough to do.
And so that's -- I'm trying to keep it short, but that's basically the biggest problem I have run into.
>>JASER ELMORSY: Well, as I said, I would like to touch on some of the points that, as an African company, are painful for us. Jonathan, I'm very happy you decided to wait until the translation service came up for all of us because in this room, not everyone talks English, and worldwide, not everyone talks English. It's -- Unfortunately, the Internet still offers most of its services only in one language, and this is one of the major pain points we are having with our services.
On the one hand, companies should be offered some form of -- or be explained why they should start offering their Web sites, their services in other languages as well so that they can broaden their consumer base, but on the other side, the Internet itself must also be made ready for that.
I'm very happy that country-level domains are starting to touch in non-Latin languages as well, but what about general domains, for example? Why can't I type in www.something.com in Arabic in my case or Chinese or Russian, you name it.
Things like that are really painful for us as a non-U.S. or non-Anglo-Saxon company. Whereas maybe for Europe, that has joined the Internet a long time ago, it was not as painful because English has a wide relevance there. But for us and our consumer base, we should really start thinking about including those other languages into the Internet.
One of the other pain points we're having is connectivity in our area. I'm very thankful that we are online here and thank you for the organization that is providing this service, but I'm talking about a more broader view. Connectivity is still very expensive in many countries outside the European and U.S. market. And the more expensive this connectivity is, the more it also costs to provide you services. And this is also something that the Internet community, and that's why I am putting my points out here in the IGF, this is something that we should touch on and work on to make it better.
>>EVAN BURFIELD: I think I wanted to share a story again about some of the work we have done with governments. As many of you know, back in February of 2009, the United States passed a very significant stimulus, about a trillion dollars in government spending to try to get the economy jump started. And President Obama told the American people that this money was going to get spent in a way that was fundamentally more accountable and more transparent than any money that had ever been spent before by government. And he said every American will be able to go to a Web site called recovery.gov and see exactly where every dollar gets spent, who the money has gone to, what it was used for, whether it has created jobs, whether the projects were actually successful.
And we were, Synteractive and our partners were actually hired to build the Web site, and we had about ten weeks to do it to meet the requirements of the law. And ten weeks to build a system that's able to track a trillion dollars in spending is a very, very tight time frame, and so we had to resort to a very different approach to the one you would traditionally do. So we actually took some off-the-shelf Microsoft technologies and were able to run those on the Amazon Web services cloud. We were able to leverage some Google Web services, some Yahoo! Web services, some Microsoft Web services and weave together a solution truly in a matter of ten weeks that actually gave every American the ability to enter in their personal post code and see, in their local community, what was happening.
We wouldn't have been able to do that without the power of cloud computing and the capabilities it afforded.
The interesting part for us is it took ten weeks to build the solution and it ended up taking nearly that long to go through the entire process of actually figuring out how to make it compliant with government security regulations.
We move on from there and we've built a variety of other open government solutions. We built a really excellent platform on the Microsoft cloud on Azure that enables citizens to actually submit their own policy ideas to the American Congress and vote on them and comment on them and try to get their representatives to take action on it, and the representatives will actually respond on the platform to these ideas that their citizens are actually submitting.
We have done other things in the health-care space and actually are in this whole concept of making government more accountable, more transparent, more efficient and responsive to citizens.
And just inside the U.S., in order to actually be able to offer these kinds of solutions in this kind of cloud computing framework, you have to deal with this incredible array of different acronyms. You have to deal with FISMA, you have to deal with HIPAA, you have to deal with COPPA, you have to deal with dot frank, each one of which is a different privacy regulation and a different data regulation and security regulation that you have to conform to.
Then we started going out and having conversations with European governments. We go this is great. We have an entire set of solutions to help make your governments more affordable and more accountable and more transparent. And then the answer goes, "Well, in my country you can't run it in the cloud the way you are running it there because in my country we have data sovereignty issues and your data has to be located here and we can't have data transfer issues and you can't do it the way you are doing there because you are actually capturing personal information" so you can actually personalize government to citizens, which is valuable but complicated.
And it becomes a very prohibitive process to go through, this fragmentation of regulation. And we're a pretty substantial company and we're pretty sophisticated in this stuff. The thing that struck me -- and we had a really good conversation this morning about many of the innovative things using the Internet today that companies here in Kenya are doing. And I was blown away by a lot of the solutions. And then it struck me, if I was a Kenyan entrepreneur and I built a fundamentally better application and I wanted to go launch it right now in America and in multiple European countries, which are substantial markets, it would be much, much more difficult and almost impossible, in certain circumstances, for an entrepreneur in Kenya to go through the same process that we've been able to go through with a much more complex capital base.
And I think that process of harmonizing those regulations, I think, can benefit almost everyone around the Internet.
>>JONATHAN ZUCK: Thanks, guys. Yes, as we've talked to entrepreneurs around the world, there's sort of two choices for small businesses.
One is to try and find a business that's too small to be, you know, visible to larger businesses and -- both foreign and domestic, and the other is to try and leverage equalizers, if you will. And so one equalizer along the way has been intellectual property. The ability to patent something can create a kind of equalization between a small business and a large business. And another equalizer has been the Internet and now more recently cloud computing, which allows small businesses to have a kind of reach that they wouldn't otherwise be able to afford and to only pay for it as they needed it. And mobile computing has offered that same kind of equalizer whereby the application you create is available to the same number of people than an application created by a large business.
And so when looking at barriers to entry for small businesses, it's about the things that affect those equalizers, right?
As businesses are looking to invest here in Kenya, one of the things they're concerned about is protection of IP, and so there's laws that are beginning to appear to address these issues.
One of the things that has become an issue around the world, though, is access to markets in a uniform way.
So, you know, depending on what region of the world you're in, sometimes you call it a single market, sometimes you talk about it as a cooperative market, et cetera, but the reality is the extent to which data can flow seamlessly across national boundaries, the extent to which labor can flow seamlessly across national boundaries, or that people can hire people outside of their country and create a large virtual organization to compete with what would otherwise be a very large corporation in a brick-and-mortar sense is the degree to which small businesses have these kind of equalizers to big businesses.
So nine times out of 10, when we talk to public policy officials about small business policy, it's rarely the right answer. Most small businesses are not looking for a small -- a new small business act or a small business grant program. Instead, they're looking for a general improvement into the fluidity of the market in which they operate. And, yes, that will benefit everyone, not just small businesses, but it will benefit small businesses disproportionately because the congestion and the fragmentation of the current system disadvantages then disproportionately.
So just improving the business environment in general is more often than not the right solution for creating an environment more conducive to small business. And that's something that's often missed.
When I target small businesses through my reforms, I'm usually missing the businesses that haven't yet been invented, that are looking for the exception, that have a new idea that doesn't fit the mold, and that just making the environment more conducive to rapid expansion, access to customers in a broader region, those are the things that end up helping small businesses to equalize with large businesses.
So for the rest of the time, I just wanted to open this up for discussion or conversation.
This was meant to be a table shaped like a "U" where we would all be facing each other and not having you all facing us, so all of these entrepreneurs need to be applauded because I didn't give them any warning that they would be sitting up at a podium like this, giving speeches. It's really just meant to be a conversation, because that's really what we're here at the IGF to do is to talk about what policies and best practices are best for the future of small businesses, which I think we all agree are critical to economic growth and recovery.
So I'd love to open it up for question. Yeah.
>> (Speaker is off microphone.)
>>JONATHAN ZUCK: Yes. Use your microphone because then the transcribers will hear you.
>>ATSUSHI YAMANAKA: Well, thank you, chair and thank you all the entrepreneurs here. It's so exciting to hear the real stories about the real challenges you're actually facing.
My name is Atsushi Yamanaka, an ICT strategy advisor in the government of Rwanda. We are also facing the same issues. You know, how can you actually increase innovations, increase SMEs, because they're really going to be the driving force for economic development in Rwanda and also in developing countries as well.
I had a few questions.
You mentioned about, you know, some of the issues like harmonization of the regulations, you know, the data privacy, data security as being challenges, language barriers, you know, connectivities.
I mean, these are all very understandable challenges, and we also face similar challenges, but at the same time, in the developing countries, where we look at it, we have other challenges as well, such as, you know, when I talk to my SMEs, they talk about access to finance. That's really the key. You know, they have no -- you know, if they are going to actually go to the bank and they are asking 15% loans, they will never be able to compete against you guys, see?
So, you know, you mentioned about small grants, but I think, you know, small grants or how can you facilitate access to, you know, both the start-up capital and the continuation -- continual capital are going to be very important parts, at least from the developing country's perspective.
And second is, you know, business aptitude and capacities. You know, maybe -- a lot of these young entrepreneurs, they have great ideas. You know, and those are great technology capabilities. But they don't necessarily have, you know, business aptitude. You know, how to do business. How to run business. How to do market. How to do accounting.
So continuously, you know, we're hearing that they need support in that.
And also, number three, you know, a number of developing countries do not have the luxury to fail. You know, like they -- and, you know, will you be having in there -- I'm sure like you have failed in many instances, but you could always come back, you know, and many of us do not have that luxury.
So it's really important for us to give them the space to explore, space to fail, and learn from that experiences.
So and number four, I would like to ask you questions now, given this context.
What else -- you know, what kind of things we, as a government, could do to support this. Especially in developing countries. What do you think about it?
You know, I mean, you are -- most of you are actually from the developed countries, but, you know, of course the regularized, you know, harmonized market access is nice. Of course, you know, we really want to see that eventually, but we really have a lot of problems before we could actually do that.
And I thought of one more thing. And also the general, you know, education base. Hamed, you mentioned about how the U.S. education system challenges, and that's also something that we're struggling. You know, a lot of countries are still conformistic in terms of education system, so, you know, when I go out and like I see this little 3 years or 4 years kids coming up to me very curious about me, by the time they graduate out of high school, they are very shy, they don't talk to me and so on, so we really want to -- or we need to actually change that to be like you, basically, you know? Why? Why do you think out of the box and so on. So given this context, what do you think, you know, the developing countries' governments could actually do to help create more innovations and more SMEs like you guys? Thank you.
>>ALI HAMED: Just to address quickly the grant issue, one fear that I think that we'd all have in working with the government and getting capital from the government is that you always feel like there's an agenda if you take a grant.
And so this has to be a very open-minded grant. It can't have -- you can't be steering the entrepreneur in a particular way, because there's so many companies that we could never have fathomed are -- were needed, you know, until they were.
But to address more quickly the education system, what I'd say more is there can't be so much focus on just memorization of things that have already happened. I mean, of course you have to -- there is, to some extent -- you have to know very basic things, but new ideas can be okay. Even -- as long as teachers are accepting new ways of solving a problem, that's really what entrepreneurship is. It's a new way of solving a problem. And a better way of solving a problem.
So instead of having them learn something that's already been done, have them learn ways to think that help them find new ways. So that's my two points.
>>MIKE SAX: I believe bandwidth is very important, because it opens the door for so many other opportunities.
For example, in education, if you want to educate yourself, there are a lot of resources out -- available on the Internet to learn about new things that might not be available close -- geographically close to you. So being able to watch a video on YouTube and having the bandwidth to do that and not having to pay a lot of money is important.
Allowing businesses to be created fairly easily, making it easy for a person to start a company, and collect money from people abroad is important.
Like you said, the -- you know, the ability to fail is really something that affects the willingness of people to take risks.
The good news, I believe, is that because of the way the Internet has provided opportunities, we can try something and essentially nobody has to know that we failed. And with -- with regards to bank -- banks and their ability to lend us money, the good news is also that the capital requirements for doing business is -- are much lower today than they have been, and I do believe that it's important to have a culture of intellectual property within a country because it also allows both investors and banks to have some guarantee that the investments they make will have some value and won't just vanish.
>>JONATHAN ZUCK: I would just say one thing and I'll turn it over to Damir. If you did a survey of -- we ended up with a more European panel than I expected. We have a speaker that didn't make it today. But if you did a survey of European entrepreneurs and asked for their top three challenges, I almost guarantee you they would say access to finance, a lack of business aptitude, and not having the luxury to fail, right?
It's -- because it's a -- you know, in the access to finance issue is a question of what it is that inspires venture capitalists to invest, and as Mike said, that very often is having financial structures in place to give return on investments, it often has to do with tax reform and things, and intellectual property protection. Having a business aptitude is an education problem that is a problem for entrepreneurs, especially technical ones, right? I think there's a difference between somebody who is opening a dry cleaning service. They master their craft sooner and then they spend all their time learning how to be a marketer. Whereas if you're in I.T., you spend your entire life just trying to keep up with the thing that you're trying to be the expert in, right?
And then this luxury-to-fail thing is, again, a very common cultural question and very often has to do with the juxtaposition of the social net and the ability to succeed and how much that is encouraged and suppressed, and it's that gap that creates that concern over failure.
But it's funny that you mention them as being unique, because you ask anyone, they'll say that's their top three challenges, but Damir, go ahead.
>>DAMIR TOMACIC: Yeah. I would just add a few more things. As Jonathan said, this -- actually you pointed it out, and I can share with you that it's not that easy in Europe to get capital because the Internet companies are not the most wanted companies for the venture capitalists.
We had those issues in 19 -- back in the '90s, with the dot com bubble, and since then it's pretty challenging. But nevertheless, it's possible.
What we have -- and what you can do is developed countries in Europe are scared, especially in losing its power, in losing its leading edge, so we are scared of unknown. I can share with you that the European Union is a quite big territory, and western countries were pretty scared in opening up the borders, scared of eastern European countries moving from eastern Europe to western Europe to live and work there.
Actually, they all were really, really sure that this will happen. So everyone from Poland will move to Germany.
And actually, nothing like that happened. People stayed in their countries. They love their countries, they see the opportunities.
This is one issue.
So educate Europe about the opportunities.
The second thing is -- and I think this is also very interesting for you to know is, in many European countries, the life is still good enough. We are lazy. And I'm excited to be here to see how many people actually want to do something. I would love to hire you all, just to get your motivation and your ideas.
It's very hard to find those people in Europe, and I was not aware of that. I was partially aware of that.
So exchange -- I think that's very, very important. That's something that government can do. Educate us. Show us what you can do. And allow us to collaborate.
I think this is one of those things that the governments can do.
>>JONATHAN ZUCK: And please introduce yourself, too, at the beginning.
>> I would like to add something real quick, if I can.
>>JONATHAN ZUCK: Why don't we let -- he had his hand up.
>>REMI CARON: All right.
>>ALEX GAKURU: Okay. Thank you. My name is Alex Gakuru. I do wear several hats, so I'm the chair of the ICT Consumers Association of Kenya. I'm the elected Africa representative at ICANN noncommercial users constituency. I am the chairman of the Broadcasting Content Advisory Council at the Communications Commission of Kenya, which is CCK. I'm a programmer. I've got my company that I've run since 1991 doing a lot of apps. So I speak on my own behalf.
The issues -- first of all, I'd like to thank all the discussants. The issues they are raising are very dear, and I think they're very enlightening to -- and should I say reassuring -- to know that you have the same problems that we have, because we thought because you are from developed countries, with all fairness, that somebody else was meant to be there, that you probably have not had the same problems we have. But I've seen a common theme in all of your presentations. It started off with the chair, Germany, it's been repeated, even America. One of what you may call desperate, scattered laws, regulations, across jurisdictions that cut out innovation. They kill innovation. He's given an example that is very sad and I've been having that position for so long, that we may have very good innovations but getting them out there is a problem.
Now, I want to play a devil's advocate and say all the innovation we want to promote and we say is going to be possible on the Internet has just ended and we won't have it in Africa and developing countries before even we have got any connectivity. I'm just -- I'm looking at Internetworldstarts.com to see all the global statistics and Africa is now at 5.7% of the global Internet. By the time we get reasonable Internet, we can't innovate and put anything on the Internet.
Because in America, there is a law they are passing that is going to protect IP, which will have a chilling effect on all innovation worldwide, on anything Internet-based.
Any Web site anywhere can be shut down using an American law. It's the law that has morphed to what was previously called Quaker (phonetic) and I think this is the most dangerous thing to not only innovation and the small business ever coming up as a big businesses that have so-called IP or intellectual property industry or the large corporates as they are minding the corporate interest in the U.S., have gone on over even public interest and so even small companies and even individual expression are threatened by that law.
So inasmuch as we already realize that there are so many small laws and regulation in every jurisdiction, the chilling effect of innovation is just around the corner. So I just wanted to get your reaction to that. Thank you.
>>JONATHAN ZUCK: I can talk a little bit about the protect IP act, which is very controversial in the United States as well. And there's a lot of discussions going on around how to prevent unintended consequences from that law. And I think that the content industry is very scared right now, because the sales of their business goods are way down. The movies and music and things like that. And so they're pushing very hard to try to find the ways to shut down sites whose primary purpose is pirated content.
And so finding what that middle ground is, is an ongoing challenge. But I will tell you that that particular law is very controversial, even in the United States, in terms of trying to find what the right balance is between protecting online content and preventing sites whose primary purpose is just the distribution of pirated content.
And so figuring out how to institute sufficient due process, et cetera, is, again, one of the ongoing challenges in that bill, and I think will continue to be a debate for some time. Yeah.
>> We actually have a question from Maureen in the Cook Islands. In the small island developing states in which we live, market size, connectivity, accessibility, access to capital, are real challenges for anyone contemplating leaving the security of their already poorly paid jobs to try to be innovative. Even if we have ideas that could benefit our isolated and technologically deprived situations.
Does the panel have any comments or potential solutions to that problem?
>>REMI CARON: Well, this question basically ties into the question we had earlier, and I have a couple of points from an entrepreneurial standpoint, I think.
Starting with the luxury to fail, one of the things over here in Kenya, for instance, is you have this phenomenon called brown outages, right? Where there's simple no power. So if you have an Internet application or any application, for that matter, let's say a long-running process running on your own server and you have a brown outage, you have an issue.
So to lower the risk of failure, you could take a very good look at posting that application and/or service in the cloud, where you have a 99.9% uptime guarantee from your provider, right?
So then at least from the business side of things, you have lowered the risk of failure.
From financing aspect, I'm not an expert on financing but I think the finance and the business skill problem can be overcome, or at least an effort can be taken to overcome that, to partner with a company that has done it before. And that doesn't necessarily have to be a domestic one. It could be a European or a U.S. one. Right?
So you could -- you could try to partner with a company from abroad in order to overcome the financing issue with the banks locally.
So the education part, I don't really have an answer to.
Some of the things that you might think about is organized conferences, right? To get people from abroad to fly in and share their experiences like we do today, and that's something that you see happening in Europe and in the U.S. all the time, that there's conferences specific on certain topics where people actually get learned from the specialists out there in the field.
>>MIKE SAX: As I mentioned before, geography is becoming less and less important, but culture is more important than ever. And your knowledge of culture is some -- something that is incredibly valuable. And so one of the opportunities that people have who live in less -- in more remote areas or specific cultures is to be a bridge that allows companies in other countries to reach out to those markets. And for that, you need to establish trust and develop trust. And once you create that, there is tremendous opportunity to work together.
So focus on eliminating, you know, the geographical barriers, which is fairly easy now that we have the Internet as a technology, but also look at the opportunities created by your knowledge and immersion in the culture and the trust that you can develop in creating partnerships with other companies globally.
>>MUCHIRI NYAGGAH: Good morning. My name is Muchiri Nyaggah from Semacraft Consulting Partners.
I've had the unfortunate experience of failing a few times. It was very expensive. And one of the biggest reasons is because access to capital is -- you know, is way more difficult, I think, in emerging markets than it is in developed ones, but one of the -- one of my observations has been over the years the need for a more mature business incubator ecosystem. We've begun to see it here. It's beginning to grow, and with the help of organizations like infoDev and private enterprise, we're beginning to see incubators show up, but the model that the incubator takes and the way the incubator looks here is beginning -- you know, looks a whole lot more like a western incubator.
If you walk into any of -- you know, any of the business incubators that you will find in Nairobi, you know, fairly nice environment, high-speed Internet, you know, nice-looking space in an expensive neighborhood.
So the small business people, the small entrepreneurs who have a non-tech business that need incubation find that they can't access it, and when they do find what looked like an incubator, they find that they have to come up with $200 a month, which, quite frankly, for most of them is way more expensive than renting a small room in downtown Nairobi and setting up shop anyway.
So the -- one of the things that I have come to appreciate about what an incubator ecosystem would do here is sort out a bit of the issue with education.
Because those incubators would allow small business people to access continuous education on whatever specialty that they have within that -- within that incubator, and then the incubator also allows enterprise -- small enterprise to find a space to fail, a place where you can co-innovate with others, you can try something, fail, learn, and move on, and do it all fairly fast without losing your shot.
And the access to capital issue is also kind of addressed by a good incubator system, because venture capital find -- private equity funds find a place where they can work in and find businesses that have tried and failed and learned and moved on, and have had a track record of toughing it out and learning in a place where enough of that exists, the cost of due diligence is way higher, and way more prohibitive.
So one of the things I'd like to see personally is more incubators and more incubators in the downstream market where there are guys trying to -- you know, not more of the hacker spaces that we see with coders, but also maker spaces, you know, when we have incubators for people who do crafts that can't afford an expensive DeWalt and Black & Decker equipment but they can come in and create a fantastic piece of furniture and create a brand and grow a business. Thank you.
>> Excuse me. First of all, my name is Francis (saying name). I'm the project manager for Servtech Systems.
I was looking at Internet as a catalyst of change, as the theme of the whole event, and I think let's give credit where it deserves. I'm about 47 years old now, and if I look way back on our old ages, where we never used to have a lot of this Internet stuff, and it used to be really crazy because information, innovations, and stuff like this could not be -- accessibility were not so much in place in terms of reaching up in time, and I can say the Internet has really rolled out dynamically in a credible way.
First of all, in terms of entrepreneurs, I think it's really ideal and the only challenge is that sometimes they may get problems in terms of, say, slow Internet and maybe wiring and stuff like this are not really working out in some places.
But I believe it's okay. It's taken up and it's really all right, and we want to thank whoever -- the expertise who have gone ahead to do this. It's really amazing.
Secondly, I also -- I'm looking at the Internet in terms of softwares where we can have softwares that can manage, say, maybe in hospitals a number of, say, checking up diagnoses and stuff like this, number of patients and stuff like this, just to do away with the papers and, you know, because this idea of papers, I think, it's become somewhat -- piling up papers you see in shelves and you see it's not really -- but it's good because I think it's a good work.
Secondly, I want to say that in the area of schools, if we look at the Internet, the teachers, they are in classes doing away with the chalks. I'm giving credit to a colleague of mine, a friend of mine who came up with some softwares in terms of transforming the information in books on softwares, and where he can go as far as sending the education system in the suburb areas, actually teaching -- the teachers teaching with this system in classes and the students just getting all their information without the teacher standing in front of the class. So it's really -- it's really credible and I believe you are doing a good job. I just want to thank the panel.
Let us give credit where it deserves: Internet and innovation has taken us and is taking us places. Thank you.
>>JONATHAN ZUCK: Thank you very much for your intervention. I am being told by the Secretariat that, even given the confusion this morning, that our session has to be cut short, even though it started late.
And these guys are all come a long way to have this conversation with you, and so what I want to do is recommend that we take this conversation to the food court or something like that and keep this going, because it's really why we are all here. But we are being told that the next session has to set up in here.
So I'm really sorry to cut off questions, but we really want to continue this conversation.
I have put a URL on my machine that's here, but not on -- I don't know if it's possible to put the laptop up on here. But one of the organizations -- oh, sorry. There it is. I was going to have to spell it. But there is the URL for an organization which is designed to help innovators with the issue of business aptitude, which we talked about quite a bit. There's a lot of Webinars and a lot of discussion about how to build your business.
So I wanted to make sure and draw your attention to that. It's a nonprofit. It's international in scope and works in a lot of different areas and a lot of different topic areas.
So we're being kicked out of this room, but we have such a great critical mass that I don't want to lose it. And there are people with your hands up, and so I think what we are going to do is just take this group and move to the food court and hopefully keep the conversation going. But I really want to appreciate you coming out and being a part of this conversation, and let's try to find a way to keep the conversation going for the coming year.
Thank you so much and thank you to the panelists.
[ Applause ]