For the tech hubs of the future, look to Asia’s smaller cities

This is an update on a piece I’d written for Reuters six years ago on remote freelancing in emerging markets. It was written in part for a new Cisco report on Technology and the future of ASEAN jobs (PDF), launched this week at WEF.

 

Much of the disruptive change in Southeast Asia in the past five years has been been by adding formalized systems and layers to existing sectors, most of that in what broadly be called mobile commerce. Think Grab, Go-Jek, Lazada.

The investment has been concentrated, in country, sector and in companies. But the real change in skills and work in the long run may come more from the backroads of Southeast Asia, tapping into a vibrant but hidden economy of online knowledge workers.

According to data collected by Google last year, the majority of investments in Southeast Asia have targeted companies based in Singapore and Indonesia — together accounting for 92% of funds. In turn most of that money ($9 billion — 73%) found its way to unicorns — those companies with more than a $1 billion valuation — while companies worth less than $100 million got $1.9 billion and those between $100 million and $1 billion attracted $1.4 billion.

These figures are good, in the sense that it had taken some time for Southeast Asia to attract significant venture capital attention, but it illustrates how slanted the overall picture is. Those unicorns are: Go-Jek, Grab, Lazada, Razer, Sea Ltd, Traveloka and Tokopedia. All are essentially platforms for retail selling: transport, consumer goods, travel etc. All capitalize on inherent problems in the free flow of goods and people in Southeast Asia, because of inadequate infrastructure, be it physical, financial or social.

And most are now trying to extend their presence beyond the major regional cities. But I think what has been happening in these smaller cities and towns for several years may be the more significant development in the long run. Indeed, when these platform players bring their services to these cities, there may be an interesting confluence of improved infrastructure and pent-up B2C or B2B demand. It should be here that companies and governments are focusing their attention — on building infrastructure, on tapping into these self-replenishing skill pools, and hubs of quiet entrepreneurialism. In the long run these skills are going to help to even out and possibly reverse the long term trend of migration to the cities, or megacities.

Take, for example, 99designs, an Australian crowdsourcing design company. They’ve been operating for several years, providing a platform for graphic designers to submit their work and earn business. I interviewed their CEO six years ago and he told me he was awestruck by how one city in Indonesia — central Java’s Yogyakarta — consistently beat other cities for quality and contracts won. He eventually went to see for himself, and was greeted like a rock star by the city’s 99designs community — one of the biggest in the world. Those young men and women were tapping into a deep well of artistry that stretches back hundreds of years, and can still be seen in carvings, batik and other artwork around the city.

I asked 99designs for an update, and they told me the trend has only increased: 95% of the Indonesian designers on the platform live outside Jakarta. Nearly 70% of them live outside the country’s top five cities. This is not just an Indonesian phenomenon: In fact the numbers are higher in the Philippines and India, two other big contributors to 99designs.

I checked Upwork, one of the main providers of freelance services and I lost count of the number of services being offered by freelancers based in Yogyakarta (and in other Indonesian cities like Makassar and Medan.) These services are not basic, either: they range from Ruby developers to 3D rendering artists.

Another important thing to note about these freelancers is that they are constantly taking on new skills. For this piece I caught up with a Philippines librarian I had met when I wrote my story six years ago. Back then Sheila was using her library skills to work with clients in Australia and the U.S. to enter metadata as they digitised their libraries. Now, she tells, me she’s taken some online courses in personnel management and is now working as a project management for a startup. Freelancers are well-motivated to acquire skills and their clients are keen to help them do it because they like working with them.

The implications are clear. As technologies emerge and develop more quickly so will companies have to look elsewhere for skills. This benefits freelancers like Sheila because they can more readily and rapidly identify what skills they should acquire and position themselves. The top fastest growing skills on Upwork in Q2 2018, for example, included blockchain, Google Cloud, ecommerce software volusion, risk management and rapid prototyping. While most of these skills are likely to be found in the U.S., they can also be found in Southeast Asia, where rates are significantly lower: rapid prototyping in Southeast Asia fetches mostly $10-30 an hour, whereas in the U.S. evenly between $10-$30 and 30-60 and 60 and above). Of course there are many more in the U.S. offering that skill, but expect that to change.

This hidden economy is growing, and is impressively independent. But it could do with support. This will come in part as Go-Jek and others further expand beyond the big cities, bringing improved transportation and better support services. But governments too, could lend a hand. Internet connectivity is still patchy in some parts, and a lot of those hoping to switch from a long commute to working at home often find it hard to get that first job. If those who do succeed can be encouraged to help build out these communities and share their skills, a whole new generation of home-based knowledge workers could lift towns like Yogyakarta and even further afield into hubs of the future.

Solving the Tragedy of the Commons

 

(edited for clarity)

Bike sharing has become something of a plague for those who don’t appreciate its advantages. Even for those who do, the sight of bikes lying all over the place, broken, is jarring in a place like Singapore. But the solution is not obvious. First off, you need to have a mechanism for policing errant bikes and the companies that own them. You need to find a way for users to report them. Then to punish the offending companies.

But wouldn’t that just encourage companies to damage or mislay their rival companies’ bikes? I am pretty sure that’s already happening — I see lots of slashed seats and vandalized bikes, which I’m willing to bet are not all caused by deviant residents.

The result: the old problem of the tragedy of the commons, where common resources, in this case space, is damaged for all by those who choose to externalise their costs. In this case that’s the bike companies, who have no clear incentive to keep their bikes tidy and shipshape. So the supposed ‘commons service’ they’re offering — cheap, available, healthy personal transportation — in fact is a downgrade for those people who appreciate their public spaces — sidewalks, parks, verges — clean.

So I have a solution:

* instead of fining each company for transgressions of their bikes, you fine all companies equally for each bike that is out of place, broken, or obstructing. Three bike companies, say, get the same fine for any bike misplaced, whichever company owned the bike.
* Each company would be required to include in their app a standard method of reporting broken or misplaced bikes. This information would go to the company — but would also go through to a central repository managed by whatever government agency oversees the bike companies. Individuals reporting a case that is subsequently found to be accurate are rewarded by the bike company in question — free rides, or whatever. If the bike company can resolve the incident within 24 hours there will be no fine.
* Fines are collected by the agency and pay for the inspection teams and for publicity.
* A tally is kept. If one company is clearly more egregious than the others, action might be taken by the agency.

In the long run I think a better system would be to use LoRa or another narrowband technology to better monitor the location of bikes and theitr state. But for now this might just be enough. I’ll write a more detailed proposal on that later.

Bike Fencing

Some interesting stuff going on in Singapore’s world of bike sharing.

They’re approaching the problem of errant bike-parking by regulating the companies via a licensing regime, which will begin later this year, according to Today.

From what I can make of it, operators must
– be licensed, or face a S$10,000 fine and/or six months in jail
– be responsible for the parking of bikes within designated parking locations, or lose their licence or find their fleet size reduced

Users will also be watched, under a geo fencing scheme that will require them to scan a QR code at the designated parking locations before ending their trip. Failure to do so will mean they’ll be charged continuously — I guess meaning the meter will keep running (not sure how this would work with the flat monthly rates all three operators are currently offering).

Readers have already pointed out potential flaws:
– what happens if there’s no space at the designated area?
– what happens if someone moves the bike after the user has scanned their code?

And Today pointed out in a piece that there need to be more designated areas to make this work. It’s fine picking up and parking a bike at a subway station or a bus stop, but what about when you’ve pedaled back to your home?

Singapore, as ever, is taking a positive but cautious approach to the sharing economy. I quite agree that companies are so far not incentivised to distribute their bikes with consideration, or to monitor them after they’ve been deployed. So something has to change. But also the usefulness of these bikes is going to decline rapidly if users aren’t able to leave the bikes within a few meters of their home for fear of draining their digital wallets.

More importantly, Singapore needs to consider what more it can do to encourage bike usage — by rapidly expanding its bike paths, by offering guidance to users about how and where they can use the bikes, and generally rewarding their use. As China has found, the more these bikes are used, the more other people feel comfortable using them and the quicker a social code of conduct emerges about their usage.

 

Grab’s Promotion Problems

(updated to include Grab’s response, edits)

Grab, Uber’s rival in Southeast Asia, is putting up an impressive fight against the ridesharing company. Both have deep pockets, and offer incentives to both drivers and riders.

But Grab is either struggling to phrase its promos correctly or something more sinister afoot. Today riders were in uproar when they found that a promotion that offered “$4 off 20 Grab rides next week” turned out to mean, well, not exactly that.

Those complaining that the $4 deal was cut short well before they’d used 20 rides were told that “the Terms and condition stated that the promo [has] limited .. redemptions available”. One Grab employee posted on Facebook that “We have taken your feedback and we will make it more obvious and clearer in our future communications. Stay tuned to our future promotions and happy Grabbing!”

Happy Grabbing indeed. I’ve looked at the terms and conditions and it does indeed say, at the bottom of the promo that ‘limited redemptions available’. But not all of them: see this one on my app below:

 

It’s hard to imagine, though, that this would be at the expense of the clear offer to “enjoy $4 off 20 Grab rides next week” — without any asterisk or weasel wording, at least close to the title.

I’ve reached out to Grab and they offered this:

I do want to assure you that our promos are genuine. There are terms and conditions and in this case, we had shared that the promo was for up to 20 rides, until the promo was fully redeemed (referencing the line on limited redemptions).

I’d like to be open with you on what happened. We could have been clearer on our communications. We had transparently highlighted it was limited redemptions in our eDMs and in-app notification of the promo, however in our notification when passengers had successfully redeemed the ‘4off’, it mentioned it was up to 20 rides without the additional line on limited redemptions. This was an oversight and I apologise for that. 

We’ve unfortunately disappointed some people this time around, and we have to put our hand up that we made a mistake in not repeating that there were limited redemptions. This oversight should not have happened.

I know there are questions asked about whether we had shared that there were limited redemptions – we did make sure to highlight this when we shared this promo. You’ll also see it in the notifications panel in the Grab app.

It’s not the first time I’ve wrestled with Grab’s promotion schemes. While they’re attractive, they clearly cannot be permanent, and at best I find them awkwardly implemented; at worst I find them deliberately awkwardly implemented, designed to fool the rider into believing they’ve been offered something only to find it’s something else. In the words of one Grab rider on Facebook: bait and switch.

Grab assure me that’s not the case, but I’m sure I’m not the only chump who topped up his GrabPay wallet thinking he would be enjoying a week of cheap rides. More fool me.