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64 WORLD DEVELOPMENT REPORT 2016
information. 35 Each farmer has a topped-up phone
card and has been trained to recognize early symptoms
of cassava mosaic disease and brown streak
disease. The farmers use the mobile phones to send
monthly text messages to researchers about disease
incidence. In return, they receive advice on disease
control, and disease experts visit the area when more
than 10 percent of the members of a group report the
disease. The network, part of the Great Lakes Cassava
Initiative, supports more than 1 million farmers in
six countries.
Digital technologies help farmers in Botswana
meet quality and traceability requirements for beef
exports to the European Union. The farmers use the
Livestock Identification Trace-Back System, based on
transponders inserted into each animal, transmitting
information automatically to databases in 46 district
offices. The centrally stored data allow exporters to
trace beef to the individual cattle and their owners,
necessary to meet traceability requirements for
imports into the European Union. The technology
also helps improve veterinary services and save costs
by optimizing feeding schedules.
Digital interventions in agriculture seem to work
best when the information provided to farmers is
simple, such as real-time prices or weather forecasts.
Based on simple mobile phone applications or internet
kiosks, real-time data improve farmers’ access
to prices, local weather forecasts, and more detailed
advice on agricultural practices and input use (see
sector focus 1).
Real-time data help equipment manufacturers
in China turn over their inventory stocks five times
faster than suppliers not connected to the internet.
Supply chains and logistics operations account for
10–20 percent of Chinese equipment manufacturers’
costs, so companies using real-time data to optimize
inventories and transportation routes can achieve
substantial efficiency gains. Anji Logistics, a wholly
owned subsidiary of Shanghai Automotive Industry
Corporation, connects its IT systems with dozens
of Chinese equipment manufacturers to manage
logistics. General Motors China has cut costs and
improved customer satisfaction by building internet
connectivity into cars, so that dealers can check faults
remotely and send maintenance alerts to owners.
With only 20–25 percent of small manufacturing
firms in China estimated to have used the internet in
2013, there clearly is more scope to improve manufacturing
efficiency. 36
The Egyptian logistics firm RW uses the online
platform En2ly to optimize supply chains, shortening
the time to deliver goods. The platform ensures more
efficient real-time communication and coordination
with clients and gives RW access to a large pool of
independent carrier trucks. Each truck has a global
positioning system (GPS), so RW can track shipments
in real time and be notified once the shipment is
delivered. The technology shortens the supply chain
gap between shipment and delivery in the domestic
market, allowing RW to provide superior transport
services at more competitive rates.
Connected water metering systems help municipalities
identify leaks or changes in water use, reducing
water losses by up to 10 percent. At its research
center in France, U.S. manufacturer Itron developed
water metering systems with wireless devices
allowing remote reading over large distances, so
that municipalities can reorganize maintenance and
respond immediately to water waste or losses in the
distribution network. The data also improve water
consumption analysis to optimize client service and
tariff structures. Itron’s production of communication
devices has increased fifteenfold since 2000,
and its production of water meters threefold. Such
connected metering systems have great potential to
save drinking water—more than 30 percent of the
drinking water produced worldwide never reaches
the customer (often due to leaks). 37
Looking forward, the internet of things should
further increase the labor productivity of firms,
implying substantial opportunities for more efficient
business models and thus future growth (see
spotlight 6). For instance, the German truck body and
trailer manufacturer Schmitz Cargobull uses telematics
(the integrated application of telecommunications
and data) in its trailers for real-time sharing of data
with drivers, freight agents, and customers on maintenance,
loaded weights, cargo temperatures, and
truck locations. The company adjusted its organizational
structure and management practices to maximize
efficiency gains and escape competition from
low-wage countries. As a result, the firm’s production
pace necessary to meet customer demand fell by 90
percent, internal failures decreased by 92 percent, and
yearly accidents declined by 95 percent between 2000
and 2013, as its market share for refrigerated trailers
in Europe rose to 50 percent. 38
Enabling online marketing and distribution
Firms are finding new and more efficient ways to
market and distribute their products online. Carmakers
represented on the internet in China can attend to
about 10 million searches each day on Baidu, reducing
their marketing and sales costs relative to nonconnected
manufacturers. Volkswagen, for instance,