Each year, hundreds of Columbia Business School students travel around the world on Chazen Global Travel Programs to countries that have barely emerged out of communism, military rule, or dictatorships. What do businesspeople interested in tapping these markets need to know? Here’s on-the-ground intel from tomorrow’s leaders. 

In Myanmar, the Internet is new

“In Myanmar, the Internet is equivalent to Facebook: some phone sellers will even go as far as to help people set up Facebook accounts when purchasing a device,” said Miriam Krule ’18, writing about the Chazen Global Immersion Program trip in May. “As a result, Facebook is the main source of information and connection for many Burmese people. What’s more, because of the political situation and the sanctions, many Burmese people jumped straight from having no computers to having smartphones with Facebook,” leapfrogging into social media and mobile technology without the 30 years of the Internet much of the developed world has had, she said.

A Miami-to-Cuba pipeline is funding real estate transactions

“Eighty percent of Cubans have either remittances, a private enterprise, or a second job to supplement their $25 monthly average salary — and the US is a big part of how they do this,” reported Jill Wang ‘18. 

The US-Cuban embargo prevents any foreign business other than tourism from investing in Cuba. “However, some say Miami — which has the largest population of Cubans in the world after Havana — keeps Cuba afloat with the estimated US$3 billion in remittances sent each year from friends and family,” she said. “This creates disparity, because the 20 percent of Cubans who truly live on $25 a month may not have family who can send $100 each month, effectively increasing income by 500 percent.”

During a Chazen Global Immersion Program in March, a Cuban real estate lawyer shared an example of how this plays out. Because Cuba is a socialist country, Cubans used to only be able to swap their houses, not sell them. That has changed — real estate sales are now permitted — but the actual prices paid for apartments can exceed $100,000-200,000, and there are no loans, mortgages, or credit of any kind available to do so. Some foreigners are effectively “investing” in Cubans if they float housing costs, because Cubans can either re-sell their houses after making improvements, or turn the house into an Airbnb or “casa particulares,” where they can earn money renting out their homes to tourists.

In Kenya, technology doesn’t replace jobs — it creates them

One stop on a Chazen Global Immersion Program trip to Kenya in March was telecommunications company Safaricom. Students got a firsthand look at M-PESA, a peer-to-peer mobile money platform to enable people to send money to people who only have access to SMS/feature phones. M-PESA processes 10M+ daily transactions, controlling 45 percent of the country’s GDP and enabling financial transactions that help start small business growth, reported Ray Phua ‘18. Dedicated to increasing financial inclusion, M-PESA is now fully integrated with all 43 banks operating in Kenya, progressing its well-distributed agent network model.

Products like M-PESA are succeeding despite fears in the developed world about technology’s role in job loss and wage stagnation. Research from Chazen Senior Scholar Jonas Hjort shows that this isn’t the case. “We have clear evidence of the positive impact of high-speed Internet on job outcomes in Africa,” he says. “And it’s the people with lower levels of education who receive the greatest benefit.” Rather than widening the employment gap between high-skilled and low-skilled workers, new Internet infrastructure has actually driven down inequality across the fourteen African states they examined.

ABOUT THE RESEARCHER

Jonas Hjort

Jonas Hjort was a Columbia Business School faculty member from 2012 to 2022.