Morgan Stanley
  • Institute for Sustainable Investing
  • May 12, 2017

The Inclusive Power of Technology

A multitude of opportunities exist to impact inclusive growth across finance, healthcare, education and gender by investing in technology.

By using the Morgan Stanley Inclusive Growth Opportunities Index, developed with The Economist Intelligence Unit, investors can analyze and compare the 20 countries in the tool across factors ranging from the need for technology and the business and government support for tech startups, to the competitive landscape and overall risk appetite.


Global banking is getting a makeover in response to disruptive innovations from financial technology (FinTech) startups, and a new industry is developing to support digital delivery of financial services and insurance.

Banks alone could generate annual revenues of $380 billion1 globally by using technology to serve underbanked people in emerging economies.

The tech revolution in finance is arguably having the greatest impact in regions like Africa and Latin America. Nearly 90% of Africans have access to mobile phones, making it a promising region for technology that connects smallholder farmers, businesses and remote or low-income populations to financial products. Examples of FinTech in Africa include FarmDrive's mobile technology, which connects smallholder farmers in Kenya to financial institutions and products like credit and insurance.

Developing credit profiles is a major issue for remote populations and many low-income earners in major cities. In Latin America, Destacame is a company whose mobile credit-scoring platform uses data like utility bill payments to assess creditworthiness.

According to the Index, Nigeria ranks first out of the 20 countries analyzed in terms of FinTech needs, while Rwanda has goals of becoming the "Silicon Valley of Africa" and scores high marks for its business and government-friendly environment.

Mexico is an interesting country for FinTech investment opportunities, especially for those with less risk tolerance. In spite of its strong banking system, 60% of Mexico's adult population lacks access to a formal bank account and a third of small and medium-sized companies identify access to finance as a major impediment to growth.

Analysis using the Index puts it as the country with the fourth-greatest need for inclusive finance. 


Digitalization has been slow to take off in the healthcare industry, at least compared to other sectors. But that means ample opportunities exist for innovations that reduce costs and improve access to treatment and medications. The global mobile health market, which uses mobile devices to provide access to medical care, expects to see average annual growth of 25% to reach $116 billion2 by 2025. That's approximately the size of Hungary's total economy.

Albeit slow to get going versus other sectors, there are innovative companies beginning to digitalize aspects of healthcare. Peek Vision, for example, is a medical device manufacturer providing eye exams on a smartphone — a service that enables doctors to assess people in remote areas.

The need for healthcare innovation is immense and across nascent, emerging and advanced countries covered in the Inclusive Growth Opportunities Index. According to the Index, Nigeria’s infant mortality rate is double that of either India or Bangladesh, and requires substantial investment to reach its ambitious universal healthcare target. India’s Health Tech sector offers opportunities for investment in products that capitalize on its tech-savvy population; while the U.S., South Korea and Israel are in need of innovations to reduce out-of-pocket health spending.


EdTech is taking off in China and India, where there are large disparities in basic and advanced education levels between rich and poor, rural and urban. Both countries are attracting large amounts of investment related to digital learning and performance measurement. In India, where the number of internet users is increasing quickly and is expected to reach 550 million — or 40% penetration — by 2020, digital education’s potential is enormous3. Technopak, a consultancy, estimates that the Indian digital learning market will almost triple between 2016 and 2020, growing from $2 billion to $5.7 billion4.

In advanced countries, a multi-year tertiary degree does not provide life-long skills that keep up with the pace of technological change. Retraining has become necessary to keep employees up to speed, and Massive Online Open Courses (MOOCs) like Coursera and Udacity are helping close the gap.


India has one of the biggest gender gaps when it comes to employment, banking and access to the Internet. Only 30% of Indian Internet users are women5, and a 2014 government survey found that just 9% of women know how to search the Internet or send an email. Reducing this digital divide means building a new market for existing technology and telecommunication products. Companies like Google's parent Alphabet, as well as Telenor ASA, a Norwegian IT company, have already launched gender inclusion initiatives there.

Alphabet has deployed 9,000 female tech trainers on bicycles in rural India, to teach women how to use smartphones and tablets to improve their lives through access to the Internet. Telenor also has a network of women that sell discounted SIM cards to women in rural areas, to overcome social conventions that discourage women from possessing mobile phones.

Globally 1.7 billion women and girls do not have access to a mobile phone6. And in the world's least developed countries 31% fewer women than men are Internet users7.