Abstract
There is widespread recognition of political economy factors
that underline 'inclusive innovation'. Key among these include the trio of
states, markets and society; the conditions that lead to technology transfer,
adoption and finally diffusion in a new context; the corresponding creation
of indigenous capacity with participation from local actors and stakeholders;
and socially inclusive outcomes that can thrive from complementarities of
technology and social innovation. Building on these ideas from the IDS
50th Anniversary Conference in July 2016, this article links them with the
Heeks Ladder of Inclusive Innovation to discuss the prospects for further
inclusive innovation and development.
Keywords: inclusive innovation, development, policy.
1 Introduction
There is widespread recognition of political economy factors that
underline innovation and its role in development. Key among these are
interactions that span the trio of states, markets and society governed by
a set of rules and institutional frameworks (Altenburg 2009); conditions
that lead technology to be transferred, adopted and finally diffused in
a new context; the corresponding creation of indigenous capacity with
participation from local actors; and socially inclusive outcomes that can
thrive from complementarities of technology and social innovation. The
Institute of Development Studies (IDS) 50th Anniversary Conference
debated these key themes in furthering the agenda of inclusive
innovation and development.
As early as the 1970s, IDS and the Science Policy Research Unit (SPRU) at the University of Sussex collaborated to produce the so-called Sussex Manifesto (Singer et al. 1970). This brought innovation into the centre of the development discussion, stressing the role played by technology and research. In 2010, IDS and SPRU collaborated again to produce a follow-up Innovation, Sustainability, Development: A New Manifesto (STEPS Centre 2010). This laid emphasis on organising innovation as being networked, distributed and inclusive, where various groups of people and stakeholders are included, especially the poor and marginalised.
In this entire period, innovation has been hypothesised as an
amalgamation of various processes that emerge from the interactions
among various actors that are involved in those processes.1 A parallel
can be drawn with the concept of global value chains where various
innovations come together to bring a product or service from
conception to the final consumers (Kaplinsky and Morris 2001).
However, weak institutions and less formal definitions of interactions
among the actors often present challenges for innovation to be inclusive
at various nodes of the chain. As a result, excluded groups (for instance,
smallholder farmers or the marginalised without access to health
services) may fall outside the domain of creation and impact from
conventional innovations. 'Inclusive innovation' emerged in response to
these challenges that emerged for excluded sections of society.
There have been various developments of the concept of inclusive
innovations since 2010. In this article, I draw on the work of Foster
and Heeks (2013), where inclusive innovation is defined such that
marginalised groups are incorporated within the structures and
processes that underline an innovation activity. The key questions
stressed in their work are 'who is included in innovation?', and 'where
to include them?'. Both acquire importance from the perspective of the
political economy of innovation that creates inclusive outcomes and is
also inclusive in terms of the innovation process itself, the latter alluding
to the social shaping of technologies (Smith 2014). This approach helps
support the frame of analysis for the ideas discussed in this article.
Heeks, Foster and Nugroho (2014) developed their work on innovation further as the 'Ladder of Inclusive Innovation', outlining six levels to help ascertain if an innovation was inclusive: 'intention' (intends to address the needs of the excluded); 'consumption' (adopted and used by the excluded); 'impact' (positive impact on the livelihoods of the excluded); 'process' (if the excluded are involved in the development of the innovation); 'structure' (created within a structure that is itself inclusive); and 'post-structure' (created within a frame of inclusive knowledge). Each level involves gradual broadening of the extent of inclusion of the excluded groups and presents a useful framework to evaluate the extent of inclusion encompassed in a specific innovation.
Saha (2016) outlined six aspects of inclusive innovation and development that were discussed and debated at the IDS 50th Anniversary Conference. Attempting to draw key themes that can feed into the Heeks Ladder of Inclusive Innovation, here I discuss four, as depicted in Figure 1. First, interactions among the trio of states, markets and society with links to the bottom of the ladder; second, technology adoption, diffusion and upgrading in parallel with the middle of the ladder; third, innovation as participation towards the top; and fourth, the complementarities of technology and social innovation, right at the top of the ladder.
In discussing the four themes, I draw on recent developments in the field of innovation that were also vibrant in the debate at the conference.
These include the emphasis on political economy of interactions leading
to innovations, the global systems of innovation (Martin 2015), thinking
of innovation in terms of new or incremental improvements, not only
in products, but in terms of processes/markets/organisation, and finally
the social framing of innovations (Smith 2014).
The remainder of the article is organised as follows. Section 2 outlines key literature and analysis around the trio of states, markets and society. In Section 3, I draw from key debates on technology transfer, adoption and diffusion. Section 4 discusses the idea of innovation as participation. Section 5 hypothesises the complementarities of technology and social innovation. Section 6 concludes and highlights topics for further research in these areas.
2 The trio of states, markets and society
The literature on innovation has identified the range of actors that are
involved, varying across sectors and countries. These actors are drawn
from state-owned institutions involved in developing new products or
supporting them (state), the private sector that also undertake similar
initiatives (markets); and research and education systems (Chataway,
Hanlin and Kaplinsky 2014) as well as not-for-profit organisations
(society).
To work towards the goal of inclusive inclusion, the trio of states,
markets and society play not only a primary role but comprise the set
of actors that are in fact an imperative to the process of innovation for
any country. In the Heeks et al. (2014) ladder, this trio can be situated in
parallel with the first level of 'intention', with essential support to ensure
outcomes for the following levels, and especially to push the existing
frontiers leading to the fourth level of inclusion in 'process'.
The role of the state in innovation has received immense emphasis in Mazzucato (2011), where the author draws attention to the role of the state in not only fixing markets but also in shaping and in fact creating them. She outlines 'mission-oriented' finance as strategic public sector investment to trigger economic activity and innovation, and to create opportunities for markets and economic growth. Such finance begins on the premise of problem-specific challenges that need to be solved, and requires coordination across different sectors and the state. While the example of the iPhone is the most popular example in Mazzucato's work, the ideas are also reverberant in several other less documented instances.
One such example is the evolving progress in anti-retroviral drugs and
therapy in Mozambique (Pfeiffer et al. 2010) where donor funding has
been coordinated by the government following national health objectives
on HIV/AIDS with positive spillovers to overall primary health care for
the country. Even though the finance came from international agencies,
the commitment to tackle the disease on the part of the Mozambique
government has led to significant reductions in disease burdens. The
most recent success has been a Brazilian collaboration for a factory that
is producing anti-retroviral drugs (Russo and de Oliveira 2016).
Innovation policy is often attributed to being about supporting discovery processes that necessarily involve significant trial and error (Rodrik 2004). However, countries may find themselves trapped in situations where poverty can limit the scope of investment capacity to further innovation on the one hand, while the absence of efficient institutions may inhibit the process further (Altenburg 2009) on the other. In this scenario, while the state must play a greater role to regulate markets and prevent market failure, it is also important that there are institutions that can carefully evaluate potential winners and lessons to learn in the playing field (Mazzucato 2011).
Therefore, arguments from existing literature point towards the role of the state in furthering inclusive innovation to especially ascertain 'intention' in the Heeks et al. (2014) ladder. Such 'intention' can be discovered by means of exploratory public sector organisations that can identify opportunities where investments in new innovations can address the needs of excluded groups. On the lines of Mazzucato (2011), while strategic public finance led by the state can be key here, there is an essential room for careful monitoring of such institutions to overcome gaps between intentions that are outlined and those that are actualised. Further, the role played by markets and public–private partnerships cannot be discounted. Private actors often support large-scale investments that may include donor aid in cooperation with national governments to facilitate the correct channelling of resources. Again, there is the need to strengthen checks and balances to prevent this from being skewed in the favour of powerful corporations.
What will be key in future policies aimed at assessing the 'intention'
to achieve inclusive innovation will be the synergies of partnerships
between states and markets. The role of non-governmental organisations
(NGOs) is also of importance as agents of policy implementation
for increased inclusion that act independently of states or markets.
Therefore, for the trio of actors, each stands to make an essential
contribution in 'intention' going forward with inclusive innovation, and
to overcome gaps between stated intentions and actualising them.
3 Technology transfer, adoption and diffusion
Technology transfer, adoption and diffusion play a crucial role
following up from the creation of a new technology or innovation. How
technology transfer in developing countries can lead to adoption and
actual diffusion in terms of building local capabilities is of importance
for 'consumption' and 'impact' in the Heeks et al. (2014) ladder.
To enable low-income producers and consumers to adopt the
innovation, emerging productive activities that replace less efficient
ones should be accessible for the most marginalised actors. Altenburg
(2009) outlines that labour market rigidities and skills development may
be the key binding constraints for integrating low-income workers in
competitive industries.
Once the new technology or innovation is created and transferred to new settings, innovation still occurs at every stage from production or adoption of the new good or service to distribution or diffusion of the good or service along the value chain. Also, further innovations may occur on feedback from surrounding social systems that lead to the creation of further innovations (Foster and Heeks 2013).
Taking the case of agriculture as an example, transfer of technologies
can solve specific problems at the farm level, such as adoption of new
seed varieties, irrigation systems, etc. for smallholder farmers. However,
for innovations to be inclusive, significant changes are essential in
supporting social systems such as input services, marketing systems,
intermediaries and others. These are necessary to support consumption
such that small-scale farmers can adapt the innovations to local
conditions and create positive impacts on their livelihoods.
While new technology can improve productivity and thereby create
improved livelihoods for the excluded, investments in local capability
are essential for the impact to be sustainable. Thereby investments in
national technology need to focus on the objective of diffusion such that
adopted innovations can enable the creation of design and capabilities
for transforming existing knowledge into new configurations by local stakeholders (Bell 2007). Therefore, while technology transfer and adoption
is criticised for increasing reliance on foreign sources of innovation,
investment in local capability for diffusion of knowledge is necessary.
Technology transfer may, however, stop at adoption without creating
any diffusion. One example is the cut-flower industry in Ethiopia, where
the introduction of seed varieties and other technologies such as glass
greenhouses from abroad created jobs for the local population and
sparked a significant rise in cut-flower exports of the country (Perry 2011).
However, this has not been followed by the building of significant local
research capacities as most technology continues to be foreign sourced.
Although the cut-flower value chain has witnessed some local innovations
in other linked sectors of transport in the use of chilling trucks and
warehouses, local diffusion for innovations has only been limited.
For technology transfer to lead to diffusion, innovation policies should
focus on reaching out to wider sections of the population of excluded
groups. Various types of technology transfer and their corresponding
pathways to diffusion lead to varied outcomes on inclusion. For
example, the adoption of foreign seed varieties in agriculture can lead
to further investments in research and creation of local production
capability that then creates jobs for the local population, but the
creation of inclusion will depend on the wellbeing of workers, impact
for excluded groups, gender effects, etc.
In the context of global value chains, this can be assessed for instance by
the extent to which the small and medium enterprises and the small-scale
farmers in least developed countries (LDCs) can actually upgrade and
link into the existing global value chains being led by China and India.2
This can be key to unlocking the potential of technology transfer, leading
to adoption and finally diffusion, especially for poorer countries that face
constraints in forwarding the goals of inclusive innovation.
An important policy lesson is that adoption of foreign technology needs to
be supported by national policies and investments in research capabilities
to catalyse local diffusion and create wider impact for 'consumption' and
'impact'. Altenburg (2009) has emphasised the importance of sustainable
policies that can support the adoption and diffusion of new technology
to speed up the process of learning and shifting resources to more
productive uses. This includes developing markets for subsidies, improved
governance of financial markets, competition policy, simplification of
business procedures, property rights reforms, labour market reforms, etc.
Thereby, it also outlines the importance of the design of institutions to
enable technological learning in a socially inclusive way.
4 Innovation as participation
Innovation as a process based on 'participation' can occur within a
structure that is inclusive by being a combination of new or external
technology that adds value to existing or local structures and includes
the excluded groups in the creation of innovation. This furthers the goal of inclusive innovation and calls for policy conducive to creating
structures that support the goals of inclusivity. The emphasis on
building local capacity can be traced to ideas of 'putting the last first'
(Chambers 1983) and of 'development as freedom' (Sen 1999).
In the Heeks et al. (2014) ladder, the levels of 'process' and 'structure'
essentially point to the creation of new technology or innovation with
participation from local actors. The role of local entrepreneurs and
local research organisations that are better aware of local needs creates
actors that can contribute to this participation, and creates knowledge
to cater to local and national needs supported by local stakeholder
involvement. The role of local actors is exemplified in the engagement
of communities and especially community health workers in health
services provision in resource-poor countries such as the case of antiretroviral
treatment (ART) in Mozambique (Hog 2014).
Heeks et al. (2013) stress the hybridity of inclusive innovations expressed as the combination of external and local knowledge, seen to take place within a single individual, within a group, within an organisation, via collaboration or via intermediaries. This hybridity is important from the perspective of 'innovation as participation' that implies broadening the very foundation of innovation, to begin from neglected issues faced by excluded groups, but often built in collaboration with external support.
Development policy to build on the view of innovation driven by local
needs with support from external agencies is not without its critiques.
Arora and Romijn (2009) discuss the nature of participatory practice
that determines local knowledge situated within structures of asymmetric
power distribution. This includes development experts and communities
on the one hand, and the global/national corporate capital on the
other. Therefore, for the active role of communities in ART provision
in Mozambique situated within donor–government–local community
structures, the balance between the exercise of power by international
bodies and the potential disempowerment of public services and local
actors needs to be kept in check for ensuring effective participation.
Therefore, innovation seen as participation not only involves reaching
out to the marginalised but also working with them such that technology
is seen in its capability of being empowering. This suggests innovation
as a distributed activity where innovations and organisational structures
are built on local knowledge, but also to ensure excluded groups are
included in the process of innovation with balanced power equations.
Innovation can then occur within a structure that is inclusive by being a
combination of new or external technology that adds value to existing
or local structures.
5 Technology and social innovation
The collaboration of technological innovation and contribution from
social innovation puts light on framing innovations in a social context.
'Social innovation' can be defined as innovation that leads to broad-based outcomes for society (Gaventa and Mathie 2015). Bringing
together the idea of innovation that creates smart growth, with a social
context that leads to inclusive growth and improved social welfare
can be set within the argument that there is in fact nothing natural or
inevitable about technological trajectories, and that these are shaped by
social forces and actor interests (Smith 2014).
A linked concern about design–reality gaps from Heeks (2002)
emphasises that innovation designs mismatched to the realities of
low-income consumers can fail in adoption. The need for innovation to
be matched with the realities of low-income consumers is an important
component of the final top level of 'post-structure' in the Heeks et al.
(2014) ladder. Creation of new ideas in an inclusive knowledge frame
where excluded groups are involved in creation of the knowledge that
can build on the unmet needs of the marginalised.
Smith (2014) outlines the role of community-based networks, where access
to technical advice and prototyping services to develop socially useful
products enabled tapping into the scientific and innovation knowledge of
communities and social networks. Examples of community-led provision
of services, especially in the health sector in several African countries
such as Kenya, Ethiopia and Mozambique, have created wider access to
health provision for people outside the coverage of primary health care.
While there are often limitations to achieving socially inclusive frames of
knowledge creation, the role of development policy can support initiatives to
overcome these and create a combination of smart and inclusive growth.
The role of cooperatives comprising smallholder farmers producing
livestock and small-scale milk vendors is another example that stands
out as a social frame where people-led initiatives have created success in
dairy production in Kenya, leading to improved milk yield and nutrition
outcomes (Staal, Pratt and Jabbar 2008). Cooperative groups have
filled in gaps especially in providing crucial input services to small-scale
farmers in production and transport services along the milk value chain.
These organisation and marketing innovations have emerged from the
unmet needs of marginalised farmers and actors, where local research
organisations further supported the development of innovations. While
small-scale farmers and the role of women have been significant, there
are still unmet challenges from the affordability of input services that lie
outside of the scope of public services and cooperatives.
Therefore, innovation created on the premise of inclusive networks
of knowledge can contribute to activity that consciously shapes
technology for social benefit, creating inclusive outcomes in innovation.
Development policy, by facilitating support systems for these networks,
has a valuable role to play in furthering inclusion.
6 Conclusion
There is now widespread recognition of the role of inclusive innovation in
development and the importance of political economy factors. This article has analysed four key aspects of inclusive innovation and shows how they
help elaborate and modify the Heeks Ladder of Inclusive Innovation.
The particular interactions among the trio of states, markets and
society is strategic for creating new technology and innovations for
any country. State-led support, markets and donors and not-for-profit
organisations are important contributors to its creation. What will be
key in future policies and research aimed at inclusive innovation is
not only to assess 'intention', but also to find the means to fill the gaps
between merely stated intentions and actualised intentions, possibly
using the synergies of partnerships between states and markets, as well
as non-governmental agencies.
Technology adoption, diffusion and upgrading are discussed as fundamental steps following the creation of new technology or innovation. The adoption and actual diffusion in building local capabilities is emphasised for 'consumption' and 'impact'. Sustainable policies by way of institutions and social systems are identified as important to facilitate adoption and diffusion. The institutions and support to enable the creation of local capability will be key in policy design.
'Innovation as participation' contributes to 'process' and 'structure' for
inclusive innovation. Local entrepreneurs and research organisations
can create knowledge that caters to local and national needs by means
of local stakeholder involvement. Therefore, this can ensure that
innovation is inclusive also in terms of the process of creating the
innovation within a structure that is itself inclusive. Further research
in this area needs a special emphasis on the system of checks and
balances for the exercise of power by external agents and the potential
disempowerment of domestic actors to ensure effective participation.
Finally, the complementarities of technology and social innovation is an overarching theme for inclusive innovation. The social frame for innovation with emphasis on the 'post-structure' of inclusive knowledge stands out in the conscious shaping of technology for social benefit, towards creating inclusive outcomes in innovation.
The four themes above are identified as essentials for furthering the agenda
of inclusive innovation, development and policy. These could provide
valuable foci for future research to disaggregate finer nuances, and to relate
these to policies and practices to further inclusive innovations.
Notes
1 Innovation has been outlined as emerging from a broad network of
dynamically linked actors within a particular institutional context
(Lundvall 2011).
2 See for instance Banga and Saha (forthcoming), where LDCs are examined as potential links into existing global value chains for India.
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© 2016 The Author. IDS Bulletin © Institute of Development Studies | DOI: 10.19088/1968-2016.184
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This article is part of IDS Bulletin Vol. 47 No. 2A November 2016: 'States, Markets and Society – New Relationships for a New Development Era'; the Introduction is also recommended reading.