For inclusive innovation to prosper, new policy initiatives are needed, argues the working paper “Policies to Support Inclusive Innovation”. Inclusive innovation is the means by which new goods and services are developed for and by marginal groups (the poor, women, the disabled, ethnic minorities, etc). It is central to addressing inequality in society, and thus increasingly on the agenda of global development actors. (See here for a more detailed explanation of inclusive innovation.)
But inclusive innovation suffers from a series of failures – of innovation development, design, diffusion and use – that provide a rationale for policy intervention:
- Formal innovators focus insufficiently on the poor.
- Informal actors are delinked from innovation systems.
- Those serving peripheral markets have weak adaptive capacity.
- Low-income users lack capability to use innovations effectively.
- Underlying policies and context are weak or absent.
These can then be flipped directly into five main inclusive innovation policy objectives:
- Orient Formal Innovation Systems Towards the Poor. Measures will include creating new innovation partnerships, supporting local innovative research, and reducing risk by providing market incentives for inclusive innovation.
- Promote Grassroots Innovators. Measures will include linking grassroots actors into formal innovation systems e.g. via intermediaries, and incentivising development and diffusion of grassroots innovations.
- Improve Absorptive Capacity of Low-Income Groups. Measures will include building skills to absorb and adapt innovations that meet the needs of marginalised groups, and supporting innovation hubs and clusters.
- Drive More Effective Use of Innovations among Low-Income Groups. Measures include supply-side actions to accelerate affordability of innovations, and demand-side actions to build the skills and knowledge necessary for effective use of innovations.
- Reduce Structural Barriers to Inclusive Innovation. Measures include altering government regulations that exclude or are biased against low-income actors, including altering sourcing rules.
However, such policy measures will only be enacted if there are broader policy changes. This firstly means changing the worldview of policy makers so that they understand there is an important two-way connection between innovation and social inclusion; that marginalised actors are both consumers and producers of inclusive innovation. It also means creating “Inclusive Innovation Policy Collaboratories” that bring together a wide range of stakeholders, and which adopt an experimental and iterative approach to the policy measures outlined above.
The diagram below provides an overview summary of inclusive innovation policy background and recommendations.