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Policies for Inclusive Innovation

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Inclusive Innovation Policy Overview

  1. Olga Ustyuzhantseva
    2 May 2016 at 3:53 pm

    Dear Dr. Heeks, thank you for sharing the paper. If I may, I’d like to ask about the following matter. Among the research priorities you identify ‘Analysis of the political economy of inclusive innovation policy’ with reference to Altenburg (by the way, he is missing in the reference list🙂 ).
    Indeed, reading various papers about inclusive innovation I noticed that political regime and political structure are considered to be homogenous by default, let’s say democratic. At the same time, even if we take such countries as China, Russia and India, their political regimes and structures are different de facto. This influences landscape of innovation policy much. This defines specific configuration of main actors, such as their roles and place in policy processes. What was done in India by informal movement Honey Bee Network is almost impossible in Russia due to weak civil society, highly centralised political system and quasi-market environment. This theme is very interesting for me as trying to establish Russian chapter of Honey Bee Network (on the basis of university in Tomsk region of Russia) I faced not just problems but antagonism against this agenda by university management, local region administration and local business. So I’d like to ask if you could recommend any published papers/books regarding this matter besides Altenburg?
    Thanks! With regards, Olga.

    • Richard Heeks
      2 May 2016 at 4:25 pm

      Olga – thanks for your message, and apologies for the missing references which are shown below.

      Altenburg, T. (2009) Building inclusive innovation systems in developing countries: challenges for IS research. in: Handbook on Innovation Systems and Developing Countries, B. A. Lundvall, K.J. Joseph and C. Chaminade (eds), Edward Elgar, Cheltenham, UK, 33-57

      Gault, F.(2010), Innovation Strategies for a Global Economy, IDRC, Ottawa, Canada

      George, G., McGahan, A.M. and Prabhu, J. (2012) Innovation for inclusive growth: towards a theoretical framework and a research agenda, Journal of Management Studies, 49(4), 661-683

      See also, Altenburg, T. (2011) Industrial Policy in Developing Countries, Discussion Paper 4, GDI, Bonn https://www.die-gdi.de/uploads/media/DP_4.2011.pdf

      The bad news is that I’ve not particularly worked on the political economy of innovation policy, so I’d be starting from scratch looking for material via bibliographic databases (I can see there looks to be work by Bartzokas & Teubal on the topic).

  2. Olga Ustyuzhantseva
    5 May 2016 at 8:52 am

    Thank you for the references! As I can see there is much to investigate here, specially about Russia with its specifics of being between developed and developing countries

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