1 Inclusive Innovation for Sustainable Development
In the twentieth and twenty-first centuries, private sector companies, entrepreneurial state agencies, and civil society organizations have emerged as dominant actors in the creation and provision of goods and services. Innovation has been at the centre of these processes. Innovation within the private sector has been, and still is, mainly driven by a focus on those markets and market segments that pay the highest premium on goods and services. This business approach, and its conception of innovations and their outcomes, is justified by the private sector on the grounds that because heavy financial investments and other resources are committed up front in research and development, companies must therefore recoup their investments from markets that can pay the justifiably high premiums. Unfortunately, the outcome of this practice is the exclusion of the four billion segment of the world population comprising low-income earners and the desperately poor.
However, at the turn of the twenty-first century, there has been an evolving paradigm shift in how some companies view their innovations in relation to inclusion of low-income earners and the poor. In addition, new forms of quasi-private sector entrepreneurship models have emerged, leading to social enterprises whose main mandate is serving low-income groups and those living in poverty, therefore demonstrating the viability of an inclusive socioeconomic development agenda.
This term ābottom of the pyramidā (BOP) was first used by then US President Franklin D. Roosevelt in his April 7, 1932 radio address, The Forgotten Man (Roosevelt 1932). Roosevelt saw great potential and general benefits of inclusion of the neglected low-income groups in economic development. In fact, he candidly expressed the indispensability of such inclusion. In the late 1990s the work of Prahalad and Hart brought the BOP concept to mainstream academic debate and research; in this case, the term refers to the low-income group of around four billion which forms the majority of the total global population. Prahalad (2004) emphasized not only the underlying business opportunities represented by BOP as a market, but also made a strong case that BOP citizens should be viewed positively as entrepreneurs and engaged consumers. Although his arguments have attracted some critics, the moral imperative to ensure people no longer live in poverty, together with the logical persuasion of the need to engage the energies of entire populations to foster economic growth and development, remains an unshakeable position.
Since the work of Fritz Schumacher in the 1970s and the emerging concept of appropriate technology, there have been alternative models of innovation that seek to develop and deliver innovative technologies for goods and services, incorporating the needs and interests of the poor, and which also seek to stimulate growth for those on the lowest incomes (Kaplinsky 2011). Recently, there has been an extension in practice of these alternative models with significant involvement of the private sector and global value chains, and the development of poor consumers as an accessible mass market. Moreover, we have witnessed within developing countries the growth of technological capabilities, and the creation of new technologies, especially information and communication technologies (ICTs) such as mobile phone applications. Recent academic debate has been using terms such as āpro-poor innovationā and in particular āinclusive innovationā (II) which we adopt here as it seems to have the widest currency. As a guide to what this may involve, the Global Research Alliance Organization suggests that some key features of II are: affordability, based on extreme reduction of costs; sustainability; quality; accessibility for marginalized populations; and widespread uptake (Heeks et al. 2013).
To explore the potential of this broad variety of considerations involved in II, this book uses a three-dimensional approach to discuss inclusive innovation for socioeconomic growth and development, and the implications for human security within the context of developing and emerging economies. The three dimensions are those of policy and issues relating to the technology itself, business strategies and best practices, and theoretical underpinnings and broader contextualisation.
Using this approach, we interrogate the concept of inclusivity of innovations with incisive and in-depth analyses whether it is in terms of affordability of products and services based on frugal engineering, the income and welfare enhancing scope of innovations, scale of business opportunity within low-income segments of populations, or just exclusive pro-poor focused attention by private sector products and services. We cover nonconventional considerations of innovations such as those initiated by organizations targeting social mobilization, conflict prevention, justice, and equity among many other social agendas. Alongside this, we consider the potential of modern technology to contribute much to human security while presenting certain risks. Thus, although we appreciate that technology may bring more knowledge and mobility, citizen journalism and enhanced information for political decision-making, better disaster prediction and response, improvements in medicine and food security, we also aim to develop frameworks that counter the potential increase in inequality that may accompany this.
This collection is the result of cooperation between leading international scholars in a wide range of relevant disciplines, including economic development, strategic management, innovation studies, and other relevant social and natural sciences. There are also contributions from practitioners in international development organizations and private sector actors working on inclusive innovation products and services. Our geographical focus centres on Asia and Africa, however, we hope the cases and critical issues presented are found to be relevant to other regions such as Latin America and the postindustrial economies, as well as providing comparative studies for global research. Moreover, we believe that, considering the many levels of the social ramifications of sustainable development, the constructive and judicious application of the concept of inclusive innovation can be of benefit to many sectors, as listed below:
ā¢ Water, Agriculture, and Food Security Issues ā¢ Health Care and Education ā¢ Environment and Climate ā¢ Personal and Community Security ā¢ Social and Political Mobilisation ā¢ Job Creation Initiatives ā¢ Governance | ā¢ ICT and Social Science research ā¢ Media and Economic Development ā¢ Mobilisation and Financial Inclusion ā¢ Artificial Intelligence and Robotics ā¢ Mobile Communications ā¢ Geographical Information Systems ā¢ Big Data ā¢ Scientific research |
2 Clarity and the Importance of Provoking Further Questions
In this work, we seek to fulfil the twin goals of bringing clarity to our understanding of inclusive innovation, on the one hand, and provoking further questions regarding the subject matter. Consequently, a characteristic of this book is the clear presentation of new and ground-breaking ideas regarding inclusive innovations coupled with in-depth consideration of the practical, theoretical, and philosophical relationships between inclusive innovation and human security.
To reflect the three-dimensional approach of the book, it is divided into three broad sections relating to (1) technology and policy, (2) business strategies, and (3) human security and the theoretical underpinnings of inclusive innovation. However, these are not necessarily mutually exclusive and although cases presented in each section cover only limited socioeconomic sectors, our expectation is that lessons from each chapter can be judiciously combined to inform a three-dimensional understanding of the subject.
In the first section of the book, we discuss the policies supporting or obstructing the development and diffusion of innovative technology. We look at issues relating to innovation in terms of the technology itself and in design processes developed to involve and cater for low-income sectors more directly. Such issues include problems relating not only to assessing needs and desires of low-income sectors but also to access and adoption, as well as the importance of considering multistakeholder perspectives beyond the laboratory. Using case studies from Nepal, Kenya, and Japan, we explore the effects, implications, and challenges of new technologies including recent significant developments in the use of ICT and renewable energy. Through these, this section explores issues involving systemic problems, the significance of interactive processes between a wide range of stakeholders, and the potential of community projects to influence mainstream innovative approaches. The main focus here can be described as a disciplined attempt to answer questions that need to be asked within the public policy realm. Those given below illustrate the wide range of questions addressed:
- What types of innovations encourage inclusiveness, and how can these be targeted by governmental policies?
- How can policy facilitate formalisation of innovations from the informal sector so as to reach a wider audience?
- How should governments optimally support inclusive innovations targeting poverty alleviation and human security issues?
- What is the ecosystem of inclusive innovations, and how can governments develop this?
- How can BOP members participate more fully in inclusive innovation processes and outcomes as consumers, producers, and as market entrepreneurs?
The second section deals with business strategies and practices; here, we suggest that inclusiveness calls f...