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Innovation systems perspective and Value Chains Approach for development: Concepts and principles


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Presentation by Berhanu Gebremedhin at the National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010.

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Innovation systems perspective and Value Chains Approach for development: Concepts and principles

  1. 1. Innovation Systems Perspective and Value Chains Approach for Development: Concepts and Principles National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010 Berhanu Gebremedhin, ILRI/IPMS
  2. 2. Presentation Outline <ul><li>The Impact Pathway </li></ul><ul><li>Innovation and Innovation Systems Perspective </li></ul><ul><li>Value Chains </li></ul><ul><li>Integrating ISP and Value Chain Approaches </li></ul>
  3. 3. Resources (Staff time, finance, equipment/materials, transportation etc) Activities (Problem identification, research design, implementation, evaluation) Outputs (technologies, institutional/ Organizational/policy recommendations, publications, briefs etc) Outcomes (Research outputs are taken up/adopted by intended users) Impact (economic, social and environ- mental changes ) The Impact pathway
  4. 4. Commodity versus technology development approaches <ul><li>Commodity development: an approach that is focused improving the productivity and profitability of the commodity based on analysis of constraints and opportunities along the value chain </li></ul><ul><ul><li>Major constraints can be related to technology, markets, institutions, service delivery, and organizations. </li></ul></ul><ul><ul><li>Is comprehensive </li></ul></ul><ul><li>Technology development: an approach that is focused on promoting a production technology in order to alleviate the technical production constraints or expand the technical opportunities of a commodity </li></ul><ul><ul><li>Presupposes that the key constraint is the technology </li></ul></ul>
  5. 5. What is Innovation? <ul><li>Successful application of “knowledge” to economic, social & environmental benefit. </li></ul><ul><li>Knowledge creation, adaptation, dissemination and use of knowledge, not just knowledge creation ( Invention ) </li></ul><ul><li>Both new knowledge and novel combination of exiting knowledge </li></ul>
  6. 6. Why ISP? <ul><li>Criticism on development interventions for having low impact </li></ul><ul><li>Knowledge/invention comes from multiple sources </li></ul><ul><li>Need to exploit the complementarity between researchers and development stakeholders </li></ul><ul><ul><li>Roles </li></ul></ul><ul><ul><ul><li>Problem definition </li></ul></ul></ul><ul><ul><ul><li>Research design </li></ul></ul></ul><ul><ul><ul><li>Result validation </li></ul></ul></ul><ul><ul><ul><li>Implementation </li></ul></ul></ul><ul><ul><li>Their knowledge systems </li></ul></ul><ul><ul><ul><li>Scientific/modern knowledge </li></ul></ul></ul><ul><ul><ul><li>Indigenous/local knowledge </li></ul></ul></ul>
  7. 7. What is a Value Chain? <ul><li>An agricultural value chain is considered as an economic unit of analysis of a particular commodity (eg. milk) or group of commodities (eg. dairy) that encompasses a meaningful grouping of economic activities that are linked vertically by market relationships. </li></ul><ul><li>A value chain encompasses a set of interdependent organizations, and associated institutions, resources, actors, and activities involved in </li></ul><ul><ul><li>input supply, production, processing, and distribution of a commodity. </li></ul></ul><ul><li>A value chain entails the addition of value </li></ul><ul><li>Value chains are also the conduits through which finance, information and technology are disseminated </li></ul>
  8. 8. Business development services <ul><li>Services that play supporting role to enhance the operation of the different stages in the value chain and the chain as a whole </li></ul><ul><ul><li>Infrastructural services (market place development, roads and transportation, communication, energy supply, water supply) </li></ul></ul><ul><ul><li>Production and storage services (input supply, genetic and production hardware from research, farm machinery services and supply, extension services, weather forecast, storage infrastructure) </li></ul></ul><ul><ul><li>Marketing and business related services (market information, market intelligence, technical and business training, facilitation of linkages of producers with buyers, organization and support for collective marketing) </li></ul></ul><ul><ul><li>Financial services (credit, saving, risk insurance) </li></ul></ul><ul><ul><li>Policy and regulatory services (property rights, market and trade regulations, investment incentives, legal services, taxation) </li></ul></ul>
  9. 9. Production Post-harvest handling Processing Retailing Consumption Trading Trading Market information and intelligence Financial services Transportation Communications Govt. policy regulation Tech. & business training & assistance Production input supply & Business Support Services Research The Value Chain Transport Input Supply
  10. 10. Integration of Value Chain and Innovation Framework Conditions I NS T I TUT I ONS Knowledge Generation Knowledge Adaptation Knowledge Dissemination Knowledge Application + Use INNOVATION CAN OCCURE ANYWHERE IN THE VALUE CHAIN Agro-industry inputs and services Agricultural Production <ul><li>Agro industry </li></ul><ul><li>Processing </li></ul><ul><li>Marketing </li></ul><ul><li>Retailing </li></ul>LEARNING ACTORS + ACTIONS+ INTERACTION Value addition Value addition
  11. 11. Innovation possibilities in VC <ul><li>Input supply </li></ul><ul><li>Production and post harvest </li></ul><ul><li>Marketing </li></ul><ul><ul><li>Organization and coordination of marketing functions </li></ul></ul><ul><ul><li>Market information and intelligence </li></ul></ul><ul><ul><li>Market institutions </li></ul></ul><ul><ul><li>Market infrastructure </li></ul></ul><ul><li>Technical assistance and training </li></ul><ul><li>Financial services </li></ul><ul><li>Policy and regulatory issues </li></ul>
  12. 12. Integration of Value chain and Innovation system perspective Target Group Identification Broad understanding of the Livelihood of the Target Groups (Unit of analysis is the HH) Prioritizing enterprises within the Target Group Identifying and describing the Value chain of priority enterprises National Innovation System- Generic (dealing with science and technology at National Level) Intervention Based Innovation System (Based on the priority problem) Agricultural Innovation System-Generic (dealing with Agricultural S & T) Commodity based Innovation System (dealing with the entire value chain of an enterprise) Prioritizing the key component of the Value chain-1 st level priority setting Prioritizing problems within the priority key component identified Analysis of the priority problems identified Identifying potential Intervention Identifying feasible Intervention Planning, Implementation and Evaluation Screening (Ex-ante assessment) Dissemination, Utilization by end users, and scaling out
  13. 13. Thank You for Your Attention!!!