Innovation for Inclusive Development Program Prospectus for 2011-2016

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Innovation for Inclusive Development Program Prospectus for 2011-2016

  1. 1. Innovation for Inclusive Development Program Prospectus for 2011-2016 Public Version Program and Partnership Branch International Development Research Centre October 2011
  2. 2. Innovation for Inclusive Development Program Prospectus for 2011-2016Table of ContentsLIST OF ACRONYMS ............................................................................................................................................... IIEXECUTIVE SUMMARY .......................................................................................................................................... III1. CONTEXT AND BACKGROUND....................................................................................................................... 1 A. DEVELOPMENT CHALLENGE AND SITUATIONAL ANALYSIS .............................................................................................1 B. ABOUT THE PROGRAM ...........................................................................................................................................62. APPROACH TO PROGRAMMING ................................................................................................................... 8 A. PROGRAM GOAL ..................................................................................................................................................8 B. PROGRAM OUTCOMES ..........................................................................................................................................83. PROGRAM STRATEGY ................................................................................................................................. 114. REGIONAL AND THEMATIC PRIORITIES ....................................................................................................... 135. CONCLUDING COMMENTS .......................................................................................................................... 166. REFERENCES ............................................................................................................................................... 17 i
  3. 3. Innovation for Inclusive Development Program Prospectus for 2011-2016List of AcronymsAFS Agriculture and Food SecurityBRICS Brazil, Russia, India, China, South AfricaGDP Gross Domestic ProductGLOBELICS The Global Network for the Economics of Learning, Innovation, and Competence Building SystemsGRIID Group for Research on Innovation for Inclusive DevelopmentiBoP Innovation for the Base of the PyramidICT4D Information & Communication Technologies for DevelopmentIDRC International Development Research CentreIID Innovation for Inclusive DevelopmentILO International Labour OrganizationITS Innovation, Technology and Society Program (2006-2011)LAC Latin America and the CaribbeanMDGs Millennium Development GoalsMENA Middle East and North AfricaMSMEs Micro, small and medium-sized enterprisesNGO Non-Governmental OrganizationOECD Organization for Economic Co-operation and DevelopmentR&D Research and DevelopmentRoKS Research on Knowledge SystemsS&T Science and TechnologySTI Science Technology and InnovationUNCTAD United Nations Conference on Trade and DevelopmentUNDP United Nations Development ProgramUNESCO United Nations Educational, Scientific and Cultural Organization ii
  4. 4. Innovation for Inclusive Development Program Prospectus for 2011-2016Executive SummaryOver the past two decades, economic growth in many developing countries’ has beenspurred by substantial investment in science, technology and innovation (STI). Thisinvestment has enabled these countries to graduate to middle income status byincreasing their competitiveness, growth, and wealth. Yet, it has also resulted in greaterinternal inequality and multi-dimensional poverty— a billion of the world’s poorestpeople now live in middle income countries.While STI can contribute to poverty alleviation and wealth creation, innovations thatemerge in the formal sector rarely address the needs of the poor. At the same time, asignificant number of innovative activities take place in the growing informal sectors indeveloping countries. But growth-oriented approaches to STI fail to encourage orsupport these activities and so the impact tends to be marginal. Systemically studyinginnovation in informal settings is crucial to understanding how to transform marginalinnovative activities into sustainable innovations that have wider impacts and strongerlinks with the formal sector.The field of innovation studies has proven useful to better understand how OECDcountries and emerging ones such as South Korea and China have achievedcompetitiveness and growth. It illustrates that innovation depends upon dynamicinteractions among actors such as firms, government agencies, universities, andscience granting councils, that result in systemic learning and capacity building. Thismakes the understanding of knowledge flows for innovation important and raisesquestions of system failures in developing economies where not all of the relevantactors are well developed and connected. Likewise, the characteristics of informalactors, the interactions, and the learning processes that take place among them, candiffer dramatically from those in the formal sector.This program will also contribute to the emerging field of Innovation for InclusiveDevelopment by supporting research that merges the fields of innovation studies anddevelopment studies. It will support the development of new frameworks, methodologiesand metrics for studying informal sector innovations. IID’s goal is to enable greaterunderstanding of how innovation in the informal sector can improve livelihoods andcontribute to inclusive development. It will place particular focus on the role of womenand intermediaries that bridge informal and formal sectors, in activities essential tolivelihoods, such as natural resources, services, and cultural industries. IID’s intendedoutcomes include low- and middle-income country universities conducting research oninnovation for inclusive development, science granting councils funding research in thisarea, and governments developing enabling policies that encourage and supportinnovation for inclusive development. iii
  5. 5. Innovation for Inclusive Development Program Prospectus for 2011-20161. Context and Background a. Development Challenge and Situational AnalysisOver the past two decades, economic growth in a number of developing countries hasbeen spurred by substantial investment in science, technology and innovation (STI)(UNESCO, 2010), enabling several developing countries to graduate to middle incomestatus. Despite this progress, inequalities and multi-dimensional poverty1 haveworsened—a billion of the world’s poorest people now live in middle income countries(Summers, 2010) (Figure 1).STI can genuinely alleviate poverty. Cellphones have had a notable impact in banking,agriculture, and health.Social innovations such asmicro-credit have alsoreduced poverty. Butstriking examples thathave had a widespreadimpact are few. Thebenefits of innovationsemerging in the formalsector rarely address theneeds of the poor becausemost STI policies areaimed at achievingeconomic growth andcompetitiveness and not atreducing poverty(Cassiolato, et al., 2008;Kaplinsky, 2010; STEPCentre, 2010). At the sametime, an enormous amountof innovative activity takesplace in the informal sectorin developing countries,such as innovative waste Figure 1 Population living in middle income countries on less thanmanagement approaches, US$1.25 a day (in millions)construction methods, Source: The Guardian www.guardian.com.uk/global-development, found at “The New Bottom Billion and the MDGs—A Plan of Action”, IDS in Focus policy briefing, Octobervehicle maintenance, 2010.cellphone repairs anddistribution, or ways of producing energy. But growth-oriented approaches to STI fail to1 The number of people living in multi-dimensional poverty – an acute deprivation of basic human needs in health,education, and standard of living – is estimated to be 1.75 billion, exceeding the number of people whose poverty isestimated by the $1.25 income a day measurement. (UNDP, 2010) 1
  6. 6. Innovation for Inclusive Development Program Prospectus for 2011-2016measure, encourage, or support these activities and so the impact of most tends to bemarginal.The field of innovation studies has proven useful in emerging and developed countries.There is a correlation between a country’s overall economic performance and thefunctioning of its national innovation system. Innovation studies have been used, forexample, to better understand how countries such as Korea and China have achievedcompetitiveness and economic growth by strengthening systemic linkages andinteractions among multiple actors. The innovation systems framework is importantbecause it illustrates that innovation is not a linear process whereby research anddevelopment (R&D) leads to commercialization, industrialization, and growth. Instead, itillustrates that what is most important are the dynamic linkages and interactions thattake place among actors such as firms, government departments, universities, andscience granting councils, that result in systemic learning, the distribution of knowledgethroughout the system and lead to strengthening of capabilities (Lundvall et al., 2009).A finding common to both developed and developing countries, but more prevalent inthe latter, is that there are more firms that innovate than do R&D. Taking a systemicapproach to studying innovation, notably in informal settings, is crucial to understandinghow to transform marginal innovative activities into innovations that are sustainable andhave wider impact to include those people that are usually left out from the benefits offormal sector innovations. Understanding of knowledge flows for innovation is pertinent;it raises questions of system failures indeveloping economies where not all of the Box 1 - Informal services sectoractors are well connected. Learning "Suame Magazine" is Ghanas largestcapabilities are weakened by constrained informal industrial area and among theopportunities to apply local knowledge to the largest in Africa. About 12,000 mostlysolution of local development problems informal vehicle repairs and metal works MSMEs conduct business there. Several(Box 1). innovation activities making use of available materials and creating productsEvidence from earlier IDRC’s Innovation, to suit local needs, are hindered by poorTechnology and Society (ITS) projects (2006- infrastructure; lack of computer-based2011) demonstrate that formal STI policies business solutions or modern machineinsufficiently address the informal sector, or shop practices; and inconsistent energyworse, completely ignore it. For example, in supply. A major challenge is meeting theChina, industrial decentralization to diversify quality expectations of customers in therural incomes failed to impact local formal sector; gaining access to marketseconomies in the mountainous coastal areas and capital and financial services; facingof China because of weak innovation system health and safety risks; and lack of securelinkages. In fact, the research showed that the land tenure. Further research is needed toformal innovation processes not only did not understand how support innovations in thishelp the poor in this region, but led to greater informal industrial area better link it to theexclusion. Another study of three rural Indian formal sector, to enable a local,clusters found that a lack of intermediaries sustainable, Ghanaian vehicle repairresulted in informal rural enterprises in industry.textiles, footwear, and terracotta pottery 2
  7. 7. Innovation for Inclusive Development Program Prospectus for 2011-2016unable to leverage government support for technology development, businessinfrastructure, and access to credit or markets. The missing links between publicpolicies and the informal sector underscore the important intermediating roles that localand developmental agencies can play. These include helping small informal enterprisesaccess scientific and technical knowledge and technology, find specialised markets, andovercome policy bottlenecks.While there are many challenges to bridging the informal and formal sectors, examplesof innovative activities in the informal sector that are linked to the formal sector do exist.For example, an ICT4D project in West Africa showed that dynamic and highly adaptivepractices occur in the informal sector in the area of telecommunication service deliveryfor urban and peri-urban households. The liberalization of the telecommunication sectorin three countries enabled actors to ingeniously develop tools to repair and adapt anymobile phone as well as regularly innovate in delivering services on the basis of culturalcustoms and revenues from clients. Most of the services developed by telecomoperators to address low income populations’ needs were influenced by informal actors’innovations, which has resulted in new jobs and sources of income for youth in thesecountries. An IID project is now using this past ICT4D project as a case study for thedevelopment of indicators for innovation in Africa.In improving our understanding of the dynamics of learning and innovation processes,one has to acknowledge that there are still some knowledge gaps on what comprisesinnovation in the informal economy. Even beyond the informal sector, “innovation” hasmany meanings. A broad definition is converting knowledge to value. In business terms,“value” means “commercial” value. In other words, a true innovation is something novel,to the firm, to the sector, or to the world, such as a product, a process, or a way oforganizing, that connects to the market.2 In a development context however, innovationis expected to contribute to improving people’s lives. Thus, while improving financialassets is one important dimension, other objectives include multi-dimensional povertyalleviation, such as empowering marginalized groups. Moreover, social innovations, oradaptations are as important as technical ones. In fact, while social innovations, such asparticipatory budgeting processes, may thrive with little technical input, the reverse isnot true. Technical innovations such as improved water pumps depend on socialadaptation to genuinely improve people’s lives.Given the myriad of definitions of innovation, one of the program’s goals will be to assistin developing a common understanding of the processes and outcomes that can bedescribed as innovation in the informal sector. IID will thus, at its outset, adopt a broaddefinition of innovation that can be refined: processes that improve people’s lives bytransforming knowledge into new or improved ways of doing things in a place where or(by people for whom) they have not been used before.2 www.oecd.org/dataoecd/35/61/2367580.pdf 3
  8. 8. Innovation for Inclusive Development Program Prospectus for 2011-2016Re-conceptualizing innovation studies to investigate how to add value to innovativeactivities taking place in the informal sector is critical because the livelihoods of so manylow income people in developing countries depend on informal economic activities. Forexample, the estimated contribution of the informal sector to GDP is 29% in LatinAmerica, between 27% - 41% in Africa, and 41% in Asia (Floodman Becker, 2004).Transforming marginal innovative activities into sustainable innovations with widerimpact by strengthening links between the informal and the formal sector could greatlyimprove productivity and improve people’s lives.Informality and livelihoods: From its earliest observations, the informal sector wasdescribed as people seeking income opportunities through self-employment because oftheir exclusion from formal wage employment (Hart, 1973) and usually for more thanmere subsistence (Portes & Haller, 2005). The term garnered a negative connotationwhen the ILO equated informality with poverty in urban contexts and framed it to besynonymous with low levels of skill, capital, and organization; family ownership ofenterprises; or small scale operations where labour-intensive production was based onout-dated technology and where unregulated and competitive markets resulted in lowlevels of productivity and savings (ILO, 2002).These negative notions of informality are being challenged as some researchers nowsee the informal sector as a “seedbed” for entrepreneurial dynamism rather than ahindrance to development (Losby, et al., 2003; Williams, 2007). Others have describedhow people use the informal system to recover some economic power, particularly inhighly centralized countries, to avoid institutional rules or because they are deniedprotection by these rules and institutions (Feige, 1990). Therefore, “street-sellers in theDominican Republic and Somalia, through to informal garment businesses in India andthe Philippines, to home-based microenterprises in Mexico and Martinique” (Williams2007, p. 121) become the foci for enterprise and entrepreneurship potential, creativity,dynamism, and innovation (ILO, 2002b). Moreover, UNDP research suggests that indeveloping countries the informal sector is taking the lead in innovation as opposed tomultinational firms.Based on a reconfigured understanding of the informal sector and its important role inthe developing world, the IID program will support research that examines how theseinformal activities can become more effective and efficient, specifically focusing on theways they can lead to improved livelihoods and eventually inclusive development.Livelihood can simply refer to a source of income in its most narrow definition. But itbecomes a broader concept within the “Sustainable Livelihoods” (SL) Framework whereit is comprised of the capabilities, assets (including both material and social resources),and activities required for a means of living (Chambers & Conway, 1992). Not beingpoor means that people can sustain and enhance these capabilities and assets, andcope with and recover from various stresses and shocks (Schilderman, 2002). Inclusivedevelopment is understood here as development that reduces poverty and enables allgroups of people to contribute to creating opportunities, sharing the benefits ofdevelopment, and participating in decision-making. 4
  9. 9. Innovation for Inclusive Development Program Prospectus for 2011-2016IID’s research will be organized around three Box 2 - Innovating with localthemes: the role of women in informal sector intermediariesinnovation; intermediaries that bridge informal IDRC’s iBoP Asia project shows thatand formal sectors; and activities essential to interactions between communities and intermediaries are pivotal to innovations thatlivelihoods in the informal sector. improve livelihoods of poor people: In the Philippines, the intermediary -- aWomen: Particular attention will be placed on social microenterprise -- worked with awomen because they constitute two-thirds of network of “sari-sari” stores and enabledthe informal sector producers and traders; women entrepreneurs to adopt a new business model to legally includeyet, their interactions with technological and affordable generic drugs in their productscientific knowledge and practices are often range.unrecognized. In fact, after decades of STI for In Cambodia, a local NGO became adevelopment, women’s positions and ‘technology intermediary” for floatinglivelihoods in their communities have declined poor communities to develop the world’sin comparison to men (Huyer, 2004). IID will first community-based human waste treatment barge.support research that examines women’s In Vietnam, a more formal actor, theroles as informal sector innovators and Center for Marine Conservation andentrepreneurs as well as how informal sector Development, assisted coastalinnovations specifically impact women’s communities to improve their informallivelihoods. eco-tourism services. In the Philippines, the Jeepney cooperative of taxi operatorsIntermediaries: Within the formal innovation intermediated between a research andsystem, intermediaries are seen as bridging training centre, the local governmentagents between firms that help them and a fast food chain, to enable fuelcommercialize, scale up and diffuse cost savings by converting waste cooking oil into biodiesel.innovations (Howells, 2006). In the context ofthe informal sector, recent case studiesindicate that similar players help informalenterprises find new technologies, products, markets, and even overcome manybottlenecks (Box 2); yet understanding of these informal intermediaries’ roles andpotentials to take innovations to scale, remain limited in developing countries.Informal sector activities: Research will focus on activities important to livelihoods ininformal settings, including natural resources, services, and cultural industries.Examples of natural resources-based industries include mining and fishing andproduction of medicines, cosmetics, furniture, and biofuels. Services includetransportation, vehicle maintenance, construction, and waste management and reuse.Cultural industries include crafts, art, design, as well as ecological and cultural tourism.In summary, to examine these issues, IID will support interdisciplinary research thatseeks to understand the underpinnings of innovative activities in the informal sector. Itwill also examine ways in which informal enterprises respond to, interact with, andinfluence existing social, economic, and policy structures as well as bottlenecks indeveloping countries. IID-supported research will focus on how informal enterprisesbuild capacities to generate sustainable livelihoods and engage strategically with, forexample, other enterprises (formal or informal), financial service providers, government 5
  10. 10. Innovation for Inclusive Development Program Prospectus for 2011-2016agencies, development practitioners, and communities. These interactions help informalenterprises identify specific demands for affordable and niche goods and services,enhance their resource base, overcome bottlenecks, mitigate risks, and improvebusiness and investment opportunities through innovation. b. About the programThe IID program will support the development of research tools and methods, casestudy syntheses, and analyses of innovation by and with the informal sector.Program choices: The program will not support top-down research on innovations forthe poor, without their involvement. The IID program will also not support research oninnovation for food production as the Centre’s program on Agriculture and FoodSecurity (AFS) is already working in this area. There is however complementarity withAFS on issues relating to innovation in natural resources-based livelihoods as well ason informality with the Centre program on Supporting Inclusive Growth (SIG). IID willpursue Intra-IDRC collaboration with both these programs where there are obviousopportunities for synergy.Field building: IDRC has a long standing legacy in field building. For example, it hasconstructed the field of Ecohealth by bringing together the fields of environmentalstudies and public health as well as constructed the field of ICTs for Development(ICT4D) by bringing together the fields of soft- and hard-ware engineering anddevelopment studies. The development of the IID field, which will bring together theresearch fields of innovation studies and development studies, will be supported by andalso contribute to Centre learning in the area of field building.Building on strengths: The field of IID is emerging from the Centre’s continuedcommitment to S&T, which goes back to its very early days of supporting science andtechnology policy reviews in several developing countries (Box 3). It also builds on twoexploratory activities: In 2001, Research on Knowledge Systems (RoKS) explored theways in which knowledge is produced, communicated, and applied to developmentproblems, and investigated the policy and institutional frameworks that govern thisprocess. The 2003 Task Force on Biotechnology and Emerging Technologies shared asimilar focus as it reviewed the most controversial applications of biotechnology andnanotechnology related to poverty alleviation. 6
  11. 11. Innovation for Inclusive Development Program Prospectus for 2011-2016 Box 3: The Past Decade and Future of S&T Programing at IDRC 2001-2006 2006-2011 2011-2016 The Exploration Years Emergence of the Field Building a new field•Research on Knowledge Systems •Innovation, Technology and •Innovation for Inclusive(RoKS) –Explored ways in which Society (ITS) – Built on RoKS and Development (IID) – a new fieldknowledge is produced, New Technologies projects while where innovation systems andcommunicated and applied to creating its own portfolio under three development studies converge todevelopment problems and the policy pillars: contribute to inclusive development.and institutional frameworks that innovation systems actors,govern this process. science and technology IID will transition projects focused on policies, science and technology policy•Task Force on Biotechnology and impacts and inclusion of reviews and emerging technologies.Emerging Technologies – To review transformative technologies.biotechnology applications as theyrelate to food security, agriculture andpoverty alleviation. Later it expandedto nanotechnology and convergingtechnologies. After several years of not having a dedicated Centre program on STI, a new program on Innovation, Technology and Society (ITS), building on RoKS and the New Technologies Task Force, was approved in 2006. ITS culminated past learning by integrating new understandings about the more complex nature of the processes behind STI as well as the realization that innovation in developing countries means more than R&D and crosses over the exclusive boundaries of laboratories and firms. Several ITS-funded projects revealed the program’s strength and the potential focus on innovation in the informal sector. They helped to raise the issue on the broader research agenda. Partly a result of ITS projects, the Indonesian Science Granting Council is incorporating the links between innovation and poverty alleviation in its strategic plan and the Chinese State Council for Higher Education has approved the establishment of a PhD program on grassroots innovation at Tianjin University. In Latin America, IDRC- supported researchers investigating “social technologies” were asked to design specialized courses and convene ministerial round-tables. The closing workshop of the “Innovation at the Base of the Pyramid” project brought together 30 participants representing national science granting councils and universities in Southeast Asian countries who are interested in moving to a second phase—a promising sign that formal actors are interested in fostering innovations with and by the informal sector. A project on building capacity in STI indicators has resulted in the publication of two books that are now being used to train researchers in the development of indicators to measure innovation in the informal sector in Africa. The program also funded a joint OECD– UNESCO workshop that brought together innovation and development scholars and resulted in the book, Innovation for Development: Converting Knowledge to Value (Kramer-Mbula & Wamae, 2010). 7
  12. 12. Innovation for Inclusive Development Program Prospectus for 2011-2016Consistent with the themes outlined in the 2010-2015 Strategic Framework for STIprogramming, universities and science granting councils will figure prominently in IID.The program will support research by, and on, universities, and build their capacity to“cross the street” and examine innovation in the informal sector as a means to lead toinclusive development. IID will introduce science granting councils to the premise ofinnovation for inclusive development as a sensitizing concept (Patton, 2010). Thesecapacity building projects will encourage them to increase their support for innovation inthe informal sector in order to alleviate poverty and inequality.An analysis of the development context and knowledge gaps suggests that IDRC’sniche in STI is innovation for inclusive development. This is an emerging area ofstrength for the program. An external consultation with STI experts revealed that theysaw real promise in IDRC focussing on innovation that alleviates poverty and fundingresearch that demonstrates the links between these areas and the formal STI sector.A donor scan and consultation further confirmed this niche. Few other donors providefunding in the area of innovation for poverty alleviation and fewer still support researchthat systemically addresses interactions, joint learning, and capability building amongimportant actors that bridge the informal and formal sectors.2. Approach to Programming a. Program GoalIID’s goal is to enable greater understanding of how innovation in the informal sectorcan improve livelihoods and contribute to inclusive development. The program will striveto produce evidence that will influence actors in the formal innovation system, such asuniversities, science granting councils, policy makers, firms, and intermediaries, tobroaden their perspectives in order to create policy instruments and processes that helptransform marginal innovative activities in the informal sector into sustainableinnovations that have wider impact and stronger links with the formal sector. b. Program OutcomesThe program has three inter-related key outcomes—capacity building, knowledgegeneration, and research use.Capacity Building: Innovation for Inclusive Development is an emerging field ofresearch that is currently composed of two separate bodies of research—innovationstudies and development studies. Researchers in these two fields are currently workingin isolation; therefore, a key goal of IID programming will be to build researcher capacityin this new field of research. In order to build a field of research, researchers will need toconstruct its language and concepts. The development of these tools and researchmethods will signal the field’s progress, particularly once a critical mass of researchersbegin to use these tools and methods to study the ways in which innovation leads toimproved livelihoods and inclusive development. 8
  13. 13. Innovation for Inclusive Development Program Prospectus for 2011-2016Knowledge Generation: Generating knowledge about how innovations in the informalsector can lead to inclusive development through improved livelihoods will encompasstwo main areas: The first area is around IID’s entry points of women and intermediaries,including the role of women as entrepreneurs. It deals with the impacts of innovation onwomen; the role of intermediaries in addressing bottlenecks; and their role in facilitatinglinkages with the formal sector. The second area in which the program will generateknowledge is innovation in activities essential to livelihoods in the informal sectorincluding natural resources, services, and cultural industries. The production of credible,objective, evidence will be crucial to influence policies that encourage formal sectoractors to support innovation in informal sector settings.Research use and Policy Influence: Both during and following the process ofgenerating knowledge, the program will strengthen research recipient capacity tointeract with policy makers. For instance, in the project to strengthen capacities ofuniversities and science granting councils in South East Asia, the program will work toinfluence science granting councils in four countries to explicitly include innovation forinclusive development in their strategic plans and implement follow-up research fundingstrategies with universities in the region. Researchers will also interact with UNESCOand the OECD because these organizations are interested in better conceptualizing andmeasuring innovation in the informal sector. IID will also support recipients tocommunicate how improving livelihoods through innovation in the informal sector ismight enhance global governance in post MDG framework debates.Table 1 presents, in a graduated way, the baseline as well as examples of minimum,medium, and high outcomes that IID could achieve. The baseline gives a sense of thefield at the time of starting the prospectus. Program success depends on a longer-termstrategy; however, some small successes might be possible depending on contexts. Akey goal in building this new research field is to support the development of an evolvingglobal network of researchers but whose members are from both developed anddeveloping countries. To achieve this goal, the program will develop an explicit strategyto support the development of leadership in the South. 9
  14. 14. Innovation for Inclusive Development Program Prospectus for 2011-2016 Table 1: Summary of Expected Program Outcomes Baseline Minimum Medium High Researchers A global research A set of new Working through struggle in isolation network is formed and frameworks, international and local to find common starts developing methodologies and partnerships, IID language, concepts common language metrics for studying researchers lead the and principles for and methodologies for informal sector development of a setCapacity building and field building research on research on informal innovations are of new frameworks, innovation for sector innovations developed. This will methodologies and inclusive involve collaboration metrics for studying development Science granting with international informal sector councils, universities organizations such as innovations Science granting and intermediaries UNESCO and the councils and begin participating in OECD. National science intermediaries are activities that granting councils and unaware of or do incorporate innovation universities not appreciate IID studies and incorporate IID into concept and its role development studies their research funding and teaching agendas Developing country Research leads to Research on how Rigorous synthesis ofKnowledge generation researchers ignore context-specific innovations in the research reveals or are unaware of understanding of how informal sector lead to findings on how innovations in the innovations and sustainable livelihoods innovations and the informal sector and intermediaries in the and the role of role of intermediaries how they can informal sector affect intermediaries is in the informal sector contribute to sustainable livelihoods published and cited by affect sustainable sustainable peers livelihoods livelihoods Policy and decision IID researchers inform Policy/decision National, regional and makers and formal local policies and makers and international policies sector practices with context- intermediaries request and regulations on intermediaries are specific evidence on IID researchers to innovation in the unaware or dismiss what constrains inform policies and informal sector areResearch use and policy influence the importance of informal sector practices. For influenced by informal sector innovations example being invited evidence from innovations to STI round tables context-specific and and the development synthetic research. of STI plans Intermediaries help innovations in the informal sector go to scale based on research from context- specific and/or synthetic research. 10
  15. 15. Innovation for Inclusive Development Program Prospectus for 2011-20163. Program StrategyStrategies for helping to build the IID field, transition particular ITS activities, andaddress cross-cutting issues are described below.Strategies for Building the IID FieldComplementary strategies for building the IID field and achieve its outcomes include: Support for networking: The program will follow an explicit strategy to support interdisciplinary research networks to deepen and accelerate learning. Sub- regional networks will be strengthened and globally networked with the GRIID research group and others. Existing projects to be networked include “grassroots innovation”, “pro-poor innovation” and “innovation for inclusive development” in South Asia, “innovation at the base of the pyramid (iBoP-Asia)” in Southeast Asia, “social technologies” in Latin America, a project on building capacity for STI indicators in Africa, and one on innovation in the BRICS countries. Building Network Capacity: The program will follow complete capacity building (IDRC Evaluation Unit, 2007), in order to strengthen the ability of the networks to undertake and manage research and put it to use. This approach involves building capacity in multiple areas. Training could be given to network members on, for instance, social and gender analysis, research communications, and evaluation. It could also mean providing administrative training and capacity building for managing network members and sub-granting relationships across organizations and countries. Building Southern leadership: A key and explicit tactic within the program’s networking strategy is to enable Southern leadership to emerge. Through a range of capacity building approaches, including those described above, fellowships and awards and the development of university courses, a set of Southern students and scholars, will be encouraged to participate in building the IID field. Knowledge generation: One of the key ways to develop these concepts and ideas is to consolidate research findings from existing case studies. Once common issues emerge from these case studies, IID will begin to support pilot participatory research projects in several regions that involve key stakeholders (boundary partners, such as informal sector actors, particularly women, intermediaries, and policy makers). The purpose of these participatory studies will be to identify innovative activities taking place in the informal sector and the policy or institutional bottlenecks they face. Scholarly publications: The intended strategy is to partner with the new journal Innovation and Development (Routledge), which was established in 2010, to help make it a preeminent publication with a strong Southern voice that helps to build the IID field. 11
  16. 16. Innovation for Inclusive Development Program Prospectus for 2011-2016Transition of ITS activitiesOver its five years of programming, the program will devote at least 80% of its programfunds to the core field, while 10% will be reserved to new and emerging issues. Giventhe greater focus of programming around IID, the program will use the final 10% totransition several existing activities: Science, Technology, and Innovation Policy Reviews: Informing the development, review, and implementation of national STI policies so that they incorporate IID will be part of the program’s on-going work. However, each year, the Centre receives several requests for support for the development and review of national STI policies, with elements far beyond the scope of IID. These STI policy reviews have generally had a very high return in terms of policy influence, but a mixed record in terms of building capacity, as they are often carried out by international specialists, rather than local researchers. The program intends to transition these activities to a Southern network of interested countries and organizations that would be interested in building local and regional capacity for conducting these reviews. Socio-economic impacts of Emerging Technologies: ITS-supported research has resulted in biosafety policy recommendations and “good practices” for assessing socio-economic impacts of genetically modified crops on small-scale farmers in developing countries. An impact assessment “toolkit” is being developed within existing projects to assist developing countries integrate socio-economic assessments into policy-making processes. Other donors and foundations have indicated an interest to continue this work and IID will support the formation of a global network of researchers and other stakeholders as a way of transitioning this programming. Science Journalism: ITS has supported a number of science journalism projects in the past, including peer training for the development of science journalism in Africa and the Middle East, as well as core-support for the Science and Development Network (Scidev.Net). These activities are important to the Centre as a whole and these projects will be transitioned into cross-cutting funding to be managed by IID and the Communications Division and funded by Forward Planning.Cross cutting issuesIID will address cross-cutting issues in the Centre’s strategic framework as follows: Global governance: Poverty indicators now point to a “new Bottom Billion” of people living in multi-dimensional poverty in middle income countries. The program will seek to communicate how improving livelihoods through innovation in the informal sector is crucial to global governance in post-MDG framework debates. The program will seek recipients to engage in the lead-up debates to the UN high-level summit in September 2013. A policy influence strategy to work with the OECD, 12
  17. 17. Innovation for Inclusive Development Program Prospectus for 2011-2016 UNCTAD, and/or UNESCO, which are already interested parties in the research outputs from this program, will be given priority planning via several active projects. Gender: As already described, the program has an explicit focus on women and will support gender analysis research capacity building. Within IID, ICTs will not be a main entry-point; however, they will be addressed in so far as they relate to innovative services that contribute to livelihoods in informal settings, such as the sale and maintenance of cellphones.4. Regional and Thematic PrioritiesThis section reviews the regional aspects that are pertinent for shaping IID’sprogramming. Figure 3 shows a preliminary assessment of low- and middle-incomecountry innovation systems and policies. As previously noted, there is a high correlationbetween countries with structured systems and their overall level of development;however, many middle income countries are also witnessing significant inequality andpoverty. As discussed below, IID programming will be responsive to regional contexts,however, networks that link countries across regions with similar characteristics mayalso be pursued—for example, a network of low-income countries with entry orfractional innovation systems, or another of BRICS-plus countries, that have structured 13
  18. 18. Innovation for Inclusive Development Program Prospectus for 2011-2016innovation systems, but nevertheless, large informal sectors with only marginalinnovative activities.Despite recent improvement in Africa’s overall economic performance, it contains someof the world’s poorest countries. Three quarters of Africans live in low-incomesettlements. Informal employment represents 72% of non-agricultural employment inthe region and up to 78% when South Africa is excluded (ILO 2002). Understanding thedynamics of the informal sector in Africa and devising strategies to empowermarginalized people by adding value to livelihoods through innovation is thus crucial.Specific attention will be given to universities, the private sector, and intermediary 14
  19. 19. Innovation for Inclusive Development Program Prospectus for 2011-2016organizations—mostly NGOs—and the way in which they help to build and channelinnovative capacities in the informal sector. IID’s active project on the governance,quality and relevance of university research in West Africa, and lessons from the closed4th RoKS competition “Developmental Universities: A Changing Role for Universities inthe South” are expected to provide relevant lessons for future programming.The Middle East and North Africa has suffered from decades of low STI investment,political interference in agenda setting, and low quality and quantity of research output.Recent developments may offer a niche for IID programming in MENA. First, there weresigns of increasing respect for the value of science in the region, accompanied by somesignificant investments by higher income countries. For instance, Turkey increased itspending on R&D by 600% over the last 10 years. Second, is the 2011, so-called ArabSpring. However, the number of unemployed, disaffected youth is a key challenge inMENA, and growing numbers of unemployed people continue to join the informaleconomy, which exacerbates the situation by pushing wages down (Saif & Choucar,2009). Improving the lives and livelihoods of those within the informal sector will becritical to sustain the movement towards greater democracy in the region, and thusoffers a clear niche for IID. At the same time, potential democratization of institutions incountries such as Egypt and Tunisia, such as rescinding the requirement of securityagency approval for research and the election of University Presidents and Deans mayease the top-down approach to innovation and influence formal STI actors to be moreopen to an IID approach. Programming in this region will be informed by the on-goingIID project on the Atlas of Islamic Innovation, which is mapping and evaluating thechanging landscape of STI in countries across MENA.Asia, home to two thirds of the world’s poor with population expected to reach 5 billionover the next 20 years, is also a region where the informal sector is prominent as itcontributes 41% to GDP. Rapid urbanization is putting significant challenges on accessto basic services and the environment. In order to address these challenges, a growthtrajectory that is inclusive and ultimately contributes to sustainable livelihoods isrequired. Building on its work in the region, in particular, the Innovation at the Base ofthe Pyramid project (IBoP), IID will support research that focuses on enhancinginnovative capabilities in the urban informal sector and in rural areas while linking theseresearchers to the global networks mentioned above. Emphasis will be placed on thenetwork of universities that are currently building capacity to focus curriculum andresearch on innovations in the informal sector.Parallel economies exist and function in most Latin American countries. Although theinformal economy is large and accounts for about 29% of GDP, many questions stillexists about its composition, size, and effects on economic growth. For example,controversy has arisen about whether the informal economy is a manifestation ofpoverty or can be a potential solution to poverty. The gender dimension to informality isimportant as women are over-represented in informal employment, receive lower pay,and belong to precarious occupational groups. Around three quarters of the populationin the Latin America and the Caribbean (LAC) region live in towns and cities, making itthe world’s most urbanized developing region. The programming focus on “social 15
  20. 20. Innovation for Inclusive Development Program Prospectus for 2011-2016technologies” will continue, although the group of researchers in this area will benetworked with others building the field of innovations for inclusive development.Linkages with universities, particularly in Central America and the Caribbean, will bestrengthened through developing a network of LAC universities to pilot curriculum andresearch related to innovation in the informal sector.5. Concluding commentsAfter a period of internal reflection and external consultation, the program teamidentified innovation for inclusive development as the niche where IDRC could make adifference. IID aims to address the problem of the “new Bottom Billion” in the informalsector. The program aims to produce knowledge and influence policy to transformmarginal innovative activities in the informal sector to sustainable innovations that havewider impact and improve people’s livelihoods.After the end of the five year program cycle, IID intends to have contributed to buildingan inter-disciplinary field on innovation that leads to inclusive development throughimproved and sustainable livelihoods. It will also have transitioned national STI policyreview activities to Southern networks and have in place a “network of networks” ofresearchers working in the area of innovation for inclusive development that will helpshape global agendas around the post-MDG framework. 16
  21. 21. Innovation for Inclusive Development Program Prospectus for 2011-20166. ReferencesCassiolato, J., Couto Soares, Ma. C., & Lastres, H. 2008. Innovation in unequal societies: How can it contribute to improve equality? Paper presented at the “Seminario Internacional: Ciencia, Tecnología, Innovación e Inclusión Social”, Montevideo, Uruguay 27-28 March 2008. Online: http://www.unesco.org.uy/ciencias-naturales/fileadmin/templates/cultura/cultura- mercosur/archivos/CyT/Resumen-Couto25-3-08.pdfChambers, R., & Conway, G. 1992. Sustainable rural livelihoods: Practical concepts for the 21st century. IDS Discussion Paper 296. Institute of Development Studies, Brighton, UK.Feige, E. 1990. Defining and Estimating Underground and Informal Economies: The New Institutional Economics Approach. World Development, 18 (7): 989–1002.Floodman Becker, K. 2004. Fact Finding Study: The Informal Economy. Stockholm. Report for SIDA. Online: http://rru.worldbank.org/Documents/PapersLinks/Sida.pdf.Hart, K. 1973. Informal Income Opportunities and Urban Employment in Ghana. The Journal of Modern African Studies, 11(1):61-89.Howells, J. 2006. Intermediation and the role of intermediaries in innovation. Research Policy, 35 (5) 715-728.Huyer, S. 2004. Position paper on gender and science and technology from an international perspective, United Nations Commission on Science and Technology for Development. Washington, DC, USA.International Labour Organization (ILO). 2002a. Decent Work and the Informal Economy. Online: http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/rep-vi.pdfInternational Labour Organization (ILO). 2002b. Women and men in the informal economy: A statistical picture. ILO, Genève, Switzerland. pp. 64.Kaplinsky, R. 2010. Schumacher meets Schumpeter: Appropriate technology below the radar. Research Policy, (193-203) 40.Kraemer-Mbula, E., Wamae, W. 2010. Innovation and the Development Agenda, OECD, Paris, France. Online: http://web.idrc.ca/openebooks/501-4/Losby, J., Else, J.F., Kingslow, M., Edgcomb, E., Malm, E., Lundvall, B-A., Joseph K.J., Chaminade, C. 2009. Handbook of innovation and Developing Countries: 17
  22. 22. Innovation for Inclusive Development Program Prospectus for 2011-2016 Building domestic capabilities in a global setting. Edward Elgar Publishing, Cheltenham, UK. pp. 416.Losby, J.L., Else, J.F., Kingslow, M., Edgcomb, E., Malm, E., Kao, V. 2002. Informal economy literature review. ISED Consulting and Research and The Aspen Institute. Online: http://www.kingslow- assoc.com/images/Informal_Economy_Lit_Review.pdf.Lundvall, B-A., Vang, J., Joseph, K.J., Chaminade, C. 2009. Innovation system research and developing countries. In Handbook of innovation and developing countries: Building domestic capabilities in a global setting. Edward Elgar Publishing, Cheltenham, UK. pp. 1-30.Neilson, S., Lusthaus, C. 2007. IDRC - supported capacity building : developing a framework for capturing capacity changes. Online: http://idl- bnc.idrc.ca/dspace/handle/10625/29146Patton, M.W. 2010. Developmental Evaluation: Applying Complexity Concepts to Enhance Innovation and Use. Guilford Press. New York. NY. pp 375.Patrizi, P., Quinn Patton, M. 2009. Learning from Doing: Reflections on IDRC’s Strategy in Action, Evaluation Unit, IDRC, Ottawa, ON, Canada.Portes, A., Haller, W. 2005. The Informal Economy. In Neils Smelser and Richard Swedberg, The handbook of economic sociology, 2nd Edition. Chapter 18. The World Bank. pp 403-425. Online: .http://rru.worldbank.org/Documents/PapersLinks/Informality/18-Smelser.pdf Saif, I., Choucair, F. 2009. Arab Countries Stumble in the Face of Growing Economic Crisis. Carnegie Endowment for International Peace. Online: http://www.carnegieendowment.org/files/economic_crisis_wc_english.pdfSchilderman, T., Lowe, L. 2002. The Impact of Regulations on Urban Development and the Livelihoods of the Urban Poor. ITDG February 2002. Online: http://www.dfid.gov.uk/r4d/PDF/Outputs/Urbanisation/R7850_SchildermanandLo we_RGUU2.pdfSTEPS Centre. 2010. Innovation, Sustainability, Development: A New Manifesto. The STEPS Centre (Social, Technological and Environmental Pathways to Sustainability), Brighton, UK.Summer, A. 2010. Global poverty and the new bottom billion: Three-quarters of the World’s poor live in middle-income countries. Institute of Development Studies (IDS), Sussex, UK. 18
  23. 23. Innovation for Inclusive Development Program Prospectus for 2011-2016UNDP. 2010. Human Development Report: The real wealth of nations. United Nations. Second printing, November 2010. UNDP, New York, NY, USA.UNESCO. 2010. UNESCO Science Report 2010. UNESCO, Paris, France.Williams, C. 2007. Entrepreneurship and the informal economy: a study of Ukraine’s hidden enterprise culture. Journal of Developmental Entrepreneurship, 12(1), 119–136. 19

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