How to Scale Up Inclusive Innovations? Policy Lessons From a Cross-Country Perspective Advisory Group Meeting - 3 July 2014 Lavison Cynthia Background • Based on forthcoming working paper: How to Scale-Up Inclusive Innovation? Policy Lessons from a Cross-Country Perspective • This background paper will be the basis for Section B of the final publication. 2 Overview 1. 2. 3. 4. Defining Inclusive Innovations Characteristics of Inclusive Innovations Scaling Up Inclusive Innovations Policy Approaches in Support of Inclusive Innovations 3 1. Defining Inclusive Innovations • Innovations that improve the welfare of lower-income and excluded groups – For consumption – In support of economic activities Frugal innovations: poor as end consumers Grassroots innovations: poor also innovators • Other critical factors: – Quality – Scale 4 1. Defining Inclusive Innovations • Micro indicators – A few case-specific scaling indicators – Needs-based indicators Share of the population with an account at a formal financial institution by income segment, 2011 Share Mobile of themoney population and financial having used a mobile inclusion phone by income to receive segment money inby income Kenya, segment 2011 income (% age 15+) (% age 15+) 100 90 80 70 60 50 40 30 20 10 0 16 90 86 75 63 44 47 44 27 15 53 41 29 31 26 10 16 92 80 14 70 12 60 10 50 0 Source: World Bank Findex top 60% 11 40 8 30 6 20 4 10 20 bottom 40% 13 6 4 1 2 1 1 0 bottom 40% 3 3 0 2 1 top 60% Mobile phone to receive money Low Colombia China India used Indonesia South Africa Mobile phone used to send money income 40% financial top 60% Accountbottom at a formal institution Middle income 5 1. Defining Inclusive Innovations • Macro indicators – Challenge Government funding of health-related R&D, 2012 As a percentage of GDP 0.3 0.2 0.1 Direct health GBAORD Advancement of knowledge (medical sciences) Other health-related funds Data on indirect health funds not available USA GBR NOR OECD EST CAN DNK ESP PRT LUX KOR ISL AUS FIN EU28 ITA FRA NZL DEU CZE SVN NLD JPN HUN AUT IRL CHL MEX SVK RUS SWE BEL POL GRC ISR CHE 0.0 6 Source: STI Scoreboard 2013 2. Characteristics of Inclusive Innovations • Inclusive innovation differ from traditional innovations in several dimensions Frugal Grassroots Type of innovations and impacts Scale of innovation Access to expertise and knowledge Access to expertise and knowledge Financing opportunities Access to finance Information about consumer needs Information about consumer needs Characteristics of demand Costs for providing innovation Market conditions Market conditions 7 3. Factors of Success for Scaling Up Accurately captured the demand Private businesses play central role Importance of innovation (incl. process) Building on existing infrastructure and ecosystems • Regulatory framework facilitated development • • • • Role of government: Facilitator 8 4. Policy Approaches Governmental Co-operation 1. Type of Innovation and Impacts 2. Scale of Innovations 3. Access to Expertise and Knowledge Fostering co-ordination across other actors 4. Access to Finance 5. Information about Consumer Needs Access to Finance 6. Characteristics of Demand 7. Costs of Providing Innovation Regulatory Framework 8. Market Conditions Other incentives 9 4. Obstacles and Responses 1.Type of Innovation and Impacts Definition and measurement Governmental Co-operation - cross-institutional co-operation Involving local governance Fostering co-ordination across actors 2.Scale of Innovations 3.Access to Expertise and Knowledge Incentives to universities and PRIs, intermediary institutions 4.Access to Finance International co-operation 5.Information about Consumer Needs 6.Characteristics of Demand 7. Costs of Providing Innovation Direct funding, PPPs, fostering private investment Product Regulatory FWs Market Regulatory FWs 8. Market Conditions IP Rights Prizes and Competitions 10