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Development and Innovation
Contributor : FAO-AGS (2008-02-28 14:56:47)
Staying Competitive: innovation, product development and adaptation
The Proposition
The “innovation systems” of most developing countries are inadequate to respond effectively to innovation-based competition in agro-industry. A new (innovative) public sector approach, targeting the small to medium-sized agro-processor, is required.
Rationale and Recommended Response (Click here to read)
Update on the debate
This round of discussions was fairly quiet. The sustainability and advantage of knowledge networks was questioned. The establishment of centres of excellence was seen as one possible mechanism for servicing the needs of SMEs.
Current Focus of the Debate:
Traditional knowledge is often the source of information. How can this knowledge be protected and at the same time be utilized, and best disseminated to support innovation within the SME sector?
For summary of previous round of debate and questions click here
12 Comments
Mark Lundy , (2008-04-04 15:10:48)
To promote effective product and process innovation a network or multi-stakeholder approach is useful. The way we have done this in Latin America is to: i) conform a representative group of chain actors from production, processing and marketing segments of the chain; ii) with this group, identify a market opportunity for a new product or new product presentation; ii)review the changes needed along the chain -- both product and process -- to meet this opportunity; iv) develop prototype changes and pilot them in the chain and target market; v) identify and disseminate positive innovations along the chain.
We have used this process in Colombia for non-refined sugar (panela in Spanish), beans in Nicaragua and also for process innovation in coffee producer organizations in Nicaragua.
Key principals for this are: (a) a concrete market opportunity that is profitable for all actors; (b) collaborative work among actors to meet this need; (c) access to local and external knowledge and information; and, (d) a facilitating agency that can help guide the process. A field guide is available in Spanish for those who are interested.
To promote effective product and process innovation a network or multi-stakeholder approach is useful. The way we have done this in Latin America is to: i) conform a representative group of chain actors from production, processing and marketing segments of the chain; ii) with this group, identify a market opportunity for a new product or new product presentation; ii)review the changes needed along the chain -- both product and process -- to meet this opportunity; iv) develop prototype changes and pilot them in the chain and target market; v) identify and disseminate positive innovations along the chain.
We have used this process in Colombia for non-refined sugar (panela in Spanish), beans in Nicaragua and also for process innovation in coffee producer organizations in Nicaragua.
Key principals for this are: (a) a concrete market opportunity that is profitable for all actors; (b) collaborative work among actors to meet this need; (c) access to local and external knowledge and information; and, (d) a facilitating agency that can help guide the process. A field guide is available in Spanish for those who are interested.
Dave Harcourt , (2008-04-03 17:55:16)
I think a knowledge network is an absolute necessity to help us to break the "learning by failing" approach, we too often see.
In the private sector it has an important role to play but care is needed. Too often, especially in young companies, there is a neurotic preoccupation with protecting secrets. However, there are too many cases where it has been successful - so education is necessary.
Although I generally believe we too often let the public sector intervene in enterprise matters, knowledge sharing would be ideal where this is happening anyway and should save public funds.
This would be a typical web 2.0 opportunity and would need to be established and maintained by someone with a good wide business, technology and IT background. Using the 2.0 approach an inclusive process that would bring those with contributions to make to the fore.
Peter´s point about glass packaging in countries without glass manufacturers, which is most of sub Saharan Africa I think,is quite correct. But don´t forget the small scale processors in South Africa still suffer enormously compared to the large industry - high unit prices, poor deliveries, large minimum orders for new bottle design, existing modern bottles licensed to large companies etc.
I think a knowledge network is an absolute necessity to help us to break the "learning by failing" approach, we too often see.
In the private sector it has an important role to play but care is needed. Too often, especially in young companies, there is a neurotic preoccupation with protecting secrets. However, there are too many cases where it has been successful - so education is necessary.
Although I generally believe we too often let the public sector intervene in enterprise matters, knowledge sharing would be ideal where this is happening anyway and should save public funds.
This would be a typical web 2.0 opportunity and would need to be established and maintained by someone with a good wide business, technology and IT background. Using the 2.0 approach an inclusive process that would bring those with contributions to make to the fore.
Peter´s point about glass packaging in countries without glass manufacturers, which is most of sub Saharan Africa I think,is quite correct. But don´t forget the small scale processors in South Africa still suffer enormously compared to the large industry - high unit prices, poor deliveries, large minimum orders for new bottle design, existing modern bottles licensed to large companies etc.
Peter Steele , (2008-03-19 18:44:28)
A short time back we put together a review of agro-industrial development/agro-industries in a country in East Africa; based on the work of a local agro-industrial consultant with whom we have worked for many years. (In other words - someone who know his way around.) Of all the constraints and opportunities that arose, the fact that the country did not produce glass containers was considered a major barrier to progress. In earlier times there had been a domestic source of glassware, but this had become defunct. You can pack processed foods in plastic, board and paper but, for best, you need access to glassware. All the best information in the world - accessable to everyone with Internet access (which means the literate and mainly those in the capital city) - will not help the entrepreneur and/or product that is best packed in glass.
Meantime, the products of countries to the south - with their resilient and dominant agro-processing industries (i.e. great packages, excellent marketing and incredible prices) can be shipped in to compete with local products. With them come the supermarket chains that also originate down south. What to do?
This is real challenge for the mainly small-scale agroproducer and agroprocessor at home. Agro-Industrial development within the home state has to encompass domestic needs - but what do you do when there is insufficient investment to provide for that startup service, product or fund? Cheap glassware factory anyone?
Peter Steele. Rome. 19/03
A short time back we put together a review of agro-industrial development/agro-industries in a country in East Africa; based on the work of a local agro-industrial consultant with whom we have worked for many years. (In other words - someone who know his way around.) Of all the constraints and opportunities that arose, the fact that the country did not produce glass containers was considered a major barrier to progress. In earlier times there had been a domestic source of glassware, but this had become defunct. You can pack processed foods in plastic, board and paper but, for best, you need access to glassware. All the best information in the world - accessable to everyone with Internet access (which means the literate and mainly those in the capital city) - will not help the entrepreneur and/or product that is best packed in glass.
Meantime, the products of countries to the south - with their resilient and dominant agro-processing industries (i.e. great packages, excellent marketing and incredible prices) can be shipped in to compete with local products. With them come the supermarket chains that also originate down south. What to do?
This is real challenge for the mainly small-scale agroproducer and agroprocessor at home. Agro-Industrial development within the home state has to encompass domestic needs - but what do you do when there is insufficient investment to provide for that startup service, product or fund? Cheap glassware factory anyone?
Peter Steele. Rome. 19/03
Dr. Damian Ihedioha , (2008-03-18 11:08:43)
There are many networks established across the globe. Some died at birth, while others did not live long to achieve set the objectives. What would be the attraction/incentive for people to bring their best practices to the open. Networks are voluntary and loose.
My idea is the establishment of Centers of Excellence for SMEs operation in regions that would reach out and advise SMEs on ways forward. The Center will gather, collect and sieve information on SMEs are circulate same to country affliates on FAO. In Africa for instance, we may have 3 of such centres to take care of inherent diversities.
There are many networks established across the globe. Some died at birth, while others did not live long to achieve set the objectives. What would be the attraction/incentive for people to bring their best practices to the open. Networks are voluntary and loose.
My idea is the establishment of Centers of Excellence for SMEs operation in regions that would reach out and advise SMEs on ways forward. The Center will gather, collect and sieve information on SMEs are circulate same to country affliates on FAO. In Africa for instance, we may have 3 of such centres to take care of inherent diversities.
Chido Makunike , (2008-03-18 00:14:01)
The public sector, particularly in developing countries, is very poorly suited to facilitate innovation. Unfortunately, very often public sector institutions places more importance on their bureaucratic existence than on efficiently executing the function for which they ostensibly exist.
For instance, the passport office of a country may show its power and importance not by seeking to serve the citizens more efficiently, but by making it more difficult than is necessary to obtain a passport! Simple, inexpensive suggestions on how they can make their work more efficient may be met with "we have always done it this way," and besides, may make the institution lose the public cachet of how difficult it is for the public to obtain a service from them, making that institution more feared and remote, which has benefits such as opening up the opportunity for some of the bureaucrats to sell a special "faster, easier" service, in exchange for an extra off the record fee of course!
The point is that many developing world public institutions are not only poorly suited to facilitate innovation, they often are actively hostile to it in their own internal workings.
By its nature, the ability to innovate cannot easily be imparted to an entrepreneur by an external party. Having the quality of the ability to innovate is an important part of the process of national development, and depends on things like the degree of freedom in a society, which influences things like whether people are generally encouraged to think outside the box, or whether that is discouraged.
A peripheral, long-term way the public sector can assist to instill a culture of innovation is to move school curricula away from rote learning for the purpose of passing exams, to instead focusing more on encouraging pupils to think, to question, to compare. THis will help to encourage innovation.
In the short term, one of the best ways to force entrepreneurs to innovate is to facilitate their attendance at trade shows. That is one of the most stark ways of making them appreciate the global competition they are up against, and therefore of how they will need to innovate in order to compete. That is worth more than any amount of abstract lecturing one can do about "the market" and the competition out there.
The public sector, particularly in developing countries, is very poorly suited to facilitate innovation. Unfortunately, very often public sector institutions places more importance on their bureaucratic existence than on efficiently executing the function for which they ostensibly exist.
For instance, the passport office of a country may show its power and importance not by seeking to serve the citizens more efficiently, but by making it more difficult than is necessary to obtain a passport! Simple, inexpensive suggestions on how they can make their work more efficient may be met with "we have always done it this way," and besides, may make the institution lose the public cachet of how difficult it is for the public to obtain a service from them, making that institution more feared and remote, which has benefits such as opening up the opportunity for some of the bureaucrats to sell a special "faster, easier" service, in exchange for an extra off the record fee of course!
The point is that many developing world public institutions are not only poorly suited to facilitate innovation, they often are actively hostile to it in their own internal workings.
By its nature, the ability to innovate cannot easily be imparted to an entrepreneur by an external party. Having the quality of the ability to innovate is an important part of the process of national development, and depends on things like the degree of freedom in a society, which influences things like whether people are generally encouraged to think outside the box, or whether that is discouraged.
A peripheral, long-term way the public sector can assist to instill a culture of innovation is to move school curricula away from rote learning for the purpose of passing exams, to instead focusing more on encouraging pupils to think, to question, to compare. THis will help to encourage innovation.
In the short term, one of the best ways to force entrepreneurs to innovate is to facilitate their attendance at trade shows. That is one of the most stark ways of making them appreciate the global competition they are up against, and therefore of how they will need to innovate in order to compete. That is worth more than any amount of abstract lecturing one can do about "the market" and the competition out there.
Christian Fischer , (2008-03-17 02:10:20)
True innovation (i.e., the successful implementation of fundamentally new discoveries) may be a rare event and thus cannot be systematically “developed”. However, in most practical cases (i.e., in business applications) it is often sufficient to adapt existing products and services to ever-changing market trends and consumer tastes. Thus, the continuous, successful modification of packaging, labels, recipes, marketing messages, logistics processes etc. helps to secure a company’s competitiveness. This is a more systematic process which can be professionally managed. However, it is still hard to see what public universities can do to assist this “private business”, except for – as Vinay writes – to widely teach the workings of marketing.
True innovation (i.e., the successful implementation of fundamentally new discoveries) may be a rare event and thus cannot be systematically “developed”. However, in most practical cases (i.e., in business applications) it is often sufficient to adapt existing products and services to ever-changing market trends and consumer tastes. Thus, the continuous, successful modification of packaging, labels, recipes, marketing messages, logistics processes etc. helps to secure a company’s competitiveness. This is a more systematic process which can be professionally managed. However, it is still hard to see what public universities can do to assist this “private business”, except for – as Vinay writes – to widely teach the workings of marketing.
Vinay Chand , (2008-03-16 02:01:59)
Innovation, to me depends almost entirely on an intimate and dynamic understanding of the market and current or potential consumer preferences. Even then it requires creative development. The only thing the public sector can do to asssist in the process is to help develop appreciation of markets, marketing and most important of the marketing function as such.
Innovation, to me depends almost entirely on an intimate and dynamic understanding of the market and current or potential consumer preferences. Even then it requires creative development. The only thing the public sector can do to asssist in the process is to help develop appreciation of markets, marketing and most important of the marketing function as such.
Pierre Berthelot , (2008-03-10 11:57:50)
The idea of innovation originating from the public sector is quite challenging. Entrepreneurship is at the basis of innovation and is motivated by considerations rarely associated with or to be found in the public sector. On the other hand, one cannot assimilate the academic world to the public sector. Academic research has its own logics and cannot be compared to profit-driven R&D.
The idea of innovation originating from the public sector is quite challenging. Entrepreneurship is at the basis of innovation and is motivated by considerations rarely associated with or to be found in the public sector. On the other hand, one cannot assimilate the academic world to the public sector. Academic research has its own logics and cannot be compared to profit-driven R&D.
Peter Nelson , (2008-03-10 11:08:12)
In terms of globalisation if we are looking at a development context, you need to separate the developed from the developing. Each year the standards are raised and the undeveloped countries have the ladder pulled up even further. The innovations do not reach the developed world in a practical sense and the undeveloped countries see an ever shrinking market. If there is to be any appreciable difference, assistance particularly to the SME sector needs to be given to companies in the processing sector so that they can stay on top of the ever changing requirements.
In terms of globalisation if we are looking at a development context, you need to separate the developed from the developing. Each year the standards are raised and the undeveloped countries have the ladder pulled up even further. The innovations do not reach the developed world in a practical sense and the undeveloped countries see an ever shrinking market. If there is to be any appreciable difference, assistance particularly to the SME sector needs to be given to companies in the processing sector so that they can stay on top of the ever changing requirements.
Divina D. Bawalan BSChE, MSEgyE , (2008-03-08 12:14:56)
One basic problem why a lot of research outputs of universities and research centres have not been commercially adopted is that economic viability and adaptability to actual process conditions of a developed technology are not being given paramount importance. This is especially true in researches being done in universities where professors are competing on the number of published research work. For industries, the driving force to adopt a particular process or produce a product is always profitability.
One basic problem why a lot of research outputs of universities and research centres have not been commercially adopted is that economic viability and adaptability to actual process conditions of a developed technology are not being given paramount importance. This is especially true in researches being done in universities where professors are competing on the number of published research work. For industries, the driving force to adopt a particular process or produce a product is always profitability.
Rosa Rolle , (2008-03-08 10:22:46)
Quite a number of innovative products and processes are developed in research centres and universities across the developing world. Few of these products and processes, however, make it beyond the prototype level. What approaches need to be taken to better link university/research systems to the needs of local and regional SMEs to facilitate the adoption and use of such innvations?
Quite a number of innovative products and processes are developed in research centres and universities across the developing world. Few of these products and processes, however, make it beyond the prototype level. What approaches need to be taken to better link university/research systems to the needs of local and regional SMEs to facilitate the adoption and use of such innvations?
Dr. Damian Ihedioha , (2008-03-06 14:59:21)
The questions are quite thick. What are the unmet needs in the current products on display, what gaps do we need to fill? The disconnect between industries and universities is ever widening. Industries I think should take interest in supporting action and innovative research in Universities. That is one sure way industries would benefit from Universities. Industries should drive the process by placing at the doorsteps of universities areas they require research and further information in diversifying their products.
The questions are quite thick. What are the unmet needs in the current products on display, what gaps do we need to fill? The disconnect between industries and universities is ever widening. Industries I think should take interest in supporting action and innovative research in Universities. That is one sure way industries would benefit from Universities. Industries should drive the process by placing at the doorsteps of universities areas they require research and further information in diversifying their products.
