Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems

1. Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems An economic sector work study conducted by ARD and SASAR World Bank and UNU-MERIT

2. From explanatory towards operational innovation systems • Exploring innovation systems theory for analytical purposes • Developing a methodology for case study analysis • Comparing case studies • Key characteristics of innovation • Identifying interventions opportunities to build innovation capacity • Towards a framework for diagnosis and intervention • Conclusions and implications for the Bank

3. What is an innovation system? • All the actors and their interactions involved in the production and use of knowledge, and the institutional and policy context that shapes the processes of knowledge access, sharing and learning. • Multiple knowledge bases, research but also others • Capacity to innovate in changing environments, -- it is a dynamic adaptive capacity. • Embedded in an institutional (attitudes and practices) and policy context that shapes the ways actors and organisations behave. Contextual and locally specific.

4. Why innovation systems now? • Policy shift from delivering knowledge and technology products to creating social and economic change – innovation • Strengthened research systems increase availability of knowledge, but not necessarily the extent of innovation • Changing context of agricultural development

5. Changing context of agricultural development • Markets, not production drive agricultural development • The economic environment of agriculture has become more dynamic, interconnected and evolutionary – largely due to globalization, also urbanization • Rate of change has increased, with a need for more rapid responses – competition, trade rules, technological paradigms, climate, pest and diseases

6. Changing context of agricultural development (cont) • The role of the private sector in generating and using knowledge has grown • ICT has radically changed the accessibility of knowledge and information • The knowledge structure of agriculture is changing – eroding the primacy of public agricultural R&D and R&D organizations. Design, packaging, post-harvest, private advisory services. Less elite more consultative

7. Innovation systems approach necessary but also now possible • Necessary to deal with innovation as a social process of knowledge use, taking place in a rapidly evolving context requiring the integration of many different resources and activities. • I.E. need a more inclusive way of thinking about the capacity to innovate. • Possible because of (a) existing investments in R&D infrastructure and the progression of NARS to AKIS to NAIS (b) emergence of new knowledge sources (c) access to information, ICT etc

8. The expanding view of how to strengthen innovation capacity

9. How to analyse capacity using the innovation system concept? • Actors in the innovation system and their role • Diversity and appropriateness • Attitudes and practices of the main actors • Ways of working, traditional roles, trust, views on collaboration, risk taking • Patterns of interaction • Links, partnerships, formal and informal networks, sector coordination • Enabling environment • S&T policies, legal framework, fiscal policies

10. Case studies

11. What did we find? • Two distinctive scenarios emerged • Usually. Sectors emerge because entrepreneurs identify new market opportunities and innovate to gain market access. Subsequently falter as can’t continuously innovate in dynamic markets • Occasionally. Research interventions promote innovation when organised in ways that promote interaction and or as part of integrated sector support.

12. Shrimps in Bangladesh • Sector value. US$ 300 million. Employs 2 million people. (2003) • Sector take off. Natural comparative advantage for aquaculture. International demand for shrimps in 1970/80. Market knowledge through diaspora. Entrepreneurs established processing and export companies.

13. Challenges. Increasing competition. Increasing hygiene requirements of importing countries and subsequent EU ban in 1997. Continually changing standards and norms. Increasing need to address environmental and social issues • Core problem. Relationship and habits and practices where sufficient for the degree of innovation needed to build sector relying on low costs, but not for a sector needing to continuously up grade and innovate

14. Diagnosis • Actors. Mainly entrepreneurs, weak coordination and unclear role of research organisations. • Interaction, attitudes and practices. Highly fragmented due to local business, social and intervention traditions – lack of collaborative traditions; reactive approach to problem solving; lack of trust of research. • Enabling environment. Quality standards and environmental policies in place but not working due to institutional setting and not appropriate to small scale producers • Ways forward. Develop locally relevant sector coordination mechanisms

15. Pilot, research based initiative on industrial utilisation of cassava • . • Background. A series of food science research project over 10 years to develop new cassava based processed products. • Challenge. Research was developing many options for industrial utilisation of cassava, but no uptake • Core problem. Not just a technical research problem, but a question of how to develop total systems of production processing and marketing and how to integrate scientific expertise into this system

16. Diagnosis of pilot intervention • Actors. A coalition of researchers, entrepreneurs, cassava farmers and NGOs • Interactions attitudes and practices. Strong interaction and coordination of activities across the whole system. Emergence of partnering as core approach in the scientific organisation. • Ways forward. Build on success of pilot intervention and explore possibilities of applying principles in other sectors

17. Generic observations about innovation. • Innovation combines technical, institutional, organisational and other sorts of change • Innovation is not about global novelty, but often about local creative imitation. • Innovation can involve radical changes, but more usually many small improvements and a continuous process of upgrading • Innovation can be triggered by the market (most often), policy changes (sometimes) and research (rarely)

18. Generic observations about innovation capacity • Linkage and patterns of interaction often weak or absent • Attitudes and practices are a major obstacles so even where, e.g. competition requires collaboration it doesn’t take place. • Policy space for interventions that promote interaction; usual policies are not the bottleneck • Lack of interaction causes: • limited access to new knowledge; • weak articulation of demand for research and training; • weak technological and institutional learning; • weak integration of social and environmental concerns; • and weak access to sources of financing for innovation