Supporting local innovation for rural development: Analysis and review of five innovation support funds

In continents and countries such as Africa and India, huge agricultural areas are "de-facto" organic. More formalised - and knowledge intense - methods of organic agriculture has proved potential help farmers achieve better development returns from farming organic. While not commonly referred to (formally certified) as "organic", this huge agricultural sector mainly depend on farmer-knowledge intensive and local innovation systems very much of the same kind that served development of organic agriculture in the west, before agricultural universities and subsequently governments took interest in participating in developing "organic" agriculture. The aim of this study is to follow up on a World Bank workshop on innovation systems at the community level. Most of the knowledge and innovation referred to in the report relates to agriculture. By resolution, this workshop recommended that a ‘review of existing innovation support funds and outline of a global mechanism to foster community level innovations’ should be undertaken. The study is also, in part, a response to a recent report from the World Bank’s Indigenous Knowledge for Development Program, which calls for the establishment of an “innovation fund to promote successful IK practices” (Gorjestani, N., in WB 2004; 45-53). Th is desk study reviews fi ve innovation support funds (ISFs) or funding concepts: the Indian ‘National Innovation Fund’ (NIF) and its associated web of institutions; the GTZ-funded ‘Small-Scale Project Fund’ (SSPF); the NGO concept ‘Promoting Local Innovation in ecologically oriented agriculture and NRM’ (PROLINNOVA); the FAO’s project, ‘Promoting Farmer Innovation-Farmer Field Schools’ (PFI-FFS); and the ‘Local Agricultural Research Committee’ (CIAL) in Latin America. Local innovations are broadly perceived as constituting a major under-utilized potential for development and rural poverty reduction, and ISFs as contributing to realize this potential. Local innovators continue to experiment and generated knowledge within a broad spectrum of areas, including improved mechanical tools for agriculture, natural resource management, medicinal and agricultural practices, and innovative ways of organizing and doing business. Th e signifi cance of local innovators as a source of knowledge and well-adapted solutions is high among the poorer sections of rural society, many of whom cannot aff ord, nor have access to, relevant advisory services. Th ere is growing recognition that a whole range of diff erent actors and organizations are required to stimulate widespread local technological development. New products and processes are brought into local economic and social use through networks of organizations, which are often referred to in the abstract as the innovation system. Th e key challenge is not perceived in terms of devising new technologies, e.g. doing diff erent things, but in bringing about changes in how the innovation system works, e.g. doing things diff diffff erently (Phila 2005). DIIS REPORT 2007:4 6 Our comparative analysis of the fi ve reviews listed above draws twelve preliminary conclusions: (i) NIF is globally the largest and most advanced ISF. However, although the other four ISFs are more limited in scope and focus, they can all contribute valuable experiences, complementary to those of NIF. In our assessment, the eff ectiveness of investing in innovation support could be enhanced if existing complementary experiences were exchanged and acted on in a systematic manner. (ii) ISFs understand innovation as a matter of both processes and products, the latter varying from hard mechanical implements to soft institutional innovations. ISFs support both innovators and their links with public institutions and private entrepreneurs, and groups of rural producers, as platforms for innovations and as their links with innovators. It is our assessment that all ISFs could benefi t from a more balanced mix of the two areas of innovation support. (iii) ISFs’ understandings of who the innovators are varies. NIF celebrates the qualities of individual, small-scale entrepreneurs with a proven record of being innovative, while the remaining ISFs place their eff orts in facilitating poor rural producers and users of innovations to learn to become ‘researchers’ in their own right. It is our assessment that supporting both types of innovator is likely to increase the development outcomes of ISFs. (iv) A general lesson learned by all ISFs is that innovations have to be understood in their context. ISFs currently diff erentiate between innovations on the basis of the types of issues they are concerned with (e.g. soil and water conservation, biological pest management, etc.). It is our assessment that it would be useful if the ISFs could instead distinguish between innovations in relation to (i) the relevance of formal property rights; (ii) public/private goods; and (iii) market/non-market value. (v) When using a ‘learning selection’ analytical framework for rural innovations for development, the focus shifts away from simply understanding innovators as inventors and rural producers as the users of innovations towards a focus on how innovations are continuously improved upon through interaction between the various actors. In our assessment, the facilitation of cycles of ‘ learning selection’ involving innovators, entrepreneurs and innovative adopters is a potential area of activity for ISFs that could contribute to scaling out use and the commercialization of rural innovations. DIIS REPORT 2007:4 7 (vi) Understanding capacity development as ‘the ability of an organization to produce appropriate outputs (e.g. services and products) helps clarify the aim of capacity development eff orts in these ISFs. ISF-supported eff orts are centered on the one hand on building eff ective mechanisms for identifying, documenting, vetting and promoting innovations, and on the other hand on ensuring organizational and fi nancial sustainability. (vii) Th e ISF funds reviewed here have a decentralized management structure linked together by a central management unit or committee. Th e Indian NIF has the most formalized and well-established governance structure, including a national Governing Board that coordinates activities among the web of independent organizations, each with diff erent functions and foci. Coordination of activities is less visible in the case of CIAL and PFI-FFS, as most management decisions in these organizations are taken at the farmer-group level and at the district-level networks of these groups. Th e PROLINNOVA concept provides a refreshing mix of centralized and decentralized decision-making management. (viii) None of these ISFs have a comprehensive system for monitoring outcomes and assessing the impact of support activities. Since none of the M&E systems diff erentiates between diff erent social categories, one potential development impact of ISF activities has not been documented. ISF documents are also unclear in their understandings of the social and economic mechanisms through which support for local innovations result in improved levels of well-being for poor people. (ix) Th e review reveals a diverse picture of Innovation Scouting, from none or implied (PROLINNOVA,) via criteria-based (SSPF), the village walks and student scouts of the NIF, reliance on grassroots “champions” and/or use of extension workers (FFS), to the structured group innovation process encoded in the CIALs. Th e use by NIF of students who return to their villages during their vacations to scout for innovations seems to be a successful approach that may be replicable in other areas where university students come from rural areas. Th e availability of comprehensive standardized forms and criteria that the students can easily apply has contributed to the success of this approach. An unintended side eff ect has been changes in student’s own attitudes to rural development. (x) Most of the funds reviewed made few if any attempts to support any genuine commercialization of local innovations. Th e exception is NIF, which we found to be more advanced in this sense. NIF includes both formal and informal sector DIIS REPORT 2007:4 8 commercialization. While primarily focusing on innovations of a public-good nature with a view to informal commercialization or information-sharing, NIF has developed a proven capacity to work with innovations of a rival good or excludable nature, in other words, those with the potential for commercialization based on standard or sui-generis IPRs. Th e other funds focus mostly (CIAL) or almost exclusively (FFS) on non-excludable and non-rival goods. In the latter cases, most or all the innovations they support are likely to be of a public-good nature. (xi) Th ree complementary forms of innovation vetting are practiced by the IFSs, each with their merits. One of the funds reviewed rely on two separate innovation “review” committees, one “scientifi c”, and one by peers among innovators (NIF), while another used joint experiments involving both external facilitators and researchers (CIAL). Vetting by potential users (e.g. rural producers) is widely practiced in PFI-FFS. (xii) Th e approach to learning varies within the ISFs, from the highly complex and elaborate learning programmed for at all levels, through a wide array of instruments and forums (NIF), to a far more specifi c and scoped adult or joint learning model (CIAL, FFS), to the rather more amorphous “collective learning” envisioned by the PROLINNOVA concept. A global innovation facility (GIF) could play a role in compiling existing documentation of experience, initiating cross-country studies, and assisting in ensuring that these experiences are made available and exchanged in a systematic manner among the existing ISFs. Th e mission of such a GIF could be to enhance the effectiveness of existing ISFs and the global expansion of activities by facilitating institutional learning, the exchange of experience between existing ISFs and the provision of technical assistance.