The missing link – Partnering for innovation
By Jacob Ravn
The author provides his perspective on the missing link between the obvious needs of developing countries and existing technologies and how they can be met by providing a platform for strategic partnerships between the private sector, NGOs, universities and public authorities.
“Cross-sector collaboration is characterised by a range of challenges and barriers.”
“If we are to meet the growing demands and apparent challenges arising through-out developing countries, partnership-driven innovation can be an integrative approach.”
Developing countries in Africa and Asia, are experiencing yearly GDP growth rates of 7-9 per cent, but lack access to knowledge, products and resources to ensure a sustainable growth. Therefore, there is a growing demand for sustainable solutions and systems for renewable energy, agro-business, green technologies, resource efficiency, waste management, water and sanitation.
A demand that could be addressed by existing solutions, but a number of uncertainties and barriers such as the following seem to arise for the private sector in meeting the market demands:
♣ Getting insight into specific market needs;
♣ Developing technologies for an unknown market setting;
♣ Developing the needed human resources in the organisation to innovate and implement business strategies and products to an often new and unknown market with an unfamiliar (in)formal framework;
♣ Accessing the needed venture capital or donor funding to test solutions and commercialise the needed solutions;
♣ Establishing network to and / or partnering with local organisations to access local competencies, knowledge and network.
The overall challenge is that despite the fact that the private sector has the technologies at hand, companies lack competencies, resources and networks to tackle the constraints in entering unknown market settings.
However, the experience from the access2innovation network is, that this apparent missing link between the obvious needs and existing technologies can be met by providing a platform for strategic partnerships between the private sector, NGOs, universities and public authorities. An approach has kick-started a range of new solutions within humanitarian relief, sustainable energy, agri-business and sanitation targeting needs in developing countries. A mind set that so far has led to collaborations between more than 350 companies, seven NGOs and four universities; provided the platform for launching 20 partnerships, established seven start-up companies with 50 new jobs and mobilising USD 11.7 million in private and public capital.
Up until 2015 this approach has proven the ability to provide access to end-users and testing grounds for companies in close partnerships with NGOs, researchers, local communities and the private sector. Stakeholders holding valuable expertise and knowledge at local and national levels that would otherwise be out of reach of the individual company. This through a facilitated process where the “innovation platform” has provided the anchor point in enabling the test and implementation of a number of initiatives such as the One Stop Shop sanitary initiative, mini-grids providing electricity to rural areas, development of second generation bio-fuel and small drones – just to mention a few (for more information, please visit www.access2innovation.com).
Despite the positive results, the experience gained from access2innovation is however that cross-sector collaboration is characterised by a range of challenges and barriers.
First of all, the key is to understand that the risks associated with entering the emerging BoP markets for the private sector are very significant, and the required knowledge and resources are often found beyond the existing organisation. The technologies very often exist, but the challenge is to fully comprehend the end-user needs and market opportunities and constraints, to identify potential and to develop and test the business models in a new and relatively unknown market setting for the private sector. This requires skill and resources beyond most individual companies’ organisational capacity to which participation in cross sector innovation platforms can be the key.
When entering onto an innovation platform the partners are often challenged by adapting to a fluent set-up where roles, responsibilities and invested resources change as the concepts mature. A network can provide the platform and facilitation of the initial stages in building up the partnership, but the partners need to build up the necessary competencies to identify, test and scale the business case. In this setting, NGOs can play an integrated role in identifying and testing the business case. Researchers are most informative in the first phases, but often left behind once they have provided their state-of-the-art knowledge. This calls for an understanding of the fact that partnerships are not a static organisational form, but a constantly changing approach that will need to be adaptive to the process of identifying, developing and scaling the needed business cases.
Furthermore, the experience from the access2innovation platform is that private sector, NGOs and researchers find it difficult to establish and run the partnerships. In that sense, the access2innovation network has been a “partnership incubator”. By facilitating the process, the network and partnerships have provided the “glue” for initiating, developing and maturing the concepts; a role that has proven crucial for ensuring ownership, access to information and funding that the partners otherwise would not have been able to obtain.
Participation in this joint facilitated innovation process has had a clear effect on the developed business models that have matured in an on-going process of product development, market potential, customer relations, production, business partners etc. The developed business models have integrated the capabilities and resources from the NGOs and the researchers, essentially meeting the previous mentioned barriers and challenges providing the private sector:
• Access to the potential customers/markets when defining features and pricing
• Testing and developing in collaboration with end-users both in Denmark and through on-site development with local communities
• Building legitimacy in the market by working closely with the Red Cross, DanChurchAid, CARE etc.
• Researching knowledge and gaining access to university students when building up the companies’ core competencies
• Networking with international NGOs and UN organisations through the access2innovation network
To sum it up, if we are to meet the growing demands and apparent challenges arising through-out developing countries, partnership-driven innovation can be an integrative approach. It can be done by applying a network-driven approach that is essentially facilitating the coupling of otherwise dispersed technologies, resources and network that collectively can provide the basis for creating innovative sustainable solutions that target the demands in developing countries. But it requires awareness, willingness and adaptability if we are to fully realise the potential that lies ahead in developing commercial partnerships between NGOs, researchers and companies as an effective and sustainable, market-driven path towards poverty reduction.