Nurturing user–producer interaction: inclusive innovation flows in a low-income mobile phone market

Abstract

Understandings of inclusive innovation in developing country low-income markets have typically taken one of two perspectives. On the one hand, a business perspective on the role of top-down, strategic innovation from larger-firm actors. And on the other hand, a more developmental perspective that highlights the role localized practices play in making new goods and services applicable to local needs. Both are demonstrably important to successful inclusive innovation but, to date, there has been little analysis of the link between these two perspectives. The goal of this paper is to explore the interaction between top-down and localized elements of innovation, and to provide an understanding of the conditions by which these two perspectives might be complementary. Drawing on the case of the mobile phone sector in Kenya, and adapting Lundvall's concept of user–producer interaction, a conceptual model to understand such innovation flows is outlined. This highlights the centrality of operational links between producers and users which serve as a medium for interactive learning.

Keywords:

• inclusive innovation
• user–producer relations
• systems of innovation
• learning
• mobile phones
• Kenya

Notes

1. Agents in M-Pesa allow customers to convert between virtual e-cash of the mobile transfer service and real money. There were 27,988 M-Pesa agents in Kenya as of April 2011 (Safaricom 2011).

2. This was one of the security measures introduced into the service as part of ‘anti-money laundering’ and ‘know your customer’ rules, which came to form a core element of agent service.

3. This includes those who cannot afford the fee for identification, those who do not have documentation such as birth certificates, and those who are illegal immigrants.

4. Transactions in the M-Pesa service are charged on a sliding scale of commission depending on the amount transacted.

5. A derivation in part supported in wider literature examining the underlying nature of innovation networks and in systems of innovation notions of ‘path-dependency’ (Nelson and Rosenberg 1993).