2.1.1. Growth theories and innovation

The original position of neoclassical economics was one of indifference to the concept of technological innovation (Verspagen 1992) – or rather considered it as an external variable (ibid.) However, this all changed with the work of Joseph Schumpeter. He postulated that technological change was in fact the real internal engine of the market, capitalist production and expansion. Through a “gale of creative destruction”, it “revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”. Technological innovation continuously disrupts the way goods and services are produced and delivered, fostering dynamism, entrepreneurialism and instability as key ingredients for a productive and competitive market economy. He argued that the ability to innovate (through technological exploitation) is embedded in people and organizations. He individuated the main agent of this process as being the visionary entrepreneur (the so-called Mark I) who is actively and incessantly looking for technological ideas and associated advantages in order to overcome market competitors. The idea of competition is central to this. Later on in his life, Schumpeter modified this position following his observation of the new wave of innovations that followed World War II. He witnessed the development of heavy industry and the beginning of the mass consumption culture in the USA and Europe, where large private or state-owned companies were the major actors of innovation processes. As a result, he considered the R&D departments of major corporations to be the new core of industrial innovation (the so-called Mark II) (Schumpeter 1934; 1994).

Building on this, successive scholars then attempted to include innovation into economic thought. In the 1950s, Solow (1957) introduced technical change into the function of production, claiming that innovation is the major reason for the increase in productivity. Further research was carried out by Arrow (1962), Lucas (1988) and Romer (1994) who attempted to prove that economic growth was due to investment in human capital, which then had spillover effects on the economy through the continuous creation of endogenous innovation. These models aimed to explain why the law of diminishing returns does not seem to affect the industrial system in the real world. The conclusion was that technical innovation constantly scales up the function of production, increasing productivity. This thinking is commonly known as the “endogenous growth theory” or the “new growth theory”. These theories acknowledge that since the second half of the 20th Century, capitalist economies have addressed the problem of diminishing returns through a continuous differentiation of products and, most importantly, the creation of new goods and services, thereby increasing market share or creating entirely new markets (Bonaiuti 2014).

In the endogenous growth theory, investment in human capital, innovation and knowledge are considered as significant contributors to economic growth. According to this argument, innovation can thus be fostered by investing in research, development and education (Romer 1994), fuelling the “knowledge economy”. This approach became known as the “linear model” (described by Schot and Steinmuller (2016) as the first of their two dominant macro frames for innovation in the 20th and 21st Centuries – “R&D and Regulation”). It encourages the private sector and the state to invest in R&D activities and basic scientific research and training to feed the innovation process (Godin 2006). This was fostered, particularly in the 1960s and 1970s, through proactive policies “coupling” science, R&D, innovation and markets by governments in the West.

On the distribution and diffusion of the benefits of innovation in society, economists are less explicit (Castellacci 2007). In terms of benefits, the main argument is that sustained economic growth generates a long-term increase in per capita income that is transferred through society (i.e. a trickle-down effect) (Arndt 1983). In this respect, the solution to underdevelopment is to “get the process right, get the property rights right, get the institutions right, get the governance right and get the competitiveness right” (Chang 2003). It has been postulated that innovation and technological knowledge can also spill over from advanced to low-income countries through international trade, foreign direct investment and licensing. In a free trade world, it has been hypothesized that enterprises in the Global South would, with help, be able to acquire the best technology available on the market to foster innovation within their own national context, thereby supporting competitiveness and endogenous growth. What they need to do is absorb and “catch up”.

2.1.2. Evolutionary theory and innovation systems

Like the endogenous growth theory, the “evolutionary school” recognizes Schumpeter’s work as a major source of inspiration (Schot and Steinmueller 2016). From an evolutionary perspective, the creation of new varieties and combinations of technologies results in new technological paths, new trajectories and new forms of socio-technical change. As we have noted above, the equilibrium of “the normal mode of economic affairs” is continuously destroyed by visionary entrepreneurs (Mark I) or public/private organizations (Mark II) that introduce innovative processes or products. A successful innovation introduces turbulence and discontinuity in the system, and produces disruption, disturbance or even breakdown in the normal flow of the economy. Through a process of creative destruction, existing technologies can be made obsolete, forcing them to lose their market positions within the economy (Schumpeter 1994, pp. 82–83).

As technical changes constantly take place in the economy, a kind of evolutionary process, which can be compared to Darwinian evolutionary theory and natural selection, comes into play (Nelson and Winter 1982). Like mutation in the genes in DNA, technologies mutate and are selected by the external environment, which eventually determines their adoption or abandonment (Arthur 2009). In this ongoing evolutionary battle, there are periodic technological revolutions, which in turn can trigger major social and economic discontinuities and transformations (e.g. the industrial revolution in England, ignited in part by the technological development of, for example, the steam engine, in combination with other factors such as ready access to cheap coal and a government policy that encouraged entrepreneurialism (Freeman and Soete 1997; Pérez 2002)). This socio-technical evolutionary process in turn generates pathways, technical regimes and paradigms (Dosi 1982) that, once established, become locked in (Dosi and Freeman 1988). However, these incumbent regimes are always themselves under threat from disruptive, emerging technologies through a continuous process involving “survival of the fittest”.

In this evolutionary ecosystem view, innovation is not considered as being the result of a linear process in which the outcomes are determined by a specific set of fixed inputs (i.e. science or education). It emerges from a complex system involving knowledge flows and interactions between numerous actors, including firms, research centers, suppliers, users and governments (Kline and Rosenberg 1986): what Bessant describes as “knowledge spaghetti” (Owen, Bessant and Heintz 2013). This system creates technological winners and losers that are selected by the environment (the market) into which they are introduced.

One important consequence of this evolutionary systems thinking in terms of development was that it was soon realized, particularly by those in developing countries themselves, that technology in fact does not inevitably spill across borders and flow freely from North to South (Ulku 2011). In order to be transferred and absorbed effectively, technology requires the right context, institutions and conditions. To describe those factors needed to establish a “fertile” environment for innovation, concepts such as “technological capability”, “absorptive capacity” and “social capability” were introduced.

However, probably the most significant concept, and one which would have a profound influence on the Global South, was the concept of innovation systems (IS), the second macro frame for innovation described by Schot and Steinmuller (2016). The IS approach, which was introduced to provide a framework for policy-making, draws on evolutionary thinking; however, it pays particular attention to the social and institutional aspects that characterize and support the innovation process. IS advocates consider innovation as a learning process that requires the interaction between markets and public agents (Lundvall 1992): emblematic of this is the concept of the “triple helix” model of government–industry–university interactions, which places at its heart the construct of the “entrepreneurial university” (Leydesdorff and Etzkowitz 1998). Innovation is the outcome of a systemic process that involves a network of relationships as well as a set of capabilities. The IS approach also advocates a important role for the state, sustaining the economy by developing national or regional innovation policies (Edquist 2005; Edquist 2006).

There are three main perspectives of IS. The first perspective focuses on agents (or actors) and their interactions. IS are characterized by agents and the mesh of relationships that intertwines them. Freeman (1995) defined IS as the network of actors in public and private sectors whose activities and interactions initiate, modify and diffuse new technologies. A nation’s innovation performance depends on the aggregation and organization of these interactions, from the micro to the macro level.

The second perspective focuses on processes, learning and knowledge flows. Lundvall (2010) stressed the centrality of learning at the core of the IS. The ability to innovate is the result of a larger process of mutual learning, e.g. between private and public actors. Different modes of learning (learning by searching, learning by doing, learning by using and learning by interacting) take place at different levels, requiring a wide range of capabilities necessary to produce new services and products and introduce them successfully into the market. Those capabilities not only encompass scientific and technological knowledge, but also market-oriented and managerial skills (Edquist 2005; Edquist 2006). A key feature of the IS framework is the role of tacit knowledge (Foray and Lundvall 1998). The skills required and acquired by agents through the interactive learning processes that occur in the system are not easily codified because they are usually the result of a long, iterative process of practical learning (Jensen et al. 2007; Johnson and Lundvall 2002), often through face-to-face interaction. In other words, the knowledge involved in the process of innovation within the system cannot be separated from the people who constitute that system. A manifestation of this is the purposeful creation of place-based technology and innovation clusters or zones (e.g. Silicon Valley) where agents with different types of knowledge are co-located to foster the (sometimes serendipitous) flow of tacit knowledge and learning, fuelling creativity and innovation.

The third perspective focuses on institutions (both formal and informal): rules, values, norms and routines (North 1990). Nelson and Nelson (2002) defined a routine as “a way of doing something, a course of action”. The way routines are organized can impede or support a country’s economic progress (Nelson 2008). Management routines, information supply and access, incentives and resource allocation are all important aspects of this, a topic we will return to in some detail in our second case study.

2.1.3. Innovation systems and developing countries

The concept of innovation systems has had significant traction in developing countries over recent decades. Justifying this, supporters have cited the relationships between economic growth rates and the variables described above (e.g. education, institutional settings and infrastructures). A statistical analysis carried out using 25 indicators in 115 countries between 1992 and 2004, for instance, suggests that inadequate physical and digital infrastructures, low human capital capacity and degraded institutional environments (all highly relevant to IS thinking) negatively affect innovation performance on a national and regional basis (Fagerberg and Srholec 2008; Fagerberg et al. 2007). As a result, in the first decade of the 21st Century, IS promoters have made huge efforts to adapt, develop and apply the IS framework to the Global South. They started by analyzing the structural factors that are supposed to influence innovation. Ulku (2011), for instance, argued that low-income countries have poorer performance in key areas such as human capital. He also argued that national or regional policies are needed to strengthen strategic sectors such as education and research institutions, private sector competitiveness and public support for entrepreneurship.

The Globelics² network has also focused its attention on the contribution of the IS approach to developing economies in Africa (Muchie and Gammeltoft 2003), Latin America (Cassiolato and Maciel 2003) and Asia (Lundvall and Intarakumnerd 2006; Lundvall et al. 2009). The general aim of these studies was to understand how to reproduce the systemic conditions that enhance innovation performance observed in advanced, developed countries. The analysis of the IS of the countries examined, which combines aggregate statistical analysis with sectoral analysis, shows that some emerging economies have preferred to passively imitate more developed nations (e.g. Latin American and African countries), while others have invested in learning dynamics (e.g. South East Asia).

In an attempt to create a framework for innovation-driven development based on the IS approach, Arocena and Sutz (2000) identified four major issues. First, unlike the situation in developed countries, for developing countries, the IS concept is an ex-ante concept. In industrialized countries, the study of IS has emerged from empirical analyses of data and patterns that have enabled the identification of common features for IS among different nations and regions. In developing countries, the lack of empirical analyses and data makes this identification much more difficult. Second, there is no global, ideal IS model: the idea of an IS carries with it a normative dimension that depends on its context of application, which can vary considerably across the Global South. Third, the IS concept is, by its nature, a relational model: productive and effective relationships and interactions between actors are often the most important factor for success. However, this is not easy. In the case of Latin America, for example, given the strong influence of Europe and North America, it has been relatively easy to create organizations and institutions that boost those relationships and interactions, shaped on Western models; however, in practice, it has been hard to make them work. Finally, the IS concept is useful to formulate policies which form the basis of interventions aimed at achieving tangible changes in national innovation performance. However, in the majority of developing countries, science and technology policy has never occupied a high position in the political agenda.

Other authors have stressed the importance of the social aspects of the IS concept when applied to less developed countries, in particular advocating an IS which encourages social inclusion and reduces inequality – we will shortly turn our attention to the concept of “inclusive innovation” and how this is framed. According to the CEPAL³, for example, the IS framework can be applied to Latin American countries (in particular as an instrument for policy-making) only if it is modified to include goals such as poverty alleviation, social inclusion and environmental sustainability (CEPAL 2009, p. 165).

In total, while IS advocates have suggested a recreation in the Global South of the systemic conditions that have enabled technological development and innovation in the more advanced economies, they recognize that this process cannot happen without taking into account the specificity and diversity of contexts and conditions found across the Global South. The African and Latin American IS academic community, for example, recognizes the inadequacies of an approach that merely replicates policies in wealthier, more advanced nations, particularly for addressing issues of poverty and inequality (Arocena and Senker 2003; Muchie and Gammeltoft 2003). For the same reason, Lundvall et al. (2009) and Arocena and Sutz (2000) advocated for a flexible intellectual attitude that takes into account the diversity and complexity encountered in developing economies.

In summary, from the early formulation of the economic growth theory to the formulation of the IS framework, the thinking concerning innovation in the Global South has evolved considerably. A predominant view has emerged, e.g. in international policy, that technological change and innovation are fundamental to achieving endogenous economic growth, and that this can be fostered by creating and sustaining an effective innovation system that sits within a well-governed institutional context. However, endogenous growth and innovation systems thinking has encountered the Global South with mixed results, particularly in addressing key issues of poverty, inequality, social justice and environmental degradation. Some have argued that it has failed to substantively address these key issues, or, worse still, exacerbated them. As a result, increasing efforts have been dedicated to developing more inclusive models of technology development, innovation and economic development, witnessing in turn the emergence of umbrella terms such as “inclusive innovation” and “inclusive business models”. It is this intersection between innovation, poverty, development and inclusion to which we now turn our attention.

2.2.1. Resource-constrained innovation (RCI): bricolage, frugality and jugaad

“Necessity is the mother of invention”. This popular phrase suggests that the necessity to address compelling needs sharpens ingenuity and encourages innovative thinking. Poverty, defined as a lack of material resources, and scarcity are certainly related. However, scarcity can also refer more generally to a situation encompassing shortage of resources or managerial skills in an organizational context. A recent business and management literature has approached the topic by introducing concepts such as bricolage, frugality and jugaad (Horn and Brem 2013).

An attempt to theorize RCI, or “scarcity-induced innovation”, lies in the work of Srinivas and Sutz (2008). They argued that in the academic literature, there has been a misguided quest for uniformity (i.e. the idea that the conditions required to innovate are the same in any given context – see our previous discussion on innovation systems). This has in turn sidelined the study of those broader capabilities required to innovate in conditions of scarcity, conditions which characterize large sections of the Global South. Mainstream innovation studies tend to focus on those innovations that occur in efficient innovation systems, while, in fact, RCI often takes place in a huge variety of different contexts that cannot be analyzed using the same intellectual arsenal.

Even more importantly, they argue that innovation in resourceconstrained environments is not necessarily on a journey to an idealized, Western-inspired innovation system with all the assumptions (e.g. institutions) this entails, instead emphasizing idiosyncrasy. In their words:

“We argue that roughly speaking, people search for and design solutions within ‘technological universes’. To innovate or to solve problems in a technological universe characterized by scarcity requires the development of a series of skills – learnt by doing, by searching, by interacting, by solving – that are idiosyncratic: we term them capacities to innovate in scarcity conditions”. (ibid., p. 135)

Given the resource limits that affect such innovation contexts, some authors have attempted to use the notion of bricolage to theorize how firms and organizations can deal with scarcity (Domenico et al. 2010; Gibbert et al. 2006; Halme et al. 2012; Immelt et al. 2009; Zeschky et al. 2011). The notion of bricolage was introduced by the anthropologist Lévi-Strauss. According to him, the bricoleur “is […] someone who works with his hands and uses devious means compared to that of the craftsman […] is adept at performing a large number of diverse tasks” (Lévi-Strauss 1966, pp. 16–18). The concept was introduced into the business literature at the beginning of the 21st Century by Baker et al. (2003) and Garud and Karnøe (2003). Bricoleur firms “refuse to conceive scarcity as a limit” (Baker and Nelson 2005) and develop a number of strategies to cope with it. According to these authors, resource scarcity drives the development of capacities in firms to improvise and generate alternative solutions. The evidence from a number of empirical studies supports this assumption (Weiss and Gibbert 2011). One interesting dimension of bricolage is the search for new configurations and applications of pre-existing technologies and the recombinant dynamics that this process can generate: we will return to this in our first case study. Indeed, one of the characteristics of the bricoleur is the ability to combine different technologies that were originally designed for other purposes (ibid).

A number of authors have documented the bricolage-like activity of multinational companies in emerging countries such as India and China (Immelt and Trimble 2009; Prathap 2014). In this body of literature, the concept of bricolage is often replaced by the concept of frugality (Bhatti 2013; Pisoni and Martignoni 2018). Bricolage and frugality have vernacular equivalents in many languages. In India, for instance, frugal innovations are indicated by the Hindi word jugaad. Jugaad colloquially means a creative idea or a quick workaround to surmount commercial, logistic or legal hurdles (Radjou et al. 2012; Sharma and Iyer 2012). The words gambiarra in Brazil and chapuza in Spain similarly indicate (sometimes shoddy) work carried out with minimal means. The terms zizhu, chuangxin or shanzai in China indicate low-cost (sometimes counterfeit) manufacturing. Terms such as arrangiarsi in Italian suggest bricolage attitudes. Rao (2013) suggested that such frugal innovations must be i) robust enough to deal with infrastructure shortcomings, e.g. electrical voltage fluctuation (see our first case study in Part 2), ii) fault resistant, to cope with unsophisticated or even illiterate users and iii) affordable for larger sections of the society. For these reasons, some authors have considered frugal innovation essential for the development of the Global South (Leliveld and Knorringa 2017), and even for its “sustainable development” (Rosca and Bendul 2017).

By analyzing the evidence coming from the field, some authors have emphasized the fact that the “jugaad attitude” is an indispensable element for survival of firms, and customers, in rural India (Singh and Mondal 2012). Others, such as Radjou et al. (2012), have imagined an extension of the jugaad attitude and frugal innovation beyond India, i.e. not only being a revolutionary tool in emerging countries, but also representing an opportunity for Western companies that are facing low rates of growth in the oversaturated markets of developed nations. Indeed, some evidence suggests that MNCs are paying more attention to the concept of frugal innovation for three reasons: to reduce the costs of product and services design; to create new markets in developing countries for low-cost products; and to explore the potential markets for disruptive innovations based on high-quality/low-cost products in wealthier nations. Two notable examples in this sense are the portable ECG machine for rural India and the ultrasound device for rural China, both developed by the MNC General Electric (GE). When GE’s portable ECG was redesigned by its Indian branch, the cost shrank from $10,000 to $1,000, while the Chinese branch was able to reduce the cost of the ultrasound device from $30,000 to $10,000. These achievements have been made possible by rethinking the way GE designs its products (Immelt and Trimble 2009). The local branch used low-cost materials, less plastic and smaller LCD screens. They used local engineers in order to redesign the software to reduce the memory requirement and to use the same printer employed in bus terminal kiosks in India (Kriplani 2008). These pioneering machines are now being sold in the USA. This process is known as “reverse innovation”, which is quite the opposite of the technology transfer paradigm that characterized the technology transfer discourse of previous decades (Agarwal and Brem 2012; Govindarajan and Trimble 2012).

However, some critical voices have questioned this positive framing of frugal or jugaad innovation. According to Birtchnell (2011, p. 249), for instance, “Jugaad is a product of widespread poverty and underpins path dependencies stemming from dilapidated infrastructure, unsafe transport practices, and resource constraints. These factors make it wholly unsuitable both as a development tool and as a business asset”. The analysis made by Krishnan (2010) of the Indian innovation potential published in the book From Jugaad to Systematic Innovation: The Challenge for India highlighted the temporary, precarious and uncertain consequences of a frugal, jugaad culture. According to Krishnan, a modern country that aspires to become a world-leading power should invest in a proper innovation system with the aim of triggering a systematic and continuous process of technological development, instead of indulging in notions such as frugality and jugaad. He thinks that these latter notions, invoking ideas of “the others” so prevalent in the historical Western development discourse, are a product of what he calls Hindolence, which he describes as a “bhraminical attitude”, or the “lack of a strong time orientation”, “disdain for physical work” and being “passive on action” (Krishnan 2010, pp. 136–140). We will interrogate this critique and discuss its impacts on the field in Part 2.

2.2.2. The fortune at the Bottom of the Pyramid

One influential body of work concerning innovation, poverty and development is the so-called “BOP” literature. The notion of the BOP was famously introduced by Prahalad in his book The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits (Prahalad 2010): for the purposes of this book, we will describe this first formulation of the BOP discourse as “BOP1”. The main argument posited by Prahalad’s work is that the poor are unserved consumers who represent an immense, unexploited market. Those at the BOP, he argues, are currently excluded from mass consumption because of their very limited purchasing power. By appropriately targeting the poor, the private sector would have access to new and unsaturated markets and the poor in turn would gain access to consumer goods that are currently inaccessible because they are too expensive, raising their standards of living. In a nutshell: “doing more with less and for more people” (Prahalad 2010; Prahalad 2012; Prahalad and Mashelkar 2010).

Central to the BOP concept then is the idea that poverty can be addressed by increasing consumption of material goods, i.e. selling to the poor. The strategy is to produce affordable products and services with the objective of raising the consumption rate of the poor. According to these scholars, those institutions that are best placed to implement such a strategy are MNCs (Kanter 2008; Rosenbloom and Althaus 2007). The underlying philosophy of the BOP approach is that their quest for profit can simultaneously generate economic growth and deliver social value: “making money by doing good” (Agnihotri 2013; Bardy and Kennedy 2012; Chakravarti 2007; Faulconbridge 2013; Seelos and Mair 2007). By attempting to address problems faced by the poor, BOP innovators can contribute to creating a new way of innovating (Anderson and Markides 2007). BOP initiatives in China, India and Brazil appear to follow four different strategies (Prahalad 2012; Prahalad and Mashelkar 2010): (i) applying disruptive business models to acquired Western technology; (ii) inventing new uses and business models for acquired technology; (iii) creating new products and technologies for local contexts; and (iv) creating new business models to exploit endogenous technology.

In a review of the BOP literature, Kolk et al. (2013) concluded that the BOP concept had evolved significantly since Prahalad’s original call to MNCs. Further elaboration had sought to overcome the lack of institutional perspective inherent within Prahalad’s original work. In BOP1, the actors are depicted as isolated subjects, without any attempt to understand and engage with the institutional, cultural and historical settings that are at the root of poverty. The subsequent literature updates the “poor-as-consumers” framing in a second formulation which we will describe as “BOP2”. In the book Next Generation Business Strategies for the Base of the Pyramid (London and Hart 2011), the concept of “co-creation with the poor”, for example, is introduced. This new framing of co-creation and “business co-venturing” still emphasizes a central role for MNCs and the co-production of economic profit and social value underpinned by free market economy thinking, innovation and Western-style democratic institutions (London and Hart 2004; London 2009). However, BOP2 subtly updates this, in part due to observations made by London and Anupindi (2011), who compared donorled initiatives with enterprise-led ones, and found that both approaches have common failures, which include a lack of local stakeholder involvement and long-term sustainability. London and Hart (2004) previously discovered that BOP-type initiatives claimed as being successful imply a strong commitment to establishing alliances and participative ventures, co-created with local actors and set in the context of local institutions. They found, for example, that local institutions and social networks influence purchasing decisions in rural India. As a result, the BOP2 narrative draws on and leverages these webs of relationships, emphasizing alliances and capability building (Ansari and Gregg 2012). Ramani et al. (2012), for example, reported that the role of local intermediaries is crucial to the diffusion of BOP innovation in the field of water sanitation in India; Sesan et al. (2013) analyzed the diffusion of clean-cook stoves in Nigeria and concluded that its success was mainly due to the collaboration between for-profit ventures and local NGOs; Weidner et al. (2010) analyzed several cases of innovation at the BOP to explore the strategies used by social enterprises and concluded that the most successful ones are those with a strong relationship with local actors. In a nutshell, the strategy underpinning BOP2 is based on the idea of bringing the “poor as coproducers” into the realm of market economy rather than simply targeting them as beneficiaries of affordable consumption goods.

One interesting idea emerging from the BOP literature has been the concept of “leapfrog” or “trickle-up” effects (Hart (2011). As we described earlier, the introduction of technologies in industrialized countries can often be hampered by incumbent technological regimes. It is argued that these constraints are often looser at the BOP. Lower levels of technological lock-in and less entrenched socio-technical regimes might potentially provide a way for the development of a huge variety of alternative technological paths, for example in the field of renewable energies and sustainable development. In this view, the BOP context is thought to be fertile ground to test and to experiment with sustainable technologies, such as off-the-grid energy production (see our first case in Part 2), organic farming or micro-finance with the potential for, as we described earlier, reverse innovation from South to North.

2.2.3. Critics of the BOP approach

The BOP narrative has emerged as an important frame for innovation and development over the last 20 years. However, it has also been the subject of extensive critique (Arora and Romijn 2011; Kolk and Rufin 2013; Landrum 2007). Critics have argued that it risks neglecting the social and political causes of poverty while simultaneously promoting and “advancing the spread of neoliberalism over the planet, perhaps to compensate for, and foster, the effective withdrawal of state support for welfare provision to the poor” (Arora and Romijn 2011, p. 497). The implicit reasoning behind the BOP narrative is that the private sector, or alliances between it and third sector organizations and communities, are more efficient at delivering development and poverty alleviation than the state. These authors, quoting the work of S.B. Banerjee (2012) on corporate social responsibility and Willmott (2008) on critical management, have accused those promoting BOP thinking of promulgating a depoliticized rhetoric of inclusion and participation. In doing so, they neglect the existence of unequal global and local power relations and norms that are known to shape the processes of socio-technical change and innovation, while unreflexively perpetuating capitalist hegemony at a global scale (Peredo 2012). In the words of Arora and Romijn (2011, p. 497):

“[…] the BOP literature is rapidly inching toward a new corpus of apolitical management studies for managing the (adverse) incorporation of the poor into world markets and further neoliberalization of extremely indigent areas of the planet. Such an apolitical understanding of complex social dynamics, by masking extant privilege and its consolidation will only serve to reproduce existing inequalities at the local level and further entrench the dominance of national and global capitalist formations”. (ibid., p. 497)

In fact, the BOP approach was questioned almost from the first appearance of Prahalad’s book (Walsh and Beyerchen 2005). According to these authors, it fails to understand the effects of MNCs’ strategies on socio-economic development in the Global South. One of the sharpest criticisms came from one of Prahalad’s colleagues at the University of Michigan, Aneel Karnani (2011b, p. 149), who wrote:

“First, it results in too little emphasis on legal, regulatory and social mechanisms to protect the poor who are vulnerable consumers. Second, it overemphasizes microcredit and underemphasizes fostering modern enterprises that would provide employment opportunities for the poor. More importantly, it grossly underemphasizes the critical role and responsibility of the state in poverty reduction”.

Many feminist NGOs have also strongly criticized BOP interventions, including the notable case of Unilever’s advertisement of skin whitening products that allegedly promoted racist messages among disadvantaged women in rural India (Karnani 2007a, Karnani 2007b, Karnani 2007c, Karnani 2010, Karnani 2011a). Moreover, the environmental perspective, as Pitta et al. (2008) argued, is left almost untouched. Selling shampoo in smaller packaging, as Prahalad suggested and Procter & Gamble is already doing in India, can in fact increase waste, with only a minimum impact on the welfare of the poor. Jaiswal (2007) and Schwittay (2011) showed that targeted marketing of appropriate products does not necessarily enhance the poor’s well-being, framed as a social process with material, relational and subjective dimensions (White 2010). On the contrary, it can increase the probability of being abused by MNCs’ interests while failing to address the social and political causes of exclusion and poverty.

2.2.4. Appropriate technology and grassroots innovations

The market-based perspectives described above have become increasingly popular. However, they have also been opposed by social movements (Abrol 2005), grassroots movements (Smith and Thomas 2014) and many non-governmental organizations (NGOs) (Hopwood and O’Brien 2005; Smith 2005). These present alternative, often quite different narratives of innovation and development. Social and grassroots movements have, for example, been more concerned with using innovation to empower local communities, maintain and enhance local production and realize indigenous potential (Seyfang and Haxeltine 2012). Moreover, grassroots perspectives, echoing the work of Langdon Winner, often acknowledge technology and innovation as being neither politically neutral nor sufficient to overcome the problems of poverty, social exclusion (Burnett and Walker 2010) and global justice (Papaioannou 2011). Some organizations, such as the People’s Science Movement in India that we will explore in Part 2, are overtly political in their outlook in this respect.

An early attempt to develop a bottom-up, grassroots approach to technology development can be found in Schumacher’s seminal work between the 1950s and the 1970s, which ignited the debate on the notion of “intermediate or appropriate technology”. Schumacher’s approach privileges people over markets when he explicitly stated: “Instead of mass production, we need production of the masses” (Schumacher 1973). According to Schumacher, the quest of developing countries to catch up with industrialized countries by making a technological leap in fact increases inequality and poverty. Technology is a partial and temporary solution to fundamentally social problems (Smith 2005). As a result, his approach, and grassroots approaches since, tend to focus on the innovation capability of common people and communities in order to provide more socially just, autonomous and situated technological solutions (Kaplinsky 1990) to problems that they themselves face, often in a small-scale, decentralized and environmentally-friendly manner.

The appropriate technology movement, which originated in the 1960s, in part as a result of the debate concerning international aid and development programs, was a distinct, identifiable movement until the early 1980s. It reflected the frustration of an increasing number of development practitioners with the top-down, industrial blueprint imposed on the Global South in the post-World War II period (Rist 2011; see Chapter 2). Its activists aimed to reformulate and reconfigure technology as a tool for development (ibid.). According to Smith et al. (2014), although heterogeneous across different countries, the appropriate technology movement had a set of common features:

“[…] low in capital cost; use local materials; create jobs, employing local skills and labour; small enough in scale to be affordable for small groups; understood, controlled and maintained by local people wherever possible, without requiring a high level of Western-style education; suppose some form of collective use and collaboration; avoid patents and property rights”. (ibid., p. 118)

By the end of the 1970s, many of the principles of the movement had been accepted by mainstream scholars of development (Smith and Thomas 2014), and appropriate technology-oriented organizations could be found in about 90 different countries, some of which enjoyed financial support from the state (Smith 2005; Smith and Thomas 2014).

Despite its diffusion and success, the movement, however, quickly lost momentum in the early 1980s. The neoliberal turn embodied in the agenda of structural adjustments promoted by the World Bank and others shifted innovation policy towards the model of technological catch up, seeking to replicate the successful experience of some East Asian countries (Kaplinsky 2011). Furthermore, according to Smith et al. (2014), the movement failed to fulfill its promises of delivering community empowerment and promoting local ingenuity. The vast majority of the appropriate technology projects were carried out by well-intentioned engineers on the basis of their own assumptions about what poor people needed. Moreover, the movement failed to acknowledge that the solutions to the problems they intended to address involved substantively engaging with local power relations (ibid.). In many cases, gender, class and ethnicity hampered participation. Technology was not able to reverse these relations without radically questioning the sociopolitical and cultural structures and hierarchies within which appropriate technology initiatives operated (ibid.). We will return to this in our fourth case study in Part 2.

The principles of the appropriate technology movement have since been revisited by contemporary grassroots innovation movements. Smith et al. (2014) outlined key dimensions of this contemporary grassroots innovation discourse. First, it is locally specific yet widely applicable: grassroots ingenuity stimulates innovation that can be applied locally as project-based solutions and, potentially, in a number of other contexts that share common features such as material and human resource scarcity. Second, it encourages the emergence of socio-technical practices within different value systems rather than, for example, those associated with profit-driven innovation within a market economy paradigm. Third, it stimulates debates about social reform, transformation and structural change in light of extant economic and political structures.

Smith et al. (2012) documented the activities of several formal and informal networks of grassroots innovators in developing countries. Furthermore, Smith et al. (2014) have identified at least three major grassroots groups: the People’s Science Movement (see Part 2) and the Honey Bee Network in India and the Technologies for Social Inclusion movement in Latin America. Other examples of grassroots innovation can be found across the globe, for example in the cases of Desobediencia tecnologica (technological disobedience) documented in Cuba by the designer Ernesto Oroza⁵. Interestingly, grassroots thinking has also permeated into industrialized countries (Seyfang and Smith 2007), for example in the field of community energy projects (Hargreaves et al. (2013), and Ornetzeder and Rohracher (2013)); in the food sector (Kirwan et al. (2013); in the evolution of communal growing initiatives (White and Stirling (2013)) and in the so-called makers’ movement (Honey and Kanter, 2012; The Economist, 2011).

Within the scant contemporary academic literature focused on grassroots innovation emerging from the Global South itself, the work of Anil Gupta is particularly relevant. According to Gupta (2012), innovation that stems from the poor to the poor is not a novel phenomenon, but he frames it in a rather particular way in terms of its social and cultural constitution. He refutes the essentialist idea that poverty is caused by a direct lack of income and consumption potential. He also argues for innovation that is empathetic (Gupta 2010) and which pursues objectives other than more consumption, profitability or ever increasing incomes (Ansari et al. 2012). According to Gupta (2009), who founded the Honey Bee Network devoted to scouting grassroots innovators in rural India, instead of adapting the national policy to develop specialized fields of technology for the benefit of major corporates and large-scale industry, a frugal innovation policy should focus on the specific needs of local communities, empowering people to have control over technology themselves (Gupta 2010). Other authors have contended that, despite their limited impact to date, grassroots innovations should remain an important alternative source of knowledge that should be taken seriously in policy terms. For example, Smith (2005; 2007) have suggested that small-scale grassroots initiatives can generate relevant knowledge to formulate alternatives for sustainable innovation policy. Likewise, Demeritt et al. (2011) have argued that grassroots innovation can open up space for debates on alternative pathways to sustainable futures.

However, in reality, the penetration of grassroots thinking into mainstream innovation policy has to date been limited (Fressoli et al. 2014). Smith et al. (2014) documented the institutional links and the public support raised by networks active in Argentina, Uruguay and Brazil, which are supported by both public institutions and private organizations. However, despite the increasing interest and support to those initiatives shown by the political elites of these countries (and those in the Indian subcontinent), grassroots innovations are still considered a form of social intervention rather than a real alternative to mainstream industrial innovation policies.

2.2.5. “Inclusion”: an emerging discursive bridge

What seems clear from our review of the literature (Figure 2.1; see also Heeks et al, 2014) is that inclusion of the poor is a key overarching principle underpinning many narratives of innovation for development. Indeed, we suggest that the buzzword “inclusion” has emerged as a significant but fragile discursive bridge between innovation and development in the 21st Century. Terms such as “inclusive innovation” (Altenburg 2009; Foster and Heeks 2013a; Heeks and Nugroho 2014; Levidow and Papaioannou 2017; Nijhof and Looise 2002), “inclusive business models” (UNDP 2008), “inclusive development” (Sachs 2004; World Bank 2008) and “inclusive growth” (George et al. 2012) have become prevalent in the academic and policy literature relating to development (Figure 2.1). However, inclusion is a buzzword that encloses a large number of possible meanings, which we will explore in greater detail in Part 2. Although vague and heterogeneous, it tends to advocate for a more equal and fair distribution of social goods and the economic benefits of innovation, development and economic growth, evoking the concepts of social justice and equity (Cozzens and Sutz 2012; Papaioannou 2011).

One of the earliest users of the term “inclusive development” was Sachs (2004). Drawing on an historical analysis of successive conceptualizations of development, he advocated the coordination of policy efforts to find a balance between economic efficiency, decent work and environmental protection. He wrote:

“Given the unruliness of the globalization process, nationallevel policies must be relied upon to bring the excluded into the economic mainstream, notably by helping informal-sector workers make the transition to formal entrepreneurship” (Sachs, 2004, p. 161)

More recently, the concept has been transformed through the idea of “inclusive growth” (Kanbur and Rauniyar 2010; Rauniyar and Kanbur 2010; Sengupta 2010). Kanbur and Rauniyar (2010, p. 445) wrote:

“the main argument is that a growth process becomes inclusive when every individual has access to the different elements of well-being, without being prevented from enjoying these rights because of any legal and social barrier”.

According to George et al. (2012), inclusive innovation is the

“development and implementation of new ideas which aspire to create opportunities that enhance social and economic wellbeing for disenfranchised members of society”.

The underlying subtext to such allied concepts is that the process of development, while creating wealth for some, has excluded a vast portion of humanity: development and innovation aimed at this must be made to be more inclusive. However, what type of innovation and innovation policy best fosters development and economic growth in a more inclusive and equitable way is a matter on which the academic community is divided. As we have described, from the BOP perspective, inclusion implies innovation of lowcost, appropriate products, services and business models which target the poor in developing countries by including them in the market economy, for example, as consumers or business co-venturers. Grassroots perspectives frame inclusion in a very different way, whereby the poor are included as both producers and recipients of frugal, grassroots innovations, fostering local production in (often rural) communities or networks of communities. Here, inclusion of the poor into the market economy is not the primary aim; indeed, such inclusion may be seen as an anathema: it is often other goals such as autonomy, decentralization and empowerment that matter.

This discussion on the topic of inclusion can be situated in a broader scholarship, focusing on the concepts of equity, equality and social justice in the context of technologies, technical change and development (Cozzens 2007; Cozzens and Kaplinsky 2009; Papaioannou 2011): here, we can only touch lightly on these issues. These authors have questioned, for example, whether innovation itself is creating inequality, or whether it is the distribution of wealth originating from such innovation that is inefficient. This is in turn prompting others to explore non-mainstream economic thinking, including an emerging “degrowth” community which criticizes what they describe as the “religion of growth”, advocating for a new kind of inclusive development which sits outside the paradigm of economic growth (Fournier 2008; van Griethuysen 2010; Jackson 2009; Kallis 2011; Martinez-Alier 2009).