Conceptualising Inclusive Innovation: Modifying Systems of Innovation Frameworks to Understand Diffusion of New Technology to Low-Income Consumers

  • Christopher Foster
  • Richard HeeksEmail author
Original Article


Inclusive innovation is the means by which new goods and services are developed for and/or by the billions living on lowest incomes. Although a topic of increasing interest, it has been relatively under-researched and under-conceptualised to date. This article studies arguably the most successful new technology to reach low-income groups: the mobile phone, focusing specifically on its diffusion in Kenya. Systems of innovation are shown to be an appropriate frame for conceptualisation of inclusive innovation. However, the conventional content of this framework must be modified to allow for particular features of inclusive innovation, including the nature of innovations required, the actors involved and their interrelations, the type of learning they undertake, and the institutional environment in which they operate. Four system domains must be effective if inclusive innovation is to succeed: the product, its retailing and support, the micro-enterprises that provide these demand-side services, and the wider context.


inclusive innovation systems of innovation mobile phones bottom-of-the-pyramid 


L’innovation inclusive est le moyen par lequel de nouveaux produits et services sont développés pour et/ou par les milliards de personnes aux revenus les plus faibles. Bien que ce thème fasse l’objet d’un intérêt croissant, il reste à ce jour relativement peu étudié et sous-conceptualisé. Cet article examine la technologie qui a probablement le mieux réussi à atteindre les populations à faibles revenus, à savoir le téléphone mobile et, plus particulièrement, sa diffusion au Kenya. Nous montrons que les systèmes d’innovation constituent un cadre approprié pour la conceptualisation de l’innovation inclusive. Toutefois, le contenu traditionnel de ce cadre doit être modifié pour pouvoir prendre en compte les caractéristiques particulières de l’innovation inclusive, notamment la nature des innovations nécessaires, les acteurs impliqués ainsi que leurs interrelations, les types d’apprentissage qu’ils entreprennent et l’environnement institutionnel dans lequel ils évoluent. Quatre domaines de système doivent fonctionner efficacement pour permettre le succès de l’innovation inclusive: le produit lui-même, sa distribution et les services d’assistance, les micro-entreprises qui fournissent ces services axés sur la demande et, enfin, le contexte général


  1. Altenburg, T. (2009) Building inclusive innovation systems in developing countries: Challenges for IS research. In: B.A. Lundvall, K.J. Joseph and C. Chaminade (eds.) Handbook on Innovation Systems and Developing Countries: Building Domestic Capabilities in a Global Context. Cheltenham, UK: Edward Elgar, pp. 33–57.Google Scholar
  2. Bell, M. and Pavitt, K. (1993) Technological accumulation and industrial growth: Contrasts between developed and developing countries. Industrial and Corporate Change 2 (1): 157–210.CrossRefGoogle Scholar
  3. Brinkerhoff, D.W. and Goldsmith, A.A. (2005) Institutional dualism and international development. Administration & Society 37 (2): 199–224.CrossRefGoogle Scholar
  4. Chaminade, C., Lundvall, B.A., Vang, J. and Joseph, K.J. (eds.) (2009) Designing innovation policies for development. In: B.A. Lundvall, K.J. Joseph and C. Chaminade (eds.) Handbook on Innovation Systems and Developing Countries: Building Domestic Capabilities in a Global Context. Cheltenham, UK: Edward Elgar, pp. 360–378.Google Scholar
  5. Cheneau-Loquay, A. (2010) Innovative Ways of Appropriating Mobile Telephony in Africa. Geneva: ITU.Google Scholar
  6. CIA (2012) The World Factbook: Kenya. Washington DC: Central Intelligence Agency.Google Scholar
  7. Codagnone, C. (ed.) (2009) Vienna Study on Inclusive Innovation for Growth and Cohesion. Brussels: European Commission.Google Scholar
  8. Cozzens, S. and Sutz, J. (2012) Innovation in Informal Settings: A Research Agenda. Ottawa: IDRC.Google Scholar
  9. DeBresson, C. and Amesse, F. (1991) Networks of innovators: A review and introduction to the issue. Research Policy 20 (5): 363–379.CrossRefGoogle Scholar
  10. Economist. (2011) Pleased to be bourgeois. 12 May.Google Scholar
  11. Edgerton, D. (1999) From innovation to use: Ten eclectic theses on the historiography of technology. History and Technology 16 (2): 111–136.CrossRefGoogle Scholar
  12. Edquist, C. (1997) Systems of Innovation Technologies, Institutions and Organisations. London: Pinter.Google Scholar
  13. Edquist, C. (2001) The systems of innovation approach and innovation policy. Paper presented at the DRUID Conference, 12 June, Aalborg, Denmark.Google Scholar
  14. Edquist, C. (2005) Systems of innovation: Perspectives and challenges. In: J. Fagerberg, D.C. Mowery and R.R. Nelson (eds.) The Oxford Handbook of Innovation. Oxford: Oxford University Press, pp. 181–208.Google Scholar
  15. Edquist, C. and Hommen, L. (1999) Systems of innovation: Theory and policy for the demand side. Technology in Society 21 (1): 63–79.CrossRefGoogle Scholar
  16. Edquist, C. and Johnson, B.H. (1995) Institutions and organisations in systems of innovation. In: C. Edquist (ed.) Systems of Innovation Technologies, Institutions and Organisation. London: Pinter, pp. 41–64.Google Scholar
  17. Fleck, J. (1988) Innofusion or Diffusation. Edinburgh: University of Edinburgh. PICT Working Paper.Google Scholar
  18. Fleck, J. (1993) Innofusion: Feedback in the innovation process. In: F.A. Stowell, D. West and J.G. Howell (eds.) Systems Science. New York: Plenum Press, pp. 169–174.CrossRefGoogle Scholar
  19. Fleck, J. (1994) Learning by trying: The implementation of configurational technology. Research Policy 23 (6): 637–652.CrossRefGoogle Scholar
  20. Foster, C. and Heeks, R. (2010) Researching ICT micro-enterprise in developing countries. Electronic Journal of Information Systems in Developing Countries 43 (7): 1–20.Google Scholar
  21. Foster, C. and Heeks, R. (2013) Analyzing policy for inclusive innovation: The mobile sector and base-of-the-pyramid markets in Kenya. Innovation and Development 3 (1): 103–119.CrossRefGoogle Scholar
  22. Freeman, C. (1995) The ‘national system of innovation’ in historical perspective. Cambridge Journal of Economics 19 (1): 5–24.Google Scholar
  23. FSD Kenya. (2009) FinAccess National Survey 2009: Dynamics of Kenya's Changing Financial Landscape. Nairobi: Financial Sector Deepening Kenya.Google Scholar
  24. Fu, X., Pietrobelli, C. and Soete, L. (2011) The role of foreign technology and indigenous innovation in the emerging economies: Technological change and catching-up. World Development 39 (7): 1204–1212.CrossRefGoogle Scholar
  25. Gërxhani, K. (2004) The informal sector in developed and less developed countries. Public Choice 120 (3–4): 267–300.CrossRefGoogle Scholar
  26. Goodman, J. and Walia, V. (2006) A Sense of Balance: A Socio-Economic Analysis of Airtime Transfer Service in Egypt. London: Forum for the Future.Google Scholar
  27. GSMA. (2011) Mobile Telephony and Taxation in Kenya 2011. London: GSM Association.Google Scholar
  28. Heeks, R. (2002) Information systems and developing countries: Failure, success, and local improvisations. The Information Society 18 (2): 101–112.CrossRefGoogle Scholar
  29. Horton, D. (2008) Facilitating Pro-Poor Market Chain Innovation. Lima: Papa Andina.Google Scholar
  30. Hughes, N. and Lonie, S. (2007) M-PESA: Mobile money for the ‘unbanked’ turning cellphones into 24-hour tellers in Kenya. Innovations 2 (1–2): 63–81.CrossRefGoogle Scholar
  31. IDRC. (2011) Innovation for Inclusive Development: Program Prospectus for 2011–2016. Ottawa: IDRC.Google Scholar
  32. ITU. (2012) ICT Statistics Database. Geneva: International Telecommunication Union.Google Scholar
  33. Jack, W. and Suri, T. (2010) The Economics of M-Pesa: An Update. Boston, MA: MIT Sloan.Google Scholar
  34. Johnson, B.H. (1992) Institutional Learning. In: B.A. Lundvall (ed.) National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning. London: Pinter, pp. 23–45.Google Scholar
  35. Joseph, K.J. (2012) Spaces of exclusion in the institutional architecture for innovation. Paper presented at the 10th Globelics International Conference; 9–11 November, Hangzhou.Google Scholar
  36. Joseph, K.J. et al (2011) Editorial. Innovation and Development 1 (1): 1–3.CrossRefGoogle Scholar
  37. Kaplinsky, R. (2011) Schumacher meets Schumpeter: Appropriate technology below the radar. Research Policy 40 (2): 193–203.CrossRefGoogle Scholar
  38. Kaplinsky, R. et al (2009) Below the radar: What does innovation in emerging economies have to offer other low-income economies? International Journal of Technology Management and Sustainable Development 8 (3): 177–197.CrossRefGoogle Scholar
  39. King, K. (1996) Jua Kali Kenya: Change & Development in an Informal Economy, 1970–95. Athens, OH: Ohio University Press.Google Scholar
  40. Klerkx, L. and Leeuwis, C. (2009) Establishment and embedding of innovation brokers at different innovation system levels. Technological Forecasting & Social Change 76 (6): 849–860.CrossRefGoogle Scholar
  41. Kraemer-Mbula, E. and Wamae, W. (2010a) Innovation and the Development Agenda. Paris: OECD/IDRC.Google Scholar
  42. Kraemer-Mbula, E. and Wamae, W. (eds.) (2010b) Adapting the innovation systems framework to sub-Saharan Africa. In: Innovation and the Development Agenda. Paris: OECD/IDRC, pp. 65–86.Google Scholar
  43. London, T. and Hart, S.L. (2004) Reinventing strategies for emerging markets: Beyond the transnational model. Journal of International Business Studies 35 (5): 350–370.CrossRefGoogle Scholar
  44. Lundvall, B.A. (1992a) National Systems of Innovation: Toward a Theory of Innovation and Interactive Learning. London: Pinter.Google Scholar
  45. Lundvall, B.A. (ed.) (1992b) Introduction. In: National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning. London: Pinter, pp. 1–22.Google Scholar
  46. Lundvall, B.A. and Intarakumnerd, P. (2006) Asia's Innovation Systems in Transition. Cheltenham, UK: Edward Elgar.CrossRefGoogle Scholar
  47. Lundvall, B.A., Joseph, K., Chaminade, C. and Vang, J. (eds.) (2009a) Handbook on Innovation Systems and Developing Countries: Building Domestic Capabilities in a Global Context. Cheltenham, UK: Edward Elgar.CrossRefGoogle Scholar
  48. Lundvall, B.A., Vang, J., Joseph, K. and Chaminade, C. (eds.) (2009b) Innovation system research and developing countries. In: Handbook on Innovation Systems and Developing Countries: Building Domestic Capabilities in a Global Context. Cheltenham, UK: Edward Elgar, pp. 1–33.CrossRefGoogle Scholar
  49. Mackintosh, M., Chataway, J. and Wuyts, M. (2007) Promoting innovation, productivity and industrial growth and reducing poverty: Bridging the policy gap. European Journal of Development Research 19 (1): 1–12.CrossRefGoogle Scholar
  50. Mathews, J.A. and Cho, T. (2000) Tiger Technology: The Creation of a Semiconductor Industry in East Asia. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
  51. Matin, I., Hulme, D. and Rutherford, S. (2002) Finance for the poor: From microcredit to microfinancial services. Journal of International Development 14 (2): 273–294.CrossRefGoogle Scholar
  52. Mitullah, W. (2003) Street trade in Kenya the contribution of research in policy dialogue and response. Paper presented at the Urban Research Symposium on Urban Development for Economic Growth and Poverty Reduction; 15–17 December, Washington DC.Google Scholar
  53. Moulaert, F. and Hamdouch, A. (2006) New views of innovation systems. Innovation 19 (1): 11–24.Google Scholar
  54. Müller, J. (2010) Befit for change. Paper presented at the FAU Conference; 17–19 March, Djursland, Denmark.Google Scholar
  55. Mytelka, L.K. (2000) Local systems of innovation in a globalized world economy. Industry and Innovation 7 (1): 15–32.CrossRefGoogle Scholar
  56. Ncube, M., Lufumba, C.L. and Kayizzi-Mugerwa, S. (2011) The Middle of the Pyramid. Abidjan: African Development Bank.Google Scholar
  57. Nichter, S. and Goldmark, L. (2009) Small firm growth in developing countries. World Development 37 (9): 1453–1464.CrossRefGoogle Scholar
  58. North, D.C. (2009) Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.Google Scholar
  59. Nzepa, O., Keutchankeu, R. and Esse, C. (2011) Statistical Compilation of the ICT Sector and Policy Analysis in Cameroon. Montreal: Orbicom International Secretariat.Google Scholar
  60. OECD. (1999) Managing National Innovation Systems. Paris: OECD.Google Scholar
  61. O'Farrell, C. (ed.) (2003) Revisiting the Magic Box: Case Studies in Local Appropriation of Information and Communication Technologies (ICTs). Rome: Food and Agricultural Organisation (FAO).Google Scholar
  62. Poncet, J., Kuper, M. and Chiche, J. (2010) Wandering off the paths of planned innovation. Agricultural Systems 103 (4): 171–179.CrossRefGoogle Scholar
  63. Prahalad, C.K. (2009) The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, 5th anniversary edn. Philadelphia, PA: Wharton School Publishing.Google Scholar
  64. Ratanawaraha, A. (2012) City innovation systems in Southeast Asia. Paper presented at the 10th Globelics International Conference; 9–11 November, Hangzhou.Google Scholar
  65. Schofield, J.W. (2002) Increasing the generalizability of qualitative research. In: M.B. Miles and A.M. Huberman (eds.) The Qualitative Researcher's Companion. Thousand Oaks, CA: Sage Publications, pp. 171–203.Google Scholar
  66. Shirley, M.M. (2008) Institutions and development. In: C. Menard and M.M. Shirley (eds.) Handbook of New Institutional Economics. Berlin: Springer, pp. 611–638.CrossRefGoogle Scholar
  67. Simanis, E. and Hart, S. (2009) Innovation from the inside out. MIT Sloan Management Review 50 (4): 78–86.Google Scholar
  68. Stewart, J. and Hyysalo, S. (2008) Intermediaries, users and social learning in technological innovation. International Journal of Innovation Management 12 (3): 295–325.CrossRefGoogle Scholar
  69. Utz, A. and Dahlman, C. (2007) Promoting Inclusive Innovation. In: M.A. Dutz (ed.) Unleashing India's Innovation: Toward Sustainable and Inclusive Growth. Washington DC: World Bank, pp. 105–129.Google Scholar
  70. Winch, G.M. and Courtney, R. (2007) The organization of innovation brokers: An international review. Technology Analysis and Strategic Management 19 (6): 747–763.CrossRefGoogle Scholar
  71. Yin, R.K. (1994) Case Study Research: Design and Methods. Thousand Oaks, CA: Sage Publications.Google Scholar

Copyright information

© European Association of Development Research and Training Institutes 2013

Authors and Affiliations

  1. 1.IDPM, University of ManchesterManchesterUK

Personalised recommendations