pathways out of poverty(2012) by ibop

7/31/2019 Pathways Out of Poverty(2012) by iBoP

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Pathways

Out of Poverty:Innovating with the BOPin Southeast Asia


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Pathways

Out of Poverty:Innovating with the BOPin Southeast Asia


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Editorial Team

Senior EditorsJessica Dator-BercillaDr. Antonio G.M. La ViaAtty. Brenda Jay Angeles-MendozaDr. Ellie OsirMary Grace P. Santos

Graphic Design and LayoutJulie Barcenas

ContributorsMarkus DietrichJoanne C. DulceRamon L. Fernan IIILilac C. FlorentinoJames L. KhoDr. Segundo E. RomeroMary Grace P. SantosKristian Paolo D. TorresLance Andrew D. Viado

iBoP Asia Secretariat

2007-2011

Director

Co-Director

Communications andNetworking Coordinator

Grants Administrator

Web & SystemsAdministrators

Project Assistant

2011 - present

UNIID-SEA TEAM

Director

Project Manager

Research Associate

Project Associate

Intern

Dr. Antonio G.M. La Via

Mary Jean A. Caleda

Mary Grace P. Santos

Lorenzo V. Cordova, Jr.

Broderick SapnuMark Aethen Agana

Marien N. Fulo

Segundo E. Romero, PhD

Mary Grace P. Santos

Lilac C. Florentino

Kristian Paolo D. Torres

Lance Andrew D. Viado

Pathways Out o Poverty:

Innovating with the BOP

in Southeast Asia

Copyrights 2012

Ateneo School o Government (ASoG)All rights reserved.

ISBN No. 978 - 971 - 8597 - 15 - 6

Produced by iBoP Asia

A project o the

Ateneo School o Government

supported by Canadas International

Development Research Centre(IDRC-CRDI)

Published by

Ateneo School o Government

Pacifco Ortiz Hall,

Social Development Complex

Ateneo de Manila University

Katipunan Ave., Loyola Heights

1108 Quezon City PHILIPPINES

URL: http://www.asg.ateneo.edu

This publication was produced with the

aid o a grant rom Canadas International

Development Research Centre

(www.idrc.ca).

No part o this book or the book in

its entirety may be reproduced and

distributed in any orm by any means

(electronic, mechanical, photocopying,

recording) without a written permission

rom the authors or the publisher.


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Table of Contents

List of Acronyms

Part One:Innovation & Development

Chapter 1: Introduction

Chapter 2: The Evolving Concept o the BOP

Chapter 3: Patterns in Innovation at the BOPin Southeast Asia

Patterns in Acquiring, Applying, and Sustaining Innovations

Patterns in Engaging BoP Communities and Sectors

Patterns in Innovation Intermediation

Chapter 4: What it Takes to Innovate at the BOP

Part Two:Pathways Out O Poverty: Innovation Stories

Innovation stories in Water and Sanitation, Health, Inormationand Communications Technology (ICT) and Business

Chapter 1: Innovation in Water and Sanitation

Chapter 2: Innovation in Health

Chapter 3: Innovation in ICT and Business

Innovation stories in Energy, Agriculture and Food, and ClimateChange Adaptation

Chapter 4: Innovation in Energy

Chapter 5: Innovation in Food and Agriculture

Chapter 6: Innovation in Climate Change Adaptation

ReferencesList of Figures

List of Tables

iv

1

3

8

20

22

27

33

45

57

58

86

96

132

164

180

194197

197


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iv

ADL

AER

AMCHA-MCPC

ASDSW

ASEAN

ASoG

BAP

BEMHaS

BIFA

BoP

BSF

BSM

CAPS

CARD

CLTS

CPU

DA

DENR

DepEd

DILG

DOCHSEI

DOH

DOLE

DRN

DSWD

DTI

Eco-Agri

Ecosan

ECP

AdDU EERC

EFR

EMHaS

EWB

FAO

FIN

FOSS

GILAS

GTH

GTZ

iBoP Asia

IBC

ICRC

ICT

IDE

IDRC

IHM

INM

IP

IPED IBON

IPM

IPSARD

ISSI

IT

ITB

ITDI-DOST

KATAKUS

LIST OF ACRONYMS

Acvies of the daily life

Acon for Economic Reforms

Atlas Mining Community

Handicapped Associaon

Mulpurpose Cooperave

A Single Drop for Safe Water

Associaon of Southeast Asian

Naons

Ateneo School of Government

Business Advisory Program

Bale-Endah E-Mulple

Handicapped System

Banaba Integrated Farmers

Associaon

Base of the Pyramid

Bio-Sand Filter

Basic Science and Mathemacs

Center for Advanced Philippine

Studies

Center for Agriculture and Rural

Development

Community-led total sanitaon

Computer Professionals Union

Department of Agriculture

Department of Environment and

Natural Resources

Department of Educaon

Department of Interior and Local

Government

Davao Oriental Coco Husk Social

Enterprise, Inc.

Department of Health

Department of Labor and

Employment

Dewan Riset Nasional

Department of Social Welfare and

Development

Department of Trade and Industry

Ecological and Agricultural

Development Foundaon, Inc.

Ecological Sanitaon

Ecosan Club Philippines

Ateneo de Davao Universitys

Energy and Environment

Resource Center

Emergency Food Reserve

E-Mulple Handicapped System

Engineers Without Borders

Food and Agriculture Organizaon

FishBase Informaon and Research

Group, Inc.

Free and Open-Source Soware

Gearing up Internet and Access for

Students

Gis, Toys and Houseware

Gesellscha fr Technische

Zusammenarbeit GmbH

Science and Technology

Innovaons for the Base of the

Pyramid in Southeast Asia

Interdependence-based model of

collaboraon

Internaonal Commiee for the

Red Cross

Informaon and communicaons

technology

Internaonal Development

Enterprises

Internaonal Development

Research Centre

Integrated hatchery machine

Integrated nutrient management

Indigenous Peoples

Partnership in Educaon for

Development

Integrated pest management

Instute of Policy and Strategy

for Agriculture and Rural

Development

Instute for Small Scale Industries

Informaon technology

Instute Technology Bandung

Industrial Technology

Development Instute -

Department of Science and

Technology

Kababayen-an Alang sa

Teknolohiya nga Haum sa

Kinaiyahan ug Kauswagan


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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID

IN SOUTHEAST ASIA

LAKAS

LBP

LGU

LLEE

MANCOR

MCD

MFI

MHP

MNC

MOU

MRD

MSMEs

MVINASA

NFCWPD

NGO

NOx

NTFP

OTC

PAGASA

PBSP

PDCC

PhilRice

SAIV

POC

PODS

PT PLN

R&D

rpm

RWH

SETARA

SNA

SnT/S&T

SRP

TIMSS

TNO

TRICOM

UDDT

UN

UNICEF

UNIDO

UP-NISMED

VA

VAWTS

Vietnet-ICT

WAND

WARECOD

WASH

WBDWHO

YBMU

Lubos na Alyansa ng mga

Katutubong Ayta ng Sambales

Landbank of the Philippines

Local Government Unit

Live & Learn Environmental

Educaon

Mindanao Agri NetworkCorporaon

Centre for Marine Life

Conservaon and Community

Development

Micro-nance instuon

Mulple handicapped person

Mulnaonal corporaon

Memorandum of Understanding

Mekong River Delta

Micro, small, and medium-scale

enterprises

MicroVentures, Inc.Naonal Aeronaucs and Space

Administraon

Naonal Federaon of

Cooperaves for Persons With

Disability

Non-governmental organizaon

Nitrogen oxides

Non-Timber Forest Product

Over-the-counter

Philippine Atmospheric,

Geophysical and Astronomical

Services AdministraonPhilippine Business for Social

Progress

Provincial Disaster Coordinang

Council

Philippine Rice Research Instute

Social and Agro Industrial

Ventures

Point of Care

People Oering Deliverable

Services

Perusahaan Terbuka Perusahaan

Listrik NegaraResearch and development

Revoluons per minute

Rainwater harvesng

Sejahtera Semesta Rakyat

Senator Ninoy Aquino

Science and Technology

Suggested Retail Prices

Trends in Internaonal

Mathemacs and Science

StudyThe Netherlands Organizaon for

Applied Scienc Research

Tri-People Concern for Peace,

Progress and Development of

Mindanao, Inc.

Urine diverng dehydraon toilets

United Naons

United Naons Childrens

Emergency Fund

United Naons Industrial

Development Organizaon

University of the Philippines Naonal Instute for Science

and Mathemacs Educaon

Volunteer Advisers

Vercal axis wind turbines

Vietnet Informaon Technology

and Communicaon Centre

Water, Agroforestry, Nutrion and

Development

Center for Water Resources

Conservaon and Development

Water, Sanitaon, and Hygiene

Water Borne DiseaseWorld Health Organizaon

Yayasan Bhak Mitra Utama


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IN SOUTHEAST ASIA

This secon presents a discussion of the Base of the

Pyramid (BoP) concept and the BoP approach to

development, and how it can be integrated in science

and technology (S&T) innovaon to help address

specic problems and needs.

Innovation& Development

PART 1


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2


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Dr. Antonio G.m. La Via

For three years now, the Ateneo School of Government, with Canadas

Internaonal Development Research Centre, has been working to promote

and support pro-poor innovaon in the eld of science and technology (S&T)

through the agship project, Science and Technology Innovaons for the Base

of the Pyramid in Southeast Asia, more popularly known as iBoP Asia. This

project ran from 2008 to 2011.

iBoP Asias aim is to foster science and technology (S&T) innovaons in order to contribute to

the development of aordable soluons to unmet needs, increase producvity and incomes,

and facilitate the integraon of the poor and excluded in the formal economy.

In the context of this project, S&T refers to the full range of social, natural, medical and life

sciences, as well as the physical and engineering disciplines, while innovaon is dened as

the use of new ideas, technologies or ways of doing things, in a place where, or by people for

whom, they have not been used before.1

Why focus on S&T? Scienc achievements and technological advancements have greatly

improved the quality of life and social well-being of millions across the globe. However, many

innovaons in S&T are mainly targeng the demands of well-o consumers, and are too high-

tech or too specialized that it limits those who can aord them and, more so, benet from

them. S&T innovaons in energy-saving systems, healthcare facilies and water delivery,

among others, have a huge potenal to have posive impacts on the lives of the poor when

harnessed to respond to their needs and budgets.

1 Spence, R. (2008). Research Councils and Support Organizaons in Southeast Asia: Instuons, Issues and Collaboraon: A

Report on Science, Technology and Innovaon Systems in Indonesia, Vietnam, Philippines, Thailand, Malaysia and Singapore .

Internaonal Development Research Centre (IDRC)

Introduction

Chapter 1


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4

The project drew lessons from the evolving

concepts, approaches and work at and with the

base of the pyramid (BoP), the socio-economic

segment comprised of billions of people living

below US$ 2 a day.

iBoP Asia, via its Small Grants Program,

partnered with 25 organizaons in 6 countries

in Southeast Asia - Cambodia, Indonesia,

Singapore, Philippines, Thailand and Vietnam

- to undertake innovaon research and help

nd soluons to specic issues and problems

of those at the BoP in the region. The iniave

looks into the engagement among government,

business, civil society and those at the BoP to

develop innovave approaches and products

that are not only aordable but also acceptable

to those at the BoP. Of parcular interest to

the project is how the various actors ulize

BoP approaches to encourage and harness S&T

innovaon for social development.

Most of the innovaon projects carried out by

our grant partners are exploratory in nature.

Yet, from them we gain signicant lessons on

pathways to S&T innovaon not only for but alsowith and by those at the BoP.

Going around Southeast Asia

and interacting with people rom

dierent sectors - innovators

and local communities, most

importantly - yielded valuable

insights on how pro-poor and

inclusive innovation works and isbeing practiced.


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IN SOUTHEAST ASIA

Objectives this book

Pathways Out of Poverty: Innovang with the BoP in Southeast Asia is a collecon of innovaonstories and lessons from the research done by our 26 grant partners. These stories aempt to uncover

how organizaons, instuons and poor communies work together to develop, adopt or adapt,

and disseminate technologies and approaches to create soluons for poverty issues and needs in

Southeast Asia. The areas covered were: water and sanitaon, energy, health, agriculture and food,

climate change, and the cross-cung areas of informaon and communicaons technology (ICT) and

micronance.

By doing so, the book also hopes to

Contribute a disnctly Southeast Asian perspecve to the literature on

the applicaon of BoP principles and approaches in S&T innovaon;

Be a ready reference for praconers seeking new leads for new

innovaon iniaves;

Provide a robust set of case studies that can be used for systemacallyteaching courses in innovaon at the base of the pyramid, or innovaon

for inclusive development; and

Help inspire and guide further research that will help generate more

iniaves and collaboraon on innovaon at the base of the pyramid.

This book aims to capture how the principles

o working or and with those at the BoP are

used in S&T innovation or how they enhance the

innovation process.


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6

The stories featured in this book show theS&T innovation work done by the iBoP Asia

grantees and their partner communities from

2008 to 2010. These stories highlight key

ideas, insights and possible directions for pro-

poor S&T innovation.

The book does not only coveractual innovation attemptsbut also eorts to enhance

capacities through researchand the application o BoPprinciples and approaches in

S&T innovation.

The reader is advised to consider that the stories,

as presented in their abridged versions, were

developed based on our partners documentaon

of their respecve projects, as they aempted to

innovate for and with the BoP. iBoP Asia workedwith a pool of writers to arculate the innovaon

stories of our partners based primarily on their

project reports and on informaon gathered

via informal interviews and other means of

correspondence with our partner organizaons.

Part One discusses in detail the concept of thebase of the pyramid and how it has evolved over

me, not simply as an economic market concept

but also as a development and innovaon

approach. It also explores how BoP approaches

are being used to guide development and

innovaon in the eld of S&T, and how S&T can

be harnessed to address BoP needs and issues in

various areas.

Part One also presents the key insights that

emerged from the innovaon stories of our grantpartners. These insights focus on what it takes to

innovate at the BoP and the general movement to

make development more inclusive. Also discussed

is how iBoP Asia hopes to take this eort further

by working with key innovaon actors such as

educators and students in universies, research

councils and entrepreneurs.

In the next chapter, Chapter Two, iBoP Asia aims

to generate a beer understanding of the BoP as

a concept and as a development approach that

can be applied to S&T innovaon to improve

the quality of life of those at the base of the

pyramid. In Chapter Three, iBoP Asia gleans

from the stories paerns on how organizaons

and communies in Southeast Asia used BoP

principles, approaches and strategies to uncover

or produce S&T innovaons. In Chapter Four, we

explore some of the factors and condions for

eecve innovaon at the BoP in the Southeast

Asian context. From the reecons and lessons

learned, we present recommendaons on ways

towards beer uptake of S&T innovaons for

Scope and Limitations Overview o the Book


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Risks, Problems, and Barriers What were the challenges encountered in

researching, creang, launching or introducing

the innovaon?

How were these challenges overcome or,conversely, unable to be resolved?

Benefts, Outcomes, or Reach How did individuals, local communies, local

or naonal government and other partners/

stakeholders contribute to and benet from

the iniave?

What are the perceived, felt, or tangible

outcomes of the iniave?

Lessons Learned Regarded as one of the most important

components of the project, what was learned

from the experience the innovaon process,

implementaon, dicules encountered,

and gaps/shortcomings/errors made, if any?

The Future Where is the innovaon and the iniave

likely to head?

What are the post-grant plans, if any?

In the process of innovang at the BoP, poor

communies themselves and their take on

the innovaon are of primary importance. A

deeper understanding of the plight and needs

of BoP communies and their involvement

and parcipaon in all stages of the innovaon

process are crical to the overall success of

these eorts.

the poor, and enhance the parcipaon of key

stakeholders, especially of poor communies, in

addressing poverty issues through innovaon.

Part Two summarizes the case studies into

readable stories. These stories do not intend to

provide all the instrumental details of the cases,

only to engage the reader in the discovery of how

innovaons can create pathways out of poverty.

The Final Technical Reports of the 26 case studies

from these stories are based are available in full

at the new project website of UNIID-SEA, www.

uniid-asia.net.

The innovaon stories answer the following

quesons:

Project Brie What is the BoP problem or issue that the

project would like to address and what is the

proposed S&T innovaon to help solve this

problem or issue?

Who is the target community?

Is the innovaon a disnct iniave of the

organizaon, or is it ed to, related with or part

of an exisng innovaon?

In which domain or themac area does this

innovaon belong?

Process What led to the creaon of the innovaon?

At what stage is the innovaon currently

in (e.g. research, laboratory development/

prototyping, pilong, business model,

organizaonal or enterprise development,

scaling up)?

What is sll needed to take the innovaon

further?


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Markus Dietrich & Jessica Dator-Bercilla

The term base o the pyramid or BoP is primarily used to reer to thesocio-economic base o the income distribution pyramid. The concept

has grown across time and used in various approaches. O interest

to this section is how the BoP is viewed by these approaches and the

subsequent discussion looks into various thoughts on the BoP.

8

C.K. Prahalad, a business and managementguru from the University of Michigan in

the United States, puts forward that the

distribuon of wealth and the capacity to

generate income in the world [that] can

be captured in the form of an economic

pyramid. More than four billion people live

at the BoP on less than $2 per day.2

Prahalad and colleague Stuart Hart, another

leading authority in business strategy and

the implicaons of poverty and environment

in business, took this idea further and made

it the core of a business strategy in providing

products and services to the huge untapped

populaon of the BoP. This line of thinking

draws aenon to the lowest socio-economic

segment of society as a market opportunity

rather than as recipients of government or

philanthropic aid.3

Prahalad and Hart cemented the foundaon

of the BoP concept by asserng that

mulnaonal corporaons (MNCs)

investment at the BoP represents the biggest

potenal market opportunity in the history

of commerce.4

This idea ushered a paradigm

shi from viewing the poor as beneciaries to

the poor as customers. The opportunity was

esmated to be a mul-million market, with

billions of people at the BoP.

The BoPas a Market Opportunity

2 Prahalad, C.K. (2005). The Fortune at the Boom of the

Pyramid. Upper Saddle River: Wharton School Publishing

3 United Naons Global Compact (2009). www.

unglobalcompact.org/AboutTheGC/.

4 Prahalad C.K. and Hart, S.L. (2002). The Fortune at the

Boom of the Pyramid. Strategy + Business Issue 26, 1-14

The Evolving Concept o the BOP

Chapter 2


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IN SOUTHEAST ASIA

5 Prahalad, C.K. and Hammond A. (2002). Serving the Worlds Poor - Protably. Harvard Business Review, September Issue, 48-57

Prahalad, in another piece co-authored with Allen Hammond, further elaborated on the BoP concept

and stressed three important advantages of serving the poor: a new source of revenue growth; [it]

contributes to greater eciency; and [allows] access to innovaon.5

In this follow-up work, Prahalad

provided some strategies for companies to eecvely tap into the BoP market, which included changing

the atudes and pracces of execuves, doing structural changes, and involving external partners such

as non-governmental organizaons (NGOs).

Prahalad and Harts business

model focused on MNCs as prime

actors in the model because of

their managerial and technological

resources and capacies, which few

local entrepreneurs have.

Apart from these

resources, MNCs also

have an established

knowledge base, have

the capacity to bring the

necessary people required

for certain operaons,

and the ability to push

innovaons in the market.

The Commercial Inrastructure at theBottom o the Pyramid

CreatingBuying Power

ShapingAspirations

TailoringLocal

Solutions

ImprovingAccess

Targeted productdevelopment

Boom-upinnovaon

Distribuonsystems

Communicaonslink

Consumereducaon

Sustainabledevelopment

Access to credit Income

generaon

fgure 1:The Original Business Models

Prahalad and Hart (2002)


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10

6 Prahalad, C.K. (2002). Strategies for the Boom of the Economic Pyramid: India as a Source of Innovaon. Reecons Vol. 3 No. 4, 6-17

Prahalad and Hart point out that the high cost economy of the poor (also called BoP penalty) where

the BoP customer pays higher prices for basic goods and services, results from local monopolies, lack of

or inecient access/distribuon channels and tradional intermediaries. This provides an opportunity

for larger and more ecient companies to ll in the gaps and serve this market at protable margins.

fgure 2:Prahalad and Hammonds Pyramid (2002)

Population (in millions)

> $20,000

> $2,000 - 20,000

< $2,000 - 20,000

Purchasing Power Parity (in U.S. Dollars)

In a separate arcle on economic development

in India, Prahalad underscored the importance

of reaching scale as one of four basic condions

for BoP soluons. The other three are price-

performance relaonship, environmentally

sustainable models, and harmonizing the most

advanced technologies and local condions.6

The

authors introduce addional case studies, such as

that of the Aravind Hospitals in India, in which a

system of eye-care features paying paents from

the top er of the pyramid subsidizing services

for paents from the middle and boom er.

In 2002, Hart and Clayton Christensen further

argued that working for the growth of the company

and helping to li the poor out of poverty should

not be mutually exclusive undertakings; in fact,

they are mutually reinforcing. As an example,

they menoned Grameen Telecoms Village

Phone venture, a protable wireless phone

service in Bangladesh for the rural poor. Their

paper also introduced the term base in lieu of

boom under which the current BoP concept is

known to avoid any connotaon of inferiority of

the BoP.


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IN SOUTHEAST ASIA

7 Prahalad, C.K. (2005). The Fortune at the Boom of the Pyramid. Upper Saddle River: Wharton School Publishing

fgure 3:Hart and Christensens Pyramid (2002)

In the past, major waves of growth have been created by innovaons that

have had an impact only on the boom of developed markets. Disrupveinnovaons at the base of the pyramid - home to billions of the aspiring

poor - have much greater potenal than those that begin and end in

developed markets

Disrupting the Pyramid

the Baseo the Pyramid

the Base at theTop o the Pyramid

Business + Innovaon and development opportunies at the BoP

The BoP concept gained greater public awareness when Prahalad released his book, The Fortune at the

Boom of the Pyramid, in 2005, which expounded on his original arcle by building upon studies ofbest pracce in BoP strategy.

7

In this book, Prahalad crically unpacked a number of mainstream assumpons about the poor

--having no money, unable to be accessed protably, not valuing brands, disconnected from

informaon networks and not accepng of or open to new technology. He refuted these assumpons

by means of case studies supported the argument that the poor represent a huge and growing market

for corporaons who iniate appropriate changes in their business models, innovaon pracces, and

products and services.

At the core of this BoP business model development is innovaon, which shapes key processes

such as: a) price performance; b) scalability; c) ecological sustainability and d) product, process and

communicaon innovaon. This BoP model, according to Prahalad, focuses on small unit packages, low


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12

Hart and Ted London later introduced the concept ofnave capabilies, which puts a premium on local

community knowledge and capacies as key to doing business at the BoP.8

To achieve success at the

BoP, MNCs have to become embedded in that ecosystem and unlearn exisng pracces or, in other

words, move away from employing their own logic to understand the BoP.

A case study that exemplies such an approach is that of Honey Care Africa, which formed non-

tradional partnerships with NGOs and the local community to become the largest producer of highquality honey in East Africa.

margins per unit, high volume and high return

on capital employed. He further noted that

transacon governance capacity-building (i.e. the

guarantee of transparency and enforcement of

contracts) would be needed for feasible private

sector involvement and development.

These new insights promote the premise of the

BoP as a global market and of poverty alleviaon

as a business development goal. The expected

outcome was idened as a social and economic

transformaon that would ulmately lead to

the morphing of the pyramid into a diamond

with the middle class making up the largest part

of society.

the Very Poor the Middle Class

fgure 4:Prahalad: From

Pyramid to Diamond

8 Hart, S.L. and London, T. (2005). Developing Nave Capability. Stanford Social Innovaon Review, June 2005, 2833.


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IN SOUTHEAST ASIA

9 Budinich, V. (2005). Market Based Strategies Serving Low Income Populaons. hp://www.caseplace.org/d.asp?d=1434.

The rst framework based on models for BoP market-based strategies was developed by Valeria

Budinich.9

Placing a strong emphasis on cizen sector organizaons, who, according to Budinich, have

more experience in delivering products and services to low-income consumers and small producers,

the framework stressed the importance of partnership between the business and the social sectors in

hybrid value chains.

Budinich idened nine (9) business models based on case studies and placed parcular importance on

the emergence of community as an important factor that inuences business models.

fgure 5:Business Models at the BoP

according to Budinich (2005)

World ClassQuality atAordable Price

David Green Health(Global)

Mul-Tiered

Pricing ModelRebecca VillalobosHealth (Costa Rica)

SharedPurchasing

Grameen TelecomICT (Bangladesh)

Combining Retail &Financing

Casas Bahia (Brazil)Consumer Goods

Group Micro-

Lending & DemandAggregaon

Prof. Muhammad YunusFinancial Services (Global)

Transformingeconomies of SmallProducers

Dr. Verghese KurienDairy (India)

AcquiringTechnology throughMicro-Leasing

Fabio Rosa Energy(Brazil)

Save and Built

Assets NowCEMEX/PatrimonioHoy Housing (Mexico)

Leveraging SocialNetworks

ICICI and CSOsFinancial Services(India)

Factors/Principles

Limitedpurchasing

o individualclients

High volumebusiness basedon small (eventiny) individual

transactions

Poor understandingo the human andsocial capitalso low incomecommunities

Change

radically thelogic behindyour businessmodel

Leveragethe power ocommunities asboth consumersand producers

Designproducts &services thattap into thewealth o poor

Mosaic of Market-based strategies beneng low-income populaons.

Examples from cizen-sector organizaons and businesses.


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14

Anew generaon BoP concept, which was

called BoP 2.0 based on the noon of creang

mutual value as opposed to selling to the poor,

was proposed by Hart in 2007.10

The following

year, BoP Protocol 2.0 was produced by Hart

and Erik Simanis, which was anchored on a co-

creaon logic that encourages close personal

partnership with the BoP, dialogue instead of

just listening to concerns of those at the BoP, and

mutual sharing and learning in order to foster a

shared commitment.

BoP 2.0: The Poor as aCo-Inventors & Co-Creators

10 Hart, S.L. (2007). Capitalism at its Crossroads: Aligning B usiness, Earth and Humanity (2nd ed.) . Upper Saddle River NJ: Wharton

School Publishing

11 Hart, S.L. (2011). Wring the Unnished Symphony at the Base of the Pyramid. hp://stuartlhart.com/blog/2011/05/wring-the-unnished-

symphony-at-the-base-of-the-pyramid.html

table 1:The Dierence between the First and Second Generaon BoP

Concept, adapted from Simanis & Hart (2008) and Hart (2007)

BOP 1.0 BOP 2.0BOP as a consumer BOP as a business partner

Deep listening Deep dialogue

Low cost producon Build local capacity

SELLING to the POOR BUSINESS CO-VENTURING

Extended distribuon Embedded processes

Reduced price point Expand imaginaon (bringingnew life into business ideas and models)

Redesigning packaging Marry capabilies and buildshared commitment

Arms length relaonshipvia NGOs

Direct, personal relaonshipfacilitated by NGOs

Aer years of study on the business potenal of the BoP, Hart and Ted London, came to the conclusion

that there is no fortune at the boom of the pyramid waing to be discovered, contrary to earlier

assumpons and proposions. The new realizaon is that the [real] challenge for companies is to learn

how to create a fortune with the base of the pyramid11

.


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IN SOUTHEAST ASIA

Michael Porter and Mark Kramer recently

published a paper on creating shared value

that examines the reinvention of capitalism

to unleash a wave of innovation and growth.

This work proposes that business and society

have been pitted against each other for so

long that it may be useful to look further into

connections between societal development

and economic progress.

Their framework goes beyond the concept ofsharing an economic value created by business

(i.e. redistribuon) and seeks to expand social

and economic values by showing policies and

pracces that not only guarantee prot and

compeveness in business but also improve

the economic and social condions of the

communies where these businesses are

located. Re-conceiving products and markets,

examining how productivity is maximized in

the value chain, and the creation of industry

clusters in the locale of the companies are

among the pathways identified to effectively

create shared values.12

Sensivity to the needs of communies is vitalto this approach. Hence, though Porter and

Kramer did not explicitly refer to the BoP, they

further provide ways by which the BoP takes on

a crical and a more acve role in the creaon

of products, processes and systems that facilitate

innovaon and growth.

Another notable development is that of the

concept of collaborave interdependence that

builds on the second-generaon BoP strategies

of co-creaon and suggests a partnering strategy

that seeks ways on how various stakeholders can

be of help to each other. The framework was

developed by Ted London and Ravi Anupindi,

aer examining how food security and nutrion

investments can be beer directed for both prot

and poverty alleviaon.13

This encourages shis and changes in roles,capabilies, metrics and investments. Again,

New Developments: BoP as a stakeholder and collaboratorin developing shared value and poverty alleviation

12 Porter, M. and Kramer, M. (2011). Creang Shared Value. Harvard Business Review, January-February 2011

13 London, T. and Anupindi, R. (2011). Using the base-of-the pyramid perspecve to catalyze interdependence-based collaboraons. hp://

www.pnas.org/cgi/doi/10.1073/pnas.1013626108


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16

this new way of looking at engagement with the

BoP requires collaboraon with non-tradional

partners, embracing socially-oriented metrics,

supporng local capacity building, enabling

enterprise capabilies, and creang more

aracve market opportunies. Collaboraon

will be imperave in the design, implementaon

and sustainability of engagements under this

framework.

Thus, a new interdependence-based model

of collaboraon (IBC) is introduced with the

following strategies:

1. Catalyzing investment to encourage

more enterprises to seek opportunies in

designing iniaves that engage the BoP --

in this study, London and Anupindi refer to

small-holder farmers;

2. Balancing metrics and aligning

incenves in order to enhance the ability

of enterprises to pilot and scale viable

business models that are responsive to the

needs of the BoP;

3. Creang exible mechanisms that

facilitate experiments in the stages of

design and implementaon, aiming to

support business models that serve the BoP

in more sustainable ways;

The long and arduous search for soluons to

poverty has led many to the realizaon of the

limitaons of the wisdom of and approaches used

by governments, corporaons, and tradional

development agencies and organizaons, leading

to an increasing recognion of the important

role that the poor can take on in developing new,

creave and life-changing ideas and technologies.

Understanding and creating

values desired by dierent

stakeholders is at the heart o

collaborative interdependence.

4. Enabling compeve advantage

in order to improve opportunies for

enterprises to become more sustainable;

and

5. Ensuring skill transfer to develop

capabilies to scale engagements into new

market contexts.


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IN SOUTHEAST ASIA

14 Market based Innovations Pro-poor Solutions. (2012). BoP Innovation Center. http://www.bopinc.org/images/documents/flyer-

bop%20inc.pdf

15 Miedema, M. (2009). Science, technology and innovaon for sustainable povery reducon. The Netherlands: TNO. hp://siteresources.

worldbank.org/EDUCATION/Resources/278200-1099079877269/5476641099079975330/Mathilde_Miedema_Science_Innovaon.pdf

The BoP Innovation Center, anindependent oundation in Europe

that employs a multi-stakeholder

approach to developing sustainable

innovations or BoP markets, used

such strategies in developing

alternative energy sources.14

In recent years, notable aempts have been

made to develop new products using pro-poor

innovaon strategies.

To guarantee successful pro-poor innovaon, Miedema proposed that aenon

should be given to these to types of innovaons15

:

However, Mathilde Miedema of The Netherlands

Organizaon for Applied Scienc Research

(TNO) looked into the value of the BoP in science

and technology and found the following hurdles:

(1) inadequate idencaon of BoP demands

and matching potenal for a business case;

(2) insucient co-creaon iniaves; (3) gap

in investments for research and development

parcularly for new, disrupve innovaon; and

(4) missing innovaon management, among

others.

Technical innovations. Development of sustainable and aordableproducts and technologies;

Social innovations.New partnerships and ways of interacon; Management innovations. Novel ways of product development,

markeng, purchasing investment; and

Value-chain innovations.Exploring new relaonships and arrangementswith suppliers and retailers alongside new nancing schemes.


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18

16 Oosterlaken, I., van den Hoven, J., Kandachar P., Mani, M. (2009). Technology and Human Development A Capability

App roa ch . Bangalore: Indian Institute of Science

There are those that question the

application o the BoP approach to

innovation in S&T. Oosterlaken et.al,

or instance, point to the insufcient

attention given to BoP involvement in

the engineering and design phases, and

to innovation that takes into account

local contexts. They encourage more

participatory approaches to innovation

in order to expand human capabilities

rather than just aiming to raise incomes

to address poverty.16


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IN SOUTHEAST ASIA

Finally, we note the new concept of inclusive innovaon, a term

recently introduced by Dr. R.A. Mahelkar and is being supported by

the World Bank to deliver high performance products, processes and

services at an ultra-low price for resource-poor people by harnessing

sophiscated science and technology know-how to invent, design,

produce and market high performance products and services at

prices that can be aorded [by the poor]. On top of this is the call

for the inclusion of the BoP in innovaon processes to co-create and

co-innovate inclusive soluons.17

The process of inextricably linking innovaon as an instrument for

development for, with and by those at the BoP brings us further to

the emerging concept of innovaon for inclusive development. An

important idea is that innovaon must support a pace of development

of the BoP that outstrips the pace of the rest of society in order to

close the inequality gap. Without an equitable sharing and staking of

claims to the benets of development, it is and will not be inclusive.

iBoP Asias search for the key to unlock this dramac development

potenal of the BoP has led to the discovery of technical, social,

managerial and value-chain innovaons that can bring communies

out of the BoP.

17 Oce of Science and Technology Policy (2010), More from Less for More: The Imperave for Inclusive Innovaon, hp://

scienceofsciencepolicy.net/event/more-less-more-imperave-inclusive-innovaon.


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Segundo Romero, Mary Grace Santos, Lilac Florentino,Kristian Paolo Torres, Lance Andrew Viado

20

Therefore, these cases, as a set, can

be considered to represent small-scale

iniaves to respond to pressing social

concerns in BOP communies and sectors

that experts considered parcularly

technically feasible and had signicant

technical, nancial, socio-cultural, and

polical sustainability.

Taken as a purposive sample of S&T

innovaons at the BoP, the cases can be

characterized along the following variables:

As research projects, how muchme and resources were required to

generate the project outputs? What

does this say about the level and

range of eort required to produce

signicant S&T innovaons in BoP

communies and sectors?

What were the various types ofinnovaon outputs and outcomes of

the projects products, processes,

prototypes, informaon, knowledge,

capabilies, partnerships, and

collaboraon networks?

How were the projects distributed interms of their acquision, applicaon,

adaptaon, adopon and scaling of

the innovaons? The research projects

applied themselves to dierent points

and ranges along the connuum

Overview

Patterns in Innovation at the BoP

in Southeast Asia

Chapter 3

This chapter provides some o the relevant patterns that characterizethe 26 innovation stories. As previously mentioned, these stories were

the result o a Southeast Asia-wide call or research proposals on the

application o S&T innovations at the base o the pyramid.


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IN SOUTHEAST ASIA

of entry to exit or mainstreaming

of the innovaon. Some projects

aempted to create new product or

process innovaons while others took

exisng products and processes and

applied them in new sengs. Some

projects focused on the acquision of

appropriate innovaons to respond to

idened needs.

To what extent were the targetbeneciary-partner communies

or sectors engaged in the research

projects? What was the depth and

breadth of their parcipaon? How

were the communies represented by

formal or informal leaders?

Which development actors andintermediaries played a role and

contributed to the project? What were

the similaries and dierences in the

parcipaon of government (naonal

and local), private sector, and civilsociety organizaons (academe, NGOs)?

What sustainability concerns technical, nancial, socio-cultural, and

polical) were raised and addressed in

the project? What follow-on acvies

were designed or implemented?

These are the paerns that this chapter explores.


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22

Patterns in Acquiring, Applying,and Sustaining Innovations

Innovang from scratch is not really a requirement

in order to address a social problem. Exisng

innovaons from dierent regions and created

within dierent contexts can be introduced into

similar or analogous problem situaons. The real

requirement for innovaon is to analyze a social

problem situaon and do a wide search of the

available (extant and feasible) innovaons that

can possible address it. If found, a suitable or

appropriate innovaon is acquired and applied.

If no suitable innovaon is found, then it has to

be created.

Acquiring the innovation and introducing it

into a specific social situation may take the

form of a purchase, transfer via grant, or

manufacture or construction.

There are many circumstances under which

innovaons are introduced into a BoP community

or sector. It is always assumed and usuallyestablished that there is a strong felt need by the

target community to resolve a parcular social

problem. It is, however, harder to establish how

the innovators themselves came out with the

idea for the innovaon proposal.

From among the innovation stories, two

peculiar circumstances are notable. In the

small-size wind turbine case (Innovation

Story 20), the researchers candidly admit

that when they started conceptualizing the

project, nobody from the research team

knew how to develop a generator. They

were thus overwhelmed with an inordinate

amount of queries to sort out: the position

of the generator when coupled with the

turbine; the availability of materials, locally

as well as abroad; and even the confidence

of the research team members to deal with

the unknowns.

In the project on Agri-based commerce

(Innovaon Story 22), the researcher recounts

how they purposively searched for an appropriateinnovaon in a global forum on agri-business

soluons held in Egypt at the me they were

designing their project:

This secon provides an overview of the process by which innovaons are introduced to solve pressingsocial problems of communies and sectors at the BoP in various countries of Southeast Asia.

The rst part of the secon characterizes the cases in terms of their locaon on the stages/ phases of the

innovaon process. The second secon presents the sustainability challenges, factors and mechanisms

highlighted in the cases.

How are Innovaons Idened and Acquired?


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IN SOUTHEAST ASIA

The participation o the delegation rom the Philippine Department o Agriculture

to the Conerence on the Sharing o Agribusiness Solutions: From Farm to Markets,Providing Know How and Finance (November 2008, Cairo, Egypt) was the opportunity

to learn about a wide range o agribusiness development models all over the world.

With the objectives o the iBoP project at hand, the proponent was on the look [out]

or an innovative solution that optimizes science and technology innovations to enable

marginalized agricultural communities to participate in the global supply chain.

Among the solutions that were presented in the Conerence, the Egyptian Traceability

Center or Agro Industrial Exports (E Trace), was the best solution identifed.18

Boru Dothwaite provides us with a diagram of the stages and

milestones in the innovaon process19

:

gure 6: Stages in the Innovaon Process

Stages and milestones in the invention, innovation and diusion process

DIFFUSION

INNOVATION

INVENTION

Researchin a similar

area begins

Firstcommercial

sale

Researchon new (to

system)

techniquebegins

Widerdiusion

begins

Buildings ofrst concept

prototype

Use of newtechnology

becomesroune

Pre-Development Development

Development in

the laboratory

Field/market

materials

Adopon by

innovators, then

early adopters

Adopon by

early majority

Adopon by

late majority

and laggards

Start-Up Adaptaon Expansion Disappearance

18 Alfon, H., Rodolfo-Sawit, M., Scholten, P. (2010). Bridging the Base of Pyramid (BoP) to Mainstream Commerce: An acon research among

Southeast Asian Countries on policies and enabling factors for the BoP to eecvely parcipate in the R&D and trade of value-added agriculture-

based commodies. iBoP Asia Grants Program Technical Report No.22

19 Dothwaite, B. (2002). Enabling Innovaon: A Praccal Guide to Understanding and Fostering Technological Change. Zed Books. London, UK.


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24

Using this schema, the 26 research projects undertaken by the iBoP Asia grant partners appear to fall

under the following categories, based on the Final Technical Reports submied:

STAGE Case Illustration

[1] PRE-DEVELOPMENTResearch in a similar area begins

[5] EXPANSIONWider diusion begins (Adopon by

early majority)

[6] DISAPPEARANCE

Use of new technology becomesroune (Adopon by late majority

and laggards)

[2] DEVELOPMENTResearch on new (system) begins

(Development in the laboratory)

[3] START-UPBuilding of rst concept prototype

(Field/ market trials)

[4] ADAPTATIONFirst commercial sale (Adopon by

innovators, then early adopters)

N/A

N/A

N/A

10 Cases:

Community-led water services (Innovaon Story 4)

Household nance management (Innovaon Story 13)

Socio-econ impact of biofuels (Innovaon Story 17)

Bioethanol value chain (Innovaon Story 18)

Agri-based commerce (Innovaon Story 22)

Emergency food reserves (Innovaon Story 23)

Livelihoods under climate change (Innovaon Story 24)

Rainwater catchment systems (Innovaon Story 25)Disaster resilient food crops (Innovaon Story 26)

8 Cases:

Clean water from Red River (Innovaon Story 1)

Drinking water soluons (Innovaon Story 2)

Rural water system design (Innovaon Story 3)

Mulplex diagnosc test (Innovaon Story 7)

SnT in a Box (Innovaon Story 11)

Mulple handicap e-system (Innovaon Story 12)

Business development service (Innovaon Story 14)

Solar powered poultry hatchery (Innovaon Story 19)

Small-size wind turbines (Innovaon Story 20)

Teaching farmers rice quality (Innovaon Story 21)

7 Cases:

Sanitaon in oang villages (Innovaon Story 5)

Eco-sanitaon with food producon (Innovaon Story 6)

Medicine for communies (Innovaon Story 8)

Ecolife village Cafe (Innovaon Story 9)

Mobile phones for sh data (Innovaon Story 10)

Waste cooking oil into jeepney fuel (Innovaon Story 15)

Waste into biogas and ferlizer (Innovaon Story 16)

table 2: Milestones in the invenon, innovaon and diusion process


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IN SOUTHEAST ASIA

Cases at the

Pre-Development Stage

It appears that none of the 26 cases fall into this

category. This suggests that the researchers

and proponents of the innovation projects

already undertook what would be considered

pre-development work that preceded the

project that was funded by iBoP Asia. In other

words, the projects were merely phases in a

continuing process.

Some of the projects, conceivably, could have

been pre-developmental, except that the

researchers, as in the small-size wind turbines

case (Innovaon Story 22), went on to learn the

basics while designing the proposed innovaons.

Cases at the Development Stage

There are ten (10) cases at the developmentstage. At this stage, the innovaon eort is

focused primarily on understanding how the

technology being considered can be developed

into an appropriate and adequate response to

the problem and the parcular BoP context/

condion at hand.

Some of these cases tried to understand physical,

chemical, and biological cause-and-eect

relaonships, many of them dealing with water

and sanitaon, and food and energy producon.

A very simple but powerful innovaon project

that focused on the applicaon of earth science

principles was that of the rainwater catchment

systems project (Innovaon Story 25). The powerof this project derives from the indigenous

knowledge embedded in the use of exisng

rainwater catchment systems in the Tigum-

Aganan Watershed in the province of Iloilo

in the Philippines. The project systemacally

documented and classied these systems

according to specic characteriscs and mirrored

back to the BoP community this systemazed

classicaon in such a way that can be used by

farmers in deciding whether or which rainwater

catchment system is appropriate for their needs.

While drawn from the experience of a parcular

region in the Philippines, the range of rainwater

catchment systems (7 types, 39 systems) are

applicable to other countries in Southeast Asia

and beyond.

Other cases tried to understand the inuence

of social and behavioral factors (or aributesof proposed social and behavioral systems),

including entrepreneurial soluons.

The research on household nance management

(Innovaon Story 13) aempted to uncover how

poor households in rural Philippines and India

cope with unstable income ows and manage

their meager resources. Understanding how

poor people earn, save, invest and spend their

income, and looking at how the development

of an innovave payment strategy can help

them manage their nances are relevant to a

systemac aempt to alleviate poverty.


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26

Cases at the Start-Up stage

Eight (8) cases fall in the start-up stage, wherethe projects developed a prototype and/or

conducted eld and market trials.

The sanitaon for oang villages project

(Innovaon Story 5) sought to demonstrate

to oang villages on the TonLe Sap lake in

Cambodia a comprehensive waste management

soluon. In doing this, the project accomplished

the following tasks:

1) eld trials of latrine opons;

2) idencaon of potenal waste/

recycling markets;

3) construcon and operaon of a

oang waste management barge;

4) demonstraon and gathering of

inial data on the use of appropriate

sanitaon systems in oang

communies; and

5) documentation of the lessonslearned.

Another case that illustrates the start-up phase

is the waste cooking oil as jeepney fuel study

(Innovaon Story 15), which examined the

nancial viability and technical acceptability

of waste cooking oil as an alternave fuel for

jeepneys. It also looked at the most appropriate

business model for the adopon of the technology.

In order to achieve the identified objectives

the project 1) formed a multi stakeholder

coalition involving groups from the transport

sector, local government, academe, business

to support the adoption of waste cooking oilas fuel for jeepneys; 2) tested and evaluated

the technical, environmental and economic

viability of the various modes of utilizing waste

cooking oil in jeepneys; 3) formulated a waste

cooking oil collection strategy, processing

technology and business model that will

ensure maximum benefits to the jeepney

sector; and 4) documented and disseminated

the study results for possible replication.

Cases at the Adaptaon and

Disappearance Stages

There were no cases at the adaptaon and

disappearance stages. The project duraon was

too short to enable the innovaon to advance

to these stages. It is clear, however, that for

many of of the projects, a follow-up phase --scaling-up the innovaon vercally (combinaon

with other elements) as well as horizontally

(implementaon in other communies) such as

the Hapinoy Healthcare Hub (Innovaon Story 8)

was in the works. Updates on these projects

may well show progress along the connuum of

the innovaon process. The documentaon of

the cases, however, did not cover details of these

follow-up phase.


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IN SOUTHEAST ASIA

Acquiring the BoP Perspecve

Several development perspecves have been introducedto beer understand and address dierent dimensions of

poverty. What sets the BoP approach apart is the premium

that it gives on the engagement of poor communies in

the process of idenfying and understanding key issues and problems, and working on the best possible

soluons for them. As such, poor communies are now considered as benepartners (beneciary-

partners) and major stakeholders in innovaon and development.

As discussed in Chapter Two, there has been the movement from BoP 1.0 to BoP 2.0, which regards

the poor as an acve partner in

the development process.

We again present the presentaonof the rst and second generaon

concepon of the BoP approach by

Simanis and Hart:

BOP 1.0BOP as a consumerDeep listening

Low cost producon

Extended distribuon

Reduced price point

Redesigning packaging

Arms length relaonshipvia NGOs

SELLING to the POOR

BOP 2.0BOP as a business partner

Deep dialogue

Build local capacity

Embedded processes

Expand imaginaon (bringingnew life into business ideas and models)

Marry capabilies and buildshared commitment

Direct, personal relaonshipfacilitated by NGOs

BUSINESS CO-VENTURING

Patterns in Engaging BoPCommunities and Sectors

table 1: The Dierence between the First and Second

Generaon BoP Concept, adapted from Simanis &

Hart (2008) and Hart (2007)


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28

Using this community engagement framework as an assessment tool, we ask: how engaged are the

community partner-beneciaries in our 26 cases? Is it possible to idenfy factors and condions that

inuenced the level of parcipaon in each case?

The value of community parcipaon in development iniaves has been discussed and documented

by scholars and praconers alike. Hashagen outlined six (6) levels of community engagement20

:

20 Hashagen, S. (2002). Models of community engagement. Scottish Community Development Centre.

TYPE OF COMMUNITYINVOLVEMENT

Role of Community

Passive

Proactive communityparticipation

Community mobilization

Reactive communityconsultation

Entrusted communitycontrol

Interactive

Community is informed about what has been decided.

Community inuences the priories in the project, resource

use and service provision.

Community parcipates by taking iniaves to improve the

system. Community takes role in networking for resources

and technical advice that they need, retains control over

resources.

Community is consulted about issues but the process does

not equate to share in decision-making. Project implementer

is under no obligaon to take on the view of the community.

Community has same role with community mobilizaon

including the control of public budget allocaon.

Community engages in joint analysis, development of aconplans and empowerment of local groups. Community and

project implementer decide on how resources will be used.

table 3: Six Levels of Community engagement


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IN SOUTHEAST ASIA

The table below classies the 26 innovaon stories according to the level of community partner-

beneciaries engagement:

Type of CommunityEngagement

Illustrations

Passive:

Reactive community consultation

Proactive community participation

Interactive

Community mobilization

Community is informed about what

has been decided.

Community is consulted about

issues but the process does not

equate to share in decision-making.

Project implementer is under no

obligaon to take on the view of the

community.

Community inuences the priories

in the project, resource use and

service provision.

Community engages in joint

analysis, development of acon

plans and empowerment of local

groups. Community and project

implementer decide on how

resources will be used.

Community parcipates by taking

iniaves to improve the system.

Community takes role in networking

for resources and technical advice

that they need, retains control over

resources.

Drinking water soluons (Innovaon Story 2)

Community-led water services (Innovaon Story 4)

Mulple handicap e-system (Innovaon Story 12)

Household nance management(Innovaon Story 13)

Socio-economic impact of biofuels (Innovaon Story 17)

Bioethanol value chain (Innovaon Story 18)

Small-size wind turbines (Innovaon Story 20)

Agri-based Commerce (Innovaon Story 22)

Clean water from Red River(Innovaon Story 1)

Mulplex diagnosc test(Innovaon Story 7)

Business development service (Innovaon Story 14)

Emergency food reserves (Innovaon Story 23)

Livelihoods under climate change (Innovaon Story 24)

Rainwater catchment systems (Innovaon Story 25)

Disaster -resilient food crops (Innovaon Story 26)

Rural water system design (Innovaon Story 3)

Mobile phones for sh data (Innovaon Story 10)

Medicine for communies (Innovaon Story 8)

SnT in a Box(Innovaon Story 11)

Waste cooking oil into jeepney fuel(Innovaon Story 15)

Solar-powered poultry hatchery(Innovaon Story 19)

Teaching farmers rice quality(Innovaon Story 21)

Sanitaon in oang villages (Innovaon Story 5)

Eco-sanitaon with food producon (Innovaon Story 6)

Ecolife Village Cafe (Innovaon Story 9)

Waste into biogas and ferlizer(Innovaon Story 16)

table 4: Level of Community Engagement in the 26 innovaon stories


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30

Factors aecng the level of

community engagement

Purposive embedding o participation in

the project design

The project designs of a number of our grant

partners facilitated community engagement

in the innovaon process by providing

venues for collecve sharing, deliberaon

and learning among community members

and project partners. In the sanitaon in

oang villages project (Innovaon Story 5) in

Cambodia, Live & Learn, in partnership with

Engineers without Borders (EWB)-Australia,

conducted a series of consultaon workshops

and meengs aimed at elicing inputs

from the community on exisng sanitaon

pracces and the preferred waste collecon

methods. Community members were also

tapped to be part of the project team, to help

idenfy locally available materials for and

take part in the construcon of the oangwaste management barge/ staon.

The project on teaching farmers rice quality

(Innovaon Story 21), the Sub Plant Protecon

Department (SPPD) of An Giang province

in Vietnam tackled the problem of the

transfer of agricultural technologies to rural

farmers. SPPD observed that despite several

legislaons from the naonal government

and aempts to expose local farmers to the

use of new farming methods and alternave

rice variees, the farmers sll keep to the

tradional ways and rice variees that yield

poor harvest. Thus, SPPD strategically shiedto a more parcipatory and praccal approach

of reaching out to local farmers through

lengthier and deeper dialogues (from the

usual 2-hour workshops to 4-month training

sessions) and actual eld demonstraons and

trials that eecvely improved the learning

process and encouraged the praccal

applicaon of learnings so that by the end

of the training sessions, the farmers already

observed an increase in rice yield and more

eecve pest management.

The purpose of the project also dictates the

level of engagement that is necessary. The

project of the Philippine Business for Social

Progress on business development service

for the BoP (Innovaon Story 14) is mainly to

assess the impact of the low-cost Business

Advisory Program (BAP) services that theyoered to small and microenterprises

(SMEs). As such, the engagement with

their clients was limited to key informant

interviews for data gathering.

Technical skills needed in innovation

There are cases wherein community

engagement was limited because of the

high technical skills that were required in

developing the innovaon. This was true for

the project of Aqueous Soluons (Innovaon


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IN SOUTHEAST ASIA

Story 2), which primarily focused on

idenfying and tesng indigenous materials

as potenal carbon lters and how tradionalmud kilns can be enhanced to produce such

charcoals. This mostly required laboratorary

analysis of samples and the re-engineering

of kilns that can only be performed by

technical experts.

Consideration o the risks and change in

mindsets involved in innovation

BoP communies and those at the base of

the pyramid, in general, are risk-averse as

they try to protect and hold onto the scarce

resources that they have. Engaging poor

communies in innovaon entails certain

adjustments and disrupons in daily life that

can be perceived as risks (e.g. me spent in

meengs, workshops is me lost for livelihood

acvies, hence, loss of income). Hence, theinial hesitaon by community members to

parcipate in project acvies. This was seen

in the case of the waste cooking oil for fuel

project (Innovaon Story 15) and the project

on teaching farmers rice quality (Innovaon

Story 21),

Facilitang community understanding and

appreciaon of the innovaon process and

of the value of the innovaon itself also takes

me as these may go against certain norms

and percepons held by the community. This

is shown in the story of WAND Foundaon,

Inc.s eort to promote ecological sanitaon

(EcoSan) pracces in rural communies,

which required the handling, storage and

treatment of human waste. The thought of

reusing human excreta as organic ferlizer

for backyard vegetable farms did not sit wellwith community members at the onset;

thus, the project team spent some me

sensizing their partner communites to the

concept and to the benets of this waste

management approach. Eorts to clearly and

eecvely communicate innovaon goals

and outcomes to the community generate

beer buy-in of the iniave and serve

as a foundaon for an eecve working

partnership with the community.


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32

Use o indigenous knowledge and

capacities in innovation

Learning from poor communies themselvesis deemed key to innovaon at the BoP. An

understanding of exisng local knowledge,

pracces and behavioral and social paerns in

a BoP community are invaluable to ensuring

innovaon success. The rate of adopon/

adapon of the innovaon is made higher

when an innovator takes into consideraon

local capacies and knowledge in designing/

tailor-ng the technology or process for a

BoP community.

The Live & Learn project in Tonle Sap

(Innovaon Story 5) harnessed community

know-how on the local materials and skills

available for the construcon of the oang

waste management staon/ barge. The same

is true for the Kahublagan project (Innovaon

Story 25), where the research team took note

of exisng rainwater harvesng facilies usedand pracces by farmers, and made easy-to-

use guides on how the farmers can properly

use or maximize the use of these facilies.

Other projects such as that of SPPD (Innovaon

Story 21), Aqueous Soluons (Innovaon

Story 2) and ITDI-DOST (Innovaon Story 23)

built on and enhanced exisng community

technologies and pracces in order to make

them work more eecvely or eciently.

Engagement o community leaders

The inial engagement, at least, between the

innovator and the community were facilitatedby a recognized and trusted community leader

in all cases. All our grant partners sought

permission from and coordinated with local

authories as they worked on their respecve

projects. The community leader may be an

elected ocial (i.e. barangay chairman) or

simply a member of the community who has

signicant inuence within the community

who can help arculate the needs and wants

of the community, idenfy community

members who can and will be able to assist in

or parcipant in the project, rally support for

the iniave, and idenfy ways towards an

innovaons sustainability in his/ her locality.

Local authories were instrumental in

idenfying the research areas and informants

in the project of IPSARD in Vietnam (Innovaon

Story 24), in organizing community membersfor the operaon and management of the

Ecolife Village Cafe (Innovaon Story 9),

and in providing an ocial memorandum

supporng the reuse and conversion of waste

cooking oil into fuel in Los Baos, Laguna

(Innovaon Story 15).


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IN SOUTHEAST ASIA

Patterns in InnovationIntermediation

It is important to note that because many of the cases were sll at the developmental and start-up

stage, community engagement in the innovaon process has not been fully ulized and maximized.

However, a considerable number of cases show the valuable contribuon that poor communiescan make to innovaon, as partners more than just being beneciaries.

Innovaon studies, over me, has shown thatinnovaon is a complex, dynamic and connuing

process driven by the collecve acon and

interacon of various agents engaged in creaon,

learning and negoaon, with the end-goal of

not just bringing about new ideas, perspecves

and technologies but more so meaningful social

idenes, arrangements and relaonships.

Integral to innovaon is the successful

combinaon of new technical devices and

pracces (hardware), new knowledge and modes

of thinking (soware) and new social instuonsand forms of organizaon (orgware).

21

Innovaon intermediaries are key to facilitang

this integraon and the interacon of various

actors in the process of innovaon. Inially

denong third pares, bridgers and brokers

between two or more pares, its denion

has since evolved to more broader denionspertaining to organizaons or groups within

organizaons that work to enable innovaon,

either directly by enabling the innovaveness

of one or more rms, or indirectly by enhancing

the innovave capacity of regions, naons, or

sectors. To the extent that an organizaons

or organizaonal units purpose is to enable

innovaon, it may be considered an innovaon

intermediary.22

Our case stories illustrate

the engagement of ve (5) sectoral agents

civil society organizaons, the academe, local

governments, naonal government agencies and

private enterprises in innovaon at the BoP,

and the intermediary roles and funcons that

they played in the process.

21 Smits, R. (2011). Innovae in de universiteit. Inaugurele rede. Universiteit Utrecht, Utrecht. 2000, and Aarts, N. and Leeuwis, C. Rethinking

Communicaon in Innovaon Processes: Creang Space for Change in Complex Systems . Journal of Agricultural Educaon and Extension Vol.

17, No. 1, 21 36


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34

Non-governmental Organizaons (NGOs)

The role of intermediaon is perhaps best embodied by non-governmental organizaons or NGOs,who in the democrac discourse are recognized as bridging agents between the people and the

state that facilitate public parcipaon in needs assessment, decision-making processes and acon-

oriented programs in order to sasfy basic needs; increase levels of polical parcipaon and social

empowerment of parcular sectors and groups, especially of the poor and dispossessed, women,

ethnic groups and other marginalized groups; and increase access to resources needed for the delivery

of development programs and operaons.23

Fourteen (14) of our grant partners are NGOs. Table 5 shows the types of non-governmental

organizaons that weve engaged as project implementers, the intermediary roles that they played and

the collaborators in their respecve projects:

Project Implementer,Researcher, Community

Organizing/Engagement,

Capacity-Building/Training

Project Implementer, Network

Brokering/Relaonship

Building, Capacity Building/

Training, Community

Organizing/Engagement

Instute for Small-Scale Industries of theUniversity of the Philippines-Diliman, local

governments of partner communies

Ministry of Rural Development, Engineers

Without Borders-Australia, Resource

Development Instute-Cambodia, Royal

University of Phnom Penh, local leaders of Phat

Sanday community

Innovaon Story 4:Community-led water

services

A Single Drop for Safe

Water

Innovaon Story 5:

Sanitaon in oang

villages

Live & Learn

Environmental Foundaon

Project/Implementer

IntermediaryRoles

Collaborators

Project Implementer, Technical

Support, Network Brokering/

Relaonship Building

North Carolina State University, University

of Colorado-Boulder, Pun-pun Sustainability

Learning Center, Sarabuvi Wood Energy

Research Center

Innovaon Story 2:

Drinking water soluons

Aqueous Soluons

Non-proft Service Providers

22 Dalziel, M. (2010). Why do innovaon intermediaries exist?Paper presented at the DRUID Summer Conference, London. June 1518

23 Novy, A. and Leubolt, B. (2005). Parcipatory Budgeng in Porto Alegre: Social Innovaon and the Dialeccal Relaonship of State and

Civil Society. Routledge, Urban Studies, Vol. 42, No. 11, 20232036, and Oce of Development Eecveness-AusAID (2009). Civil Society

Engagement Evaluaon


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IN SOUTHEAST ASIA

Researcher, Policy

Recommendaon

Project Implementer, Product

Development

N/A*

GILAS(Gearing up Internet Literacy and Access

for Students)Project, Green Grants Fund of

Earth Island Instute

Innovaon Story 17:

Socio-economic impact of

biofuels

Acon for EconomicReforms

Innovaon Story 11:

Snt-in-a-Box

Computer Professionals

Union

Project Implementer, Design/

Product Development/Tesng,

Technical Support, Capacity

Building/Training, Community


Project Implementer, Design/

Product Development/Tesng,

Technical Support

Project Implementer,

Relaonship BuildingCommunity Organizing/

Engagement, Capacity

Building/Training


Informaon and Data

Management, Capacity

Building/Training



Building, Community

Organizing/Engagement,

Capacity Building/Training

Deutsche Gesellscha fr Internaonale

Zusammenarbeit (GIZ, formerly GTZ), Xavier

University, Live & Learn Environmental

Foundaon, Center for Advanced Philippine

Studies, City Environment and Natural

Resources Oce of San Fernando, La Union

Peoples Organizaons in Negros Occidental

-- Jovita Garcia-Yogore Residenal Associaon,

Inc. (JGYRA, Inc.), Malvar Organic Farmers

Associaon (MOFA), Dancalan Waterworks

Mul-Purpose Cooperave, Cana-an Small

Farmers Associaon (CFA), Quinn Remo

Farmers Associaon, Naturay IrrigatorsAssociaon (NAI), Humayan Ministry; local

government units of Ilog, Moises Padilla and

San Carlos City in Negros Occidental and

Municipality of Argao in Cebu

Vietnam Naonal University, local authories of

Thuy An Village

Centre for Marinelife Conservaon and

Community Development (MCD), Ecolife Ltd.,

local authories and community groups of Giao

Xuan commune

Bio-ethanol producers in Central Kalimantan

and Banten, local authories in partner

communies, consultants from Martha

Tilaar Foundaon, Banten Instute for Social

Transformaon (Baist)

Innovaon Story 6:

Eco-sanitaon with food

producon

Water, Agroforestry,

Nutrion and

Development

Innovaon Story 16:

Waste into biogas and

ferlizer

Ecological and Agricultural

Development Foundaon,

Inc.

Innovaon Story 1:

Clean water from RedRiver

Center for Water

Resources Conservaon

and Development

(WARECOD)

Innovaon Story 9:

Ecolife Village Caf

Vietnet Informaon

Technology and

Communicaon Centre

(Vietnet-ICT)

Innovaon Story 18:

Bioethanol value chain

Sejahtera Semesta Rakyat

(SETARA) Foundaon /

NTFP Indonesia

Advocacy Groups

Project/Implementer

IntermediaryRoles Collaborators


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Many innovaon experts consider the ability to innovate as an inherent trait of non-government

organizaons because of their greater exibility and openness to risk-taking given their more informal

structure and culture, non-prot nature, and broader network of associaons.24

The projects involving NGO grant partners, as shown above, engaged the widest range of actors local

communies, local government units, internaonal development orgs, private companies, naonal

government agencies/ bodies, universies, research instutes, peoples orgs.

Our NGO partners also took on the widest range of intermediary funcons, from demand arculaon

(scanning, foresight, diagnosis), network brokering (idenfying, selecng, linking and forming

24 Bogacz-Wojtanowska, E. (2011). Innovative public services as a result of cooperation of public and non-government

organisations. Contemporary Management Quarterly


Technical Support/Quality

Management, Informaon and

Data Management, Capacity-

Building/Training



Building


Community Organizing/

Engagement, Network

Brokering/RelaonshipBuilding

Researcher, Community


Bantay Dagat of San Juan, Batangas

N/A*

College of Engineering and Architecture, Ateneo

de Davao University

N/A*

Innovaon Story 10:

Mobile phones for sh

data

WorldFish Center

Innovaon Story 14:

Business advisory

services

Philippine Business for

Social Progress

Innovaon Story 20:

Small-sized wind turbines

Tri-People Concern

for Peace, Progress,and Development of

Mindanao (TRICOM)

Innovaon Story 13:

Household nance

assessment and

management

Emerging Futures Lab

Corporate Foundation

Think Tanks

*No other organizaons or groups were involved in the project.

table 5: Types of NGOs engaged in the 26 innovaon stories

Project/Implementer

IntermediaryRoles Collaborators


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IN SOUTHEAST ASIA

partnerships among collaborators), knowledge/

technology brokering (disseminaon,

communicaon/ demonstraon, matchingdemand with supply) to innovaon

management (project implementaon, process

monitoring, mediang relaonships, providing

interacve spaces for learning), capacity

building (skills training, standards development,

organizaonal development), and instuonal

support (linking policy to pracce, providing

plaorms for policy advocacy, working for

instuonal change). NGOs were engaged in

eorts in 5 out of the 7 work areas of iBoP Asia

(water and sanitaon, ICT, micronance, energy

and climate change adaptaon).

Creavity and innovaon thrive in an open,

parcipatory and interacve environment, which

NGOs and other civil society groups champion. As

such, the leadership and experience of NGOs not

just in creang open spaces for change but also

in establishing trust with local communies arecrical to innovaon at the BoP. However, NGO

work, being project/ acvity-based and donor-

driven, connues to pose capacity limits and

makes the sustainability of eorts a challenge.

The Academe

Higher educaon instuons (HEIs) suchas universies and colleges are seedbeds

for innovaon given their extensive and

muldisciplinary knowledge base, their capacity

to generate and apply new knowledge in

research, and the ability to test new approaches

and validate theorecal assumpons through

praccal applicaon to real-world sengs and

interacon with external actors and communies

via their extension services. In what has been

called as the learning economy, innovaon

based on new knowledge or on fresh research

has always been at the core of all economic

and social iniaves, and learning becomes an

important, connuing social process.25

Eleven (11) projects engaged academic instuons

at dierent stages of the innovaon process

but primarily in demand arculaon (scanning,

diagnosis), knowledge/ technology developmentand brokering (matching with demand,

disseminaon/ transfer, communicaon), and

technology assessment. Most of our grant

partners engaged university/ college departments

or units to develop research methodologies and

tools; conduct laboratory tesng; and develop

and test innovaon prototypes. Table 6 shows the

universies/ colleges that were engaged in these

types of supporng intermediary roles:

25 Lundvall B.A. and Johnson, B. (1994). The Learning Economy. Published in Journal of Industry Studies, Vol. 1, No. 2


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We have cases where university departments/units themselves were the project implementers, where

apart from demand arculaon and knowledge/ technology brokering, they were also engaged in

innovaon management (execuon and monitoring), network brokering (linking and coordinang

with collaborators), and capacity-building (community development and training).

Project/

Implementer

UniversityIntermediary/

Partner

Intermediary

roles

Vietnam Naonal University

Royal University of Phnom

Penh

North Carolina State University

and University of Colorado-

Boulder

College of Engineering and

Architecture, Ateneo de Davao

University

Design/Product Development/Tesng

Researcher/Laboratory Tesng/Analysis

Researcher/Laboratory Tesng/Analysis

Researcher, Design/Product Development/

Tesng

Innovaon Story 1:

Clean water from Red

River

Center for Water

Resources Conservaon

and Development

(WARECOD)

Innovaon Story 5:

Sanitaon in oang

villages

Live & Learn

Environmental

Foundaon

I

pathways out of poverty(2012) by ibop

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