10. Barriers for market goods, (Market mapping) 30 min Chapter 4 Ivan Nygaard

How to identify barriers for market goods? Consumer goods and capital goods Content Economic assessments Market mapping approach

Is the technology competitive? Cost Cost of new technology Baseline Select the right baseline: solar home system – a small gen-set Large grid connected solar – large diesel fired power plants drip irrigation – sprinkler irrigation – no irrigation improved seeds – traditional seeds Economic assessments Size of economic barrier

SELLER SUPPLY BUYER DEMAND EXCHANGE MONEY & SERVICE PRODUCT, SERVICE & LABOUR A Introduction to market mapping What is a value chain or market chain ? Earnings Labour & investment B Earnings Labour & investment C Earnings Labour & investment D

Example of a global value chain for photovoltaic (PV) Introduction to market mapping

Market mapping - what and why ? A framework for understanding market systems and to facilitate the change of – Roles – Actors – Relations A way to promote dialogue and improve understanding between market actors Inspiration from scientific approaches such as Technological Innovation Systems approaches (TIS) and Global Value Chain approaches (GVC) – Systemic perspectives on innovation – Emphasises institutional aspects, interactive organisational learning, and dynamic processes

Création of a preliminary market map Identification and analysis of stakeholders Preparation by the consultant A participative process to involve the economic actors Analyse the market chain Identify support services Identify enabling business environment Facilitated workshop Creation of a functional network between the different market actors Long term vision Facilitated workshop The process of market mapping

Preparing the market mapping session Stakeholder identification technology developers, including research organisations technology owners and suppliers product buyers and users financiers and donors market intermediaries, including consultants, NGOs, community groups, trade organisations information providers government agencies educational institutions international organisations Stakeholder analysis Identify the main interest of each stakeholder in relation to the problem area. – Show the different perspectives of each group Categorize the stakeholders in clusters of related interest and name the clusters – The linkages in the market map may be useful for this purpose Analyse the significance of stakeholders within each cluster

Battery producers (1) Assembly of panels (1) Solar home systems (6000) Solar PV for water pumping (50) Solar PV systems institutions (1000) PV system retailer (30) Maintenance providers (10) Battery retailers (1000) Poor market information High cost of finance Poor trade standards Unclear finance policy High cost of imported prod. Low contract enforcement High interest rates Poor conditions for local industry Corruption Importers of PV panels (5) Importers of wafers (1) Importers of batteries (3) Battery whole sales (5) Low awareness low technical skills Low research capacity Market mapping, example PV industry Sales not coordinated Component don't match Low quality of products

Barriers from the example Specific barriers Economic barriers – high cost of products – High interest rate – High cost of finance Low awareness of PV products Poor condition for local industry Sales not coordinated Components don't match General barriers Unclear finance policy Poor trade standards Low contract enforcement Corruption Low research capacity Low technical skills Poor market information Return to prioritizing and decomposition

Barriers for market goods Summing up Economic analysis to assess economic barriers Market mapping to assess barriers from a innovation system perspective All barriers need to prioritized and to be analysed in details