Nurturing user-producer interaction Innovation flows in a low income mobile phone market Christopher Foster Institute for Development Policy and Management, University of Manchester

Low income markets & innovation HOW DO WE CONSIDER THE LINK BETWEEN THESE TWO PROCESSES?

Kenya’s mobile phone sector Mobile Money Mobile Handsets

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Innovation systems 1)Systems of interactive learning: DUI (Lundvall) 2)Integration of innovation and diffusion (Fleck) Mobile Money Mobile Handsets

Mobile money: Guided interaction

Mobile money: Systemic learning Intermediaries learning the rules of the innovation system Elements of control limits scope for adaptation – intermediaries follow the rules Regulatory requirements, consistant service × Reduces ‘user/intermediary innovation’

Handsets: Marketised Interaction

Handsets: Systemic learning Local adaptation, but lack of reverse flows. Distant firms simply do not see adaptation Horizontal diffusion: imitation, staff etc Simple to administer for lead firms X Localised ideas rarely amplified by lead firms, undesirable innovations

User-producer interaction “ An important aspect of the innovative process is the exchange of disembodied information between the producer and the user via information channels” (Lundvall 1985:7 ) Embedded in practices/objects around innovation. Local adaptation Demand-side intermediaries as the active and adaptive actor Operational elements of supply chain

Lundvall and risks Guided networks: “asymmetrical power relationships between users and producers resulting in biased technical change” (Lundvall 1992 p.54) Better learning where power is more equal e.g. Buffering actors, Reduction of elements of power and control

Lundvall and risks Marketised structures: “…producers would have difficulties in observing new user needs” “…users would lack information on the characteristics of the new products” (Lundvall 1992: 50) Develop more consistant channels between user and producer e.g. Bridging actors, Increasing operational involvement as strategy

Conclusions Nurturing user-producer interactions –Active intermediaries as key for ‘user’ innovation –Operational links as a channel of interactive learning –Objects and elements as guiders of innovation –‘Distance’