Sustainability of Technology- intensive Social Innovations: The Role of Absorptive Capacity, Complementary Assets and User-orientation Xiaolan Fu and Christine Polzin University of Oxford

Introduction  Innovation research: Traditional focus on products, services and processes in business enterprises  How to create (and sustain) value?  Little research on social innovation  Why do potentially useful social innovations may fail to sustain or to scale up?  Case: technology-intensive social innovations in developing countries

Outline 1.Introduction 2.Theoretical framework 3.Methodology 4.Case studies 5.Findings and Conclusions

Theoretical framework (1) 1. Social innovation Taylor (1970), Gabor (1970) Definition by Mulgan et al (2005):  Innovative activies and services  Goal: meeting a social need  Predominantly developed and diffused through organisations whose primary purposes are social 2. Technology innovation Absorptive capacity (Cohen and Levinthal 1990) Complementary assets (Teece 1986)

Theoretical framework (2) Absorptive Capacity Complementary assets User-led process Training E-literacy Physical & Digital capital Human & Organisational Processes Networks & partnerships Technology Innovation Social Innovation Participatory design

Methodology  Case studies  Criteria of selection: Age: > 5 years, beyond pilot-stage Business model Both third sector and corporate projects Both success and failure Location: Central & South India  Interviewed 9 projects  3 typical cases emerge for comparison

Methodology Comparison of case studies: 1) Drishtee – Microfranchising, e-services kiosks, initially based on e-governance 2) N-Logue – Microfranchising, e-services kiosks in clusters of very small villages 3) E-Choupal (ITC) – two-way distribution channel for procurement & sales

Case studies (1) - Drishtee Source: Loonker (2004: ) Business Information provider Villagers Government Village Kiosks Aggregation of local content Information, labour, money, requests Content: -Health -Education -Agriculture -Local, etc Customer Information, money, inputs Services: -Responses -Documents -Licenses Request information and services Communication

Case studies (2) – n-Logue Source: Jhunjhunwala et al. (2004: 33)

Case studies (3)- ITC e-Choupals Source: UNITAR (2005: 5)

Findings (1) 1) Absorptive Capacity - Participatory skills, education and e-literacy of kiosk operators - Facilitating skills for the design, implementation and maintenance of networks - Control skills of governments, influence on government regulation - Literacy levels, age and income of target groups

2) Complementary Assets o Physical and digital infrastructure, o Human and organizational processes, improved business conduct o Generic assets (e.g. networks and partnerships)  Example: e-Choupals Findings (2)

Example: e-Choupals Digital & physical infrastructure Human & organisational processes Procurement hubsE-Choupal kiosks Unbundle price discovery and physical transactions at the market place Eliminate inefficiencies inherent in the physical flow through the market place SanchalaksSamjojaks Appointed Farmer to handle digital infrastructure Former collaborator at the market to handle physical infrastructure

Findings (3) 3) User-led process - Common assumption: complete customer freedom of choice - Constraint: interlinked contracts - Complete end-to-end solutions as feasible social innovations

Conclusions  Research on technology-intensive social innovation can benefit from parallels in established research on traditional technology innovation  Absorptive capacity and complementary assets as technology-specific determinants of sustainability  Usage depends on the degree of freedom of customers in choosing new products and services user-led design process end-to-end solutions

Conclusions (2) Limitations: o Sample bias o Difficult to make generalisations