Purpose Blockchain is expected to have a significant impact on Systems of Innovation as the new General Purpose Technology. The purpose of this study is to investigate how Blockchain can revolutionise the Systems of Innovation by investigating its overall structure, actors and relationships. Design/methodology/approach This study used the systematic mapping method to explore and integrate the Blockchain and Systems of Innovation literature for the creation of a new conceptual model of Blockchain-enabled Systems of Innovation. In that scope, 37 Blockchain-related and 32 Systems of Innovation-related papers, besides two major books in the field of Blockchain, have been reviewed and then integrated based on the Systems Thinking approach. Findings The key findings for Blockchain-enabled Systems of Innovation are that there is (1) an increased distribution of networks and collaborations, (2) increased trust through the use of reputation systems, (3) an emerging new nature of platform characteristics, (4) a democratisation of entrepreneurship by the new funding landscape and (5) an increased significance of technological drivers, such as energy. Research limitations/implications The study shows new Systems of Innovation-related research implications. Accordingly, a new type of actor, relationship and attribute has been introduced where the boundaries of the role definitions are blurred and more distributed. This is where larger organisations can expect to lose their central position. The different types of actors are replaced by a network of actors as a result of the distributed new Blockchain-based system. The threshold for the Bottom of the Pyramid is expected to be reduced, leading to a more democratised innovation system. Practical Implications Blockchain appears to reduce the effects of distrust in collaborative innovation practices with its consensus mechanisms and the new Blockchain-enabled Systems of Innovation is expected to revolutionise the interactions in the future. Originality/value There are very few studies that have been found to integrate innovation management practices with Blockchain. This is the first Blockchain-based Systems of Innovation study enabling the fundamental revision of its structure, types of relationships and actors.
Open innovation is a concept in flux; from the practice of large-scale, internet-mediated collaboration, to a strategic option and business model for firms. However, the scope and breadth of its transformative dynamic is arguably restrained. Despite the theoretical and empirical benefits of openness, established firms face significant challenges deploying the coordination patterns of open innovation communities, further reducing the potential of spill-overs in the supply chain. Viewed differently, open innovation presents more user-centric and responsible innovation paths. These are manifested in the processes and outputs of open innovation by empowering participation and by successfully employing the capacities of user communities. To reap the benefits of open innovation, a rapid reconfiguration of the production and exchange structures is needed in intrafirm and interfirm relations. Sensorica is an open enterprise that achieves such forms of organization and a unique techno-social infrastructure supporting them. It illustrates a potential path that can realize the full potential of open innovation, for users, firms, and the economic system as a whole.
Although business models presumably have a prominent role in socio-technical change remarkably little research has been conducted in this domain, more particularly in the context of developing economies. In this paper, we tap into this knowledge gap and study business model components and the challenges they face. We argue that the market value of renewable energy technologies will increase when new business models are implemented to overcome financial and institutional challenges. We complement concepts of the business model literature with the insights from the sustainable transitions literature. This paper addresses two research questions: What are the challenges of business and financial models in the transition towards decentralized solar energy driven systems? And what are the promising opportunities for new business models in a developing country context? To answer these research questions, we use a case study research design focusing on niche market development of solar thermal and solar photovoltaic (PV) technology in Lebanon. Data collection involved analysis of relevant text documents and expert interviews with 30 informants across different groups of stakeholders. Data analysis involved qualitative interpretation of collected data against concepts from the business model and Strategic Niche Management literatures. The results show that business model challenges initially were highly dependent on donor aid, which contributed to the launch and network creation of niche markets. Later, a shift to micro-finance and business startup models was observed, which showed promising development. Knowledge transfer and community empowerment were found to play an important role in developing new business models that involve consumers more closely. As this development is expected to take place more often, we expect that new opportunity pathways will develop in developing economies like Lebanon.
Distributed ledger technology (DLT) is increasingly proposed as a powerful tool to address the social and ecological challenges in the Global South. DLTs are opening up possible futures, one of which is a wave of infrastructure decentralization with common-centric and cosmo-local production. Shared logistics and supply chains for a circular economy, with collaborative and networked ‘flow’ accounting allow the integration of contributive logics as well as the integration of social and ecological externalities, including practical knowledge on resource use limitations linked to planetary boundaries, as an integral part of ecosystems of productive collaboration. Indeed, DLTs remove the need for central intermediaries to validate transaction between parties, who instead place their trust in the encrypted, disintermediated system software. DLTs can be designed as a new unencloseable (non-commodifiable) medium of communication, which could lead to radically new forms of cooperation, organization, and governance. Yet these revolutionary possibilities will not be realized unless technologists consciously and strategically design systems redistributing sovereignty from elites to the people in financial, service and national infrastructures. This paper concludes with a critical examination of the application of DLT in Puerto Rico and how DLTs could alter the production and exchange of “value” in service of a global popular sovereignty.
This paper describes one of Oxfam’s pilot projects exploring blockchain technology, focusing on the non-technological, institutional challenges faced by the organisation. There is an emerging literature on blockchain for social good, however, this predominantly focuses on the use cases and issues relating to applying the technology in international development projects. A gap in the literature exists regarding the non-technological aspects of blockchain projects both within the sector and more broadly. Addressing this gap is critically important as many of the promises of blockchain technology will only eventuate in their fullest when whole ecosystems are using the technology. To get there requires a transition period and it is this transition period that holds the key to success for organisations exploring the technology. This paper goes some way to addressing this gap. It does so by describing a specific case study and unpacking some of the organisational challenges associated with implementing a blockchain-based project in the international development and humanitarian sector. This has important implications for the sector as blockchain technology becomes ever more present as a tool capable of reducing inequality and addressing power imbalances. The Oxfam case study described in this paper highlights the difficulty many not-for-profits are having engaging with the technology. The lessons are drawn from a specific use case of a current pilot project using blockchain technology in a cash transfer preparedness project in a small island developing state. Although important and insightful, this paper does not focus on the specifics of the application of the technology but rather discusses the myriad non-technological challenges faced from Oxfam Australia’s perspective. These are categorised into three main areas: awareness and understanding of the technology, capacity constraints of in-house support services in providing relevant support for a nascent technology, and issues related to engaging in non-traditional partnerships. The paper concludes by recommending further areas of research and suggestions to develop practical tools and guidance to help the international development and humanitarian sector navigate this emerging technology.
The main research objective is to identify and analyse significant economic sectors subject to potential disruption from the distributed ledger technology (DLT) within the economy of Latvia. The tasks are 1) to identify sectors subject to disruption from DLT in line with global technological developments, business readiness trends and distributed ledger use cases, 2) to identify sectors generating the most significant output within the economy of Latvia, 3) to analyse interconnections of global trends related to DLT and the areas of potential disruptions to the identified sectors within the economy of Latvia. The research concluded that economic sectors with the most significant output within the economy of Latvia are all subject to disruption from distributed ledger use cases and global DLT trends in the short, medium or long term.
Modern patent systems are slow, inefficient, expensive, and may result in outcomes that actively harm technological progress. This paper proposes a substantive re-think of these systems and lays a foundation upon which practical solutions can be built. Many solutions proposed in the past, such as prior-art bounties, outsourced examination, and dynamic fee setting, have gone unheeded due to the cost of administering them and the rigidity of the patent system. We explore how distributed ledger technologies (DLTs) enable these major changes by altering the way stakeholders are able to interact with the patent records system. We find that transitioning to a DLT-based patent records system can enable many previously suggested improvements to current patent systems in a flexible, scalable, and transparent manner. The case for such a transition is strengthened when jointly considering the complex but common roots of problems facing modern patent systems, rather than a balkanised set of technical solutions to address each issue independently. Noting that a DLT-based system is not a panacea, we also provide comment on the political, legal, and organisational challenges that must be overcome for such changes to be implemented at scale.
The objective of the study was to examine financing rural industrialization and employment creation practices and possibilities in Ethiopia. In this context, rural industrialization refers to encouraging small to large industries to be established in rural areas. As rural industrialization is a new concept at a policy level let alone to the practice on the ground in Ethiopia, a full-fledged data regarding the rural industrialization and the rural financing practice is inadequate. However, attempts were made to see at least the trends in agricultural commercialization, off farm practices, the government’s policy, the financial institutions practices, and above all how other countries approached rural industrialization and financing such industries. Hence, relevant data were collected from CSA, NBE, DHS, World Bank, and Ethiopian Investment Commission and the collected data were analyzed using descriptive statistics. The major finding of the study indicates rural industrialization process is at conception stage and financing the rural strategy is still poorly developed despite the immense economic and social implications. Hence, a combination of centralized financing rural industrialization through commercial banks and a decentralized financing rural industrialization through microfinance institutions is recommended for the country to get better depth and breadth of rural industrialization.
A well-functioning financial sector in developing countries is extremely important for economic development. This requires local institutions, which originally were often state-controlled, but gradually non-state actors conquered the financial market. Recently the growing importance of alternative forms of finance in many African countries has become remarkable. Although often created by donors, their role changed when financial inclusion, economic liberalisation and decentralization became more important. Microfinance institutions started to compete with banks by also offering a broad range of services (loans, savings, transfers, accounts, insurance). This is a frugal innovation (less regulated financial institutions compete with regulated ones at a lower cost). Meanwhile, mobile payment revolution has been taking place in Africa and other developing regions. This article analyzes these developments and suggests that these new financial technologies contribute substantially to the 4th industrial revolution in the third world countries. Financial resources that become more available replaces development initiatives and allows developing countries finance industrial and agricultural revolutions with local money. We will deal in detail with one example – the role of M-Pesa in helping people to be 'financially included' and trying to learn from their experience with customer satisfaction for other countries.
Grany Mmatsatsi Senyolo, Edilegnaw Wale, G. F. Ortmann
The aim of this study has been to analyse the value chain of African leafy vegetables in the Limpopo Province of South Africa. This was done by identifying the prominent value chain actors, institutions governing the chain, the infrastructural endowments, key factors and challenges affecting the success or failure of the value chains for African leafy vegetables. Relationships among the value chain actors were weak, with transactions based mostly on spot markets. While smallholder farmers attain high gross margins, their intention to take part in the mainstream markets are prevented by lack of technical advice on production, lack of packaging and processing services, poor infrastructure, deficiency of contractual agreements between actors, and lack of access to finance. Although producers currently attain relatively higher gross margins, more benefits might be realized if government services (such as training, seed production and distribution) could either be decentralized or privatized. Future policy interventions should focus on promoting value addition along the African leafy vegetable chain, provision of cold storage facilities by municipalities closer to smallholder farmers in the rural areas and this will stabilize farm gate prices to encourage continuation of production.
In this study, we consider a decentralized agricultural supply chain consisting of a capital-constrained smallholder farmer and an intermediary platform. The smallholder farmer sells the agricultural products through the intermediary platform but lacks the financial resources for production. In addition to the traditional solution of bank financing (provided by a bank) as a source of finance for the capital-constrained farmer to ensure the sustainable production of the agricultural goods, the intermediary platform can also provide loans directly to the smallholder farmer (known as direct financing) or serve as a guarantor if the capital-constrained farmer has insufficient creditworthiness to obtain bank loans (known as guarantor financing). The farmer can thus obtain a loan through three methods: bank financing, guarantor financing, and direct financing. We find that the smallholder farmer produces the most under direct financing and the least under bank financing, and that the intermediary platform prefers direct financing over guarantor financing in a weak sense. Specifically, when the farmer’s production cost is low, the intermediary platform prefers financing the farmer directly; when the cost is in an intermediate range, the platform prefers either direct or guarantor financing; and when the cost is high, it is in the best interest of the intermediary platform to encourage the farmer to raise funds from the banking market. We also assess the best financing format for profitability of the smallholder farmer and the sustainability of the whole supply chain, and find that the farmer prefers bank financing while the preference of the supply chain as a whole depends on the cost. Interestingly, under both guarantor financing and direct financing, the smallholder farmer’s level of production can be higher than that under a centralized chain (where the farmer and the intermediary platform belong to the same entity) regardless of whether the chain encounters financial constraints. Moreover, the decentralized supply chain can be coordinated under direct financing when the farmer’s production cost is relatively low.
Just like its recent predecessors, blockchain – also known as the distributed ledger technology – is considered to have the potential to cause major economic, political and social transformations in the Global South. The visible effects of this technology are already being noted there. We present early evidence linking the use of blockchain in overcoming some economic, social and political challenges facing the Global South. The article highlights the key applications and uses of blockchain in developing countries. It demonstrates how blockchain can help promote transparency, build trust and reputation, and enhance efficiency in transactions. The article looks at opportunities and key triggers for blockchain diffusion in these countries. It also delves into challenges and obstacles that developing economies are likely to encounter in the use of blockchain.
Elmar Steurer, David Manatsgruber, Esther Prudence Jouégo
Projects in the energy sector in Africa suffer from a number of barriers. Especially the combination of political instability and an unclear regulatory framework hampers the private sector to realize the investment possibilities in the field of decentralized rural electrification. For debt based projects these barriers result in prohibitively high interest rates – roughly 15% while the return on investment does not exceed the low 10% area. This situation leads to strong reluctance from private investors to provide equity. A possibility to encourage private investors to step in could be a separation of the different risks, especially separating the typical high sovereign risk of a country from the commercial risk of the energy project. As a result, the separated risks can be clearly allocated to different investor groups looking for investment opportunities going along with distinct risks. A structured approach is proposed through which private international investors are exposed only to the general political risk while international development banks cover mainly the regulatory risk. Finally, the newly invented financial instrument convertible grant by the electriFI initiative of the EU provides an equity substitute to take over the commercial risk. With this additional financial support, decentralized electrification projects in Africa have the possibility to be implemented and the potential to be scaled up.
Entrepreneurship on small scale is the only solution to the problems of unemployment and proper utilization of both human and non-human resources and improving the living conditions of the poor masses. The basic rationale of developing these industries are that they provide immediate large scale employment, ensure more equitable distribution of income, encourage decentralization of industries and eradicate poverty and unemployment. During the last three decades, many countries of the world have experienced the need and importance of entrepreneurship has been accepted as a strategy to achieve the twin objectives of promotion of entrepreneurship, particularly among the educated unemployed youth and also for rapid industrialization in the economy. The main object of this paper is to study the existing literature on entrepreneurship through Micro finance-SHG linkage in India in general and NER in particular. The analysis of this study is based on secondary sources. Efforts are also made in this paper to analyze the role of micro finance through SHGs in the promotion and development of entrepreneurship. This paper examines the different approaches of entrepreneurship and also explains the different key areas of micro enterprise development. Finally, this paper highlights the problems of micro, rural and women entrepreneurs and also suggested some specific measures based on the survey of existing literature, for the promotion of these industries in the country.
The availability of abundant renewable resources, lack of fossil fuels and difficult geographical terrain for grid line extensions contribute to the advantages of renewable based decentralized rural electrification in Ne-pal. Solar home system (SHS) and micro-hydro are the most commonly adopted off-grid renewable energy technologies in the country. This dis-sertation examines the market of renewable energy based rural electrifi-cation within prevailing policy and programmes framework. The study verifies whether the market has been able to serve the poor in Nepal. It also captures the perception of various stakeholders (e.g. private sup-ply/installation companies, NGOs, financial institutions and the donor‘s programme) regarding the business, financing issues and the role of gov-ernment policy on the market development. In addition, the study dis-cusses and analyses renewable based rural electrification supply models, the economics behind rural electrification, market drivers and market distribution in the rural areas of Nepal. The financial mix in the off-grid rural electrification is generally charac-terized by subsidy, equity and credit. The study shows that awareness about renewable energy technologies and willingness to pay for electricity access has increased considerably. However, there is a huge financial gap between the cost of electrification and affordability among the poor. The distribution analysis shows there is significant increment in the extensive growth but decrease in the intensive growth rate of rural electrification thus indicating market expansion with uneven penetration among the ru-ral people. Solar PV technology is still not in the reach of the economic poor. Access to credit and cumbersome subsidy delivery mechanisms have been perceived as the major factors affecting the expansion of rural electrification by the stakeholders, requiring innovation in the credit and subsidy delivery system so that a larger rural population can be given ac-cess to electrification.
Paul Gertler, Harry Anthony Patrinos, Marta Rubio Codina
Mexico's Compensatory education programs provide extra resources to primary schools that enroll students in highly disadvantaged rural communities, thus increasing the supply of education.By reducing the price of schooling through school stipends conditional on school attendance and performance, Oportunidades is increasing the demand for schooling amongst its eligible beneficiary households.This study exploits the different phasing-in over time and space across these interventions to test their degree of complementarity (or substitutability).We focus on the effects on intermediate school quality indicators (failure, repetition and dropout) of teacher training, provision of supplies, and empowerment and financing of parent associations -on the supply side; and conditional on attendance cash transfers -on the demand side.Difference-in-difference estimates prove reducing the opportunity cost of schooling and decentralizing school management at the lower level as effective measures in improving educational outcomes.No robust evidence of synergies between the two interventions is found.
We examine the pyramidal ownership structure of a large sample of newly listed Chinese companies controlled by local governments or private entrepreneurs. Both types of the owners use layers of intermediate companies to control their firms. However, their pyramiding behaviors are likely affected by different property rights constraints. Local governments are constrained by the Chinese laws prohibiting free transfer of state ownership. Pyramiding allows them to credibly decentralize their firm decision rights to firm management without selling off their ownership. Private entrepreneurs are constrained by their lack of access to external funds. Pyramiding creates internal capital markets that help relieving their external financing constraints. Our empirical results support these conjectures. Local governments build more extensive corporate pyramids when they are less burdened with fiscal or unemployment problems, when they have more long-term goals, and when their firm decisions are more subject to market and legal disciplines. The more extensive pyramids are also associated with smaller "underpricing" when the firms go public. Entrepreneur owners construct more complex corporate pyramids when they do not have a very deep pocket - as indicated by whether they are among the top-100 richest people in China.