Micro-enterprises and inclusive innovation: a study of the Kenyan mobile phone sector

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Abstract

Micro-enterprises have traditionally been connected with goods vending or trading in developing countries. But, increasingly micro-enterprises are emerging which centre on information and communication technologies (ICTs) where such micro-enterprises tend to connect ICTs into low income customers.Literature suggests that these enterprises are often unstable and have elements of informality, but they undertake innovative practices which are central both to building ICT-based livelihoods, and more widely to support the adoption of ICTs by low income users. Literature analysis suggests there are also gaps in knowledge around ICT micro-enterprises, particularly in understanding the link between innovative activity of micro-enterprises, and the wider conditions in ICT sectors. This thesis looks to explore these issues with the aim to build clear policy relevant understanding to enhance ICT micro-enterprises and low income-focussed ICT sectors. Innovation system models are adopted which are well suited to analysing interactive activities around ICT innovations, but these models initially require some refinement to fit in with the low income delivery of ICTs. This is done through integrating notions of ‘inclusive innovation’ which consider innovation from the perspective of wider development outcomes, and allow integration of a more diverse range of actors and processes around innovation. These models form the basis of qualitative study on the mobile phone sector in Kenya, with findings providing significant new insights. Firstly, empirical work is used to examine inclusive innovation models and refinements to innovation systems models are suggested based upon empirical work. Innovation needs to be conceptualised in minor processes, as well as the inclusion of wider intermediary actors and a more contextual examination of relations and institutions. Secondly, drawing on this model, it is found that the innovative activities of a range of systems actors, including micro-enterprises are vital to push innovations to be more inclusive. Thus, relationships that enable interactive learning between system actors, notably between ICT producers and demand-side intermediaries can support innovation. Crucially, where ‘reverse’ flows around innovation can be enabled and supported, then innovation tends to become more inclusive. Thirdly, policy plays a role in inclusive innovation. In one sense, conventional policy approaches in systems models hold: coherent underlying policy drives competitive markets. However, evidence also suggests that specific ‘inclusive’ policies for low income market might be successful. From a wider institutional perspective it is also important to analyse policy weaknesses which can lead to problems amongst ICT micro-enterprises, and these can be detrimental to an inclusive innovation system.In sum, this thesis makes contributions in a number of areas. Conceptually, it extends system models and offers one of the few empirically grounded studies of inclusive innovation, drawing on this ICT case. Thus, these findings potentially have applicability to examine other innovations in low income markets in developing countries. For ICT sectors with a focus on low income consumers, this work highlights new policy relevant approaches to analysing such sectors and provides knowledge about how to push innovation in the ICT sector which is more inclusive, particularly by better consideration of the important role of ICT micro-enterprises.

Keyword(s)

ICT; Kenya; innovation; innovation systems; microenterprise

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