Sustainability of Technology-intensive Social Innovations:

The Role of Absorptive Capacity, Complementary Assets and User-orientation

Xiaolan Fu and Christine PolzinUniversity 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. Introduction2. Theoretical framework3. Methodology 4. Case studies5. 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

TrainingE-literacy

Physical & Digital capital

Human & Organisational Processes

Networks & partnerships

TechnologyInnovation

SocialInnovation

Participatorydesign

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: 154-155)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 conducto 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 thephysical flow through the

market place

Sanchalaks Samjojaks

Appointed Farmer

to handledigital

infrastructure

Former collaborator

at the market to handlephysical

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 biaso Difficult to make generalisations