Innovation Systems for Inclusive Development: Lessons from Rural China and India

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Innovation Systems for Inclusive Development
Lessons from Rural China and India

• Synthesis
• Rural India- Rural China
• Exclusion- Inclusion
• Innovation Systems Development Outcomes
• Technological changes-Institutional changes

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Key message

• Decentralized innovation capacities
• Rural India and China 700 million people in
  each country - enable innovation for equitable
  sustainable growth
• Changes in sectoral policies, investments and
  governance create opportunities
• Reforms in the organization and conduct of
  natural and social sciences
• Creation and maintenance of decentralized
  innovation capacities

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About the project

• What is SIID? Systems of Innovation for Inclusive
  Development
• Why? Inclusion? Innovation Systems?
• How? Rural India and Rural China
• - The teams
• Brief introduction to the SIID project
• www.siid.org.in

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Science, Technology and Innovation for Inclusive
Development in India

• Science 24 February 2012 News Focus
• Vol. 335 no. 6071 pp. 907-908 DOI
  10.1126/science.335.6071.907
• QA Manmohan SinghIndia's Scholar-Prime Minister
  Aims for Inclusive Development
• Pallava Bagla, Richard Stone
• Indian Prime Minister Manmohan Singh vowed last
  month to more than double the nation's RD
  spending to 8 billion a year by 2017. Since
  taking office in May 2004, Singh has launched
  initiatives to entice overseas scientists to
  return home, create elite universities, and
  establish a grants agency modeled after the U.S.
  National Science Foundation (see p. 891). But the
  largesse announced at the Indian Science Congress
  comes with a sobering assessment. "Over the past
  few decades, India's relative position in the
  world of science had been declining, and we have
  been overtaken by countries like China," Singh
  declared. In an exclusive interview with Science,
  Singh reiterated that concern, observing that
  "China is in many ways far ahead of India."

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Inclusive development Policy shifts in
Asia-The ADB initiatives ?????
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Comparison
Country Brazil China India
(1) Total National Population 2011 (million) 194.9 1,372.1 1,224.6
(2) Share Rural Population in total population (2010) 13.5 (Growth p.a. -2.2) 53.0 (Growth p.a. -1.2) 70.0 (Growth p.a. 1.2)
(3) Labor Force Total (million) (2010) 101.2 786.4 459.4
(4) Share of Employment in agriculture () (2010) 17.0 39.6 51.1
(5) Per Capita GDP (constant 2005 PPP) (2011) 10,162 7,476 3,468
(6) Agricultural Value Added as Share of GDP (2009) 6.1 10.3 17.8
(7) Per Worker Agricultural Value Added constant US (2009) 3,760 525 468
(8) Per Capita Agriculturally Active Arable Land (ha) (2004) 2.23 0.16 0.26
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Shrinking primary sector -India
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Population dependent on primary sector- India
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Shrinking Primary Sector - China
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Population dependent on Primary Sector - China
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Inclusive development Definition ?

• A process of development that includes every
  citizen in any country (from a global
  perspective) (Conceição, Gibson, Heitor and
  Sirilli 2001)
• A development process that generates broad-based
  participation, and specifically reduces poverty
  and social exclusions (mainly from a national
  perspective)(Chatterjee 2005, ADB)
• The improvement of distribution of well being
  along the dimensions of income, health and
  education at the same time that the average
  achievement improves (more related to the SENs
  theory, and rather broadly promoted by
  international organizations)(Kanbur and Rauniyar
  2009, ADB)

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Adaptation inclusive development in a process of
rapid growth and analyzed from IS perspective

• Three elements
• The importance of development as powerful means
  for humans well-being
• An innovation systems approach to identify and
  inform micro, meso and macro level components and
  complex process of change
• Learning and capability buildingin all important
  aspects, technological, organizational,
  managerial, institutional/legal as driver for
  innovation-based inclusive development

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Key questions

• (M1) How does the innovation systems framework
  help inclusive development?
• (M2A) What is the evidence of innovation and
  inclusive development in excluded rural spaces
  in agriculture?
• (M2B) What is the evidence of innovation and
  inclusive development in excluded rural spaces
  in MSME clusters?

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Theoretical framework looking for processes

• Amartya Sen constructive welfare economics
• Major policy prescriptions
• ?the removal of political, institutional,
  judicial and financial impediments to the poors
  access to opportunities
• ?investment in education and health care for the
  poor so that the poor advances their capability
  to engage in opportunities

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constructive welfare economics --Contribution
and limitation

• Sens Constructive welfare economics has been
  the principal theoretical basis for policy shifts
  thus far.
• The expected outcome - human beings well being
  to be the end goal of development and growth
• The theory addresses improvement of social
  welfare under the assumption of static
  development actors and processes
• All existing forms of exclusion
  are taken for granted
• ?Policy measures focusing on improvement in
  accessibility to opportunities a relative
  ignorance of the creation of new opportunities
  from the process of development and impact
• ?Thus far little has resulted from various
  inclusive or poverty reduction strategies,
  either international or domestic
• ? Top-down process, one set policy for all,
  limited understanding of how opportunities and
  possibilities for participation are created and
  sustained, and diverse approaches to inclusive
  development evident in diverse contexts.

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Innovation Systems for Rural China and India

• Embedded in institutional/cultural/societal
  structures
• Cumulative (through feedback-loops), hence
  path-dependent
• Great diversity among systems and their
  evolutionary processes no single mode as best
  practice
• Specificscountry specific region specific
  sector specific development-stage specific

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SIID methodology (contd.)

• 1. Evidence of exclusion -
• Development choices Secondary data/ sources
• Current innovation and development evidence -
  hinterlands, small farmers, drylands/rainfed
  farming, plantations, North-Eastern states,
  agricultural biotechnology
• - rural MSME clusters cultured-pearl, TVEs,
  pottery, textiles, leather footwear, traditional
  crafts.
• Primary data/ case analysis

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SIID methodology (contd.)

• 2. Innovative methods
• Engaging stakeholders
• Space for dialogue academia and policy
• Communication material
• Learning platform
• - Interrogating innovation systems
• - Deconstructing development economics esp.
  about rural spaces, people, knowledge.

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SIID methodology

• 3. Communication strategies
• Academic audience re-conceptualization
• Policy makers contexts and options
• CSOs/farming community analysis and
  articulation
• Industry MSME- analysis and articulation
• Students new terrains problems

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The Excluded Rural in India Diversity within a
common Development Framework
5 Rural MSME Clusters 2 Agricultural
Innovation cases Rainfed Agriculture (MP AP)
North Eastern States Plantation Sysfems
Inclusive Agri Biotech Hyd Rice
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Sampling through mapping Mapping the diversity
The Five Rural ChinasSource OECD 2009 72-74

• Mapping/structuring modes/patterns/factors
  creates a value for conditional generalization
  and comparison

1,The rural poor The West provinces Population 28
2,The rural with strong outmigration The Middle, such as Anhui 44
3,The rural dependent on grain production The northeast provinces 11
4,The rural diversified The costal provinces Shandong, Zhejiang, Fijian, Guangdong 15
5,The peri-urban rural Beijing, Tianjun, Jiangsu 2
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Analysis

• Secondary data based national and two
  provinces/ states (Anhui and Zhejiang M.P. and
  A.P.)- evidence of exclusion
• Rural industrial /MSME /traditional clusters
  innovation systems 5 cases (India), 4 cases
  (China)- evidence of inclusion
• Agricultural innovation systems 2 cases
  (India), 2 cases (China)
• Content of and linkages between innovation system
  components
• - Employment(labour), incomes, resource use
  changes
• - Markets and/vs. State
• - Changing roles of actors learning and
  capacities

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India-ChinaCurrent Context

• Economic growth, with poverty, unemployment and
  rising inequality
• The excluded rural -result of choices made
  ignoring the structural characteristics and
  institutional issues
• Linkages between industrial and agricultural
  innovation industrial growth models used
• Cumulative causation vicious circle
  (L,Y,RgtInnSys)
• Virtuous cycle Identify and promote
  institutions - linking rural industrial base and
  agriculture

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But acknowledge exclusion

• Evidence of rural exclusion in rural areas,
  occupations, resources,
• Evidence of exclusion of the rural in
  mainstream policy making, RD, credit, market
  development,
• Types active/passive, constitutive/
  instrumental.
• Find evidence of inclusion ---innovation for.

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Lessons

• ST Capacity- context, people, funds, processes
• Control - local, industrial, SOEs,
• Competence excellence, RD admin., Iteration,
  Bridges/linkages
• Governance macro policy frameworks
• -structures levels-
• -investment, markets, etc.
• -responsiveness

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Lessons

• Data meso, micro, -
• Aggregation
• Multiple paths or types indicator intensity
  at diff levels
• Systems effective structures
• -rules of engagement- linkages-
• -designs and processes- networks

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Lessons

• Systems of innovation
• Institutions are critical
• Institutions evolve must be allowed to evolve
• Domains production linkages knowledge
  linkages
• Evaluation and learning (esp. public sector and
  policy)

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Key message

• Rural transformation for India and China
• Sequential ??? (environment, resources,
  spaceconstraints)
• Synchronised???
• Innovation for rural transformation that sustains
  farm and non-farm resources, jobs, incomes,
  communities allows for progressive evolution
• Decentralized innovation capacities

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Key differences- AIS

• India
• Central government leading agricultural
  innovation
• Land ownership , tenancy and reverse tenancy
  increasing
• RD institutes under Central or State
  governments
• Extension under state governments
• Export oriented production -
• Civic space active in local agriculture limited
  state support

• China
• Provincial governments leading agricultural
  innovation
• Land on lease from the state (more equal access
  to land)
• Half the RD institutes under County/Township
  governments
• Extension under County/Township and provincial
  governments
• Domestic markets oriented production
• Private corporate sector with state support and
  finance

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Key differences in Rural Industrialization and
Innovation

• India
• Focus on

• China
• Focus on labour intensive prod.

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SIID- Limitations

• Innovation systems limited engagement with
  development economics, politics, social and
  cultural features of agriculture
• Inadequate attention to macro-policies and
  framework conditions
• Little information/data about formal industrial
  RD
• Inadequate understanding of forms and magnitudes
  of exclusion and new challenges
• Size and complexity of Indian and Chinese
  agriculture and rural industrialization
  secondary data analysis and case studies are not
  enough
• Administrative and RD changes contingent upon
  political willingness.