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Innovation response capacity is a relatively new concept that tries to explain the process that enables companies, sectors and countries to survive and prosper in changing circumstances. LINK Ph.D. scholar Ekin Keskin has been developing this idea through a study of livestock sector dynamics in Kenya and Ethiopia.
Livestock has traditionally played a very important role in the economies of these two East African countries. Regional and global markets for livestock and livestock products are predicted to grow. Livestock markets are, however, competitive, with rapidly changing quality and food safety requirements and other standards. The ability to respond to change is therefore the key to being able to make the most of these new market opportunities.
To understand the innovation response process, Ekin has developed an analytical framework that draws on both the organisational competences literature as well as the innovation systems literature. This framework suggests that rather than being a company’s internal attribute, innovation response capacity is embodied within wider networks of interconnected practices that go beyond single company boundaries.
To help build up a detailed understanding of the innovation response process, Ekin has tracked the historical development of a number of livestock products companies in Kenya — Farmer’s Choice (pigs) and Kenchic (poulty) — and in Ethiopia, Helimex and Luna (sheep and goats). For each case she has collected detailed information on response episodes.
Her findings from Kenya suggest the two companies have responded to changing market conditions despite the fact that they have almost no existent patterns of interaction with Kenyan R&D organisations. The companies do, however, have very well-developed links to sources of market information – partially because of their historical connections with the tourist industry — and these signals to innovate have been critical. When technical innovations have been necessary the companies have either bought technical services — for example, to introduce HACCP quality measures — or linked to international sources of technology — for example, to access new pig and poultry breeds from Brazil and France.
Ekin believes the innovation response capacity strategies in Kenya have worked in part because the two companies operate in a virtual monopoly with almost no competition. It is unlikely that this pattern of capacity will be sufficient when competition intensifies. At that point policy interventions will be required to address some of the institutional reasons why livestock companies are so weakly connected to Kenyan livestock research and other sources of technical support. Similarly, the patterns of response capacity that exist at the moment do not ensure that innovation response pays attention to social goals in the country or address the needs of poor stakeholders. Public policy intervention will be needed if innovation capacity is to address poverty reduction.
Ekin is still analysing the Ethiopia situation. The historical and political context in the country is very different from that in Kenya. The private sector and the market are still at an early stage of development. In the transition to a market-based economy, NGOs and externally-funded projects have often acted as intermediaries between livestock producers and markets. The sustainability of these arrangements in the long-term is questionable. The mechanism and policies needed to build the network of interactions to link companies to market information and technological support, and thus build innovation response capacity, are currently underdeveloped. A long tradition of looking to the government for assistance has impeded the emergence of proactive strategies by entrepreneurs to grasp new opportunities and deal with external threats to the sector.
Contact Ekin Keskin at keskin@merit.unu.edu
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