The diffusion of innovation in low-income countries

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This in-depth case study of DEGRP innovation project The diffusion of innovation in low-income countries takes a detailed look at the types of impact the project helped bring about and how these were achieved, paying particular attention to the communications and engagement strategies employed by the research team to realise their impact aims. 

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Project impact at a glance

Structural transformation and growth in Africa

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This in-depth case study, of DEGRP innovation project Structural change and productivity growth in Africa, examines how this project has contributed to helping unpack the African growth story, particularly in terms of the links between growth and structural change. The last five years have seen a growing movement around defining structural transformation and industrialisation, and what it means for the continent. This includes a shift in the narrative at a global level, by major multilateral and bilateral agencies, inclusion in the Sustainable Development Goals (SDGs), but also a growing recognition by national governments.

The case study takes a detailed look at the types of impact the project helped bring about and how these were achieved, paying particular attention to the communications and engagement strategies employed by the research team to realise their impact aims. 

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Changing perceptions of female workers in Bangladesh

A female supervisor on the Better Work programme © ILO

A female supervisor on the Better Work programme © ILO

This impact case study looks at what has been achieved by a DEGRP project investigating barriers to women’s promotion into management in Bangladesh’s garment sector.

Led by Christopher Woodruff from Oxford University, the project has helped shift perceptions about female production supervisors, and change promotion practices in certain factories.


The challenge

Once one of the poorest countries in the world, Bangladesh has seen dramatic improvements in poverty levels and overall development in the last thirty years.

The ready-made garments (RMG) industry has played a key role in stimulating these improvements. The industry’s rapid expansion from the late 1970s onwards helped fuel the economic growth needed to help push Bangladesh out of poverty. The industry remains important today, accounting for 80% of Bangladesh’s export earnings, and more than 12% of Gross Domestic Product. It’s also currently the largest employer in the country, providing jobs for over 4 million people. 

The garment industry’s growth has been particularly important for women’s economic empowerment in Bangladesh. Before the arrival of factory jobs, opportunities for formal wage work for women were rare, with most women limited to working at home, or in the informal sector. But though garment factories employ a huge number of women – over 60% of the workforce is female – fewer than 10% of managers in the sector are women. 


Supervisors on the Better Work Programme Bangladesh © ILO

Supervisors on the Better Work Programme Bangladesh © ILO

The DEGRP research

In response to this issue, DEGRP-funded researchers undertook to investigate why there are so few women in management positions in Bangladesh’s women the sector, with a particular focus on understanding barriers to promotion.

Their reasoning was that information on barriers to promotion would be a valuable resource not only for policy- and decision-makers seeking to redress gender imbalance in the labour market, but also for businesses seeking new sources of managerial talent.

In pursuit of this aim, the researchers teamed up with German aid agency GIZ to deliver a supervisor training programme to a sample of 286 female and 131 male sewing machine operators from across 80 different garment factories in Bangladesh. This gave them an opportunity to observe and evaluate the reactions of a range of employees to female trainees, before, during, and after the training was complete. The researchers also examined promotion rates for women trained through the programme six months after the training finished, and compared women's post-training performance with that of their male colleagues. 

Research findings

The study revealed three key barriers to women’s promotion into management: perceptions of female supervisors among other workers; low self-confidence among female operators who were nominated to be supervisors; and resistance among workers, particularly male workers.

An employee survey conducted before the training started showed that workers from across a range of factories and at all levels believe women are less prepared than men to become supervisors, particularly when it comes to technical knowledge and organisational ability. However, detailed skills diagnostics of female and male trainees showed no gap in technical skills, suggesting that reality does not always match perceptions.  

The study also revealed that, prior to training, even the female trainees themselves believed they would perform worse than their male counterparts once they had achieved supervisor level. 

Operators supervised by the trainees also rated the females as less able supervisors in the immediate post-training period, but the female trainees eventually caught up to their male peers, so that after a few months the  male and female trainees had very similar effects on efficiency. Management simulation exercises suggested that female trainees had a particularly challenging time directing male operators. 


The project's impact

The DEGRP study has had a number of impacts, both at the factory level and more widely. 

Perhaps one of the most important outcomes of the research is that the training programme helped change perceptions of female supervisors among workers at factories participating in the study. The researchers noted that once operators had had exposure to female supervisors for approximately four months, they no longer considered them less capable than male supervisors. In addition, the training course raised the self-confidence of the female trainees close to the level of their male counterparts. 

The training also led to more women being promoted to management in the participating factories, with 56% of female trainees moving into supervisor roles, representing a 50%-100% increase on previous numbers of female supervisors in the factories in question. 

One factory that participated in the study even began piloting an all-female production line in November 2015, around a year after the training programme ended. Impressed with the line’s productivity and the female team’s way of working, the factory then expanded to six all female-lines, and now has an all-female floor, with female supervisors and line chiefs. 

The DEGRP project also attracted the attention of the Better Work programme, developed by the International Labour Organization and International Finance Corporation with the aim of improving labour standards and productivity in global supply chains. Since the original training-based study ended, the research team have collaborated with Better Work to design and implement an updated, streamlined version of the training for delivery to over 30 new factories in Bangladesh.

 

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Understanding barriers to agriculture sector growth in sub-Saharan Africa

c. CIAT/Neil Palmer

c. CIAT/Neil Palmer

This impact case study looks at what has been achieved by a DEGRP project examining the effects of domestic agricultural market structure on poverty and economic growth in sub-Saharan Africa. 

Led by the African Center for Economic Transformation, Ghana, the project played an important role in drawing attention towards the domestic constraints affecting the sub-Saharan African agriculture sector, as well as attracting funding for further research into the issue.


The challenge

Structural transformation – defined as the transition of an economy from natural resource-based activities towards manufacturing and services – is a key priority for many sub-Saharan African countries. Economic diversification to complement primary activities like agriculture and mining has historically helped many countries all over the world boost their economic growth and pull themselves out of poverty.

It is generally assumed that a country’s agricultural sector can facilitate this transition. A productive and dynamic agricultural sector, the thinking goes, provides affordable food and other raw materials to help support the transformation process, while releasing labour and capital for other sectors. 

Yet in many sub-Saharan African countries, the agriculture sector is underperforming. Although Africa possesses 60% of the world’s uncultivated arable land, and a huge number of Africans are employed in agriculture, the sub-Saharan agriculture sector has so far largely failed to fulfil its potential. In fact, the continent overall is a net importer of food.


The DEGRP research

Farm land in Madagascar c. Raffi Youredjian/Flickr

Farm land in Madagascar c. Raffi Youredjian/Flickr

In response to this issue, researchers from the African Center for Economic Transformation (ACET), a pan-African think tank based in Ghana, decided to investigate possible domestic issues preventing the sub-Saharan agricultural sector from fulfilling its potential, with a focus on Ethiopia, Ghana, Tanzania, Uganda, Madagascar, Malawi, and Zambia.

Their hypothesis was that while much research looks at the external conditions that might be limiting the sector’s performance, such as trade liberalisation and globalisation, it is also likely that domestic factors – such as non-competitive behaviour in the supply chain and poor national institutions and infrastructure – are partially responsible, and therefore in need of further exploration. 

The team employed a range of methods to test this hypothesis, including: mapping the supply chains for a variety of both cash crops and staple food crops in each country; studying the constraints faced by smallholders at the farm level; and feeding data from these first two steps into a model in order to simulate the interplay between and combined effects of various types of domestic factors under different conditions. 

The research revealed that solutions aimed at improving problems within the domestic market – such as deregulation and policies to boost competition along supply chains – would only have limited effects on farmers’ incomes, and ultimately wellbeing, given the many constraints affecting productivity and marketing of produce in Africa. 

The team’s recommendation, based on these findings, is that a range of complementary agricultural policies are needed to achieve a dynamic sector capable of supporting economic growth and transformation. These could include policies to improve infrastructure; policies to improve access to cheaper and better-quality agricultural inputs such as seeds and fertiliser; and policies to boost access to agricultural knowledge or credit. Making these types of changes, they argued, would likely enhance farmers’ incomes and overall welfare even without the addition of changes to domestic market structure. 


The project's impact

Interaction with policymakers during the project revealed to the research team that there is a high demand for more ‘deep dive’ studies into domestic constraints to agricultural sector development. 

On the back of this feedback, and equipped with increased knowledge and skills on the subject, ACET sought out and won over US$1.4million of new funding from the Bill & Melinda Gates Foundation to produce further studies on agricultural value chains, using the same simulation model they developed for their DEGRP project. With this funding, they undertook 20 in-depth studies across five countries – Burkina Faso, Ghana, Kenya, Tanzania, and Uganda – with the aim of exploring how value chains can be upgraded to support the emergence of strong agro-processing sectors; and enhancing understanding of how smallholder farmers can be linked to these sectors.

Since then, ACET’s policy and advisory team has used the combined results of these research projects as part of a push to promote an agenda of agricultural transformation in Africa, incorporating them into its 2017 African Transformation Report, which showcases ACET’s findings on agriculture’s role in Africa’s economic transformation.

At the local level, the project team also helped build the capacity of ACET researchers involved in the project, providing training to both research and field assistants. 

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Integrating health care and industrialisation in East Africa

This in-depth case study, of DEGRP innovation project Industrial productivity, health sector performance and policy synergies for inclusive growth in Tanzania and Kenya, takes a detailed look at the types of impact the project helped bring about and how these were achieved, paying particular attention to the communications and engagement strategies employed by the research team to realise their impact aims. 

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Project impact at a glance

Raising agricultural productivity in Uganda

This in-depth case study, of DEGRP agriculture project A behavioural economic analysis of agricultural investment decisions in Uganda, takes a detailed look at the types of impact the project helped bring about and how these were achieved, paying particular attention to the communications and engagement strategies employed by the research team to realise their impact aims. 

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Boosting innovation in Ghana

Inspection at at Ghanain tile factory © Arne Hoel/The World Bank

Inspection at at Ghanain tile factory © Arne Hoel/The World Bank

This impact case study looks at what has been achieved by a DEGRP project examining innovation in business and industry in low-income countries

Led by Xiaolan Fu from the Technology and Management Centre for Development, Oxford University, the project has had far-reaching impacts, from influencing policy in Ghana, to contributing to the formulation and implementation of Goal 9 of the Sustainable Development Goals. 
 


THE RESEARCH CHALLENGE

‘Innovation’ is considered a key driver of economic growth. According to economists, the development or use of innovations - new or improved products, production processes, or even business practices - enables firms to increase their productivity, which in turn leads to higher Gross Domestic Product (GDP).

Innovation is thought to be particularly important for low-income countries. It’s argued that without it, low-income developing countries will not be able to transition away from low-productivity activities, such as resource extraction, to more profitable, high-productivity activities such as manufacturing and services. 

Yet understanding of innovation in developing countries is currently quite limited. Not enough is known about how much and what kind of innovation is occurring; whether or how these innovations are spread; or what ultimately drives firms to innovate. 

Gaining a better understanding of these issues is essential if governments are to develop and implement the right strategies and policies to support growth-enhancing innovation. 


Textile factory, Accra, Ghana © Dominic Chavez/World Bank

Textile factory, Accra, Ghana © Dominic Chavez/World Bank

THE DEGRP RESEARCH

In response to this challenge, DEGRP researchers embarked on an investigation into the determinants, sources of, and barriers to innovation in low-income countries, with a focus on Ghana. Although now categorised as a low-middle-income country or ‘LMIC’, Ghana was until recently considered a low-income country, and therefore constitutes a good case for examining the role played by innovation in boosting economic growth.

Between November 2013 and January 2014, the research team surveyed more than 500 businesses to find out more about how and why they innovate, and what constraints they face. The firms researched ranged from informal micro-businesses of fewer than nine people, to large formal businesses employing over 99 members of staff, in diverse sectors such as textile and garment production, food processing, metalwork, and construction.

The survey findings

The survey yielded a number of interesting findings on the nature, impact, and sources of innovation in Ghana. For example, it confirmed that innovation is definitely happening, and that it’s helping both formal and informal sector firms to survive and grow. It also revealed that much of this innovation, particularly in the informal sector, is happening ‘under the radar’. That is, it typically involves the adaptation of existing technologies, rather than development or adoption of brand-new or ‘new-to-firm’ technological innovations. 

Gender plays a part in innovation too, with the researchers finding that firms led by women are less likely to introduce technological innovations, but are more active in adopting non-technological innovations such as new marketing techniques. 

The survey results also uncovered a number of obstacles to innovation, and technological innovation in particular, including: difficulty accessing credit; under-skilled employees; perceived economic risks of innovation; inconsistent innovation policy; and low levels of collaboration with universities and research institutions, despite their important role as gatekeepers and producers of innovation knowledge and technology.  

New innovation policy strategies

Armed with these insights, the team developed a range of possible policy strategies that could be used to encourage and facilitate innovation in Ghana, and in other LICs facing similar constraints. 

These strategies included:
•    Finance schemes enabling more firms to gain access to credit for innovation
•    Offering firms compensation to offset the risks of innovating in volatile markets
•    Boosting technological capacity by raising awareness of, and facilitating access to, existing government training schemes
•    Fostering collaboration between firms and universities and other research institutions


[the findings are] extremely helpful to researchers, and definitely relevant for policy makers (and for people like us in international organizations)… The project contributes to fill a vacuum. The conclusions of the study, dealing in particular with the informal sector, are extremely important given the importance of that sector in developing countries.
— Anne Miroux – UNCTAD

THE PROJECT'S IMPACT

The research findings and proposed solutions have contributed to a number of changes, both in Ghana and further afield. 

As the first comprehensive study on innovation in low-income countries, the project filled a significant gap in existing knowledge about the issue, leading to a better understanding of innovation among policymakers at both the national and international level. 

This enhanced understanding in turn resulted in new action to boost innovation. 

In Ghana, presentation of the research findings to the Minister of Environment, Science, Technology and Innovation (MESTI) and the Ministry of Trade and Industry, inspired the government to introduce a major new programme to strengthen university-industry collaboration for increased, and better, innovation. The project team is also now developing a project with the Ghanaian government to carry out an even larger innovation survey involving over 2,500 firms in the formal and informal sector.

In addition, the project team’s close collaboration with the Ghanaian Science and Technology Policy Research Institute (STEPRI) helped boost STEPRI’s profile among Ghanaian policymakers. As a result, STEPRI now leads the university-industry programme, and will also lead the new, larger innovation survey planned. 

The project has also strengthened networks and communities of practice around innovation in low-income countries. The initial planning for the project involved think tanks and universities from Kenya, Ethiopia, and South Africa. Now that the project is complete, the research survey is being used to conduct similar innovation research in Tanzania and Uganda, with new funding support from the European Commission and World Intellectual Property Organisation.

the project has provided very important knowledge and evidence to strengthen the implementation of the Sustainable Development Goals.
— Li Yong, Director General – UNIDO

At the global level, the research findings featured in preparatory documents for the 2030 Sustainable Development Agenda, which in turn contributed to the development of a new Sustainable Development Goal – SDG9 – which aims to promote sustainable industrialization and foster innovation. 

 

RELATED CONTENT

For more on the survey findings, research methods used, and policy recommendations, read the full DILIC Survey report. Or, view our Research in Context for a shorter analysis by project lead Xiaolan Fu and DEGRP’s innovation theme lead, Dirk Willem te Velde. 

Supporting agricultural investment in Uganda

c. Laura Pohl/Bread for the World

c. Laura Pohl/Bread for the World

This impact case study looks at what has been achieved by a DEGRP agriculture project that undertook an analysis of agricultural investment decisions in Uganda. 

The project team’s work, led by Arjan Verschoor from the University of East Anglia, has had a significant impact on agriculture in Uganda, including changes to the country’s national agricultural policy.


The research challenge

Low agricultural productivity is a common problem across Africa, contributing to food insecurity and rural poverty. There are many obstacles to increasing productivity, among them lack of access to agricultural technologies, lack of knowledge of the latest growing techniques, and land ownership issues.

But even when farmers do have access to products and services that could enhance their harvests, such as fertiliser, quality seeds, or irrigation technology, they are often reluctant to invest in them. And with good reason: investment is risky, typically requiring a large cash outlay with no guarantee that bad weather, disease, or other kinds of damage won’t affect crops.

Encouraging farmers to invest in new technologies while protecting them from risk is therefore a key challenge for policymakers.


The DEGRP research

c. USAID/Flickr

c. USAID/Flickr

DEGRP-funded researchers sought to address this challenge by exploring how farmers perceive risk, and how these perceptions influence their investment choices. Their rationale was that a better understanding of farmers’ risk-aversion would give insights into how productivity-enhancing products and technologies could be adapted to make them less risky, and therefore more attractive to farmers.

Focusing on two districts in eastern Uganda that frequently experience harvest failure, the project team worked closely with 1,803 farmers in 100 villages, using economic experiments, interviews and surveys to investigate the drivers of risk-aversion.

Their research revealed a number of factors affecting farmers’ decisions to take risks, including: previous experience of risk-taking; expectations around risk-taking within their communities; and concerns over how the risk will be spread across their social networks – e.g. friends, family or neighbours – in the event of a failed investment.

From their findings, the research team generated a series of policy recommendations to adapt existing investment opportunities in line with farmers’ complicated relationships with risk. Their proposed solutions included: 

  • Better insurance offers
    Traditional crop insurance is rarely available to smallholders, but weather-index insurance is a viable alternative and could be promoted more by agricultural policymakers. Insurance would also be more attractive to smallholders if ‘bundled’ together with credit and agricultural inputs into a convenient package. Offering insurance to groups of smallholders may also increase its attractiveness, since group members can share the remaining uninsured risks.  
  • Community warehouse receipt systems
    These allow farmers to leave their produce in a warehouse, borrow up to 80% of its value and sell it when prices rise, rather than having to sell immediately because they need the cash, even if the price they get for it is low. These warehouse receipt systems already operate in Uganda, but are not accessible to smallholders; a community level system offers a good alternative and allows farmers to manage their own risk. 
  • Selling fertiliser in smaller packs
    Inorganic fertiliser can greatly increase productivity, but few smallholders in Uganda use it. It is typically sold in 50 kg bags, but research indicates that buying smaller bags makes the investment less risky. Thus, selling fertiliser in smaller packages would increase the likelihood that farmers will buy and use it.

The project's impact

The research findings and policy recommendations resulted in a number of positive changes at different stages of the project.

The research team shared and consulted on their findings with a wide range of local and national stakeholders – including policymakers and business representatives – at various points during the research process. By shedding light on how smallholder farmers approach risk, these stakeholder consultations helped to shift perceptions of the conditions needed to encourage farmers to invest in certain agricultural products and technologies.

Stakeholder engagement process

Stakeholder engagement process

With this shift in perceptions underway, the research team then partnered with Ugandan NGO AT Uganda to lobby for changes to Uganda’s agriculture policy. As a result, promotion of weather index insurance now features as one of five core activities in the Uganda Climate Smart Agriculture Plan. Uganda’s new Agriculture Sector Development Plan now promotes this type of insurance as well, both in its own right and as a complement to warehouse receipts systems.

The research has had a wider impact, too. It helped to build the capacity of Ugandan researchers involved in the project by giving them the opportunity to use new research techniques. In fact, at the end of the project, the lead Ugandan researcher set up a new research institute - the Field Lab Research Services Institute - dedicated to providing research conducted with these techniques.

The project also fostered collaboration between different organisations and groups involved in boosting agricultural productivity. The researchers’ efforts to continually engage stakeholders throughout the research process led to an alliance of insurance companies, micro-finance organisations, farmer organisations and agricultural service providers who have agreed to collaborate to improve insurance products.

[i]n the original draft plan, promoting weather index insurance had not been mentioned… [its inclusion] would not have been possible if you had not shared your research recommendations and provided the necessary evidence to lobby for these changes
— Godfrey Wakula Kivunike, Senior Policy Analyst for the Ministry of Agriculture, Animal Industry and Fisheries, Uganda

Related content

For a full report of the research findings, download the project’s Policy Brief or Stakeholder Engagement Report.

Or view our Research in Context for background information about the research project, and further analysis of the findings.