Innovation for Inclusive Structural Change. A Framework and Research Agenda

The paper proposes the foundations of an analytical framework to map different innovation pathways and explain how innovation leads to inclusive structural change in low-income countries. Innovation pathways depend on how actors, interactions, and variables affect the origin of innovation; the uptake of the innovations (adoption and diffusion); the impact of this diffusion on upgrading, structural change and inclusion; the complementarity between these processes; the potential trade-offs between structural change and inclusion. The paper offers a set of novel applications to test the proposed framework, through different examples of innovation pathways: (a) international technology transfer, based on an extensive systematic literature review; (b) product and process innovation in the dairy sector in Kenya, based on a secondary case study; (c) an organisational innovation in the provision of antiretroviral treatment in Mozambique, also a case study; (d) a systematisation of metrics and indicators of innovation, structural change and inclusion and an empirical exploration of their relationship. The learning generated will support a multidisciplinary, multi-methods research agenda to map the dynamics around innovation, structural change, and inequality and generate an integrated platform of evidence on these processes. In doing so, we respond to the recently increasing demand coming from international institutions, inter-departmental research funds, NGOs and national ministries, for better knowledge to shape a more effective innovation policy for sustainable and inclusive development in low income countries.