Innovation to strengthen the bottom of cross-border agri-based chains.
|Myrtille Danse and Sietze Vellema;|
Agricultural Economics Institute (LEI)
|The Base of the Pyramid approach (Prahalad and Hart, 2002) creates space for discussions on existing international business theories. The BOP argument is that the demand in emerging markets, i.e. users of applied technology such as farmers or food processors, creates an interesting starting point for establishing a mutual benefit between private sector, having the capacity to innovate and develop technology, and users with limited resources and financial means. Hart (2004) urges the importance of social embeddedness to diagnose this demand for product innovation. This paper explores this argument in the context of cross border agri-based chains. In the context of globalization these chains are often considered as an important vehicle for pro-poor development strategies, since large numbers of people in emerging markets are still dependent on the agricultural sector for their livelihoods. In these chains, societal pressures in the Western end use markets, fe. by environmental groups, labor unions or consumer organizations, induce various contracts, standards and codes of conduct, which, eventually, have to be incorporated in the processes of innovation and technological change targeting the bottom of the chain. In particular the need to comply with strict quality requirements pressures firms to rely on a hierarchical and prescriptive approach to technical change, dependent on uniform practices designed by institutionally remote experts, rather than to use an open-ended and learning approach tailored to the actual users of technology. Accordingly, the paper tries to use a BoP perspective to identify alternative routes within the context of cross-border chains. Of particular interest are the connections of the primary flow of produce in the chain with the enabling and supporting technologies, such as monitoring systems or information technologies. The paper uses empirical work on technical problem solving and quality systems in fresh produce and flowers in Southeast Asia.|