In recent years, observers everywhere have watched with fascination Asia’s rapid economic ascent and its impressive performance on several social indicators. Across Asia, more and more people are not only living longer, they are increasingly able to take part in and contribute to economic and social life. Creating greater participatory opportunities for those who are otherwise economically marginalized through new products and services – also known as inclusive innovation – has been identified as a key factor driving this remarkable success. The potential inclusive innovation bears in a region expected to drive 40% of global consumption by 2040 is massive and is of growing interest to decision-makers in the public and private sectors of so-called developed countries.
In both the political domain and the impact investment community, “inclusive innovation” has become a much-debated phenomenon in recent years. In academic discussions, the term stands side by side with related, yet not identical concepts of “frugal” and “jugaad” innovation. In contrast to these concepts, however, the concept of inclusive innovation has remained a somewhat “weakly defined” area of inquiry. As a result, inclusive innovation has represented a difficult-to-measure opportunity for business and society.
This Atlas for Inclusive Innovation set out to amend this persistent fuzziness, first by clarifying our fundamental understanding of what inclusive innovation is and then by providing concrete evidence of triggers, enabling conditions and activities in the field in different countries.
In line with the core proposition of frugal innovation, inclusive innovation thus relates to innovation activities performed with the ambition to provide “more for more for less” – that is, to conceive more functional solutions that are accessible to more customers, as they require less resources and come at a lower price. At its core, the concept suggests that serving the needs of the less wealthy – or even genuinely poor – need not necessarily be a matter of charity. In practice, inclusive ventures as well as established corporates have demonstrated that innovating for those otherwise excluded from consumption can be a profitable business model. Where developers address simple, yet prevalent needs smartly, development costs remain limited and can be swiftly offset by the large numbers of additional customers reached by the newly provided solutions, even if individual margins are low.
More explicitly than frugal innovation which – in a first step – focuses on commercial viability, inclusive innovation is more directly associated with “doing good” or at least with taking a societal perspective when starting activities. Indeed, inclusive innovations arguably provide a more lasting and systemic contribution to resolving societal challenges than do traditional charities. In short, reconciling commercial viability with societal development within one business model is the core proposition of inclusive innovation. It highlights and heralds the potential of individual entrepreneurship (both private and public) in addressing societal challenges and in contributing to the pervasive delivery of sustainable solutions in the social, economic and environmental domains.
Accordingly, the following report defines inclusive innovation as follows:
As an objective, inclusive innovation seeks to provide sustainable solutions to those who would otherwise remain excluded from access to offers as a result of their social, economic or environmental context.
As an activity and business model, it reconciles the goals of commercial viability with sustainable societal development.
Approach and ambition
By means of a two-step approach, the Inclusive Innovation Atlas offers two important perspectives on the development of inclusive innovation practices.
First, it provides evidence of existing activities, cutting through the veil of political rhetoric to look at the genuine impact they have on socioeconomic development.
Second, it provides an evidence-based assessment of individual countries’ specific potential to take advantage of inclusive innovation opportunities in the future.