Innovation process

‘From a development perspective, an innovation is a new solution with the transformative ability to accelerate impact. Innovation can be fueled by science and technology, can entail im­proved ways of working with new and diverse partners, or can involve new social and business models or policy, creative financing mechanisms, or path-breaking improvements in delivering essential services and products’ [1]. Innovation can be driven by technical-focused research and development, but can also entail new ways of working with diverse partners, or can involve the creation of new social and business models, creative financing mechanisms, or improvements in the delivery of the created products and services [2].

Business innovation in G4AW

G4AW projects are innovative in more than one way. A focus on creating business models of a new type of services is key in G4AW’s approach. The objective of the projects is to develop a financially sustainable business case, resulting in reliable (long-term) services that provide the desired social and environmental impact. Innovative in the G4AW Facility has been the use of public-private partnerships in creating the services. Creating a sustainable business requires:

a) selecting a suitable business owner [3];
b) finding the right product-market fit [4];
c) (co-)creating innovative, useful and accurate services [5];
d) selecting an appropriate revenue model [6];
e) delivering this to the end-user in a reliable and efficient way [7]; and
f) scaling the innovation to reach a sufficiently large market.

Scaling innovation

Scaling is the process of expanding beneficial practices over geographies and across organizations to impact larger numbers of people [8]. When aware of the phases of the innovation of the service or product and its viability (market-product fit), an investor or business must be persuaded of the potential: whether a new technology, product or services will contribute to increasing turnover, improving profit-margin, or strengthen loyalty. The impact a product can make on sustainable development (linked to SDGs) is increasingly also taken into account when investing in products and services (impact investors [9]). Impact investors have a different objective and generally provide a longer timespan for investments. This results in new opportunities for projects that create social enterprises [10].

Six stages of innovation: International Development Innovation Alliance (IDIA). See https://www.idiainnovation.org/ecosystem-actors

The interaction between consortium partners will develop throughout the project: business owners will be assigned or created (start-up and/or social-enterprises). The remote-sensing companies either continue as traditional (commercial-rate) service providers, or proceed in a more hybrid form in which continued provisioning of services is seen as an investment by these companies, resulting in a ‘share’ in the enterprise. The bottom-line is that in many cases, costs will still outweigh the benefits after the initial project duration. This is because products haven’t reached sustainable scale. As working capital is not offered via subsidy any longer, this is where access to capital [11] becomes important for passing the valley-of-death and initiate scaling.

Technical innovation

Creating innovative projects has not been a target of the G4AW Facility. Creating new innovations takes many years of research, which is a separate process that is often funded by science-focused organizations. It was assumed sufficient well-researched concepts for satellite-based advisory services were already available at different organizations. The focus was aimed at getting these concepts into operational products. Problems were that, while remote-sensing based research focused at agronomic advice is well established, the conversion from research concept to operational product takes a longer period than anticipated. It has not been a plug-and-play process, but has taken a longer part of the initial three-year project duration than initially anticipated. The translation of remote-sensing based indices to local advisory is a complex process. Even if all data-flows are already operational, a useful product requires a significant amount of research into local conditions.

Innovation challenges

In order to have a good technical concept as starting point of products, an increase focus on use of ‘challenges’ is seen. This provides business with the opportunity to pitch products, and possibly receive funding in different stages of project formulation and development. Large foundations such as the Bill & Melinda Gates Foundation, and banks such as the Rabobank use these challenges to find products that can reach a certain impact, while also being able to create sustainable businesses. The Geodata for Inclusive Finance and Food (G4IFF) has used a challenge (G4IFF Innovator’s Challenge) to select organizations to pilot their solutions [12].

Read more:

1. https://www.idiainnovation.org/innovation
2. Development Innovation Principles in Practice.
3. Business Owner Role.
4. What is Product-Market fit?
5. What is the link between co-creation and innovation?
6. Agritech is driving resilience in agricultural value chains – Lessons from COVID-19.
7. Service delivery models.
8. https://ppplab.org/2018/11/explorations-06-shaping-successful-scaling-processes/
9. Impact investing: the fundamentals.
10. A framework for action: social enterprise & impact investing.
11. Funds Database for Agtech.
12. G4IFF Innovator's Challenge
13. FAO - Agricultural digitalization and automation in low- and middle- income countries: Evidence from ten case studies
14. FAO - Leveraging automation and digitaliztion for precision agriculture: Evidence from the case studies