Inclusive Innovation: Evidence and Options in Rural India (India Studies in Business and Economics) 813223927X, 9788132239277

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India Studies in Business and Economics

Rajeswari S. Raina Keshab Das Editors

Inclusive Innovation Evidence and Options in Rural India

India Studies in Business and Economics

The Indian economy is considered to be one of the fastest growing economies of the world with India amongst the most important G-20 economies. Ever since the Indian economy made its presence felt on the global platform, the research community is now even more interested in studying and analyzing what India has to offer. This series aims to bring forth the latest studies and research about India from the areas of economics, business, and management science. The titles featured in this series will present rigorous empirical research, often accompanied by policy recommendations, evoke and evaluate various aspects of the economy and the business and management landscape in India, with a special focus on India’s relationship with the world in terms of business and trade.

More information about this series at http://www.springer.com/series/11234

Rajeswari S. Raina Keshab Das •

Editors

Inclusive Innovation Evidence and Options in Rural India

123

Editors Rajeswari S. Raina Department of International Relations and Governance Studies Shiv Nadar University Gautam Buddha Nagar Uttar Pradesh, India

Keshab Das Gujarat Institute of Development Research Ahmedabad, India

ISSN 2198-0012 ISSN 2198-0020 (electronic) India Studies in Business and Economics ISBN 978-81-322-3927-7 ISBN 978-81-322-3929-1 (eBook) https://doi.org/10.1007/978-81-322-3929-1 © Springer Nature India Private Limited 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature India Private Limited The registered company address is: 7th Floor, Vijaya Building, 17 Barakhamba Road, New Delhi 110 001, India

Acknowledgements

This is a manuscript that has been in the making for a long time. It is indeed a collective effort, thanks to the constant concern of all its “stakeholders” to put together a set of well-argued papers on a subject that has layers of unstated and understated narratives (or, should we say, angularities), especially when one deals with the excluded rural. The volume draws its initial inspiration from the findings and contestations that marked the research project “Innovation Systems for Inclusive Development: Lessons from Rural China and India” (2009–2012), which we called the SIID Project, sponsored by the International Development Research Centre (IDRC), Canada. Stephen McGurk and Veena Ravichandran, albeit being from the sponsoring agency, played an unusually active role in both facilitating and joining the free and stimulating discussions amongst the participant-researchers all through the project’s life and beyond. The Chinese scholars, who started off as co-researchers in the project, became good friends and remain so much after the closure of the project. They are Gu Shulin, Wu Xiaobo, Guo Bin, Shou Yongyi, Zuhui Huang and Ye Chunhui. Much of the research work in China was possible due to the intellectual leadership and camaraderie of Wu Xiaobo. Our efforts to publish a joint volume comparing and juxtaposing Indian and Chinese lessons will continue. The Indian scholars included, apart from the co-editors of this volume, K. J. Joseph, E. Haribabu and Nimmi Kurian. Those scholars who undertook separate stand-alone studies under the project were Priyatam Anurag, Anant Kamath and Tara Nair. The project gained tremendously from its advisers, T. Ramasami, A. Vaidyanathan and Abhijit Sen, eminent academics and policymakers. The Chinese and Indian Ph.D. scholars who visited India and China, respectively, as part of this project, shared with us some of their observations (surprises) about the nature of democracy in the Indian state and the nature of democratic practice in the Chinese research system. We are grateful to L. Ravi and Ramesh Kumar at the Centre for Policy Research, and Lifang Tong, Zhejiang University, for all the administrative and logistics support.

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Acknowledgements

As the book idea got firmer by the day, we were convinced to enlarge its scope beyond the SIID Project. In the process, we came across several scholars, policy specialists and practitioners from civil society organisations. We spoke, argued, agreed and disagreed with them through meetings, correspondences and formal workshops in India and abroad. We greatly value those interactions and all that could be learnt or unlearnt towards enriching the arguments presented in this volume. A few important ones whom we would like to thank are Dinesh Abrol, Amita Shah, Dhruv Raina, Ligia Noronha, Pradosh Nath, Parthasarathy Banerjee, Prajit Basu, Sunil Agarwal, D. Raghunandan and Swati Bhogle. Transforming the draft manuscript to a standard book, that involved a long-drawn and at times stressful process for which the co-editors accept responsibility, was possible only due to the remarkable cooperation, understanding, encouragement and tremendous patience of the following at Springer: Sagarika Ghosh, Nupoor Singh, N. S. Pandian, V. Praveenkumar and Lokeshwaran, M. We earnestly hope that this book would be of use to scholars, practitioners, policymakers and, importantly, young readers who might take some of these ideas further. New Delhi, India Ahmedabad, India

Rajeswari S. Raina Keshab Das

Praise for Inclusive Innovation

“Deploying a refreshingly unconventional approach to received understandings of innovation in development literature, Raina and Das simultaneously explore how the obsession with searching for key drivers of innovative growth has resulted in a series of exclusions of people and locations, particularly rural India. At the same time, they demonstrate how the ‘innovation illiteracy of the state’ has, through its non-interaction as well as refusal to learn, not only made invisible but also denied legitimacy to the range of innovative actions and practices that characterize the lives and livelihoods of rural artisans and farm workers. Truly, the book turns Development Economics and Innovation Systems Theory on its head at one go!” —Padmini Swaminathan, Former Director, Madras Institute of Development Studies, Chennai, and Former Chairperson, School of Livelihoods and Development, Tata Institute of Social Sciences, Hyderabad. “Professors Raina and Das have edited an enlightening volume which reveals the material conditions, contradictions, and challenges experienced in contemporary rural India. This volume of engaged social scholarship challenges academics and activists to enquire more deeply and critically about the real outcomes and impacts emerging from the praxis of innovation. Rendered with academic rigour and integrity, this volume is indispensable to those seeking to redress exclusion and advance a better life for all.” —Rasigan Maharajh, Professor, Node Head: DST-NRF Centre of Excellence in Scientometrics, Science, Technology, and Innovation Policy, South Africa. “The term inclusive innovation is so freely used across diverse contexts that it ceases to be conceptually meaningful. This volume is useful as it brings out subtle analytical nuances of inclusion in different spaces of rural India. It highlights that in most situations inclusion and exclusion co-exist and one cannot be fully understood without analyzing the other. And perhaps the impact of inclusion in one space will not be high unless exclusion in a related space is not dealt with.” —Rakesh Basant, Professor of Economics, JSW Chair Professor of Innovation and Public Policy, Indian Institute of Management, Ahmedabad. vii

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Praise for Inclusive Innovation

“This book is a timely reminder that the capacity to formulate new ideas and to bring about the changes we need in our societies can be difficult if not impossible without ‘inclusive innovation’. By this, one means empowering citizens and communities toward developing alternatives that reflect their own situations and knowledge, helping them to make as well as to realize their own choices. Without people being in genuine charge of decision-making processes, innovations passed down from above can be irrelevant and unsustainable—just as so much of our S&T effort has proved to be. At stake are our democracy and the integrity of its participatory systems. These become critical as distinctions between ‘rural’ and ‘urban’ are rapidly erased, and when pressures of migration threaten traditional knowledge and capacities for problem-solving. The need for a new and liberating understanding of both ‘inclusion’ and ‘innovation’ was never greater.” —Ashoke Chatterjee, Hon Advisor, Crafts Council of India.

Contents

Part I 1

Inclusive Innovation: Changing Actors and Agenda . . . . . . . . . . . . Rajeswari S. Raina and Keshab Das

Part II 2

The Problem 3

The Evidence

Crafts, Innovation and Exclusion: Challenges for Inclusion in a Terracotta Cluster, Rajasthan . . . . . . . . . . . . . . . . . . . . . . . . . Keshab Das

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Factors Determining Innovation in Micro Enterprise Clusters . . . . Tamal Sarkar, Nonita Yap, Geeta Vaidyanathan and Sangeeta Agasty

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Inclusion and Innovation Challenges in Handloom Clusters of Assam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Priyatam Anurag and Keshab Das

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Informal Information-Exchange Networks in Rural Low-Tech Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Anant Kamath

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Commodity Markets, Computers and Inclusive Development: A Study of Marketing and Price Formation of Cardamom with e-Auctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 K. J. Joseph

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Modern Genetics as an Opportunity for Inclusive and Sustainable Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Haribabu Ejnavarzala

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Turnaround in Maternal and Child Healthcare: Institutional Innovation and Interactive Learning . . . . . . . . . . . . . . . . . . . . . . . . 157 Amarendra Das

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Contents

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Inclusion Problems and Prospects: Introducing Gender in Agricultural Research and Education . . . . . . . . . . . . . . . . . . . . . . . 183 P. S. Geethakutty

10 Social Innovation and Entrepreneurship: Nurturing the Institutional Sine Qua Non for the Informal Sector . . . . . . . . . . . . 203 Rajeswari S. Raina 11 Learning from China: S&T and Innovation Policy Responsiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 G. D. Sandhya and N. Mrinalini Part III

The Options

12 Inclusive Innovation: Realizing the Options . . . . . . . . . . . . . . . . . . 255 Keshab Das and Rajeswari S. Raina Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Editors and Contributors

About the Editors Rajeswari S. Raina is a Professor at Shiv Nadar University’s School of Humanities and Social Sciences (SHSS), Department of International Relations and Governance Studies, and Associate Director of the University’s Centre for Public Affairs and Critical Theory (C-PACT). With a background in the agricultural sciences and the social sciences (Ph.D., Economics from Kerala University, through the Centre for Development Studies, Trivandrum), her research explores the complex relationships between development policy and knowledge—formal scientific and diverse informal knowledge systems. Her research questions have been mainly in the social studies of science, innovation systems and policies and institutional learning capacities, specifically in the agricultural and rural sectors, and the environment in India and Asia. Individually and in collaboration with networks of actors in the government, civil society and environmental organizations, farming communities and international agencies, her current research focuses on the knowledge politics of and institutional reform for (a) poverty relevant science, technology and innovation, (b) ecological and bio-economic wellbeing, and (c) sustainable agriculture–environment–nutrition interfaces and state nutrition programmes. Well published in internationally refereed journals, edited and co-authored books, several domestic and international task force and working group reports, her edited books are Science, Technology and Development in India: Encountering Values (Orient BlackSwan 2015), and (co-edited with Julien-Francois Gerber) Post-growth Thinking in India (Orient BlackSwan, 2018). Keshab Das is a Professor at the Gujarat Institute of Development Research, Ahmedabad, India. He holds M.Phil. (Applied Economics) and Ph.D. (Economics) degrees from the Jawaharlal Nehru University, New Delhi (through the Centre for Development Studies, Trivandrum). He also holds a bachelor’s degree in Journalism and Mass Communications. He is a recipient of the VKRV Rao Prize in Social Sciences (Economics) and had been empanelled as an Indian Council for

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Cultural Relations Chair Professor in Economics. He has been a visiting research fellow/faculty at the NKC Centre for Development Studies, Bhubaneswar, Odisha; Punjabi University, Patiala, Punjab; Tshwane University of Technology, Pretoria, South Africa; University of Insubria, Varese, Italy; International Institute of Social Studies (ISS), The Hague, the Netherlands; University of Manchester, Manchester, UK; Institute of Developing Economies, Chiba, Japan; Institute for Studies in Industrial Development, New Delhi; CNRS-REGARDS, Bordeaux, France; Maison des Sciences de l’Homme (MSH), Paris, France; and Institute of Development Studies, Brighton, UK. Published extensively, his research focuses on issues in local and regional development; industrialisation strategies; informal sector; micro, small and medium enterprises (MSMEs), clusters and globalisation; innovation; labour; basic infrastructure; and politics of development. Among others, his two published books with Springer are Globalization and Standards: Issues and Challenges in Indian Business (ed., 2014), and Manufacturing Exports from Indian States: Determinants and Policy Imperatives (co-authored with Jaya Prakash Pradhan, 2016).

Contributors Sangeeta Agasty is General Manager, Foundation for MSME Clusters (FMC), New Delhi. She is a Post Graduate in Management and also in Economics. In her over 15 years of experience in industrial development work, she has led several programs and initiatives working across positions as Programme Manager, team leader, and advisor in several projects for agencies like EU, UNIDO, UNDP, ADB, AfDB, GIZ, World Bank, SDF and various national and international agencies in more than 15 countries in Asia, Africa and Europe and has gained recognition as international MSME cluster development expert. She has vast experience in project designing and implementation; monitoring and evaluation; policy and research; advisory and strategy consulting work in the areas of SCP, productivity and competitiveness, innovation & technology transfer, BDS development, skill & entrepreneurship and value chain management in multiple sectors across engineering, textiles, leather & footwear, fragrance & flavor, agri & food processing, artisan clusters and also in heritage, culture and creative industries based tourism sector. As an international cluster development expert she has undertaken several training and capacity building programs for policy stakeholders & practitioners and has also undertaken more than a dozen of policy studies, and several research assignments. Priyatam Anurag is an Assistant Professor in Strategic Management at the Indian Institute of Management Lucknow. He is a Ph.D. in Strategy from the Indian Institute of Management Bangalore. His research interest is at the interface of Strategy and Development. His research work primarily focuses on policies and strategies for expanding access in financial and pharmaceutical markets, and entrepreneurship in the informal sector.

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Amarendra Das is currently working as Reader-F in the School of Humanities and Social Sciences, at the National Institute of Science Education and Research (NISER), Bhubaneswar. He has obtained his M.A. in Economics from Utkal University, Bhubaneswar, and M.Phil. and Ph.D. from the Jawaharlal Nehru University, New Delhi (through the Centre for Development Studies, Trivandrum). Before joining NISER he has worked as a lecturer in Utkal University and Deputy Director in the Fourteenth Finance Commission of India, New Delhi. He teaches Introduction to Economics, Environmental and Ecological Economics, Public Economics and Development Economics. He has won the prestigious Global Development Medal instituted by the Global Development Network for the year 2008. Haribabu Ejnavarzala obtained Ph.D. degree in Sociology from the Indian Institute of Technology-Bombay in 1980 and taught at the Indian Institute of Technology, Kanpur between September 1980 and June 1990 and at the University of Hyderabad in from July 1990 to June 2015. He taught courses in the area of science technology and society interface over the last three decades. He has been carrying out research on social and cultural implications of genomics for agriculture. He advised 24 doctoral students and 12 M.Phil. students. He published research papers in journals such as Journal of Biosciences, International Journal of Biotechnology and Journal of Food Policy (on agricultural biotechnology and society interface), PLoS Biology and Current Science. He was an adjunct professor to the International Programs of the University of Iowa, Iowa City, USA for a period of six years from July 2007 to 2013. He carried out projects supported by the Rockefeller Foundation New York, European Research Commission, and IDRC, Canada. Currently he is associated with the Research and Information System (RIS) for Developing Countries, New Delhi. P. S. Geethakutty is former Registrar, Kerala Agricultural University (KAU) and Professor, Centre for Gender Studies in Agriculture and Farm Entrepreneurship Development of KAU. She had obtained her Ph.D. degree in Agricultural Extension from UAS, Bangalore. The Centre of Gender Studies in KAU was established in 1999 under her leadership, and since then she was heading the Centre. During 2007– 11, she was the Director of the Centre for Women and Gender Studies in NIRD, Hyderabad. She was heading capacity building programmes for the senior officers in India and South Asian countries for women development and political empowerment of women. She had undertaken collaborative projects in the area of gender with FAO, UN Women, DBT, DST, ICAR and MSSRF, Chennai. She had served as Member of the Working Group of 11th and 12th Five Year Plan. During 2012, she had served as Visiting Professor in Leibniz University, Hannover, Germany. K. J. Joseph is the Director of the Gulati Institute of Finance and Taxation and Professor at the Centre for Development Studies (CDS), Trivandrum. He is the President of Globelics and Founding Editor-in-Chief of Innovation and Development (Routledge). Gold Medalist of the Calicut University for M.A. Economics, he earned M.Phil. and Ph.D. degrees from the Jawaharlal Nehru

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University (through CDS) and undertook post-doctoral research at the Yale University as a Ford Foundation Fellow. Earlier positions that he held include Visiting Senior Fellow at RIS, New Delhi; Professor, Jawaharlal Nehru University (CSSP); IT Policy Consultant of UNESCAP for Cambodia, Laos, Myanmar, Vietnam, Thailand and the Yunnan Province of China; and Expert in Innovation Studies, Tianjin University of Finance and Economics, China. Apart from over 80 research papers and a number of policy-oriented reports, he has to his credit six books published by five leading international publishers. He has delivered invited lectures, keynote addresses and presented papers in over 150 seminars/conferences held in 35 countries. Anant Kamath is currently Assistant Professor at the School of Development, Azim Premji University, Bangalore, India. While his background is in economics and social science, his interests lie in technological change, specifically the sociological basis of technological change and outcomes. He has published in various international journals on issues of technology-society relations and has brought out a book in 2015 titled Industrial Innovation, Networks, and Economic Development. His second book titled The Social Context of Technological Experiences in India is underway. N. Mrinalini retired from CSIR-NISTADS as chief scientist. She holds a degree in Chemistry and a doctorate degree in Policy Research. Her research pursuit has been in the area of R&D and Innovation management and policy studies with a focus on R&D capabilities and institutional linkages. She has undertaken several national and international projects in this area. She has several publications both in national and international journals. G. D. Sandhya transitioned from a pure science (M.Sc. Chemistry) academic to a Ph.D. In Science Policy, adding a Diploma in Development Planning and Policy. Having retired as Chief Scientist from the National Institute of Science, Technology and Development Studies (NISTADS) of the Council for Scientific and Industrial Research (CSIR), Government of India, she now advises and supports knowledge for development initiatives in the not-for profit and for profit sectors. In NISTADS, her research focused on S&T and innovation policy, technological change in Indian industry, S&T policy reform and organizational change in China and other developing countries. Besides being widely published, her expertise has contributed to leading national (the Prime Minister’s Scientific Advisory Committee, the Department of Science and Technology, the CSIR, and several industries like textiles, silk, information and communication, and industrial research organizations) and international bodies and networks on S&T and innovation policy. Tamal Sarkar is a D.Phil. in the Economics of Cluster Development and has around 25 years of experience in industrial development, with special reference to micro, small and medium enterprises (MSMEs) in clusters both in India as well as

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various other developed and developing countries. He specializes in thematic areas like competitiveness, innovation, sustainable development and poverty alleviation. He has authored a number of policy and methodology documents in the area of MSME cluster development, cluster financing, poverty alleviation and resource based planning and have supported in creating over 200 cluster studies, value chain mapping, cluster mapping and led over 35 cluster development related projects in India and the world. He is a trainer in the area of cluster development and has conducted (or was faculty) for around 50 training programmes in cluster development methodology. He has extensive hands-on experience in implementing cluster development projects in the areas of pharmaceuticals, foundry, processed food, leather, ceramics, handloom and handicrafts. Geeta Vaidyanathan an architect from MS University, Baroda, did her Masters and Ph.D. from the University of Waterloo, Canada and Post-Doctoral Research at the University of Guelph, Canada. Her work on rural energy planning, diffusion of innovation and urban renewal is underpinned on community development processes. She has co-founded with Ramani Sankaranarayanan, the Canadian NGO, CTxGREEN (Community based Technologies Exchange, fostering Green Energy) partnerships, and is their Team leader, Community Initiatives for the Village-Level-Bioprosperity, Food-Fuel-Income Security Project in India and Kenya. She is also Associate Professor at the Faculty of Architecture, Sri Sri University, Cuttack, Odisha, India. She has over 19 years of experience in participatory habitat and livelihood design in Canada and India accompanied by action research and academics, in addition to 12 years of research on energy in building coupled to practical implementation. Projects were focused on shelter, renewable energy, appropriate technology and micro-enterprise development, while mobilizing and training local community members. Nonita Yap (Deceased) was the lead for the project titled “Innovations for Sustainability Among Micro and Small Enterprises: Case Studies in India-Project,” under which this paper was initiated. At that time she was Professor at the University of Guelph’s School of Environmental Design and Rural Development. She retired in August 2017 and was awarded Professor Emerita in March 2018. She passed away in May 2018, while volunteering with Canadian Executive Overseas in Bolivia. She had a Ph.D. in Chemistry from the University of Alberta. After a Post-Doc at Texas A&M University, she shifted her focus to Environment and joined the Board of Friends of the Earth Canada. She later completed a Masters in Environmental Studies from Dalhousie University and worked prolifically in the field. She was an environmental consultant with the Canadian International Development Agency and a staff for the National Round Table on Environment and Economy. Her work spanned over 20 countries, focusing on cleaner production and environmental policy. She was on a mission to make life better on this planet, and her mission had no borders!

Part I

The Problem

Chapter 1

Inclusive Innovation: Changing Actors and Agenda Rajeswari S. Raina and Keshab Das

Abstract This introductory chapter presents the spaces, forms and norms of exclusion mainly in and of rural India. It lays the foundation for explaining the evidence on how some of these exclusions have been overcome or changed to enable inclusive innovation, and how many forms and norms of exclusion persist. Theoretically, the state with its organized policies and programmes, and the formal organized knowledge actors are the fulcrum in both development economics and innovation systems studies. When exclusion in its multiple and mutually reinforcing forms becomes invisible or part of accepted norms of development, the nature of these actors and their agenda demand specific attention. Drawing upon the findings of a research project, which was that inclusive innovation demanded reform or major changes in the innovation system components, this chapter explores the conventional dichotomy between public and private policies and decision making, the capacity of the state and the market to direct and operationalize innovation and the role of organized science and technology (S&T) in the spatial diversity and informality of rural India. The agenda setting framing of development driven by industrialization and the supply of technologies for industrialization from formal S&T derive from ex-post analysis and theorization in development economics. This makes it impossible for the key actors— the state and formal S&T organizations— to engage with the massive informality, diversity of livelihoods and knowledge and the multiple exclusions in and of rural India. The ex-post theorization of development and approaches to organize science and technology for innovation for industrialization pay little attention to the history of economic development in the West. The state was one among several actors in the West, a big enabler of multiple sources of incremental and revolutionary technological changes and several institutional innovations. This introduction also points out that contrary to received wisdom from development studies and innovation systems framework, organized scientific research and the institutionalization of public and R. S. Raina (B) Department of International Relations and Governance Studies, Shiv Nadar University, Gautam Buddha Nagar, UP, India e-mail: [email protected]; [email protected] K. Das Gujarat Institute of Development Research, Ahmedabad, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_1

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private corporate science did not lead to but were the consequences of the first and much of the second industrial revolutions. The chapter details the organization of the book and the key evidence presented in each chapter, concluding with a demand for democratic decentralized innovation capacities fostered by communities, formal S&T and the state.

Actors and Agenda This book is one additional contribution to the burgeoning literature on inclusive innovation for development. What makes it different is that it explores the spaces, forms and norms of exclusion mainly in and of rural India. It presents evidence where these have been overcome or changed to enable inclusive innovation. Based on this evidence, it argues for changes in the nature of the state and in the nature of formal organized knowledge systems. These changes are absolutely necessary if inclusive innovation is to become a reality; changes that can be enabled by interactions and learning with diverse actors and their agendas for exclusion or inclusion in society. Innovation within two key actors, the state and the formal S&T system, has happened and enabled innovation in the rural informal arena. This book presents evidence from such cases. Organized knowledge systems include science and technology (S&T) organizations and artefacts, and university and firm-based research. But knowledge also exists as norms and actors (individuals and organizations besides formal S&T) governed by these norms. These include knowledge embedded in schemes and programmes of the state, rules for service delivery in banks, health centres and markets. Several of these rules and norms and actors, are designed to exclude and resist innovation. This book also presents cases where innovations have been resisted or have not happened despite the evidence of knowledge generation, access within and by individual producers and consumers in rural India. Theoretically, the state with its organized policies and programmes and the formal organized knowledge actors are the fulcrum in both development economics and innovation systems studies. In both, they shape economic growth, production and consumption, savings and investments, social and economic development, innovation trajectories and, most importantly, markets. Insights from the evidence presented and some answers to transform the carefully maintained distance between development economics and innovation systems framework possibly offer a few options for inclusive innovation for and in rural India. That these options include innovations in the prevalent relationships between knowledge and policy, in the spatial and temporal realities, nature of evidence and expertise, and decentralized democratic accountability, is what makes this book different. The state in India, has historically, promoted both inclusion and innovation for its rural poor. Inclusive innovation is supposed to result from reforms for inclusion and for innovation targeting those thus included. The affirmative action policy for the Scheduled Castes (SCs) and Scheduled Tribes (ST) is an ideal example of the former. Schemes supported by the division on Science for Equity, Empowerment

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and Development (SEED), of the Department of Science and Technology (DST), generating technologies for and ensuring access to and utilization of these technologies by the weaker sections of the population, SC/ST population groups and women, in particular, illustrate the latter. Underpinning these examples and the popular as well as the academic and policy imagination of inclusive innovation are several assumptions and unresolved problems. Some are concerns with the problem statement itself; will the supply of technology by the state to the under-privileged population groups enable inclusive innovation? Some are inalienable conceptual and theoretical issues; how does technological determinism shape National Innovation Systems (NIS)? Or, is there an evident incompatibility in conceptualizing innovation systems as relatively autonomous domains (of research, policy, enterprise, demand and intermediary actors) interacting with and learning from each other, and supporting the generation of technologies for innovation by individual producers and by rural industrial clusters? Some pertain to the ways in which the state thinks; how does the state convince itself that investment in the formal organized S&T establishment gets translated into innovation performance in the economy? Some explore the drivers of rapid economic growth; how does the dominant trajectory of capital-intensive, high-skilled innovation relate to rural poverty and exclusion? Is the state complicit in ensuring this kind growth? Do the social and natural sciences provide the evidence to make the state aware of the multiple alienations and exclusions created by dominant innovation trajectories? That the intersectionality of multiple exclusions and consequent identities is exploited by the state and some rural population groups for petty advantages adds to the complexity. ‘The rural’ is defined in India as anything that is not urban. Rural India provides the arena of this book to ask why inclusion and innovation as conceptualized and realized in the innovation systems framework happen at times and do not happen most often. The rural is simultaneously a set of contexts and processes that help explain how inclusion and innovation are enabled, and how they translate into economic performance. There is a felt need to define inclusive innovation and explore its theoretical basis (Cozzens and Kaplinsky 2009; Chataway et al. 2013). This book is focused on identifying and enabling the ways in which the state and organized knowledge intersect and interact with innovation in and for rural India. Theoretically, this is demanded by the voice and agency that development economics and the processes and structures of planned development interventions have granted to these two actors—the state and organized knowledge. The given theoretical legitimization of and frameworks for establishing and operationalising innovation systems for development in the Third World were formulated in the Western or Northern contexts drawing largely from ex post analyses (Lundvall 1992; Freeman 1987). The multiple exclusions and deprivation of the majority were not as painfully evident as it is today, particularly in developing economies. Many of the newly independent Third World nation states had, in the 1950s, inherited the development economics legacy of faith in development and the ability of the state to enable innovation opportunities as well as shape the markets to realize economic gains. Industrialization was acknowledged as the backbone of economic growth and development (Rosenstein-Rodan 1943), a blueprint of technologies for industrialisa-

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tion was available (Gerschenkron 1962), and there was a possible sequence or different stages of growth (Rostow 1960). These were part of the legacy of development economics that was inherited by those who ventured to operationalize innovation systems for development (Lundvall et al. 2009). Thereby, innovations for development—for industrialisation, urbanization, skilled workforce and capital mobilization for the same, promotion of markets and trade—have been explored in great detail (Fagerberg et al. 2009). The evidence presented in this book, about the various forms of exclusion, and innovations within the government (in the department of health or agriculture) or within a university or manufacturing cluster to ensure inclusion, pushes us to ask how evidence, especially scientific and academic evidence, is used in policymaking. How does scientific evidence get used in policymaking for inclusive innovation development? How do policymakers frame the questions, source the evidence and shape the research that needs to be done to generate further policy advice? (Sutherland et al. 2012). This book opens an array of questions about evidence and its use, whether it is within the state for policymaking, in formal S&T or in informal rural production units. Beginning with the evidence about the role of industrialisation in economic growth and development, in both development economics and innovation systems literature (Seers 1979; Freeman 1995; Lundvall et al. 2009), and the consequent faith that policymakers have in this path or causal relationship between industrialization and economic development (Seers 1979), the role of knowledge is one that has been framed a priori, to facilitate industrialisation processes. This, the ‘agenda setting’ framing of the relationship between knowledge and policy (Kingdon 1995), is one that brings further questions about the academic endeavour, evidence and policymaking in a democratic context. As long as the relationship between knowledge and policy is one of ‘agenda setting,’ a political and policy agenda drawn from the Western experience of industrialisation, economic growth and development, material and personnel flows into and outcomes of production investments in dominant (capital-intensive, high-tech, export-oriented, skilled workforce, exclusionary corporate R&D, high environmental costs) innovation trajectories, the evidence presented here will be of no consequence. The evidence presented here, about innovation within a public sector health scheme, the processes of learning and innovation in a rural industrial cluster, or the new rules and norms of business crafted by social entrepreneurs, demand a genuinely democratic state, willing to learn, enable learning and change for inclusive innovation, beyond a targeted industrial output or growth rates of value-added or capital accumulation. This book submits that the distorted relationship between democracy and capitalism (Bowles and Gintis 1986) cannot furnish the grounds, skills or material for inclusive innovation. Strange as it may sound to development economists and innovation systems experts, the book does not claim that inclusive innovation will lead to rapid economic growth. The innovation performance sought and enabled in inclusive innovation systems is decent work, prosperity, well-being and cultures of institutional learning and change. Economic growth in some sectors may be one of the outcomes, and may eventually turn out to enable more innovation (Rosenberg and Birdzell 1986; Mokyr 2016). By looking beyond the conventional dichotomy between public and private,

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or the capacity of the state and the market to operationalise innovation for development (see Lundvall et al. 2009), this book asks how alternative cultures of growth and development (Mokyr 2016; Shrivastava and Kothari 2012; Sachs 1992, 2017), a better appreciation of the relationships between the state and the market (Polanyi 1944 (2001 edition)), can be enabled. The analyses of inclusive innovation presented in this book demand capacities of development policy and knowledge, in particular, to understand and engage with decentralized democratic decision-making. These two actors, the state and organized S&T, have to engage with a different agenda, including different types and shades of markets and exchange mechanisms, use and non-use values of commodities, resources and people in diverse contexts. The next section discusses the genesis of the ideas in this book, highlighting the findings of a research project stating that inclusive innovation demanded reform or major changes in the innovation system components. Following this, we introduce the reader to how the developmental state understands and handles innovation. The demand for broad based rural development falls on deaf ears in India. This is because the key innovation system components, the state and formal S&T organizations, do not engage with the massive informality, diversity of livelihoods and knowledge, and the multiple exclusions in and of rural India. The agenda-setting policy framing of innovation for industrialisation as the preconceived driver of development is the legacy of development economics. This is a legacy that is difficult to dislodge. The next section discusses how the ex post theorisation of development and approaches to organize science and technology for innovation for industrialisation, ignore the history of economic development in the West, where the state was one among several actors. And there were multiple sources of incremental technological changes and several institutional innovations. Organized scientific research, the institutionalisation of public and private corporate science did not lead to, but were the consequences of the first and much of the second industrial revolutions. The last section presents the organization of the book and the key evidence presented in each chapter, concluding with a demand for democratic decentralized innovation capacities fostered by communities, formal S&T and the state.

Inclusive Innovation: A Project The entry of multinational capital as a key driver of national innovation and economic growth has been significant in India since 1991, the post-liberalization era. There has been political willingness and eagerness of the state to ensure innovation for development, even as it takes place adding value to multinational capital. Many innovation policy initiatives that responded positively to multinational capital learning from and catering to local markets—recall ‘bottom of the pyramid’ (Prahlad and Hart 2002), ‘frugal innovation’ (Radjou and Prabhu 2015) and ‘reverse innovation’ bringing local informal innovation to global business and value addition (Immelt et al. 2009; Jha and Krishnan 2013)—speak about this willingness.

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In India, with massive populations, natural resources, knowledge and social systems that are substantively rural, the Eleventh Five Year Plan (2007–2012) commitment to inclusive growth automatically generated a focus on the rural. Unlike the focus in previous plans addressing poverty or even inequality (where reducing the income gaps between the bottom and top deciles of a population would suffice), inclusive growth presupposes the ‘identification of the set of deprived that cannot and hence does not (i) participate effectively in the production process, (ii) benefit from it in terms of income generated, and (iii) experience welfare improvements as measured by consumption’ (Suryanarayana 2008, p. 95). But inclusion was interpreted very differently in much of what was pronounced as policy documents and programmes for inclusive growth—within the different arms (departments and ministries) of the Government of India. There was not much clarity about how inclusion was to be measured and what these measures entail in terms of data sets, monitoring processes and impact assessments of programmes meant to enhance inclusion (ibid.). Though, the spatial and organizational exclusion of rural India continued to receive some attention; be it through a policy favouring industrialisation in backward districts, or a scheme for proper pre- and post-natal nutrition and care. While it was obvious that inclusion demanded some innovation (new actors, concepts, data sets, ways of measuring and evaluating performance) within the state, little was attempted. With escalating clamour for economic growth, the state and major stakeholders (whether they were big businesses or caste groups seeking reservations) demanded incremental changes to foster their stakes, be it through FDI, skill development, infrastructure and more extractive industries to fuel economic growth. There was little acknowledgement that the twenty-first century presents contexts where the rural is changing and is being reconfigured by multiple global, national and local changes mainly in social systems, resources, work and technology. Rural India is the embodiment of multiple exclusions. Evident in the form of geophysical and locational disadvantages, poor and in many cases non-existent infrastructure like roads, and reliable electricity, inadequate services like health care and education, meagre micro enterprise based subsistence, largely agrarian and extractive industry employment, exploitation and immiserization of women workers, and a heavy burden of caste and gender discrimination within, the efforts to alter these persistent exclusions and convert them into inclusions have been the forte of India’s national planning and development policy decisions. Historically, many policies and programmes have had an impact, articulating and addressing these exclusions, and creating the space and support for pro-active inclusion, be it through legal, institutional reforms or specific programmes as, for instance, the smokeless cook stove or the pre- and post-natal care programme.1 1 Though

all these institutional reforms and development programmes are policy instruments designed by the state, there is an important distinction that we note, of great import for the options available for inclusive innovation. The social sciences led and politically articulated initiation of and further evidence generation and policy reference to the institutional reforms like tenancy regulation, land reform, employment guarantee legislation, affirmative action or reservation for specific caste groups, are distinct in their policy intelligence and policy processes, compared to the technical, natural and physical sciences led and a rather apolitical proof of concept and programme design that

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Inclusion, innovation for development, inclusive innovation and many such concepts are now part of official parlance, academic analyses and media reports (several of these are referred to in this chapter). This book stems from a research project on ‘Innovation Systems for Inclusive Development: Lessons from Rural China and India’, involving researchers from India and China during 2009–2012 (called the SIID project, Systems of Innovation for Inclusive Development), sponsored by the International Development Research Centre (IDRC), Canada, which addressed the question of inclusive innovation (see IDRC 2009).2 The main argument was that inclusive innovation demanded innovation in and of all the components of the innovation system. Summarized (looking back from our vantage point a decade later) in a rather naive fashion in the project proposal (Table 1.1), the project defined an inclusive innovation system as one that would essentially understand, articulate and respond to the demands of rural India and China, and lead to inclusive development. Presenting innovation and development as corresponding angles traversing the two parallel, distinct and comfortably distant intellectual worlds of innovation systems and development economics (Wu and Raina 2008), a small research team and a committed donor agency (IDRC) willing to address this conundrum, started work on the SIID project. This was in the wake of a global economic crisis with Indian and Chinese economies growing rapidly with increasing inequality. Globally, the importance of the spatial dimension of poverty and inequality were evident in the noticeable increase in the Gini coefficient when China and India were included in population-weighted global inequality estimates (Milanovic 2012). Increasing rural– urban inequality in these countries, where the population is predominantly rural (72% in India compared to 60% in China in 2005) did cause a marked global shift in inequality. As academics in India and China, mainly from the public sector S&T and university systems, the SIID team did carry its ‘knowledge industry’ baggage. Being increasingly noticed for the rapid growth of the knowledge industry and their economies, both India and China suffered from the lack of capacities to translate this knowledge/information industry into economic development (Leadbeater and Wilsdon 2007; OECD 2007; ADB 2005). The SIID team was concerned about how this massive knowledge industry—especially the public sector S&T system could support innovation efforts that could help the massive numbers of people in the vast informal economy in rural India and rural China. What was needed was not mark development programmes and inputs therein, be it a smokeless stove, a weaving technology or even a commodity market. That both institutional reforms and specific development programmes are innovations within the state, and that both have technological innovations and institutional innovations that evolve together give us crucial leads to explain the evidence of inclusive innovation and explore options for action later in this book. 2 The SIID team had Rajeswari S. Raina (Centre for Policy Research) and Xiaobo Wu (Zhejiang University) as Principal Investigators from India and China, respectively, with K.J. Joseph (Centre for Development Studies), E. Haribabu (Central University, Hyderabad), Keshab Das (Gujarat Institute of Development Research) and Nimmi Kurian (Centre for Policy Research) from India, and Shulin Gu (formerly Tsinghua University), Zuhui Huang (Centre of Agriculture and Rural Development, Zhejiang University), Guo Bin, Yongyi Shou and Ye Chunhui (Zhejiang University).

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Table 1.1 Inclusive development approaches versus the conventional development approaches—a comparison Innovation components/functions/roles

Inclusive

Conventional

People

Widespread democratic participation of people

The majority of the population excluded

Knowledge

People as repositories of knowledge—shaping and changing knowledge

People as passive recipients of knowledge transmitted to them; with capacities for adaptation

S&T focus

Focus on capability building—learning with and from the community and formal organized knowledge systems

Focus on top-down training without integrating local knowledge systems

National economic issues

Address both domestic needs and opportunities from international markets

Export orientation with focus on quantitative output growth

Spatial issues

Balances between urban and rural, between industry and agriculture, and between economic growth and environmental sustainability

Wide disparities between urban and rural, between modern and traditional sectors, and increasing environmental degradation

Interaction/learning

Promote interlinkages and overall innovation system performance—equality, effectiveness and efficiency

Promote interactions within segregated national and regional/sectoral innovation systems

Institutions/rules/norms

New and flexible institutions or rules of engagement among actors

Rigid and bureaucratic formats of engagement or linkages between actors

Source Wu and Raina (2008, p. 4), SIID (2010)

just a supply of technologies that reduced the costs, enhanced production efficiency and increased the availability of goods and services needed by the poor, but (more importantly) the ways to open up learning, sustainable livelihoods and productive income-generating opportunities for the poor. The project analysed and worked with policymakers, researchers and practitioners within and outside the state, presenting evidence about forms of exclusion in the rural areas of India and China, forms of inclusion and ways of innovation—technological and institutional, which have enabled inclusive development outcomes (Special Session, GLOBELICS, 2012; 5 issues of SIID Policy Options 2011–12). The researchers pointed out that innovation for inclusive development demands inclusive innovation system components and linkages. Fundamentally, innovation was not confined to products or artefacts or the ways of delivery of these products to the poor, but included several modifications in planning and intervention, new actors/organizations and ways of working, new norms of exchange and market development, new investments

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and ways of investment, reforms in information generation and access to information, and new ways of risk reduction and capacities for adaptation and re-distribution of risk. This book presents the evidence of such inclusive innovation, which have reformed the formal state and the S&T actors involved and their ways of working as they led, enabled or participated in the innovation system. The agenda to include the rural poor and innovate for them is embodied in the very conceptualization of ‘rural development’. Contrary to the given wisdom of development economics of the 1950s and 1960s, many countries that became independent from their colonial masters in the post-war era conceptualized a development agenda for their rural populations. Urban populations with skills required to operating the industries essential for economic growth and development in these economies, and ability to emulate the Gerschenkronian blueprint for investments in technologies and industries, did not demand an urban development conceptualization or innovation for urban development. They were endogenous to and constitutive of the very theorisation of development. It was rural populations involved in agrarian livelihoods and with limited skills for industrial jobs that needed a separate agenda for rural development, over and above and distinctly demarcated from the theoretically espoused development agenda which embodied and included urban development. Drawing upon the SIID project and other evidence on inclusive innovation in rural India, this book questions the fundamental demarcation or exclusion of ‘the rural’ within the overall development agenda of a nation state, which then demands specific policy instruments in planning and investments for rural development. Poverty eradication programmes have been part of India’s development history since the 1960s. The relationship between the rural poor and urban poor was recognized early in the 1950s; there was a concern that as much as 30% of the increase in total income during the decade of the 1950s had accrued to the higher income groups like salaried government personnel, traders and corporate sector (Raj 1961). This led to the demand for patterns of economic growth that would not make the bulk of the population feel that they have been excluded (ibid.). The desired political deliberation on growth did not happen (or happened only in radical groups). Instead, poverty eradication (the slogan garibi hatao) became embodied as programmes designed for the poor, especially as rural development schemes and programmes that supplied production inputs, infrastructure and other material support to individual farmers, workers and artisans. In recent years, given the increase in urban poverty and evidence of jobless industrial growth (Nagaraj 2011; Das et al. 2015), the inclusion and innovation agenda has encompassed both the rural and urban poor. This book reflects on the nature and magnitude of these programmes for poverty eradication through various means, planned and designed by the state, its policymaking and administrative arms, scientific and technological expertise, and procurement and disbursement agencies for almost everything ranging from food grain to welfare like education and health care. When formal actors or organizations have acknowledged persistent and multiple exclusions of the rural poor, and have modified their own ways of working, inclusive innovation for rural development has been enabled; the formal actors learn from and with actors in other (predominantly informal) domains of the innovation system.

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An Inclusive Innovation Fund was launched by the Government of India in 2010. It was ‘built on the principle that innovative enterprise can profitably, scalably and competitively engage citizens at the bottom of the economic pyramid; and in doing so, provide goods and services that will transform their lives for the better’ (NIC 2011, p. 1; Office of Advisor to Prime Minister 2011). The two predominant assumptions about inclusion and innovation were that the investments for these have to come from the state and that when targeting the rural poor, delivery mechanisms matter. All it takes for innovation to work for rural development is then a similar funding by the state, and proper delivery of the technologies, products or services to the rural poor. The innovation fund was to ‘focus on providing risk capital funding to enterprises that create and deliver technologies and solutions aimed at enhancing the quality of life at the Bottom of the Pyramid’ (op cit). The latter, in practice, translates to the hierarchy of organized scientific knowledge to generate technological solutions, and the entrepreneurial capabilities that have to be re-oriented to work on these and deliver innovation for the rural poor. The SIID project analysed innovation by the rural poor; by farmers, artisans and entrepreneurs working in informal unorganized systems creating and enabling development.3 Entrepreneurs or actors in the informal sector, their risk assessment and risk-taking capabilities, the firm-level re-organizations and mergers or agglomerations that keep them in business, the market organization formats and exchange mechanisms they deal with, are complex. They involve regular learning exercises and levels of flexibility that are not appreciated by ‘innovation funds’ that supply risk capital to enterprises to enhance the livelihoods and incomes of the rural poor. The simple and rather obvious fact that the entrepreneurs who cater to the bottom of the pyramid would also have learned how to keep their clients at the bottom of the pyramid seems to have escaped the state that promises to deliver innovation for rural development by supplying risk capital. The informal sector entrepreneurs also know how opportunities to climb up the pyramid or shift the economy from a rigid pyramidal structure to a relatively flexible flatter amoebic form are perpetually denied to their clients. It is by identifying and catering to the various exclusions from the mainstream in which the rural poor do not participate that these entrepreneurs make their livelihoods and those of the rural poor. Forms of exclusion that are evident, like poverty or a rural location, are perhaps easier to address through formal development programmes or innovation projects, and through informal efforts whether they are community-based, semi- or unorganized or individual efforts. But there are exclusions that are not explicit and are constitutive of several of these formal and informal organizations, which are intractable because of their very constitutive nature, as embodied in a pricing mechanism or the norms governing a financial or scientific research organization or an industrial production programme. Inclusive development or more specifically, innovation for

3 Some

chapters in this book present these analyses and working papers developed within the SIID project. They include innovations by farmers (and their organizations or networks) cultivating cardamom, millets, rice, weavers and weaving clusters, small or micro-entrepreneurs.

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inclusive development, becomes difficult because exclusion in its multiple and mutually reinforcing forms becomes invisible or part of accepted norms of development. This book presents the spaces, forms and norms of exclusion and inclusion, evidence of inclusive innovation in formal organized spaces, and evidence of inclusive innovation in informal unorganized spaces. The evidence that many of these have been or are being challenged brings to the book, its substantive content. That many opportunities for learning from these and thereby options for reform are either irrevocably lost or at times recovered in a dilute or inappropriate form, to enter policy formulation and implementation, gives the book its deliberative analytical and normative content. In a concluding part, the book discusses ways to identify and enter the spaces, forms and norms of exclusion. This, the ability to identify exclusion, the democratic and ethical challenges posed by exclusion are central to innovation capabilities for development.

Innovation and the Developmental State The innovation systems framework and the conceptualization of the national innovation system (NIS) seem to have high acceptance within the development planning mechanisms and political leadership of developing countries like India. India’s Twelfth Five Year Plan (Planning Commission 2012) promised innovation for faster, more inclusive and sustainable growth. Even after a significant regime change, the Niti Aayog (which replaced the erstwhile Planning Commission in 2014) continues to promote the National Innovation Foundation (founded in 2000 in Gujarat by Prof Anil Gupta and adopted by the Department of Science and Technology of the Government of India in 2012) and has created an Atal Innovation Mission (Niti Aayog 2015) to promote a culture of innovation and entrepreneurship. (http://niti.gov.in/ content/atal-innovation-mission-aim). Innovation is expected to play a major role in development, driven by the need to reduce social exclusion, the widening rural–urban and agriculture industry divides and disparities, partly the consequence of past development models. How can the innovation systems framework be applied to and enable inclusive development in a developing country like India that faces the pain of structural unemployment? This book argues that the current conceptualization, planning and implementation of development for rural India will need some fundamental changes, if the developmental state intends to enable inclusive innovation.

Broad-Based Rural Development and Innovation Theoretically, the innovation systems framework presupposes the existence of certain ground rules or social processes that enable innovation (Lundvall 2010). Referred to as the innovation ecosystem and proclaimed as something that can be created by

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the policies of the state, it is assumed that the ecosystem is one that comes with the consensus and acquiescence of the actors or organizations in the innovation system. In other developing societies, social cohesion and broad-based rural development preceded the major innovations like land reform (Grabowski 2002). Historically and socially, the capacity of the state in countries like Taiwan or South Korea to ensure land reform and create more equal opportunities for rural populations to participate in the production and distribution activities thus unleashed (Kay 2002) is very different from the capacity of the Indian state to ensure the policy planks of input subsidy and output pricing as the key drivers of enhancing agricultural production (Ray 2007). Whether it was in Meiji Japan or modern South Korea, the advances in technology (water control, or seed selection methods) or institutional changes (credit or market facilities, land reform, etc.) leading to productivity enhancement seem to happen because of several informal associations or linkages, social cohesion and strong linkages between producers and the domestic markets through new growth opportunities for a range of intermediary actors (Grabowski 2002). A natural question then, is how this consensus evident as social cohesion among innovation system components is to be created. The history of rural transformation and the role of innovation systems in diverse contexts point to the need to understand the roles of agricultural and rural industrial development—being both foundational and catalytic. Rural India as a spatial entity brings an important dimension of selective achievements in increasing crop/livestock productivity and performance of rural manufacturing in some areas/pockets; say, the green revolution states or new cropping systems like soya or leather, textiles or pottery clusters (Vaidyanathan 2010; Das 2015). But the innovation system actors relevant to system-wide development are either missing or are compartmentalized sector-wise and functionally; their isolation, linear hierarchies and upward accountabilities reinforce decisions predicated on technological determinism and assumptions about the presence of passive technology-adopting rural populations in homogenous sociocultural contexts. For instance, the understanding of diverse social and biophysical contexts or technological capacities to engage with production problems in rainfed agriculture (Shah et al. 1998; Raina 2006), banking systems (Nair 2015) and agricultural markets (Singh 2006) remains limited, leading to exclusion, almost by default. In effect, the range of formal innovation system components seem incapable of learning and changing their ways of working to address both technological and institutional innovation necessary for rural India. It is important to understand the mutual shaping of innovation systems actors and the structural features of specific sectors—agriculture and rural micro/small manufacturing sectors, in the context of agenda setting development paradigms, if millions of the rural poor who have thus far been excluded are to be equal articulate participants in innovation and development. Given that agriculture, like other ‘traditional’ low technology sectors, is an indispensable player in the innovation systems in developing countries (von Tunzelmann and Acha 2005), the relationships of innovation in the sector with other sub-sectors of the rural economy especially the intermediary actors like processors, traders and financiers (Grabowski 2002), demands detailed study. Ideally, the dynamics of developing country NIS derives from the inclusion of agriculture in learning and capability

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building, and interaction of agriculture with other sectors and actors in the system (Raina 2015). In modern Indian agriculture, the state and its patronage of knowledge and various other inputs have focused on the production and productivity-enhancing roles of agriculture, and in the process have interfered and disrupted several others—employment creating, ecological and social functions and roles of agriculture (ibid.). Both as alternative livelihoods options for agricultural and rural labour and in a substantive sense of contributing to higher levels of regional income, employment and growth through elevating the capability of factors of production, the micro, small and medium enterprise (MSME) clusters have been construed as major conduits of progress. Industrial clusters have gained acclaim within development policy, through which specific regions or artisanal communities can be empowered economically and socially. Several cases ranging from the Italian garment clusters to IT clusters in Malaysia or South Korea have shown how a variety of local productive activities can be unleashed that not only would help generate income and employment in these clusters but also help foster an innovative ethos that is crucial for the growth, evolution and sustainability of local enterprises. Innovation economists and economic geographers also observe and argue that agriculture and small and medium enterprises in rural areas rely on location-specific conditions and develop traditional skills and tacit knowledge which are often unique to the locality where they are tried out and are possessed in social networks and local cultures (Cooke and Morgan 1998). Examples galore across the world reveal how MSME clusters, even as these often engage in the production of the so-called traditional goods, have done well in entering competitive global markets by creating niches and/or striving to enhance product quality, sticking to exacting standards of higher quality, delivery schedule and also post-sales customer services (Das 2005, pp 2–4). In terms of planning interventions, the big question is how to facilitate the massive inclusive development potential of these enterprise clusters. It is in this emerging business perspective for the MSME sector that inclusive innovation assumes importance. Investing in and enabling innovation in the huge and diverse informal sector rural (artisanal) clusters which receive limited attention from the formal organized S&T establishment, have few formal organized firms and or institutions and norms (which the firms of western economies do have) brings on board several challenges. These range from appropriate decentralized databases to dynamics of intra-sectoral and inter-sectoral resource flows, management of labour and skills, domestic markets and standards. That the SIID project (IDRC 2009) was followed by a major programme on Innovation for Inclusive Development (IID) for five years (2011–16) (IDRC 2011) which closed down in 2012, citing reasons of budget cuts, remains a puzzle to several innovation system scholars (Dickson 2012). But the fact that innovation systems scholarship may have contributed to a committed donor shutting down the only programme of its kind in the world is more than a lingering doubt. The focus of IID was on innovation for inclusive development, and it was intended to contribute to ‘building new bridges between innovation studies and development studies’ (Santiago 2014, p. 2), as the SIID project proposed to do. The difference between the SIID project of

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Indian and Chinese scholars and the larger IID programme was in the conceptualization of development and inclusive innovation—in that order. ‘IID expected to provide evidence on how innovation in informal settings can improve livelihoods and contribute to development processes that are more inclusive and sustainable.’ (op cit.). This was distinct from the SIID project objective ‘to analyse poverty, inequality and social exclusion in China and India, and explore the corresponding policies necessary for the transformation of knowledge infrastructure of NIS in order to enable socially inclusive and harmonious development’ (IDRC 2009). That the nature of development was questioned and the demand was made for evidence of reforms or changes within the knowledge infrastructure of the innovation system—mainly the state’s policies and its formal organized S&T, made the SIID project a bit too radical (perhaps) for the IID programme and for IDRC as the donor.4 The exclusion of the SIID project, even within a thematic programme designed for inclusive innovation, is yet another illustration of the trivial stakes of actors in formal organized knowledge systems. There are millions in rural India and China who are perplexed at what their own (developmental) state does to them. They do not understand the dominant development agenda or the innovation trajectory that keeps a spatially and socially alien development agenda going. This book acknowledges their agenda; they have to keep their informal innovation processes going, learning and evolving, for survival and for every chance to improve their quality of life.

‘Agenda Setting’ and Reforming The policy sciences present ‘agenda setting’ as one of the theories of policy change (Kingdon 1995; Baumgartner and Jones 2002). The agenda setting theory of policy change tells us that the way problems are defined determines whether and where they are placed within the policy agenda. Thereby, when development and innovation are set in the policy agenda and political arena (including the government, interest groups and advocacy campaigns) as the Western model of industrialization-led development and capital-intensive technology choices, inclusive innovation for rural India will get attention only if the problem is defined as innovation in the informal sector that can contribute to development (as seen in the IID case IDRC 2011; OECD 2013; World Bank 2013; Government of India 2014; Chataway et al. 2013). Though past attempts to reduce inequality and poverty were in a context of low growth, poverty exists today in a context of rapid economic growth over the past decade which accentuates the increasing inequality; with 270 million Indians living below the poverty line, and over 80% of the poor in rural India (World Bank 2016). Though poverty had declined overall at the turn of the century (Dev and Ravi 2007), rates of decline in poverty have been the lowest during the 1990s than ever before, 4 Note

that no mention of the then ongoing SIID project is made in the IID document (IDRC 2011) or in Santiago (2014).

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with an increase in economic inequality in all its dimensions, most specifically as urban growth against increasing rural poverty (Sen and Himanshu 2004; Lanjouw and Murgai 2009). This is reflected in the patterns of employment and GDP sectorwise, where it is evident that a massive share of the national workforce (53%) lives on a steadily thinning share of the economic pie contributed by agriculture (down to 13.8% of the GDP in 2011–12 and marginally higher at 16% of the GDP in 2017– 18). This decline in the economic contribution from agriculture and the shrinking share of rural industries within the manufacturing sector happens in the context of the increasing number of (young) unemployed people in rural areas and a national scenario of jobless industrial growth (Papola and Sahu 2012). A ‘broad-based’ development strategy (much like the Japanese case) that will lead to increased productivity and employment among a large and growing number of small farms is necessary for ‘countries with abundant rural labour’ (CARL) (Tomich et al. 1995). But in India and in many other developing countries with abundant rural labour, low levels of formal skills and abysmally low wage rates, the preferred path is one of capital inputs and increasing technological change in agricultural production. Based on empirical evidence of poverty and unemployment, there were critiques of policy processes in the past that favoured large farms and industrialisation of agriculture, and recommendations of strategies for a different engagement of the state with agricultural production, labour and capital investment, knowledge generation and transfer (Rudra 1978; Sen 1981). Few were, however, considered in the dominant policy agenda, and converted to effective policies for enhancing the productive capacity of the rural poor. The ones converted to policies or even legal instruments or acts for employment generation or poverty reduction, like the National Skill Development or the Mahatma Gandhi National Rural Employment Guarantee Act, sit in the dominant policy agenda for industry-led development fed by surplus capital and labour generated in rural India. Increasing inequality, domestic (Himanshu 2018; Dev and Ravi 2007) and global (Milanovic 2009), and the exclusion of rural populations from (mainly service sector led) economic growth have become significantly higher after the 1990s. But this has also become acceptable, as part of or a pre-requisite for the dominant policy imagination of development. From the theories of Lewis (1954) who addressed the daunting ‘structural unemployment’ issue that appears during catch-up of a backward economy with characteristic dual structure, to the essay of Prebisch (1959) who argued on the unequal relationship between the central and periphery countries, the major solutions recommended were the development and expansion of the modern and the urban. What was the role of the state in this expected modernisation and urban growth? In South Asia, the state was the provider; from land and resources, to knowledge and export facilitation. Modern industry was the user. The East Asian Tiger economies took an industry-led process to their economic growth. Their experiences were summarized as export-oriented development (The World Bank 1993), meaning that they acquired technologies externally, accessed external demand and gained incentives from the international market, so as to overcome the difficulties and constraints of their small domestic markets. Very few among scholars noted the massive internal institutional reforms—within the state, its bureaucracy and its S&T organizations; they were the key to identifying these external high-tech demands, re-orientation of

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knowledge and production systems, and building capacities within industry to play different markets differently (Amsden 1992). Fewer still were the ones who argued that the nature of state and public support for innovation and development were very different when the Western economies were growing in the nineteenth and twentieth centuries, and that getting the state–market relationships right, was far more important than the race to catch-up with the developed industrialized countries (Chang 2009). Social inequality and exclusion, consequences of dominant innovation trajectories and development policies based on accepted development theories (Kaplinksy and Morris 2009; Cozzens and Kaplinsky 2009; Sachs 1992/2010; Escobar 2010) were also handled differently in the history of innovation and development in the West. In the European development experience, the opportunities for emigration of large chunks of the population to the “New World” eased the difficult social transition process. Within the larger agenda setting development articulation, the state in less developed countries like India had little need to learn about exclusion or about reform of its own administrative and technological arms. Demands to confront the challenges of massive structural unemployment in India, with ‘inequality reducing’ technologies, were made (Reddy 1975), with widespread participation and enhanced capacities of people at the actual production sites in farms and firms in rural areas. Enhanced capacities were demanded within other innovation system components too, such as banks, extension agencies, private input suppliers, local administration and policymakers, over and above capacities within formal S&T organizations (ibid). But that is a part of the untold history of innovation for rural India.5 Innovation, when defined as the processes of change when the generation and utilization of knowledge by people occurs in economically productive and socially progressive ways, demands a shift from linear top-down technology generation and transfer models entrenched in India’s S&T establishment, to non-linear systems perspectives, interactions and linkages (Lundvall 1992; Nelson 1993, 2008). In conventional development and innovation for development, knowledge is seen as a transaction between knowledge producers (scientists and social scientists) and knowledge users (policymakers or decision-makers). Such a dyadic framing of knowledge fails to recognize people as repositories of knowledge, with active stakes and interests. In the recent past, the term innovation has been appropriated by the state, into the national and sectoral development plans and documents. But this dyadic relationship among select knowledge producers and users (for policies or plans or schemes), which relegates people and their capacities into target or beneficiary statistics, is very dominant and prevails unhindered. Reforming this agenda setting policy framework is difficult; but possible. We will have to revisit key insights from the history of the role of the state and the role of science, and the relationships between the two in the industrial revolution of the eighteenth and nineteenth centuries. 5 The

debate about the technological determinism in this demand still awaits a jury. But there is no argument about the fact that this paper (Reddy 1975) and the consequent establishment of ASTRA at the Indian Institute of Science (IISc), the heart of India’s scientific empire, with a conscious architecture and strong linkages with the Karnataka State Council for Science and Technology (KSCST) are major institutional innovations within the S&T establishment.

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History as Eye-Opener Though urbanization was evident in ancient civilizations in the Orient and urban centres were technologically advanced even in medieval Europe, the rural resources and populations were crucial to the wealth of nations. Industrialisation, with factory production as a major innovation, changed the nature and role of urban centres in the mid-eighteenth century, drafting a new relationship between the rural and urban production systems and people. This has been documented and analysed in detail. But the role of the European industrial revolution in shaping innovation and exclusion in other nation states needs more attention. The drivers of industrialisation and urbanization, and the consequent institutionalization of exclusion of the rural within the state’s planning/administration systems and its scientific research systems, have their roots in this history; an assumed causal relationship between scientific research for innovation and its application for industrial growth and development. It is exciting and alarming, simultaneously, to see how many Indian innovations and their contexts read much like the pre-industrial revolution period in Europe. The late medieval (1150–1500) period in Europe witnessed massive technological progress that had little to do with systematic learning (Mokyr 1990). These technological changes were ‘concentrated largely in the private sector … carried by peasants, wheelwrights, masons, silversmiths, miners and monks. It was, above all, practical, aimed at modest goals that eventually transformed daily existence. It produced more and better food, transportation, clothes, gadgets, and shelter’ (Mokyr 1990, p. 56). Going further into post-renaissance and the enlightenment Britain (1800s), the comparison with contemporary India brings home the painful reality of persistent exclusion of rural India, its people and production systems from development processes and gains. The existence of ‘established agricultural and industrial sectors’ alongside ‘a booming software and international services industry that has fuelled new cities, a new middle class, and immense private fortunes, while the majority of Indians remain largely untouched by these changes and stuck in some of the world’s worst poverty’ (Goldstone 2010, p. 994). While we agree with the overall comparison of Britain of the 1800s and contemporary India, the opportunities for technological change, innovation and growth offered by the co-existence of optimism and pessimism, we note serious differences between the two. First and foremost, in this history, the state was a minor player in formulating and enabling innovation, industrialization and economic growth. Most striking is the revelation that the state, whether in Britain or any European country during the first industrial revolution (1750s–1880s), was aware of the importance of technology, but was not theoretically informed about the much-touted purported causal relationship between innovation, modern industrial growth and consequent economic growth. The state in this history of innovation was one among several other players—the reasonably autonomous spheres of industry, trade, finance, science, politics, education, art, music, literature, religion, and the press—all of them playing crucial roles in innovation, the organization of agricultural and industrial

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production as well as civic life, innovation and economic performance (Rosenberg and Birdzell 1986). In a society marked by pluralism and diversity of actors and opportunities, the scope for innovation was indeed unprecedented and enormous. Over two centuries of social and political churning before the first industrial revolution had generated major institutional innovations like the norms of the firm (as opposed to the feudal family firm), double-entry book-keeping, banking and insurance norms, and the establishment of formal courts and the rule of law (ibid.). That these processes of institutional innovation had enabled a state that respected these institutions and the relative autonomy of actors (organizations and individuals) governed by these institutions is a striking feature absent in the modern Indian state, irrespective of the political party governing the country. The Indian state as patron and donor, playing an agenda setting role in the planned economy, seems to have a hearty disrespect bordering on contempt for the relative autonomy of industry, science, trade, finance, education, the arts and the press. So much so that multiple informal exchanges of knowledge and technology, and iterative processes of learning (that marked renaissance Europe) which are key to the survival and economic performance of the majority, exist in the massive unorganized and informal sector in India, ungoverned and without funding by the state. This may well be the fount of the next phase of innovation, economic and social well-being, global value addition and trade (Jha and Krishnan 2013; Das 2011; Papola and Sahu 2012). The private actors—the peasants, wheelwrights and silversmiths of Europe—had some control over their production systems and the technologies they generated or made incremental improvements to. But India’s informal actors in their daily private businesses or production systems, face the dual burden of the heavy-handed regulatory state and the private ‘corporate’ actor as the only or most legitimate private actor eligible to collude with the state to create markets and manufacturing systems that work towards their profits. Industrial growth, planned to be a major employer in the decades following independence, is accepted in the post-liberalization era as a sector marked by jobless growth. Contrary to the state during the first industrial revolution that responded to the demands for capital saving and labour using technologies that made the factory floor, work and skills work towards increasing profits for the firm and wealth for the nation, the twenty first-century state (not exclusively in India) is devoted to politically and legally supporting the fourth industrial revolution (Industrie 4.0)! This information technology led, capital-intensive and labour saving/displacing industrialisation and service provision, is designed to enhance profits for the corporate firm (an institutional innovation that emerged during the second industrial revolution in the 1880s–1920s). That this happens with increasing distance between and monetization of the material basis and social sources of wealth, irrespective of the national state, spells danger for innovation and inclusive development. Second, the organized scientific research entities, with public sector investment in the establishment and conduct of S&T, as well as the organization of in-house industrial R&D, did not lead the world to, but followed, the first industrial revolution and much of the second. That all the economic theories prescribing or assuming the state’s ability to invest in S&T, to ensure the supply of technology for industrial

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growth came in the post-war (post 1940s and 1950s) period in the twentieth century, and that the first and second industrial revolutions happened with little or no support from organized scientific research (Rosenberg and Birdzell 1986), ought to send a powerful message to the Indian planner. Though Europe had achieved progress without science and used chemicals without chemistry in a wide range of manufacturing enterprises during the middle ages, it had by the 1500s achieved technological parity with the most advanced parts of the Islamic and Oriental worlds (Mokyr 1990). The parallel worlds of philosophical enquiry and technological livelihoods applications did not need each other (Rosenberg and Birdzell 1986). As explanations of natural phenomena with ‘unprecedented potentialities for practical applications’ European scientific and economic actors ‘developed what amounted to a system of innovation, first at the level of the firm and then at the level of the economy as a whole’ (ibid., p. 243). Though chemistry and physics were applied to industry during the first industrial revolution, it was during the second industrial revolution in the USA that Carnegie steel employed its first chemist with a specific research problem. The full impact of physics was felt in industrial technology only after 1875 with applications of electricity, radio technology, and the fruitful establishment of Edison’s Menlo Park in 1876 as an ‘invention factory’ carefully selecting its inventions which had potential commercial value (ibid.). Whether it was chemistry or physics, whether it was meat processing or cement manufacturing, industrial research was made possible by an important institutional innovation, the evolution of the scientific method, which gave science its own language and autonomy from the economic and political spheres (ibid.; Shapin 2006). Despite its limitations, and the many social factors constructing its contours, the scientific method gave the community of learners and experimenters, the ability to draw legitimization and validation (especially prediction and control), to cooperate, compete and collectively resolve conflicts. This enabled the non-hierarchical organization of science within and across nation states. It also gave this community the capacity to respond to the demands of diverse donors (ibid.). It is with the emergence of the state as the major patron and organizer of scientific research that three key features of innovation and the participation of scientific knowledge in innovation began to change These features (i) decentralization of the selection of innovation projects, (ii) the incentives for innovation and (iii) the diversity of research organizations (ibid., p. 260) were not amenable to the state’s centralized planning and funding mechanisms. The institutional flexibility that enabled the emergence of organized scientific research was lost by the 1950s, when public sector research was accepted unchallenged, in both capitalist and communist regimes. As scientific research was propounded as a key investment for innovation and industrial growth, the diversity of problems, multiple sources of innovation, and diverse decentralized funding and conduct of research were forgotten. There are several theoretical insights that development economics of the 1940s– 1970s brings to the innovation systems framework. Empirical evidence about (i) the state, its political and administrative capacities for inclusion and innovation and (ii) the organized formal knowledge system, its rules, norms and ways of working, that transformed the economies of the Western welfare states from predominantly agrar-

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ian to industrial, seems to be repeatedly collected and analysed to prove these theoretical expectations. We must note that, historically, these were consequences of the first and second industrial revolutions and the innovation systems involved in these revolutions. This is something that governments and the scientific research establishments in developing countries forget. The historical causal relationship between organized S&T and innovation for development in the West was reversed in development policy enacted in the less developed countries, within a powerful agenda setting framework. This calls for academic and political attention; some of which is attempted in this book.

Inclusive Innovation: In and for Rural India As editors of this volume, we have considered the scrutiny and academic reprimands the chapters included here may receive. Majority of the chapters are not authored by innovation systems scholars and all are not from the SIID project team (except four). An involvement in the problem beyond a fieldwork or case study visit and a definitive lived learning experience is the hallmark of each chapter in this book. And as editors, we made a decision to maintain this quality of a dynamic field narrative in these chapters. We present 10 chapters with evidence of inclusive innovation in and for rural India, in Sect. 2, titled ‘The Evidence’. This first introductory chapter in Sect. 1 titled ‘The Problem’ is authored by us, the editors. The last chapter, in Sect. 3 titled ‘The Options’, is on ‘Realizing the Options’. Authored by us, the editors, this last chapter, captures the key messages gathered from the evidence of inclusive innovation and identifies the options for action. The chapters here contend that innovation for development in rural India demands more than mere technological change or creation of employment opportunities and incomes for the rural poor. Our vantage point, a panoramic view of a tumultuous decade (2008–2018), begins with the democratic reforms following the global financial crisis of 2008. There were food riots in many countries—major food importers like the North African countries, witnessed the poor demanding and achieving major changes in their nation states. We now know this as the Arab Spring. Given the embarrassing global rank that India holds in levels of malnutrition, hunger and poverty, unemployment, gender and human rights violations, and globally unprecedented pace of environmental degradation, even as the country gets accolades for its space mission, bullet trains, and smart cities, will the next global financial crisis (Gates 2018; Ferguson 2018) witness an Indian Spring? The evidence on inclusive innovation in and for rural India begins with a close look into the presence of a variety of forms of exclusion in the omnipresent craft clusters in rural India (Chap. 2, Das). These crafts have been a source of local resource use and non-farm income generation. Craft clusters, despite a certain eulogizing of the craftsmanship and/or a culture of it, have suffered severe neglect in terms of inadequate policy attention that largely deprived the enterprises from participating as active entities within the regional or national systems of innovation. This in more

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than one manner reflects the state of micro and small enterprises, especially in rural India, which are seriously constrained by both declining financial support and lack of business infrastructure. It has perpetuated a situation whereby there has been little improvement in product and process standards, depressing the demand for output from rural clusters. In addition to well-known supply side constraints at the cluster level, the overwhelming informality of such production organizations, absence of or weak collective action by cluster constituents has been recognized as a major limitation of rural clusters to move up. The idea of inclusive innovation is a manner of recognizing the exclusion plauging rural enterprises. Such exclusion could be based on spatial, sectoral, systemic, seasonal or statistical characteristics which need to be recoginsed in a discussion on inclusive innovation in the craft cluster context. However, the extant policy framework has been unable to articulate these varieties of exclusion as denial of both options in and rights to livelihood, particularly in rural areas. The increasing incidence of casualisation and informalisation in the sphere of work and livelihood pursuits has been alarming. The institutional inertia to change has emerged the most serious challenge to inclusive innovation in rural clusters. Drawing upon primary survey-based findings in a clay–terracotta cluster in Rajasthan this paper interrogates issues in limits to innovation within the context of an informal and poor economy. This chapter attempts to locate incentives and disincentives to innovation. It helps us understand the functional dynamics of innovation systems in rural clusters to critically assess if these have been inclusive and pro-poor, mainly in terms of access to available options whether technological, organizational, marketrelated or institutional innovation. The human factors that drive rural, micro and small enterprises through innovations in business processes, market sources and market sophistication (in that order) are presented in Chap. 3 (Sarkar et al.). Covering three different rural industrial clusters, the chapter reveals continuous learning processes, cross-referencing and validation of information and technologies. The statistical analysis confirms the relative insignificance of ‘the clustering process per se’ in creating and supporting innovators in rural micro enterprises (as seen in Chap. 2 by Das). This reveals how governments uncritically follow the dominant policy agenda set by international actors/donors. The push factors from the backward linkages of these micro enterprises appear crucial in shaping inclusive social and environmental innovations; and this harks us back to the absolute minimal scientific and state policy engagement with these critical backward linkages. The ways in which some backward linkages change (especially with labour and skills in contexts of geopolitical disturbance and uncertainty), and how small entrepreneurs in villages respond with innovations that take them to a new Schumpeterian punctuated equilibrium and new linkages, are highlighted (Chap. 4, by Anurag and Das) using the case of a handloom weaving cluster in Sualkuchi, Assam and India’s North East. While technological innovations in response to labour crunch and new design options are realized by the innovator entrepreneurs, their struggle continues—to reduce costs (work hours per job), enhance productivity, improve quality and create new markets. The chapter points to a fruitful collaboration and learning between the informal enterprises in the silk weaving cluster and the formal organized

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research efforts in IIT Guwahati, with questions about how these kinds of mutual learning and experimentation can be fostered for inclusive innovation in rural India. The importance and more crucially, the intensity of learning in informal learning networks, to which the state and its policies and programmes to promote rural industrialisation are largely indifferent, are highlighted in Chap. 5 by Kamath. Exploring the role of innovation in coir producing clusters, this chapter argues that the policy discourse must appreciate and be sensitive to the role of informal learning. The findings and observations have implications not only for our conceptual understanding of learning in low-tech environments but also for pointers on technology prescription in rural low-tech clusters, to make innovation and learning a more inclusive process. This is the paradox that the book brings up. How can a state that is impervious to learning, and a formal S&T system incentivised to generate embodied technologies, with no support systems or incentives for learning about social and institutional contexts and innovations, enable this inclusive learning? Presenting findings on the multiple exclusions confronted by India’s plantation sector, and building on economic theorisation and classification of exclusion, Chap. 6 by Joseph analyses the institutionalization of an inclusive innovation in cardamom (a spice of great value in Kerala State) markets. The e-auction as a technological innovation that does address subordinated exclusion (as espoused by Amartya Sen) appears inadequate when there are so many sustained exclusions. Joseph reiterates the need for institutional innovations, and the evolutionary potential of these institutional innovations. While the chapter assumes that ‘innovation leads to growth’, in its analysis of technologically advanced e-auctions, it also opens up the paths of reverse causality, where growth leads to innovation and opens up options for further inclusive innovation (as in Mokyr 1990). Advanced technologies like genetic engineering, which face challenges from a range of actors (environmental and biodiversity activists, international trade groups, small and marginal farmers movements, seed savers, and anti-multinational campaigns), can also lead and become a dynamic learner within public sector research organizations, with avenues opened up by inclusive genetic research methodology. Haribabu (Chap. 7) makes a plea for public sector S&T to go genuinely public as part of open source innovation systems, taking up and accounting for the diversity, variability and productivity of crops that the poor depend on the most. Modern genetics offers many opportunities for inclusive innovation, which have been precluded by the excessive centralization and consolidation of public sector agricultural research in India and by the global private corporate stakes (enabled by the Indian state and its regulations within the country) in these genetic technologies. The current agricultural S&T system does not even see the massive business opportunities that modern public sector genetics and genomics offer. The option presented in this chapter is an essential set of linkages between the knowledge and intermediary domains involved in responsible and responsive, scale-effective and location-specific innovation. Bolstering the argument for continuous and iterative learning by public sector science and administration, Das (in Chap. 8) discusses a major success in health care, a genuinely public inclusive innovation. The chapter presents inclusive innovation enabled by the state, where the state and its health service delivery structures went

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through a significant change, in the actors involved and their agency in rural India. The ways in which decades of experience with and lessons from rural health workers in the informal sector, mainly NGO supported health care, were taken up by the state amount to more than a turn around from a top-down to a bottom-up or userfriendly innovation. The appointment of Accredited Social Health Activists (ASHA) and other institutional changes in the health care system are institutional innovations that have facilitated the transformation in innovation performance. That the state responded to demands, opportunities and spaces for interactive learning with rural health experiments in the informal NGO and community-led spaces is commendable. The gender stickiness of decision-making, and the inter-sectionality or the classgender equations even in the midst of an inclusive innovation attempted within a formal agricultural research and education establishment is underscored in Chap. 9, by Geethakutty. The need for a generic orientation on gender equality and human rights perspectives in agriculture among the personnel at the cutting edge—in the educational institutions and research—remains largely unattended. Through showcasing the initiatives of capacity building for gender analysis, technology development, technology transfer and curriculum development attempted by the Centre for Gender Studies in Agriculture and Farm Entrepreneurship Development of the Kerala Agricultural University, this chapter illustrates how gender capacity building is acceptable and easier in technology transfer (among the rural poor—men and women in the field). But inclusion of gender in the curriculum and research agenda of the agricultural universities, is deeply resented and resisted. The resistance within the professional class to gender awareness, learning about and teaching gender issues in the agricultural sciences and production–consumption systems remains unchallenged. Modifications or changes in values, rules and norms (institutional innovations) have always been problematic. But they are essential to lay the ground for new technologies, inclusive and sustainable social innovations and social enterprises (SEs). SEs which have created, nurtured and sustained such institutional innovations or norms are presented in Chap. 10 by Raina. The chapter explores and explains the institutions (rules and norms) that are at the heart of social innovation and lead to the creation and growth of SEs. The SEs embody a set of principles that are central to inclusive innovation. Using three case studies, this chapter illustrates how the social entrepreneur’s capacity to question existing norms, rules and ways of working, and find alternative norms that ensure social value and prosperity for the ‘excluded’ become the game changers. The analysis questions what scale means to the SE, and whether (and how) the Indian state can change to enable an appropriate ecosystem towards fostering and up-scaling SEs. In Chap. 11, Sandhya and Mrinalini present evidence that China as a nation state made changes within the policy realm and within its own formal organized S&T system. These changes did enable rural innovation and did reduce poverty (recall Chen and Ravallion 2007). This chapter examines India’s policy responsiveness to foster inclusive and responsive innovation through the interactive framework of National Innovation System (NIS) by drawing lessons from the Chinese experience of public intervention in S&T and innovation. China did a visioning of where it wanted its rural

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industries and innovation for them to be. It took up and reformed issues like linkages of S&T with other domains of the NIS, human resource and industrial research and the innovation ecosystem. While there are complexities involved in managing S&T and innovation in India, China has successfully transformed its institutions of knowledge and learning and engaged its research organizations in the growth process through an interactive model of innovation and inclusion. These options may never be taken up in India, where the relationship between the state and S&T is one of mutual dependence and legitimization of the persistence of exclusion, deprivation and poverty of millions of Indians. The book concludes with a chapter (Das and Raina) that summarizes why all the innovation system actors will have to learn and change to pro-actively address the elements of social exclusion that are embedded in the current structural and policy configurations. It presents a brief review of some of the policy architectures recommended for inclusive innovation in the Third World by innovation systems scholarship. What the plea for inequality reducing rural technologies (Reddy 1975) which was essentially labour using and less capital-intensive, and the demand for a system for learning and change and not just a system for production and export (Lundvall 2010) had in common, was a fundamental challenge to both democracy and capitalism (Bowles and Gintis 1986). Designing policy architecture for governments to enable inclusive innovation (UNCTAD 2014; Chataway et al. 2013) is without doubt well intentioned. But with minimal effort to even learn about problem realities, these attempts are a flagrant dismissal of the sheer diversity of the architectures of policy and institutional innovations that exist in informal poor production systems and livelihoods contexts. Both inclusion and innovation, being terrains of struggle and creativity, offer us, scholars in the Third World, multiple registers of play, protest and provocation (Jasanoff 2017) and of cognitive justice (Visvanathan 2009). Scholars in all walks of academia, the natural and physical sciences, liberal arts, humanities and social sciences, can and should question the state’s capacities for institutional learning and change (Freeman 1997—recall his quote from List, 1840, emphasizing the importance of the liberal arts, humanities and the social sciences for innovation and national economic performance). Knowledge has grown in the past with individual actors in communities and communities themselves as equal participants in the learning and change processes, with organized S&T and the state. It is crucial to re-create such opportunities. A fundamental starting point is economics as a discipline that needs to discard its ‘dismal’ avatar, include and analyse community categories, processes and metrics to explain and enable progressive economic, social and ecological change (Marglin 2008). Finally, politically, opening up a public dialogue on inclusive innovation will be an ideal option for a democratic state, one committed to the inclusion and well-being of all its communities and environments. The book summarizes these findings and concludes (Chap. 12 by Das and Raina) with an array of options for action that the state and its S&T system can consider depending on the degree of democratic commitment they are willing to make. Conceptually, the application of the innovation systems framework to rural India demands a re-location and translation of the innovation systems framework into the historical

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and social contexts of exclusion and development in India. Besides this, the transition of this analytical framework—which has been used largely to explain ex post, the technological changes, market strategies and industrial growth patterns in developed country contexts—to an important tool for ex ante planning and investment strategies for development in a developing country context demands a careful reconsideration of the state and its instruments—the organized formal knowledge organizations in particular. Application of the innovation systems framework in a context marked by inequality and the uneven distribution of opportunities for participation in economic activities demands planned investments and interventions that become cognizant of how a large proportion of people get access to necessary knowledge, information and other resources. The chapters in this book point to the need for decentralized community-based innovation capacities, and the role of the state in promoting public investments that build innovation ecosystems.

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Marglin, S. A. (2008). The dismal science—How thinking like an economist undermines community. Cambridge, MA: Harvard University Press. Milanovic, B. (2012). Global income inequality by the numbers: In history and now. An overview. Policy research working papers Nov. 6259. Washington, DC: The World Bank. Milanovic, B. (2009). Global Inequality Recalcuated—The effect of new 2005 PPP estimates on Global Inequality. WPS 5061. Washington, D.C.: The World Bank. Mokyr, J. (1990). The lever of riches: Technological creativity and economic progress. Oxford: Oxford University Press. Mokyr, J. (2016). A culture of growth: The origins of the modern economy. Princeton: Princeton University Press. Nagaraj, R. (2011). Industrial performance 1991–2008, a review. In R. Nagaraj (Ed.), National innovation systems: A comparative analysis. New York: Oxford University Press. Nair, T. (2015). Regulation, legislation and moral contestations—The case of Indian microfinance. In R. S. Raina (Ed.), Science, technology and development in India: Encountering values (pp. 66– 83). Hyderabad: Orient BlackSwan. Nellemann, C., MacDevette, M., Manders, T., Eickhout, B., Svihus, B., Prins, A. G., et al. (Eds.). (2009). The Environmental Food Crisis – the Environment’s Role in Averting Future Food Crises. United Nations Environment Programme: Arendal. Nelson, R. (Ed.). (1993). National innovation systems: A comparative analysis. New York: Oxford Univeristy Press. Nelson, R. (2008). What enables rapid economic progress: What are the needed institutions? Research Policy, 37, 1–11. NIC. (2011). India Inclusive Innovation Fund, National Innovation Council, Office of Advisor to the Prime Minister, New Delhi: Yojana Bhavan, Government of India. http:// innovationcouncilarchive.nic.in/index.php?option=com_content&view=article&id=52& Itemid=34 Niti Aayog. (2015). Atal Innovation Mission. http://niti.gov.in/content/atal-innovation-mission-aim. OECD. (2007). Innovation and growth: Rationale for an innovation strategy. Paris: OECD. OECD. (2013). Innovation and inclusive development. Conference Discussion Report (Cape Town, South Africa, 2012). Paris: OECD. Office of Advisor to the Prime Minister. (2011). Towards a more inclusive and innovative India: Creating a roadmap for a decade of innovation. Strategy Paper. Office of Advisor to the Prime Minister: New Delhi: Yojana Bhavan, Government of India. Papola, T. S., & Sahu, P. P. (2012). Growth and structure of employment in India: Long-term and post-reform performance and emerging challenges. New Delhi: ISID. Planning Commission. (2012). Twelfth five year plan 2012–17 (Vol. II). Planning Commission, Government of India. Polanyi, K. (1944) (2001 edn.). The great transformation: The political and economic origins of our time. Boston: Beacon Press. Prahlad, C. K., & Hart, S. (2002). The fortune at the bottom of the pyramid. Strategy and Business, 26, 54–67. Prebisch, R. (1959). Commercial policy in the underdeveloped countries. American Economic Review, 49(2), 251–273. Radjou, N., & Prabhu, J. (2015). Frugal innovation: How to do better with less. Delhi: The Economist and Hachette India. Raina, R. S. (2006, August). Researching the drylands. Seminar (No. 546, pp. 25–29). Raina, R. S. (2015). Technological and institutional change: India’s development trajectory in an innovation systems framework. In P. Shome & P. Sharma (Eds.), Emerging economies: Food and energy security, and technology and innovation (pp. 329–352). New Delhi: Springer. Raj, K. N. (1961/2006). Some features of economic growth of the last decade in India. In A. Mody (Ed.), Inclusive growth—K. N. Raj’s essays on economic development in The Economic Weekly and Economic and Political Weekly. Hyderabad: Sameeksha Trust & Orient Longman (Reprinted 2006).

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Ray, S. (Ed.). (2007). Handbook of agriculture in India. Delhi: Oxford University Press. Reddy, A. K. N. (1975). Alternative technology: A viewpoint from India. Social Studies of Science, 5(3), 331–342. Rosenberg, N., & Birdzell, L. E. Jr. (1986). How the West Grew Rich. London: Basic Books; Bombay: Popular Prakashan. Rosenstein-Rodan, P. N. (1943). Problems of industrialization of Eastern and South-Eastern Europe. The Economic Journal, 53, 202–211. Rostow, W. W. (1960). The stages of economic growth: A non-communist manifesto. Cambridge: Cambridge University Press. Rudra, A. (1978). Organisation of agriculture for rural development: The Indian case. Cambridge Journal of Economics, 2(4), 381–406. Sachs, W. (Ed.). (1992/2010). The development dictionary: A guide to knowledge as power (2nd ed.). London: Zed Books. Sachs, W. (2017). The sustainable development goals and Laudato si’: Varieties of postdevelopment? Third World Quarterly, Special issue: The Development Dictionary @25, 38(12), 2573–2587. Santiago, F. (2014). Innovation for inclusive development. Innovation and Development, 4(1), 1–4. Seers, D. (1979). The birth, life and death of development economics. Development and Change, 10, 707–719. Sen, A. (1981). Market failure and control of labour power: Towards an explanation of ‘structure’ and change in Indian agriculture, part 1. Cambridge Journal of Economics, 5, 201–228. Sen, A., & Himanshu. (2004). Poverty and inequality in India. Economic and Political Weekly, 39(39). Shah, M., Banerjee, D., & Vijayshankar, P. S. (1998). India’s drylands: Tribal societies and development through environmental regeneration. New Delhi: Oxford University Press. Shapin, S. (2006). Science. Contexts, 5(3), 41–43. Shrivastava, A., & Kothari, A. (2012). Churning the earth: The making of global India. Delhi: Penguin. SIID. (2010, February). “Inclusion” in innovation systems. SIID Communique No. 2. Project team Systems of Innovation for Inclusive Development. New Delhi: CPR. Singh, S. (2006). Credit, indebtedness and farmer suicides in Punjab: Some missing links. Economic and Political Weekly, 41(30), 3330–3331. Suryanarayana, M. H. (2008). What is exclusive about ‘inclusive growth?’. Economic and Political Weekly, 43(43), 93–101. Sutherland et al. (2012). A collaboratively derived science policy research agenda. Plos One, 7(3). Tomich, P., et al. (1995). Transforming agrarian economies: opportunities seized, opportunities missed. Ithaca: Cornell University Press. UNCTAD. (2014). Innovation policy tools for inclusive development. A note by UNCTAD. Geneva: UNCTAD Secretariat. Vaidyanathan, A. (2010). Agricultural growth in India: The role of technology, incentives and institutions. New Delhi: Oxford University Press. Visvanathan, S. (2009). The search for cognitive justice. Seminar (Issue on Knowledge in Question— A Symposium on interrogating knowledge and questioning science), No. 597. Von Tunzelmann, N., & Acha, V. (2005). Innovation in “low-tech” industries. In Fagerberg et al. (Eds.), The Oxford handbook of innovation. Oxford: Oxford University Press. World Bank. (1993). The East Asian miracle. Washington, DC: The World Bank. World Bank. (2013). World Bank Group support for innovation and entrepreneurship. An independent evaluation. IEG, World Bank: Washington, DC. World Bank. (2016). India’s poverty profile. http://www.worldbank.org/en/news/infographic/2016/ 05/27/india-s-poverty-profile. Wu, X., & Raina, R. S. (2008, April). (mimeo) Innovation systems for inclusive development: Lessons from rural China and India. Research proposal submitted to IDRC, Ottawa.

Part II

The Evidence

Chapter 2

Crafts, Innovation and Exclusion: Challenges for Inclusion in a Terracotta Cluster, Rajasthan Keshab Das

Abstract The massive presence of craft clusters in rural India has not only been a source of local resource use and non-farm income generation but also of opportunities for innovation promising product diversification, reaching out to newer markets and networking between relevant business-state-research stakeholders. However, craft clusters, despite eulogising the craftsmanship and/or a culture of it, have suffered severe neglect in terms of inadequate policy attention that largely deprived the enterprises from participating as active entities within the regional or national systems of innovation. In addition to well-known supply-side constraints at the cluster level, the absence of or weak collective action by cluster constituents has been recognised as a major limitation of rural clusters to move up. The idea of inclusive innovation is a manner of recognising the exclusion of plaguing rural enterprises. Drawing upon primary survey-based findings in a terracotta cluster in rural Rajasthan, this paper interrogates issues in limits to innovation within an informal and poor economy context. It is observed that the specific context of production, labour process and business as a whole underscores a distinct approach in institutional innovation that would facilitate sustainable access to basic raw materials, skills and market channels. This is essential for ensuring inclusive innovation beyond the limited artefact-centric product or process innovation.

The Context In hundreds of villages and small towns in India—as, in fact, in many parts of Asia, Africa and Latin America—numerous traditional and craft-based activities have been facing severe challenges not only of growth and dynamism but, unfortunately, of bare survival. That several of these crafts and enterprises based upon hereditary skills/occupations are languishing and quite a few have already vanished pose serious questions about the nature and relevance of policy interventions in transforming rural craft activities into dynamic sources of local non-farm employment and income K. Das (B) Gujarat Institute of Development Research, Ahmedabad, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_2

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generation. A key concern in the decline remains to the fact that these enterprises and/or craft clusters failed on the innovation—both product and institution related— front and, hence, became uncompetitive. This paper addresses the limits to innovation in craft activities as dictated by the various factors or forms of exclusion and identifies possibilities of institutional initiatives including formal support and community level trust or cooperation building efforts crucial for reviving such creative enterprises. This is pursued by examining the relevant literature as well as an intensive case study of a terracotta cluster in arid rural India. At the level of academic engagement, studies on innovation and, subsequently, innovation systems have drawn so much and for so long upon industrial production, science and technology, competitiveness focusing “industrializing capitalism” (inspired by the path-breaking analysis by Schumpeter, 2012) often in a neoclassical economics framework and in formal domains that informality or productive activities within the informal sector failed to receive any substantive attention (Williams and Edge 1996; Wieczorek et al. 2009). This is especially valid in case of developing and poorer economies where very little theoretical work has been attempted to comprehend innovation challenges to the traditional sectors steeped in informality. This lapse in scholarship is a serious one as it renders the current discourse on inclusive innovation partial by not being informed by the rich literature on development studies concerning developing economies. Both Chapters 1 and 12 in this volume discuss these issues at some length. Only during the last decade or less there, nevertheless, been an emergence of ideas and writings concerned with such typologies that construe innovation as frugal, inclusive, grassroot, jugaad or democratic to mention only the prominent ones. These notions of innovation challenges, despite lack of clear definitions or even theoretical grounding, often deal with the Global South and have certainly expanded the space for debate. As most of these draw upon large number case studies from the developing world informality issues have come to be recognised albeit not in a substantive manner. Beyond these classifications, which are helpful to an extent, much remains to be understood regarding the functional dynamics of enterprises or enterprise clusters as these live and work within larger institutional contexts often beset with informality and infirmities. Appreciation of these varied and complex institutional spaces and how these influence the innovative ethos of the enterprises— whether in clusters—is essential to sharpen issues being addressed under these several typologies of innovation as mentioned above. As articulated in Mytelka (2007: 47), a constellation of factors—actors, capabilities and linkages—contribute to competence building in a cluster. ‘The ability to learn, to invest and to partner increase the likelihood that critical action in the system will move to assume new roles and develop new initiatives in response to changes in competitive conditions’. It is possible to find similar views expressed earlier in Lundvall (1988) highlighting the role of interactions between various actors and institutions as an essential requirement for promoting an innovation ecosystem. However, especially, in the case of traditional and artisan based clusters enterprises encounter challenges those undermine the innovative ethos in the production space itself (Das 2008). As argued in Mudombi and Muchie (2014: 322), even as

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in the African context, the key factors could include ‘macroeconomic uncertainty; political instability; unfavourable institutions; poor/lack of infrastructure; and lack of information on innovation; technologies, and markets’. They also add such important aspects as risk-averse nature of entrepreneurs, poor policies, funds constraints, expensive innovations and even chances of being out-competed by established enterprises and/or products, low investment in quality education and limited skills. These are important barriers to innovation—not just at the product level—which emphasises the need to rethink the approach to innovation in developing countries, particularly, concerning craft or traditional skill-based activities. Underscoring the challenges posed by poverty in these spaces of production, Nur (2012: 116) makes a strong case for appreciating the local conditions towards reformulating national innovation systems and sector and region-specific policies. Similar positions have been taken by scholars studying diverse regions across the developing economies (Berdegué 2005; Utz and Dahlman 2007; Gupta 2010).

Indian Craft Clusters and Forms of Exclusion The massive geographical presence of such craft activities may be comprehended from the fact that there are over 6000 rural clusters spread over the length and breadth of the country engaged in a huge variety of handicrafts and textile products. Almost entirely in the domain of the informal sector, these clusters have been disadvantaged by limited or no access to formal financial credit, linkages to the regional or national innovation systems and wider markets. Constraints of infrastructure—physical and economic—have persisted despite claims of the state (Das 2005, 2007, 2011a, b, 2015). At the cluster level, deficient collective action has further marred chances of negotiations with the state and other stakeholders to access certain businesssupportive benefits. Given the multiple challenges faced by rural clusters an approach of inclusive innovation may offer potential opportunities for their growth and dynamism. The core idea relates to “ways of enabling innovation for inclusive development”, importantly, in complex and diverse geographies, livelihoods and knowledge systems in rural India. The main argument has been that the exclusion of millions of rural poor from development gains is inexorably linked to the innovation system features that have evolved over time in specific national and regional contexts and sectors of the economy. That ‘innovation systems’ need to be broad-based with a major emphasis on institutional innovation has been a key requirement in interventions construed. The analytical constructs of innovation systems, with the central features of a learning economy, hold that there are coalitions of actors (individuals and organisations like firms, policy making bodies, market intermediaries, banks), co-evolution of technological and institutional changes, continuous learning and information exchange, and enabling policy environments. The core concern addressed relates to ‘ways of enabling innovation for inclusive development’, importantly, in complex and diverse geographies, livelihood and knowledge systems in rural India. The proposition that

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innovation ought to be inclusive carries with it the embedded recognition that exclusionary tendencies or factors have been dominant. The exclusion of millions of rural poor from development gains is inexorably linked to the innovation system features that have evolved over time in specific national and regional contexts and sectors of the economy (Das 2015). It is important to recognise that these craft-centric rural enterprises have been subject to several forms of exclusion which could be derived upon their spatial, sectoral, systemic or seasonal characteristics (Table 2.1). Even the undermining of craft activities as manifest through the absence of comprehensive official statistics on the enterprises, work and output could be construed as a form of exclusion. The failure of the policy framework to articulate these varieties of exclusion has worsened options in and rights to livelihood, especially as possibilities for experimenting and broad-basing innovation—product, process and institutional—have been constricted. Growing incidence of casualisation and informalisation in the spheres of production, labour processes and resource access/use has been reflective of the institutional inertia to respond to the innovation crisis at the craft clusters. State policies have hardly facilitated upgradation of rural clusters in terms of providing access to better business infrastructure, linking with innovation or knowledge systems and accessing wider markets. Rather, by neglecting spatial infirmities, the extant policy measures on rural cluster development tantamount to an approach aimed at ‘poverty eradication’. It is commonplace that in the formal sphere, technology generation remains confined to elite organisations and hardly connect to the users steeped in low-income and low-network spirals as enterprises in rural craft clusters. Table 2.1 Forms of exclusion in the rural craft sector Form

Challenge

Manifestation

Spatial

Conditioned by geography

Poor natural endowments Long distances Inadequate/poor quality infrastructure

Sectoral

Disadvantaged by Specialization

Products/services/skills no longer in demand Low earnings Dwindling raw material sources (mainly, natural) Absence of innovation

Systemic

Marginalised by institutions

Dysfunctional/discriminating agencies, policies, practices and norms of the state and/or society (formal or informal)

Seasonal

Constrained by occasion/periodicity

Seasonal availability of raw material (mainly, farm or forest produce) Demand linked to occasions/events/festivals

Statistical

Official neglect of building and sharing comprehensive data

Non-existence or non-availability of data/information on the sector

Source Conceptualised by the author drawing upon practical field experiences

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Another dimension widely discussed in the cluster literature relates to the proposition that clustering, intrinsically, promotes innovation. Even as there have been several instances across countries where clusters have acted as sites of generation and diffusion of innovative activities knowledge on the crisis in innovation in traditional craft based clusters remains absent or poorly articulated. Substantive issues in limits to innovation in craft clusters are, in fact, embedded in the dysfunctionality of institutions—both formal and informal—and a mismatch between resources, skills and changing demand. Existing literature is deficient in exploring determinants of the absence of an innovative ethos in rural clusters. Studies have been wanting in exploring what constrains innovation in ‘method-material-applications’. Or, has weak ‘market-institutions-infrastructure’ acted as disincentive to innovate? As the state of innovation at the grassroots (for artisanal enterprises at least) has remained largely a livelihood-centric issue, it is important to delve deeper into understanding the crisis of this huge neglected sector in India, and, by implication, much of the Global South.

Sidelining of Rural Industrialisation in India A notable aspect of the evolution of the Indian industrialisation strategy during the post-independence period has been an utter neglect of the rural and craft based enterprises, the entire attention being drawn towards building up a large industrial base wherein the small and medium enterprises (SMEs) would play an essentially subsidiary role of producing for the large enterprises; in fact, there was hardly a comprehensive policy statement for the ubiquitous and huge micro enterprises, not to mention those in the rural traditional sectors. An increasing incidence of casualisation and informalisation in the sphere of work and livelihood pursuits has been alarming. The institutional inertia to change has emerged the most serious challenge to inclusive innovation in rural clusters. While it is obvious that state policies have been irresponsive to the needs of ‘real services’ by rural clusters in terms of better business infrastructure, linking with innovation systems and accessing wider markets, an approach akin to ‘poverty eradication’ to rural cluster development has undermined the spatial infirmities of business. As often the formal sphere of technology generation remains confined to the elite organisations, their inability to reach out to the users steeped in low-income and low-network spirals raises questions over new ways of operationalising inclusive innovation as a policy strategy. One glaring example is the status of database on rural clusters which is in a shambles (Das 2017: 115–117). It is interesting that there is not even a reliable official count of the crafts and craft enterprises in India; the first and only such effort so far was the Census of Handicraft Artisans 1995–96, which had its share of limitations including that it was ‘not a census enumeration in a true sense. Each and every

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household of all villages and urban localities was not visited’ (Ameta 2003: 73).1 The growing emphasis upon modern large enterprises and SMEs over the decades has been so strong that the village artisan or entrepreneur almost always was construed as an indigent person but having some skills useful for an economic activity. This equating the craftspersons as quintessentially persons in poverty, has misguided policy initiatives to address their business needs and appreciate institutional innovations that are essential to elevate the craft enterprise. The massive and widespread presence of craft clusters in rural India has not only been a source of local resource use and non-farm income generation for but also of opportunities for innovation promising product diversification, reaching out to newer markets and networking between relevant business–state–research stakeholders. However, craft clusters, despite certain eulogising the craftsmanship and/or a culture of it per se have suffered severe neglect in terms of inadequate policy attention that largely deprived the enterprises from participating as active entities within the regional or national systems of innovation. This in more than one manner reflects the state of micro and small enterprises, especially in rural India, which is seriously constrained by both declining financial support and lack of business infrastructure. It has perpetuated a situation whereby there has been little improvement in product and process standards depressing demand for output from rural clusters. In addition to well-known supply side constraints at the cluster level, absence of or weak collective action by cluster constituents has been recognised as a major limitation of rural clusters to move up. Hence, intervening in building up of an innovative ethos in the clusters would be dependent upon the ‘preparedness’ of the cluster ‘stakeholders’ and limits set by imperfections of resource availability, technology access and business development services. However, quite different from the supply-side constraints, markets as existing or potential would determine the nature and extent of innovation that would be possible at the cluster level. Drawing upon primary survey-based findings in a clay-terracotta cluster in Rajasthan this paper interrogates issues in limits to innovation within an informal and poor economy context. It is observed that the specific context of production, labour process and business as a whole underscores a distinct approach in institutional innovation that would facilitate sustainable access to basic raw materials, skills and market channels. This is essential for ensuring inclusive innovation beyond the limited artefact-centric product or process innovation. Craft clusters need to be construed as business activities that support livelihood pursuits. Inter alia, The study makes a case for empowering rural clusters (ensuring access to affordable and reliable supply of electricity to enterprises) and holds that looking for newer markets (especially, within the domestic and regional space) would act as a catalyst not only to innovations in methods, materials and applications but potentially develop useful networks in learning. An approach in inclusive innovation must delineate the cru1 Even in April 2013, it was reported that the Government’s work on the second Census of Handicraft

Artisans 2010–11 was ‘in progress’. See, ‘Census of Handicrafts Artisans in Progress: Government’, Economic Times, April 29, 2013. [http://articles.economictimes.indiatimes.com/2013-04-29/news/ 38904849_1_artisans-handicrafts-census (Accessed July 14. 2015)].

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cial role of the state not only in creating relevant social and economic infrastructure but also in preparing strong grounds in exercising vigilance over the implementation of such strategies as geographical indications at the cluster level. This paper attempts to locate incentives and disincentives to innovation and to understand functional dynamics of innovation systems in rural clusters to critically assess if these have been inclusive and pro-poor, mainly in terms of access to available options in progress in innovation be that technological, organisational, market-related and institutional.

Emergence and Status of the Terracotta Cluster in Molela Molela is a village of 885 households (as per the Census of India 2011) in the Rajsamand district of the western Indian state of Rajasthan. Located in the Nathdwara Taluka this village is just about 11 km from the famous Shrinathji (Krishna) temple which is a major draw for both pilgrims and general tourists. Although the dominant caste group in the village is Baniya (trading households who have mostly migrated to Mumbai) there are around 50 households belonging to the Kumbhar caste (traditionally engaged in pottery or clayware) who have kept the terracotta activities vibrant, Molela having earned its fame for this craft. The terracotta work at Molela bears special significance due to its sociocultural moorings that dates back 400 years when terracotta artisans migrated from the nearby Bagol village about 2 km away.2 Given this specific backdrop, generally artisans have been making statuettes, figurines and idols of local deities, animals and plants which have symbolic links with tribal gods and belief systems. Essentially, these terracotta items have customers in the locality and, particularly, the Bhil tribals from Gujarat, Madhya Pradesh and Rajasthan who visit this village for buying these clay figures. In terms of style of the craft, it has been recognised that the distinctive feature of the Molela terracotta is its inside-hollow work whereby on a plaque the clay shape is made with its inner part remaining hollow. The process is rather simple and almost entirely manual. The special clay found in this area is typically reddish-muddy in colour and is dug from the nearby banks of the Banas river. This is brought to the workplaces to be mixed with donkey excreta, vegetable gums and wheat/maize chaffs and ‘beaten’ with a patiya (wooden club) so that the clay would be pliable and better bonded. Different shades of the terracotta products emerge by adding natural elements as red sand, stone or mineral powders to the mixture. From the clay a tablet or plaque with raised edges around and a distinctive convex shape marking the top fringe is made depending upon the dimensions of the product aimed at. The tribal designs or figures are shaped by hand in a manner that the inside is left hollow; this 2 As narrated during the field survey, it was believed that a blind man of Bagol villages was instructed

in his dream by god Dharamraj to make his statue for which he brought back his lost vision and took him to Molela village where the special mud was available. Since then, with Dharamraj’s blessings the terracotta activity has been going on in Molela where artisans from other villages also shifted.

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Table 2.2 Types of terracotta products made in Molela Form

Vintage

Artefacts

Tribal/Ethnic

Ancient

Figures of Dharamraj and Nagdevta; Depiction of ‘ancestral’ trees, serpents, forest and village life; Tribal toys; Lamps

Conventional/Mainstream Hindu

Recent decade

Figures of Ganesh and Hanuman; Decorative bells and tiles; Decorative pots and utensils; Depiction of various historical/legendary themes

Modern

Current

Artefacts painted with varnish colours; three-dimensional figures; Abstract-looking decorative items

Source Field Survey

is carefully formed to avoid the product cracking up inside the kilns while firing. The figurines are decorated with minute accessories as jewellery and dresses all made of the same clay mix. Open air drying of the plaques takes about ten days or more and finally, these are arranged for firing in the kilns. Generally, the articles are made during the monsoon season as, due to humidity, incidence of cracks is minimised. While finalising the plaques occupy most of the monsoon time, firing and colouring activities are carried out in the subsequent months. As clay is easily available during the monsoon season, artisans collect and store the same in large quantities so as to use it throughout the year. As shown in Table 2.2, the range of products has remained limited and the only product innovation has been mere diversification in images to cater to non-tribal sensibilities as well. Nevertheless, the Molela terracotta’s unique style has received mention by experts and viewers from home and abroad.3

Meanings of Innovation in a Terracotta Cluster It is clear that the terracotta work is based entirely on manual work and skill with little scope for mechanization. The key raw material being local clay and in the 3 ‘Recently these potters have also been noticed by architects and decorators and have gained much

prominence. Their art and craft is being used to decorate the walls of urban Indian homes, farmhouses and corporate offices. This exposure has also helped them to interact with the Western market and they have demonstrated their production techniques in America, Europe and Japan. The demand has also had an effect on the style of their work. The potters often make larger plaques and instead of the traditional images they often depict local scenes of everyday life’. [‘Molela Potters’ at http:// www.potteryindia.com/Terracotta/molela.html (Accessed July 15, 2015)]. While some artisans have received awards and recognition as master craftsperson from the state and central governments a Dutch scholar has documented the craft, its processes and artefacts in detail for the international audience.

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absence of any modern inputs and designs4 it limits the possibilities of product or process innovation; this has been explained a while later. Despite being over 400 years old, there has not been any scope or attempt in innovation in this activity. One possible explanation has been that the demand has remained low but somewhat steady as the traditional practices by certain tribal groups needed these products every year. However, in the apparent scenario of changelessness, the craft has, in fact, undergone some modifications gradually responding to changing preferences of the larger clientele base. A close perusal of the evolution and manifestation of the craft indicates that artisans had, nevertheless, shown signs of innovation albeit in a limited manner. Through the field survey, an attempt was made to comprehend the meanings of innovation in the terracotta cluster as articulated by artisans. While a few artisans being recognised with state and President’s awards for their craftsmanship encouraged fellow craftspersons to try newer designs and better techniques of drying, colouring and firing, the real inspiration to attempt innovative products and processes came with their exposure to vast market potential in national craft exhibitions and fairs, particularly held in Delhi and Surajkund. The variations in products included making theme tiles often using various colour schemes, three-dimensional articles and different types of toys as desired by new and outside customers. With the growth in business and exposure to external market needs the artisans had planned using machines that could mix the clay faster, in large quantity and with better consistency; this, however, has not fructified due to the prohibitive cost of installing such machinery. Moreover, they continue to depend upon indigenous small kiln (bhatti) technology for firing. These kilns cost around Rs. 4000–5000 while a mechanised kiln would involve spending around Rs. 3 lakh. Given the small batch production and various constraints in expanding market reach the small artisans have continued with their old kilns and techniques of firing. The field survey brought out some interesting dimensions of innovation in this cluster. On being asked if the artisans had adopted any product or process innovation in furthering their craft as well as improving marketability a total of 26 (48.1%) respondents replied in the affirmative. While this proportion per se was indicative of poor innovative ethos present in the cluster the nature of the innovation was only marginal, as could be gauged from Table 2.3. The reasons for undertaking these rather limited changes in their occupation were varied and suggest the latent responsiveness of the artisans to changes in demand for their product as also enhancing productivity within local constraints. Table 2.4 provides a glimpse of the ‘drivers’ of innovation in the cluster. With the innovations introduced in products and processes the artisans did observe changes in product quality, time use and managing the activity. Table 2.5 brings together their responses as articulating the improvements achieved. It is important to note that despite subjectivity in assessing actual improvement the artisans could identify advantages as product quality improvement and cost-saving as well. In fact, 4 As

actively pursued, for instance, at the Andretta Pottery and Craft Society in Palampur and quite a few similar training centres in Kangra, Himachal Pradesh.

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Table 2.3 Nature of innovation introduced by artisans Nature of innovation

Number (%)

Altered workplace arrangement (including storage, display and drying) but retaining same instruments/tools

7 (26.9)

Electric machine (fans) installed as blowers

13 (50.0)

Varnish paint used instead of natural/organic colours

3 (11.5)

Diversified to decorative items

2 (7.7)

Potter’s wheel (chak) strengthened with cement

1 (3.8)

Total

26 (100.0)

Source Field Survey

Table 2.4 Reasons for introducing product and process innovation

Reasons for adopting new technology

Number (%)

For speedy work

9 (31.0)

For reducing drudgery (or, health problems)

8 (27.6)

Learnt new work when visited Delhi

5 (17.2)

Customer demand

3 (10.3)

Learnt making new showpiece-tiles

3 (10.3)

Cement chak is cooler and stronger

1 (3.4)

Total

29 (100.0)

Source Field Survey Note Multiple responses

Table 2.5 Effects of introducing product and process innovation

Effects

Number (%)

Product became stronger and smoother/attractive

24 (92.3)

Production capacity increased

21 (80.8)

Easier to manage financial matters

21 (80.8)

Labour requirement decreased

18 (69.2)

Administration became easier

13 (50.0)

Work load reduced

12 (46.2)

Source Field Survey Note Multiple responses

discussions with the artisans further revealed that in addition to adopting product and process related innovations, they planned to expand their business by increasing the workspace, opening new shops, enlarging the kiln size, using more of modern colours and accessories to respond to individual customer specifications. These new ways of doing business have helped them to survive in the business despite signs of an overall decline in the popularity of the craft.

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Constrained Craft Business as Disincentive to Innovate As the terracotta craft is an important source of livelihood for the 55 households (all of whom have been covered under the survey) it needs to be underscored that as a business it faces serious constraints. While for 69% of artisan households the craft continues to be the sole source of income the remaining households have been depending upon other secondary sources unconnected to the craft as farm labour, petty trading, teaching and LIC agency. The reasons for pursuing this craft have been provided in Table 2.6 which affirms the dominance of family occupation in this activity; about 89% of households have inherited the skills, it was reported. Artisans were asked about the local and industrial condition at the time when they started this work. Almost all of them reported that till the 1980s, there seemed to be good prospects of the business even as much of the clientele was from the local region. There was a good number of buyers including tourists who were impressed by the craft (Table 2.7). However, the craft as a business has been struggling to survive and grow, limited severely by the market for it. For instance, given the brittleness of the products and in the absence of any support in improved packaging and transport the price realised remains very low. The growing disinterest of buyers from across relates to chances of breakage during transit. Moreover, there has been hardly any effort at market promotion through advertising or using sales outlets in popular locations and urban Table 2.6 Reasons for opting for terracotta craft as an occupation

Reason

Number (%)

By inheritance

49 (89.1)

Did not involve any initial investment

4 (7.3)

Thought it a profitable occupation

2 (3.6)

Total

55 (100.0)

Source Field Survey Note Multiple responses

Table 2.7 Local conditions for business till the 1980s

Local conditions

Number (%)

Only tribal faith-based figures were made, no showpieces

19 (35.8)

No competition, more profit

16 (30.2)

Buyers were more in number

3 (5.7)

Regular visit by tourists including foreigners

2 (3.8)

People used to buy artefacts in exchange for grains

2 (3.8)

Total

53 (100.0)

Source Field Survey Note Multiple responses

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K. Das

areas. The craft faces another serious challenge in the emergence of duplication of products whereby unscrupulous traders and business interests have come up with artefacts made of cement and plaster of paris (pop) bearing the same Molela ethnic designs and emulating some of the unique techniques of making as well. For instance, it was mentioned that the Molela motifs were now copied by people in other states as in Uttamnagar of Agra in Uttar Pradesh where similar work and drawings of the artefacts are made and sold. The field survey brought out some important aspects of the difficulties in marketing the Molela terracotta products in current times. For one thing, in the absence of much product variation, all the artisans are engaged in making the same or very similar items leading to stiff competition amongst the sellers themselves. The potential buyers including those from tribal areas purchasing in bulk, in the absence of any designated place for trading or storage, are approached by artisans in a huddle desperate to attract attention to their own wares. Every artisan household engages a family member who waits at the bus stop (the usual place of such business) to persuade the buyer away from similar other ‘agents’. While this practice in itself creates adequate space for down-pegging the prices the other flip side is the acrimony this leads to between artisan families of the same village. An idea regarding the low prices obtained for the various items of craft may be had from Table 2.8. Assuming that competition would coexist with cooperation and collective action remains a high point in any cluster progress, a striking dimension of the Molela terracotta cluster is that no local/enterprise-level business association or formal group exists here. The cluster has not facilitated any form of cooperative production or seeking common facilities. Although over a quarter century ago the artisans, jointly, had formed a committee whereby all artisans were to keep their products in a common large hall and products were sold according to commonly agreed prices, this arrangement faltered with allegations of dishonest practices by those who were to manage it. During the past decades, sporadic efforts at rebuilding a cluster association have not materialised mainly due to deficit of trust, a key requirement of any successful cluster. Artisans are convinced that those at the helm in joint business groups would not pass on a share of revenue as they would make by selling, clandestinely, at higher prices. Also, the association would be of no help in any other business issues as liaising with the government for fiscal benefits or group advertising or procuring joint orders. The absence of a collective strategy to discuss challenges facing the craft and the cluster has resulted in a situation of accessing limited market space by individual artisans. So far as newer and potential markets are concerned they have only been able to make items to be sold at the 10-days annual craft fair taking place in Gujarat state’s capital Gandhinagar. However, it was reported during the field survey that unlike in the initial years when artisans used to carry and sell truckloads of products at the fair and returned only with cash, in recent years, the sales have plummeted and they return with huge stocks of unsold goods. Competition from cheaper and better alternatives and lack of a coordinated market strategy whereby networking with potential agencies would have been of help have created a crisis of survival for the craftspersons of Molela.

2 Crafts, Innovation and Exclusion: Challenges for Inclusion … Table 2.8 Average price and rate of profit of Molela artefacts

45

No

Product name

Selling price per piece (Rs)

Profit rate (%)

1

Tiles (medium size)

250

50

2

Model tiles (small size)

150

60

3

Village life theme tiles

100

50

4

Toys (elephant, horse, etc.)

20–30

20

5

Showpieces

300

30

6

Tribal statues

300–500

50

7

Statues of god

450–500

30

8

Earthen pot

20–50

80

9

Curd pot

20

50

10

Water jug

30

50

11

Big horses

2000–5000

10–15

12

Diwali diyas

5

20

13

Decorative statues

300

70

14

Earthen utensils

10

5

15

Mirabai statue

40,000

70

16

Ancestor tree model

70,000

70

17

Ganesh statue

20–500

50

18

Decorative bells (many sizes)

20–300

60

Source Field Survey

The major market channels for the artisans of Molela, thus, are very few and promise little incentive for innovative ideas to flow in from the buyers. Table 2.9, interestingly, shows that the main sales outlet remains exhibitions and fairs which are, essentially, once-a-year events. The traders constitute the next major channel. With 43 (80%) respondents not having any sales outlet as a shop of their own, it is important to recognise the extraordinary dependence of the artisans on the itinerant traders and, of course, the fairs for their markets. A look at Table 2.10 establishes the precariousness of the artisan as a businessman; some artisans offer incentives as even bearing lodging expenses of the buyer!

46 Table 2.9 Market channels for terracotta products

K. Das Channel

Number (%)

Exhibitions and fairs

39 (50.0)

Traders from outside the state

18 (23.1)

Local small traders

15 (19.2)

Subcontractor

4 (5.1)

Exporter

2 (2.6)

Total

78 (100.0)

Source Field Survey Note Multiple responses

Table 2.10 Incentives offered to dealers and customers by artisans

Nature of Incentives

Number (%)

Nothing

33 (60.0)

Concessional price on bulk demand

14 (25.5)

Free samples

3 (5.5)

Lodging and boarding facility

3 (5.5)

Discount on delay

2 (3.6)

Total

55 (100.1)

Source Field Survey

The Raw Material Crisis The cluster faces a major challenge not just to its innovation possibilities but its very survival and growth. This relates to the significant crisis precipitated in procuring the key raw material—the local clay. First, the field survey revealed that there has been a gradual, if not alarming, decline in the quality of the clay over the last quarter century or so. This has implied that it has no longer been possible to create the specialised (with intricate designs) large or tall products (say, about 20 feet or more in height) which have high demand in the niche market. As one artisan explained, the present clay quality would fail to hold fast to larger size and often crumbles into a few pieces. Hence, the large figures are made in parts which are finally assembled at the costumer’s location. Second, the growing pace of urbanisation in and around the temple town and beyond has led to large scale brick-making. While the new business of kilns has found a more lucrative use of huge quantities of local clay, in some areas even the land itself has been used for raising housing colonies. These ubiquitous kilns have come up on the fields, river banks, seasonal water bodies like tanks and even one in the river bed itself. The clay for the terracotta artisan used to be free as a common property resource and was accessed by all within reasonable limits. The new capital in realty business has started buying and occupying the resource which has become scarce for the artisans.

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State and the Craft So far as supply side factors are concerned, state policies have been framed towards providing concessional loan capital, creation of common facility centres (CFCs) and organising fairs across states and also at a national level to enhance the visibility of a given craft to help create possibilities for learning and innovation at the enterprise and/or cluster level. In Molela of the total 55 artisans interviewed as high as 49 (89%) respondents stated that they had not received any support whatsoever from either the state or central government. While only four artisans indicated about receiving financial support for their craft related expenses another two respondents pointed to having been allotted small plots of land to build their worksheds from where they could sell their products as well. However, detailed discussions with craftspersons revealed that there was a proposal by the state government regarding the allotment of plots of three different sizes (worksheds costing Rs. 3000, 5000 and 8000). While most artisans did not have a clue about such a scheme the two who opted for this (and received the first instalment) did not proceed with the initial construction that would have made them eligible for the next instalment. With this negative start, the scheme was withdrawn and it was proposed that such a facility would be offered only when artisans demand these as a group, not as individuals. Eventually, the scheme fell through as achieving unity amongst artisans was near impossible. This also implied that the possibility of establishing a CFC and sharing knowledge for the advancement of the craft through higher productivity, newer designs and product innovation was stymied. The Artisan Identity Card has been introduced by the central government so that various benefits as health insurance, financial assistance for the education of children of artisans, opportunity to take part in fairs held across the country and access to Artisans Credit Card with a limit of Rs. 25,000 could be availed. However, most artisans surveyed either did not know about it or did not possess it. Similarly, the State Bank of India (SBI) in Khamnor in the vicinity of Molela has a provision of providing loan to the artisans with a facility of 50% subsidy in interest. However, by insisting on certain documents from the local District Industries Centre (DIC) as a necessary requirement and the DIC refusing to furnish any such documents the artisans never could avail of the loan finance that the SBI had agreed to provide. In yet another interesting development that would guarantee intellectual property rights to the terracotta makers of Molela, the central government had initiated the process of issuing Geographical Indications (GI) for which a team from the Geographical Indications Registry in Chennai had visited the cluster in November 2010. Although a workshop was held to explain the benefits of GI and forms were filled no further was done to familiarise the artisans regarding its procedures and utility. During the field survey it was obvious that the artisans had no idea about the usefulness of GI and none had given a thought to it from the point of protection and development of the craft. The team found copies of the GI information material in the village dump.

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Concluding Observations It is observed that the specific context of production, labour process and business as a whole underscores a distinct approach in institutional innovation that would facilitate sustainable access to basic raw materials, skills and market channels. This is essential for ensuring inclusive innovation beyond the limited artefact-centric product or process innovation. Craft clusters need to be construed as business activities that support livelihood pursuits. Inter alia, The study makes a case for empowering rural clusters (ensuring access to affordable and reliable supply of electricity to enterprises) and holds that looking for newer markets (especially, within the domestic and regional space) would act as a catalyst not only for innovations in methods, materials and applications but potentially develop useful networks in learning. An approach in inclusive innovation must delineate the crucial role of the state not only in creating relevant social and economic infrastructure but also in preparing strong grounds in exercising vigilance over the implementation of such strategies as geographical indications at the cluster level. This chapter attempts to locate incentives and disincentives to innovation and to understand functional dynamics of innovation systems in rural clusters to critically assess if these have been inclusive and pro-poor, mainly in terms of access to available options in progress in innovation be that technological, organisational, market-related and institutional. As the case study represents the microcosm of the functional dynamics of rural craft industries the paper would attempt to contextualise the challenges facing such processes of what we have termed as subsistence industrialisation. An articulation of the role of state in safeguarding the interests of these traditional and hereditary occupations could be made with substantive inputs of learning gleaned from other Asian countries (Das 2008, pp. 22–26). An attempt has been made in this paper to understand the nature of disincentives to inclusive innovation in a traditional handicraft cluster in rural Rajasthan. The field survey-based enquiry focuses on the specificities of the craft and organisation of production to unravel constraints to innovation by the constituent enterprises. While the nature of the craft and its specific dependence on certain key inputs as skill or raw material can have a substantial bearing upon the survival and growth of the enterprise itself the changing conditions of market could determine whether and where to opt for innovative strategies. The craft as an art form and as a livelihood/business proposition needs to be distinguished towards developing a meaningful approach in inclusive innovation. The role of the state, mainly as the supply side driver, would be better designed (and implemented) only when it remains relevant concurrently. It would be most rewarding to understand the ground reality through intensive case studies across economies before making a protagonist out of inclusive innovation.

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References Ameta, H. R. (2003). Census: Handicraft Artisans 1995–96. Seminar (Vol. 523, pp. 73–75). Berdegué, J. A. (2005). Pro-poor innovation systems, international fund for agricultural development. Retrieved April 12, 2018, from http://www.lamolina.edu.pe/postgrado/pmdas/cursos/ innovacion/lecturas/Obligatoria/3%20-%20Berdegue%202005.pdf. Das, K. (2005). Industrial clustering in India: Local dynamics and the global debate. In K. Das (Ed.), Indian industrial clusters (pp. 1–19). Aldershot, UK: Ashgate. Das, K. (2007). Electricity and rural development linkage. In H. Panda (Ed.), Governance of rural electricity system in India (pp. 53–66). New Delhi: Academic Foundation. Das, K. (2008). Fostering competitive clusters in Asia: Towards an inclusive policy perspective. VRF Monograph No. 437. Institute of Developing Economies, Chiba, Japan. Das, K. (2011a). Indian rural clusters and innovation: Challenges for inclusion. Economics, Management, and Financial Markets, 6(1), 283–301. Das, K. (2011b). Rural industrialization in India: Enhancing reach and returns. In K. Das (Ed.), Micro and small enterprises in India: The era of reforms (pp. 208–224). New Delhi: Routledge. Das, K. (2015). Institutional constraints to innovation: Artisan clusters in rural India. Asian Journal of Innovation and Policy, 4(2), 132–153. Das, K. (2017). Craft clusters and work in rural India: An exploration. In D. Narasimha Reddy & K. Sarap (Eds.), Rural labour mobility in times of structural transformation: Dynamics and perspectives from Asian economies (pp. 103–125). Singapore: Palgrave Macmillan. Gupta, A. K. (2010). Leveraging innovations for inclusive governance. Working paper 2010-10-01. Indian Institute of Management, Ahmedabad. Lundvall, B.-A. (1988). Innovation as an interactive process: From user-producer interaction to the national system of innovation. In G. Dosi, C. Freeman, R. R. Nelson, G. Siverberg, & L. Soete (Eds.), Technical change and economic theory (pp. 349–369). London: Pinter Publishers. Mudombi, S., & Muchie, M. (2014). An institutional perspective to challenges undermining innovation activities in Africa. Innovation and Development, 4(2), 313–326. Mytelka, L. K. (2007). From clusters to innovation systems in traditional industries. In B. OyelaranOyeyinka & D. McCormick (Eds.), Industrial clusters and innovation systems in Africa: Institutions, markets and policy (pp. 39–62). Tokyo: United Nations University Press. Nur, Y. (2012). Rethinking the innovation approach in developing countries. World Technopolis Review, 1(2), 107–117. Schumpeter, J. A. (2012) [1934]. The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. New Brunswick, New Jersey: Transaction Books. Utz, A., & Dahlman, C. (2007). Promoting inclusive innovation in India. In M. A. Dutz (Ed.), Unleashing India’s innovation: Toward sustainable and inclusive growth (pp. 105–128). Washington, DC: World Bank Institute. Wieczorek, A., Hekkert, M., & Smits, R. (2009). Contemporary Innovation Policy and Instruments: Challenges and Implications, Innovation Studies Utrecht (ISU) (Working Paper Series No. 09– 12). Utrecht: Utrecht University. Retrieved April 21, 2018, from http://www.geo.uu.nl/isn/pdf/ isn0912.pdf. Williams, R., & Edge, D. (1996). The Social Shaping of Technology. Research Policy, 25(6), 865– 899.

Chapter 3

Factors Determining Innovation in Micro Enterprise Clusters Tamal Sarkar, Nonita Yap, Geeta Vaidyanathan and Sangeeta Agasty

Abstract This paper argues that the primary drivers of innovation for micro enterprises in clusters are human factors sharpened through business processes (including learning by seeing and learning by doing), market sources (backward, forward and horizontal linkages) and market sophistication (size of the firm and nature of the buyer), in that order. Any change in or introduction of new processes, products or organizational arrangements has been considered as an innovation at the cluster level. It presents findings based on statistical analysis of primary data collected from 50 “innovators” in four clusters. Interestingly, factors related to the influence of institutional source and role of associations were found to be negatively correlated and insignificant in explaining the phenomenon, as these were mostly underdeveloped or absent in these clusters. Traditional horizontal active cooperation, the principal clustering process per se, was not a significant explanatory variable to promote innovation in underperforming underachiever clusters. Also, while market was a major mover of economic innovations, social and environmental innovations are found as a kind of push factors coming from backward linkages. Nonita Yap is deceased. This publication is jointly supported by Canada’s Social Sciences and Humanities Research Council under its Partnership Development Grant # 890-2011-0026 to the University of Guelph and an EU SWITCH Asia Project, ‘Scaling up Sustainable Development of MSME Clusters in India’. The views expressed are those of the authors and does not necessarily reflect the views of the Support Agencies. T. Sarkar (B) · S. Agasty Foundation for MSME Clusters, 6 Special Institutional Area, New Delhi 110067, India e-mail: [email protected] S. Agasty e-mail: [email protected] N. Yap Formerly with School of Environmental Design and Rural Development, University of Guelph, Guelph, Canada G. Vaidyanathan School of Environmental Design and Rural Development, University of Guelph, Guelph, Canada e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_3

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Introduction More than 50% of jobs in the developing countries come from micro, small and medium enterprises (MSMEs), but the high numbers in employment do not translate to a proportionate share in GDP. For manufacturing enterprises, this low productivity is accompanied by negative impacts on worker health and the environment. These are attributed to factors such as old technologies, inefficient management, weak support institutions, limited access to inputs, and unfavourable regulatory environments (e.g., Gopalan and Bartone 1997; Saith 2001). Micro and small enterprises are ubiquitous in both urban and rural areas in the developing countries, generally in sectors with low barriers to entry and a workforce with low technical skills, producing basic products for poor consumers (e.g., Arnould and Mohr 2005; Yap 2008). What is creating the ground for optimism and excitement among development researchers is the compelling evidence that developing country SMEs can successfully innovate, and indeed compete globally (Régnier 2004, 2008). One common element is clustering. Notable success stories have been documented in Brazil (e.g., Schmitz 1999; Villaschi et al. 2006), in Mexico (Bair and Gereffi 2001), in Pakistan (Nadvi 1999), in Indonesia (Rietveld and Sandee 2001), in India (Gulrajani 2010; Knorringa 1996; Narayanaswamy and Scott 2001; Foundation for MSME Clusters (FMC) 2006; Sarkar 2011a), in Base-of the-Pyramid countries such as Niger (Arnould and Mohr 2005) and Nigeria (Brautigam 1997). Cluster1 development is now considered the most productive strategy in promoting regional and sector growth in developing economies (ILO 2008; UNIDO 2007) and credited with raising rural living standards (Narayanaswamy and Scott 2001). The sheer survival of the micro units against the onslaught of globalisation, shows the resilience that these units are capable of and the various types of organisational and other innovations that they might be going through. Data on Indian MSMEs is a challenging issue. It is estimated that as of 2013– 2014, India has 48.8 million MSMEs employing 111.4 million persons (Ministry of MSME 2014). Ninety-nine percentage of India’s manufacturing enterprises are microunits as per the last MSME Census (2006–2007) with a total value of plant and machinery at less than USD 40,000 per unit.2 It is estimated that 70% of Indian 1A

cluster is a geographical concentration of enterprises producing similar products and facing similar opportunities and threats. 2 The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, and accordingly defined micro, small and medium enterprises for enterprises engaged in (a) manufacture or production, processing or preservation of goods and (b) providing or rendering of services based on investments. 1. A manufacturing enterprise is micro when its investment in plant and machinery does not exceed Rs. 25 lakh (Rs. 2,500,000 approx. USD 40,000); 2. A manufacturing enterprise is small when its investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; (Rs. 2,500,000–50,000,000, approximately USD 40,000 to USD 800,000) and

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micro enterprises are situated in clusters (Sarkar 2011b), numbering over 5000 manufacturing clusters (www.clusterobservatory.in) in India. Majority of these clusters are “underachievers” (Rosenfeld 1996) meaning that they perform much below their potential with respect to scope (Sarkar 2005, FMC 2007). These are mostly surviving units with a predominance of market based value chain, which mainly works on price signals, as compared to developed clusters which are based on specialisation or network based value chains (Pietrobell and Rabellotti 2004.). Yet the very fact that these clusters are surviving for years, against all odds, is an indicator of their survival techniques and provides hopes for identifying innovative activities and their causalities. In the late 1980s, reports on the remarkable success and resilience of SME clusters in the industrial districts of Italy in the face of global competition, inspired business and development researchers to use the industrial district model as a starting point for analysing the potential for increasing the productivity and competitiveness of SMEs in developing countries (Becattini 1990; Best 1990; Pyke and Sengenberger 1992; Schmitz and Nadvi 1999). Clustering appeared to enable firms to overcome productivity constraints and make them profitable. Industrial clusters and cluster dynamics in non-OECD countries became a research agenda in the early 1990s, with funding from international agencies such as the European Union, DFID (UK) and and UN organisations like UNIDO, FAO and ILO. This first ‘wave’ of cluster research established very important insights: (a) Industrial clustering is significant in developing countries but the economic outcomes vary widely from cluster to cluster. (b) Within cluster, there are pronounced heterogeneities. Even in successful clusters there are firms that fail, and in these clusters, medium and large firms have emerged that appear to play a very influential role. (c) Clusters change over time in response to threats and opportunities in an international competitive context, whether global, regional or subregional. Based on the selective review of literature on promoting innovation through cluster route and innovation index, this paper attempts to address three questions: 1. Does clustering help innovation? 2. What are the principal factors in the Indian context that explain the capacity of a micro unit to innovate? 3. Can an innovation index be constructed to measure such capacity?

3. A manufacturing enterprise is medium when its investment in plant and machinery is more than Rs. 5 crore but does not exceed Rs.10 crore (Rs. 50,000,000–100,000,000, approximately USD 800,000–1,600,000). In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries in its notification No.S.O.1722(E) dated October 5, 2006 (Annex I).

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The interest is in incremental innovation among cluster-based micro enterprises that have no formal R&D, venture capital, dedicated training arrangement, dedicated time for innovation, individual management, similar firm size and structure, no planning for innovation promotion, no reliable data on profitability and even turnover and no project management team. Moving away from radical innovation (competency destroying), the ‘Oslo Manual’ (Eurostat and OECD 2005) has further widened the scope, where innovation has been defined as or incremental (competency enhancing) (Schumpeter 1934; Anderson and Tushman 1990) ‘…the implementation of a new or significantly improved product (goods or service), a new process, a new marketing method, or a new organisational method in business practices, workplace organization, or external relations’ (cited in Insead and Wipo 2012, 5). However, in many cases, the genuineness of declarations of innovations by firms cannot be verified as the exact history and evolution of such innovations are not authenticated, e.g., data on patent/trademark and subsequent market launch, etc. In this paper, innovation is defined consistent with the Oslo Manual definition. It is recognised that even if a declared innovation is not consistent with the OECD definition and the self-proclaimed innovator is an adopter, rather than an innovator, that also, in no way takes away the spirit of innovativeness from a micro unit.

Literature Review A review of the literature on determinants of innovation and different approaches to developing innovation index shows the following trends: First, some of the existing literature on innovation index considers both input and output achieved in terms of innovation (e.g., number of patents), to construct a measure of the innovation index. The ‘Global Cleantech Innovation Index’ 2012 (GCTII), constructs the index based on (a) ‘general innovation promoters’ and (b) evidence of emerging (e.g., patents as indicators) and commercial ‘cleantech’ (cleaner technology related) innovation. The Global Innovation Index (GII) is composed of ‘input pillars’ consisting of institutions (political, regulatory and business environment), human capital and R&D, infrastructure, market sophistication, business sophistication and ‘output pillars’ including knowledge and technology output and creative output including intangible assets like patents. For example, starting with a very wider definition of innovation, Carayannis and Provance (2007) measured innovation through its degree of newness, sales, profit, patents, etc. Second, both broad indicators and the sub-indicators within an indicator carry equal weights, without any explanation or justification. In GII, the broad indicators of input and output pillars (indicators) carry equal weights. The input indicator has five ‘pillars’ (sub-indicators), each with equal weights, while the output indicator has two ‘pillars’ (sub-indicators), each with equal weight. Hence, the weights of output

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sub-indicators are higher than those of the input sub-indicators. The sub-indicators also have equal weights. The GCTII gave equal weights to its broad indicators and unequal weights to sub-indicators, again with no explanation given. Third, both explanatory as well as the explained variables explaining innovation and later used to create innovation indices are either absent or cannot be quantified appropriately in the context of micro enterprises. The GII was meant for a country as a whole and it contained parameters such as (a) institutions––political, regulatory and business environment, (b) human capital and R&D consisting of status of general and tertiary education in the country and R&D spending, (c) infrastructure including general and IT infra and ecological challenges, (d) market sophistication including credit availability, market capitalization, stocks, debts and (e) business sophistication including presence of knowledge-intensive workers, formal training, etc. A survey (FICCI 2012) showed that the education level of the owner, especially technical degree, global exposure through training, ownership structure, R&D intensity, firm size, exports and habits and practices of innovation. Knowles et al. (2012) discusses the GCTII, that constructs the index based on ‘general innovation inputs’ specifically institutions, human capital, infrastructure, market sophistication, business sophistication and ‘entrepreneurial culture’ and variety of cleantech focused innovation drivers including government policies and investment in cleantech, access to private finance for cleantech start-ups, national renewable energy markets, renewable energy infrastructure and their suitability for and clean technology cluster programme. Starting with a wider definition of innovation, Carayannis and Provance (2007) measured innovation through its degree of newness, sales, profit, patents, etc. They then tried to explain innovation by firms by using indicators like (a) ‘input oriented measures’ like R&D expenditure, investment in internal venture capital, commitment of human capital to training on innovation, top management attention to innovation, (b) ‘process oriented measures’ including innovation and process management systems. It is difficult to find relevant indicators for innovations (new to cluster, incremental rather than radical) among cluster-based micro enterprises that have no formal R&D, venture capital, dedicated training arrangement, dedicated time for innovation, individual management, similar firm size and structure, no planning for innovation promotion, no reliable data on profitability and even turnover and no project management team. However, some important leads were found for constructing a suitable innovation index. Goodridge et al. (2012) observed that R&D is not the only knowledge investment. They found that ‘investment in long-lived knowledge, which creates intangible assets, now exceeds tangible investment; training, organisational investments and software are the largest categories of intangible investment...’. Thus, the need to go beyond ‘R&D’ has been established. Nagesha (2006) in a study on factors responsible for energy-related investment, concluded that the barriers were financial and economic behaviour followed by behavioural and personal barrier (BPB), awareness and information (AIB), structural and institutional barrier (SIB) and policy and

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regulatory barrier (PRB) in that order were ranked important by cluster firms in two clusters. Lack of internal fund (FEB) and willingness to raise fund for that purpose (BPB) are the critical issues. The GCTII also established the fact that an innovation index is dependent on the nature of target audience whose innovation potential is to be measured. Romijn and Albaladejo (2002) argues that innovation capability of a firm can be conditioned by (a) internal sources including professional background of founder/manager, skills of workforce, internal efforts to improve technology, and (b) external sources including intensity of networking, proximity advantages related to networking, and receipt of institutional support. An analysis of data in relation to software firms shows that among the internal factors, prior work experience, as opposed to academic qualifications, is associated with higher innovation capability. On the external factor front, the study did not “…support the belief…that strong overall locally based interaction (…with firms in similar lines of business, banks, training institutions or industry associations)…would be conducive to innovativeness. Strong relation was found with a science base. However, considering the nature of the industry and the fact that majority of the entrepreneurs have emanated from the mother institutes, the ‘science base’ in this context appears more like a ‘mother firm sister firm’ syndrome as against the traditional ‘R&D linkage’ phenomenon. Interestingly, ‘subjective impression’ suggested that…the most innovative companies...are those that are operating in leading global markets, which shows that the learning process is not only internal knowledge flow (which is weak among micro enterprises), but is also dependent on external factors, which ‘willing’ micro firms can attempt to pick up from. Gebreeyesus (2011) argued that ‘it is not only the size...but also the depth of relations acquired through long term business interactions...impacts innovation positively’. While education of the owner was found to be important, experience was found to ‘…have less impact...(maybe)... due to measurement error’. This contradicted the findings of Romijin and Albaladejo (2002). Training was found to be a significant contributor too. Interestingly, the analysis suggested that ‘…blanket approach of policies towards small firms’ clusters is not appropriate as firms are heterogeneous in various way and perform differently’. In industrialised countries, Roelandt et al. (1998) argues that firms need to innovate to survive and this is best done through a networking model, with each player in the network specialising and each taking the benefits of the innovations done by other members of the networks. This is facilitated in a cluster model, where networking is natural and easy. With reference to clustering Porter suggested that innovation is one of the important factors for promoting competitiveness. The innovation factors identified were divided into three main categories: common innovation infrastructure, clusterspecific conditions that support innovation in a particular group of interconnected industries and the strength of linkages among them, and contribution of corporate efforts to the overall pool of technology and skilled personnel. Thus, the importance of clustering was clearly highlighted. Raghavendra (2006) also reported that creating technological capability in firms was influenced significantly by horizontal

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collaboration and not at all by vertical collaboration. Such horizontal collaboration was triggered by active industry associations. The Illinois Innovation Index given in the annual report called Illinois Innovation Network (2012) concluded that innovative firms are generally on an upward curve in their business growth process and such growth was found to occur in clusters. This recalls Bell and Albu’s (1999) argument that knowledge flow in developing (i.e., underachieving) clusters, is unstructured and mostly happening through informal exchange. The presence of traditional ‘gatekeepers’, e.g., technical institutes in these contexts is low. Gulrajani (2010) confirms this trend for a reasonably developed textiles cluster of Panipat. She notes that the challenge has a dual dimension: ‘deficiencies in the own structure/functioning of the (technical) institutions, and the deficiency in the networking of existing institutions with the cluster firms…(at times)…because of their inability to keep pace with the requirements of the fastgrowing challenges of globalisation’ (ibid p. 184). However, “…vertical links present in the cluster have played an important part”. (ibid: 185) Thus, while a number of factors have been identified, the importance of clusters and clustering were underlined as important. The question remains regarding the impacts of these factors on micro enterprises; and a primary data based analysis was conducted to answer this.

Methodology for Developing Cluster-Level Innovation Index To keep the sample independent of any typical product, a simple random selection of three sectors was done from a population of 11 most environmentally challenging sectors (IICA-GIZ 2013). The selected sectors included textiles, leather and foundry, all having serious environmental issues. Since the study was based on primary survey, existing trust with interviewees was very crucial to get access to real data. Hence, the clusters were so chosen that researchers have a prior working relationship with these clusters and have easy access not only to the firms but also to other important support stakeholders including industry associations, technical institutions, financial institutions, industry organisation of the local government, etc. Accordingly, the selected clusters include the leather clusters of Kolkata, textiles clusters of Jaipur and Kolkata and foundry clusters of Ajmer and Kolkata. Although there are elements of performers in those clusters also, they can be broadly grouped as ‘underachiever’, with huge potential. In view of the lack of data on possible innovators a chain sampling strategy was used to identify the innovators. Again in order to take away the influence of possible size discrepancy, only micro enterprise innovators were interviewed. A structured questionnaire was used to capture details of the innovation and its impact on the firm. The questionnaire was first tested out with a few innovators in Jaipur textiles cluster before formalising. Here, although we tried (during the pre-sampling period) to restrict the period of innovation to last 3 years, the micro enterprise memory

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was not found to be particularly accurate, leave aside any written evidence of the same. Hence, we had no option but to dilute the recollection period to a subjective measurement, ‘the recent past’. Variables were selected to cover both firm and cluster-specific aspects that might have generated or led to creation and most importantly supported in putting it to practice (process innovation) or accept the new product (product innovation). At the firm level, factors like (a) firm/human-specific factors such as, human factors (viz., education, training, experience and exposure), (b) market sophistication (viz., firm category, legal status and existing markets) and at the cluster level, factors like (c) market sources (viz., role of suppliers of equipments, materials, components, or software, business development service providers (BDSPs)/consultants/private R&D institutes, traders, buyers/end customers), (d) institutional sources (university or other higher education institutions, government or public research institutes, private funds/initiatives), (e) support institutions, (f) association of enterprises, etc. The impact of innovation was captured in terms of economic and also social and environmental benefits. Apart from the qualitative data, qualitative information to capture the process of innovation through case studies was gathered (see, Sect. Selection of Variables) and this helped in initial grouping of variables. To analyse the data and define the innovativeness of a firm, multivariate technique in the form of multiple regression was used where the outcome of innovation which defines innovativeness of the firm was regressed on the likely driving factors of innovation such as human factors and cluster-level factors as detailed above. However, a large number of variables used in the equation was a limiting factor to come out with an accurate and appropriate equation. Thus, factor analysis using principal component method was used on all independent (explanatory) variables to see commonality in behaviour and closeness of the meaning. Based on these, they were grouped into and named as different factors. Multiple regression was run on the dependent variable, which is the innovativeness of the firm, with these identified independent factors. Several trials were done to remove the less significant factors in the equation and to bring out the best-fit equation. In the end, the variables that were found to be significant and with appropriate sign were identified and the beta values of these variables were proposed as the weights to construct the innovation index of micro enterprises in clusters.

Selection of Variables During the pilot interviews, it was felt that human factors like knowledge and exposure, market linkages like forward and backward value chain partners, service providers and at times other cluster-level factors like presence of other support stakeholders, played important roles in promoting innovation. All these factors were also administered in the questionnaire too. Accordingly, the following categories of variables were grouped for statistical analysis.

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It is expected here that not only formal but technical education (code-named: FHEF) of the owner matters, as often he/she is the only person experimenting with changes. Also, what is of importance is that the informal experience of that person, especially, if the person has gone through some sort of specialisation (code-named: FHEI). Together, these two variables are code-named as FHE. Again, since initial indications suggested that learning for micro units takes place while in business through (a) learning by seeing (FHBLS) say through exposure to fairs/exhibitions, visiting new markets and better units and (b) learning by doing (FHBLD) through specialised projects often leading to certification and specialisation or generation of special knowledge. Together, these two variables have been code-named as FHB. Since there is no formal R&D expenditure in any of the interviewed enterprises, this variable was dropped. It is expected that in underperforming clusters, the innovating firms will have specialised buyers in the form of hierarchical or network-based learning relationship, as compared to non-innovative units who generally are used to arms–length exchange relation, based on price signals only. Here, the role of international buyers is assumed to give access to higher order knowledge as compared to national buyers, as those information are either easily accessible or are less tenable to global competitiveness. Thus, the degree of market sophistication was considered an explanatory variable and has been code-named as FMS. At the cluster level, three issues were found to be of relevance—the role of (a) value chain partners, (b) institutions and (c) local associations (active cooperation) and natural horizontal linkage among similar firms (passive co-operation). The value chain or ‘market based innovation influencing forces’ (code-named as CMF) can be divided into forward linkage providers (CMFFL) including intermediate traders or final client/consumer and backward linkage providers (CMFBL) including suppliers of equipment, raw materials or components and consultants. The importance of institutions at a cluster level can be gauged through the presence and activeness of local technical institutions, government and private institutions and usage of scientific journals and trade/technical publications. This factor has been code-named as CINS. The role of cluster-based natural cooperation (CNC) was found important by various studies. Here, associations often playing the role of active cooperation (CNCA) was also considered as an explanatory factor. Interestingly, they are the originators of ‘joint actions’ or ‘active cooperation’ in a cluster and their importance will explain the contributions for ‘joint actions’ in clusters (Sarkar 2011a). Apart from active cooperation, a cluster also benefits from natural ‘passive’ or informal ‘cooperation’ among competing firms in the cluster. This factor has been captured as CNCP. While the role of firm-level factors towards innovation was derived based on the status of the firms, the role of cluster-level factors was derived based on the ranking given by the firms as per the importance felt by them in promoting their innovation. Accordingly, the explanatory variables can be broadly summarised as follows (Tables 3.1 and 3.2). The detail scoring structure of the variables appears in Table 3.1.

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Table 3.1 Explanatory variables FIRM LEVEL (F) Human factor (Education) (HFE)

Human factor (Business) (HFB)

Formal (FHEF)

Education including tertiary education

Informal (FHEI)

Training and frequency of training

Learning by seeing (FHBLS)

Exposure to fairs/exhibitions and new units

Learning by doing (FHBLD)

Experience through projects leading to specialisation and certification

Market sophistication (FMS)

Nature of market served

CLUSTER LEVEL (C) Market forces (MF)

Backward linkage (CMFBL)

Role of intermediate traders and final client/consumer as ranked by firms for their contribution towards their innovation

Forward linkage (CMFFL)

Roles of suppliers of equipment, raw materials or components and consultants as ranked by firms for their contribution towards their innovation

Institutional sources (CINS)

Role of university or other higher education institutions, government or public research institutes, external private funds, support institutions and usage of scientific journals and trade/technical publications, as ranked by firms for their contribution towards their innovation

Natural cooperation (NC)

Association membership and support—active cooperation (CNCA)

Role of associations as ranked by firms for their contribution towards their innovation

Natural cooperation (NC)

Competitors–passive cooperation (CNCP)

Role of competitors/other enterprises in the sectors as ranked by firms for their contribution towards their innovation

Participated in technical/nontechnical training, innovation-related learning identified and utilised

Weekly

Informal: training (FHEI)

Informal: frequency of training (FHEI)

Learning by seeing: exposure to fairs/exhibitions (FHBLS)

Participated in more than two national or international fairs, with knowledge gain identified

Firm-level: human factor—business (FHB)

Qualification: technical

Formal (FHEF)

Firm-level: human factor—education (FHE)

Very high (6)

Participated in less than two national or international fairs, with knowledge gain identified

Monthly

Participated in technical training and innovation related learning identified

Qualification: masters

High (5)

Participated in more than two international fairs, with no knowledge gain identified

Bi-annually

Participated in non-technical training and innovation related learning identified

Qualification: graduate

Moderate (4)

Participated in less than two international fairs and may or may not in any national fairs, with no knowledge gain identified

Annually

Participated in Technical training, no innovation-related learning identified

Qualification: higher secondary

Low (3)

Table 3.2 Scoring pattern for explanatory variables: expected contribution to innovation for firms that innovated

Participated in more than two national fairs and no international fairs, with no knowledge gain identified

Once

Participated in non-technical training, no innovation-related learning identified

Qualification: secondary

Very low (2)

(continued)

Participated in less than two national fairs, with no knowledge gain identified

None

Did not participate in any training

None

Not there (1)

3 Factors Determining Innovation in Micro Enterprise Clusters 61

Participated in Special projects now for less than 5 years and gained special knowledge or certification

Learning by doing: exposure to special project and gaining certification/special knowledge (FHBLD)

More than five international buyers, may or may not have national buyer

Four–five international buyers, may or may not have national buyer

Participated in special projects now for more than 5 years and gained special knowledge or certification

Yes, better units in other cluster and has a lesson to share other than innovation or innovative ideas, may visit to better units in cluster

High (5)

One–three international buyers, may or may not have national buyer

Participated in special projects now for less than 5 years but no special knowledge or certification gained

Yes, better units in same cluster and has a lesson to share other than innovation, no visit to better units outside cluster

Moderate (4)

More than five long-term national buyers, no international buyer

Participated in special projects now for more than 5 years but no special knowledge or certification gained

Yes, better units in other cluster, no lesson to share, no visit to better units outside cluster

Low (3)

Cluster-level: contribution of market forces (CMF) towards innovation (Ranked by innovator)

Nature of markets served (FMS)

Firm-level: market sophistication (FMS)

Yes, better units in other cluster and got lesson to share on innovation/innovative ideas, may visit to better units in cluster

Very high (6)

Learning by seeing: exposure visit to better units (FHBLS)

Table 3.2 (continued)

Four–five long-term national buyers, no international buyer

Participated in no special projects in less than 5 years

Yes, better units in same cluster, no lesson to share, no visit to better units outside cluster

Very low (2)

(continued)

0–3 long-term national buyers, no international buyer

Participated in no special projects for more than 5 years

No exposure visit to better units

Not there (1)

62 T. Sarkar et al.

6

6

6

Backward linkage: consultants (CMFBL)

Forward linkage: trader (CMFFL)

Forward linkage: client or customer (CMFFL)

5

5

5

5

High (5)

4

4

4

4

Moderate (4)

3

3

3

3

Low (3)

6

6

University or other higher education institutions (CINS)

Government or public research institutes (CINS)

5

5

4

4

3

3

Cluster-level: contribution of institutional sources towards innovation (Ranked by innovator)

6

Very high (6)

Backward linkage: suppliers of equipments, materials, components, or software (CMFBL)

Table 3.2 (continued)

2

2

2

2

2

2

Very low (2)

1

1

1

1

1

1

(continued)

Not there (1)

3 Factors Determining Innovation in Micro Enterprise Clusters 63

6

6

External private funds (CINS)

Support institutions (DIC/MSME-DI, etc.) (CINS)

6

6

Active: association member (CNCA)

Passive: competitors and other firms (CNCP)

Cluster level: natural cooperation (CNC)

6

Very high (6)

Scientific journals and trade/technical publications (CINS)

Table 3.2 (continued)

5

5

5

5

5

High (5)

4

4

4

4

4

Moderate (4)

3

3

3

3

3

Low (3)

2

2

2

2

2

Very low (2)

1

1

1

1

1

Not there (1)

64 T. Sarkar et al.

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The degree of innovativeness Y (Innovativeness) of an innovator was identified as a multiplicative model of the average value of the nature of innovation done and the average value of the impact of such innovation as ranked by innovators. Besides the overall Y values, we also calculated the intensity of innovation separately for (a) economic issues: Y (Economic)––by multiplying the average value of types of innovation with average value of those changes which impacted the 14 economic issue and (b) social and environmental issues: Y (Social and Environmental)––by multiplying the average value of types of innovation with average value of those changes which impacted the eight social and environmental issue.

Innovativeness

Y (Overall)

Multiplicative model of the average value of the nature of innovation done and the average value of the impact of such innovation

Y (Economic)

Multiplicative model of the average value of the nature of innovation done and the average value of the impact of such innovation on 14 economic issues (as in the questionnaire)

Y (Social and environmental)

Multiplicative model of the average value of the nature of innovation done and the average value of the impact of such innovation on 8 social and environmental issues (as in the questionnaire)

Indications from Case Studies A brief of some of the cases shows the importance of factors identified. Eco-friendly natural substances like ‘Gwar based organic paste (‘daabu’) is an innovative material used by an innovator in Bagru village to introduce five shades of indigo on the same cloth. For this to happen, the cloth is to be dyed at least five times, each time in a different shade of indigo dye. To prevent that particular shade coming onto other parts of the fabric ‘daabu’ is used as a colour resistant. The use of ‘Gwar’ is most useful in this sort of printing because to maintain a visible difference in the five shades of indigo only a good quality ‘daabu’ could be used. This is a unique case of product innovation led by eco-process innovation, which is completely attributed to the human factors as knowledge gained through experience and skill training of artisan on eco-friendly dyes and demand placed by specialised buyer. Stencils that workers/block printers use for outlining the shape of the final outfit on the ‘to be printed’ fabric is another process innovation introduced by another unit in Jaipur. By use of these stencils, the printer would mark points on the raw fabric such that when the printed cloth is finally cut for stitching a particular outfit, it would not disturb the alignment of the prints/designs as they have already been

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placed according to the final shape of the outfit. This helps in saving a lot of fabric which sometimes had to be rejected just because the alignment of the prints was not in the right place. The origin of this innovation was attributed to—exposure to mechanised units doing similar activities. A lot of fabric was wasted in the textile and handicraft manufacturing units. Some of the innovative units thought of making use of scrap pieces to make fabric ropes which then could be put to several other uses, e.g., making baskets, creating wall decor, showpieces to be hung and so on. This innovative idea came from the market and exposure to similar enterprises in the country. After realising huge market opportunities for such products, many units in the cluster have started doing similar waste-based craft products. Process innovations were observed in the leather cluster of Kolkata. The leather tanning process generates lots of waste leather including protein and fat extracts that go to the landfills and water bodies and pollute them. The innovator who is a tannery owner, initiated a productive use by using the extracts for fish feed and fertilisers. Similarly, another innovator initiated an innovative practice by selling waste split leather to household footwear units without disposing it off to the wasteland, there being already pressure from pollution control boards. To make the tanning process efficient and reduce overuse of chemicals and chrome, labourers were trained in another unit to keep records of chemical used and monitor the process efficiently which reduce environmental hazards. In all these three cases, human factor (technical education), exposure of the firms to better units in other clusters, possible buyers and natural pressure to reduce pollution gave and pushed them towards the idea to successfully experiment on such innovations. Here, human factors were complemented by the linkage of the innovators with buyers. Organisational and managerial innovation leading to labour productivity and social benefits were found in leather goods manufacturing units in Kolkata. In some of the hand glove units as well as leather product manufacturing units, the innovators started outsourcing the work to the women living in the periphery villages of Kolkata. These women who were facing difficulties to relocating to urban centres for work got employment locally for doing this job work. Leather sheets were cut as per product design and supplied to them who then stitched it and put the attachments. For stitching, the sewing machines were operated manually by using legs to paddle which was laborious as well as time consuming. The units started providing them electric motor operated sewing machines. It not only reduced the drudgery, but also doubled the labour productivity. Human factors (learning by seeing elsewhere) came out to be a key driving factor in this innovation. Interestingly, according to the unit owner, cluster factors like association and support institutions played no role in the innovation and also its diffusion in other similar units in the cluster. Product innovation was experienced for making general leather gloves to other value-added hand gloves in Kolkata. Innovators started combining leather with canvas (cloth/fabric) and jeans. This idea came from their exposure to the global market beyond its conventional local and regional markets. The products designs were modified as per the raw material type and usage. Units started collecting waste/used jeans and other fabrics to make such innovative fashionable hand gloves which are not only trendy but are also less costly and, thus, fetched good response in the market.

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Similar products were seen in micro footwear units in Jan Bazar and Raja Bazar areas of Kolkata where units have started giving priority to the comfort and quality of the shoes. Here, the inputs provided by the BDS provider (ex-Bata production/operation manager) played a major role. The innovators in Janbazar area, now sell the leather waste (rather than dumping it) to the key making units (buyers) for making products such as key rings, which could have been possible due to their proximity with these key producers. Incremental process-based innovative practices leading to the reduction in emissions was observed in the foundry units in Howrah. In order to melt the cast iron in micro foundries, coke is used in cupola furnace. Some of the units have stepped up from the conventional way of measuring to scientific weighing practices through the adoption of measuring equipment. This has reduced the use of coke and other inputs. Moreover, scientific bed coke preparation has also made the process efficient. Some of the units have shifted from single to double blast cupola leading to a substantial decrease in coke consumption. Innovative operational practices have also resulted in savings of electricity, coal, diesel, and production time (manufacturing rate, melting rate) savings. Here also, it was exposure to good service providers and a visit to performing units outside the cluster that made all the difference. In the hosiery cluster of Shobhabazar in Kolkata, innovation in terms of technology adoption was observed. Adoption of new machines has almost doubled the productivity of the units. The innovators who are very few in number got to know about the benefit of this new technology from its supplier whom they met during an international trade fair. The technology was not only demonstrated there but the benefits were displayed. In the dying units, water is used for dyeing and bleaching. Adoption of new soft flow machines uses 4 times less water and gives good quality dyeing. Recycling of wastewater is another innovative practice adopted by the units. Among others, the use of high-pressure machine is another successful case, which penetrates the colour in the fabric faster and thus reduces the operation time by 30%. Mechanised printing instead of traditional hand block prints with the help of machines like flat belt, jiggers and jets was a process innovation adopted by many units in Sanganer and Bagru area in the Jaipur block printing cluster. Productivity increased substantially with mechanisation, and few innovative firms further stepped ahead by using services of consultancy firms for energy conservation, reducing water consumption and producing environmentally and economically sustainable products. Quality and eco-friendly dyes which consume less water were introduced by some of the innovators. Here also the linkages with technology providers, BDSPs and linkages with buyers played a major role in innovation and diffusion. An analysis of the above cases suggests that innovation is happening mostly in the process and not so much in the product front. Also, such innovation is not pathbreaking but very well fits the Oslo definition, it being mostly in the form of a new process or a new marketing method. The newness, in most cases, is new to the sector and at times new to the cluster (adopter). Since the spirit of this article is to identify the spirit of innovativeness of micro enterprises, both cases have been considered as innovation.

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Also, it shows the paramount importance that the market plays in this metamorphosis. This comes in the form of demand from buyer or identification of a new buyer. Also of importance is exposure gained from other units, visits to fairs/exhibitions and experience/knowledge gathered during growth. Role of BDS providers, machinery suppliers, etc. also played an important role, in both the cases the innovations actually led to social benefits in the form of reduction of pollution.

Results To start with factor analysis was done with the following result with the KMO sample adequacy of 0.627 and a significance level of 0.000 (Table 3.3). Hence, we conclude that while human factors consisting of education (formal and informal)––FHE, learning by seeing (FHBLS) and learning by doing (FHBLD) is the first set of important factors. Although the role of associations, CNCA (factor loading 0.784) has high factor loading, but it does not gel with the selected factor FHE. The second most important factor happens to be market, consisting of market sophistication (CMS), and backward and forward linkage providers—CMFBL and CMFFL. Although horizontal linkage (CNCP) (factor loading 0.784) has high factor loading, but it does not gel with the selected factor market. The third factor of significance is selected as institutional sources (CINS). We then did multiple regressions by considering both firm and cluster-level parameters, guided by the factors selected above. In the human factor parameter, we include FHE as a separate factor, but we merge the two—learning by doing and learning by seeing—into one factor, FHB. We then divide the market factor into two FMS. In cluster-based market forces, we merge the backward and forward linkages and Table 3.3 Rotated component matrix

Component 1

2

3

FHF

0.651

0.517

−0.262

FHBLS

0.877

0.141

0.038

FHBLD

0.462

−0.293

0.643

FMS

0.150

0.783

−0.103

CNCA

0.785

0.200

0.112

CMFBL

0.117

0.702

0.447

CMFFL

0.188

0.708

0.235

−0.266

0.122

0.784

0.135

0.221

0.722

CNCP CINS

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Table 3.4 Coefficients (Adjusted R2 = 0.665) Model

Unstandardized coefficients

Standardised coefficients

B

Std. Error

Beta

(Constant)

−6.807

2.577

−2.641

0.011

FHE

−0.981

0.561

−0.205

1.749

0.087

FHB

2.309

0.531

0.506

4.350

0.000

FMC

1.730

0.633

0.295

2.735

0.009

−0.209

0.613

−0.038

−0.340

0.735

CMF

1.721

0.518

0.363

3.321

0.002

CINS

0.397

0.900

0.049

0.441

0.661

CNCA

t

Sig.

take one-factor CMF. We include the shortlisted cluster-level parameter of institution (CINS). But we also include the two rejected high load factors of association (CNCA) and competing firms (CNCP). All these were regressed on innovativeness—Y (overall) with the following result (Table 3.4). The regression run with innovativeness Y (overall) as the dependent variable shows that formal and informal education (FHE), institution (CINS) and role of association (CNCA) are not significant. The reason why the association is not significant, maybe because of the fact that we typically worked mostly with underachiever clusters (except for one) and among them the micro units. A number of sample micro enterprises are not members of any association, yet many others are members of associations which are basically dormant. The possibility of contribution of firms from the same cluster is also low as the firms are mostly on the same level of knowledge intensity, as the ‘walls of factory are porous’ (Smith: 1876) and there is hardly any joint action among the firms to provide leads for innovation. It also shows that formal education is not a major source of innovative ideas. Such ideas come more frequently from learning through business interactions by seeing and doing, i.e., FHB. Similarly, innovation is also largely influenced by forward and backward linkages. The parameters FHB, FMS and CMF were all found to be significant in explaining innovativeness as detailed in Table 3.5. Table 3.5 Coefficients (Adjusted R2 = 0.664) Model

Unstandardized coefficients

Standardised coefficients

B

Beta

Std. Error

t

Sig.

−7.766

2.092

−3.712

0.001

FHB

1.913

0.463

0.419

4.128

0.000

FMS

1.370

0.576

0.233

2.378

0.022

CMF

1.934

0.533

0.369

3.626

0.001

(Constant)

70 Table 3.6

T. Sarkar et al. R2

Adjusted R2

Beta

Significance

FHB

0.44

0.675

0.000

FMS

0.27

0.575

0.000

CMF

0.41

0.578

0.000

Table 3.7 Weightage for creating the innovation index FHB (0.41)

FHBLS (0.50)

Exposure to new markets (0.25) and new units (0.25)

FHBLD (0.50)

Training (0.25) and frequency of training (0.25)

FMCBL (0.50)

Intermediate traders (0.25) and final client/consumer (0.25)

FMCFL (0.50)

Suppliers of equipment (0.166), raw materials or components (0.166) and consultants (0.166)

FMS (0.23) FMC (0.36)

Firm size (0.50) and nature of market (0.50)

These variables were also found to be individually significant (Table 3.6). Accordingly, we propose an innovation index as follows with weights in parentheses. While the weights of the broad categories are based on the beta values of their respective coefficients, in the absence of any distinguishing factors, we provide proportionate weights to the sub-variables (Table 3.7). Separate regressions were also done to understand the factors explaining social and environmental-related innovations as opposed to factors that promote innovation triggered by pure economic reasons. To do the same, several combinations of explanatory factors were regressed on Y (Economic) as well as Y (Social and Environmental) with the following results (Tables 3.8 and 3.9). This shows that both FHB and FMS are significant on both occasions. Interestingly, backward linkages (CMFBL) turn out significant for social and environmental issues and not significant for economic issue. However, both forward and backward linkages turn out significant for economic issue and not significant for social and environmental issues. This shows that while the market has more influence on economic issues, the social and environmental related innovations are probably more of a push factor. Table 3.8 Dependent variable: Innovativeness (Economic) (Adjusted R2 : 0.581)

Beta

Significance

FHE

−0.103

0.480

FHB

0.351

0.007

(Constant)

FMS CNCA

0.006

0.302

0.011

−0.101

0.404

CMFBL

0.203

0.140

CMFFL0

0.306

0.020

CNCP

0.054

0.626

CINS

0.020

0.869

3 Factors Determining Innovation in Micro Enterprise Clusters Table 3.9 Dependent variable: Innovativeness (Social and Environmental) (Adjusted R2 : 0.656)

71

Beta

Significance

−0.098

0.459

FHB

0.606

0.000

FMS

0.260

0.015

−0.137

0.213

(Constant) FHE

CNCA

0.005

CMFBL

0.402

0.002

CMFFL

−0.183

0.117

CNCP

−0.025

0.802

0.051

0.645

CINS

Discussion and Conclusions: Strength and Weaknesses of the Index The primary drivers of innovation in micro enterprises in clusters are human factors sharpened through business process (including learning by seeing and learning by doing), market sources (backward and forward linkages) and market sophistication (size of firm and nature of buyer), in that order. Interestingly, factors related to the influence of institutional source, role of associations (active cooperation) and clusterlevel firm linkage (passive cooperation) were found to be insignificant in explaining the phenomenon. Thus, while cluster level conditions might matter, in a ‘overachiever or performing’ cluster, the clustering process per se, is not a statistically significant explanatory variable that created innovators among micro enterprises in clusters. Also while market linkage is a major mover for innovations with pure profit motives, social and environmental innovations are more dependent on push factors coming from backward linkages. The chapter, however, suffers on several counts. First, the sample size is small. Second, the study could have been done separately for underachiever and overachiever clusters. Third, various other cluster-level ‘active cooperation’ promoting factors could have been included in the study. Fourth, the suggested innovation index is a stepping stone and factors might change depending on the type of cluster—overachiever or underachiever.

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Chapter 4

Inclusion and Innovation Challenges in Handloom Clusters of Assam Priyatam Anurag and Keshab Das

Abstract We study the dynamics of growth, innovation and inclusion in a silk handloom cluster and a silk yarn manufacturing cluster in Assam. The study is based on qualitative and quantitative data collected from 120 units in the two clusters. We observe a redistribution of production of silk handloom fabrics within and between the clusters whereby the artisans in the core areas of the cluster are increasingly specialising in premium products while subcontracting the low value handloom products to the weavers in the peripheral areas. While the reorganising of the value chain is without doubt providing weavers in the peripheral areas a foothold into the handloom market, it is happening under conditions which restrict their economic mobility due to their unequal access to policy incentives. We also note potentially stabilising role of innovation in the clusters which, though nascent and concentrated in the core areas, targets productivity improvement and reduction of drudgery in weaving activities. Our findings highlight the need for more equal distribution of policy driven incentives across space in the cluster to support not only growth and innovation but also improve the inclusion outcomes.

Introduction India has been home to a huge number of artisanal or traditional skill-based enterprise clusters typically concentrated in rural areas, and these have been in existence in almost all parts of the country. Known for their creative distinctiveness and highquality craft processes, these draw upon local resources—human and physical. Of the about 6000 traditional clusters in India, almost half deal with textile clothing products whether using a wide variety of cotton, silk/tasar, wool and jute fabric. However, several of these clusters have been operating within spaces of deep-seated P. Anurag (B) Indian Institute of Management Lucknow, Lucknow, India e-mail: [email protected] K. Das Gujarat Institute of Development Research, Ahmedabad, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_4

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poverty, informality and severe limitations of infrastructure constraining enterprises to engage in business (Das 2005, 2011 and 2015). This study explores how enterprises involving the poor or moderately poor in a cluster grow. It asks how a new policy milieu influences the growth of these enterprises and what role innovations play in furthering this growth. The study considers two handloom clusters in the northeastern Indian state of Assam and explores the phenomenon of growth, innovation and inclusiveness of growth and innovation in these clusters in this specific sectoral and geographical context. Silk handloom clusters and the textile subsector in Assam serve as a backdrop for this study. Handloom weaving in Assam has several distinctive characteristics. First, it is an activity which involves women in large numbers here as compared to several other parts of the country where the weavers––bunkar or julaha––are predominantly men. Second, silk weaving is done at a large scale for household purposes only and commercial weaving is restricted to only a few clusters. Third, Assam is a unique state in India producing all four types of silk-Muga, Eri, Mulberry (locally known as pat) and Oak Tasar silk. Of these, muga and eri are the main silk produced in the state; Assam produces more than 95% of muga silk in the world. Finally, handloom weaving is a symbol of the cultural heritage of Assam and is inextricably linked to the construct of Axomiya (Assamese) identity. However, the predominant category of the weaver in Assam is parttime and noncommercial (90%) as compared to the national level where 53% weavers take up weaving as a purely commercial activity (NCAER 2010). As a result of this, weaving contributes approximately 19% to the total household income in Assam while it is 58% for other states. In Assam, commercialization of the sector is low and weaver participation in the activity is different and culturally distinct. Sustainable development of handloom clusters in Assam, which employ a large number of workers is an area of important policy concern (Jain and Ratan 2017; Sharma et al. 2017). This geophysical context, the diversity of the weaving subsector and work demand a regionally and sectorally differentiated policy response. This chapter, by presenting the growth and inclusion challenges, nature and direction of innovation in two clusters, asks why the state and its policy-making mechanisms remain indifferent to the innovation and growth potential of these clusters.

Research Framework This is an exploratory study based upon two formats of focus group discussions (FGDs) on mapping innovations and innovation–growth linkages: one format on understanding the competitive pressures, and two formats of semi-structured questionnaires for home-based and factory/ work shed production model. A total of 12 FGDs, 3 Participatory Rural Appraisal exercises (Chambers 1994) and 45 structured questionnaires have been administered in the study covering 120 units. The field study has been conducted in Assam in Sualkuchi block, 35 km from Guwahati in Kamrup district and Dhokuakhana block in Lakhimpur district. Sualkuchi (silk village in Assamese) is the largest weaving cluster in Assam and the

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entire north-eastern region with more than 4000 households engaged in commercial weaving activity. It is a small census town, consisting of two revenue villages–– Sualkuchiand Bamundi-Sualkuchi along with the North bank of Brahmaputra near Guwahati, spread over an area of 12 sqkm, 4 km from East to West and 3 km from North to South. Sualkuchi has grown as a Development Block with a population of more than 1 lakh. The greater Sualkuchi cluster consists of 16 villages, viz., Sualkuchi,B ongsar, Sanpara, Bathan, Srihati, Gandhmou, Sarulah, Barlah, Kaeyatol, Halogaon, Bamundi, Siliguri, Hardia, Tokradia, Sobangsah and Ramdia. The other cluster—Dhokuakhana—is located in Lakhimpur district. Lakhimpur along with Shibsagar district is the largest muga silk-producing districts in Assam and hosts a Muga Substation established by the Central Silk Board.

Evolution and Growth of Clusters Evolution and Growth of the Sualkuchi Cluster Silk weaving in Sualkuchi has a history spanning more than nine centuries. Weaving of silk fabrics in the cluster can be traced back to the 11th century AD when king Dharma Pal invited 26 weavers to settle down in the village of Sualkuchi (Phukan 2012). Subsequently, it became a full-fledged weaving village in the 12th century. Silk was the royal fabric of the Ahom kings who ruled Assam for six centuries till 1826 and it received royal patronage with no taxes and land revenue imposed on silk production during the Ahom rule (Mahan 2012). Silk industry, in general, declined in the state during the British period and there was no development for decades.1 Earlier British pioneers were enthusiastic to explore and exploit it as an industry and promote sericulture in the state. However, they failed to sustain the muga culture on an industrial scale and thereafter silk industry was discouraged through the imposition of land revenue and taxes on sericulture––measures which were characteristic of the British imperial policy. Our qualitative discussions helped us know more about the recent trend of the production of silk in the cluster. Sualkuchi had predominantly home-based commercial units till the 1960s. The trend of small unregistered factory system with hired labour first originated in the cluster in the late 1970s. The main reason for the success of factory-based system was the availability of cheap and skilled labour from the Bodo areas. Bodo areas had extremely underdeveloped infrastructure, a primitive economy and limited livelihood avenues. Further, this part of Lower Assam has also faced continual conflict for several decades for a movement for separate Bodoland state. As a result of conflict and limited livelihood avenues, the region has high out-migration and therefore served as a feeder cluster for cheap labour for the handloom cluster in Sualkuchi. 1 http://www.assamportal.com/sualkuchi-silk-city-of-assam/.

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In 1987, the North East Council implemented a project called ‘Sualkuchi Prokolpa’ for modernization of the Sualkuchi cluster. Buoyed by favourable demand situation, and benefitting from the subsidies provided in the project and other schemes for handloom development in the cluster, most of the units in Sualkuchi have upgraded themselves to commercial work sheds with jacquard looms. The cluster again benefitted from the ‘Golden Thread Project’ in the early 2000s (Hindu Business Line 2000). As a result of several initiatives taken for developing the cluster, an unpublished brochure on Sualkuchi claims that the number of looms grew at an estimated rate of 4% per annum from the 1960s till 2000s. The total looms are estimated to be 19168; 75% of such looms are being used for traditional dresses such as Mekhela Sador and Riha while the remaining looms are being used for sarees, plain fabrics, new types of other clothes such as kurta. Even as the production in the cluster had consistently grown till the early 2000s with the addition of loom capacity the following years witnessed a decline on account of labour and raw material problems. As a result of these factors, the capacity utilization in the cluster has come down. Labour problems started in the cluster in the mid-2000s as a result of the formation of the Bodo Territorial Council and implementation of the Mahatma Gandhi National Rural Employmet Guarantee Scheme (MGNREGS) in Assam. Majority of weavers employed in the cluster are from Bodo community. Following the formation of the Bodo Territorial Council, the new Council has received funds for infrastructure and livelihood development in the region. As a result of this, employment potential in the Council area has improved. Besides, government departments and NGOs have also made an investment in developing the handloom industry in the sub-region through which weavers––who were earlier migrating to Sualkuchi––now find better livelihood opportunities in their own villages. Similarly, the MGNREGS has created local employment avenues in the peripheral villages and has reduced migration to Sualkuchi to work in the handloom units. Wages have therefore gone substantially high in the cluster. The payment norm in Sualkuchi is as flows: a weaver is generally engaged for a period of one year in which production happens for about eight months. The weaver is paid on a weekly basis and is entitled to advances for festivals, or any other exigency. When the weaver returns home twice in a year, the total earned wages are determined and the account is settled. With the in-migration for work reducing in the cluster, several handloom units suffered losses as a result of weavers’ not returning to the cluster for work after taking an advance. The handloom business in the cluster in this wake has not only been hit by a shortage of labour and an increase in labour rates but also by losses on account of unrequited advances. Availability and price of raw material are other major factors affecting the growth of the handloom business in the cluster. The cluster has been known for Pat-Muga (a blend of mulberry and muga silk) fabric. Due to the promotion of handloom clusters such as Dhokuakhana, which are nearer to the raw material source, the supply of local cocoons/ yarn has reduced in Sualkuchi. Earlier, Sualkuchi had a large number of units manufacturing yarn from cocoons sourced from raw material-producing regions but their numbers have gradually reduced. The price of muga silk has also seen a sharp increase, which has led to its substitution by tasar silk in the cluster. However, the major supply of tasar silk, as well as muga silk in the cluster, is from other

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states of India (Karnataka for Mulberry and Bhagalpur for Tasar). The trade in both of these raw materials is controlled by traders from non-indigenous communities. There is no government intervention in price stabilization of these raw materials and therefore, the price volatility is very high in these silk yarn varieties. Rising raw material price has eroded sales margins of the handloom units, besides increasing the working capital requirement manifold. Box 1: Labour exodus from Sualkuchi and progress of handloom industry in BTAD Areas Rising income and aspirations have increased the demand for ethnic fabrics made of silk in the BTAD areas, creating a favourable demand for handloom industry there. While dhokuna (the traditional dress of Bodo women) was earlier made mainly of cotton, it is not rare now to find silk dhokunas. Besides, the handloom weavers operating in the BTAD area, especially in Baksa district have found a new market opportunity in the production of the local ethnic fabrics of Bhutan (bakhoo for Bhutanese man and half keera for the women). The yarn for weaving the garments is supplied by the Bhutanese traders and the products go to areas such as Thimphu, Gelephu, Samdrupdzonkhar and other places of Bhutan. Another important initiative in Chirang district, Action North East Trust (The Ant), a well-known NGO, has been promoting handloom by first supplying to FabIndia and later opening its own showroom in Bangalore for direct customer selling. Sualkuchi’s loss in this wake is a gain for weavers in the BTAD areas as they are able to sustain themselves in a better manner because of the turn of events. Due to unfavourable movements in the input costs, the production in the units in Sualkuchi has been affected and the capacity utilization has come down. However, the demand scenario continues to be healthy for the cluster as it is the main commercial handloom centre in the state. The units have responded to this situation by subcontracting some class of fabrics to the peripheral villages where the labour cost is relatively less. Besides, powerloom fabrics, using the traditional design of Sualkuchi but being manufactured in Banaras, are also gradually making inroads into the cluster. To cope with the labour and raw material problems, many units in the cluster have taken up trading of fabrics, besides production in their unit. Shift in the business model from weaving to trading and subcontracting has ensured that the turnover of the cluster continues to grow despite a decrease in the local production volume in the cluster. The transformation from a home-based production system to the commercial factory system and use of jacquard technology has increased the sales margins thereby attracting loom additions in the cluster. However, the margins are under pressure as a result of adverse changes in the labour and raw material markets. The margins which have grown consistently till mid-2000s have come down in the recent period. To sum up, the overall growth scenario in the cluster is characterized by increasing turnover

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(mainly backed by a healthy demand scenario) but the production volume and sales margin have come down. Therefore, there is an apparent crisis in the sector––while a few units are able to sustain through subcontracting, a large majority of units are facing a deep crisis as a result of recent changes in the business environment. Handloom units in the peripheral villages of Sualkuchi have benefitted from the trend of subcontracting by factory owners and master weavers (despite having production capacity) and as a result, the production of fabrics has increased and the number of villages taking up handloom as a commercial activity has also expanded. Now, the supply chain of handlooms in the cluster goes beyond the Greater Sualkuchi area and extends up to the nearby Hajo block. Because of labour problems in the factory system, production of fabrics has become more competitive in a home-based system where the overheads are lower and weavers are generally from the family. The handloom business in the cluster has, therefore, seen a reorganization which has been discussed in detail in the subsequent section.

Evolution and Growth of Dhokuakhana Cluster Dhokuakhana has traditionally been a muga cocoon supplying centre for Sualkuchi. The muga-rearing households in the cluster generally procure muga seed from the middleman buying from Garo hills area in Meghalaya and do sericulture on a revenuesharing basis with the middle man. Such an arrangement may have evolved as muga culture is extremely sensitive and level of production risk is very high. Revenue sharing as compared to outright purchase of cocoon seed in this case potentially brings down the profit risk for the muga rearing household, besides the obvious benefit of solving the problem of capital for the purchase of inputs. The market for cocoons in the cluster and other muga production areas is highly inefficient as the volume of production is small and varying, and the cost of aggregation is extremely high. There is no organized marketing system for the cocoons in the cluster. In the earlier period, middle man supplying muga to Sualkuchi would visit from home to home and collect the surplus cocoon from the households and supply it to processors of Sualkuchi. Ironically enough, Dhokuakhana is in Upper Assam and in the earlier period Upper Assam––which is a comparatively prosperous sub-region of Assam as a result of the presence of tea and oil industry––was the main market for silk fabrics from Sualkuchi. The cocoon, therefore, travelled all the way from Upper Assam to Sualkuchi where it was processed and supplied back as fabric while commercial weaving was not so popular in the Dhokuakhana cluster. Lack of weaving skills for commercial quality, preoccupation with agriculture and lack of capital were the main reasons for this situation. This situation resulted in a high processing arbitrage––whereas the price of muga fabric increased substantially, the cocoon and yarn continued to fetch low prices in the cluster. Meanwhile, the cluster began to attract investment for the development of handloom value chain beginning the 1990s—first through the establishment of co-operatives and subsequently through the promotion of SHGs under the SGSY scheme. As a result of these factors, households were able to upgrade themselves to

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jacquard looms. Further, enterprising people from the cluster hired master weavers from Sualkuchi for training the local weavers. The arrangement with the master weaver or trainer was such that they were phased out once the skill of local weavers was sufficiently developed. These initiatives resulted in commercialization of handloom in the cluster. While Sualkuchi has strong and long-established market linkages, availability of market is a problem in Dhokuakhana and surrounding areas. The handloom enterprises mainly depend on numerous handloom expos organized by the state government for selling of their fabrics. More recently, the Assam government with assistance from the Union government has invested in the setting up of a mega handloom cluster in the neighbouring Shibsagar district. The cluster is aimed at tapping the export market by taking advantage of purity of raw material and through technology, design and skill upgradation. However, the project is still in its early phase and results are yet to emerge.

Expansion of Handloom Markets and Growth of the Clusters The growth of the two clusters as explained above has been driven by the expansion of markets and product and design diversification. Silk handloom industry in the clusters draws its demand mainly by catering to the market for ethnic dresses of the multi-ethnic community of Assam and the north eastern region as a whole. Rising incomes and aspirations in the state and the region as a whole have increased the demand for silk fabrics, necessitating product diversification in the cluster. Expansion in markets has posed new demands on design diversification in the Sualkuchi cluster. The traditional design in an ethnic garment in Assam is based on the varied flora and fauna of the region. With increase in labour cost, the cluster now produces fabrics with larger environments (butane Assamese) and designs adaptations, which are the fusion of several ethnic designs. The emergence of computerized design units in the ancillary sector has also helped in design diversification. It has also brought down the cost of replication of designs. Integration with outside markets like Bengal and emergence of a nascent export market (the total annual exports from Sualkuchi is estimated as Rs. 120 million) has led to market diversification. The cluster now supplies fabrics to all parts of Assam (BTAD and Karbi Anglong are emerging growth centres for ethnic fabrics made of silk), Meghalaya, West Bengal, etc. Initiatives of Artfed, a Government of Assam organization, has opened up avenues for exports. Dhokuakhana cluster is more competitive in the production of muga fabrics now and the market scenario is gradually improving in the cluster. Since the production volume is still small, trade linkages in Dhokuakhana are as yet underdeveloped as compared to Sualkuchi cluster. Handloom Expos organized by Artfed and other government departments are attractive marketing avenues which provide a premium of 10–15% as compared to the local market. The cluster also services new markets such as Arunachal Pradesh and smaller tribes and sub-tribes in Upper Assam subregion.

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There are two visible trends in the expansion of markets products are finding new market segments outside of the region in places such as Kolkata but the more important trend is that of penetration within the regional markets. The two clusters are finding niche product and market opportunities in the diverse ethnic communities of the region. While comparatively larger segments such as Khasis in Meghalaya, Bodos and Karbis in Assam are being serviced by handloom units in Sualkuchi, newly emerging clusters such as Dhokuakhana are also finding new markets in minor ethnic communities such as Mishing and Dimasa. Growth in the handloom clusters is therefore very closely linked to strong ethnic identity in the region which finds expression through the varied ethnic group-specific colours and motifs. Just to present a contrast here––the Banaras fabric industry has seen plummeting demand as the glorious Banarasi saree ever present in weddings has been gradually replaced by the lehengas popularized partly by the Hindi film and television industries. However, in the North East, ethnic garments such as Mekhela Sador and numerous others continue to have a strong demand during festivals and weddings. How the region preserves its culture and heritage over the next few decades in an environment of intercultural exchange and cultural invasion by purveyors of popular culture (such as Hindi Film industry) will also determine the future demand for handloom industry in the clusters.

Growth of Clusters and Efficiency of Production Systems The growth in the clusters is promoting specialization, leading to improvement in the efficiency of the value chain in the state. The specialization is happening in the use of raw materials as well as products manufactured in the cluster. Sualkuchi has been traditionally known for Pat-Muga fabrics. However, the cluster located in close proximity to Guwahati is now gradually specializing in raw materials sourced from outside of the state. 80% of yarns used in the cluster is mulberry or pat, 12% muga and 8% tasar. Similarly, Dhokuakhana specializes in muga fabrics. Table 4.1 gives the price of the above raw material in different places covered in the study: Table 4.1 Price of raw material in study locations––August 2012 (in Rs.) Raw material

Sualkuchi––main

Sualkuchi–– periphery

Dhokuakhana

Muga silk

15,000

15,500

12,000

Mulberry silk (warp/weft)

3,600/2,900

3,550/2,850

4,000/3,500

Tasar silk (warp/weft)

3,900/2,700

4,000/2,800

4,500/4,300

Assamese raw silk

2,400

2,200

1,600

Source Field Survey

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Due to the small volume of production and large inter-cluster distance, the spatial arbitrage of muga silk between Dhokuakhana cluster (where it is produced) and Sualkuchi is higher (Rs. 3,000 per kg) as compared to mulberry and tasar silk (Rs. 500 per kg) sourced through Guwahati and supplied by traders to both the clusters. The high spatial arbitrage in muga is driving the specialization. Besides, tasar silk is emerging as a cheaper substitute for muga. The production system is becoming efficient in the allocation of resources as the processing of respective yarns is now happening closer to their source. In view of problems related to aggregation especially in muga supply chain, the efficiency gains are significant. Similarly in the product market, Sualkuchi is gradually specializing in more design-intensive fabrics while subcontracting the production of plain fabrics to the peripheral villages. Since the level of weaving skills is comparatively low in Dhokuakhana, it mostly produces plain fabrics or fabrics with a simple design. The hallmark of fabrics produced in Dhokuakhana is the purity of silk used, while the competitive advantage of Sualkuchi is the design. The production of plain fabrics is, therefore, shifting to low skill areas while Sualkuchi is specializing more in designintensive fabrics.

Enterprise Configuration and Economics Sualkuchi Cluster Enterprise Configuration In the study, we have covered factory or work shed-based capitalist (locally known as zamidari) production units in Sualkuchi core area, and mini work shed and homebased commercial production units in the peripheral villages. Most of the units in Sualkuchi have upgraded themselves to commercial work sheds with jacquard looms. Besides, the units also have equipments for pre-loom operations, such as bobbin machine, drums for warp preparation and indigenous equipment––jari twisting machine (which has been locally developed by an innovative entrepreneur). A few units are also adopting indigenously developed equipment for weft insertion, called chinaki (literal meaning––design making machine in Assamese). The peripheral locations in the Greater Sualkuchi cluster lag behind the production system in the core spaces in all aspects- technological upgradation, scale of operation, raw material and product and market diversification. The enterprise configuration in the core and peripheral spaces in the cluster has been given in Table 4.2.

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Table 4.2 Enterprise configuration in Sualkuchi cluster Particulars

Sualkuchi

Sualkuchi peripheral villages

Nature of workplace

Loom house

Mini loom house

Home based

Main type of looms

Jacquard looms

Dobby looms

Dobby looms

Other machinery

Jari twisting machine, bobbin machine, drum

Bobbin machine

Traditional implements: charkha, ugha

Looms range (nos.)

3–40

3–10

1–2

Median looms (nos.)

9

5

1

Main raw materials used

Mulberry, muga, tasar, raw silk, wool, linen, artificial silk

Mulberry, tasar, raw silk, artificial silk, polyester

Raw silk, tasar

Main products

Mekhela sador,a saree, other NER ethnic dresses, shirt piece, kurta, salwar kurta

Mekhela sador, plain fabrics in a than

Mekhela sador, plain fabrics

Main markets for products

Guwahati, upper Assam, BTAD, karbi anglong, West Bengal, Meghalaya, BTAD, karbi anglong

Sualkuchi, guwahati

Sualkuchi, guwahati

a Mekhela

Sador is an ethnic dress of Assam

Operational Economics of Units The production unit in Sualkuchi generally functions for nine months in a year- in three production cycles of 3–4 months each. The units are partially or fully closed for about one month each during the Bihu festivals (in January and April) and Durga Puja when the workers go back to their villages for celebrations. Production in the cluster follows a two-loom pairing arrangement wherein one loom is used for Saree and Chadar, and another loom for Mekhela, Riha and Gamocha. Saree and Chadar have a higher breadth (40–42 inch) as compared to Mekhela (32–36 inch), which necessitates two-loom pairing arrangement. Pre-loom activities including degumming, dyeing, drumming, etc. take about one week time. It takes one day for mounting the warp on the loom. A unit normally operates in two shifts of 4–5 hours each—from 8 am to 12:30 pm and from 3 pm to 8:30 pm. Availability of electricity is a major constraint for the functioning of the units, which is also preventing mechanization to some extent. Power availability is irregular and at times there is no supply for 6–8 hours continuously, adversely affecting the functioning of the unit. A manufacturer generally procures the raw material for one complete production cycle. The raw material for a production cycle with mulberry silk (which is the most popular silk in the area will include 6–10 kg of raw warp and 3–5 kg of raw weft, besides zari (100 marks). Depending on the type and quantity of silk used, raw material cost ranges between Rs. 60,000 and Rs. 1,00,000 per loom. The total

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working capital per loom per cycle of production shall be between Rs. 75,000 and 1,50,000 per fully operational loom. Gross margins are difficult to estimate here because of high diversity in products and designs. On an average, a weaver (worker) and the master craftsman can earn Rs. 3,000–4,000 per loom per month. If a master craftsman has enough trade linkages to ensure that 10 looms are fully operational in a cycle, a unit can generate a surplus of Rs. 30,000–40,000 per month by selling in the local market. The production arrangement in Bamundi, which is approximately 7 km from Sualkuchi, is a scaled down version of the Sualkuchi production system. A work shed usually has up to 7 looms in Bamundi. Compared to Sualkuchi, diffusion of jacquard looms is less here, and most of the work sheds or weaving households have traditional and dobby looms. Loom arrangement and production cycles are similar to Sualkuchi. Most of the units operate on household labour; units, which have 4–5 looms require 2–3 external weavers. Tasar silk is the most popular raw material in the village. A production cycle in a dobby looms is usually of 4 months in the village. In one production cycle, 15 kg of raw material is used at an average price of Rs. 4000–4500 per kg. Average raw material cost for plain fabric is Rs. 60,000 per loom and turnover per loom per cycle is approximately Rs. 85,000–90,000. In one production cycle of 4-months, return on labour and capital is Rs. 25,000. In Ramdiah, which is 15 km from Sualkuchi, other enterprise configuration remains similar, but the major raw material used in the village is a blend of polyester and mulberry. As a result of blending, the price of a mekhela sador pair produced in Ramdiah is Rs. 1650, as compared to the pure silk variety which sells at Rs. 5,000–6,000 per pair. In Table 4.3, we have worked out the basic economics of units, assuming the main product and raw material and general operating principles used in the different locations in the cluster. The analysis and qualitative discussions revealed important trends which are driving the growth in the cluster. In the core area of the cluster, handloom units are specializing in high margin fabrics while bringing down their number of active looms to cope with the adverse situation in the input market. They are the main beneficiaries of the various cluster development initiatives and have superior access to subsidized technology and ancillary infrastructure created through policy interventions. Better access to market and common cluster facilities help the units to specialize in premium product instead of utilizing high skilled weaver for producing low-value fabrics. As a result, the gross margin per loom and operating profit per loom per month are highest for Sualkuchi cluster. In the peripheral villages, the commercial loom units have substandard technology and semi-skilled weavers apart from the fact that access to finance is also poor. Therefore, they use cheaper substitutes and produce fabrics for supply to the traders in Sualkuchi or Guwahati. They are neither too attractive for the buyers nor too attractive for weavers. As a result of this, the operating profit per

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Table 4.3 Operational economics of units operating in sualkuchi cluster Particulars

Sualkuchi

Sualkuchi Peripheral villages

Unit type

Work shed

Mini work shed

Home based

Product type

Mekhela sador with design

Mekhela sador

Than with tasar

Raw material

Mulberry silk, Jari

Mulberry, polyester

Tasar

Production cycle (in days)

90 days

60 days

120 days

Median active looms

7

4

2

5,45,000

1,06,000

1,71,600

Raw material consumedper loom

12 kg

8 kg

15.5 kg

Raw material cost

2,87,280

47,870

1,21,500

Gross margin

2,57,720

58,130

50,100

Gross margin per loom per month

12,272

7,266

6,262

Weaving cost

1,09,000

21,250

Self

Income Sales turnover Expenditure

Overhead labour cost

9,800

2,280

740

Miscellaneous overheads

17,000

5,000

6,000

Total operating expense

3,93,520

28,530

6,740

Operating profitper cycle (% in parenthesis)

1,55,480 (28.5%)

29,600 (27.9%)

43,360 (25.2%)

Operating profit per year

4,66,480

1,48,000

1,30,080

Operating profit/ loom/ month

7404

3,700

5420

Weaver income per month

5,190

3,300

NA

loom for the owner is only marginally higher than the wage for the weavers. Unequal access to policy-driven facilities is a key source of competitive disadvantage for the commercial units in the peripheral villages. It compares unfavourably with homebased commercial units in these villages since they can subcontract for the master weavers in the core area of the cluster and earn better margins, though their growth opportunities are limited.

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Enterprise Configuration and Economics in Dhokuakhana Cluster In the study, we have found four types of commercial production systems in the Dhokuakhana Cluster: Home-based, Work shed based, Self-Help Group (SHG) or Group System and Co-operative System. Majority of units in the cluster are homebased. Home-based production system is the predominant handloom enterprise in the cluster. Enterprise Configuration A home-based production system in the cluster usually has a single loin or traditional loom, a ‘charkha’ and another traditional equipment made out of bamboo called ‘ugha’ which is a substitute for bobbin machine. Such units mostly use muga cocoons and cotton as raw material, and main products are Mekhela Sador and gamosa which they sell to local traders. The commercial production system in the cluster is a scaled down version of the Sualkuchi production system, similar to Bamundi in Sualkuchi. The raw material used in the units is predominantly muga blended with tasar silk, sourced from traders from Sualkuchi operating in the local market. The units sell their products mainly in the exhibition. A usual production system will have 2–3 dobby looms and 3–4 jacquard looms. The usual products are Mekhela Sador, shirt and kurta piece, ethnic dresses of tribes in the sub-region such as Mishing, Arunachali, etc. and they target mainly the handloom expo for their product. The SHGs, receiving financial linkage from banks under the SGSY2 scheme practice a group production system. Under this scheme, SHGs consisting of 10 members from the below-poverty-line families, receive a loan (with 50% subsidy component) of Rs. 2–2.5 lacs for machinery (4–5 jacquard looms and 1 muga twisting machine) and establishment of a loom house. Because of the conservative credit practices followed by the bank, subsidy component is generally withheld by the banks as fixed deposit. As a result, the amount for construction of loom house is inadequate. Therefore, a group constructs a loom house, generally established in the location of president/secretary with a capacity to house 2–3 jacquard looms; remaining looms are with other interested members of the group. Mekhela Sador, and gamosa are the main products and like mini units, handloom expos are the main markets. Co-operatives made inroads in the cluster in the late 1990s and early 2000s and have helped members in technological upgradation to jacquard looms. Co-operatives are also the main channel for yarn supply from the yarn bank. In the co-operative model of production, the co-operative purchases yarn from the yarn bank and gives the same to the member weavers for processing. They mostly target handloom expos, where they receive an additional margin of 10% as an incentive for participation (Table 4.4). 2 SGSY

scheme stands for Swarnajayanti Gram Swarozgar Yojana, which is a rural employment generation scheme of the Government of India.

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Table 4.4 Enterprise configuration in dhokuakhana cluster Type of operating model

Domestic commercial

Commercial enterprise

SHG

Co-operative

Nature of workplace

Home based

Mini loom house

Mini loom house

Home based

Main type of looms

Loin

Dobby, jacquard

Dobby, jacquard

Loin, jacquard

Other machinery

Ugha, charkha

Reeling machine

Bobbin machine

Ugha, charkha

Looms range (in nos.)

1–2

3–5

5–6

1–2

Median looms (in nos.)

1

4

5

1

Main raw materials used

Muga, cotton

Muga, tasar, raw silk

Muga, tasar, raw silk, cotton

Muga, tasar, raw silk, wool, cotton

Main products

Mekhela sador, gamosa

Mekhela sador, shirt piece, kurta, gamosa, ethnic dresses of local tribes in upper Assam, Arunachal Pradesh

Mekhela sador, gamosa

Mekhela sador, gamosa, ethnic dresses of local tribes in the sub region

Main markets for products

Dhokuakhana

Handloom expo, dhokuakhana

Handloom expo

Handloom expo

Operational Economics As most of the households practicing home-based commercial production system engage in agriculture as their main activity, looms remain idle during the sowing and harvesting seasons. The peak season for weaving is February–April approaching the Bihu festival, and August–October approaching the Durga Puja. Households follow a production cycle of 30–35 days, processing 1.2 kg muga yarn in one cycle. If cocoons are used as raw material, the production cycle is 40–45 days. As muga silk has a natural golden colour, it does not require any dyeing, etc. Warp preparation and other pre-loom activities take 1–2 days, requiring two persons. Households benefiting from a surplus-labour situation and high social capital in the cluster, follow a system of labour sharing for pre-loom activities. In a single loom arrangement, Mekhela and Riha are generally produced in one cycle. As muga yarn is domestically produced, the process is less capital intensive. If cocoons are used, the cost of raw material is Rs. 9,000–10,000 and if yarn is used the cost of raw material ranges between Rs. 14000 and Rs. 18000 per cycle. Turnover per cycle is Rs. 20,000–25,000. Therefore, a household can usually earn between Rs. 5000 and Rs. 7000 per loom per cycle from the activity, depending on raw material cost and the type of raw material used (cocoon or yarn). In case muga yarn is supplied by the buyer, fabrics produced are shared in the ratio of 2:1 between the buyer and the weaver.

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In a mini work shed based commercial production system, the production system follows a loom pairing for Mekhela and Sador, and the two looms together process 4 kg of yarn in one cycle of 30–35 days, producing 8 pairs of fabrics with a sale value of Rs. 35,000–40,000 in the exhibitions. Depending on the extent of blending, the raw material cost is Rs. 20,000–30,000. Payment to the weaver on a piece basis is Rs. 250–300; the total wages paid is Rs. 8,000–10,000 per pair of looms, including payment to the master craftsman. The unit can generate a surplus of Rs. 15,000– 20,000 per month. In an SHG following a group production system, yarn manufacturing and other pre-loom activities are done in a group method. Each member operates the loom as per the work schedule accepted in the group. Production cycle followed is of 30–35 days, like in other cases and the finished products are sold in the exhibition. Gross margins are similar to the commercial production system, and members receive an equal share of surplus––Rs. 2000–2500 per member in one cycle of production of about a month. As the members also have their own home-based loom arrangement, the surplus acts as an additional income to the households. The fabrics are shared between the weavers and the institution in the ratio of 1:2 and 1:3 depending on the value of the yarn. In this mode of production, the institution is able to make a surplus of 20-25% by selling the products in the handloom expos while members can generate a surplus of Rs. 4,000–6,000 (US$ 80–120) per production cycle. The co-operative further receives a rebate of 10% from the government on total expo turnover, as an incentive from the state. In Table 4.5, we have worked out the basic economics of unit, assuming the main product and raw material and general operating principles used in the different locations in the cluster. The analysis presented thus far, and insights from the qualitative discussions offer important insights. Relative to the Sualkuchi cluster, the key comparative advantage for this cluster is its better access to muga yarns. However, the units in this cluster are much behind the commercial units in Sualkuchi in terms of market linkage and weaving skills. The cluster has low or medium-skilled weavers and only a few units have jacquard looms. A ray of hope is the emergence of commercially oriented enterprises under individual and collective entrepreneurship model. The individual owned enterprises in the cluster are still small in scale (3–4 looms), employ semiskilled weavers and use muga and tasar as raw materials. These are still nascent enterprises and are yet to develop a significant competitive advantage. While they are investing in the skill development of the weavers and technology, the income to the weaver is the lowest in this class of enterprise. Collective handloom enterprises in the cluster have several strengths––their operation as SHGs has created a better access to technology and finance. However, there has not been much investment in skill upgradation. The production volume is still less for creating sustainable market linkages. But they are effective in helping a household commercialize gradually. As a result, the operating profit for a weaver is the highest for the group. A weaver can combine working in a group activity and pursuing a household activity for ensuring a high return for the household. We summarize the coping strategy of the units in different spaces (Table 4.6).

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Table 4.5 Operational economics of units operating in dhokuakhana cluster (Amount in Rs.) Home based commercial

Commercial enterprise

SHG

Number of looms

1

3

5

Unit type

Work shed

Mini work shed

Hybrid of loom house and home based

Product type

Plain mekhela sador

Plain mekhela sador

Plain mekhela sador

Raw material

Muga

Tasar

Muga

Production cycle (in days)

30–40 days

90 days

30–40 days

21,000

1,29,600

1,22,500

Yarn consumed in one operating cycle per loom (in kg)

1.2 kg

2.3 kg

1.2

Total raw material cost

14,400

40,350

86,400

Gross margin

5,600

89,250

7,200

Gross margin per loom per month

5,600

9,916

7,200

Payment to the weaver*

NA

28,800

NA

Payment to other service providers

NA

3,600

NA

Miscellaneous overheads

NA

5,900

NA

Operating Profit (% in parenthesis)

5,600 (27%)

50,950 (39%)

36,100 (29%)

Operating profit per loom per month

5,600

5,661

7,220

Operating profit of the unit in a year

33,600

1,69,830

2,16,600

Weaver income in a month

5,600

3,150

3,610

Income Sales turnover* Expenditure

Source Based on analysis of field survey data

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Table 4.6 Dominant strategy of business development Nature of unit and location

Dominant strategy

Reason for dominant strategy

Factory, Sualkuchi: core location

Product and design diversification; foray into trading business

The units require higher/ additional margins to compensate for rising labour and raw material costs

Home based and mini factory, Sualkuchi: peripheral locations

Manufacturing of plain fabrics; shift to low-cost raw material

The units suffer from capital scarcity and are struggling to cope with the rising raw material cost

Home-based Dhokuakhana

Increase margins, through yarn production; modernize through SHG mechanism

High processing arbitrage on cocoon; benefits from purity of raw material, better credit access through the SHG

Mini factory Dhokuakhana

Improve weaver skills, product quality

To overcome the competition from quality products at the expos

Status of Innovation and Relationship with Growth and Inclusion Among the clusters, Sualkuchi is much ahead in knowledge systems and innovation as compared to the peripheral areas. It has better linkages with markets and institutions and as such, better access to resources required for innovation. Innovations in different stages of commercialization in the cluster have been described in Table 4.7. These innovations have played an important role in the commercialization of handloom activity in the Sualkuchi cluster. However, innovations in the peripheral locations are very limited. The upgradation of technology, expansion of products and technology transfer in the Sualkuchi cluster are closely linked to its relationship with the Banaras cluster. The master craftsmen from the cluster have acquired skills related to operation and maintenance of jacquard looms, and designs and patterns through informal exchange Table 4.7 Stage of growth and innovation Stage of commercialization

Nature of innovation

Early stage: home-based enterprises

Standardize size and dimensions of fabrics to enable the production of diverse fabrics in a single loom

Early commercialization

Improvement in organization of activities by increasing the scale of operations

Expansion phase

Product and design diversification to expand market

Maturity phase

Mechanization of pre-loom processes to overcome labour shortage

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from the Banaras cluster. The artisans from Sualkuchi, have in turn, played an important role in the operation of commercial units in Dhokuakhana cluster. The commercial units in Dhokuakhana generally employ master craftsmen from the Sualkuchi cluster who are engaged for training unskilled labour and pre-loom activities.

Technological Innovations The study captured three key indigenous innovations for the technical upgradation of the cluster. The cross-cutting theme of these innovations is the need to bring down the labour cost and improve productivity. The innovations and the innovators have been presented as case studies here. All the innovators discussed in the case study have a common starting point for their innovations––a technical design workshop on handloom machinery conducted by the Rural Technology Action Group (RuTAG-NE) housed at the Indian Institute of Technology, Guwahati.3 RuTAG-NE is an initiative by the Government of India to promote appropriate technology in the traditional methods of production. Muga silk is one of the key intervention areas of the centre and it has tried to build bridges between the local innovators and the larger innovation ecosystem in India. Innovators covered under the study, apart from receiving technical inputs, became aware of other opportunities such as the National Innovation Foundation (NIF) through networks and linkages developed by the RuTAG-NE.

Deepak Bharali and Design Making Tool: Chaneki Innovation Concept: Conventionally the task of the insertion of weft threads to make a variety of designs is done manually by tying knots. It is tedious, cumbersome and time consuming. The thread is also wasted in the connection between one motif and another. Deepak has come up with a device (chaneki) consisting of three components; base frame, magnet-bearing shaft and specially designed bobbin. These components can be fitted to any handloom jacquard machine. The innovation reduces the time required for making designs to one-third of what is required in the traditional way of doing it.4 Background of the Innovator: Deepak Bharali, a Science graduate comes from a business background; his father collected cocoons from villages in Upper Assam and supplied it in Sualkuchi. Later, the family shifted to Sualkuchi and started a handloom unit here. The unit started with two looms and has now expanded to 21 looms. Deepak, however, dreams of setting up a firm dedicated to technological innovations in the handloom sector and commercialization of his innovations.

3 https://www.iitg.ac.in/mech/Rutag-pal/about1.htm. 4 Source:

Note on innovation prepared by the NIF.

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Commercialization Status and Contribution of Other Network Actors: The device was further improved under the guidance of Professor A.K. Das of the design department of IIT, Guwahati, and with financial assistance from the NIF. The Central Silk Board has made Chaneki available for loom owners at a subsidized rate of 80% in March 2012. The device has reached around 400 weavers in Sualkuchi so far. Coping with the Changing Cluster Dynamics: Deepak is struggling to arrange finance for setting up a production unit for manufacturing his device. A commercial Bank initially showed interest in financing Deepak’s firm but brought down the loan size as a result of lack of collateral. Meanwhile, he is now looking to develop computerized designs and motifs to make weaving a sustainable and profitable venture.

Deepak Baishya and Jari Twisting Machine Innovation Concept: The jari twisting machine developed by Deepak Baishya is an adaptation of the muga reeling machine. Unlike the use of jari in stitching, it is used as a weaving material in Sualkuchi. But the manual process of jari twisting for using it as a design material is very time consuming. Deepak modified the muga reeling machines, rendered idle because of loss of prevalence of the use of muga, to be used for twisting jari. The process time has reduced as a result from 8–12 hours to 2 hours. Innovator Background: Deepak, a B.Sc. in Mathematics, has been involved in handloom activities since his childhood. Gifted with a keen sense of observation, he has high level of expertise in the sector. He owns a handloom unit with 40 jacquard machines. He is also the first master craftsman in the cluster to weave Mekhela and Sador in the same loom in one cycle by modifying the dimensions of the fabrics. Status of Commercialization: Deepak’s innovation has been replicated widely in the cluster. A local fabricator is manufacturing the machine and selling it in the market. Deepak has not benefited financially from the popular use of his machine as he was unaware about his intellectual property rights. He developed the machine in the year 2001–2002 when his unit was running at full capacity and he did not have the time to give attention to commercial development of his innovation. Coping with the Changing Cluster Dynamics: Deepak has suffered a major loss as a result of the labour crisis in the cluster his unit is running at 20% capacity utilization. However, he has diversified into trading, and now runs a showroom in Sualkuchi for local silk products. He is working on a machine to automate some of the repetitive loom processes to bring down the weaving time. Increase in productivity by automation, he believes, will reduce the dependence on labour in his unit, and help him recover the lost ground in production.

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Sarat Deka and Thread Spooling Machine Innovation Concept: In the existing equipment for thread spooling, a worker can wind one spool at a time, but in Sarat’s device a worker can wind six spools at one time. He has also included innovative features such as auto cut, length counter and manual option through a paddle. Innovator Background: Sarat Deka comes from a poor economic background. He started off his unit with one loom, which he is able to expand to five looms in a period of ten years. He has received trainings on machinery and entrepreneurship from RuTAG-NE, and Central Silk Board. Status of Commercialization: Sarat’s device is in the product development stage. He has already developed a product prototype, with financial assistance and design guidance from RuTAG-NE. He is now preparing for a cost effective method of machine fabrication, through which the machine can be widely used. Coping with the Changing Cluster Dynamics: Sarat has established links with private agencies marketing the handloom products such as Fabric Plus of Guwahati, and Apollo Mills, Rangia through which he is able to establish better marketing linkages. As a result, he is offering better working conditions to his weavers and, therefore, is able to retain them.

Organizational Innovations As part of the study, we came across two innovative public interventions in the cluster: a community tourism project with linkages to handloom and establishment of a dedicated fashion technology institute for the modernization of the handloom sector, both located in Sualkuchi.

Sualkuchi Endogenous Tourism Project5 Sualkuchi is among 36 rural sites selected for developing community ecotourism in the country by the Ministry of Tourism (MoT), Government of India in association with UNDP (Kalita 2010). The project was implemented in the cluster during 2004– 2009 with a total budget of Rs. 7 million. The site is being marketed jointly by the Ministry of Tourism, Assam Tourism Corporation and Help Tourism––a private tour operator located in Kolkata. The project is based on the concept that when material products travel, development occurs in the established market sector only, but when the consumers travel to the production centres, development reaches to the remotest places. The project has the potential to improve the margins for the local 5 The note has been prepared through interaction with the local management committee and project

consultant and draws upon the project document.

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weavers, besides improving the market and consumer orientation through buyer– seller interaction. Tourists were already visiting Sualkuchi through tour operators. But all the established silk weavers were busy in their silk business and never paid attention to tourism. On the other hand, silk is costly and it needs a good amount of investment. There are skilled families who cannot afford to fully invest in the silk business. Consequently, the project tried to identify hamlets within Sualkuchi where the silk weaving skill is present, but local inhabitants are not fully engaged in weaving. The community was imparted skills through an exposure tour for the service groups to established tourist places in Nameri and Kaziranga National Park. Training and refresher workshops to fine-tune the cuisine and to improve the presentation of the cuisine were organized. Training for the village committee representatives on site management, waste management, leadership, and accounting was organized. Members of the village committee were placed in Kaziranga to gain first-hand experience. Village committee members were involved in meetings with UNDP, MoT, District Administration and Assam Tourism Development Corporation so that the village committee could understand and network with all the relevant people. The site has benefited from an increased tourist inflow in the area, mostly for purchasing local silk. Tourist inflow is mainly from Guwahati, few from Mumbai and as reported some foreign tourists have also visited the site. The maximum stay duration in the location has been for four days. Besides, the tourist spot is also used for the filming of local TV serials, etc. because of the scenic beauty. The management of the cottage is vested in the Society comprising of three hamlets of Gandhmow village and the surplus income from the resort is utilized for village welfare activities.

Sualkuchi Institute of Fashion Technology The Sualkuchi Institute of Fashion Technology (SIFT) is an autonomous body promoted by the Assam Government, based in the Sualkuchi village. It is the only fashion technology institution of its kind, located in a rural handloom cluster. The main objective of the institute is to promote the traditional weaving industry through entrepreneurship trainings by introducing modern designs for product diversification to augment the silk industry in and outside Assam. SIFT provides training support in the following areas: • Understanding of textile material, colour applications and dyeing, forecast colour and prints, finish for silk and other materials. • Design development, fashion illustration and concept development for handloom textiles. • Fundamentals of computer applications—Computer-Aided Designs. • Pattern making, draping, garment construction and surface embellishment for conversion of handloom fabrics to fashionable items.

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• Quality analysis and assessment of textile fibre, yarn and fabric, as well as inspection and checking. • Woven design and handloom fabric development. SIFT conducts training in batches of 25 students. It also runs dedicated short term courses of 1-week duration for interested candidates on respective trades. It collaborates with other state agencies to conduct Skill Development Trainings amongst weavers in areas for Computer-Aided Designs, Garment Construction and Handloom Fabric Development. In our study, only two in 25 enterprises covered have reported any interaction with SIFT, and benefits from the same. The respondents receiving training from SIFT reported benefits such as improved knowledge and skills about raw material identification and processing, and inputs regarding the colour and design combination. The raw material and design profile of the cluster has become diverse, as a result of the factor and market dynamics and in this wake, the trainings imparted are quite useful. However, the penetration of training is low. FGDs with the cluster participants brought out that some of the barriers in their access are low level of education and informal nature of enterprises which are typical challenges of bringing the informal and formal sectors together.

Concluding Observations Sualkuchi as a cluster has traditionally had much going for it. It has a rich tradition of weaving; it is well connected and is very proximate to Guwahati––the capital city of Assam; and has been an important cultural showcase for Assam. From Mahatma Gandhi to APJ Abdul Kalam––there is a long list of illustrious visitors to the place. As a result, it has attracted the attention of policymakers for decades and has benefited from several public investments in the development of handloom value chain in the cluster. Till very recently, there was very little competition for weavers in Sualkuchi. Entrepreneurs from the cluster benefitted from a favourable policy environment, market and factor conditions and expanded their production system. It also had two important feeder clusters, peripheral villages and BTAD area for labour, and Lakhimpur-Shibsagar area for the supply of cocoons. While the handloom sector grew in Sualkuchi, the handloom value chain continued to remain underdeveloped in the feeder clusters. Since 2000s, the Sualkuchi cluster has been experiencing challenges due to labour shortages and rising price of silk which is now mainly coming from outside of the state. The units are trying to cope with this situation through reorganization and redistribution of activities in the clusters. While the production in Sualkuchi town is coming down, part-time home-based weavers are increasing their engagement in the handloom sector in peripheral villages of Sualkuchi as well as in the two feeder clusters. The value chain in the feeder clusters are developing gradually and

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as a result, they are getting disengaged from the production system of Sualkuchi and developing their own independent production systems. However, the production systems in these peripheral locations are still in a nascent stage and much behind the Sualkuchi cluster in skills and commercial acumen. However, the production relation between the core area of the Sualkuchi cluster and the peripheral villages is marked by the dominating position of the enterprises located in the core area. The reason for this dominating position is the big gap in access to technology, market and institutions between these two spaces. This is an important area where cluster development requires a rethink. One of the key ideas in developing a cluster has been that they will serve as an instrument of transfer of technology and know-how. However, if the investments are centred only around the core area, such transmission may not happen and discourage growth in the peripheral locations. And even if such linkages happen, enterprises in the core area keep the control with them. This potentially creates disparity between spaces and thwarts inclusion. The irony of the situation is marked—hundreds of jacquard looms are lying unutilized in the Sualkuchi core area while the weavers are struggling in the peripheral villages to acquire resources to upgrade their production systems. What has led to this situation? What is the way forward? A possible strategy is to distribute the public investment for cluster development evenly across spaces in the cluster so that lopsided investment, which sustains unequal and wasteful deployment of resources is avoided. Besides, there is a need to enable the social mobility of the weavers. While the handloom clusters are growing, the economic situation of weavers—who are the lifeblood of the enterprises in the clusters—has improved only marginally. These weavers come from families and villages which reel under abject poverty. They work here to provide for their families in the village. Their aspiration is to save enough to run their own enterprises in their village. But that hardly materializes in majority of cases. The labour shortage in the Sualkuchi cluster has helped push the wage of skilled workers––marginally sufficient to pay for the house rent and other living expenses. But they carry large debts from the loom owners who control them through tied transactions. Only recently, loom owners have been forced to offer better terms to retain the allegiance of the weavers. But if owners face pressure on their own margins and drop in turnover, such benefits can barely be sustainable. As new clusters are emerging, weavers have the opportunity to start their own enterprises. However, rising raw material price and lack of access to formal finance make it increasingly difficult for them to do so unless they are part of a few SHGs who are fortunate enough to have regular access to credit. The government has taken several measures for improving access to formal finance and social security mechanism. But the responses in our discussion with weavers reveal that access to health insurance and finance continues to remain poor. The role of innovations—technological, institutional and organizational—comes to the fore and requires to be appreciated in its totality. The first signs of it are visible in the pioneering innovations by the entrepreneurs in the Sualkuchi cluster. A very important example of this is the design tool manufactured by Deepak Bharali and its

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rapid diffusion in the cluster. In his words, ‘The weavers are the key persons who can make or break this entire industry. The survival of a tradition of weaving that goes back to many centuries depends on them. This means we need to keep working at developing weaver friendly upgradation techniques’. At the same time, the technological upgradation needs to be in sync with the dynamics of expanding markets, which appears not to be the case. For example, the dimensions of looms used in clusters are small as compared to dimensions required for the manufacturing of export-oriented fabrics as, for example, used for furnishings and upholstery. The cases of innovation in the cluster brought out that the linkages and interfaces are underdeveloped and are stymied by issues such as bringing together the formal and informal; demands of far-off but promising markets and skills of the local participants, to name a few. We also covered an innovation which brings together the formal and informal; market and producers together through the ecotourism project in Sualkuchi. There is a tremendous synergy between tourism, handloom and promotion of local culture (Shermin 2017). In the specific context of the sector, steps should be taken for integrating it with international tourism circuit around the original silk route (Bhattacharyay 2009; Boyd 2017). Tourism has a significant multiplier effect and can help develop inclusive innovation systems. It is ironical that despite high demand for indigenous silk varieties, their availability is not expanding. Assam has acquired the geographical indicators (GI) rights over muga yarn and it is important to leverage on the unique value propositions of such an acquisition. In view of rising prices of the raw material, it is important to make rapid inroads into the premium consumer segments through the promotion of concepts such as organic fabrics. Besides, there is a need for investment in the promotion of muga fabrics. Muga yarn has several distinctive features such as a natural glowing colour, unique drying properties, etc. which needs to be promoted through advertisement and promotion at the national and international level. The entire value chain of silk transcends state and national boundaries. There is scope for collaboration between India and China on the development of sericulture, especially within Assam. A research grid may be promoted that links up institutions in Assam with high performing national and international research institutions.

References Bhattacharyay, B. N., & De, P. (2009). Restoring the Asian silk route: Toward an integrated Asia, ADBI Working Paper Series No. 140. Boyd, S. W. (2017). Heritage trails and tourism. Journal of Heritage Tourism, 12(5), 417–422. Chambers, R. (1994). The origins and practice of participatory rural appraisal. World Development, 22(7), 953–969. Das, K. (2005). Industrial clustering in india: local dynamics and the global debate. In K. Das (Ed.), Indian Industrial Clusters (pp. 1–19). UK: Ashgate, Aldershot. Das, K. (2011). Rural industrialization in India: Enhancing reach and returns. In K. Das (Ed.), Micro and Small Enterprises in India: The Era of Reforms (pp. 208–224). New Delhi: Routledge.

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Das, K. (2015). Institutional constraints to innovation: Artisan clusters in rural India. Asian Journal of Innovation and Policy, 4(2), 132–153. Hindu Business Line (2000). https://www.thehindubusinessline.com/2000/10/09/stories/140960as. htm. Jain, J., & Ratan, A. (2017). Developing a conceptual model to sustain handloom silk industry at Sualkuchi, Assam, India. European Journal of Sustainable Development, 6(3), 413–422. Kalita, S. (2010). A journey of empowering a community for self-reliance: Endogenous tourism project in Sualkuchi, Assam, India’. Field Actions Science Reports. The Journal of Field Actions, 4. Phukan, R. (2012). Muga silk industry of Assam in historical perspectives’, Global Journal of Human-Social Science Research, 12(9-D). Mahan, B. (2012). Silk industry among the tai-ahom of Assam, India as an attraction of tourist. International Journal of Scientific and Research Publications, 2(12), 1–4. National Council of Applied Economic Research (NCAER). (2010). Third National Handloom Census of Weavers and Allied Workers 2010: Handloom Census of India (2009–10). Government of India: Ministry of Textiles. Sharma, H., Karmakar, S., & Chakrabarti, D. (2017). The possibility of sustainable development of sualkuchi (The Biggest Silk Village of Assam) handloom sector through promotion of rural tourism. A Treatise on Recent Trends and Sustainability in Crafts & Design, 1(1). Shermin, A. F. (2017). Impacts of rural tourism on architectural and cultural heritage: The cases of Sualkuchi and Mawlynnong, North-East India. International Research Journal of Engineering and Technology, 4(11), 318–322. Sualkuchi silk city of Assam (2012). http://www.assamportal.com/sualkuchi-silk-city-of-assam/. Accessed on 7th August 2012.

Chapter 5

Informal Information-Exchange Networks in Rural Low-Tech Clusters Anant Kamath

Abstract This chapter is about the role that knowledge exchanges through informal interaction play in innovation and learning in rural low-tech clusters. An empirical illustration based on a coir producing cluster demonstrates the significance of informal technological-information exchanges and the success of defensive strategies. We draw lessons from this and provide suggestions on how the policy discourse must appreciate and be sensitive to the role of informal learning. The findings and observations have implications not only for our conceptual understanding of learning in low-tech environments but also for pointers on technology prescription for rural low-tech clusters, to make innovation and learning a more inclusive process.

Introduction 1

This chapter attempts to understand how innovation and learning act out in informal low-technology spaces. It explores information exchanges by means of informal interaction among small units in ‘low-tech’ clusters which constitute a significant proportion of industrial clusters in India. When dealing with technological modernisation in small units and in low-tech clusters, the focus has generally been on labour and productivity issues. Enquiries on small units or low-tech clusters as proactive ‘innovators’ are few, despite the fact that their learning and innovative behaviour is 2 quite distinct.

1 This is based on a part of my doctoral thesis at UNU-MERIT, which was published as Kamath (2015) and earlier as Kamath (2012). Thanks are due to Robin Cowan and to UNU-MERIT for financial support for fieldwork, as well as to Rajeswari Raina and Keshab Das. For the coir study, thanks are due especially to VR Prasad, Shaji and Paul, without whom rapport with households at Manappuram would have been impossible. Thanks are due to Neethi too. 2 See Das (2005), Albu (1996), Nadvi and Schmitz (1994), also Bell and Albu (1999).

A. Kamath (B) School of Development, Azim Premji University, Bangalore, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_5

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Micro and small units—either home based or run by a small group of individuals under one roof, spend a great deal of effort in constantly on the lookout for what is new in the technology landscape around them. In clusters of such units, within traditional industry sectors, the systematic supply of codified technological knowhow is minimal and necessary updates on new techniques are sourced mainly through informal interactive channels (Bala Subrahmanya et al. 2002). It is obvious that they are too small to work in isolation and to engage in any sort of conventional research and development (R&D). The need for persistently to be on the lookout for new technology is critical since knowledge is sourced more from informal discussions among fellow small units in the vicinity than from large firms or from the state. To proceed exploring on this theme, we first provide a brief discussion of the literature on informal knowledge exchanges, defensive innovation, informal networks, and the role of innovation systems in this regard. We then move on to an empirical study of a traditional industry cluster in the southern Indian state of Kerala. With lessons gained from this account, we note possible policy pointers on how the mainstream discourse on technology policy in India must acknowledge and appreciate the role and nature of innovation and learning at this level.

Collective Innovation, Defensive Innovation, Neighbours and Networks Allen (1983) noted that small iron manufacturers as far back as the 1850s and 1860s in Cleveland in Britain were doling out new knowledge on the latest and best production practices and technologies freely even to their rivals. It was proposed that this sort of behaviour, considered hitherto by economists as ‘an undesired “leakage” that reduces the incentive to invent’ (Allen 1983: 21), was not detrimental but, in fact, a proactively pursued collective invention. A similar pattern was noticed among paper manufacturers in the early 1800s in Berkshire, New England, and in the early history of mine pumping engines too (Cowan and Jonard 2003; Gault and von Hippel 2009). These trends actually aided large technological strides in these sectors. According to Allen, one reason for collective invention was that it was almost impossible and often expensive to hold any new knowledge secretly. Information was broadcasted to other firms in the region through local publications, presentations at meetings and networks (Cowan 2004). Most information flowed through informal word-ofmouth channels and through social circles (Allen et al. 1983). Individual producers devoted little time and effort exclusively to discover new knowledge, and relied on these occasional information releases as well as the ‘buzz’ among local groups of producers (Allen 1983). Peter Maskell and others (Maskell 2001a, b; Malmberg and Maskell 1997) have contributed substantially to the idea that small units watch one another and strive to catchup with local rivals. These small units, however, rely on defensive techniques such as imitation and collective invention. Small units are always on a treadmill

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(Freeman and Soete 1997) where imitating neighbours’ strategies and movements and surveying the landscape become a survival strategy in a constantly evolving industry environment. As White (1981) had proposed: I argue that the key fact is that producers watch each within a market. Within weeks after Roger Bannister broke the four-minute mile, others were doing so because they defined realities and rewards by watching what other ‘producers’ did, not by guessing and speculating on what the crowds wanted or the judges said… I insist that what a firm does in a market is to watch the competition in terms of observables (White 1981: 518).

Freeman and Soete (1997) argue that defensive innovation is not simply the absence of R&D, rather the desire to be well informed with new developments in the environment that one needs to adapt for survival. Foray (2010: 96) also notes that this breed of innovation is mostly ‘incremental, cumulative and mostly informal (without R&D), mainly in traditional sectors or in services that do not qualify as “high technology”’. This behaviour is in fact not exceptional but ubiquitous (see Breschi and Lissoni 2001; Jensen et al. 2007; Kauffman and Tödtling 2003). However, Smallbone et al. (2003) warn that imitation and defensive behaviour among co-localised firms may result in suboptimal outcomes, i.e., a lock-in into an inferior technology or practice can result out of relying too much on strategies of defence and imitation. In defensive or collective innovation, units in the immediate vicinity play a principal role. Studies from agriculture (e.g., Braguinsky and Rose 2009) have cited neighbours as being principal sources of new information. Griliches (1957), one of the earliest studies on diffusion of new technologies in agricultural communities, discovered that the influence of neighbours as primary information sources increased as the innovation diffused further. In this study, during the first phase of diffusion (about 3 years), 50% of the farmers were convinced by salesmen and about 20% by neighbours; but after this phase, the proportions reversed (Chamley 2004). Foster and Rosenzweig (2000), in a study of diffusion of high yield variety (HYV) techniques in rural India, demonstrated, like Dasgupta (1989), that neighbours, friends and relatives were the most frequent (and reportedly more ‘credible’) information sources. Ryan and Gross (1943), also on hybrid corn diffusion, found that seed salesmen were cited as the most common original sources of knowledge, while neighbours were listed as the most influential in deciding implementation (Young 2009). All this evidence reinforces the fact that innovation and diffusion are essentially social processes involving the role of interpersonal channels, face-to-face information exchanges and the observation of one’s proximate peers (Rogers 1995). von Hippel (1987, 1988, 2005, 2007; Lüthje et al. 2005; Gault and von Hippel 2009) invoked the idea of ‘informal cooperative R&D’ as involving the routine and informal trading of information, even between direct rivals. He proposed that reciprocity (between individuals within and between competing units) is a central component of most informal knowledge exchanges. Though knowledge is given out freely, access to it may be restricted to only those who will later willingly offer knowledge. Another key component of informal information exchanges is vitality, where keeping knowledge secret might offer little comparative advantage in the local

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agglomeration and may even attract ostracism by other producers. Openness might be, as von Hippel proposes, the best strategy for an innovator for long-term profit and reputation. Such free revealing has been found even in sectors where one would assume strict secrecy of technology, such as aerospace or wafer board manufacturers. Especially for low-tech units, networking becomes a lifeline for survival and endurance. Social interaction between proximate economic agents has a clear functional aspect (Bala and Goyal 1998; Goyal 2007) in shaping innovation choices (as seen in the literature earlier on the importance of neighbours) which necessitates a careful look at interaction patterns between people on technological choices. Networks and informal spaces of technological interaction sit at the heart of the systems of innovations (SI) approach, wherein special initiative has been taken to move beyond R&D and formal technological practices into informal innovative techniques such as learning-by-doing, learning-by-using and learning-by-interacting. Many different actors in an innovation system are involved in learning and knowledge exchange, and the everyday experiences of individuals around a new piece of knowledge or an innovation matter crucially (Edquist 1997). Face-to-face interaction is vital, especially in an innovation system which is characterised by tacit everyday knowledge, and where informal networks are the primary vehicles for information exchange. The informal knowledge exchange network, hence, becomes central to the diffusion of complex context-dependent information (Storper and Venables 2004) in low-tech clusters. With this conceptual discussion, five broad traits of knowledge exchange through informal interaction emerge. This exchange occurs (1) for sourcing new knowledge as no small unit wants to be left behind; (2) since secrecy is futile; (3) to preserve the comparative advantage of small-unit agglomerations; (4) for survival, since one’s existence hinges upon being defensive, imitative and observant and (5) to strengthen the milieu for collective learning in the innovation system. Hence, it is evident why research on small firms and the traditional sector, especially in India, should extend to consider even informal learning sources, methods and practices. Incomplete or ineffective learning in innovation systems might lead to the decline and exit of lagging firms, and technological backwardness across entire clusters or regions.

An Account of a Coir Cluster in Kerala To illustrate knowledge exchange mechanisms and interaction channels, we present a descriptive case study of a cluster in a low-tech traditional industry—the coir industry—in Kerala. ‘Coir’ from the Malayalam root kayar (cord) is the stiff coarse fibre obtained from the husk of the coconut after a long process of extraction—which is used to make ropes, mats and related products. The study concerns a coir yarn producing cluster, in its experiences in learning and adapting to an exogenously introduced innovation—a ½ horse-power (HP) motorised spinning wheel (or ratt) to spin the coir fibre into yarn. This case provides evidence that informal interpersonal interaction

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was the chief instrument behind the cluster’s smooth information-exchange experience around this technological innovation, ultimately leading to an improvement in the cluster’s daily output. South India, particularly Kerala state, has been for long the world’s principal coir producing and processing region.3 Half the world’s coir comes from Kerala and coir has been the second largest employer and source of livelihood in the state after agriculture, employing around 350,000 people (GoK 2009). One-third of villages in the state are said to be ‘coir villages’ and one-third of the land is devoted to coconut cultivation (Coir Board 2001; GoK 2009). This industry attracts considerable budgetary support annually from the central and state governments, and is also a large exporter. Tens of thousands of units, ranging from large exporting firms to households, produce and process coir. Some have fully (and easily) mechanised, but most still operate with traditional production methods or intermediate technologies at best. Almost 98% of the coir industry in Kerala consists of units in the household sector (Table 5.1), a feature that has changed little over the decades (SPB 1973; CSES 2008). These household units are engaged mostly in coir spinning, weaving and fibre extraction work, spinning alone accounting for 75% of household employment in the industry. Three-fourths of coir workers are unskilled women (GoK 2009; Rajan and Kumar 2004). Table 5.1 Distribution of units across 11 districts in Kerala state (as of 2007) District

Coir units

Household units (% of total coir units)

Cooperatives (active and functioning)

Alleppey

Other units (exporters, merchants, manufacturers, etc.)

62,549

11,724

(98%)

152

673

Calicut

3627

3468

(95%)

59

106

Kottayam

3313

3241

(97%)

26

46

Kollam

1744

1612

(92%)

54

78

Thiruvananthapuram

1562

1443

(92%)

50

69

Malappuram

1004

974

(97%)

12

18

Thrissur

808

757

(93%)

12

39

Kasargod

320

307

(95%)

7

6

Ernakulam

253

209

(82%)

21

23

Kannur

248

213

(85%)

20

15

43

25

(58%)

4

14

75,471

73,973

(98%)

411

1087

Palakkad Total Source CSES (2008)

3 For a good historical account of the industry, see Rammohan (1999) and Rammohan and Sundare-

san (2003).

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There is a vast body of literature devoted to the study of this industry and its technologies, but there is still scant attention to the informal learning sources, methods and practices that are vibrant in the clusters. Even comprehensive studies on the coir industry (e.g., Isaac et al. 1992; Rammohan 1999; and Rammohan and Sundaresan 2003; CSES 2008) have not investigated into learning and information-gathering capabilities of coir clusters.

Technological Modernisation in Coir The coir industry in Kerala was (and for the most part still is) largely a traditional industry characterised by traditional technology. In the past, many minor incremental innovations were said to have been brought in the coir producing clusters as a result of day-to-day experiments and on-the-spot solutions to immediate problems. One such innovation was the use of a cycle wheel for spinning, and another was the introduction of a polythene thread at the beginning of the yarn while spinning to facilitate effective bonding of the yarn. All these were local inventions that incrementally improved the intermediate stages of the production process, the diffusion of which was relatively easy since production knowledge in coir was freely accessible. But invention has not always been in the sole purview of local actors. Over the twentieth century, the state and other agents often stepped in and introduced crucial innovations that furthered the mechanisation of this industry. The response to this mechanisation, however, was for some time negative, probably even Luddite in Rammohan’s (1999) analogy.4 The resistance to mechanisation and large firm entrepreneurships was at its height from 1950s to 1980s, a trend that threatened to escort the industry into a long-term technological lock-in and a slow death. But by the mid-1980s, the coir industry in Kerala slowly began to weaken its bond with trade unions. Simultaneously, more attractive and cheaper synthetic substitutes enjoyed their rise. Severe shortages of coconut husk (chief source of the fibre) and a general disinterest among new young labour to work in this industry also added to the industry’s quagmires. Due to these two factors, by the 1990s, the coir industry slowly had become a ‘sick’ traditional industry. The industry that hitherto vociferously resisted technological change and prided on its traditional practices was now in crucial need for mechanisation and modernisation for survival. By the end of the 1990s, the only path to survival appeared to be in technological innovation. Despite this, only superficially, advanced machinery and equipment had reached the household sector, the broadest part of the industry. In fact, a comprehensive survey of the coir industry (CSES 2008) showed that the majority of households in the state used mostly intermediate technologies, in spite of the highly subsidised 4 Though not a contemporary work, Isaac et al. (1992) is a useful reference for a detailed description

and a critique of the evolution of technologies for the production of coir fibre and further products.

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Table 5.2 Usage of technology in ratt spinning (as of 2007) Type of ratt

Household units (% of total coir units)

Traditional ratt

9823

Ratt with ¼ HP motor

31,423

Fully mechanised Ratt Total

Cooperatives (% of total coir units)

Other units (% of total coir units)

(23.8%)

946

(35.02%)

992

(38.10%)

(76.10%)

1263

(46.76%)

1591

(61.10%)

44

(0.11%)

492

(18.22%)

21

(0.81%)

41,290

(100%)

2701

(100%)

2604

(100%)

Source CSES (2008) Note This data is based on the sample taken by CSES, and not for the whole state of Kerala

and vigorously promoted innovations across all stages of coir fibre and yarn production. Intermediate technologies are employed most widely, followed by traditional methods, and fully mechanised production technologies. Table 5.2 shows this divide taking, as example, the usage of the motorised ratt which is considered by many a simple but significant innovation in this industry. However, the unpopularity of advanced mechanisation is distinctive to Kerala, and is not a feature shared by other coir producing regions such as the neighbouring state of Tamil Nadu. In the decade beginning 2001, it was discovered that the solution for survival and prosperity of coir in Kerala lay not only in process innovations but also in product innovations around the domestic and industrial applications of coir fibre and its byproducts.5 While earlier studies (such as Isaac et al. 1992; Rammohan 1999) focused on the economics of process innovations in coir fibre production, subsequent studies and policy documents (such as Coir Board 2001; Rajan and Kumar 2004; GoK 2009) highlighted the product innovations too. Also, technology adapted from the textile industry created opportunities for further product innovations such as jute-coir textiles. But the old problems have not disappeared. Hence, the National Coir Research and Management Institute (NCRMI) at Thiruvananthapuram and the Central Coir Research Institute (CCRI) at Alleppey (the two government research institutes at the forefront of a whole host of other interlinked public and private institutions undertaking research on coir production and marketing) have been undertaking R&D on fundamental processes in coir production and processing continually. We now move to the empirical component of the study.

5 Two

product innovations come at the forefront—pith and geo-textiles. ‘Pith’, a semi-solid black material that exudes while beating the husk, considered hitherto as waste, was now being treated, processed and sold in brick form as a fertiliser. ‘Geo-Textiles’, large matted sheets made from coir rope and yarn, were applied in erosion control, soil conservation and road construction.

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Primary Fieldwork The first stage of the empirical study was to interview those individuals at the state level, in academia and among other organisations actively in charge of the economic and technological development of the coir industry. We relied on them to get a broad idea of what the technology prescription experience has been so far in this industry. The eight individuals interviewed included those from the academia, government departments, government research institute involved in skill development and an exporter. The government organisations included the CCRI, NCRMI, National Coir Training & Design Centre (NCT&DC), the Directorate of Coir Development and the Coir Board. Interviews with these members were undertaken in April and May 2009 with the support of an interpreter. The state heavily subsidises generation and diffusion of coir technology and claims to approach cooperative societies to serve as information nodes for details on technological necessities and issues at the ground level. The Directorate of Coir Development reportedly refers to coir cooperatives regularly while crafting prescriptions on the grounds that this source of information keeps the state in touch with the technological needs of even the most unsophisticated units. It was claimed by respondents in these institutions that one of the fallouts of prescribing and subsidising new technologies and their diffusion was the drastic reduction in day-to-day experimenting and household-level incremental innovation that characterised the coir industry. This had occurred since mechanisation brought in standardisation and uniformity in production. For instance, as spinning and weaving were activities formerly carried out outdoors and the new improvements could be easily copied by others, but machine spinning and weaving was now done indoors in state-funded work sheds, threatening to rule out any interaction. Technological progress, however miniscule, was no longer in the hands of the units and the individuals working in them, but according to what the market demanded and what the government R&D institutions prescribed. The various government departments appeared to have appreciated the gravity of this particular problem, and rather than standardising the dozens of coir fibre varieties they had begun training coir workers to produce fibre varieties besides those they were familiar with. One of the most important processes that the state has had to undertake, while prescribing technologies to low-tech and traditional industries, is skill development. Since the majority of workers cannot immediately cope with new technologies, the state had to intervene to ensure effective dispersion of information and awareness about product and process innovations. Training and skill inputs were given to a few individuals in a coir producing region or cluster to ensure that new information invested in these few people would spread to other workers through informal communication channels. Training centres were, thus, established at various locations in the state for skill development and dissemination.

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Pilot visits were made during August and September 2009 to Manappuram village near Chertala town in Alleppey district and to Chirayinkeezh town in Thiruvananthapuram district, to shortlist a cluster for the study. Chirayinkeezh was not conducive to this research since households engaged in coir making were in a minority and most units found in the area were cottage based and large manufacturers who were relatively well mechanised. Respondents in Chirayinkeezh answered in the negative on enquiring whether their main sources of new information for technological- or production-related issues were informal; on the contrary, they reported to source information from more formal sources such as government nodal agencies and large manufacturers. In fact, producers at Chirayinkeezh also revealed that the production structure and functioning in their town were not typical of the industry. Respondents in Manappuram were more affirmative with respect to informal interactions between units on a day-to-day basis for technological issues, and the archetypical coir producing and spinning cluster; this cluster was chosen as the target case for the study. The information collection source was the household coir unit, and the targeted interviewees were the women in these households who performed the task of coir yarn spinning. Access to the units was possible only through assistance from larger producers in the village. A cottage unit entrepreneur and a large manufacturer at this village were the key informants and provided the list of coir spinning households in the cluster. Following pilot visits to Manappuram, detailed household-level interviews were conducted between November 2009 and January 2010. Initially, a list of 12 households was provided by the two informants, but on snowballing 14 more were located. There was no necessity for sampling given that the population of this cluster was well within manageable limits for full coverage, and that this study’s purpose was an empirically supported conceptual exploration of informal information sharing, and not a statistical generalisation of the industry as such. Coir producing and spinning household units in the Manappuram cluster literally spill into one another. At times, only a thin woven fence separated one unit from another, and at most a small patch of marsh or a grove of trees proxied the short distance between two units. One characteristic feature of all household units was that all owned and operated two motorised spinning wheels and one cleaning machine. Production was undertaken in households by women individually (only three households employed two assistants). Spinning, the main source of household income, was undertaken when electric power was available during the day, and fluctuated through the year based on the availability of husk. Sale of produce by the household, predominantly Vaicome variety coir yarn,6 was mainly to the large manufacturer in the vicinity of this cluster, who then wove the yarn into matting and other products.

6 Other varieties of yarn, as listed by the Coir Board, include Anjengo, Aratory, Ashtamudi, Alapat,

Cavura (generally wheel spun, like Vaicome), Quilandy, Beach and Beypore (generally hand spun). Some, like Vaicome and Alapat, are spun by both hand and wheel.

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The Innovation in Focus Yet another important reason for choosing Manappuram was that it was one of the first regions to be prescribed, in about 2000–2001 from the Coir Board, a ½ hp motorised ratt or spinning wheel. This technological innovation was introduced by the state with the help of a few prominent private actors in the industry, with ample subsidy (to the tune of 75%) from the state, and meticulously positioned state-sponsored nodal points across districts for dissemination of the machine. This extremely simple innovation—basically, a manually run spinning wheel appended to a motor—had revolutionised the coir industry. This motorised ratt is the technological reference point of this study since the adaptation to this machine at Manappuram was done mostly through informal face-toface interaction between spinners with very little teaching or training from either the Coir Board or the large coir manufacturer in the vicinity. According to the members of the Manappuram cluster, the arrival of this technological innovation was said to have set off a flurry of interactive activity among spinners who resorted to discussing with one another the best ways to use this machine, troubleshooting, possibilities of incremental alterations and so on. Whereas with the traditional hand-operated manual ratt, women reported to have spun a daily output of only about 20–25 standardised lengths (known in common parlance as ‘hanks’) of coir yarn, with this machine they reported to have all spun almost 70 lengths a day, making the leap within a couple of months through the cooperative process of sharing information at various forums and through various channels. In fact, as the surveys revealed, generally amicable interpersonal relations, friendship is what allowed households to interact easily given that there was almost no effort required in establishing familiarity with one another.7

Findings Before 2001, when spinning was entirely manual, the respondents claimed to have had ‘complete knowledge’ of spinning and the chief basis for keeping in constant contact with one’s neighbour was to maintain general interpersonal relations, or to discuss industry issues. But on the arrival of the ½ hp motorised ratt in 2001, there arose, almost immediately, numerous problems and uncertainties in operation, and speedy adaptation to it was a pressing requirement for survival given the sudden sharp rise in output demand on the units. The pressure to increase both the quantity and speed of production was said to have called for a greater interaction with, and 7 This brings to mind Storper and Venables (2004) on face-to-face (F2F) contact, who credited F2F as

efficient but entailing heavy opportunity costs in spending time in establishing partners—these costs in building relationships and rapport between units were in the Manappuram cluster. Households in this cluster spoke the same socio-economic language, shared conventions and norms, and had personal experience of benefiting from interacting; in other words, proximate in social space as much as in geographical space (Cowan 2004; Malmberg and Maskell 1997).

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observation of, proximate units in a frantic search for ‘uncomplicated ways’ to operate this new machine. Hence, injecting an innovation into this low-tech cluster seems to have actually accentuated interactive behaviour, contrary to the earlier claim that one of the fallouts of prescribing and subsidising new technologies and their diffusion was standardisation and the consequent drastic reduction in informal day-to-day experimenting. Almost every respondent in the cluster affirmed to have interacted through informal conversations with other household units for technical matters and to source new information on production, marketing or on any incremental innovations around the motorised ratt. Information being free and the production activity being easily observable, any new development in one household was reported to be easily perceptible to another household in the vicinity. Devoid of R&D in the conventional sense, defensive behaviour, such as constantly watching one another, discussing and comparing everyday practices, was mentioned by the respondents as the only channels to be well informed about incremental innovations and possible problems around adapting to the innovation. Any obstacles while learning and adapting to the innovation experienced by one household, and experiments leading to solutions, were said to be immediately noticeable by neighbouring households and the experiences were shared. Hence, for almost all households in the cluster, neighbours were reported to be the first to be approached during troubleshooting or for any other technical and production issues, and the most likely actors to be constantly observed for new updates on technical matters. Sharing of know-how and information on dealing with day-to-day problems in the operation of the mechanised ratt demonstrated the non-vitality of information. von Hippel (1988) had indicated that non-vitality of newly invented processes that offers no great comparative advantage to the innovator would permit free informal sharing even among competitors. In the Manappuram cluster too, it was argued by the respondents that there was little incentive in keeping to oneself any solutions or new methods to operate the motorised ratt. This increased interaction among neighbours and friends, and a complete lack of ‘secrecy’ among households, was effortlessly possible on account of the general affinity and informality shared among these households in this cluster. Households reported that it was mutual affinity that induced them to freely and willingly share information about the operation of the innovation. Respondents suggested that secrecy by one household might have provoked unnecessary interpersonal differences between that uncooperative household and the rest of the women in the cluster; given also that each one’s neighbours were constantly on the watch on how one was dealing with the machine, that there were literally no other sources of new information on this machine, and that all the households were facing similar initial difficulties in learning its operation. Respondents were well aware that unhesitatingly sharing and exchanging know-how with other producers would bring reciprocation in the future in the form of further information sharing. Hence, free sharing of information was fuelled by, as well as contributed to fuelling, the interpersonal relations among the two dozen or so households in the cluster.

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There was disparity between units on being net providers or net receivers of information/queries from neighbours. Two older units in the cluster, who had spent many decades operating under the older technological regime of the traditional manually operated ratt, reported to be net receivers of technical queries primarily due to their experience and consequently faster adaptive capabilities compared to the rest of the households in the cluster. These two units in the cluster who did not cite neighbours as first sources for information were also the only units who reported to have taken just a few days to fully adapt to this machine (while others reported to have taken many weeks, or even months in the case of women who had commenced spinning in 2001). One respondent reported to have had a large number of queries regarding the motorised ratt by virtue of the fact that she had experience in coir spinning not even by the traditional ratt, but by hand (a technology even older than the manual spinning wheel) since childhood at her maternal home in the vicinity.8 These ‘teachers’ evidently had little disincentive to teach the women who had approached them for help. Additionally, from the learners’ side, there was no evidence that any of these teachers ever hesitated to stop their production to teach and share even the smallest piece of information. The interactions were not only in the confines of their homes and work areas, but interestingly also at the ‘Kudumbashree’ (a state-supported women’s self-help group) meeting every week. So while everyday interaction was only with immediate neighbours, this was one forum where all the women reported to have met regularly and shared their experiences in adapting to this motorised ratt. An institutional environment with platforms such as these for collective interaction for solutions was, therefore, highly conducive to information sharing among the household units. Institutional environments such as Kudumbashree in this region were (and still are) characterised by very little socio-economic differences between their members. Since these are forums for addressing common concerns of livelihood and employment, social prejudices are usually kept at bay.9 Surprisingly, the entire cluster agreed that they maintained almost no interaction with the large manufacturer located in the cluster for technological and information purposes, despite the fact that it was the latter who organised training sessions from the Coir Board.10 The households’ success was purely on account of smooth interpersonal interaction among the women, with very little assistance from more formal sources.

8 This

provokes the proposition that those units who had longer experience in the traditional technology seemed to adapt to the new technology faster. 9 Thanks are due to J. Devika for discussions on this point. 10 A venue that was intended as a formal training session, as a forum for discussion and collective learning on the mechanised ratt, and for providing information on updates in the market was the Coir Board sponsored training session. But the actual experience was not as successful as planned. The Manappuram cluster reported that this exercise had utterly failed due to irregularity in participation payments, and little technological learning.

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Lessons In traditional industries such as coir, technological know-how on prescribed innovations would be seemingly difficult to diffuse, if not for the informal information sharing among proximate producers in an environment of general affinity among them. Some innovations have two components: a ‘hardware aspect’, consisting of the tool that embodies the technology as a material or physical object and a ‘software aspect’, consisting of the information on the operation of that tool (Rogers 1995). In horizontal interaction networks for diffusion of the software aspect of the innovation, participants shared information and at times even created incremental modifications to the original innovation. In the introduction of the motorised ratt in Manappuram, the ‘hardware’ of the motorised ratt was designed and delivered in a top-down approach, with a large subsidy and a distribution system to help diffuse the machine. But the diffusion of the ‘software’ of its operation and best-practice methods—to reach the production of 70 lengths of yarn a day—was left to the horizontal interactions and the informal communication channels in the cluster. From the findings of this case, we can imagine why some simple innovations, even with full financial backing and an uncomplicated functioning, may not diffuse effectively across target regions and may not be completely learned and adapted to. The answer may lie in the conduciveness for information sharing at the grassroots. Especially for the coir sector, these findings on the presence of rich information sharing practices and mechanisms will be useful in supplementing the literature on the technological modernisation of the industry. From the findings of this study, we propose that (1) Regions such as Manappuram performed an excellent job in adapting to prescribed innovations on account of their amicable interpersonal networks, communication channels and venues for interaction and information sharing. (2) Conversely, in other regions, some innovations even with full financial backing may have not diffused effectively across target regions or may not be completely learned and adapted chiefly due to weak informal information-exchange mechanisms on the ground, which may be the root cause of divergent regional experiences within an industry. We also see how social relations play an important role—often advantageous—in clusters where knowledge is exchanged through informal interaction across social networks, i.e., where social connections double up as channels for informal knowledge exchange. Social cohesion, such as in the Manappuram cluster, encourages trust, which is vital for low-tech traditional technology clusters that rely on informal information exchange around new knowledge.

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Policy Pointers The most fundamental feature of the organised market is the continuous process of information exchange, between producers, between users and between the two (Lundvall 1993). The information exchanged, Lundvall explained, involves ‘interactive learning’ that includes learning of substance (technical learning), communication (communicative learning) and proper behaviour (social learning). All clusters may not be able to undertake R&D or devote large amount of financial and human resources for learning or even developing new knowledge on one’s own. In fact, most clusters would undertake collective learning and innovation using defensive strategies, especially when they are low-tech. These clusters must not be perceived as just agglomerations for the convenience of production and for economies of scale but as knowledge systems, learning regions or even a localised system of innovation. Production decisions in these clusters are intertwined with social relations. It, hence, becomes only imperative, as Breschi and Malerba (2005) advise, to disentangle oversimplified notions of spillovers and proximity, and to move to deeper investigations into underlying mechanics of informal interactive behaviour in low-tech clusters. Informal innovation activities are usually not captured by innovation surveys and quantitative survey based research and policy deliberations are generally biased towards formal innovation and learning processes (Jensen et al. 2007; Gault and von Hippel 2009; Maharajh and Kraemer-Mbula 2010). The attention given to free knowledge exchange in the literature does not do justice to its ubiquity, as compared to the attention given to formal R&D and formal methods of diffusion of knowledge (Powell and Grodal 2005; Jensen et al. 2007; Maharajh and Kraemer-Mbula 2010). Taking this lead, and parallel to what Spielman et al. (2008) and more significantly Biggs (1990) recommended, policy must recognise the existence of multiple sources of innovation and integrate those sources. Hence, policy attention given to knowledge sourced through informal knowledge exchanges and to more formal sources and methods must be more balanced and sensitive to one another. One very effective strategy where public funding can be put to deliver effective results is to direct investments towards financing what are called ‘catalytic’ agents (see Ekboir 2012). These agents (which might include an NGO or a research organisation) may not provide new information themselves, but essentially perform the task of assembling potential actors in the cluster who can benefit from knowledge exchange with each other. Ekboir (2012) suggests building the capabilities of agents who are willing to be these catalytic agents. In Manappuram, we saw that a catalytic agent was not an actor but a forum Kudumbashree, which served, unintentionally, as the central nodal point for actors in the cluster to come together and meet others with whom they would, in the ordinary course of the day, not interact. Kudumbashree is but one example, and many such arenas in clusters such as these can be funded and supported for the sole purpose of bringing together agents who could potentially exchange know-how with one another.

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Formal knowledge generation mechanisms, in the form of R&D labs run by the state, or even policy think tanks and government organisations (such as the Coir Board) must balance between research on ‘formal’ technological output—embodied artefacts such as machinery—and informal knowledge transfer mechanisms. Merely providing nodal points at various locations to disseminate technologies is not sufficient (though necessary) and the ‘software’ of the technology should be disseminated taking full account of the mesh in which local actors are tied. Weakly tied actors in a cluster may require a completely different information dissemination strategy as compared to a cluster with very strong internal ties. While for the former situation the policymaking body must set up, from time to time, arenas where actors can come together to discuss problems and solutions around everyday experiences of the technology; for the latter, the policymaking body must provide information on links outside of the thickly interconnected cluster to ensure that information redundancy does not result. Policymaking in India with regard to dissemination of technologies in rural industrial clusters must take into account the vast wealth of information and lessons provided by this literature to strengthen learning capability building in order to mobilise collective learning in low-tech clusters, to make innovation a more inclusive process.

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Chapter 6

Commodity Markets, Computers and Inclusive Development: A Study of Marketing and Price Formation of Cardamom with e-Auctions K. J. Joseph Abstract The plantation sector plays a key role in fostering inclusive development in India. This chapter aims at locating the spaces and processes of exclusion in the marketing of cardamom, a major plantation crop in Kerala, and the bearing that e-auctions have in addressing them. In locating the spaces of exclusion, the study uses conceptual categories of social exclusion envisioned by Amartya Sen, like passive, active, instrumental and constitutional exclusion, to evolve new ones like subordinated or unequal inclusion, illusive inclusion and sustained exclusion. In the conventional auction system, active exclusion prevailed on account of the practice of taking a fixed quantity as a sample from all the lots regardless of its size and delay in payment along with the absence of title deeds for a large number of growers. The existence of wide variation in the price realized by different size classes of holders has been articulated as a case of subordinated/unequal inclusion. It is shown that the e-auction has been successful in addressing the subordinated/unequal exclusion. However, harnessing ICT through e-auction could hardly address the active, passive and instrumental exclusion that has been sustained over the years. This tends to suggest that in the absence of appropriate institutional innovations, the issue of social exclusion cannot be addressed only by technological innovations.

Introduction The remarkable success of India in building a fairly diversified economic structure and commendable growth performance in the recent past notwithstanding, primary commodity production in general and plantation crops in particular play a no less significant role. Though the plantation crops in India account for only about five percentage of the net sown area, it contributes about 10% of the income from agriculture and accounts for over 13% of the agricultural exports. The estate sector alone is estimated to provide about 2.5 million days of employment and is the source of livelihood for almost an equal number of small and marginal growers. K. J. Joseph (B) Gulati Institute of Finance and Taxation, Thiruvananthapuram, Kerala, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_6

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After independence, the plantation sector, given its role as foreign exchange earner, received considerable attention of the state. This got manifested in a series of institutional innovations which included, among others, the setting up of commodity boards and legislations empowering these boards to undertake various activities needed for plantation development. There have also been a series of innovations, mainly at the instance of these boards, relating to all aspects of the plantation sector. These included various production augmenting measures like subsidized replanting/new planting schemes, certified nursery scheme, water harvesting and irrigation schemes along with institutional arrangements for financing these innovations (Joseph and George 1995, 2010). In addition, research institutes have been established under the respective commodity boards for undertaking R&D on all aspects of the crops under them along with an elaborate extension network for the diffusion of R&D outcomes among the growers. Yet another institutional innovation related to labour market through the Plantation Labour Act of 1951, which dealt with the wages, working conditions and welfare of plantation labour. Institutional innovations in the sphere of marketing, in the form of various rules and laws for the regulation of the behaviour of different actors involved in marketing along with trade promotion, also came into being with a view to ensure a fair share for the producers in consumers’ rupee and to enhance international competitiveness. The system of innovation and production, as discussed above, evolved in a context wherein the plantation sector has been a key sector in India’s export earnings as they (tea coffee and spices) accounted for as high as 20.8% of India’s exports in 1950– 1951 (Singh 1964). Over the years, notwithstanding the remarkably high growth in the export of plantation commodities, their share in total export steadily declined to only about one percentage at present. This decline notwithstanding, Joseph (2014) has shown that the role of the plantation sector in the national economy is more important than ever before as it could be considered as a key sector in India’s inclusive growth strategy. This is on account of its contribution towards employment and livelihood of millions of plantation workers, especially, women and small and marginal holders, development of backward regions and backward communities along with its key role in environmental sustainability. The present study is based on the premise that the micro-foundations of inclusive growth are best explored at the sectoral level. Moreover, if growth needs to be inclusive, the innovation system that breeds growth quintessentially has to be inclusive (Joseph 2014). Against this background, this chapter aims at locating spaces of exclusion, in the sphere of marketing of plantation crops by taking the case of cardamom and examine to what extent the recently introduced e-auction has been able to address them. The analysis of marketing and price realization assumes added importance in a context wherein these products are susceptible to extreme price volatility (Maizels 1994; Cashin et al. 1999; Jacks et al. 2009; UNCTAD 2008) and the livelihood of the small holders who dominate the sector crucially depends on the farm gate price. The remainder of this chapter is organized as follows; the second section, drawing insights from the literature on information communication technology (ICT) for the development and taxonomy of social exclusion by Sen (2000) develops an

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analytical framework for understanding different dimensions of exclusion. The third section analyses the institutional and technological innovations in the marketing of cardamom to locate varied spaces of exclusion and the extent to which the introduction of e-auction has been able to address them. Concluding observations are presented in the last section.

Towards an Analytical Framework The pioneering work on innovation systems (Freeman 1987; Lundvall 1992; Nelson 1993) and the subsequent developments in the literature on regional (Asheim and Gertler 2004), sectoral (Malerba 2004) technological (Carlsson and Stankiewitz 1995) and corporate levels (Granstrand 2000) deviated from conventional linear approach to technological progress and placed innovations at micro-, meso- and macro-level as the driving forces behind growth. The past episodes of growth, however, are found to be lopsided and that the returns to growth have been mostly confined to select sectors of the economy and sections of the society resulting in increasing marginalization and inequalities that co-evolved with higher GDP growth rates (Wade 2004; Stigtiltz 2007, 2013). No wonder, the issue of inclusive growth emerged at the centre stage of development discourse and the focus of policy pendulum shifted from growth to inclusive growth. The moot question is, if innovation breeds growth, could it also be instrumental in fostering inclusive growth? While the linkage between innovation and growth appears fairly straightforward, the issue becomes more complex when it comes to innovation and inclusive growth or its twin foundations—(in)equality and poverty. As argued by Cozzens and Kaplinski (2009) while innovation is of course not the only or even main influence on inequality, it is nonetheless often causally linked to poverty and inequality through many different economic, social and political processes—but not in just one direction. UNDP (1999) and Juma and Lee (2005), among many others, assert that ICTs and biotechnology could be harnessed to deliver pro-development and pro-poor solutions which in turn could be instrumental in addressing the issue of lack of inclusion widely prevalent even in countries that managed to achieve high rate of economic growth. Here ICTs play a fundamental and often transformative role through their capacity to augment learning through networked collaborations in which online interactions play a central role. This potential is at the heart of new opportunities for developing countries to apply ICTs to strengthen the essential absorptive and productive capacities that make it feasible to exploit the gains from the application of ICTs in stimulating economic activity. This applies to every branch of the economy from agriculture to manufacturing and services. The UN Task Force on Science, Technology and Innovation (2005: 48-49) was more emphatic when it observed ‘ICT differs from other development sectors and technologies ... as accelerator, driver, multiplier and innovator; both established ICTs (radio, television, video, compact disc) and new ICTs (cell phones, the internet) are

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powerful if not indispensable tools in the massive scaling up and interlinkage of development interventions and outcomes inherent in the goals’. But at the same time, studies also recognize that the difficulties are huge, mainly due to the institutional deficits along with the dominating market considerations and weak global and national public policy counterweight. Analytically, the contribution of ICT towards development of an economy could be viewed at two, different but interrelated, levels: (a) on account of the growth of ICT sector (direct effect) and (b) on account of ICT diffusion/use (indirect effect). The former refers to the contribution in output, employment, export earning, etc. on account of the production of ICT-related goods and services and are often more visible than those from use (Kraemer and Dedrick 2001). The latter refers to ICT-induced development outcomes through enhanced productivity, competitiveness, growth and human welfare on account of the diffusion of this technology into different sectors of the economy and society. In contexts wherein ICTs have helped increasing efficiency and productivity in the developed world (see Indjikian and Siegel 2005 for a review), it has been argued that less developed countries could also benefit from increased access to information as much as the rich countries. There are also evidences across the world wherein ICTs have helped marginalized sections in less developed countries in addressing varied information needs with more inclusive development outcomes as revealed by various IT-based development projects being undertaken in different countries (DOI 2001). With respect to specific technology, Goodman (2005) in a study on the effects of mobiles on social capital in South Africa and Tanzania found that ‘mobiles were facilitating participation in social networks, helping to maintain both strong and weak links, including participation in community group activity. From an economics point of view, the main causality runs from mobile phones to higher productivity to increased growth and poverty reduction’. Waverman et al. (2005) find that mobile telephony has a positive and significant impact on growth and this impact may be twice as large in developing countries compared to developed countries. While India is known for harnessing the direct benefits of ICT as evidenced from her remarkable achievements in the sphere of IT software and service exports (Heeks 1996; Kumar 2001; Arora et al. 2001; Joseph 2002, 2009), her performance in terms of harnessing ICT for development, however, has been less remarkable. However, some of the early experiments in India like the Gyan Doot programme in Madhya Pradesh, Internet Kiosks set up by MSS foundation in Tamil Nadu and Bhoomi Project implemented in Karnataka, FRIENDS project in Kerala and various other rural IT projects are aimed at more inclusive development outcomes. The evidence also indicates that the digital divide, viewed in terms of the narrow definition of access to internet and mobile telephones, has been showing a declining trend. According to the Telecom Regulatory Authority of India (TRAI), for example, the number of telephone subscribers in India stood at 1206.22 million by March 2018 wherein the share of urban subscribers has been 56.51% and that of rural subscribers 43.5%. With this, the overall tele-density in India reached 92.81% with rural and

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urban tele-density being 59.1% and 165.9% respectively.1 The issue, however, is whether the increased access to ICT through mobiles and internet or the presence of various projects aimed at harnessing ICT for development will really ensure inclusive developmental outcomes if the system of innovation is characterized by varied spaces of exclusion?—the central issue being addressed in this chapter. Neither exclusion, both economic and social, nor the attempt towards understanding its dynamics is new. When Adam Smith talked about not being able to appear in public without shame, he was referring to nothing but exclusion. Even in the Indian context, though the term inclusive development has become fashionable only in the recent years, the need for socially and economically equitable growth has been underlined in the Republic’s Constitution and Directive Principles and was at the heart of different five-year plans. From Sen (2000) we learn that the concept of social exclusion is seen as covering a remarkably wide range of social and economic problems. Even in the practical context of identifying “the excluded” in France, René Lenoir, as Secrétaire d’Etat a l’Action Sociale of the French Government, spoke of the following as constituting the “excluded”—a tenth—of the French population: mentally and physically handicapped, suicidal people, aged invalids, abused children, substance abusers, delinquents, single parents, multi-problem households, marginal, asocial persons, and other social ‘misfits’ (quoted in Sen 2000). Since economic and social exclusion is the problem we want to address, Sen’s taxonomy of exclusion appears to be especially illuminating. Sen (2000) considers four situations that need not necessarily be mutually exclusive: (i) constitutive exclusion happens when being excluded is in itself a deprivation which can be of intrinsic importance on its own; (ii) instrumental exclusion refers to causally significant exclusions that may not be impoverishing by themselves but can lead to impoverishment of human life through consequences of great instrumental importance; (iii) active exclusion happens when exclusions come about through policies directly aimed at that result; and (iv) passive exclusion is the result of policies that have not been devised to bring about that result but nevertheless have such consequences. Of the four above, the first two appear to be based on the outcome where the latter two are based on the causes of exclusion and these categorizations are not exhaustive. We could also have other variants of exclusion, for example, based on the nature of exclusion per se. Thus, one could have a situation of a. unequal inclusion or subordinated inclusion, a context wherein the inclusion takes place in unequal or differentiated terms and that the returns to inclusion are unequally distributed, b. illusive inclusion occurs when inclusion is ensured but the outcome is not different from that of the excluded. It is also to be noted that since resources for development are limited and wants unlimited, development strategies also might necessitate certain extent of exclusion for some time a la in unbalanced growth strategy as proposed by Hirschman (1958). Hence, it might be inevitable that some are excluded for some time. But what is socially not desirable is when some are excluded all the time. Hence, we could also have sustained exclusion as opposed to transient exclusion. 1 See

for details https://main.trai.gov.in/sites/default/files/Annual_Report_21022019.pdf.

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We must hasten to state that these conceptual categories are not always mutually exclusive. For scholars involved in exploring innovation system from the perspective of inclusive development, these conceptual categories might serve as pedagogical scaffoldings to understand varied spaces and exclusion and their multifaceted dimensions.

System of Innovation in Cardamom Marketing and Spaces of Exclusion Cardamom is a plantation crop historically grown in the evergreen forests mainly for export2 and its price depends on the quality of the dried capsule. The quality of the product in turn depends on the colour, aroma and boldness of the capsule. All these depend on the timing of harvest (which is a highly skilled and women labour intensive) curing method adopted (sun drying or in curing houses) and timely implementation of cultural operations especially spraying of pesticides to protect the capsules from a number of insects and pests. To the extent that there is significant variation across and within holdings in terms of harvesting, curing and other cultural operations, there is significant quality variation across and within output offered for sale by a given grower and across different growers. Given such quality variation, an auction system has been followed historically for the marketing of cardamom.3 Until the introduction of e-auction in 2009 in Bodinaikanur (Tamil Nadu) and 2010 in Puttadi (Kerala), auction has been in the traditional outcry method wherein the bidders competed face to face for the lots offered for sale. In what follows, we shall begin with a discussion of the traditional auction system followed by the e-auction.

Market Structure Under Traditional Auctions The institutional innovations in the marketing of commodities like cardamom at the primary level takes place in the form of state regulation. A market is said to be regulated when the government establishes it under some enactment, and frames rules and regulations to conduct business therein (Harris 1981). The nature of regulation is found to be varying from one crop to another. In case of cardamom, the regulation takes the form of restricting the entry of different functional categories like the sellers, auctioneers, dealers and exporters into the auction system as per the Cardamom (Licensing and Marketing) Rules of 1977. The declared objective of such a regulation has been to ensure a fair price and timely payment of sale proceeds (Nair et al. 1989; Narayana 1994; Joseph 1985). 2 Today

the product is highly domestic market oriented as more than 90% of the output is sold in the domestic market. 3 With technological advancements there are machines that help grading the product based on colour and boldness. Hence, the relevance of auction at present, in a sense, is questionable.

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The marketing system for cardamom has been characterized by a large number of sellers (both large and small) and a small number of exporters—many of them are dealers and few of them, in addition to being dealers, are growers as well—a large number of dealers and a few auctioneers. Auctioneers are one of the major actors in the marketing of cardamom who bring together the buyers and sellers of the product. During 1980s when the auctions were conducted in the conventional outcry manner and held in the premises of the auctioneer, there were 14 auctioneers in India spread over the cardamom growing States, viz. five in Kerala, two in Tamil Nadu and seven in Karnataka. Vandanmettu in Kerala, Pattiveeranpatty in Tamil Nadu and Sakalespur in Karnataka are the major auction centres in India. The auctioneer brings together the producers holding registration certificate and the dealers (also referred to as ‘bidders’) holding license issued by the Spices Board to deal in cardamom. As per the cardamom rules, the dealers shall not purchase cardamom from an estate owner who has not registered his estate or from an auctioneer who has not been licensed by the Spices Board (formerly Cardamom Board). Further, no dealer shall solicit or accept any amount in cash or in kind from cardamom producers or auctioneers whether by way of discount or commission. A dealer participating in auction shall pay full value for the entire quantity of cardamom in the lot purchased by him. The cardamom exporters are another important link in the marketing system of cardamom. According to the Cardamom (Licensing and Marketing) Rules of 1977, the exporters shall not procure cardamom directly from a grower or from an auctioneer unless he is in possession of a license as dealer. The number of exporters varies from year to year as the license is issued for a year after which it should be renewed to carry on business. Cardamom market was characterized by high level of concentration at all levels. During the 1980s, according to an earlier study, though there were five auctioneers in Kerala, one of them (CMC Vandamettu) accounted for more than 70% of the product sold through auctions. It was further observed that during 1971–85, only two auctioneers remained permanently in business and together they accounted for nearly 90% of the total sales in Kerala. It should also be noted that all these auction centres were located in the cardamom growing areas of Idukki district covering an area of 45,172 hectares in 18,585 holdings. The only exception was the auction centre at Cochin. In Waynad, there was no auction centre though there were 270 holdings with an area of 4,247 hectares—a case of active exclusion according of to the taxonomy of exclusion suggested by Amartya Sen. It is also to be noted that for historical reasons, large number of cardamom growers are not having title deeds and that they are not entitled to register their product with an auction centre—yet another case of active exclusion. In 1983–84, there were 528 licensed dealers in India. It was found that while Kerala accounted for 69% of the total production, only 32% of the total dealers belonged to Kerala. There was a clear domination of Tamil Nadu in cardamom trade. That is, Tamil Nadu, with 6% of the total production accounted for 43% of the dealers. Historically, the activities of the traders were confined mainly to two major markets of Tamil Nadu, viz. Bodinaikanur and Viruthnagar. The situation remains more or less the same at present.

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With respect to concentration of market power, it was found that on an average 29 dealers bought cardamom from the major action centre (that accounted for over 60% of the output sold in Kerala) during 1979–80 to 1983–84. Out of this, the share of top five dealers was found to be 58% in 1979–80 and it increased to 65% in 1983–84. Similarly, the share of top two dealers also increased during the same period. It was 34% in 1979–80 and it increased to 39% in 1983–84. This may be partly accounted for by the decline in the number of bidders participating in the auction. All the top five bidders were found to be exporters. Of these five, one dealer was found to be dominating in all the years (Joseph 1985). At a time when cardamom was an export-oriented crop,4 the price realized in the internal market depended to a great extent on the market strategy adopted by the exporters. This was more so, as the export trade was controlled by a few exporters. Export in 1976–77 was 8935 metric tonnes (mt) and it increased to 2876 mt in 1978–79 and showed a marked decline in 1982–83. With the increase in the quantity exported, the total number of exporters increased and as quantity exported declined the number of exporters also decreased. The interesting point to note is that while the average share of an exporter was nearly one percentage, the top 10 exporters accounted for more than 60% of the total and some of these leading exporters are found to be the dominant buyers in certain important auction centres. Moreover, their share in the total export increased considerably during the period under consideration. Even though the export was subjected to yearly fluctuations, the share of top five exporters was reasonably stable at 50% in all the years under consideration (Joseph 1985). Thus, the foregoing discussion reveals that prior to the introduction of e-auctions, the institutional innovations have resulted in the concentration of market power in the hands of a few at all levels. A few auctioneers accounted for bulk of the quantity sold through auctions and a few dealers accounted for bulk of the quantity bought through auctions. At the export level also a handful of exporters controlled most of the quantity exported.

Functioning of the Market Having examined the marketing system, let us proceed to examine the functioning of the market which was governed by institutional innovations in the form of marketing rules that prevailed. The growers register their produce with the auction centre, sufficiently before the auction, and may get an advance from the auctioneer which will be deducted from the sale proceeds. The auctioneer maintains a warehouse where the produce is kept till the time of auction. If the product is withdrawn from 4 During the 1970s and 1980s on an average 60–70% of the domestic production used to be exported. 5 1975–76

with a production of 3000 mt, the export was 1941 mt. The sudden decline in export during 1976–77, in spite of a production of 2400 mt, was due to the imposition of the export duty of Rs.50/- per kg on cardamom.

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the auction, (the seller can withdraw the product if the price quoted is unsatisfactory) the seller is liable to pay the warehouse charges at the rate of 15 paise per kg per day. At the time of registering the produce for auction, the auctioneer mixes the produce thoroughly and takes a sample from each lot. The Cardamom (Licencing and Marketing) rules, 1977 describe the procedure of taking the sample as follows: The auctioneer shall draw 500 grammes out of each lot of cardamom offered for sale as sample. Expose 350 grammes out of it for bidders to examine at the place of auction four hours before the commencement of the auction and circulate a list indicating quantity of each lot, weight in grammes per litre6 and reserve price.7 The 100 grammes out of the sample shall be given to the highest bidder and the balance of 50 grammes shall be kept by the auctioneer in a sealed polythene bag for a period of seven days for verification in case of any dispute. On expiry of the said period or on settlement of the dispute, as the case may be, the owner of the cardamom shall be entitled to receive back the cardamom from the auctioneer.

But the actual procedure of taking sample and auctioning was stated to be different from what is stipulated by the rules. The auctioneers in Kerala take a sample of 750 g of which 500 g is paid at the rate at which the rest of the quantity is sold. Out of the 250 g, 100 g is given to the highest bidder and the rest 150 g is appropriated by the auctioneer in addition to the one percentage commission. Further, the auction report showed that 8% of the sales tax is taken from the seller as handling charges. Thus, from each lot, whatever may be its size, 250 g is lost by the seller in addition to 8% of the sales tax as handling charges. The practice of deducting fixed quantity from each lot as sample irrespective of the lot size makes the effective price (the price that the sellers get per kg after all deductions) much less than the actual price (the price quoted in auction). This discrepancy between actual price and effective price reduces as the lot size increases. Thus, the registered sellers with a lot size below a certain minimum quantity may not find it profitable to sell their produce through the auction centres because of the institutionally set rules; a typical case of active excision that Sen (2000) described. Under the conventional auctions, it used to take place in the premises of the auctioneers and procedures used to be as follows. The dealers (bidders) will be seated around a round table and a small tray kept in front of each of them and out of the 750 g of cardamom taken as sample from each lot, 500 g will be spread in all the trays for examining the lot. Then the intending buyers bid upwards for individual lots and the highest bidder will be given the lot. The process of bidding starts with the announcement of the lot number and lot size. It is a quick process and each lot takes hardly a minute to get auctioned. The seller has the freedom to withdraw his product from auction before the bidding is over. Once the price is determined through bidding, the seller loses his right over the produce. Once the bidding is completed, a slip showing the weight of the lot and the agreed price is given to the seller by the auctioneer, not the value of product sold. The slip also shows all the deductions and charges to be paid by the seller. The payment is 6 This is an indicator of the quality of the product. It is often observed the product with green colour

and bold in size has higher weight per litre. refers to the price below which the seller will not sell the product.

7 This

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K. J. Joseph

made later, usually after 20–45 days as the case may be. There is, thus, an in-built credit facility extended by the growers which in turn is guaranteed by the auctioneers. Some of the growers were of the view that the delay in payment is perpetuated both by the dealers and the auctioneers. The auctioneer could refrain from paying to the sellers for the single reason that a few of the dealers have not made the payment even though all the others have paid. The delay in payment, therefore, keeps away those growers without the holding power (presumably the small holders) from the auction system a typical case of illusive exclusion. A perusal of the auction procedure described above reveals that there were different types of exclusion inherent in the system. There were a large number of growers who were not having the registration certificate and hence confronted with active exclusion. Active exclusion also prevailed on account of the institutionally set practice of taking fixed sample from each lot regardless of the quantity offered for sale. From our discussion with the growers, we came to know that they are forced to sell their produce at the auction centres, even at an unsatisfactory price, because of the inability to repay the advance already received by them, a typical case of illusive inclusion. If they withdraw the product, they will have to pay the godown charges at the rate already mentioned.

Price Variation Across Different Lots Under Traditional Auctions Having examined the plausible spaces of exclusion induced by the institutional innovations let us now examine the process of price formation in auctions and price variation across different sizes of lots sold to see if there are additional spaces exclusion being created. To begin with, let us be clear about the market power of different actors involved; from the sellers side there is the market power of the growers of cardamom, both the large and small, who could withdraw the product from auction if the price quoted in the auction is found to be unsatisfactory and the interest of the auctioneers. The auctioneers, similar to the sellers, are also interested in obtaining higher prices for the following reasons. First and foremost, since the auctioneers were also the growers of cardamom higher prices would lead to increase in their sale proceeds. Second, higher the price realized in auction higher the commission accruing to them and third higher price quotation in a certain auction centre would attract more sellers to that centre thereby increasing the total revenue accruing to the auctioneers by way of taking sample. Coming to the market forces operating on the buyers’ side it needs to be noted that exporters, as a category, consist of both large-scale exporters and small-scale exporters and the leading exporters are found to be the major buyers in the auction centres. Since the profit of the dealers and exporters depends on the margin between the export price and auction price, the dealers and exporters would try to depress

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the auction price with a view to increase their margin. This is because the export price has been exogenously determined and therefore the exporters may not be able to manipulate the export price. Hence, in the bidding process in the auction centres, the exporters quote the price in accordance with their price agreements with the importers to other countries. Under these conditions, one could postulate the process of price formation in auction centres in the following way: In the bidding process, the bidders (the exporters and dealers) would endeavour to reduce the price, given the fact that they have already made commitment to their counterparts at a certain price, with a view to add to their margin. At the same time, the growers and the auctioneers would be interested in obtaining the maximum possible price. If the price quoted is unsatisfactory, the sellers would withdraw the product from auction. The relevant question is, which category of sellers will be able to withdraw the product? Obviously, only those with adequate holding power and good storage facility could withdraw the product. On the other hand, those sellers without adequate holding power and who have already received an advance from the auctioneer will be forced to sell the product at the price quoted in the auction. Thus, there is the possibility of price discrimination across different lots sold through auctions wherein the smaller lots (smaller growers) realizing a lower price as compared to the larger lots. In this context, the pertinent question is to what extent the bidders could discriminate across different lots? This depends on the supply and demand conditions in the market. Given the export demand, if the domestic production is higher than what the export demand warrants (excess supply) the price quoted in the auction centres will be low and the price discrimination tends to be higher. On the contrary, in a situation of low production (excess demand), the price quoted in the auction centres would be relatively high and the price discrimination across different lots may be low. With a view to empirically verifying the above hypotheses, we have classified the lots sold through auctions during the two peak season months and two lean season months into different size classes and estimated the average price obtained by each size class of lots during 1979–80 to 1983-84. Table 6.1 throws light on different interesting aspects of price variation. First, there exists a positive relationship between lot size and average price. That is, as we move upwards from the smaller size class, the average price obtained also rises. Second, the price difference between smaller lots and larger lots is higher during the peak season and lower during the lean season. Third, as we move from a year with high production to a year with low production, the extent of price variation across different lots gets reduced and finally unlike any other agricultural commodity, the peak price has been associated with peak season. This empirical evidence is indicative of the prevalence of subordinated or unequal inclusion that we have articulated in section ‘Towards an Analytical Framework’ of this chapter.

169.23

174.25

178.87

179.51

185.76

187.49

29.29

4500

40–60

60–100

100–150

150–200

200–250

250

Price difference (%)

Production (MT)

86.45

64.99

142.63

136.5

135.8

116.3

100.39

96.31

88.77

4400

66.60

133.56

132.87

127.76

120.76

108.26

100.5

91.89

80.17

87.43

129.61

113.59

111.38

109.23

89.84

94.81

76.79

69.15

Lean season

4100

25.24

132.84

136.35

135.07

134.02

124.45

118.6

109.74

106.07

Peak season

1981–82

55.61

158.44

138.6

135.42

132.12

122.45

119.79

112.82

101.82

Lean season

2900

22.78

168.49

153.81

152.84

148.73

149.5

143.61

140.83

137.23

Peak season

1982–83

Source Cardamom Marketing Corporation Vandanmettu, weekly auction reports from 1979–80 to 1983–84 Note Price refers to average price difference refers to the difference between the price of smaller and larger lots (%) Peak season: September and October and lean season: February and March

145.01

159.93

Peak season

20–40

1980–81

Peak season

Lean season

1979–80

0–20

Size class

Table 6.1 Price variation across different lot sizes under the conventional auction (Rs./kg)

8.36

202.67

187.58

202.85

213.99

185.21

182.7

174.87

187.04

Lean season

1600

7.06

387.65

359.06

363.88

372.68

351.89

353.12

346.98

362.1

Peak season

1983–84

23.31

426.99

421.08

408.72

412.41

385.26

375.75

363.46

346.28

Lean season

130 K. J. Joseph

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Marketing and Price Formation Under e-Auction In a context wherein the traditional auction system has not been successful in ensuring remunerative prices for the small holders, the Spices Board introduced e-auction in place of conventional auctions with a view to rendering the marketing system more efficient and ensure remunerative prices to all growers by harnessing information technology. Under the e-auctions, major change is in the auctioning system and that there is hardly any change in the rules governing auctions or the way in which samples are taken or in the time of payment. Unlike in the earlier system, e-auctions do not take place in the premises of the auctioneer, instead in a state-of-the-art auction centre established by the Spices Board with over 60 computer terminals networked to a server and a few large display boards that display the details regarding the lots being auctioned (like reserve price lot number, quantity, number of bags current highest bid). In the new system, licensed dealers are provided with a user id and password. They are also provided with the details regarding each lot offered by sale like the lot size, weight per litre (an indicator of quality) and reserve price. The dealers have to login to the system to participate in an auction. In each week, a particular day is assigned for auctioneers for auctioning the product registered with them. The auction starts with the reserve price and a bid for a particular lot by a dealer is made with key depressions (each depression indicates an addition of a fixed amount). As in the previous system, the grower has the freedom to withdraw the product if the price is not satisfactory. Identity of bidders is protected during the auction process. Highest bidder’s name is displayed only on the Auction Masters’ terminal. The auctioneer assigns a lot number to each lot and the auction takes place as per the auction number in the ascending order. It should be noted that by the time e-auction was introduced in 2009, significant changes had taken place in terms of total production, productivity and export intensity. There has been a significant increase in the production of cardamom from about 4400 mt in mid-1980s to over 10,000 mt in 2009–10. Similarly, productivity increased from about 55 kg per hectare in 1980–81 to 269 kg per hectare in 2009–10. More importantly, share of export in production (export intensity) steadily declined from over 60% in the mid-1980s to less than 10% since 1990s (Table 6.2). There have also been changes in the market structure. It is evident from Table 6.3, which is based on the e-auction data obtained for the year 2009–11 from two auction centres (Puttadi in Kerala and Bodinaikanur in Tamil Nadu) that accounted for nearly 90% of the total output sold, bulk of the output is handled by five of the auctioneers. Thus, the domination of a single auctioneer prevailed in the mid-1980s is replaced today by an oligopolistic market structure (Table 6.3). When it comes to market concentration at the level of dealers there appears to have been a significant decline. While a few traders accounted for bulk of the quantity sold during the mid-1980s, the share of top five dealers did not exceed more than 20% in none of the years and the share of largest dealer was only around 5% in all the 3 years.

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Table 6.2 Trend in production, productivity, export and export intensity of cardamom Year

Export (mt)

Export intensity (%)

1975–76

Production (mt) 3000

1941

64.7

44

1980–81

4400

2345

53.3

55

1985–86

4700

3272

69.6

56

1990–91

4750

400

8.42

Productivity Kg/hectare

79

1995–96

7900

527

6.67

122

2000–01

10,480

1545

14.74

247

2005–06

12,540

650

5.18

318

2009–10

10,075

1975

19.6

269

Source Estimates based on the data obtained from the different Annual Reports of Spices Board, Cochin

Table 6.3 Distribution of output sold through different auctioneers under the e-auction Auctioneer

2009

2010

2011

1

The Kerala Cardamom Processing and Marketing Company Ltd.

20.1

19.6

16.0

2

The Cardamom Processing and Marketing Co-op. Society Ltd.

18.7

17.2

12.7

3

Header Systems (India) Ltd.

15.9

14.7

13.3

4

MAS Enterprises limited

13.1

13.2

12.8

5

ISMPCS Ltd. no i-580

9.5

4.0

……

6

Cardamom Planters Association—Santhanparai

9.0

6.6

8.5

7

STCL limited—Kumily

6.7

3.8

7.8

8

South Indian Green Cardamom Co. Ltd.

6.5

14.9

16.1

9

Cardamom Planters Association—Bodi

0.4

0.8

1.3

10

Greenhouse Cardamom Marketing India Pvt. Ltd.

…….

5.3

11.4

Source Own estimates based on the auction data obtained from the auction centres

With a view to understand the price variation across different lots under the e-auctions, we have analysed the data on all the lots sold through the two e-auction centres during 2010. Average price obtained by lots belonging to different class of lots for both the seasons and also for the whole year is reported in Table 6.4. It is evident that with the introduction of e-auctions there has been a significant reduction in the price variation across lots belonging to different size classes. In contrast to the significantly higher price realization recorded for the larger lots as compared to the smaller lots under the conventional auctions, we find that for the whole year and the lean season the lots in the smallest size class received higher price than the largest lots. But during the peak season price received by the larger lots is found to be higher than the smaller lots. What is interesting to note is the significant reduction in the extent of price variation between larger and smaller lots and that the extent of price variation at present is marginal when compared to what prevailed during the 1980s. Also, in contrast to what was observed during the period wherein the product was

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Table 6.4 Price variation across different lots sold through e-auctions (2010) Season

Less than 40 kg

40– 100 kg

100– 200 kg

200– 300 kg

Above 300 kg

Total

% difference in price

Lean season price (Rs./kg)

1103.8

1134.5

1136.1

1100.8

1050.9

1124.6

−4.79

No. of lots sold

2130

7286

14,613

6438

595

31,062

Peak season price (Rs./kg)

976.7

1010.5

1019.7

1036.3

1055.6

1022.2

No. of lots sold

1072

5960

15,349

8120

1266

31,767

Whole year price (Rs./kg)

1061.2

1078.7

1076.5

1064.8

1054.1

1072.8

No. of lots sold

3202

13,246

29,962

14,558

1861

62,829

8.08

−0.67

Source Own estimates based on the auction data obtained from the auction centres

more export oriented, the peak price is not associated with the peak season. Thus viewed, the empirical evidence indicates that the introduction of e-auctions appears to have had the effect of reducing significantly the price wedge between larger and smaller lots of cardamom sold through auctions, and hence the subordinated exclusion experienced under the earlier system. In e-auctions, the only human intervention is in terms of assigning the lot number by the auctioneer, which governs the timing of the auctioning of a particular lot. With a view to examine whether the lot number has any bearing on the price received, we have analysed the price difference between the lots auctioned at the beginning of the auction and at the later part of the auction. From Table 6.5, it is evident that the lots sold at the beginning of the auction are in general subjected to larger number of biddings indicating higher competition for such lots. The table also indicates that though the quality difference between the lots auctioned at the beginning of the auction and later part of the auction is marginal, the difference in the price is notable. What is more the observed price difference is found to be increasing from about Rs. 10 per kg in 2009 to Rs. 66 per kg in 2010 and further to Rs. 126 per kg in 2011. This tends to suggest that the lots auctioned at the beginning of the auction are subjected to greater competition and lead to higher price realization and the difference has been increasing.

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Table 6.5 The price realized by lots auctioned at the beginning of auctions and at the end of the auctions Mean lot size

Mean No. of biddings

Mean litre weight

Mean price

Lot number 250

138.622

30.632

399.227

697.523

Yearly average

156.073

33.534

396.346

703.784

Lot number 250

146.762

34.3117

396.763

1005.309

Yearly average

151.119

39.247

396.756

1071.603

Lot number 250

140.249

43.240

407.916

923.722

Yearly average

150.90

40.80

391.18

1042.944

2009

2010

2011

Source Own estimates based on the auction data obtained from the auction centres

With a view to analysing the bearing of different factors in price formation under e-auction, we have estimated the following model of price formation: Price = α + β1lotsi ze + β2 lotqualt y + β3lotnumber + β4 number o f bidding + β5 T otalquantit y + Uit , wherein lotsize Lotquality

quantity offered for sale through a particular lot, the quality of the lot offered for sale measured by weight per litre, Lotnumber number assigned to a particular lot by the auctioneer which decides when the lot is auctioned, Number of bidding total number of bids made for a particular lot and Total quantity total quantity of cardamom available for auction in a particular auction. Theoretically, the lot size (quantity offered for sale by a particular grower) could have either positive or negative relationship with price depending on the supply and demand situation. In case of an excess supply situation, the lot size may not have positive influence. But if the larger lots have higher quality it may attract higher price. The lot quality is expected to have a positive effect because higher quality product could receive higher price. In a perfectly functioning market, the lot number, which indicates whether the lot is auctioned at the beginning of the auction or at the end of the auction, may not have any influence on price. The number of bidding is expected to

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have a positive influence because larger number of biddings indicates greater demand for the particular lot given its characteristics. Finally, it could be hypothesized that the total quantity available for sale could, in general, have a negative influence. A definite conclusion is not warranted because the price, in general, depends on the supply in conjunction with demand. The result of the estimated model is presented in Table 6.6. It is evident from the estimated coefficient that all the four variables considered are found statistically significant in determining the price of cardamom sold through e-auctions. The value of the estimated coefficient, its sign and the level of significance have shown similar pattern during all the 3 years under consideration. In all the 3 years, we found a positive relationship between lot size and price. However, as we have noted earlier the observed difference was much less as compared to what existed under the conventional auction and there are also instances of small lots getting higher price. Moreover, the estimated correlation between lot size and quality is also found to be positive indicating that the larger lots that received higher price are also of better quality. The estimated model also indicates that the lots with better quality are able to obtain a higher price as compared to lots with lower quality. The expected negative relationship of price with total quantity put for auction is evident only in 2010, which calls for further enquiry. The estimated model further indicates that there is a positive and statistically significant relationship between lot number and price. This tends to suggest that the lots that get auctioned at the beginning of the auction get a higher price as compared to the lots auctioned later. Thus viewed, though there is evidence to suggest that the price discrimination and the subordinated inclusion that prevailed under the conventional auctions ceases to exist under e-auction, yet another form of exclusion seems to have crept in because of the tail end syndrome wherein the lots auctioned at the beginning of the auction are subjected to greater competition and higher price realization. While there are evidence to suggest that the introduction of e-auction appeared to have significantly undermined the process on subordinated inclusion observed under the conventional auctions on account of the market power of the actors involved, the key question relates to the spaces of active exclusion and passive exclusion Table 6.6 Estimated price equations for the period 2009–11 Constant

Lot size

Quality

No. of biddings

Total quantity

Lot number

2009

508.5969 (69.75)*

0.1412 (16.09)*

0.3493 (19.26)

0.5770 (20.94)*

0.00096 (27.68)*

−0.13137 35127 (−17.53)*

0.0564

2010

966.6022 (93.95)*

0.0139 (12.76)*

0.2109 (8.49)*

1.3273 (42.34)*

−0.00088 −0.19328 62829 (−15.39)* (−15.14)*

0.0467

2011

883.9588 (71.35)*

0.1452 (5.51)*

0.2496 (8.95)*

0.0594 (20.14)

0.0013 (8.40)*

−0.4144 20539 (−13.56)*

0.0353

Figures in the parentheses are t values * Significant at 1% level

No. of observations

R2

Year

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that we have observed. This, as we have noted earlier, arise on account of practice of collecting fixed quantity of sample regardless of the lot size and the delay in payment. Though e-auctions have been introduced in the absence of an amendment of the Marketing Regulation Act, these practices continue and therefore the spaces of exclusion that are built in on account of the institutional practices that regulates the auction system.

Concluding Observations Given the key role of innovations as the driving force in economic growth, the present study has been based on the presumption that if growth and development need to be inclusive, it is essential that the innovation system that breeds growth-sansdevelopment also has to be inclusive. In the context of varied institutional innovations as manifested by the rules and laws governing marketing along with technological innovation as indicated by the introduction of e-auctions, the study explored the extent to which the new technology has been effective in addressing the varied spaces of exclusion that existed in cardamom marketing. With a view to locating the spaces of exclusion, the study has made use of the taxonomy of social exclusion by Amartya Sen, like passive, active, instrumental and constitutional exclusion and added new plausible categories exclusion like subordinated or unequal inclusion, illusive inclusion and sustained exclusion. It was observed that in the conventional auction system, active exclusion has been prevalent on account of the practice of taking a fixed quantity as sample from all the growers regardless of the quantity offered for sale as specified in the cardamom marketing rules. Active exclusion also arises on account of the delay in payment along with the absence of title deeds for large number of growers. The exclusion of those without title deeds from the auction centre also could be considered as a case of instrumental exclusion as articulated by Sen. Moreover, the practice of proving an advance appears to have the effect of illusive inclusion. These dimensions of exclusion have been sustained over the years. In addition, the study also found the existence of a wide variation in the price realized by different size class of holders (larger growers getting significantly higher price) which we have articulated as a case of subordinated/unequal inclusion. With a view to address these varied spaces of exclusion the Spices Board introduced e-auction. An analysis of the price variation and factors influencing price formation under e-auction revealed that e-auction has been successful in addressing the subordinated/unequal exclusion. But, the study observed a tail end syndrome wherein there exists significant price difference between the lots auctioned at the beginning of the auction and those auctioned at the end of the auction. This could be addressed if the lots are randomly auctioned instead of the practice of auctioning as per the lot numbers assigned by the auctioneer. The study has also shown that the introduction of e-auction and harnessing of ICT could hardly address the active, passive and instrumental exclusion that has been sustained over the years. This tends to suggest that the issue of social exclusion cannot be addressed simply by techno-

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logical innovation in the absence of appropriate institutional innovations. The study therefore reinforces the argument by Lundvall et al. (2009) that to understand the development dynamics in developing countries, especially the bearing of innovation system on inclusive development, we need to have a broader approach to innovation system instead of focusing simply on technological innovations.

References Arora, A., Arunachalam, V. S., Asundi, J., & Ronald, F. (2001). The Indian software services industry. Research Policy, 30(8), 1267–1287. Asheim, B., & Gertler, M. (2004). The geography of innovation: regional innovation systems. In J. Fagerberg, D. Mowery and R. Nelson (Eds.), The oxford handbook of innovation (pp. 291–317). Oxford: OUP. Carlsson, B., & Stankiewitz, R. (Eds.). (1995). Technological systems and economic performance: The case of factory automation. Kluwer Academic Publishers: Dordrecht. Cashin, P., Liang, H., & McDermott, C. (1999). How persistent are shocks to world commodity prices? IMF Working Paper. Washington, DC: IMF. Cozzens, S., & Kaplinski, R. (2009). Innovation povery and inequlaity: Cause, coincidence or coevolution. In B. A. Lundvall, K. J. Joseph, C. Chaminade & J. Van (Eds.), Handbook of innovation systems and developing countries. Edward Elgar Cheltenham. DOI (2001). Creating a development dynamic: Final report of the digital opportunity initiative (Washington DC: UNDP). http://www.opt-init.org/framework/DOI-Final-Report.pdf. Freeman, C. (1987). Technology policy and economic performance: Lessons from Japan. London: Pinter Publishers. Goodman, J. (2005). Linking mobile phone ownership and use to social capital in rural South Africa and Tanzania, the Vodafone policy paper series, No. 3. Government of India, Ministry of Commerce, Cardamom (Licencing and Marketing) Rules 1977, Cardamom Board, Cochin 1977. Granstrand, O. (2000). Corporate innovation systems: A comparative study of multi-technology corporations in Japan, Sweden and the USA. Gothenburg: Chalmers University. Harris, B. (1981). State and market—a report to ESCOR of the overseas development administration of the U.K. Government on State Intervention in Exchange in a Dry Region of South India. Heeks, R. (1996). India’s software industry: State policy, liberalization and industrial development. New Delhi, Thousand Oaks, London: Sage Publications. Hirschman, A. (1958). The strategy of economic development. Yale University Press. Indjikian, R., & Siegel, D. S. (2005). Impact of investment in IT on economic performance: Implications for developing countries. World Development, 33(5), 681–700. Jacks, D. S., O’Rourke, K. H., & Williamson, J. G. (2009). Commodity price volatility and world market integration since 1700. NBER Working paper series (Vol. w14748). SSRN: http://ssrn. com/abstract=1347270. Joseph, K. J. (1985). An analysis of marketing and price formation of cardamom in Karala. M Phil Dissertation, Jawaharlal Nehru University (CDS Trivandrum). Joseph, K. J. (2002). Growth of ICT and ICT for development: Realities of the myths of Indian experience. Discussion paper No. 2002/78, Helsinki: UNU/ WIDER. Joseph, K. J. (2009). Sectoral innovation systems in developing countries the case of ICT in India. In Lundvall B. A., K. J. Joseph, C. Chaminade, & J. Vang (Eds.), Handbook of innovation systems and developing countries: Building domestic capabilities in a global setting. Edward Elgar, Cheltenham. Joseph, K. J. (2014). Exploring exclusion in innovation systems: Case of plantation agriculture in India. Innovation and Development, 4(1), 73–90.

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Joseph, K. J., & George, P. S. (2010). Report on structural infirmities in plantation sector (spices & Natural Rubber, A Report submitted to the Ministry of Commerce, Centre for Development Studies, Thiruvananthapuram. Joseph, K. J. & George, P. S. (1995). Evaluation of the promotional measures in cardamom cultivation, report submitted the spices board, Ministry of Commerce, Centre for Development Studies, Trivandrum. Juma, C., & Lee, Y.-C. (2005). Innovation: Applying knowledge in development. UN Millenium Project Task force on Science Technology and Innovation, Earthscan, London, Sterling,Va. Kraemer, K. L., & Dedrick, J. (2001). Information technology and economic development: Results and policy implications of cross-country studies. In M. Pohjola (Ed.), Information technology, productivity and economic growth. Oxford: Oxford University Press. Kumar, N. (2001). Indian software industry development: International and national perspective. Economic and Political Weekly, 36(45), 4278–4290. Lundvall, B.-A. (Ed.). (1992). National systems of innovation. Towards a theory of innovation and interactive learning. London: Pinter. Lundvall, B. A., Jan, V., Joseph, K. J., & Chaminade, C. (2009). Innovation system research and developing countries. In Lundvall B. A., K. J. Joseph, C. Chaminade, & J. Vang (Eds.), Handbook of innovation systems and developing countries: Building domestic capabilities in a global setting. Cheltenham: Edward Elgar. Maizels, A. (1994). The continuing commodity crisis of developing countries. World Development, 22(11), 1685–1695. Nair, K. N., Narayana, D., & Sivanandan, P. (1989). Ecology or economics in cardamom development. New Delhi: Oxford & IBH. Narayana, D. (1994). Government intervention in commodity trade: an analysis of the coffee trade in India. Working paper No. 256, centre for development studies, Trivandrum. Nelson, R. (Ed.). (1993). National innovation systems. A comparative analysis. New York: Oxford University Press. Malerba, F. (2004). Sectoral systems: how and why innovation differs across sectors. In J. Fagerberg, D. Mowery, & R. Nelson (Eds.), The oxford handbook of innovation (pp. 380–406). Oxford: OUP. Sen, A. (2000). Social exclusion: Concept, application and scrutiny, social. Development Papers No. 1, Asian Development Bank, Manila. Singh, M. (1964). India’s export trends and prospects for self sustained growth. Oxford: Oxford Clarendon. Stiglitz, J. (2007). Making globalization work. New York: W. W. Norton. Stigltz, J. (2013). The price of inequality. New York: W. W. Norton. UNCTAD. (2008). Trade and development report 2008: commodity prices, capital flows and the financing of investment. Geneva: UNCTAD. UNDP. (1999). Human development report 1999. New York: UNDP/Oxford University Press. UN Task Force on Science, Technology and Innovation. (2005). Innovation: Applying knowledge in development, Earthscan. London. http://www.unmillenniumproject.org/documents/Sciencecomplete.pdf. Wade, R. H. (2004). Is globalization reducing poverty and inequality? World Development, 32(4), 572–596. Waverman, L., Meschi, M., & Fuss, M. (2005). The impact of telecoms on economic growth in developing countries (p. 3). No: The Vodafone Policy Paper Series.

Chapter 7

Modern Genetics as an Opportunity for Inclusive and Sustainable Agriculture Haribabu Ejnavarzala

Abstract This paper argues that new knowledge and technologies need not always be exclusionary. By using the concepts of the National Systems of Innovation (NSI) framework, the present study explores the potential of 1) Hybrid Rice Technology (HRT) and 2) genomics-based Marker-Assisted Selection (MAS) technology to address a) Bacterial Leaf Blight (biotic stress) and b) drought (abiotic stress) to improve rice crop in India. Scientists involved in the development and the applications of these technologies were interviewed as part of a case study during 2011–2012. The findings suggest that there is a need to integrate MAS protocols with the HRT to not only expand the scope and success of biotechnology to be more inclusive but also to avoid the extremely rigid appropriation of genetic material by a few actors. At the level of policy, efforts should aim at evolving interlocking technological and institutional innovations.

The New Context India’s population crossed the one billion mark by the turn of this century. The necessity to feed the large population of which over 60% is below 30 years, demands an increase in the volume of production of cereals, pulses, edible oil, coarse grains, animal products to enhance food security—in terms of quantity and quality. As expected, there will be new knowledge brought in, displacing old knowledge and associated practices, including technologies. For example, the green revolution technology package (irrigation, chemicals and high-yielding variety seeds) was brought into achieving food security in the 1960s. The strategy was introduced in the Punjab where there were irrigation facilities and the average size of landholding was seven acres. In other words, the green revolution strategy was meant for irrigated areas where the size of land holdings was relatively big. It should be acknowledged that the green revolution helped in achieving rapid increases in volume of production H. Ejnavarzala (B) Formerly with University of Hyderabad, Hyderabad 500 046, India e-mail: [email protected]

© Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_7

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and productivity food grains—wheat and rice (from 51 million tons in early 1950s to 206 million tons at the turn of the century). It has been established decades ago that the green revolution benefited rich farmers and it increased the disparity between the ‘haves’ and ‘have nots’, especially landless labourers thus creating conditions for agrarian unrest (Oommen 1974). The green revolution technology, based on chemical fertilizers and pesticides, displaced knowledge and practices associated with traditional organic farming that was extensively practised in India. Further, it generated several unintended consequences—excessive use of chemical fertilizers and pesticides, and their residues in soil and food and water. Many acknowledge that the green revolution contributed to the improved well-being of the rural poor (Brainerd and Menon 2013). But the heavy use of fertilizers to increase yields has led to high levels of toxicity and contamination of surface and groundwater in India which in turn has led to negative effects on the health of infants and ecosystems (ibid.). The green revolution strategy because of its emphasis on irrigated areas also created conditions for the neglect of India’s dry lands and crops, such as millets and pulses, grown in dry lands. This paper argues that new knowledge and technologies therefrom, need not always be exclusionary. They need not lead to (the allegedly) unintentional and perhaps irreversible consequences, if some basic criteria of inclusion and sustainability are considered in the decision-making processes right from the conceptualization of the problem which these technologies propose to solve. The formal institutional and organizational response to the food shortages in the 1960s was the advocacy of green revolution strategy and not an inclusive long-term change in knowledge and policy. Given the present advances in genomics of crops and the need to feed the growing population, there are several important questions. How can we harness the latest technologies in crop sciences like hybrid seeds technology and genomics-based Marker-Assisted Selection (MAS) technology to achieve an economically and environmentally sustainable and socially, acceptable and culturally appropriate agro-food system, in a country which has diverse agro-ecological zones? The question as to how to arrive at a policy for inclusive development that recognizes the diversity in terms of agro-climatic zones, and agro-food systems that include regional food crops and food preferences is an important one. In India, where the green revolution measured in terms of revolutionary increases in wheat productivity from the late 1960s to the early 1980s (Bhalla and Singh 2010), is attributed to technological innovations, and the high-yielding varieties (HYVs) generated by plant breeding and genetics research, the policy domain is clearly open to any new technology. This paper presents insights into the complex and historically contextualized knowledge and policy relationships that must be confronted before any attempt is made to formulate a policy for inclusive innovation and development. The present study explores the potential of innovations in seed technology—the hybrid seed technology and genomics-based technologies, for improving the rice crop. It examines the extent to which these technologies are currently contributing to, and can potentially contribute to inclusive agricultural modernization and growth. The selection of rice as the staple and most diverse staple cereal is perhaps obvious. The selection of

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life science knowledge base is also perhaps self-evident, given the legacy of the green revolution HYVs. The specific choice of technologies for this study is legitimized partly by the ongoing research on genetically modified rice in India; here, hybrid rice technology and MAS protocols are far less controversial or come with relatively low environmental concerns.

The National System of Innovation (NSI): A Framework Technology is not disembodied artefacts. Technology is constitutive of the following elements that underlie the artefacts: (a) knowledge underlying the production of the artefact, (b) design of technology which is based on certain values regarding its social function and access, in terms of who would have access and (c) a set of regulatory norms that govern social organization that is required for its deployment and implementation. Innovations disrupt and displace existing technologies and associated practices causing exclusion of sections of society that were engaged in production of and use of the existing technologies. While we briefly discussed the green revolution technology package in the introduction, there are many others like the invention of synthetic dyes which rendered Indigo growers (forced by the colonial government to cultivate indigo) indebted and starving in India (Kumar 2012). Likewise, synthetic nylon yarn affected cultivators of jute, a natural fiber, and jute industry. Similarly, traditional potters have been rendered jobless because of plastic substitutes. The establishment and rapid growth of the synthetic fiber and plastics manufacturing in India was supported by the policy goal of self-reliance starting in the early 1970s, which led to massive support and incentives given to chemical industry (especially with the import substitution era), the design of a wide range of consumer goods and effective market development. All these examples show that the mere formulation of a chemical dye, a synthetic fiber or plastic material would not have become technologies, entered and transformed their respective innovation systems along with new knowledge production, design systems and institutions (rules, norms or regulations). The ways in which the development of a technology creates exclusion/inclusion are dynamic and interrelated processes, involving several institutional changes. Sometimes certain development policies and new technologies which are intended to address the question of exclusion may result in creating new and unanticipated exclusions. Hence, the quest for inclusive development through innovations is a response to certain systemically generated exclusions as part of the development process (Sen 1999; Silver and Miller 2003). Processes in and related to agriculture and its products may be seen from various perspectives—technological perspective, market perspective, farmers’ perspective and consumers’ perspective. However, these perspectives tend to be very restricted and do not capture the interrelated systems and multidimensional elements that operate in a social, economic, and political and context mediated by dynamic knowledge and associated practices. A framework that incorporates and enables the analysis

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of the interconnected dimensions from the stages of production and consumption is needed. The national systems of innovation (NSI) framework has the potential to capture these processes of innovation in agriculture. Agricultural development involves contribution of knowledge from multiple sources, disciplines and interactions among the organizations that generate the knowledge and application of the knowledge in specific social, economic and cultural contexts (Lundvall et al. 2009). The institutional environment is characterized by legislations indicating the values and related goals of agricultural development, policies related to market, credit and regulations. Thus, the overarching institutional environment and the specific organizations and social functions of knowledge locate innovation studies in agriculture within the sectorial innovation systems (Malerba 1999). But sectors are shaped by the national scientific, political and economic institutions and the interactions or exchange mechanisms between different sectors within the economy. Thereby, a larger NSI framework helps to identify and analyse the interactions and changes within and between different domains of the NSI that are relevant to a sector. Most crucially, the NSI locates the specific knowledge and technological innovations within the historical and institutional contexts as well as the co-evolution of the key domains of the innovation system (Raina et al. 2010). Recent attempts to conceptualize innovations mark a departure from earlier attempts. Cassiolato and his co-authors (2008) argue that the popular meaning of innovation is seen as an ‘act’ of successful commercialization, which splits innovation and diffusion. In other words, earlier approaches have conceptualized, to quote Cassiolato et al. (2008), innovation as an ‘act and its development and diffusion occurs in subsequent phases of invention, innovation and diffusion’ (pp. 4–5). This is a narrow framing of innovation that focuses on national science systems and technology policies that generate technologies which are then diffused by other actors. Such a perspective develops indicators of R&D efforts and technology. The policy analysis focuses on S&T policies relating to R&D. In other words, the narrow framework focuses only on the ‘supply side’. Following Lundvall (2007), Cassiolato et al. (2008) argue for a broader framing of innovation that includes a variety of elements, interaction and institutions governing them that affect innovation. These are mainly, a) macro-economic policies, financial system, cultural, historical processes that underlie the innovation system in a country; b) institutions that shape competence building in the economy, such as education, training, industrial relations and labour market dynamics (Cassiolato et al. 2008). They also argue that inequalities affect the demand for innovation and that the demand tends to be very heterogeneous. Theoretically, this makes it imperative that the decision-makers in policymaking and in the R&D domain, the knowledge and technology generators, have to be conscious of how to design technologies with a clear understanding of the limited demandside capabilities in contexts marked by inequality. It is when these contexts are not understood and ignored in the onrush of supply-side-led technology generation and implementation that many existing producers, intermediaries and consumers are excluded.

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The Indian Context Agricultural production in India occurs in diverse agro-ecological contexts characterized by different type of soils, crops, patterns of irrigation and rainfall and terrain, insect and pest populations. These biophysical production variables exist in a social context characterized by an unequal distribution of ownership of land, worsening with every generation of farm households that depend exclusively on arable land. In addition, farmers have different levels of economic and cultural endowments. This pattern of distribution results in different degrees of exclusion of farmers, women and agricultural workers from: (a) agricultural knowledge generation and technology development/enterprise and (b) agricultural intermediary domain (extension, credit, markets, transport and other services); with a further alienation of (c) the demand domain including processing, urban consumers including women and SC (Scheduled Caste) and ST (Scheduled Tribe) populations incapable of articulating their demands to (d) the policy domain (the state, corporate sector), both Indian and international. The innovation system has to address the demands of different agro-ecological contexts and farmers with different economic and cultural endowments. In this context, the innovation system has to ask how agriculture in India can become modern by making use of the advances in modern biological sciences, and yet become economically, socially and culturally inclusive and environmentally sustainable. In terms of the innovation processes and the policies or institutional changes needed, the question is how we can transform India’s Agricultural Innovation System (AIS) to become more inclusive of the massive and diverse demand domain. The present study explores these questions by focusing on two cases of technological applications for rice crop improvement, (1) hybrid rice technology (HRT) and (2) genomics-based Marker-Assisted Selection (MAS) technology. These are selected to understand inclusive innovation in a major staple crop, rice, with a strong applied research history and strong location-specific farmers’ knowledge. The two technologies are chosen because HRT just continues along the historical legacy of proprietary technologies and processes that the green revolution had laid out, and MAS being a non-proprietary set of protocols and selection practices is an anomaly of sorts in the agricultural innovation system designed for and catering to the green revolution technology package. The present study employs the case study method used in sociology. The two cases, the deployment of HRT and MAS in rice, are analysed to explain how the existing domains and actors in the innovation system enable or obstruct inclusive innovation. Scientists involved in the development of technologies and scientists involved in the applications of these technologies were interviewed during 2011–2012. The study also drew upon secondary literature—published and unpublished. Producing hybrids in rice poses several challenges. Rice is a self-pollinated crop with tiny florets with male and female organs in the same floret. Further, short period of flowering is another feature of rice. Hybrids are developed by exploiting heterosis or

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hybrid vigour, a phenomenon where the hybrid resulting from parental lines is superior to their parents in one or more than one trait. China, pioneered the development of rice hybrids in the world.1

HRT in India and the Policy Domain Since independence the policy environment has been influenced by the model of planned development under Five-Year Plans. The first Five-Year Plan was devoted to agriculture and the second Five-Year Plan was focused on industry. However, since the early 1990s, with liberalization, there has been a shift in the policy environment as the Government has withdrawn from many areas of industrial production. As an extension of the economic liberalization programme of the 1990s, the Government of India recently replaced the Planning Commission, and institutionalized the National Institution for Transformation of India (NITI Ayog). This has implications within the NSI and at the international level for knowledge generation and agricultural production, due to changes in the institutional context. Scientific knowledge which was a public resource has become an intellectual property as a consequence of provisions for IPRs. India is a signatory to the WTO since 2005. R&D for industry, agriculture and pharmaceuticals which was earlier concentrated in public institutions has moved to private industrial corporations. An important feature of policymaking with respect to agriculture in India was that in the federal structure of the government, policy decisions were taken at the Union government level and the State governments were expected to implement the policies. This was always the case despite agriculture being a State subject as per the Constitution of the Republic of India. This hierarchical relationship and division of policymaking and implementing functions between the Union and State Government has led to variations in the effectiveness of policy implementation. It was often the case that the policy itself would not reflect the needs of diverse agro-ecological contexts in the country and appropriate demands from these diverse agricultural production systems. The New Agricultural Policy (NAP) of 20002 emphasized the need to encourage ‘technically sound, economically viable, environmentally non-degrading, and socially acceptable use of country’s natural resources—land, water and genetic endowment to promote sustainable development of agriculture’. The NAP aimed to attain over 4% annual growth rate in two decades since the announcement of the NAP. It aimed to enable the use of biotechnology develop crop plants which are 1 Now

China is the largest rice-producing and rice-consuming country in the world. China’s rice accounts 30% of total food crop acreage while producing 40% of crop yield. In India, rice productivity is 3.3 tons per hectare. China’s productivity is almost double and is at 6.6 tons per hectare. 2 The NAP of 2000 is the only policy document that addresses Indian agriculture. Though it is not a policy document that has been accepted by the Government of India, passed by the executive and approved by the legislature as a policy goal or direction and set of policy instruments, this remains the only document worth quoting, that replaces the complete centrally controlled ad hocism that has been meted out to agriculture thus far (see Raina 2011).

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drought resistant, resistant against biotic stresses, high yielding and environmentally safe. The NAP also aimed to ensure supply of adequate hybrid seeds and realized the need to develop effective systems that build the interface and continuous interaction between farmers and technology producers. The NAP seeks to protect farmers’ interests by allowing their traditional rights to save, use, exchange, share and sell their farm-saved seeds. The framers’ rights, according to the NAP, do not come in conflict with the breeder’s rights of seed companies. The XII Five-Year Plan (2012–2017) Working Group on Agricultural Research and Education in its report recommended that the XII Plan should focus on innovation for conserving the natural resource base and build resilient strategies to reduce malnutrition and hunger (Planning Commission 2011). The Working Group further suggested making ‘agricultural research demand-driven’ to promote inclusive growth and improve food and livelihood security of the poor. The Working Group also recommended some ambitious programmes for achieving inclusive growth. Some of the significant programmes are (a) hybrid development, (b) seed production technology for developing hybrids, (c) integrated farming with the emphasis on dryland farming (ibid.). The need to support dryland farming stems from the fact that the bulk of India’s pulses and oil seeds are produced in dryland areas. Major millet crops are also produced in dry lands. Regarding the mega programme for crops the Working Group also recommended for accelerated development of hybrids to enhance yields in wheat, rice, maize, pigeon pea, cotton, pearl millet and mustard. The Working Group reiterated the objectives of the New Agricultural Policy of 2000 and strongly pleaded for substantial rise in public investments in agriculture to achieve 4% growth rate. Well intentioned and firmly placed within the technological determinism that characterized the policies that enabled the green revolution, this policy environment for HRT assumes a direct linear linkage between investments (mainly in the private corporate firms) in scientific research and technology generation, as well as between the technologies thus generated and agricultural growth rate.

HRT and Competence of the National Agricultural Research System (NARS) R&D institutions that are involved in agricultural research and development include the Indian Council of Agriculture (ICAR) and its research institutes, State Agricultural Universities (SAUs), private foundations and seed companies. The NARS played an important role in ushering in the green revolution and since the 1960s the NARS expanded in terms of the number of scientific personnel. A critical examination of the evolution of strategies and policies relating to agriculture since the 1960s indicate a disproportionate emphasis on applied science compared to basic science, increasing centralization and bureaucratization and promotion of ‘one solution for all contexts’ instead of solutions for different regional and agro-ecological systems

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(Raina 2011). Though agriculture is subject matter that falls within the ambit of regional/state governments, research policy formulation takes place at the level of central government as mentioned above. Encouraged by China’s success in developing rice hybrids (Yuan et al. 2004) through continuous efforts since the 1960s, the Government of India resolved to evolve policy measures to promote hybrid rice research programme. The Indian Council of Agricultural Research (ICAR) initiated the National Hybrid Rice Programme (NHRP) in 1989 in a network mode that involved ICAR institutions engaged in rice research in the country (Rao and Sarma 2009). The objective of the National Hybrid Rice Programme was to increase the yield of rice especially in the areas that experienced green revolution—Punjab, Haryana, Indo-Gang etic plains in North, Krishna and Godavari basins in A.P and Kaveri delta in South. As productivity reached a plateau in these areas, introduction of hybrid rice was seen as effective intervention. However, hybrid rice has been adopted in non-traditional rice-growing areas like Bihar, and tribal districts of Jharkhand.3 During 1980–2000, 46 rice hybrids were released for commercial cultivation in the country. Out of these, 29 were developed by the public institutions while the remaining 17 were developed by the seed companies in the private sector (Viraktamath 2010). Currently, more than 80% of the total hybrid rice area is in states like Uttar Pradesh, Jharkhand, Bihar, Chhattisgarh, with some small pockets in states like Madhya Pradesh, Assam, Punjab and Haryana (Viraktamath 2010). The National Food Security Mission launched in 2007 set a target to cover 20% of the total rice area planted with hybrid rice. In an effort to enhance rice productivity, the Government of India offers subsidies to encourage the cultivation of rice hybrids. The Ministry of Agriculture, Government of India has been exploring possible public–private partnership in areas like development of hybrid seeds. In 2014, the area under hybrid rice was over 2.5 million hectares accounting for 5.6% of the total rice area, with States like U.P. Madhya Pradesh, Punjab, Jharkhand, Chhattisgarh, Bihar and Assam accounting for the highest share in arable land under hybrid rice.

Adoption of Hybrid Rice Technology Evidence of adoption of HRT indicates that in traditional rice-growing southern states, it is low (Janaiah 2002; Chengappa et al. 2003). For example, in Karnataka, farmers reported that hybrid rice is high yielding but less profitable compared to existing modern varieties (Chengappa et al. 2003). Efforts to develop farmer-acceptable rice hybrids to achieve higher yield gains through hybrid rice in farmer’s field have to be strengthened.

3 It

should be mentioned here that almost simultaneously in 1989 the Rockefeller Foundation, New York identified rice, the staple food crop of Asia, as a target crop for the application of molecular biology tools and initiated the International Rice Biotechnology Programme (IRBT).

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Some of the reasons for resistance to adopt hybrid rice in India are (a) shortage of hybrid seed in terms of quantity and quality; (b) poor hybrid rice grain formation; (c) biotic stresses like bacterial and pest attacks; (d) lack of market for hybrid rice because of consumers’ preferences regarding grain quality, shape, colour and cooking quality and short shelf life of cooked rice; (e) risks (Interview with N. P. Sarma, a rice breeder). For example, in traditional rice-consuming areas, consumers would prefer long, white colour rice that stays as such after cooking. Hybrid rice becomes sticky after cooking which is not liked by consumers used to non-sticky rice in Southern states. However, this not a consideration in states like Jharkhand (Choudhary 2018). The Bihar government in 2012–13 paid Rs. 61 crore to farmers who cultivated hybrid rice because the grain formation did not occur in the seed and hence farmers incurred losses (AERC, Bhagalpur 2013). Further, higher cost of hybrid seed vis-à-vis inbred seed may discourage adoption (Chengappa et al. 2003, and Ramasamy et al. 2003). As mentioned above, HRT has been adopted more extensively in areas that are not traditional rice-growing areas, for example, U.P., Jharkhand. The implication is that to improve adoption rates farmers and consumers have to be sensitized about hybrid rice by encouraging them to use hybrid rice for alternative uses in processing ricebased food products. Some more effort on the part of technology developers seems necessary to learn from farmers as to why there is reluctance to adopt hybrid rice. One of the central features of the National System of innovation is learning from other participants. The HRT efforts did not involve consumers, farmers, and other intermediaries from the beginning of the innovation process.

Genomics-based Innovation: the Marker-Assisted Selection (MAS) options Another set of technological advances are the genomics-based technologies: (a) genetic engineering, which is a transgenic technology involving transfer of genes across taxonomic groups and also a proprietary technology which has been opposed for various reasons including developement of resistance in the pest against engineered genes like the Bt gene (Haribabu 2014) in the context of food crops; and (b) the marker-assisted selection (MAS) technology, which is a non-transgenic and non-proprietary technology, which has proved to be useful in improving rice and millet crops. The latter, grown in India’s dry lands, ignored in the onrush of the green revolution, stand to gain significantly by the application of MAS technology. The debate over questions of the nature of genetic engineering technology involving transfer of genes across taxonomic groups and access to genetically modified seed which is a proprietary seed, as mentioned above, remains unresolved in India (Haribabu 2012a). It is in this context that the MAS becomes a significant strategy as it can be used to transfer genetic material from wild relatives of rice to popular cultivars to enhance resistance against biotic and abiotic stresses and in increasing yield. Besides, MAS offers an open-source model of innovation (Haribabu 2010); farming

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communities can contribute to the innovation process at different stages through a process of iteration. Another important feature of MAS is that molecular markers can be developed by individual labs on the basis of the genomic data of rice that is available in the public domain. Or the markers may be bought as any other chemicals are bought and used without causing any infringement of IPRs. The markers may be patented, but the way in which they are used is not patented. The advantage with the DNA-based markers, in contrast to morphological markers (based on phenotypes), is that there is no need to destroy the seed or plant but only a small fragment of a plant (DNA) can be used to test for the expression of the gene(s) of interest (Korzun 2003). India has witnessed a couple of successful applications of MAS for improvement of the rice crop: (a) Bacterial Leaf Blight (an instance of biotic stress) and (b) watersaving rice variety (abiotic stress).

MAS Technology for Conferring Resistance Against Bacterial Leaf Blight (BLB) A collaborative project between the Directorate of Rice Research (DRR), renamed as Indian Institute of Rice Research recently, Hyderabad and the Centre Cellular Molecular Biology (CCMB), Hyderabad, the two public R&D institutions with complementary strengths resulted in the development of a rice variety resistant against Bacterial Leaf Blight (BLB). The scientists involved in the project were grantees of the Rockefeller Foundation under its International Rice Biotechnology Program (during 1990–2000), which resulted in creating conditions of understanding complementarities, cross learning and collaboration. The scientists, at CCMB and DRR, saw the following advantages of MAS: (a) it involves transfer of genes across varieties within rice species, (b) markers could be developed in the laboratories on the basis of rice genome map which is in the public domain and (c) it would enhance self-reliance. The project involved introgression of three genes—Xa 21, Xa13 and Xa5—that were found to confer resistance against the BLB disease into the genetic background of Samba Mashuri from a rice cultivar called SS 1113 into which the three genes were pyramided earlier. As part of the collaboration, the scientists located at the CCMB did the basic work relating to introgression of genes and the stability of the expression of the introgressed genes in the rice plant. Then, the scientists located at the DRR took over the plants for field testing and validation and it has been released to farmers by the Central Varietal Release Committee of the Ministry of Agriculture, Government of India, on the basis of satisfactory results of multi-location field trials (Reece and Haribabu 2007; Haribabu 2010). The question that is not addressed is the commercialization aspects. For instance, who is going to commercialize the variety?

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MAS for Development of Water-Saving Rice Variety Another success story is release of water-saving rice variety—MAS 946-1 developed at the Marker-Assisted Selection Laboratory at the University of Agricultural Sciences (UAS), Bangalore (Bengaluru) by Shailaja Hittalmani, a genomics researcher and her colleagues, who established a MAS lab at the UAS. The variety was released to farmers in rainfed areas of Karnataka, in 2007. A survey conducted by Gandhi et al. (2012) found that water saving was to the tune of 45 to 55% in summer season and even higher in kharif season as compared to continuous submerged rice crop. Over 70% of the farmers in the study adopted the recommended package of practices. The success of the innovation was partly the involvement of farmers from the beginning of the project and technology was developed in an iterative mode. A great deal of mutual learning occurred during the innovation process. The variety was multiplied in farmers’ fields and then released to the farmers. By employing the MAS and participatory methods, drought- and disease-resistant finger millet, a dryland crop was also improved by this genomics research team during 2004–05. Reece and Haribabu (2007) point out that the MAS is likely to be most effective when it is both: (a) linked to the farmers who are expected to cultivate the new crop varieties that will eventually be developed and (b) integrated with plant breeding and with a range of complementary disciplines. MAS applications developed in public domain and as non-proprietary technology offer farmers the options to choose the ideal traits they want in each crop and region; an incredible number of permutations and combinations. The MAS applications are not likely to be promoted by agribusiness corporations (Reece and Haribabu 2007). The very problems for which the new variety is bred being highly context dependent, MAS offers context-dependent solutions at a decentralized level. The potential of MAS technology to develop cropspecific solutions in the open-source mode makes it imperative that public R&D organizations be strengthened to ensure participatory- and context-dependent inclusive agricultural development.

Inter-locking Technological and Institutional Innovations The MAS used to develop rice variety and the millets, like any other technology, needs several institutional changes that go along, to make it commercially available (Haribabu 2012b). Some of the challenges are as follows: 1. The experience shows that finding a partner to commercialize the technology after it has been developed and field tested is difficult—especially in the biotechnology applications like MAS. For future application of MAS technology, it would be ideal to bring in the commercial partners and the community partners on board during the research process itself. That would make it an inclusive innovation system.

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2. The lessons regarding varietal acceptance and most importantly about rice varieties are crucial; but the agricultural research system has been unable to bring about institutional changes within, to enable participatory plant breeding. The highly centralized structure of the research system and entrenched evaluation systems do not insist on field-level performance of varieties released. MAS technology offers an escape from this—because rice-growing communities, rice seed producers/firms, etc. can get involved in identifying appropriate traits that they would like incorporated into the rice plant by using molecular markers. But the national agricultural R&D system has to find ways of introducing new norms and compliance to the new norms in their R&D institutes for sharing credit with partners including farmers, ensuring genuine participation (with authentic voice to tribal women, in states like Jharkhand where hybrid rice is cultivated in tribal areas, who would want dual purpose—say fodder and grain—varieties), and plausible validation and impact assessment methods. 3. Issues like high seed costs can be effectively addressed when the varieties are developed through participatory MAS processes. It is possible to make legitimate claims for state support (subsidy or facilitation costs) to establish mechanisms to get the seeds at affordable cost for farmers to encourage adoption. Without confronting these constraints, we lose out on the opportunities to use the technology for crop improvement. Over enthusiastic attempts to introduce genetic engineering technology which seem to have consumed a lot of energy and resources of the scientists and policymakers and, scientific organizations have ended up in an unresolved impasse. MAS offers an opportunity to bring in genuine democratic practices and inclusion into agricultural R&D and its development impacts. In both, the HRT and the MAS-based varietal development, the cases reveal lack of appropriate policy instruments that suit the diverse agro-ecological features and economic and cultural interests of farmers and consumer preferences within each state. To utilize the MAS technology, the traits which have to be improved in different regions have to be identified. Then the genetic material within the primary gene pool of a given crop that has the potential to improve traits of interest, for example, enhancing resistance against biotic and abiotic stresses and yield needs to be identified, mapped and introgressed into popular cultivars. Much of this knowledge about the traits that have to be improved and phenotypes that have the potential to improve the traits, are vested with marginal and small farmers, tribal and niche ecosystem cultivators, especially women in the traditionally rice-growing tracts in India. This brings us back to the question of inclusion; the highly centralized organization of India’s agricultural research system does not permit the ‘inclusion’ of these extremely rich location-specific knowledge vested with farming communities, especially women. India has a rich source of rice germplasm: over 30,000 varieties of rice available for exploring the genetic resources and traits desired within the primary gene pool of rice crop. Innovations for rice crop improvement have to be context dependent in terms of agro-ecological zones, social differentiation and consumer demand. Rice is a crop that is cultivated in a variety of conditions—coastal areas,

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and semi-arid areas, and over time farmers have identified suitable varieties and conserved them in situ. The MAS could also be used for improving dry land crops such as millets, also marked by high diversity and location-specific traits. Farmers in India have been granted the freedom to cultivate the varieties they choose, and design varieties4 as part of larger participatory plant breeding and varietal selection processes. But the agricultural research organizations and the agricultural policy making bodies are yet to enable an innovation system for rice crop improvement, which is context dependent and inclusive of regions, crops and social preferences. The two cases presented above reveal that the challenges of hybrid rice have to be addressed to enhance acceptability of farmers and consumers, and the same applies to the MAS—protocols which offer an open-source and inclusive model of innovation for rice crop improvement. Using the HRT and the MAS technology, Indian agricultural R&D system has the opportunity to bring back the lasting and time-tested methods of hybridization; in other words, an integration of MAS protocols with the HRT. This will not only expand the scope and success of biotechnology but also avoid the extremely rigid appropriation of genetic material by a few actors. This can lead to an endorsement of sustainable agriculture as a value and a goal; there is a need for institutional reforms and participatory processes to ensure that modern technologies are developed and deployed in inclusive ways.

Policy Options for Inclusive Agricultural Development Biotechnology presents a unique and pressing case for institutional reform in agricultural technology generation and agricultural policy (Raina 2003). Two crucial aspects of this institutional reform in the Indian National Agricultural Research System (NARS) are (i) a shift in research paradigm from the green revolution to sustainable agriculture, (ii) participatory policymaking and technology assessment capabilities. The centralized and consolidated NARS (especially post 1975 when the ICAR became a full Department within the Union Government’s Ministry of Agriculture) with a centralized research agenda (Raina 2011), makes it difficult for even the State governments to take up appropriate location-specific research.5 Centralized schemes for agricultural development have been the norm; they accounted for all the schemes till the Rashtriya Krishi Vikas Yojana (RKVY) was launched in 2008, during the XI Five-Year Plan, giving 25% of the agriculture budget to State Governments to formulate and implement programmes that address location-specific problems. Though 4 The Protection of Plant Varieties and Farmers’ Rights (PPVFR) Act, 2001 allows to save, use, sow

resow, exchange, share or sell his farm produce including seed of a variety protected under this Act in the same manner as he was entitled before the coming into force of this Act, provided that the farmer shall not be entitled to sell branded seed of a variety protected under this Act (see Chap. 6: Farmers’ Rights). 5 The State Agricultural Universities being heavily dependent on the ICAR for research funding and direction have little accountability to the local State Departments of Agriculture or the farming communities in the State.

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the RKVY funds do flow to the States, the green revolution paradigm entrenched in the NARS at all levels hinders in formulating new agenda and programmes in the States. Given the diversity of Indian agriculture, the existing dominant and overarching knowledge and policy framing leads to variations in and distortion of even the well-meaning policies and programmes developed by the Union government and respective State governments. The evidence from the cases presented here shows that hybrid rice has registered only a partial success. This is because of inadequate supply of good quality of hybrid seed and limited consumer acceptance of hybrid rice in major rice-consuming areas. The case of HRT reveals the need to give a thrust to the production of good quality hybrid rice seed at affordable prices, and for further research to develop hybrid rice that is acceptable to consumers. Public institutions must take a pro-active part in developing hybrids that are less risky to adopt by farmers and satisfy consumer preferences. Since hybrid rice is only partially successful as of now, policy should focus on development of varieties with collaboration and participation of diverse rice-producing communities. Participatory plant breeding and varietal development would make the technology more inclusive, and enhance farmers’ involvement in conservation and breeding. Simultaneously, genomics-based Marker-Assisted Selection technology for rice crop improvement has to be developed and deployed as it offers an open-source model of innovation. There is then tremendous scope for the integration of HRT with MAS. That the current agricultural research system should recognize this as a crucial link between knowledge (R&D on MAS) domain and the intermediary or business domains (hybrid seed firms, public procurement and supply or extension) is a matter that needs urgent correction. All these, the development and deployment of new genetics and genomics-based technologies for inclusive agricultural innovation require investment for expansion of capacities of agricultural research institutions, scope of their mandates and competence of personnel. Public agricultural extension system has to be more participatory and acknowledge that farmers are creative social actors rather than passive recipients. The impasse over genetic engineering technology is an example where the scientific and industrial establishments took society and culture for granted. If inclusion is indeed a desirable goal, then the social sciences are a necessity within the formal S&T organizations; not to validate technologies as they do now, but to guide and establish the essential linkages between the natural sciences and other domains of the innovation system—be it the intermediary, enterprise, demand or policy domains. Now, more than ever, there is a need to strengthen social science research, especially the understanding of innovation systems and their potential into areas of interface between science and technology on the one hand and society, culture and environment on the other. The funding bodies that support science and technology projects must earmark some funds for social science research on social, economic and political factors that influence technology generation, its application and consequences for society, culture and polity. Unless policy options for innovation in agriculture are based on the specificities in terms of physical endowments such as water resources,

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soil conditions and genetic resources, and pattern of land holdings, there is little chance for success. Lessons about local-level institutional innovations that the policymakers should encourage include crop-specific cooperatives along the lines of cooperatives in China, viable town and village agri-businesses that can produce and supply seeds based on location-specific traits desired as in Vietnam, Thailand and China, and many cases of niche agro-ecosystem-specific sustainable agriculture models promoted by civil society organizations within the country. Another important finding of the study is that if the innovation process involves cross learning across the domains, there are greater chances for a technology to become part of other domains of an innovation system, and thereby, to find social acceptance. For example, in the case of HRT, it appears that the hybrid rice developers in public R&D organizations did not learn from the rice-growing regions regarding the acceptability of hybrid rice and they went on to develop hybrids to demonstrate their capability and competence without learning from the context in which the rice hybrids had to be introduced. In the case of application of MAS for conferring resistance against Bacterial Leaf Blight and in the development of water-saving rice variety, the innovation process learnt from the socio-economic context and agroecological context and identified the problem and converted it into a researchable problem and provided locally acceptable solution. Agriculture in India has changed since the introduction of green revolution technology on the basis of research and extension efforts of public institutions. The postliberalization shift is problematic in that the research, production of inputs and their supply and even extension services have become concentrated in private enterprises which also exercise control over ownership of technology that lead to considerable impediments in this cross learning and participation by actors from different domains of the innovation system. Private ownership of the technology also raises questions regarding suitable variants responsive to diverse agro-ecosystems and consequences for biodiversity and the environment. To address these serious questions, the R&D organizations have to think in terms of producing agricultural technology including seed technology that is designed to promote access, environmental safety and promotion of biodiversity. At the level of policymaking, the efforts should aim at evolving interlocking technological and institutional innovations (Haribabu 2012b). The kind of institutional innovations needed may call for the creation of platforms that facilitate mutual learning among scientists, farmers and consumers in different regions. This would go a long way in moving towards a decentralized agricultural innovation system capable of including and responding to local agricultural problems. A democratic decentralized innovation ecosystem creates conditions for enhancing opportunities for inclusive—in terms of crops, regions, farmers and consumers— development. There is a need for the policy regime to be more pro-active to create an institutional ambience at different levels that makes agricultural innovation a more decentralized learning, iterative and nonlinear process integrating advances in modern biology to make agriculture economically and environmentally sustainable and socially and culturally appropriate.

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Acknowledgements I am thankful to Dr. N. P. Sarma (a rice breeder formerly associated with DRR, Hyderabad), Dr. Ramsesh Sonti of CCMB, Hyderabad, Dr. Shailaja Hittalmani, UAS Bengaluru and other scientists for sharing valuable insights regarding hybrid rice and MAS technology. I thank my partners in the SIID project for their critical comments on an earlier version of the paper.

References AERC. (2013). Spread of new varieties of hybrid rice and their impact on the overall production and productivity—In the state of Bihar. Report prepared by the Agro Economic Research Centre, Bhagalpur. Bhalla, G. S., & Singh, G. (2010). Growth of Indian agriculture: A district level study. Final Report, Submitted to Planning Commission, Government of India. Brainerd, E., & Menon, N. (2013). Seasonal effects of water quality: The hidden costs of the green revolution on infant and child health in India. Brandeis University, Working paper. http://www. ideasforindia.in/article.aspx?article_id=194#sthash.trgcWVDv.dpuf. Cassiolato, J., Soares, M. C., & Lastres, H. M. M. (2008). Innovation in unequal societies: How can it contribute to improve equality? Seminario Internacional Ciencia, Tecnología, Innovación e Inclusión Social, UNESCO, Montevideo. Chengappa, P. G., Janaiah, A., & Gowda, M. V. S. (2003, June 21–27). Profitability of hybrid rice cultivation: Evidence from Karnataka. Economic and Political Weekly, 38(25), 2531–2534. Choudhary, G. (2018). Innovation in agriculture: A study of hybrid rice technology adoption in Bihar and Jharkhand. Unpublished Ph.D. thesis, Department of Sociology, University of Hyderabad, India. Gandhi, V. R. et al. (2012). Performance and adoption of new aerobic rice variety MAS946-1 (Sharada) in southern Karnataka. Karnataka Journal of Agricultural Sciences, 25(1), 5–8. Haribabu, E. (2010). Open source route to innovations in agricultural biotechnology. In N. Asheulova, B. K. Pattnaik, E. Kolchinsky, & G. Sandstrom (Eds.), Liberalizing research in science and technology: Studies in science policy (pp. 537–539). St. Petersburg: Russian Science Academy. Haribabu, E. (2012a). Genetically modified food. In G. Ritzer (Ed.) Blackwell Encyclopedia of Globalization. Blackwell Publishers. Haribabu, E. (2012b). Biotechnology for rice crop improvement: Options for inclusive agricultural development. Policy options—No 5, IDRC supported project (2009-12): Systems of Innovation for Inclusive Development: Lessons from China and India (SIID). Haribabu, E. (2014). Obsolescence of first generation GM cotton seed: Is it planned? Asian Biotechnology Development Review, 16(3), 47–60. Janaiah, A. (2002, October 19–25). Hybrid rice for Indian farmers: Myths and realities. Economic and Political Weekly, 37(42), 4319–4328. Korzun, V. (2003). Molecular markers and their applications in cereals breeding. http://www.fao. org/biotech/docs/korzun.pdf. Kumar, P. (2012). Indigo plantations and science in colonial India. Cambridge University Press. Lundvall, B. A. (2007). Innovation system research: Where it came from and where it might go. Globelics Working Paper 2007-01. Available at www.globelics.org. Lundvall, B. A., Joseph, K. J., Chaminde, C., & Vang, J. (2009). Handbook of innovation system and developing countries: Building domestic capabilities in global setting. UK: Edward Elgar. Malerba, F. (1999). Sectoral systems of innovation and production. In Proceedings of the DRUD Conference on National Innovation Systems, Industrial Dynamics and Innovation Policy. Rebuild June 9–12. Ministry of Agriculture, Government of India. (2000). New Agricultural Policy.

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Oommen, T. K. (1974). Green revolution and agrarian conflict. Economic and Political Weekly, 6(26). Planning Commission, Government of India. (2011). Faster, sustainable and more inclusive growth: An approach to the twelfth five year plan (2012–2017). Raina, S. R. (2003). Biotechnology in the Indian National Agricultural Research System: A case for institutional reform. Asian Biotechnology and Development Review, 5(3), 27–56. Raina, R. (2011). Institutional strangleholds: Agricultural science and the state in India. In D. Narayana & R. Mahadevan (Eds.), Shaping India: Economic change in historical perspective (pp. 99–123). New Delhi: Routledge. Raina, R. S., Joseph, K. J., Ejnavarzala, H., & Kumar, R. (2010). Agricultural innovation systems and the co-evolution of exclusion in India. Paper No. 308, presented at GLOBELICS Conference, Kualalumpur, Malaysia, 8th–10th November 2010. Ramasamy, C. A., Janaiah, A., Selvarajan, K. N., & Hossain, M. (2003). Hybrid rice in Tamil Nadu: Evaluation of farmers experiences. Economic and Political Weekly, 38(25), 2509–2512. Rao, B., & Sarma, N. P. (2009). Hybrid rice in India. mimeo. Reece, J. D., & Haribabu, E. (2007). Genes to feed the world: The weakest link? Food Policy, 32, 459–479. Sen, A. K. (1999). Development as freedom. Oxford University Press. Silver, H., & Miller, S. M. (2003). Social exclusion: The European approach to social disadvantage. Poverty & Race Indicators, 2(2), 5–21. Viraktamath, B. C. (2010). Hybrid rice in India—Current status and future prospects. Hyderabad: Directorate of Rice Research. Yuan, L. P., Deng, Q. Y., & Liao, C. M. (2004). Current status of industrialization of hybrid rice technology. Report on China’s development of biotech industries. Beijing: Chemical Industry Publishing House.

Chapter 8

Turnaround in Maternal and Child Healthcare: Institutional Innovation and Interactive Learning Amarendra Das

Abstract This paper examines the impact of institutional innovation in the healthcare delivery system in rural India. With the launch of the National Rural Health Mission (NRHM), the approach to healthcare delivery has changed from a top-down model to bottom-up and participatory system. The implementation of NRHM has resulted in an increase in institutional delivery and reduction in IMR and MMR substantially. The appointment of Accredited Social Health Activists (ASHA) and formation of Village Health, Sanitation and Nutrition Committee (VHSNCs) and Rogi Kalyan Samities (RKS) have helped bring a behavioural change among the rural healthcare users. The circular flow of information between the health practitioners (innovators) and users (rural women and children) through ASHA, Anganwadi workers and ANM has facilitated interactive learning and further innovation in the healthcare delivery system. The new institutional arrangement for healthcare provisioning has brought a turnaround in healthcare use by the rural households. Analytically, the paper uses the innovation systems framework to explain the performance of the healthcare programme. It contributes to the innovation systems literature by (i) highlighting the need for and role of institutional innovation, and (ii) emphasising that institutional innovation that leads to transformation in innovation performance demands opportunities and spaces for interactive learning.

Introduction Utilisation of healthcare by the marginalised sections can be substantially enhanced by changing the healthcare delivery mechanism from a top-down approach to a participatory approach. The introduction of a new method of healthcare delivery system could be termed an innovation. In this chapter, we discuss the impact of institutional innovation in India’s healthcare delivery system on its utilisation and outcomes. A. Das (B) National Institute of Science Education and Research, Bhubaneswar, Jatni 752050, Odisha, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_8

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In order to provide accessible, affordable and quality health care to the rural population, especially the vulnerable groups, the Government of India had launched the National Rural Health Mission (NRHM) in April 2005 and, subsequently, the programme has been extended to the urban areas, thus, renaming it as the National Health Mission (NHM). The launch of NRHM/NHM brings a paradigm shift in the approach to healthcare delivery system from a supply-centric approach to a user-centric participatory approach. In the new paradigm, the key driver and agent of this health care to the rural households has been the Accredited Social Health Activist (ASHA). ASHA is bridging the gap between the modern care institutions and the healthcare users. The results of these innovations are enormous. The present study documents the institutional innovation made through NHM and the interactive learning (between communities, ASHA and healthcare providers) in the healthcare delivery system and its impact on the maternal and child health across Indian states.

Study Objectives, Methodology and Data Used The objectives of the present study are as follows: 1. To comprehend the institutional innovation and interactive learning in the healthcare delivery system in India. 2. To examine the impact of the innovation on the maternal and child health. We use data sets provided by the National Health Mission Management Information System, Census, Sample Registration System (SRS), and reports posted at the NHM website in order to understand the role of different actors in providing health care to the users. The rest of the chapter is organised as follows: section ‘NRHM and the Transformation of India’s Healthcare Delivery’ provides an overview of the NRHM and the transformation in India’s healthcare delivery system. Section ‘Institutional Innovation as Fundamental to Innovation Systems’ surveys related literature and provides the framework for understanding the role of institutional innovation as fundamental to innovation systems. Section ‘Institutional Innovations: ASHA, VHSNCs and RKS’ discusses institutional innovations and explains the role of key agents. Section ‘Concluding Observations’ summarises the findings and concludes.

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NRHM and the Transformation of India’s Healthcare Delivery About NRHM The salient features of NRHM include making the public health delivery system fully functional and accountable to the community, better human resources management, community involvement, decentralisation, rigorous monitoring and evaluation against standards, convergence of health and related programmes from village-level upwards, innovations and flexible financing and also interventions for improving health indicators. The NRHM has brought in an impressive range of innovative approaches and interventions pursued across the country. The innovations have been categorised into themes that roughly follow those laid out in the National Programme Implementation Plan of Reproductive and Child Health (RCH) II and also in the Implementation Framework of the NRHM. Table 8.1 provides a list of the innovations that have taken place after the launch of NRHM. Before the launch of NRHM, India had a top-down model of healthcare delivery system. Largely government hospitals and primary health centres were assigned the responsibility of motivating people to avail the RCH. However, this was not successful in improving the maternal and child health. This is evidenced from the high maternal mortality rate (MMR) and infant mortality rate (IMR) among the economically backward states such as Madhya Pradesh, Bihar, Chhattisgarh, Jharkhand Rajasthan, Odisha and Uttar Pradesh. Although health workers used to visit villages at regular intervals to create awareness among rural women to access the RCH care it did not have significant impact. With the launch of NRHM, state governments recruited ASHA workers with a minimum level of training for maternal and child healthcare, in almost all villages. The ASHA workers could bridge the gap between the health services provided by the public health centres and the users. The local presence of ASHA workers helped the community members avail all information regarding healthcare benefits provided by the government. Through ASHA basic medicines for fever and diarrhoea could be provided and it was possible to conduct blood check-up for malaria, etc. as and when needed. ASHA also motivated women to avail of all healthcare benefits provided by the government and get rid of traditional practices such as going to the witch or quack during illness. The presence of ASHA helped in the smooth flow of health-related information from the government agencies to the rural households. This also facilitated interactive learning between community members, ASHA, Auxiliary Nursing and Midwifery (ANM) and public healthcare providers. Circular flow of information among the community users to health practitioner via ASHA and ANM helped in continuous innovations in the mode of healthcare delivery. Consequently, the interactive learning and innovation had helped to improve maternal and child health status.

160

A. Das

Table 8.1 Innovations in healthcare delivery implemented after the launch of NRHM Category of innovation

Nos.

Safe motherhood/maternal mortality reduction

43

Innovations to promote safe motherhood and institutional delivery

24

Ambulance services and helplines for transport of obstetric emergencies

17

Strengthening skills and capacity of providers

2

Immunisation and infant and young child feeding (IFCF)

28

Adolescent reproductive and sexual health (ARSH)

5

Behaviour change communication

19

Gender mainstreaming

9

Service delivery for RCH

38

Mobile health units

11

Social franchising networks

4

Health financing

8

Contracting out management of public health services

15

Programme management

80

Incentive to improve mobility, availability and attendance of staff

22

Incentive to improve performance and range of services

8

Alternative to in-service training for improved performance

4

Community and Panchayat involvement in planning, monitoring and management of health services and facilities

29

Programme monitoring and management information system

13

Improving procurement and finance systems

4

School health

5

Total

227

Source Government of India (2009)

ASHA mobilises community members and facilitates their accessing stateprovided health and health-related services available at the Anganwadi/subcentre/primary health centres, such as immunisation, antenatal check-up (ANC), postnatal check-up (PNC), supplementary nutrition, sanitation and other services. The knowledge agent, however, does not function in silos rather in coordination with other community-based organisations of the villages such as self-help groups or women’s health committees, village Health and Sanitation Committee and even peripheral health workers, especially, ANMs and Anganwadi workers. As on 31 March 2015 as many as 907918 ASHA were engaged in India to spread the benefits of health care provided by the government. This has resulted in a substantial rise in the proportion of institutional delivery, immunisation of newborn babies and reduced both infant mortality rate (IMR) and maternal mortality rate (MMR).

8 Turnaround in Maternal and Child Healthcare ...

161

Maternal and Child Health After NRHM In order to assess the impact of the innovation in healthcare delivery, we analyse the progress of maternal and child health focusing upon two important indicators, namely, MMR and IMR between 1997 and 2013. We have also examined the proportion of institutional delivery, weights at birth of the newborn babies. In order to establish the linkage between the change in approach to healthcare delivery (from top-down to participatory), we have compared the progress in maternal and child held before and after the implementation of NRHM. In order to account for the role of ASHA in improving the maternal and child health, we have taken the number of ASHA per thousand of women in the reproductive age group.

Maternal Health Table 8.2 presents the MMR between 1997 and 2013. In order to know the impact of NRHM—which also brought a change in approach to healthcare delivery system— on the MMR we have analysed the reduction rate of MMR before NRHM and after NRHM. Thus, we have computed the compound annual growth rate (CAGR) of MMR during the pre- and post-NRHM periods, i.e. for 1997 to 2004–06 and 2004–06 to 2011–13. At the national level, MMR has fallen at an annual rate of 6% both in preand post-NRHM period. However, the laggard states have performed better as was expected of NRHM. Out of 17 states for which data on MMR are available, 12 states have witnessed faster reduction in MMR in the post-NRHM period. It may be noted that as the MMR falls it would be more difficult to achieve faster reduction. Nevertheless, we observe that 17 states have been successful in reducing the MMR after the launch of MRHM in 2005 at a progressive rate. The maximum rate of reduction in MMR in the post-NRHM period is recorded by Maharashtra (−9%). Followed by Karnataka and Andhra Pradesh (−7% each). Lagging states like Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, Assam, Chhattisgarh and some other states have been successful in reducing the MMR at the national average rate (−6%) in the post-NRHM period. In spite of the rapid reduction in MMR, there has been a wide disparity in the MMR. During 2011–13, eight states, namely, Assam, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh had MMR above the national average with Assam recording the highest MMR (300) and Kerala the lowest (61). The standard deviation from the mean values has gone down over the years and it has come down from 183.31 in 1997 to 74.18 in 2011–13. Another indicator of reproductive health is the percentage of stillbirth; Table 8.3 presents data across states during 2010–15. While the national figure has not varied much, the rate varies across states. Chhattisgarh and Odisha recorded the highest percentage (2.3%) of stillbirth in 2014–15 followed by Meghalaya, Assam and Jammu and Kashmir. The lowest rate of stillbirth was recorded by Kerala at 0.4%.

135

361

Maharashtra

Odisha

194

517

134

445

178

358

149

379

110

228

371

162

172

379

371

490

195

254

141

440

111

388

192

303

130

335

95

213

312

186

160

335

312

480

154

115.98

145

359

97

318

172

258

104

269

81

178

261

153

148

269

261

390

134

91.04

178

117

292

90

255

155

235

87

230

66

144

219

146

122

230

219

328

110

75.22

167

113

285

79

244

141

222

68

221

61

133

208

127

112

221

208

300

92

74.18

−4 −6 −5 −6 −3

0 −6 −6 −8

−4 −7

−9

−6

−5 −2

−6 0

−7

−9

−6

1

−5

−5

−4

−5

−6

−5 7

−6 −6

2

−7

−5

0

Source HDR 2011 and SRS Note MMR is deaths due to complications from pregnancy or child birth and is measured as deaths per 100,000 live births.

264

498

Madhya Pradesh

707

195

Kerala

West Bengal

195

Karnataka

Uttar Pradesh

451

Jharkhand

176

105

Haryana

Tamil Nadu

229

Gujarat

196

498

Chhattisgarh

677

451

Bihar

Rajasthan

401

Assam

Punjab

154

Andhra Pradesh

301

130.7

212

−6

408

183.3

Standard deviation

−6

2011–13

2004–06 to 2011–13 (%)

2010–12

CAGR 2007–09

1997 to 2004–06 (%)

2004–06

1997

2001–03

Maternal mortality rate (MMR)

India

Major Indian states

Table 8.2 Reduction of maternal mortality rate in India, 1997–2013

162 A. Das

8 Turnaround in Maternal and Child Healthcare ...

163

Table 8.3 Percentage of stillbirths across Indian states States

2010–11 (%)

2011–12 (%)

2012–13 (%)

2013–14 (%)

2014–15 (%)

Andhra Pradesh

0.8

0.8

1.4

1.5

1.4

Arunachal Pradesh

2.0

2.1

1.6

1.1

1.4

Assam

2.5

2.3

2.2

2.1

2.0

Bihar

2.1

1.9

1.7

1.6

1.6

Chhattisgarh

1.6

2.2

2.2

2.1

2.3

Goa

1.0

1.4

1.3

1.7

1.8

Gujarat

1.3

1.4

1.4

1.6

1.4

Haryana

1.0

1.2

1.4

1.3

1.4

Himachal Pradesh

1.2

1.3

1.2

1.4

1.4

Jammu & Kashmir

2.1

2.0

1.6

1.9

2.0

Jharkhand

1.2

1.7

1.4

1.4

1.5

Karnataka

1.7

1.7

1.4

1.2

1.1

Kerala

0.4

0.5

0.5

0.4

0.4

Madhya Pradesh

1.5

1.7

1.7

1.7

1.7

Maharashtra

1.3

1.6

1.5

1.3

1.0

Manipur

0.7

0.7

0.7

0.5

0.5

Meghalaya

2.3

2.4

2.3

2.2

2.1

Mizoram

0.8

1.4

1.0

1.0

0.9

Nagaland

1.0

1.2

1.3

1.2

1.5

Odisha

2.5

2.4

2.4

2.4

2.3

Punjab

1.5

1.4

1.4

1.4

1.4

Rajasthan

1.7

1.8

1.8

1.7

1.8

Sikkim

1.9

2.2

1.2

1.3

1.5

Tamil Nadu

1.0

1.0

0.9

0.9

0.8

Tripura

2.0

1.8

1.9

1.7

1.7

Uttar Pradesh

1.1

1.9

1.7

1.4

1.3

Uttarakhand

1.0

1.5

1.3

1.5

1.5

West Bengal

1.6

1.7

1.6

1.5

1.6

India

1.4

1.6

1.6

1.5

1.4

Source HMIS Portal Note = % of still births = [Number of still births/pregnancy outcome (live births + still births + abortion (spontaneous/induced)] × 100

164

A. Das

For the safety of mother and newborn baby, the delivery in hospital in the presence of experienced medical professionals plays a very crucial role. One of the most important objectives of NRHM/NHM is to ensure 100% delivery in medical institutions. In order to achieve this goal government is not only providing free medical care but also has launched a dedicated ambulance on-call service (known popularly by its phone number, 102) and provides financial incentives for 100% immunisation and delivery at hospital under the Janani Surakshya Yojana (JSY). The ASHA and Anganawadi workers play a crucial role in motivating pregnant women to get registered, receive all immunisation and go for regular medical check-up and deliver the baby at the hospital. All these efforts have yielded very satisfactory results. Across states the percentage of delivery at medical institutions has peaked significantly (Table 8.4). At the all India level, the percentage of institutional delivery has gone up from merely 25.5% in 1992–93 to 86.7% in 2015. The impact of NRHM is obvious from the fact that while institutional deliveries at the national level increased by only 13.2% points between 1992–93 and 2005–06, the same has increased by 48% between 2005 and 2015. The state-wise analysis shows that the poorer states have witnessed a major jump in institutional delivery after the launch of NRHM. At the all India level, the CAGR of institutional delivery between 1992–93 and 2005–06 (pre-NRHM period) was only 3.3%. In the post-NRHM period (2005–06 and 2015), the CAGR was 8.4%. In the post-NRHM period, the highest CAGR had been recorded by Nagaland (21%) followed by Chhattisgarh (18.9%), Jammu and Kashmir (15.6%) and Bihar (14.7%). More than 15 states had recorded 90% or above in institutional delivery. The states that had recorded above 99% of institutional delivery in 2015 are Goa, Kerala, Karnataka and Tamil Nadu and the lowest rates were recorded by Meghalaya (52.33%) and Uttar Pradesh (76.3%). Further, states that have performed below the national average were Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Manipur, Meghalaya, Nagaland, Uttar Pradesh and Uttarakhand. In order to measure the contribution of NRHM (thus change in approach to healthcare delivery) in increasing institutional delivery the following analysis was done. First, the rate of institutional delivery was projected using the CAGR of the preNRHM period. The projected values imply that without NRHM what would have been the rate of institutional delivery? Subsequently, the projected values have been compared with the actual value. A negative figure implies that NRHM has helped faster growth in institutional delivery. The last column of Table 8.4 shows the contribution of NRHM in enhancing the institutional delivery. Except a few states like Andhra Pradesh, Himachal Pradesh, Jammu and Kashmir, Kerala and Tamil Nadu in all other states a significant contribution of NRHM in increasing the institutional delivery could be observed. The highest contribution of NRHM in this sphere may be witnessed in Chhattisgarh followed by Nagaland and Jharkhand. Figure 8.1 presents the trend of institutional delivery for Indian states from 1992–93 to 2015. We observe a trend break in the year 2005–06, reflecting a very high growth in the post-NRHM/NHM launch period.

22.9

29.6

48.8

6

Meghalaya

Mizoram

Nagaland

87.8

Kerala

Manipur

37.5

Karnataka

15.9

12.1

Jharkhand

43.9

21.9

J&K

Maharashtra

16

HP

MP

16.7

Haryana

15.9

Chhattisgarh

86.8

12.1

Bihar

35.6

11.1

Assam

Gujarat

32.9

Andhra

Goa

NFHS I 1992–93

States

12.1

57.9

17.5

34.5

52.8

20.4

93

51.1

14.7

35.9

29

22.3

46.4

90.5

20.4

14.7

17.6

50

NFHS II 1998–99

11.6

59.8

29

45.9

64.6

26.2

99.3

64.7

18.3

50.2

43

35.7

52.7

92.3

14.3

19.9

31

64.4

NFHS III 2005–06

77.9

89.62

52.33

80.13

98.55

89.96

99.84

99.28

77.84

89.86

83.96

89.85

98.14

99.97

80.64

78.10

85.26

96.81

HMIS September 2015

Table 8.4 Percentage of births delivered in medical institutions across Indian states

5.2

21.0

4.1

6.1

−0.2 1.6

5.7

4.3

13.1

0.1

4.4

15.6

6.0

6.9

9.7

6.4

5.5

3.0

3.9

1.0

4.3

3.2

6.6

7.9

6.0

3.1

0.8

18.9

−0.8 0.5

14.7

10.6

4.2

CAGR 2005–06 to 2015 (%)

3.9

8.2

5.3

CAGR 1992–93 to 2005–06 (%)

19.3

69.9

28.5

78.4

87.0

38.5

109.2

98.4

25.2

95.0

92.0

64.0

71.3

96.8

13.2

29.2

68.3

108.0

Projected Value in 2015@

(continued)

−58.6

−19.7

−23.8

−1.8

−11.6

−51.5

9.3

−0.9

−52.7

5.2

8.0

−25.8

−26.9

−3.2

−67.5

−48.9

−17.0

11.1

Projected value–actual value#

8 Turnaround in Maternal and Child Healthcare ... 165

63.5

32.9

11.2

11.2

31.5

25.5

TN

Telangana

UP

Uttarakhand

West

All India

33.6

40.4

15.7

15.7

50

79.8

21.7

37.5

22.9

NFHS II 1998–99

38.7

42

32.6

20.6

64.4

87.8

29.6

51.3

35.6

NFHS III 2005–06

86.7

86.93

80.29

76.3

97.58

99.89

96.05

91.58

89.51

HMIS September 2015

3.3

2.2

8.6

4.8

5.3

2.5

7.5

5.8

7.4

CAGR 1992–93 to 2005–06 (%)

8.4

7.5

9.4

14.0

4.2

1.3

12.5

6.0

9.7

CAGR 2005–06 to 2015 (%)

53.3

52.4

74.2

32.9

108.0

112.7

60.8

89.7

72.6

Projected Value in 2015@

−33.4

−34.5

−6.1

−43.4

10.4

12.8

−35.2

−1.9

−16.9

Projected value–actual value#

Source NFHS I, II, III and HMIS (Health Management Information System of National Health Mission) https://nrhm-mis.nic.in Note @ Projected Value: CAGR growth rates for each state is computed from the values of 1992–93 and 2005–06 and used for projecting the values for 2015 #Negative values indicate that actual values are higher than that of projected values or, in other words, it implies that actual progress has been higher than the past growth rates

24.8

11.6

Rajasthan

14.1

Odisha

Punjab

NFHS I 1992–93

States

Table 8.4 (continued)

166 A. Das

8 Turnaround in Maternal and Child Healthcare ...

167

120.0 Andhra Assam Bihar

100.0

Chhattisgarh Goa Gujarat

80.0

Haryana Himachal Jammu 60.0

Jharkhand Karnataka Kerala

40.0

Madhya Maharashtra Manipur Meghalaya

20.0

Mizoram Nagaland Orissa

0.0 NFHS 1992-93

NFHS 1998-99

NFHS 3_2005_06

HMIS_2015

Fig. 8.1 Growth trend of institutional delivery across Indian states

Child Health The main challenges in ensuring better child health are to reduce the IMR, immunise all children from all fatal diseases and ensure a healthy birth weight. In this section, we have analysed the trend of IMR across all states and weight of newborn babies at birth. Table 8.5 provides the IMR across states from 1997 to 2013. At the national level, the IMR has fallen from 71 in 1997 to 40 in 2013. In the year 2013, the average IMR in rural India was 44 which is almost the double than in urban areas (27). There is wide disparity in the IMR across states. In 2013, the highest IMR was recorded by both Madhya Pradesh and Assam at 54 and the lowest by Goa at 9 followed by Kerala at 12. The states that had higher IMR than the national average are Assam, Bihar, Chhattisgarh, Haryana, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and Meghalaya. In order to assess the effect of NRHM on IMR, CAGR before the launch of NRHM (1997–2003) and after the launch of NRHM (2003–2013) has been compared. Here the CAGR will be negative as we expect a faster decline in IMR. As may be seen

51

85

53

85

55

Tamil Nadu

Uttar Pradesh

WB

Odisha

Rajasthan

96

Maharashtra

Punjab

94

47

MP

99

58

89

58

89

54

100

56

43

66

40

61

38

65

31

57

15

46

76

43

75

49

83

42

82

11

12

Kerala

11

51 52

Karnataka

24

53

Jharkhand

44

59

J&K

63

46 59

57

70

69

60

67

68

53

37

62

73

79

59

60

Haryana

71

Bihar

37

45

Gujarat

76

Assam

70

77

70

63

Chhattisgarh

71

T

AP

2003 U

T

R

1997

India

States

Table 8.5 Infant mortality rates across Indian states, 1997–2013

48

79

48

78

53

86

48

86

12

61

54

46

61

65

77

62

70

67

66

R

34

55

31

53

34

55

32

55

10

24

34

32

49

36

55

49

35

33

38

U

33

63

28

59

38

65

31

67

12

41

44

45

51

48

54

52

61

49

50

T

2009

34

66

30

65

42

68

37

72

12

47

46

48

54

55

55

53

64

54

55

R

27

47

26

35

31

46

22

45

11

31

30

34

41

33

47

40

37

35

34

U

31

50

21

47

26

51

24

54

12

31

37

37

41

36

46

42

54

39

40

T

2013

32

53

24

51

28

53

29

57

13

34

38

39

44

43

47

42

56

44

44

R

(continued)

26

38

17

30

23

38

16

37

9

24

27

28

32

22

38

33

32

29

27

U

168 A. Das

Source SRS data Note T = Total, U = Urban, R = Rural

Uttarakhand

39

41

53

51

15

52

51

22

56

51

19

Mizoram

28

Tripura

54

Meghalaya

21

38

14

Sikkim

30

Manipur

64

23

16

63

HP

17

Nagaland

19

Goa

49

41

32

33

16

57

16

49

16

34

T

47

2003 U

T

R

1997

Arunachal Pradesh

Smaller states

States

Table 8.5 (continued)

62

32

33

18

59

15

51

18

35

R

21

31

23

14

44

19

26

14

11

U

41

31

34

26

36

59

16

45

11

32

T

2009

44

33

36

27

45

61

18

46

11

35

R

27

20

21

23

19

40

11

28

10

14

U

32

26

22

18

35

47

10

35

9

32

T

2013

34

27

23

18

44

48

10

35

8

36

R

22

19

15

19

19

40

10

23

10

14

U

8 Turnaround in Maternal and Child Healthcare ... 169

170

A. Das

from the last two columns of Table 8.6, except in case of smaller states, most of the states have witnessed a faster decline in IMR in the post-NRHM period. At the national level, IMR has declined at 2.8% per annum during the pre-NRHM period and at a faster rate (4% per annum) in the post-NRHM period. In the post-NRHM period, Mizoram has recorded the highest rate of decline (8.1%) in IMR followed by Tamil Nadu (6.9%) and Punjab (6.1%), while 14 states have recorded a reduction in IMR faster than that at the national level. Appropriate weight at birth of the newborn baby is a crucial indicator of nutrition of pregnant woman, health and all-round development of the child. The standard weight at birth is considered to be 2.5 kg. Table 8.7 presents percentage of newborn babies having weight less than 2.5 kg across states. At the national level, the percentage of underweight newborns has declined from 16% in 2010–11 to 12% in 2014–15. In 2014–15, while Rajasthan had the maximum percentage (26%) of underweight newborns and Manipur and Mizoram had the least (4%), nine states had more percentage of newborns than the national average and those are Assam, Haryana, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, West Bengal, Arunachal Pradesh and Delhi. The healthcare sector around the world has witnessed massive transformation since the introduction of modern medicine. Significant innovations have been taking place in diagnosis, treatment, medicine and healthcare delivery system. This has undoubtedly improved the life expectancy and overall quality of life across the globe. Progress in improving access to health care notwithstanding inequalities by socioeconomic status, geography and gender continues to persist (Balarajan et al. 2011). Along with the unequal access to healthcare services its utilisation varies across social groups and regions due to information asymmetry.

Institutional Innovation as Fundamental to Innovation Systems Innovation is the key to social and economic progress and social well-being, irrespective of the sector. Concerning the health sector the innovation systems framework seeks to explain how through interaction and learning, organisations create or acquire and use knowledge and build up skills to deal with the changing and unknown futures (Lundvall et al. 2002). At its simplest, an innovation system can be described in terms of three elements: (1) all the organisations and individuals involved in generating, diffusing, adapting and using new knowledge; (2) the interactive learning that occurs when organisations engage in generation, diffusion, adaptation and new use of knowledge, and the way in which this leads to innovation (i.e. new products and processes) and (3) the institutions—rules, norms, habits and conventions—that govern how these interactions and processes occur (Hall et al. 2005). The framework can be used to reveal the nature of innovation process at the project, sector, regional and national levels. The ability to innovate is an adaptive capacity where learning

2

10

10

9

9

Tamil Nadu

UP

West Bengal

Orissa

Rajasthan

13

Maharashtra

Punjab

12

5

MP

10

10

10

11

1

14

8

13

9

11

9

8

4

10

13

13

15

16

11

18

15 11

2

−1

−1

5

1

Kerala

−1

7 11

0

2

1

Karnataka

14

13

18

13

11

18

11

14

0

14

8

−2

−1

J&K

Jharkhand

7

10

22

9

6

13

11

8

10

10

9

9

4

8

6

9

4

2

5

11

9

10

10

Haryana

11

Bihar

4

7

Gujarat

9

Assam

3

11

16

4

AP

Chhattisgarh

11

India

T

R

(2003–2009) U

T

R

(1997–2003)

Table 8.6 Changes in infant mortality rate (IMR) between different periods

7

−2

7

8

5

18

3

9

10

10

−1

2

13

7

12

12

14

7

13

0

7 10

4

8

10

12

8

−7

−2

8

3

8

10

10

9

10

−2

T

2

13

6

14

14

15

8

15

−1

13

8

9

10

12

8

11

8

10

11

R

(2009–2013) 4

U

1

9

9

5

8

8

6

8

2

7

3

6

9

11

9

7

5

6

7

U

−3.6

−2.3 –

−3.2

−6.1 −4.6 −6.9 −4.1 −3.9

−0.7 −2.1 −3.4 −1.8 −2.9

−4.8

−2.4

−4.1 −5.4

−2.3 −1.9

0.9

−5.0 −1.4

−0.3

−1.7

−4.5

−1.4 –

−4.1

−3.5

–

−2.1

−2.8

−4.1

−4.0

(continued)

2003–2013 (%)

−2.1

−1.1

−2.8

CAGR (T)

1997–2003 (%)

8 Turnaround in Maternal and Child Healthcare ... 171

−3

−3

3

0

18

19

Meghalaya

Mizoram

Nagaland

Sikkim

Tripura

21

18

0

4

Source Computed from the SRS data Note T = Total, U = Urban, R = Rural

Uttarakhand

6

14

Manipur

5

13

3

14

Himachal Pradesh

14

Goa

13

8

18

16

1

8

9

12

0

6

9

11 −6

−1

0

18

5

2

−3

−1 1

−27

−26

−23 12

8

1

12

−27

−5

−2

−20

4

8

−3 6

2 10

4

0

−2

7

−3

T

10

6

13

9

1

13

8

11

3

−1

R

(2009–2013)

5

0

U

−2

0

4

5

2

T

R

(2003–2009) U

T

R

(1997–2003)

Arunachal Pradesh

Smaller states

Table 8.6 (continued)

5

1

6

4

0

0

1

5

0

0

U

−5.6

–

−7.5

−7.0

−2.8

0.9

−9.9

−2.4

−2.1

−4.0

8.1

−1.9

−4.6

−3.3

−2.8 −4.1

−0.6

2003–2013 (%)

−5.3

CAGR (T)

1997–2003 (%)

172 A. Das

8 Turnaround in Maternal and Child Healthcare ...

173

Table 8.7 Percentage of newborns having weight less than 2.5 Kgs States/UTs Andhra Pradesh

2010–11 (%)

2011–12 (%)

2012–10 (%)

2013–14 (%)

2014–15 (%)

7

7

6

6

5

Assam

9

9

22

19

18

Bihar

16

9

7

7

6

Chhattisgarh

26

10

9

11

11

Gujarat

10

9

9

10

10

Haryana

16

17

17

13

14

Jharkhand

7

6

6

6

7

Karnataka

11

11

12

11

11

Kerala

11

11

11

11

11

Madhya Pradesh

17

17

18

14

14

Maharashtra

13

16

16

15

14

Odisha

15

18

18

19

19

Punjab

9

8

8

7

6

23

24

30

31

26

9

10

10

10

10

Rajasthan Tamil Nadu Telangana

6

Uttar Pradesh

26

24

22

14

10

West Bengal

15

15

15

15

15

7

7

6

6

6

Delhi

19

19

20

18

20

Goa

17

18

18

17

16

Arunachal Pradesh

HP

8

7

6

8

9

J&K

6

9

8

7

5

Manipur

4

4

4

3

4

Meghalaya

8

8

7

7

7

Mizoram

6

5

5

5

5

Nagaland

3

3

3

3

4

Sikkim

3

7

5

5

6

Tripura

14

11

10

10

10

Uttarakhand

10

9

8

10

7

India

16

15

15

13

12

Source HMIS Portal Note Percentage of newborns having weight less than 2.5 Kgs = Number of newborns having weight less than 2.5 Kgs/Total no. of live births reported

174

A. Das

is the central process which not only includes technological learning but also learning in the spheres of new approaches, new configurations of partners, new ways of achieving stated goals—referred to as institutional learning. In the normal flow of events, new social technologies or new ‘institutions’ often come into the picture as changes in the modes of interaction. Whether with new ways of organising work, new kinds of markets, new laws, new forms of collective action, these are called for in the process of new technologies coming into economic use. The concept of institutional learning concerns the process through which new ways of working emerge. It asks the question ‘what rules, habits and conventions have to be changed to do a new task or to do an old one better?’ Here the framework of innovation system is taken recourse to understand the healthcare delivery in India better and explain innovations executed through NHM in order to improve reproductive and child health care.

Innovations in Social Technology and Institutional Learning Nelson and Sampat (2000) define social technology as division of labour plus a mode of coordination. They have also proposed that social technologies are what many scholars have in mind when they use the term ‘institutions’. North and Wallis (1994) have proposed a similar distinction between physical and social technologies. The processes through which new institutions arise and are modified over time, usually are complex and involve much more than simple ‘innovation’ (Nelson and Nelson 2002). Different economic eras are driven by the development of particular clusters of technologies, and the institutional structures needed to exploit and support these clusters can vary significantly. In this section, we discuss the institutional learning that facilitates further innovations in social technology in the healthcare delivery sector. From the concerned literature, we observe that healthcare delivery in India had suffered from both supply- and demand-side problems until the late twentieth century. However, from the last decades of the last century there has been a rise in the supply of health care due to increasing participation of private sector and also the rapid growth of India’s pharmaceutical sector. In the last couple of decades, the Indian pharmaceutical industry has transformed its image from an imitator to innovator and accumulated technological capability (Kale and Little 2007). But the supply of drugs and diagnostics were not enough for the formal healthcare system to reach rural India and be used by the rural population. Due to several reasons including low income, lack of information and low education, the demand for health care did not come forth from the rural and socioeconomically backward communities. Many households failed to avail the health care. Advertisements through television, radio and other mass media also did not help improve the use of health care by many underdeveloped states like Odisha, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. In spite of being aware of the merits of institutional delivery and immunisation, people did not avail the health care

8 Turnaround in Maternal and Child Healthcare ...

175

on offer. This was probably due to the difficulty in moving away from one mental model to another mental model. The World Development Report 2015 argues that health outcomes can be improved by applying the insights from behavioural economics and related fields (World Bank 2015). It is observed that while a new idea provided by an outsider is not accepted easily by the community members, the same by an insider from the community gets better accepted. In case of healthcare delivery, the advertisement through radio, television or any other print or electronic media has not been effective. Even as no mass media campaigns in developing countries have been systematically evaluated, the available information suggests that they can work when paired with local efforts that involve direct and proactive interactions with women and their social networks (Renfrew et al. 2012; Naugle and Hornik 2014). With the launch of NRHM, the role of ASHA became pivotal to bridge the gap between health institutions and healthcare users. ASHA won the trust of the people and motivated them to use modern health care. By transmitting information from suppliers to users and from users to suppliers they also facilitated interactive learning to further strengthen the social technologies and institutions.

Institutional Innovations: ASHA, VHSNCs and RKS The impact of institutional innovations often bundled as a change in approach to healthcare delivery system is evident in the reduction in MMR and IMR and the rise in institutional delivery following the implementation of NRHM. What have been these institutional innovations and how have these worked on ground? NRHM/NHM has focused on mobilising the community through ASHA and Anganwadi workers to provide villagers with public health care to ensure better maternal and child health. Formation of Village Health, Sanitation and Nutrition Committees (VHSNCs) and Rogi Kalyan Samities (RKS) has helped to inculcate a participatory approach to healthcare provision. The presence of the village health knowledge worker (ASHA and Anganwadi workers) has helped rural women to access the health-related information continuously and smoothly. Similarly, formation of VHSNCs and RKS has helped in changing the health-seeking behaviour of rural women. In other words, the participatory approach to healthcare provision has brought about a cultural change in the health-seeking behaviour. Table 8.8 presents the presence of ASHA and constitution of VHSNCs per 1000 female population in the reproductive age group (15–44) and number of RKS per one lakh women in the reproductive age group. At the national level, on an average, for each 1000 female population in the reproductive age group there were 3.31 ASHA in 2015. This number varies across states. Goa has not appointed ASHA at all. The reason might be its cosmopolitan culture and economic advancement. The smaller and north-eastern states show higher density of ASHA. At the national level, by September 2015, there were 499,210 VHSNCs implying that for every 1000 female population in the reproductive age group there were 1.77 VHSNCs. The density of VHSNCs was observed to be higher in case of smaller and north-eastern states. The

17,404

24,440

11,686

40,964

41,497

31,829

60,400

59,118

3959

6354

987

HP

J&K

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Manipur

Meghalaya

Mizoram

66,713

Chhattisgarh

Haryana

85,272

Bihar

0

30,730

Assam

35,774

3827

Arunachal Pradesh

Gujarat

42,681

AP

Goa

Number of ASHA workers selected between (2005–06 to 2015–16)@

States

2,69,398

6,87,279

7,18,940

267,86,272

163,92,437

80,89,562

151,54,646

72,40,669

28,10,181

16,81,044

59,19,410

142,23,778

3,56,964

60,69,907

209,82,406

75,17,372

3,33,937

211,60,852

Female population in age group 15–44 (Census 2011)

3.66

9.25

5.51

2.21

3.68

3.93

2.74

5.66

4.16

14.54

2.94

2.52

0.00

10.99

4.06

4.09

11.46

2.02

ASHA workers per 1000 Female population in reproductive age group i.e. 15–44

Table 8.8 Presence of ASHA, VHSNCs and RKS across states

830

6349

4081

40,080

49,567

19,276

26,084

30,012

6857

3243

6049

17,613

260

19,148

8316

27,673

3772

21,873

Number of village health sanitation and nutrition committees (VHSNCs) constituted

3.08

9.24

5.68

1.50

3.02

2.38

1.72

4.14

2.44

1.93

1.02

1.24

0.73

3.15

0.40

3.68

11.30

1.03

VHSNCs per 1000 female in reproductive age

76

146

110

3099

1605

1204

2639

560

724

616

509

1538

14

958

1925

1203

185

2137

Number of RogiKalyanSamities registered

28.2

21.2

15.3

11.6

9.8

14.9

17.4

7.7

25.8

36.6

8.6

10.8

3.9

15.8

9.2

16.0

55.4

10.1

(continued)

No of RKS per one lakh women in reproductive age

176 A. Das

139,928

11,086

51,080

931,239

Uttar Pradesh

Uttarakhand

West Bengal

India

2815,01,645

224,44,075

24,02,619

435,33,944

9,23,888

181,49,490

1,55,305

153,37,919

66,43,540

100,53,278

4,88,055

Female population in age group 15–44 (Census 2011)

Source @ HMIS Portal Notes All Numbers are as on 30 September 2016 Population figure used from Census 2011

7590

Tripura

52,173

Rajasthan

666

18,593

Punjab

3905

44,583

Odisha

Tamil Nadu

1887

Nagaland

Sikkim

Number of ASHA workers selected between (2005–06 to 2015–16)@

States

Table 8.8 (continued)

3.31

2.28

4.61

3.21

8.22

0.22

4.29

3.40

2.80

4.43

3.87

ASHA workers per 1000 Female population in reproductive age group i.e. 15–44

499,210

27,711

8009

51,914

1038

15,064

641

43,440

13,104

45,407

1324

Number of village health sanitation and nutrition committees (VHSNCs) constituted

1.77

1.23

3.33

1.19

1.12

0.83

4.13

2.83

1.97

4.52

2.71

VHSNCs per 1000 female in reproductive age

29,063

729

330

1071

128

2028

30

2952

507

1741

164

Number of RogiKalyanSamities registered

10.3

3.2

13.7

2.5

13.9

11.2

19.3

19.2

7.6

17.3

33.6

No of RKS per one lakh women in reproductive age

8 Turnaround in Maternal and Child Healthcare ... 177

178

A. Das

reason might be due to small population size of villages there would be a need for more number of ASHA, VHSNCs and RKS. At the national level, there were 10.3 RKS for every 1 lakh population.

Roles of ASHA The ASHA has broadly three tasks: (i) Reporting and registration of pregnant women and incidence of malaria. (ii) Immunisation of pregnant women and newborn babies. (iii) Mobilise pregnant women, newborn babies and adolescent girls for health check-up in the village by the ANM on Mamata Divas (Village Health and Nutrition Day). Other than the fixed 2 days (Mamata Divas and for immunisation), there is no fixed work schedule for the ASHA. She needs to be available whenever she gets information of pregnancy or illness of any person in the village. Villagers immediately come to ASHA if there is any symptom of fever. She checks the blood with the medical kit available with her to ascertain whether it is malaria or any other disease and then gives medicine accordingly. Depending upon the seriousness of the fever she also calls the 108 ambulance services to take the patient to the nearest Community Health Centre (CHC). After medical examination, she also follows up the patient’s progress. In case of pregnancy, the ASHA in coordination with the Anganwadi worker and ANM registers the name of the concerned woman at the CHC and on her own register for regular follow-up, medical check-up and immunisation. Once the woman is registered, it is the duty of ASHA to remind her the dates for medical check-up and immunisation. Similarly, at the time of delivery, the ASHA calls the dedicated 102 ambulance service to take the woman to the nearest CHC for delivery. In case of any medical complication, the pregnant woman is also referred to the district hospital or the nearest medical college. In all cases, ASHA accompanies the pregnant woman to the hospital and remains present till safe delivery. After the delivery, the name of the child is also registered for immunisation at regular intervals.

Technological Innovation On earlier occasions, the ASHA worker used to collect blood samples from the people reporting fever and carry this to the nearest CHC for examination. The report used to come after 1 or 2 days. This was time-consuming and involved extra travel to the hospital. Now, the ASHA has got a blood testing kit with her, and points out the incidence of malaria immediately. This enables faster administration of medicine to the malaria patients and ensures quick recovery.

8 Turnaround in Maternal and Child Healthcare ...

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Incentive Structure for the ASHA There is no monthly salary for ASHA. She gets payment on activity/service basis. For attending the Mamata Divas she receives Rs. 50, for immunisation day she receives Rs. 150, for full immunisation she receives Rs. 100 and for health booster she receives Rs. 50. Thus, monthly an ASHA receives a total sum of Rs. 350. Along with this, she receives Rs. 600 for a successful institutional delivery case. One successful delivery case implies that the woman has been registered from the third month of pregnancy, got regular medical examination (four times) and received all immunisations and delivered the baby in hospital. ASHA receives Rs. 450 in case of late registration and irregularity in medical check-up and immunisation and only Rs. 300 in case of registration of the woman but delivered at home.

Role of the Anganwadi Worker The Anganwadi worker takes the lead role in registering the pregnant woman after 3 months and ensures that she receives the monetary benefits from the government directly through her bank account. The pregnant woman receives a total sum of Rs. 5000 in four instalments: the first instalment of Rs. 1500 is given at the 6 months of pregnancy, the second instalment of Rs. 1500 is given after delivery, the third instalment of Rs. 1000 is given after 3 months of delivery and the last instalment of Rs. 1000 is given after 9 months of delivery or the completion of all immunisation. Over and above this, the woman also receives Rs. 1400 during the delivery in hospital through the ASHA. The Anganwadi worker also measures and records the weight of the newborn every month, grading the baby into three categories: Green (healthy), Yellow (not so healthy) and Red (unhealthy). In case of unhealthy/undernutrition, the baby is referred to the Nutrition Resource Centre (NRC) and the child is given supplementary medicines and counselling to the parents for better diets and hygiene practices.

Interactive Learning One way information dissemination does not yield satisfactory outcome. Circular flow of information from user to provider and from provider to user improves the chances of success of the programme. In this case, beneficial information on health care flows from the health experts to the ANM then to ASHA and next to the user. Further, the user provides feedback to the ASHA to ANM and to health experts. An example is that of the timing of administering medicines or doing medical checkups. The ASHA worker being in proximity to the user has better information on the availability of time for user for such activities. Another example relates to change in

180

A. Das

blood testing kit. As receiving blood testing services would involve travelling to the nearest health centre (typically, at least 2/3 km away), people would be reluctant to go there, unless the disease is very serious. Similarly, if one day is needed to submit blood samples and another day to collect the analysis report, the number of users may decline. Such negligence can aggravate the disease and increase the health risks. However, when medical kit is available with the village ASHA worker, the willingness to access such services increases, reducing the risk of ill health. Similarly, in case of use of contraceptives, the initial users show apprehensions to the new methods. However, the continuous persuasion by the ASHA and ANM has allayed the fear of users. This paves the way for other users to adopt the new methods. Thus, interactive learning facilitates product innovation to meet local needs. Likewise, the presence of health activists within the community helps in better adoption of the new health care, products and practices.

Concluding Observations In this paper, we documented the implications of institutional innovation on healthcare utilisation by rural households. Recognising the limitations of top-down approach to healthcare delivery system, the government has moved towards a participatory system. With the launch of NRHM/NHM the government has engaged rural health knowledge agents as ASHA. The performance of these initiatives on ground has varied across regions/states reflecting the governance dynamics at the local level. Factors affecting state-level variation in the impact of these initiatives require to be understood for a firmer intervention that has not been attempted here. Following the framework of behavioural economics that emphasises reluctance to accept institutional and policy changes, this chapter highlights that rural households need a behavioural change which could come through continuous persuasion by somebody from their own community. Mere passing of information through mass media or instructions by an outside official may not be effective to bring behavioural change among the rural users. In this context, it has been argued here that the appointment of ASHA and formation VHSNCs and RKSs have helped mass mobilisation of rural households to avail the health care and adopt the change. The launch of NRHM is the result of institutional learning by the state, and has brought about a cultural revolution in the rural areas in terms of utilisation of health care. ASHA has played a very important role in increasing the institutional delivery and immunisation of pregnant women and children. Consequently, this has reduced the IMR and MMR significantly. The change in approach to healthcare delivery with the implementation of NRHM has been a turnaround in boosting maternal and child health in India.

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References Balarajan, Y., Selvaraj, S., & Subramanian, S. V. (2011). Health care and equity in India. Lancet, 377(9764), 505–515. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3093249/. Government of India, Sample Registration System (Various Years) Government of India. Government of India. (2009). Directory of innovations implemented in the health sector. http:// planningcommission.nic.in/reports/genrep/health/Directory_of_innovations_march.pdf. Hall, A., Raina, R., Sulaiman, R., Clark, N., Prasad, S., & Naik, G. (2005). Institutional learning and change: A review of concepts and principles. Policy Brief 21, National Centre for Agricultural Economics and Policy Research. Institute of Applied Manpower Research. (2011). India human development report 2011: Towards social inclusion. Planning Commission of India, New Delhi. Kale, D., & Little, S. (2007). From imitation to innovation: The evolution of R&D capabilities and learning processes in the Indian pharmaceutical industry. Technology Analysis & Strategic Management, 19(5), 589–609. http://www.tandfonline.com/doi/abs/10.1080/09537320701521317. Lundvall, B.-Å., Johnson, B., Andersen, E. S., & Dalum, B. (2002). National systems of production, innovation and competence building. Research Policy, 31(2), 213–231. Naugle, D. A., & Hornik, R. C. (2014). Systematic review of the effectiveness of mass media interventions for child survival in low- and middle-income countries. Journal of Health Communication: International Perspectives, 19(Supp. 1), 190–215. Nelson, R. R., & Nelson, K. (2002). Technology, institutions, and innovation systems. Research Policy, 31(2002), 265–272. Nelson, R., & Sampat, B. (2000). Making sense of institutions as a factor shaping economic performance. Journal of Economic Behavior and Organization. North, D., & Wallis, J. (1994). Integrating institutional change and technological change in economic history: A transaction cost approach. Journal of Institutional and Theoretical Economics, 609– 624. Renfrew, M. J., McCormick, F. M., Wade, A., Quinn, B., & Dowswell, T. (2012). Support for healthy breastfeeding mothers with healthy-term babies. Cochrane Database of Systematic Reviews, 16(5), CD001141. https://doi.org/10.1002/14651858.cd001141.pub4. World Bank. (2015). Mind, society and behaviour, world development report 2015. Washington, DC.

Chapter 9

Inclusion Problems and Prospects: Introducing Gender in Agricultural Research and Education P. S. Geethakutty

Abstract Inclusion of gender concerns in agricultural development has gained global recognition over the latter half of the twentieth century. Though India is committed to mainstreaming gender in agricultural development, the educational and research systems of agriculture in the country are quite slow and passive in accepting and including a curriculum for gender orientation and gender analysis competence. The related systems of rural development of late have started to consider the technological needs of women for poverty alleviation. But the need for a generic orientation on gender equality and human rights perspectives in agriculture among the personnel at the cutting edge, in the educational institutions and research, remains largely unattended. This chapter presents the initiatives in capacity building for gender analysis, technology development, technology transfer and curriculum development attempted by the Centre for Gender Studies in Agriculture and Farm Entrepreneurship Development of the Kerala Agricultural University. The analysis of these innovations illustrates the problems of and the potential for including gender in the curriculum and research agenda of agricultural universities in India. It points out policy decisions for inclusion required in this context.

Introduction This chapter explores the inclusion of gender concerns in agricultural research and education in India. Given the global attempts to understand and reverse the increasing feminisation of poverty, especially within agricultural and rural livelihoods (Chant 2007), it is commendable that India’s formal agricultural research and education As the author of this chapter, I state that I had an intimate association in institutionalizing gender perspectives in Kerala Agricultural University through setting up the Centre for Studies on Gender Concerns in Agriculture (CSGCA) in KAU in 1999. I thank Rajeswari Raina for crucial comments; inputs that helped me revise this chapter. P. S. Geethakutty (B) Formerly with Kerala Agricultural University, Thrissur 680655, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_9

183

184

P. S. Geethakutty

system makes attempts to include gender issues in its scientific contents and curriculum.1 The agricultural research and education system is one component of the broader agricultural innovation system. Besides a larger development agenda, which sets the terms for the agriculture sector and the sciences that serve the sector (Raina 2015), there are major stakeholders like the farming community and commodity consumers (of food and a whole range of industrial inputs that the sector provides), input and service providers including the agri-input enterprises, agricultural research and extension services, finance, storage, transport and other services, that are part of the agricultural innovation system. The problematization of inclusion is presented in this paper, using two cases of gender inclusion, locating and analysing the gender question within the agricultural research and education system, and between them and other actors in the larger agricultural innovation system. The paper discovers that the formal actors, especially actors in academic and research organizations in an innovation system assume that inclusion is for the other components or actors in the system. Inclusion, if any, is acceptable and can be designed and operationalized within the other (informal or field level) components of the innovation system; but the scientific and educational organizations are reluctant to accept or institutionalize gender sensitization or capacity-building programmes within their own research and teaching activities. The paper concludes in the hope that increasing acceptance and operationalisation of the innovation systems framework, and a scientific research enterprise forced to learn with and from rural India, will enable the inclusion of gender in the formal agricultural research and education system in India. In the mainstream agricultural research and education system any discussion about inclusion, is translated to effective transfer of technology, better communication methods, women-friendly and small-farmer-friendly technologies and markets.2 Some additional efforts are also made at participatory research and research on spaces (like mountain ecosystems), communities (tribal populations) or crops (millets) that have otherwise been excluded from or neglected by the mainstream.3 Attempts to mainstream gender in the agricultural sciences have always been few, and have either been discontinued or have faced benign indifference from the agricultural sciences and policy. Organizations involved in agricultural research and education, having been established for and functioning according to the linear transfer of technology (ToT) framework, are tuned to the hierarchy of the sciences and top-down ways of working. This has dominated and distorted attempts to make them part of mutually linked, interacting actors in an agricultural innovation system and include gender issues in the content and conduct of the agricultural sciences. 1 Research

fundings that target women cultivators and labour in India have been minimal. However, the Mahila Kissan Sashaktikaran Paryojana (a major programme within the National Rural Livelihoods Mission (NRLM)) launched by the Ministry of Rural Development in 2011, under the leadership of Sri. T. Vijaykumar, the then Joint Secretary heading the NRLM, highlighted and supported some critical relationships between women farmers, technologies and markets. 2 For example, see the website of the Central Institute for Women in Agriculture, Bhubaneswar (http://icar-ciwa.org.in/). 3 Many research programmes supported by the Department of Science and Technology, in its Science for Equity, Empowerment and Development (SEED) division fall in this category.

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The institutionalization of science and academia in ways that speak mainly (or only) to other scientists and academics (Acemoglu 2002) may be a reason why agricultural scientists in India see themselves as their primary clients (World Bank 1990). Being professionals employed to generate technologies for farmers, specific crops or production systems, they are conscious of other clients. But as professionals whose work is best understood and accredited (for career advancement and scientific merit) by similar experts in research and education, they see themselves as their primary clients. They, therefore, are reluctant to acknowledge or make attempts to include gender concerns in the content of scientific research or education. At its most benign and acceptable form, gender concerns in the institutionalization of agricultural science and education take the form of more number of women in these systems. Globally, several development compacts, covenants, agreements, policies and reports clearly indicate that currently gender is acknowledged as an important concern to be addressed for development and particularly for agricultural development. The SOFA report of FAO (2011), Gender in Agriculture Resource Book of World Bank, FAO and IFAD (2009), and the Manual on Engendering Research, Extension and Development of IFPRI (2011) have brought out striking facts on the impacts of gender inequalities in developing countries. They have brought out field evidence that gender equity can be practiced through gender-integrated agricultural development efforts, which should be an eye-opener to different decision makers and actors. The Agricultural Innovation System (AIS) framework promoted by the World Bank (2006) also reiterates inclusion of women as critical actors of agricultural development and treating gender as a cross-cutting theme in the multi-stakeholder engagements of innovations in agriculture. These initiatives create some hope that ‘all is going to be well’ for women in agriculture, and for gender relationships and diversity in agriculture because they would now get integrated into agricultural development. This paper stems from the concern and some consternation that this might not be the case. In countries where agriculture is life and livelihoods for millions of women, and a professional arena for a few hundreds who make the formal scientific and policy decisions for agriculture, inclusion of gender in the organization and conduct of scientific research and education remains a painful necessity. The next section presents two cases drawing upon the author’s, experiences and observations, and from the author’s efforts to integrate gender into the research and education in the Kerala Agricultural University (KAU) by establishing the pioneering Centre for Studies on Gender Concerns in Agriculture (CSGCA) in 1999 which was later renamed as the Centre for Gender Studies in Agriculture and Farm Entrepreneurship Development (CGSAFED) in 2007. The semantic shift in the name of the centre is a critical point. This paper considers the absolute necessity of practicing gender integrated research and education in agriculture. It argues that it is high time that gender perspectives are ‘truly’ integrated into research and education systems of the various countries, rather than remaining merely an accepted addition to be included as part of technological innovations and field level or farmer education. Using two case studies (i) on initiating efforts for engendering education and research and (ii) on productively engaging with and responding to demands for gender-friendly innovation in the field, the paper illustrates the initial response which is theoretically anticipated

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from the formal agricultural research and education organizations. Following this, the paper examines the prevalent thinking about gender inclusive research, technologies and education in the context of agricultural innovation systems (AIS). It then reviews the efforts, best practices and experiences of including gender in formal agricultural research organizations and curricula, and discovers how the hierarchy of top-down scientific research decision-making and thereby of education, pervades the modern conceptualization of AIS, which is essentially in the linear pipeline science, technology, innovation (STI) mode. Efforts to include gender in formal agricultural research and education organizations have major lessons for enabling dynamic inclusive AIS. Potential strategies of including gender can create genuinely systemic interactions and learning among innovation system components in an AIS.

Gender Integration in Agricultural Curriculum and Farm Sector Innovations in the Kerala Agricultural University The Kerala Agricultural University (KAU) in Kerala state of India had initiated the CGSAFED (then CSGCA) in 1999 as a new initiative of the University. This progressive initiative sanctioned by the decision-making body of the KAU was then highly appreciated and welcomed by all the sister concerns in the State and by related national and international level agencies. Kerala being ranked first among the states of India for highest literacy rate (general and female) and fair sex ratio, it was obvious that such a progressive initiative in agriculture would be piloted by a University in the state. In fact, the high literacy standards among women in Kerala is considered to be one major factor contributing to the good health indicators in the state which in turn is the hallmark of the Kerala Development Model. The apex policy making body of the KAU has taken the proactive step to institutionalize the promotion of gender perspectives in agriculture and gender sensitivity in the university environment by establishing the above-mentioned centre. The overarching objective of the CGSAFED is to bring about gender sensitivity and gender perspectives in research, extension and educational efforts in agriculture and allied fields set in the larger context of natural resource management, thereby increasing and facilitating women’s role and participation in agricultural development along with men and attaining gender justice in the context of the planned efforts for socioeconomic development in Kerala and the country at large. The Centre has specific objectives of gender integration in agricultural development activities under six key functions; research, capacity building, policy advocacy, entrepreneurship development, documentation and networking. The Centre has been taking up a number of pilot initiatives on gender integrated research and extension, gender-integrated curriculum, gender analysis of farming systems, women-friendly technology and enterprise promotion, women in agricultural policy advocacy and capacity building of R&D personnel and farmers, in collaboration with various international, national and state level agencies. Being the pioneer of its kind under the State Agricultural

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Universities (SAUs), the Centre has been playing key roles in various decisionmaking bodies in the country as well. The case of two gender-integrated projects in research and curriculum undertaken by the CGSAFED is presented here. They are the following: (i) Engendering of agricultural sciences curriculum (ii) Women-friendly technology promotion (i) Case 1. Engendering the Agricultural Sciences Curriculum The project ‘Building Gender-Integrated Agricultural Curriculum, Resource Materials and Capacity’ implemented by the Centre for Studies on Gender Concerns in Agriculture (CSGCA) with the support of the FAO-ROAP Bangkok, during 2002 (Geethakutty et al. 2004) was a purposefully targeted effort at evolving a model approach for ‘Engendering Agricultural Education In India’. The premises of the project were founded on principles of human rights and social justice, and on the evidence of the substantial economic contribution of both women and men in agriculture in the state. It was recognized by the KAU that agricultural development initiatives tuned to the status quo remain predominantly male-oriented and genderinsensitive. The situation demanded concerted efforts at capacity building for gender responsive development initiatives in the system—for the present and future personnel pursuing research, technology development and transfer of technology to their target groups. The project had identified that this, in turn, necessitates the need of inculcating within the agricultural education system, a culture and learning perspective that can promote gender responsive agricultural and rural development which in the long run will shape the national agenda of growth with the assurance of gender equity. Hence the project implemented during April–November of 2002 in Kerala had set the following specific objectives: (i)

Develop gender-integrated approaches in the curriculum of Undergraduate (UG) courses in KAU, (ii) Identify and develop supporting resource materials required for the gender responsive agricultural education, (iii) Capacity building of scientists for gender responsive teaching of agricultural courses, (iv) Develop a pilot programme approach for integration of gender dimensions in agricultural education. The project, through brainstorming discussions, consultations, participatory methods of group work, involved the different stakeholders—Vice Chancellor, ICAR Deputy Director General (Education), deans, directors, academic officers, scientists, students, agricultural development personnel, farmers and gender experts in the scenario of agricultural education and recommended the following possibilities for integrating gender concerns in the agricultural curriculum: (i) Introducing a two-credit course (1 + 1) on Human Centred Agricultural Development for all UG programmes in relation to technologies or crop/animal/enterprise management:

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(i) (ii) (iii) (iv)

(v) (vi)

Introduce the related dimensions of gender in different courses of the different disciplines, Introduce a separate module on gender sensitization in the field training course of Rural Agricultural Work Experience (RAWE), Introduce elective courses on Gender Studies in Agriculture for specialization, Include activities on gender issues and gender justice as part of student’s community out reach programmes (village adoption/ National Service Scheme, etc.), Capacity building among scientists for gender responsive agricultural education and Develop the needed resource and reference materials.

Among the project outputs were relevant courses, areas of gender concerns to be integrated and methodologies of teaching in the existing syllabus of the B.Sc. (Agriculture) Degree programme of KAU. The course content for the basic course to be introduced for all the UG courses in SAUs (which is to be made locally/regionally appropriate) was prepared. A 5-day module of gender sensitization to be included in the RAWE programme of all UG courses was proposed and a series of model capacity-building programmes for the teachers and scientists of the KAU was conducted. A documentation of all the events in the execution of the project and an improved action plan which can serve as a model for any other agricultural university in initiating action towards engendering of agricultural education was also provided. These recommendations were submitted in 2003, to the Kerala Agricultural University’s Academic Council, with a proposal for including a 0 + 1 course for all UG programmes. But the Council was not able to include the course as part of its UG programmes due to the burden of the extra course credits it will add to the approved credits of the degree programme (Geethakutty 2016a). But later, it was added as an optional course under the B.Sc. (Agriculture) programme of the University and is offered if any student ever opts to undergo the course! It is reported that students have seldom opted to register for the course.4 It is important to note here that the intention of recommending such a course on gender perspectives is to build the sensitivity among the graduates which is not being created by the mainstream curriculum of agriculture. Without an orientation to the topic (which was to be provided by the course), it was impossible for the students to be interested to opt for an optional course on gender in the sciences and education. This vicious circle has ensured that the course remains listed, but is never taken, even within KAU! In continuation of the above project recommendations, the Centre in KAU together with the M S Swaminathan Research Foundation (MSSRF), a Chennai-based NGO in India had developed a full-course module on ‘Gender Issues in Agriculture and Rural Livelihoods’ and a resource book for undergraduates in agricultural universities 4 As

the Project leader and a committed gender researcher, the author checks periodically and has observed ‘no takers’.

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(Ahamed 2004). The team approached the Indian Council of Agricultural Research (ICAR) in 2004 with a request to include the same as a compulsory course in the UG curriculum of all the SAUs in India. The ICAR Deans Committee had then left the decision of introducing a full course on gender perspectives in agriculture to the discretion of the individual SAUs and included a portion of the course module on gender in agriculture as a part of an introductory course on agriculture. Thus, though in a very limited way, it can be claimed that current topics on women and gender in agriculture are included in the agriculture curriculum of SAUs in India. For example since 2007, in KAU, these were included in the syllabus of the B.Sc. Agriculture Course titled AGRO – 113 (New) Introductory Agriculture (Ancient Heritage, Agriculture Scenario and Gender Equity in Agriculture) with a course credit of (1 + 0) as offered from the Department of Agronomy. The course content shows that the topics currently covered on women and gender are “Women in Agriculture: multifaceted roles and tasks, work stress factors, Nutritional and rural life standards, role in household design making, drudgery reduction for farm women, women-friendly agricultural technology; Empowerment of women; Group dynamics for farm women, rural women”. (KAU 2009)

In appreciation of the effort and to support the teachers who may be offering the course, the CSGCA and the MSSRF had then provided the above-referred resource book to the Vice Chancellors and Deans (Agriculture) of all SAUs in India in 2007. As part of its advocacy for engendering agricultural education, the CSGCA had also offered two targeted national level training courses on ‘engendering agricultural research, education and extension’ for the benefit of a select group of scientists and teachers under ICAR and SAUs. Any follow-up effort to assess the impact of the teaching on women and gender or the views of the teachers who offer the course or the response of the graduates who have undergone the course are yet to be designed and taken up. But random informal checks done (by the author of this chapter) on different occasions with various SAUs have revealed indifferent attitude and/or lack of care given to the referred section of the course by the teachers. In KAU, the students are being provided with a good discussion on the topic as part of the course; but that is because the CGSAFED is located in KAU. (ii) Case 2. Women-Friendly Mechanized Paddy Transplanters and Women Run Custom Hiring Units promoted by KAU Effective and efficient participation of women in agriculture necessitates both availability and accessibility of women-friendly technologies suitable for various roles. These roles may be as farmers, unpaid family farm labour, paid farm labour, agribusiness operators and members of collective farming groups. The technologies used in these diverse roles may be drudgery alleviating, ergonomically suitable and timesaving farm machinery or effective tools for easing the manual work women carry out in the field or a variety of crops or a breed of an animal or a fish suitable for rearing by women, or efficient products or easy procedures useful for the various tasks women carry out during farming or post-harvest handling of the produce. The KAU has an illustrative case as to how the University had evolved mechanized paddy

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transplanters suitable for women and popularized the same among the farm women labourers of Kerala and also transformed these labourers (women) into entrepreneurs. The transplanting operation in paddy cultivation is a woman-specific task in almost every region in the country and involves extreme drudgery.5 In Kerala, paddy transplanting has always been a major employment opportunity for farm women labour till the latter part of the twentieth century. But with the rapid shrinking of paddy fields (due to urbanization, abandoning of rice cultivation by the farmers, and higher wage rates claimed by labour movements), most of those labour women were left unemployed. Rice is the staple food of Kerala and in the 1970s, the State was in possession of around eight lakh hectares of paddy lands. This period onwards, largescale outmigration of male youth to Middle East countries happened. This affected the availability of human resource in the farming sector; young farmers from landowning families and male workers from labour class families. Socio-economic changes occurred with the ‘Gulf money’ flow reduced the importance of farming, brought in a rampant consumer culture and reduced women labour availability also from labour class families. Land owning families abandoned paddy farming due to the scarcity of labour. Simultaneously, under the influence of Gulf money, came large scale purchases of lands and filling up of wetlands for construction. The low profitability level of paddy cultivation in comparison to cash crops like rubber, cashew, banana, etc., and frequent climate-related disasters also dissuaded the farmers from taking up paddy cultivation. With rice and wheat supplies through the public distribution system reaching the state, there was little incentive for the State Government to encourage paddy cultivation then. As a result, now, there are large tracts of paddy lands kept fallow in the state. To be specific from 8.82 lakh hectare in 1974–75, the paddy area has come down to 1.96 lakh hectare in 2015–16 (Govt. of Kerala 2017). This, in fact, was a change which had badly affected the opportunities of livelihood among women field workers. It is important to note here that rice is a crop where the gender roles (transplanting, weeding, harvesting, threshing, winnowing, etc.) are highly women specific. Hence, the women workers were largely displaced from the paddy fields. The newly emerging plantation crops were largely male-oriented (Geethakutty 2004). The spurt of Gulf money and associated urbanization, increased education opportunities and availability of work in the tertiary sector for young men and women also drove farm labour out of agriculture. By the turn of the century, women in Kerala began searching for livelihoods in the tertiary sector. This created a vicious circle of furthering labour scarcity, thereby making the remaining rice farmers also to discontinue rice cultivation; and large tracts of rice fields were left fallow.

5 This

applies to all the traditional rice-growing cultures of the country, and does not apply to the post-green revolution rice growers like Punjab, Haryana and Western Uttar Pradesh where men do the transplanting operation. Let us recall that rice begins to occupy more than 98% of the kharif cropped area in these parts because gypsum application and standing water in the fields became a necessity to leach down the salts in the soil surface in these semi-arid (less than 600 mm annual rainfall and extremely hot summers) tracts that had become increasingly alkaline in the immediate green revolution years. The turning point was gypsum subsidy and minimum support price declared for rice in the early 1970s (Raina and Sangar 2002).

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The Government, Local Self Governments (LSGs) and the KAU tried to intervene and reverse the trend of fallowing of rice fields through group farming efforts and other experiments in Palakkad, Thrissur and other rice-growing districts. Introduction of mechanization for the major operations of paddy cultivation was a component of such interventions. Accordingly, towards the beginning of 2000, mechanized paddy transplanters, combine harvesters etc., were tried in Kerala to support the wetland farmers to sustain paddy cultivation, As a result of these efforts, a considerable area of rice fallows were brought back to rice farming. The popularization of mechanized paddy transplanter was one of the important factors, which could make this difference in the State’s rice sector. The scientists of KAU had played a major role in the process. The paddy transplanter was a boon to farmers as it was saving labour and time required for transplanting operations; at the same time, it was replacing the existing women labour from their occupation at a faster rate. The machine was operated by men workers as the women were not trained; moreover, the machine was not women friendly in operation as well. It was at this point that the CGSAFED decided to bring a mindset change among the scientists. The scientists involved were persuaded to bring in changes in the structure of the machines and to train women workers also to operate the machine. Kerala’s paddy sector has made several institutional innovations to facilitate technological changes. The state has several women-run custom hiring units of mechanized paddy transplanting, which is one of the major factors that has helped the state to bring back rice cultivation. Trained women labourers and youth registered as custom hiring societies of mechanized farming services are providing transplanting services to rice farmers in most of the districts of the state. Farmers rely on these agencies for obvious reasons. Their service is perceived as advantageous as there is a significant reduction in the cost of cultivation. Studies from the CSGCA, KAU during 2004 had observed that on adopting mechanized transplanting, there is a cost reduction of around Rs. 3500–4000 per acre in the cost of cultivation of rice. The farmers point out that mechanized transplanting operation can be completed within hours, without much worry of labour management. It is pointed out that mechanized transplanting requires only one and a half hours for transplanting one acre of paddy field, compared to 12–15 persons full day manual work. Farmers are also convinced of the low seed requirement rate and easy weed management possible in mechanized rice planting. The Yanchi model of mechanized transplanter with a reciprocating system of picking and transplanting has been fine-tuned for Kerala women labour and rice fields by the KAU’s farm machinery researchers through various field experiments and customization process with the company. The women labour group were trained to use this model with mat nursery seedlings aged 12–18 days, for mechanized transplanting. In this mode of transplanting operation, only two persons are required—one in the driving seat and another person to take care of the seedling tray. The women operated transplanting units were providing the transplanting service at the rate of Rs. 3500–4000 per acre during 2011. In those transplanting seasons, one custom hiring transplanting unit of two women was able to earn an average daily income of

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Rs. 1500 (Geethakutty et al. 2011). In the present situation, in a year, about 3– 5 months paddy transplanting work is available to them. Only some of the women-run custom hiring units could own machines and others are still hiring machines from the stations and Krishi Vignan Kendras (KVKs) of KAU and local village panchayaths. Only a few panchayaths have procured their own machines and hence most often these women may have to wait for the availability of machines from the University. The achievement that Kerala could make in popularizing machine operated paddy transplanting by women labourers is to be viewed as an outcome of a series of concerted initiatives of multi-stakeholders in the context such as KAU, State Department of Agriculture, Panchayati Raj Institutions (PRIs) of Kerala, ICAR, farmers and women labour groups. During late 1980s, the Farm Machinery Department of the Kelappaji College of Agricultural Engineering Technology (KCAET) of KAU with the funding of the Central Institute of Agricultural Engineering (CIAE), Bhopal of ICAR had started the experiments of introducing mechanized transplanting in the state with available models of the machine from IRRI and China. The continued effort of Dr. K. Siva Swamy, Professor of KAU, and his team became successful in 1996. Through continuous fine-tuning and adaptations carried out with the company, they could succeed in refining a suitable model of mechanized paddy transplanter for Kerala and India. Initially, only male labourers were trained to operate the paddy transplanters. It was at this time the CGSAFED in 1999 had started various workshops to sensitize and persuade the scientists involved to take care of the gender justice involved and to protect the traditional transplanting workers (i.e. women labour) with a necessary skill for operating the machine. As a result, selected women labourers were also trained in using the Yanchi model of paddy transplanter and Ms. Girija Surendran, Ms. Indira Lawrence and Ms. Latha Ravindran of Thrissur District and Ms Sainaba, and Ms Baby from Tavanur, Malappuram became pioneering lady operators of mechanized paddy transplanter in Kerala, around 2002 and 2003. Later with their woman labour friends, these women had started to take up contract work for rice farmers in various parts of the state. Then it was not an easy job for these women workers and they had to struggle in many ways. In the field, they had to face—non-acceptance from farmers, devaluing of women’s work and less pay, frequent repair and maintenance of the machine, non availability of machines and social ridicule. During this period, CSGCA, KAU came forward and had taken up a facilitating role in the promotion work of the women and had held a number of stakeholder workshops with farmers, scientists and labourers to address the issues involved. The availability of the costly machine and maintenance of machines were problems for all these women to take up the service as an enterprise by themselves. The continued handholding support rendered through follow-up trainings of machine operation, maintenance and hiring facility extended from the Agricultural Research Station (ARS) of the KAU in the leadership of Dr. U. Jaikumaran, Professor of Agronomy became a turning point for the initiative. In continuation of this, the hiring support extended by selected Grama Panchayaths (PRIs) as part of plan fund of the State also had helped these women to launch their custom hiring service of mechanized transplanters. The ARS of KAU is presently providing large scale training for youth and women in the use of farm machinery together with

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various local self-government bodies. Large troops of trained labourers under the name ‘Green Army’ (Vadakanchery Block Panchayath, Thrissur District) and ‘Food Security Army’ of KAU, and so on are now available to take up mechanized rice farming in the State. The Ministry of Rural Development (MORD) has sanctioned a large scale funding under Mahila Kissan Shashaktheekaran Pariyojana (MKSP) for the up-scaling of the model in the state as part of the Rural Livelihoods Mission in the three Districts (Malappuram, Thrissur and Palakkad) of the State. This case has very well indicated that a research organization with the capacity for technological innovation and gender sensitivity can restore livelihoods of farm women sustainably, and can mobilize and involve different stakeholders in sustaining the process. The collective farming efforts of the Kudumbashree Mission (The Poverty Alleviation Mission) of Kerala initiated in 1998 had promoted farming as an enterprise for income generation among women groups of low-income families in the State by 2006. The availability of fallow lands in the state became one favourable factor to support the women to take up farming. These women who belong predominantly to landless and marginal landowning families, are otherwise without sufficient land to take up farming as enterprise. The availability of capital required for farming was solved by the timely intervention of the Joint Liability (JLG) Scheme of the NABARD. The scheme is a national level intervention of the NABARD to finance farmers who are cultivating on hired or leased lands. Now, there are more than 70,000 numbers of JLG women farmer groups functioning under Kudumbashree in Kerala and they are farming in an area of around fifty thousand hectares (with around four lakh members). Now the spread of women’s Joint Liability Groups farming is worth pinpointing here. The change brought out by the women groups in the farming sector of Kerala is much appreciated; but the required large scale convergence from the parent development department, the Department of Agriculture, for the sustainability of the women farmer’s participation is still awaited (Geethakutty 2016b). The passive approach often observed among the decision makers and field functionaries of Agricultural Department in the context (see Case 1 here about gender responsive agricultural research and education) who are mainly graduates of farm universities is one typical example. The basic argument for the required teaching on gender concerns and women’s role in agricultural education and research is ignored or resisted when expressed!

Engendering Agricultural Research and Education for Innovation The innovation system perspective in agriculture demands that an agricultural education and research system play a more accountable role in moulding and equipping its human resource capacities to function within the dynamic network of stakeholders in the innovation system.

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An Agricultural Innovation System (AIS) is a network of organizations, enterprises and individuals focused on bringing new products, new processes and new forms of organizations into economic use, together with the institutions and policies that affect their behaviour and performance. The innovation system concept embraces not only the science suppliers but the totality of and interaction of actors involved in innovation as well. It extends beyond the creation of knowledge to encompass the factors affecting demand for and use of knowledge in novel and useful ways (World Bank 2007, pg. xiv).

The conceptual description of AIS clearly depicts how agricultural research systems should get equipped and be ready to depart from the notions of the usual isolated processes and disconnected actors such as ‘production of technology’, ‘transfer of technology’ and ‘end users of technology’. However, even in this conceptualization of the AIS as a totality of actors and interactions among them, the hierarchy of science remains. As propounded here (World Bank 2006), the ‘science suppliers’ are to go beyond the creation of knowledge and engage with all the factors affecting demand for and the contexts in which the knowledge is used; a little extension of the ‘supply syndrome’ that characterizes the green revolution agricultural sciences (Raina 2014). In this conceptualization, it may be argued that the AIS framework is not a totally different concept and experience for those researchers and extension personnel involved in processes of participatory technology development, in a conventional linear agricultural research system. The crucial difference, that the research and extension personnel in an AIS know and interact, and partner in equal terms with all relevant stakeholders and processes involved, is ignored. These may be actors (individuals or organizations) in; the social system, policies, institutions and organizations involved, enterprises, market and the ‘end users’ who are equal and responsible knowledge actors. The needs and demands of various actors with respect to the research and technology may have to be met accordingly by evolving appropriate research products and development processes as well. But this means that the scientific community is a willing equal partner, learning from and sharing knowledge with the other actors. Both the cases presented here, one a relative failure and the other a great success, reveal that this dynamic role expectation on the part of agricultural research within an AIS is yet to be recognized. It is not yet brought into the mainstream research and teaching system through the curriculum of the agricultural universities. The teachers of the system are also yet to be oriented to imbibe the required capabilities and in turn, enable learning of the same by their students and clients! Recognizing the explicit cross-cutting focus the AIS has on actors with gender diversity (World Bank, FAO and IFAD 2009), one important requisite among the set of capabilities identified essential for an effective role transformation on the part of every researcher and development worker of AIS, is his/her gender sensitivity and skill for gender responsive analysis (Kingri 2010). Earlier, as a part of the production system and farming system focus as well, multidisciplinary approach had been introduced and gender analysis was recommended as an essential analytical tool in the social sciences to define better who does what and to align research and development priorities and resources and participation (Godley et al. 1997). In these efforts, this

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requirement was the exclusive responsibility of the social scientists; in the AIS, it becomes a requirement for all the stakeholders in an education and research system— whether the top-level research management or the functionary at the grassroots. This is a paradigm shift which we have to note. It may also be worth to note here that the need for gender included curriculum in universities and gender sensitivity on the part of all actors in research system had been recommended as a measure for fostering efforts of innovative research by the European Commission (2012). The IFPRI manual on engendering research, extension and development (Meinzen-Dick et al. 2011) had discussed how an engendered research in agriculture can contribute through better research products to attain better gender equality in agriculture and poverty reduction, though its focus was a bit skewed towards the roles of women in post-harvest sub-sectors, home garden and food and nutrition security. But the manual had clearly established the rationale for considering gender included agricultural research in relation to agricultural productivity, food security, nutrition, poverty reduction, and empowerment. It had also indicated that women play a critical but often under-recognized role in these situations and face greater constraints than men. It has further stated that ‘Although gender inequality involves comparisons between women and men, in most (but not all) cases the gender gap penalizes women. Recognition of this can set the stage for identifying ways that the agricultural research system can redress these problems and contribute to productivity and equity’. In the manual (ibid.), the increased effectiveness of agricultural research by producing crops that reflect the needs not only of farmers, but also of processors and others along the value chain also had been highlighted. It had further indicated that gender-responsive agricultural research can result in greater sustainability of the environment and of agricultural development projects. The manual has also indicated that gender inclusive research priority setting, gender sensitive impact assessments and research monitoring processes lead to better research outcomes. But the manual is silent about the processes like engendering of curriculum and trainings that is essentially needed for building the gender sensitivity and capability needed for carrying out engendered research and extension in a proactive way. The arguments put forth for including gender in research and curriculum by the Gender in Agriculture Resource Book (World Bank, FAO and IFAD 2009) in the context of AIS had a more holistic and dynamic view with respect to the need for gender inclusion in research. It says that ‘innovation is to be viewed as a social and economic process that draws on discovery and invention but recognizes that the most important role that these innovations have is to improve the livelihoods of all people, especially those of women and other vulnerable groups’. In this approach, women are included as critical actors and they are included not only because they are in need but ‘rather because they are needed if more intensified competitive smallholder agriculture is to survive and provide sustainable livelihoods to a large percentage of presently vulnerable rural populations’. It is also substantiated that the ‘active engagement of women in innovation is no longer a right, but is an imperative to future farming, processing and marketing systems development’ and the new role of gender is viewed as a need to sustain knowledge generation (Speilman and Birner 2008). The sourcebook has viewed the need for gender focus in informal education,

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in-service training of development personnel and the need for an increasing number of female students in agricultural education and agricultural service. The arguments provided on the quality that can be attained in research and innovation by keeping gender balance and diversity perspectives in research team are worth recognizing in the context of the case studies presented here. Despite all these international agencies arguing for the need to integrate gender into research and education, they are silent on how the change can be attempted and attained in the conventional research organizations and agricultural universities. Not only is far too little attention paid to identifying the need in these organizations, there is also a limited understanding of the practices and processes involved in engendering agricultural curriculum. Ultimately, it is to be inferred that at the global level this much desired gender sensitivity and gender responsive research and extension capabilities, which are to be moulded through agricultural education systems and curricula remain practically unattempted in the mainstream agricultural education systems. In the broader conceptualization of the AIS, it is not enough to integrate gender in technology transfer or ensure women’s participation in field programmes; all the components of the AIS and actors therein have to be aware of and include gender concerns in their core activities and in their interactions with each other. It is time to recognize that unless and until the processes of gender integration in education and research are attempted, the goals of gender integration in agricultural innovation and development outcomes will be confined to these manuals and reports!

Gender Integration in Agricultural Research and Inclusive Innovation Systems in India The Indian Council of Agricultural Research (ICAR) heads the national agricultural research system in India with its 97 ICAR institutes and 47 State Agricultural Universities across the country (http://www.icar.org.in). The ICAR has a directorate dedicated to take care of gender in agricultural research. The Working Group on Agricultural Research and Education constituted by the Planning Commission, Government of India for the formulation of the Eighth Five year Plan (1992–97) had recommended the establishment of a National Research Centre for Women in Agriculture (NRCWA) and accordingly, the ICAR established the Centre in 1996 at Bhubaneswar which was later upgraded as the Directorate of Research on Women in Agriculture (DRWA) in the year 2008. The mandate of the Directorate is … carrying out basic research, strategic and applied research, appropriateness of available farm technologies/ programmes/ policies with women perspective and to do training and consultancy for promoting gender mainstreaming in research and extension for empowerment of farm women and capacity building of scientists, planners, and policy makers to respond to the needs of the farm women (http://www.drwa.org.in/).

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The DRWA had a sub-centre with a focus on evolving women-friendly technologies at the Central Institute of Agricultural Engineering, Bhopal; this Centre had evolved a number of drudgery reducing farm implements for women in agriculture. In addition to these, from time to time, the DRWA had been engaged in implementing national-level networking research projects on gender and women-related topics in agriculture with selected Universities and Research Stations. Apart from the DRWA, the ICAR had been implementing various research projects of gender analysis in farming systems, women included livelihoods, and drudgery alleviation of farm machineries for women in agriculture, as part of its National Agricultural Technology Project (NATP) and the recently completed National Agricultural Innovation Project (NAIP). Beyond these limited and isolated attempts of including gender in its research efforts, ICAR is yet to visualize and plan for a system-wide institutionalization and capacity development for gender responsive research. Similarly, in the context of the orientation of gender perspectives in the curriculum of agriculture also, ICAR is yet to introduce comprehensive policies of gender inclusion in the SAUs it supports and provides accreditation for. At present, the agriculture curriculum of SAUs in the country has only nominal coverage and content on gender orientation. In this context, to project its future potential, ICAR can showcase a number of success cases and best practices piloted in India itself. The pilot projects that KAU has carried out for gender integration in research and curriculum from its CGSAFED are worth highlighting. The practical observations and suggestions of the scientists involved in those pilots may also help India or any other national system to plan for its comprehensive policies and strategies of gender included research, education and development of agriculture.

Lessons Learnt and Strategies Suggested An agricultural research system that generates technologies to be transferred down the line or imparts knowledge to students and other trainers (or extension workers), places itself above the need for gender sensitization and gender-friendly institutional changes within. This has been demonstrated in this chapter. As indicated earlier, the CSGCA in 2007 was rechristened as the CGSAFED. Even without the case studies here, this rechristening, capturing the instrumental value of gender in enabling better or more income-generating agriculture and entrepreneurship speaks for itself. It contradicts the need for more focus on researching and learning about gender in the agricultural sciences, curriculum and pedagogy to ensure informed decisions in the sciences, so as to ensure future generations of researchers, agricultural officers and other service providers who are conscious of gender concerns and equipped to tackle them in their labs and in the field. These instrumental values of gender are far removed from the principles of human rights, justice or advancement of science that were enshrined in the initial attempts to include gender in research and education in KAU. The scientists, faculty of KAU are willing

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to generate and transfer technologies for women, provide additional handholding, financial and governance support for these new women’s enterprises in the field. But the system in general is yet to be convinced of the need for re-oriented education or training within the sciences or the curriculum and to accept ‘gender and agriculture’ as an area of research study to be established in the agricultural science establishments. It is difficult for an established and already gendered ‘system’ functioning in a patriarchal culture (Beneria and Sen 1997) to accept the change in orientation that comes with orientation on gender sensitivity. The system, as we have seen in the case studies presented here, will be very slow to acquire the required mindset and will make it a point to stall the changes needed with formal procedures and sanctions. This trend was clearly reflected in the non-acceptance of the proposed course on Gender Perspectives in Agriculture in KAU. The required decision for inclusion had to be passed and approved by a body in which then there was no commitment for the same. At the same time, it was also noticed that the efforts of introducing certain initiatives on gender perspectives in the fieldwork of B.Sc. Agriculture as part of the newly introduced Rural Agricultural Work Experience course in 1999–2000 could be carried out without much resistance from the system. There was no need of approval for the field practical design from the Academic Council of the KAU and also the decision for gender inclusion in the fieldwork was, in fact, then suggested and carried out by the Vice Chancellor of KAU himself. Perhaps this points out an important strategy that can work for inclusion of gender in the curriculum—the support, commitment and conviction for gender inclusion at the top-level decisionmaking of the University. Hence, the ICAR or similar agencies of other countries may visualize and plan for the policy and capacity development of the top SAU decision makers and administration in this regard for such sustainable changes. There is a need for evaluating the influence that could have been created on the students studying a course in agronomy with ‘women in agriculture’ topics offered in the SAUs of the country since 2007. Besides collecting the views and experiences of the teachers and students involved, such an evaluation will throw light on the inadequacies in capacity building and resources required in each context, the regionally appropriate and contextually relevant extra-curricular and co-curricular programmes which can bring gender sensitivity to the student community. The leadership role the DRWA of the ICAR (now rechristened as Central Institute of Women in Agriculture, CIWA) has to play in this context is multifarious. An awareness campaign on the need for inclusion of gender module among students of agriculture can be another strategy for integrating gender in the agricultural sciences curriculum. Here, the potential of a demand creation among the users through offering an optional course on gender and agriculture can be tried.6 In the 6 The scope for the same was revealed from the experience the author has recently gained by offering

an optional course on gender and agriculture and rural development in the Institute of Environmental Planning of the Leibniz University, Hannover, Germany. On undergoing the course, the student participants had recognized the changed perspective they have gained about the user diversity of spatial planning products and processes and the need of such a perspective to be included as part of their education programme.

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context of the AIS, the need for gender included curriculum as a capacity building of development personnel can be demanded by the other stakeholders like the farmer’s organizations, farm women groups, market, politicians. The easiest way for engendering agricultural curriculum will be as part of a policy level decision itself, in which case, resistance and reluctance would be the least. The project level criteria of gender inclusion are noticed as the best working model for introducing gender into research at the system level when it is followed by required capacity building. Equally important is the gender budgeting of research budget and keeping priority fund for tackling special problems of women in agriculture. The national agencies like ICAR may utilize the control and mandate they have in setting the required policies for the same. A long term national level co-ordinated network project of research on gender and women in agriculture is another need of the hour. The research capacity needed in the national system for gender impact assessment, gender disaggregated data, gender responsive tools, etc. is also pointed out here. The Socio-Economic and Gender Analysis (SEGA) Unit of FAO had been keen in imparting necessary gender analysis and research skills to KAU and the similar technical support of various international agencies may be of use in this regard. The required skills in the scientist’s group of the different sectors in the National Agricultural Research System (NARS) can be attained through ToTs and cascade mode of training programmes. The CIWA, ICAR has to identify its coordinating role and streamline the strategies for reaching all scientists in all sectors of agriculture for building their capability in engendered research and innovation. The author had observed that individual-level conviction and adoption of gender perspectives in research among academia were comparatively sustainable to be practised. As the individual scientists are comparatively independent in their research decisions, once he or she is convinced, supported and made capable of carrying out gender analysis, its effect will be long-lasting and productive. The possibility of introducing additional weightage for works done on gender included research, fixing gender inclusion as a funding criteria in the screening of projects, preference and increased opportunity of publication of engendered research output can be the other workable strategies for encouraging individual researchers to take up gender responsive projects in agriculture. As a part of any engendering effort of agricultural research, it is also important to create concept clarity, goal clarity and role clarity in the research system to avoid the possible tendency of stereotyping and neglect. This is indicated to avoid the generally observed tendency of attaching gender integrated research as the exclusive role of women scientists in a system. It is also dangerous to burden the scientists of food processing, nutrition and home management-related topics as the sole responsible persons for gender inclusion and women’s needs in the farming system as well. It is very important to identify that all men and women scientists engaged in the R&D of agriculture are to be capable of dealing with the stakeholders of the innovation system. The approaches of equal opportunity, gender and diversity principles, keeping relevant details (sex, date of birth, family, etc.) as anonymous before selection board, introduced currently in international systems are good examples to be adopted in the India and in similar other countries as well to avoid gender bias and to bring

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gender balance and diversity in research setting. The need for building institutional capacity to practise gender integrated research and education cannot be exaggerated (European Commission 2012). Research and education in agriculture are two basic foundation stones on which agricultural development is rooted and hence can be leveraged with greater capabilities of the human resource involved. It is also important to consider the efficiency of the human capital that can be increased through inclusive research and innovations as gender inequalities generate waste of opportunities and resources. Though engendering agriculture and gender mainstreaming are well accepted internationally, the education and research systems in India and globally, are found to be too slow to accept and adopt the same in the mainstream. However, there are some initiatives that have slowly started; this chapter captures two such attempts at institutional innovation for inclusion. It is earnestly desired that the momentum will gain speed and acceptance as gender sensitive, inclusive and responsible innovation systems.

References Acemoglu, D. (2002). Directed technical change. The Review of Economic Studies, 69(4), 781–809. Ahamed, S. (2004). Gender issues in agriculture and rural livelihoods. Chennai: M.S.Swaminathan Research Foundation and Thrissur; Kerala Agricultural University, 179pp. Beneria, L., & Sen, G. (1981). Accumulation, reproduction, and women’s role in economic development: Boserup Revisited, Signs. Development and the Sexual Division of Labour, 7(2), 279–298. Chant, S. (2007). Gender, generation and poverty: Exploring the feminization of poverty in Africa, Asia, and Latin America. Cheltenham, UK: Edward Elgar. European Commission (2012). Structural change in research institutions: Enhancing excellence, gender equality and efficiency in research and innovation. Report, Luxembourg: Publications Office of the European Union, 45 pp. FAO (2011). The state of food and agriculture, food and agriculture organization of the United Nations, 2011. www.fao.org/docrep/013/12050.pdf. FAO-ROAP (2002). Research-extension-farmer market linkages to combat Hunger and poverty in Asia and Pacific Region. Synopsis Report. ftp:/ftp.fao.org/docrep/fao006/AD643e/ad64eu.pdf. Geethakutty, P. S. (2004). Gender analysis of farming systems for sustainable technology, programmes and livelihood. Final Report, KAU – NATP Study, 44 pp. Geethakutty, P. S. (2016a). Gender concerns mainstreamed. In S. Venku Reddy & M. Suryamani (Eds.), Agricultural extension-towards changing the lives and livelihood (pp. 410–419). Hyderabad: B S Publication. Geethakutty, P. S. (2016b). Evaluative field study on effective women farmer participation in the farming sector of Kerala with focus on hired land farming and JLG activities. Final Report of KAU – NABARD Study. Geethakutty, P. S., Purushan, K. S., Rajendran, P., Prasad, R. M., Vimalakumari, K.N., Nazeem, P. A., et al. (2004). Building gender integrated agricultural curriculum, capacity and resource materials. Final Report, CSGCA, Kerala Agricultural University, Kerala, India. Geethakutty, P.S., Jiju, P. A, & Prasad, R. M. (2011). Case studies on opportunities and challenges of women in agriculture. NCAP-ICAR Consultancy Report, CGSAFED, Kerala Agricultural University, India. Godley, P., Bertson, S., Andriene, M., & Marcus, R. (1997). Approaches to address gender specific needs in relation to technological changes. Agricultural Systems, 55(2), 155–172.

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Govt. of Kerala. (2017). Economic Review, Vol. I, State Planning Board, Kerala, Thiruvananthapuram, p. 44. KAU (2009). Syllabus B.Sc. Hons(Ag). Kerala Agricultural University, pp. 9–11. Kingri, A. (2010). Gender and agricultural innovation: Revisiting the debate from an innovation system perspective. Discussion Paper RIU. www.ungs.edu.ar/ —iD-274-kingr/-innovation. Meinzen-Dick, R., Quisumbing, A., Behrman, J., Beirmayra, P. J., Wilde, V., Noordeloos, M., et al. (2011). Engendering Agricultural Research, Development, and Extension, IFPRI, (154 pp.) www. ifpri.org/site/default/files/publications/rr176.pdf. Raina, R. S. (2014). Beyond supply driven science (pp. 69–74). Seminar, No. 654. Feb 2014. Raina, R. S. (2015). Agriculture and the development burden. In K. A. Jacobsen (Ed.), Routledge handbook of contemporary India (pp. 99–117). London and New York: Routledge. Raina, R. S., & Sangar, S. (2002). Water quality, agricultural policy and science. Knowledge, Technology and Policy, 14(4), 109–125. Spielman, D.J., & Birner, R. (2008). How innovative is your agriculture? Using innovation indicators and benchmarks to strengthen national agricultural innovation systems. Discussion Paper, World Bank, Washington, DC. www.WorldBank.org/INTARD/Resources/Innovationindicators. web.pdf. World Bank. (1990). Agricultural Research in India: Prologue, Prospects. World Bank: Washington, D.C. World Bank. (2006). Enhancing agricultural innovation. How to go beyond the strengthening of research system and economic sector report. The World Bank: Washington, D.C. 149 pp https:// www. gender innovations.stanford.edu/what.is.gendered innovations.html. World Bank. (2007). Enhancing agricultural innovation: How to go beyond the strengthening of research systems. The World Bank, Washington, DC. http://documents.worldbank.org/curated/ en/864351468325269468/pdf/379000Enhancin101OFFICIAL0USE0ONLY1.pdf. World Bank, FAO and IFAD. (2009). Gender in Agriculture Source Book, The International Bank for Reconstruction and Development, The World Bank, pp. 257–302. http://www.drwa.org.in. www.kau.edu/co. http://www.icar.org.in. www.kau.edu/cohortvellanikkara.htm. www.kau.edu/genderstudies/home_mission.html.

Chapter 10

Social Innovation and Entrepreneurship: Nurturing the Institutional Sine Qua Non for the Informal Sector Rajeswari S. Raina

Abstract Social enterprises (SEs) have sprouted in India over the past couple of decades, addressing several social and economic demands. But their emergence and evolution, partaking of the market and the state, has received little academic attention. Besides the compelling reason that the state has to and can play a major role in facilitating SEs that ensure inclusive development, there is an institutional imperative, a need to explore and explain the institutions (rules and norms) that are at the heart of social innovation and lead to the creation and growth of SEs. This chapter argues that the SEs embody a set of principles that are central to inclusive innovation. Here, the social entrepreneur’s capacity to question existing norms, rules and ways of working and find alternative norms that ensure social value and prosperity for the ‘excluded’ become the game changer. The analysis leads us to question what scale means to the SE, and whether and how the Indian state can enable an appropriate ecosystem for fostering and upscaling SEs.

Introduction Many cases and contexts of social and economic exclusion have been converted into opportunities for social entrepreneurship. Social enterprises (SEs) may not solve all the development problems in India; however, given the right ecosystem and support from the state, SEs can transform the economic, social and ecological systems for millions of Indians, excluded from mainstream public and private sector growth, livelihoods and income opportunities. This chapter argues that this transformative potential of the SEs would be contingent upon not only the support of the state but also ways to mobilize the support. The latter demands capacities for institutional change; it is possible with appropriate articulation and advocacy efforts from the social entrepreneurs themselves. A major issue of concern is that several promising R. S. Raina (B) Department of International Relations and Governance Studies, Shiv Nadar University, Gautam Buddha Nagar, UP, India e-mail: [email protected]; [email protected]

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social innovations and enterprises have fallen by the wayside due to the lack of scope for experimentation, learning and evolution. With institutional support to nurture them, they can achieve wider and deeper economic and social impacts. It is widely acknowledged that the SE is here to stay, and will be much prepared to take on fundamental challenges of poverty and profit, inclusion and sustainability, diversity and new entrepreneurial challenges (CSM 2011; ADB 2012). But the SEs are essentially small, operate in niche socio-technological spaces facing impediments in their transitions to larger landscapes of innovation (Geels 2005); many fail to sustain themselves and some evolve over time. SEs represent a fundamental innovation; in their strategies, structures, norms and values, they are distinct from the conventional non-profit organizations (Dart 2004) and from the conventional for-profit agencies (Intellecap 2010; ADB 2012). In this paper we include two kinds of organizations in our definition of SEs—(i) businesses with a well-articulated social objective (e.g., Mother Earth, Bhuira) and (ii) social organizations that have adopted or shifted to business approaches (e.g., Udyogini, Snehadeep). Some of the hybrids which keep two arms—the business and the social arms—ensure engagement of both in the SE, and do not demand social values or mobilization capacities from the former, and profits or business strategies from the latter. But many SEs have a mixed or muddled strategy using their social and business skills to advantage wherever possible, and in many of these cases, failing to achieve both business goals and social impacts because of this mixed strategy. In India, the historically and socially embedded development problems have in many ways co-evolved with the existing socially, economically and politically powerful actors, especially the developmental state. Our objective here is to analyse the mutual shaping of policies and social entrepreneurship, in order to explain how the state and other actors could enable favourable policy goals, instruments and implementation mechanisms to foster the SE and its role in India. This chapter argues that stronger and more dynamic institutions—rule and norms—that support social innovation should be the target for the state, and not merely the number of SEs created. The analysis explores how the state engages with opportunities for social innovators and entrepreneurs, to ensure the deepening and upscaling of SEs. How can the state create a supportive ecosystem to ensure the emergence, continuous innovation and learning, and sustainability of the SE? The literature on social entrepreneurship in India is still emerging. There is little published material available on the role of or expectations from the state, on questions of scale and ecosystems that support social innovation and learning. This study draws upon the available published material—including secondary data, and web pages, and primary information (interviews, diaries, office notes) from a range of SEs, their ecosystem actors, partners and competitors, and using two Focus Group Discussions (FGDs), a market survey with an innovation systems question template, and triangulation of information or data (using secondary sources or phone/Skype interviews with experts). It identifies and categorizes the emergence of rules and norms, and the ways in which SEs sustain new institutions or rule formation.

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A brief theoretical overview of a SE, what it entails and its implications for innovation systems is presented in the section “Engagements with the State”. This theoretical framing helps present an overview of the state’s role and the nature of knowledge, policy and investment support that is available to SEs. A brief overview that highlights the supply-driven centralized engagements of the state, leads us to three cases of social entrepreneurship (section “SEs and the Triple Bottom Line in Social and Business Engagements” with Annexure) that deal with emerging problems/opportunities and confront persistent inefficiencies and problems in the system. SEs embody a set of principles, where the social entrepreneur’s capacity to question existing norms, rules and ways of working, and find alternative norms that ensure social value and prosperity become the game changer. This leads us to (section “Policies and Policy Instruments for Scaling up the SE”) ask what scale means to the SE, and whether and how the Indian state can enable the appropriate ecosystem for upscaling SEs. Given the ubiquitous diversity that characterizes communities and businesses in India, especially the different meanings of scale and social values in the informal civic space, it is apparent that the state cannot on its own, formulate or implement a policy for promoting and upscaling SEs. Area-specific decentralized social innovation capacities are needed. For a coalition of actors including the state and SEs, the chapter presents a policy toolkit or checklist that would be useful. The conclusion (section “A Tall Order—Strategic Engagement in the Civic Space”) presents some questions about public–private dichotomies and the epistemology of SEs, as well as the role of the ‘entrepreneurial state’ as the risk-taker. A conscious policy design by the state is necessary to deepen and scale up the opportunities for social entrepreneurship. But there is a greater need for articulation of the same from within the SEs, especially the more articulate SE accelerators, with an emphasis on fostering the rule-making capacities of SEs.

Engagements with the State This section delineates the relationship between the SE and the state. The state as the agenda-setting policy component that crafts and sets the institutions or norms in the broader conceptualisation of innovation systems (Lundvall et al. 2009; Edquist and Hommen 2008) does engage with the SE. Here, we ask how it can nurture the institutional support systems needed for social entrepreneurship. Theoretically, the SE is a phenomenon (an entity and its processes) conceived within the broader innovation systems framework, using the norm or rule-making capacities of the entrepreneur and other actors in the system. Freeman (1987) in his seminal paper on national systems of innovation (NSI), draws our attention to the ways in which the respective states in England and Germany played a major role in enabling innovation. The sectors—iron and steel industry, textiles, chemical industry, were distinct in the two cases. But the role played by the state—their respective governments in collaboration with a range of intermediaries in the public sector and several other private agencies, raises some key questions. For instance,

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did the newly industrializing countries (NIC) learn their re-engineering skills from the German re-assembly of machines imported from England? How did the state, in Korea and in Germany in two different centuries, articulate this learning process for innovation? How did these states pick their private and public sector collaborators in this learning process, technology development and use? Let us recall that the pro-market English state and the pro-development German state had very different institutions governing knowledge generation, access and use, be it small manufacturers, poor peasants or seed firms (Harwood 2005). The institutions or norms that govern the state and the relationship of the state with private and public sector agencies are featured differently in different schools of NSI. Freeman’s definition of the NSI as ‘the network of institutions in the public and private sectors whose activities and interactions initiate, import and diffuse new technologies’ (Freeman 1987, p. 1) emphasizes interaction and learning, but uses institutions as organizations or agencies. This is unlike and dynamically opposed to the definition of a system of innovation that is jointly defined and shaped by ‘the structure of production’ and the ‘institutional set-up’ (Lundvall 1992, p. 10). Lundvall’s institutional set-up is distinct from the view of institutions as organizations promoting the creation and dissemination of knowledge (Nelson 1993, as in Freeman 1987). It is closer to the Veblenian (1906) view of institutions as norms or habits of thought. A comparison of the components and functions in Nelson (1993) and Lundvall et al. (2009) helps us articulate these two worldviews of institutions (Table 10.1). Lundvall et al. (2009) focus on operationalizing innovation systems for the Third World and give the message that institutions are central to innovation capacities. Yet, the two schools of NSI can happily coexist without questioning or confronting each other about the role of institutions in innovation (Edquist and Hommen 2008). The two approaches to institutions within innovation systems scholarship (Edquist and Hommen 2008) have implications for every feature of the innovation system (Table 10.1), and the institutions or norms that define and support a SE. The emergence of the SE, in spaces and processes that lie somewhere between and partake in many significant ways, of the state and the market is least studied in India. In particular, the social and economic contexts, and processes that generate and sustain new institutions or norms for the SE, have received little attention from the conventional entrepreneurship studies. For us, it is important to understand the role of institutions or norms in the very definition of a SE. The opportunities it has for scaling-up depends on these norms. While explanations of how some path-breaking support for social entrepreneurs came about (say Ashoka 2008; Leadbetter 1997) have helped, extrapolations or abstractions from other contexts may not serve an appreciation of Indian social entrepreneurship. The two most compelling reasons to look for an institutional understanding of the emergence and growth of the SE in India are (i) the overarching presence and role of the state in the social sector (Nagaraj 2008) and (ii) the massive informal workforce in the country, of which over two-thirds are poor and are mainly located in rural areas (NSSO 2014).

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Table 10.1 Comparing two schools of national systems of innovation (NSI) and institutions Key features

Nelson (1993)

Lundvall et al. (2009)

What it is about

National systems of technical innovation

Innovation systems and economic development

Focus

Mechanisms supporting S&T and innovation in different countries

Mechanisms supporting and constraining innovation systems in different developing countries

When

After growth slowdown—1970s

After growth crisis—late1990s–2000s

Growth spurt in NIC—1980s

Growth and liberalization in developing countries—2000s

Why (the purpose)

To explore if ‘technonationalism’ works—whether the differences and similarities in the NSI explain variations in national economic performance

To explore if the innovation system is a useful conceptual framework to (i) understand and explain innovation and development in developing countries, and (ii) explore how agents and agencies can use it to design public policies

The NSI

Defined as—innovation (firm level to macroeconomic policy), system (a set of interactions among institutions), and national (within the boundaries of nation stated)

Defined as systems in a NSI, open, evolving, relationships within and between organizations, institutions and socio-economic organizations/structures

The framing

A narrow STI or DUI approach – National income grouping of countries—15 country studies – Institutions are important and define the technologies and markets

A broad (components and functions, processes and evolutionary dynamics) dynamic approach – Development theory, developing country empirics, public policy and evolutionary dynamics based arrangements – Institutions are important; the mutual dependence of institutions and actors shapes the markets, technologies and the co-evolution of actors involved

Awareness

Innovation systems are not neatly divided by national borders

Institutions, innovation and entrepreneurship—depend on ways of knowing and learning used by public policy actors

Source Raina (2013)-ISD course module, AcSIR

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A brief overview of what the state and its public services do in the social sector today lays the foundation towards understanding how the SE (largely informal, multifarious, and unquantifiable) can fulfil its potential impact on economic growth and social transformation. Even the sceptics agree that with the right ecosystem and support, the SE does deliver what the overarching development policy fails to deliver in India.1

SEs and the Developmental State The structural features of the Indian economy indicate the problems that the state faces in its engagements with social entrepreneurship. The shrinking of the primary sector in the national economy has happened in the context of (i) marginal increase in share of national income and employment in the secondary sector and relatively higher increase in the tertiary sector, and (ii) the increasing number of young unemployed people in rural areas, especially the increasingly marginal and small operational holdings (86% of the total) in agriculture that often survive on family labour on and off-farm. The state’s engagement has been mainly with employment generation and less with social or ecological values. For instance, the Swarnajayanti Gram Swarozgar Yojana (SGSY), which promotes rural self-employment, and investments and skills for the same,2 is in itself an innovation within the union government, meant to create and sustain microenterprises in rural India. State support is made available for organization of the rural poor into SHGs, training and capacity building, planning of activity clusters, credit, technology, infrastructure and marketing (MoRD 2004). But there are several criticisms and concerns about the lack of linkages between the various enterprise activities and actors that are involved in the microenterprises. Being a scheme that is designed to be a credit-cum-subsidy scheme, where the credit component is offered by local banks and markets dominated by local traders, the SGSY faces constraints in promoting entrepreneurship. To overcome some of these constraints, organizations like Sahaj (a corporate venture) and Peepal Tree (an NGO) have established partnerships between public, private and civil society groups to deliver services, develop skills among rural youth and enable e-governance, in collaboration with the government’s National Rural Livelihoods Mission (NRLM). It is important 1 Another

concern voiced is that in India the middle class may now move towards the US model, showing faith in community-based services. Let us note that the not-for-profit sector is big in the US—accounting for nearly 10% of the GDP. For India, this is a move from the age-old European model of state support in social sector delivery and some private services, to the US model where the state funds several community based co-operative or private companies. The question is whether we are institutionally ready for this—in a civic space where even existing rules (for waste disposal and road safety) are flouted by all. 2 The SGSY is in itself an innovation within the central government, meant to create and sustain microenterprises in rural India.

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to note that, invariably, all these endeavours are either entirely union government initiatives, or have some private sector collaborations or state level implementation schemes. They are all are about supplying skills, raw materials, technologies and even trade opportunities and market designs to the rural poor. Techno-centrism, selective perception and faith in target and control mechanisms, the three pillars of development policy making (Rondinelli 1993), are evident in the way the Indian state perceives development problems and formulates solutions. Development sector funding and scheme design as well as the generation of knowledge and technologies for the same are highly centralized in India. Additionally, solutions to development problems are often formulated as a production target (be it rice/wheat or graduates or drugs or hospital beds or number of days of employment) and, consequently, specific policy instruments to address the development problem indicated. For instance, hunger and poverty are accepted as the development problem (explicitly from the Fourth Five Year Plan onwards), but it is food production that becomes the policy goal for agriculture, with irrigation and production and distribution of other inputs through public sector schemes coming in as ‘selected policy instruments’ (Raina 2011). When it comes to industrial employment generation and entrepreneurship in the informal sector, the state concentrates on measures to improve the competitive strength of the small producer (Das 2010). In the post1991 liberalization phase, export-driven industrial development, external orientation of small firms and enhancing firm competitiveness received attention. In its supply of inputs and services for export promotion, there was little attention to local demand assessment, production decisions, resource mobilization, access to credit and market development that posed major hurdles for small and microenterprises.

The State Through an SE Accelerator’s Lens Beginning in the late 1990s, many business facilitation agencies or accelerators emerged; they began to help articulate the ecosystem and investment needs and enable these for SEs. Sattva, a SE that enables or facilitates business for SEs, corporate and other social clients, estimates that there are over 500 SEs in India (www.sattva.co.in). Using this indicator of the magnitude of for-profit ventures that work towards social and ecological outcomes, we now ask how these SEs have engaged with the state, and vice versa. When the Ashoka Future Forum asks if ‘we can create a new business-social ecosystem without any walls between the business and social sector?’ and the Skoll Foundation presents ‘system-change’ as the way forward (Ashoka 2012; Cheng 2013), they make a demand for changes not just from the investors or donors (like the World Bank, Rockefeller Foundation or Deshpande Foundation). They demand deeper and lasting changes in the all-pervasive state, its roles in the business and social sectors. For instance, the state is used to supporting NGOs or cooperatives tail-end delivery of schemes or social services through grants, loans and specific incentives.

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What happens when these organizations add or convert to an entrepreneurial mode and develop their own business strategies? This is where the accelerators like Ashoka, Villgro, Dasra, Intellecap, Sattva and others come in. Irrespective of their ideologies or sectors of work (expertise and experience) the accelerators provide a more or less fixed menu of services to the SEs—incubation, mentorship, talent search and recruitment, business development services—including financial management, and networking support. And it is this menu or template that makes a useful lens for us to explore what the state provides today, as well as how the SE engages with the state and what it does for the business and social sectors.3 Accelerators like Sattva, based in Bangalore,4 who are aware of the nature of the state’s techno-centric problem-solving, help social organizations negotiate their new businesses with the state’s rules and norms (licences, duties, welfare schemes, etc.). They help develop business skills needed, find and retain the right people and funds, generate, access and use knowledge and technologies. What does the state do to buttress the SEs?

Business Facilitation Services The state has always made investments and concessions to encourage entrepreneurship and industrialization. Despite the risk-averse behaviour of the public sector, limited information and technological constraints, many new ideas have either been seeded by or actively promoted by positive deviants in the bureaucracy, the state and visionary politicians. These have revolutionized the SE scene—the mid-day meal scheme introduced by Sri K Kamaraj in Tamil Nadu, and expanded by Akhshayatpatra into a SE is a good illustration. However, rural industrialization remains limited to the ‘subsistence industrialization’ (Das 2010) promoted by the state. It provides technology and some access to credit—but limited information about production and distribution contexts, processes, markets and networks (ibid). There is awareness that employment and incomes to ensure the recovery of domestic demand is the need of the hour (Office of Advisor to the Prime Minister 2011). But the public sector agencies with a mandate for business development seem to be unaware of the key values that 3 This is perhaps to be expected. Though the state spends billions of rupees to support the social sector

and to develop businesses—especially entrepreneurship, the two (social services and business) are distinct worlds and do not mingle even in the most obvious support offered by the DST (see, Indian Angel—investors and incubators supported by DST in a PPP mode) or the Ministry of Rural Development (see, Sahaj or Peepal Tree). 4 The difference between Sattva and many others who help incubate, develop and sustain SEs is that they rely almost entirely on funding from and proactive engagement with the clients—the social entrepreneurs and in some cases the corporates and communities they serve. Later in this text, we will discuss issues of ownership and local accountabilities that are built into the business ecosystem with this strategic and direct partnership between the SE and the ecosystem and support services provider.

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define entrepreneurship; namely, autonomy, innovation, risk-taking, proactiveness and competitive aggression (Bernier and Hafsi 2007). This is partly because the institutional articulation of entrepreneurship within the state is as a self-appointed supplier (often with incentives and subsidies) of technology, investment, infrastructure and even markets for manufacturing. Besides the state’s role in enabling transfer of surpluses (labour and capital) from rural to urban (often with a neat distinction between agriculture and industry), its hierarchy of knowledge (which deny key interactions and linkages with other actors) limits its capacities to enable business skills5 other than, for instance, reducing an existing license load or providing concessional storage or aggregation space.

People and Finances These are two resources that are not only scarce within the state, but also present within the state in a highly redundant form for social entrepreneurship. We know today that the many skill development and vocational education courses offered by India’s education system covers less than 10% of the age group of 15–29 years and is mainly handled by the informal sector (the formal ITIs and VETs cover less than 2%) (Qazi 2015). The Entrepreneurship Development Institutes (EDI) and Indian Institutes of Management (IIMs) do offer business and management skill development options, though the inclusion of SEs is recent and the kind of courses (market-based mechanisms to deliver sustainable social, economic and environmental prosperity) offered by INSEAD’s Social Innovation Centre are missing (Interview, Krishna, Sattva). Despite the massive amounts spent and priority sector allocations, financial resources are the least developed in state support for entrepreneurship (conventional or social). However, recent developments include a few innovative financial products (from SIDBI, IDBI, IFC and Sahaj and others in a public–private mode), besides the conventional grants (like DST’s). The National S&T and Entrepreneurship Development Board (NSTEDB) and Science for Equity, Empowerment and Development (SEED) in DST, the Department of Biotechnology (DBT), National Research and Development Corporation (NRDC) and loans (National Bank for Agriculture and Rural Development (NABARD) and all banks with priority sector lending are sources of funding for SEs. But accessing these sources is difficult for most SEs, located in and confronting informality and local contexts and problems.

5 The

business development services offered by the state now have new attractions like the eBiz launched as a public–private portal, as gateway to obtain licenses, approvals, clearances, etc., to launch business ventures in India (Infosys 2013).

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Knowledge and Skills The fact that public sector science and technology (S&T) has contributed little to civilian use or development ends in general, and that little of the public sector S&T and university research outputs are taken up by industry are a matter of concern (Mani 2010). That centralization of S&T and the hierarchy and separation of technological knowhow from social and business knowledge might be the key causes, is rarely discussed. The National S&T Management Information Systems (NSTMIS) survey estimates that in 2006–07, the central S&T agencies accounted for 62% share of total national S&T funding, with the state governments, higher education and public sector units accounting for 8.5, 4.2 and 5%, respectively, and the rest, about 20%, coming from private and civil society organizations (DST 2009). More than the magnitude of centralization, it is the agenda-setting presence of formal S&T that defines the gap between the state’s model of centralized knowledge generation and technology supply and the SE’s decentralized local knowledge creation and use. Three scientists interviewed and over 20 research projects evaluated by the author (in 2012–13) maintain the ‘supply of knowledge and technologies’ worldview (Raina 2014). This is in keeping with the linear pipeline model that they have been tuned to. In some cases when the technologies supplied are relevant to production problems in some of the poorest regions (dry lands, mountain ecosystems, tribal areas, etc.), the location-specific knowledge and market information to offer support services are missing. None of the public sector research organizations in India today, can claim that they ‘leverage the combined experience of our on-ground teams, process and network’ with their in-house expertise to ‘generate high quality research deliverables in the knowledge space’ (Sattva—www.sattva.co.in). Our concern is that the norms of supply-driven development and the powerful technocratic vision of science-based development interventions for poverty reduction (Mody 2005) that they subscribe to, will make it impossible for S&T, education (both higher education and vocational education), and even incubation facilities to engage with, analyse and solve problems that are not focused on ‘supply’. For instance, DST’s business incubation models are still firmly rooted in this approach of S&T, where technology and knowledge must be delivered down to the ‘bottom of the pyramid’ (NSTEDB 2011). Several flaws of implementation, even in the most wellintentioned schemes for rural entrepreneurship and employment generation, have their origin in their lack of research and limited awareness of the knowledge space inhabited by the SE. The state’s engagement with SEs is, thus, a vicious circle of supply-driven centralized knowledge generation and supply, with little understanding of the knowledge space of the SE.

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SEs and the Triple Bottom Line in Social and Business Engagements In this section, we analyse the ‘how’ questions that make the social entrepreneur different from the conventional Schumpeterian entrepreneur who has the capacity (creative-destruction) to transform or revolutionize production patterns, but may add unintended impacts like pollution, social disruption, etc. That the ideal enterprise or the good business will always keep a clear social and ecological record while making its profits, is often mentioned (as in the interviews with Sattva, CSM and Akshayakalpa). But historical debates about markets and the state (Polanyi 1944), public sector and private sector roles and boundaries (Bozeman 1987) and the nature of public entrepreneurship (Bernier and Hafsi 2007) tell us that the creation of wealth by exclusively private (markets alone) actors does go hand in hand with (and causes) poverty and several other social problems, if the state does not play a supportive role to avoid unsolicited or poorly incentivized outcomes, or a punitive role to disincentivize such outcomes. Box 1: Spreading Wealth ‘It is not just about creating wealth but about spreading wealth’. This statement from the founder-owner of Bhuira jams and chutneys speaks volumes about how this enterprise works and its impact on the local economy in a remote village (Bhuira) in Himachal Pradesh. The state government has been a pioneer in fruit production and processing; with a wide range of wild fruits and cultivated orchards of apples, apricots, plums and several other exotic fruits, the state accounts for nearly 20% of the national gross value added in fruit and vegetable processing (author estimates from Annual Survey of Industries 2011), with a rough estimate of nearly 15% of the total fruit production being processed (the national average ranges between 2 and 4% per annum). So agribusiness in the fruit processing sector is nothing new to Himachal Pradesh. Yet, an agri-business that is owned and operated by women, structured as a cottage industry using (almost entirely) manual labour, churning out nearly 100 tonnes of jams and jellies per year, and maintaining its social and ecological values, is news in this state!

The social, ecological and economic values added by SEs are often evoked in the oft-quoted triple bottom line; the CSM one on ‘People, Planet and Prosperity’ being the most cited one in India (see www.csmworld.org). But CSM’s own transition within this bottom line, shifting out of profits and moving into prosperity points to engagement with and essential framing of the economic value within the overarching social values. The SE seeks profits for the enterprise, but also the overall prosperity for all actors involved in the local network and its social market (CSM 2011, and Box 1 here). CSM made a strategic decision to foster social entrepreneurship, raise resources (right people more than mere funding) and produce well-researched advocacy material for the support of SEs. This is shaped by the emerging challenges of climate variability and change, and the inability of the poor, especially women and labour in remote coffee plantations, coastal populations, small and marginal farmers

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and livestock owners, to comprehend what a SE entails. CSM uses this advocacy material to help them articulate what to do about forming a SE, and to find marketbased and sustainable ways of using it to their advantage. Debates within CSM and among the social market agents (the Coffee Growers Association, for instance) it works with, point to the norms or agenda-setting institutions that the SEs seek and design for themselves. Similar is the decision made by another SE that has achieved scale, sustainable profits and market efficiencies—the ID Special company. ID Special produces and sells batter for traditional dishes—idli and dosa, providing employment and incomes to scores of unskilled women in urban and peri-urban areas (see www.idspecial.com), to ensure that it does retain its social objective of positive impacts on its local community. A whopping profit from sale of the firm to Nestle and other corporate giants in the food industry has been on the anvil ever since the ID Special group achieved its first success. There is a legitimate concern that a corporate may not ensure local employment to unskilled peri-urban or rural women, energy-efficient transport and eco-friendly production systems. But most importantly, a corporate take-over is unlikely to provide the opportunities for community engagement with immense social spin-offs like hygienic homes and kitchens, education, and lower morbidity rates among workers. This keeps the corporate take-over at bay. Employment in the informal sector and prosperity in the local community as well as for the enterprise, are results of conscious decisions—norms created and nurtured by the SE. Similarly, the ways of working of informal workers in the garbage system become a social norm (that dignity and equity must be ensured) that transforms a problem statement. Here, the state realizes that garbage is no longer a ‘transport problem’ but a lifestyle and sustainability problem (Sattva’s work with community-based waste management for Bangalore Municipal Corporation (BMC)). Problem transformation brings other issues; there are several instances where an entrepreneur or team in a SE has to make choices about enhancing the profits or about enhancing social value. While some (Mother Earth, for instance) have struggled to find the right business model that will not allow the norms of locally rooted ownership of the firm (a trust that is vested with thousands of skilled artisans and producers) and local incomes to be compromised, some simply draw a line on the profit margin (no more than 6%, says Narayana Hridayalaya). Many analyses of SEs have pointed out the ways in which they are exceedingly context-specific. The CSR-led SE, the Titan-Myrada collaboration (creating women’s employment and livelihoods around a new factory), the individual ecological commitment-driven Era Organics (a response to growing demand for safe pesticide-free food in urban markets) are both SEs with extremely specific contexts. Though they differ in their organizational format, customers and social relationships, they are responses that cater to key segments of the population (informal workforce, differently abled youth) or production systems and services (tribal foods and Non Timber Forest Produce (NTFPs), preventive health care) excluded or left untouched by the state and the private market. The third feature that cuts across SEs is that in the absence of rules or laws to engage with these opportunities, they often create their own rules or norms (a subscription-based business model, a small fee or

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levy for community use for every rupee earned, a non-hierarchical 360° evaluation). The key principles that cut across and unite all of them in a common framework of entrepreneurially virtuous behaviour—the triple bottom-line of SEs6 are: (i) Context-specific problem statements, (ii) Excluded or untouched population or production segments, and (iii) Norm or rule-making capacities. Many local and global networks, especially some of the strong global service sector and financial networks that many young social entrepreneurs belong to, offer opportunities for SEs to learn from each other. The accelerators (like Villgro, Sattva, etc.) help immensely to develop their business skills and motivation. But the three values that are shared by all SEs seem to draw from a moral-social-entrepreneurial behavioural framework. And this demands a better understanding of how this framework and the triple bottom line work.

Innovation and Social Entrepreneurship—Norm Making Capacities Three case studies on SEs in health and organic-food systems (see Annexure) help us explore the ‘how’ question. They reveal that (i) the processes of norm-making are central to the emergence and evolution of the SE, and (ii) this norm questioning and norm-making capacity of the entrepreneur precedes the innovation. Two of the case studies here show how the state’s problem perception of health care as ‘illness’ and not as ‘well-being’ led to the emergence of social innovation and entrepreneurship in the sector. In the third case on organic foods, the state’s inability to perceive that its self-assumed technology and input supplier (with massive subsidies and support to the corporate sector) role is inimical to local, nutritious, chemical-free foods and ecosystems, enabled the SE that is based on an alternative set of norms for food production and consumption. The norm-making capacities and innovations do not come easy. The social commitment and business sense pose a steep and arduous learning curve that many SEs find difficult. They work through this with their mentors and accelerators (like Sattva and Villgro) in iterative learning processes. Swasth India (our Case 2) draws from the commitment of two founders and the lessons they learnt about how to make a social impact. The learning phase explored some key US non-profits like ‘Kaiser Permanente’ and hands-on work with LabourNet, a Haryana-based SE which was providing health services for the construction workers in the Gurgaon-Manesar area as these regions witnessed the construction boom. Lessons about social mobilization interface with stakeholder groups, and resource raising (financial, physical, personnel) came from work with SSP (Swayam Shikshan Prayog) in villages in Maharashtra. 6 It

may be noted that some of these principles are included albeit worded differently in Murphy and Coombes (2009, p. 330).

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While the Government of Haryana and ILO supported these two learning experiences through their support for LabourNet and SSP, the founders of Swasth India also did the database design for the Government of Tamil Nadu in its IKP Centre for Technologies in Public Health (ICTPH) work in rural Tamil Nadu, and developed the insurance delivery mechanisms for the USAID supported initiative with the Government of Delhi. These were valuable engagements with the state and international donors; lessons that gave them handy rules and norms about their service delivery model, what to mobilize and how, and most importantly what to avoid. The norm that no family should slip into poverty because of morbidity, led to articulation of the problem statement and the choice of location for Swasth India. It had to be slums, with huge numbers of customers, high incidence of almost entirely preventable diseases, and access to ready cash. At the Deshpande Foundation, norms of locally owned and nurtured social mobilization (within a specific location—Hubli) and a ‘bottom-up approach’ to building scalable and sustainable solutions form the basis of expansion and diversification (DeshInet) decisions. CSM’s ‘Made in Bangalore’ is more than a call for rooted capital that is locally accountable (CSM 2011); it evokes a sense of ownership and pride among the SEs and their communities in the context of social isolation and alienation in a rapidly growing city. Unlike the conventional entrepreneur, the interactions of the social entrepreneur with the specific space and context are governed by the norms and values that the SE decides as important. The entrepreneurs in Swasth India, with high human capital (IIT Bombay), well networked, armed with English speaking and articulation capacities, could have mobilized funding from several international and domestic donors. But they chose the subscription model, highlighting the local social mobilization advantages that the enterprise would build on. Every Swasth Parivar (healthy family) registered with them is way more than a customer and plays a critical role in the expansion of the Health Centres across the slums in Mumbai. The other sources of revenue come from pharmaceutical companies, hospitals and their negotiations with them to make health services available to the Swasth Parivar members (when needed)—the norm being least expenditure by the family itself. By adding cost savings with their own clinic design, staff recruitment and training, drug distribution and diagnostics, they have built a sustainable revenue model and service delivery system ideal for the slum dweller families. Similar is the story of resource mobilization and norms to that end, in the Pristine Organics case (our Case 3). The portfolio of sales revenue, fees or subscription payments, business enhancement receipts, goodwill inflows, business associateships, etc., are governed by the norms that the entrepreneurs have chosen. Likewise, certain norms govern the activity and investment decisions. In the establishment of Pristine Organics (with its own fair price networks with organic farmers, NGOs and other local suppliers) or Shine Retail which maximizes employment by putting shoe-shine youth in the right places with the right accoutrements, supported by ISF (the norm was to expect a low rate of return (15–18%) compared to what VCs expect (25– 30%). The norm-making capacity seems to be a critical part of the package that the entrepreneur brings into the SE.

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As the SE gets established, several other norms or rules fall in place, like Aharam’s (a community based organic agri-food enterprise in Madurai) decision to raise 10– 20 times the initial seed capital invested by the community based enterprise, or Pristine Organics decision to invest in the knowledge space—or active in-house R&D for scientific research. At Pristine Organics, a central question that bothers the founder, Raghu, is that thus far ‘there is no attempt to deconstruct the science of food, agriculture and health’ (interview, Raghu, Bangalore). As a normative order or moral quest, the firm’s decision to invest in knowledge is because there are few S&T organizations in the country asking such questions about the systemic relationships between food, agriculture and health. The need to generate the evidence in-house is part of the firm’s rule that we need to unlearn in order to learn. The initial norms and values give the entrepreneur the opportunity to identify a product or delivery mechanism with social and ecological impact and take the necessary risk. It is the questioning of existing norms or values and formulation of alternative norms and rules that makes the SE different. Features of discovery, evaluation and utilization of future or potential goods and services are germane to the SEs as for any enterprise (Venkataraman 1997). The SE uses its norms for mobilization of social and financial resources and space or location, and timing of the structure, resources and evolution of the entrepreneurial format, to create the social and economic value (also see, Murphy and Coombes 2009). For us, this evidence of norm making or rule formation is critical to understand the nature of state engagement and the possible upscaling of SEs.

Policies and Policy Instruments for Scaling-up the SE The evidence thus far points to the emergence of social entrepreneurship as (i) a response to emerging needs with new population groups or stakeholders coming into the labour market or new technologies, or (ii) an effort to correct or modify historical and deeply embedded exclusions, inequities or inefficiencies in society. In analysing and explaining the role of the state and policies in nurturing and upscaling the SE, this understanding is useful on at least two counts. The first is the state’s own efforts to identify, keep track of and possibly report on long-standing problems (caste and gender discrimination, maternal mortality and morbidity, unemployment among youth, industrial effluents and pollution, etc.) in society and in development mechanisms. Many government reports and public sector research programmes constitute a basic set of information and awareness generation that lead to ideas for social entrepreneurship. The second is the state’s engagement with and roles in new or emerging needs—as a regulator, planner or investor, or enabler of select actors or processes. In India, many new needs have emerged in health care with increasing number of young women employees and senior citizens, incidence of lifestyle diseases (like diabetes), use of mobile phones in emerging markets, and increasing awareness of pollutants or toxins—especially in agriculture and natural resources. Despite these new needs and roles, the state’s inability to comprehend the context and get the right problem statement persists.

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The state is entrenched in the norms of ‘supply to the social sector’, and cannot engage with demand-driven service delivery and social value. Our cases reveal how the SE’s norm to create a demand for a technology or service through social mobilization, awareness and local business opportunities has replaced the state’s assumption that every technology needs to be subsidized to get households or farmers or small industries to adopt it. A painful confrontation between the norms of supply-driven subsidized development and demand-led context-specific market-based development is being enacted today in the solar energy arena (interview, Harish Hande; Harish et al. 2012). Box 2: Toxic b(y)t(e)s? The use of information to access opportunities for networking, employment and incomes is one of the key tools used by Indian SEs, and amply supported by the IT industry. NASSCOM Foundation’s quip on their web page is a case in point; ‘Changing India…Bit by bit’. The vision … ‘to harness information and communication technologies to transform lives of the underserved…’ does make a strong statement about millions of rural Indians being underserved by communication technologies and their need for livelihoods opportunities. In two interviews on social enterprises supported by CSR or industrial associations (like NASSCOM Foundation), the question of corporate behaviour in a system that is fundamentally flawed came up strongly. Should not the Foundation in question address toxic e-waste management and occupational health hazards among the urban poor too? While the size of the informal e-waste industry is growing in leaps and bounds in India and the state looks away (as it does with many other ecological consequences) it is ‘social fraud’ and not ‘social entrepreneurship’ to support awards for rural entrepreneurs who take electronic junk to rural schools and BPOs. Many of this Foundation’s SEs are into recycling and re-using business. Yet, the question of how they can enable internal organizational change within the corporate for sustainable low e-waste businesses is left hanging in the air! More critically, though, the state’s roles as facilitator and regulator of corporate growth are questionable if it continues to turn a blind eye to toxic e-waste or indulges in soft CSR options to cover-up pollution (Interview, Gopal Krishna, Toxics Watch Alliance).

Many interviews refer to dignity of labour and the need to acknowledge the naturedeficit by making people pay for eco-friendly products and services. This is perhaps the most problematic engagement that SEs have with the state and the corporate sector. With the new Corporate Social Responsibility Rules under the Companies Act 2013, the small SEs (the ones that operate with direct client or customer support and local VC equity or donations) express the concern that the new Act may actually dry up state support for SEs. By passing the buck through the Companies Act, the state may be encouraging corporate investments in clean-up or refurbishing operations, without ensuring that lasting valuation errors are addressed and rectified. For e.g., valuation of ecosystem services of coffee plantations, or the real intergenerational

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costs of fertilizer subsidies, or cumulative e-wastes generated by the IT industry (see Box 2) are ignored. SEs are established to handle these persistent problems or fundamental valuation errors. This brings us back to our question: how should the state work with SE’s to create social, ecological and economic values?

The State and Upscaling the SE Scaling-up of SEs brings us to the Durkheimian7 convergence of social value and the economic business. The ways in which each SE weaves its moral and value premise into its economic model, based on its peripheral support systems (within and outside the communities or stakeholder groups that the SE works with) and its core functions or community, are key to the question of policy support for scaling-up. The state can play a very effective role in strengthening the peripheral support system and in monitoring the delivery of social services. The scale questions in a SE (see 3 cases in Annexure) that caters to middleclass urban clients (our Case 1, Mycare Health Solutions) will continue, even if the enterprise nets a decent return of 15–20%, and expands beyond the 50,000 members target set for the first year. Systemic challenges posed by the prevalent medical education and practice, health sector governance systems—especially the turf wars between agencies, and pharmaceutical industry interests ranging from drug pricing and control to intellectual property rights, will pose hurdles to expansion plans. In the health services, the public–private dichotomies are least relevant, because the fundamental model of health care and the policy goal and policy instruments used are similar given that both public and private norms of health care are about incidence of ill-health and curative care. Taking this SE to the next level needs systemic changes.8 Scaling-up the above health care SE also entails a different role of the state within its core business community. What value-addition does the state enable when it ‘provides’ primary health care? This SE demonstrates that the state will create more and lasting, sustainable social value if it enables the community and enterprises therein, to provide the services necessary to stay healthy. The state can articulate larger questions about healthy societies and workforces (even if they are estimates of productivity loss due to morbidity that is entirely preventable), systemic understanding of well-being, people’s participation in socially accountable services, and monitoring and evaluation of service delivery and quality.

7 Durkheim’s

sociology of knowledge gives us insights into how a certain moral code or norms shape the learning system and economic outcomes therefrom. 8 The same set of systemic changes are needed in agriculture, education, etc., but the articulation of policy instruments for promotion of organic agriculture or universal education is sadly based on currently prevalent norms (yield per hectare or levels of reading and writing, as measures of success) of performance and delivery. Thankfully, the transition, seeking and experimenting with next generation institutions or norms are already out there in several agroecological alternatives, environmental justice and water literacy programmes in the civic space.

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Given the diverse sectors and skills as well as the magnitude of and different meanings of scale in different SEs, a single policy for promoting SEs appears untenable. An overarching policy framework with a portfolio of options and a conducive innovation ecosystem is desirable and doable though the state cannot on its own, formulate or implement a policy for promoting and upscaling SEs. A coalition of actors willing to ensure the effective communication and information in each development sector and social context, and capable of articulating the institutional reform within the peripheral and core activities associated with the SE or its problem context seems necessary. At best, a policy toolkit or checklist for scaling-up the social enterprise can be used to support this articulation. The creation of a favourable ecosystem for social innovation and entrepreneurship demands that the state possesses capacities to check and facilitate support systems across seven phases of emergence and evolution of the SE (Table 10.2). The context specificity and local ownership of the SE bring the onus of this engagement and ecosystem building on to the local government—the Municipal Corporation, the Gram Panchayat, Block Development Office or District Collector’s Office, with overarching legal or institutional changes at the state or central government levels. Table 10.2 Capacities needed within the state and public sector organizations for a favourable SE ecosystem—a checklist Sr. no.

Phases where favourable ecosystem matters

What exists

What is needed

1

Social mobilization – Data – Problem statement – Awareness

a

b

2

Business or Generation of value – Appropriate social valuations – Appropriate ecological valuations

3

Adequate financial resources – Private – Public

4

Appropriate structures – Networks – Value chains

5

Evaluation – Framework – Tools – Impacts

6

Scaling-up – Meanings – Options – Opportunities

7

Macro-framework

Appropriate timing

Note a and b here denote many of these key information and support systems or services that are merely assumed to exist, and never consciously nurtured by the state or the SEs

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Scale is one among several key concerns for the SE, where the state can play a role (Table 10.2). Though the ecosystem issues and upscaling issues were discussed as two separate issues in focus group discussions, when it came to what was expected of the state, what actions or investments were desirable, there was a ‘merging and mixing’ of sorts. State support for upscaling depends on the meaning of scale, which is different for different SEs (is it turnover volumes? profits? number of customers, employees? enhancing the social values? area covered? any other?). The chickenand-egg question in this context is whether creating a favourable ecosystem is enough to scale up SEs or whether scaling-up and demonstration of a few SEs at scale,9 is necessary to ensure proactive engagement of the state in a SE ecosystem. The need for a coalition of actors, involving the state and entrepreneurs, is obvious. A suggestion that came up strongly during discussions was the need for a legal-political entity to create and sustain the SE ecosystem (from G. S. N. Reddy of Akshayakalpa). But there are serious fears that a uniform model, say, a statesponsored accelerator, may not be ideal for all problem contexts—different regions and kinds of SEs. Moreover, it might become difficult to roll back, once legalized and ‘schematized’. As the current SEs evolve, they might become ossified burdens (as the state line departments today) with limited options to reform their own norms and evolve. The modification to this suggestion, of the state as a risk-taker for SEs, with quasi-public–private norms (in other words, sharing in the gains too) and specific forms of public investment in the SE ecosystem found a much greater response. But this state, participating in and providing public investment and facilities for the SE has to be present in a decentralized area-specific form, governed by overarching state government or union government social sector norms. With the mutual shaping of the SE ecosystem concerns and scale issues, the norm questioning and norm-making capacities, context-specific problem statements and social mobilization, as well as the area approach emerging as central to all SEs, there are two fundamental issues that become clear to the state willing to support SEs. These are, (i) that it has to move out of the centralized supply-driven mode, and into decentralized enabling mode; and (ii) that investments in people (capacities), physical and financial infrastructure (not subsidies) are critical for the enabling state that enhances social and economic value. It is clear that the SEs themselves have to articulate (as a consistent strategy and advocacy plan, and not as one-off events), what they need from the state. To sum up, this section emphasizes what the state’s engagement ought to be with questions of SE ecosystem development (perhaps in the order that has emerged in Table 10.2) and how the state can facilitate upscaling. 9 Many

refer to Akshayapatra as the benchmark for achieving scale. But as in rows 1 and 2 (Table 10.3), the articulation of the problem statement and business value by the state and the SE is what gave them the big push—the kind of push that many SEs dealing with ecological value or climate change will find difficult to achieve.

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A Tall Order—Strategic Engagement in the Civic Space We began this chapter by lamenting the dominant development narrative and innovation investments or capacities within the state, which are highly centralized and designed for provisioning or supply. With time, state policies for employment and income generation among the massive informal and unorganized workforce have converged along the contours of middle-class aspirations and technological skills. In the light of labour-intensive production systems and service delivery, ecological value-addition, lifestyle changes, etc., which many SEs are addressing effectively, the state’s responses point to the persistence of institutions (Robinson 2010), or the same norms and values that were held in the past. The structures of the SE being superimposed on or granted a subordinate inclusion into the state’s organizations and norms (of linear supply-driven development schemes or other centralized policy instruments) are not enough. Replacing or co-opting the current SEs into the state’s own institutional frameworks will prove disastrous. The state and its public sector need to learn to enable more and widespread social innovation and entrepreneurship from and with SEs. In this concluding section, we briefly discuss some of the larger public–private sector concerns about sustainable development, some of the ecosystem and scale issues—especially data and pedagogical issues that apply to the state and to SEs.

Persistence of Institutions or Ways of Working Countries with abundant rural labour (CARL) may have a different trajectory for their economic take-off (Tomich et al. 1995); perhaps a different content too. It has been stated before, as G. S. N. Reddy (Akshayakalpa) or Muthu Velayudham (Aharam) or Viva Keramani and Pushpanath (CSM) would articulate in their own contexts about ‘fair enterprise towns’ (to borrow Pushpanath’s conceptualization). Innovation is now proclaimed a key driver of economic development and the future of emerging India. But this national imagination about innovation is set in a context with over half the population dependent on agriculture, no new jobs being created in manufacturing and a booming service sector absorbing some skilled workforce focused on meeting the growing demands of a burgeoning middle class as well as global markets. Recent concerns about the middle-income growth trap (Agenor and Canuto 2012), and India’s ability to push its economy into an innovation-led high growth phase, do come up with recommendations for institutional change for generation of employment and domestic demand. Yet what we witness today is a willingness of the ruling classes and the middle-class professionals in particular, to legitimize innovation, technological investments and interventions that engage with global capital, multinational production and highly skilled jobs.

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Few in the middle class even acknowledge that foreign investments account for less than 2% of domestic GDP, and that domestic savings—household savings mainly— account for 35% of India’s national GDP (World Bank, WDI). That domestic investment can be financed with domestic savings may sound incredulous to many middleclass professionals—even those who acknowledge that domestic institutional change is necessary to propel a more egalitarian growth, with equal opportunities available to all to participate in production, distribution and consumption activities. The state and its development machinery, and ‘the great Indian middle class’, are unwilling to engage with questions of domestic institutional change. This is what the SEs confront. This institutional impediment needs to be overcome to allow the expansion of social entrepreneurship or new forms of rural entrepreneurship; especially agrarian and rural reform for labour-intensive value-added production, fiscal decentralization for increasing resource ownership and mobilization capacities of local governments, and decentralized innovation capacities. This unwillingness of the middle class to engage with the national problem of unemployment and social/economic value-addition (which the social innovation and enterprises engage with) is part of a much larger institutional legacy of public sector S&T and development channels.

Pedagogy Today, the Tata Institute of Social Sciences (TISS), Mumbai and Deshpande Foundation, Hubli, are among the few organizations that offer specific degrees in social innovation and entrepreneurship. Few SEs today have people who have graduated from these programmes, and many SEs worry that these courses give the students an ‘allopathic’ tool (a ready-to-use tablet for a specific symptom). There is a need for fundamental disciplinary strengths in the social sciences—philosophy, anthropology, sociology, history, economics, political science, geography and ethics—to hone the SE professional. This is to ensure rights to those excluded from mainstream growth, re-orient growth, bring a different valuation (ecosystem benefits, gender parity) and systems of collaborative behaviour. An an understanding of and analytical skills in circular cumulative causation, will be necessary. Fundamental disciplinary strengths will be needed to formulate alternative rules and norms for SEs, to address lasting inefficiencies and emerging problems, and to question the public–private dichotomies.10 Pedagogical questions thrown open by SEs echo some of the debates that have been on since the Brundtland times (the WCED report 1987, based on over 900 days of negotiations and writing, led to the Earth Summit in 1992). They will not be addressed by the state unless there are pressure and advocacy teams and a new stream of thinkers and doers who articulate it with and for the state, communities and ecosystems. Many SEs that have brought in norms and different valuations 10 What are the dichotomies when the state gives massive support (legal and illegal) and concessions to real estate developers and land grabbers, and does not even provide tax concessions for ecofriendly packing material for safe organic food? (asks Jayaram of Era Organics, Bangalore).

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in primary education can play a proactive role in addressing higher education and pedagogy for social entrepreneurship. At Pristine Organics, the pedagogy question comes up at each in-house training and learning session; the fundamental questions of how today’s civilization relates to food and nature that provides all this food is articulated as one of learning disabilities. That the scientists who should ideally be at the forefront leading these questions and the opportunities to challenge current evidence generation and policymaking in agriculture and food have refused to engage with these fundamental questions, points to a major systemic failure (Interview, K. C. Raghu). Here, a different education for sustainable development as offered by the Bhoomi College (in Karnataka) brings serious engagement with core disciplines; for instance, how is soil quality defined in the chemical sciences and biological sciences?

Data and Information Today we take it for granted that there is no agency or quality database that gives us our social statistics. The Central Statistical Office (CSO), Annual Survey of Industries (ASI) and Economic Survey reports and many others provide data for production and consumption of a wide range of commodities and services. The NSSO and several other private and social databases do give access to some household information and some qualitative data (initiated by some psephology data sets used in election campaigns). Our fiscal and financial data and discipline of these systems maintain very high standards. Yet, a SE finds little of relevance to relate to or support their clients— even decentralized databases at the district or block level have limited information or indicators of any sort that will tell them how farmers manage biomass addition to soil, the sense of well-being that a middle-class household would desire and be willing to pay for (questions that Pristine Organics, Aharam, Snehadeepam, Mycare Health Solutions do ask themselves). The context-specific local data sets, say a seasonal pest incidence or colds and coughs (as maintained by the NCIPM—public sector research institute and by Swasth India), also have a temporal dimension which is important for planning, campaigning, investing, mobilizing, intervening, monitoring and evaluating activities, whether it is crop pest control or family health. Experiments like the Integrated Participatory Seasonal Observation Systems (IPSOS) (Raina 2000), can be expanded to build location-specific databases owned and operated by the community. These are spatial–temporal data systems with assured ownership and interpretation of the data by the community, including capacities to decide who can use it and how (at what price, to achieve what impacts, etc.). But these need SEs to work with and mobilize the state’s statistical system to invest in and build these capacities, within the communities and within the state. We should note here that the ways of working of the state ensure that technological solutions can be supplied to solve any problem it perceives. That the state does not perceive the lack of quality social statistics and has fairly straitjacket solutions to address social and ecological problems is a major part of the problem (see section “Engagements with the State” here). In the absence of such decentralized location-specific

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social database, it is easy to assume that centralized technological solutions can be generated and supplied uniformly. Given the features of the SEs (see sub-section “The State Through an SE Accelerator’s Lens”) it is doubtful that the state can create these decentralized data and information systems; the SEs will have to articulate, mobilize support for and prepare the data formats for the state to invest in these data and information systems.

Mobilizing State Support—SE, Informal Sector and Democracy The take-off of decentralized innovation capacities fostered by SEs, adding millions of jobs, economic and social value, and enabling environmental gains, depends on their capacity to set off institutional reform within massive public and private actors that inhabit and shape their ecosystem. This, in turn, calls for a genuine democratic engagement in the SE arena. Today, many assume that the SE as an economic entity will always remain a minor fraction of the overall public and private business/enterprise sectors. But this need not be the case; the analysis here, based on interviews with entrepreneurs and three case studies, reveals that the social enterprise today promises much more; a deepening and strengthening of democracy. Among the democratic values of franchise, voice and authenticity, the poor in particular, the majority of the consumption-driven myopic middle class, and the powerful (not essentially rich or elite) classes are familiar with franchise. But the youth, and some citizens groups today want much more. There is a strong demand for enacting and partaking of the democratic values of voice and authenticity. What is tomorrow’s enterprise willing to deliver? (a question posed by Pushpanath of CSM, Bangalore). The only platform available to these actors seeking a different and more egalitarian future, where shared prosperity becomes the norm for sustainable development, comes from the SEs. The sociological and political dimensions of the social enterprise and the potential for transformation that it offers existing public and private actors, remain a key interest. The acknowledgement and awareness of lasting inefficiencies that many SE’s have reformed, though in small niche ecosystems, is a beginning. How do public sector actors—say a research organization or a capital goods industry or resource management organization (a medical research institute, heavy electricals industry, forest departments, etc.) acknowledge and work with SEs that address some of the ‘social exclusions’ created by or ignored by their own ‘officially approved’ mandates? We must ask what the HPCL or Goa Shipyard or the DBS group learn from the SEs they support. The Directorate of Public Enterprises (DPE) guidelines for CSR and sustainability given to CPSEs do provide interesting insights into the uptake of some lessons (like inclusion of women, or tribals) and the persistence of norms (subsidized supply) when it comes to some other aspects of the SE (interview with Dr. Guha, TISS). The norm-making capacity of a SE brings lessons for decentralized locally accountable development or sustainable corporate strategies; they are political problems involving power relationships and must be addressed as such.

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We conclude here by acknowledging (and hoping) that the state will not do to SEs what it did to cooperatives. The space and respect for the institutions and norms of cooperation, of collective thinking, decision-making and bargaining capacities with the others (non-members, other social and economic actors), the location-specific ecological and social values created along with shared prosperity, and the immutable area-specific sense of belonging and ownership that social mobilization confers on these SEs, may be enough to ward off the co-option of the SEs into the state’s norms and structures. It is painfully evident today that the state and its development departments lack the capacities to engage with the triple bottom line and norms deployed by SEs. Yet, to scale up, to create and sustain a favourable SE ecosystem, the social entrepreneurs have to work with the state, playing along where possible, reforming from within where there is space, demanding and campaigning for reform from outside where needed. This chapter has but scratched the surface of the state-SE engagement questions. A more serious and deeper enquiry is needed.

Annexure: Three Cases - The State and Social Enterprises The three cases presented here and interviews with policymakers and other ecosystem actors conducted as part of this study are about SEs in health care and agribusiness. The social, economic and ecological spaces and conversion into valueaddition opportunities for society and for the enterprise are what we highlight in these brief case descriptions here. To avoid repetition, the case analyses have been incorporated thematically in the text, along with insights from interviews and focus group discussions. This annexure presents a minimal description of three cases.

Health Care (Case 1) Why do the state and the public and private sector health services it supports address health care as services during illness? The state’s perception of health care as illness and not as well-being is a problem statement that needs to be studied carefully. This observation comes from a social entrepreneur Rajan Mehta, whose initiative Mycare Health Solutions is ushering in much more than a new business model for health care. This SE carries a key message on the legacy of state intervention and support for health care and demands an alternative epistemology of health care. The current ‘fee for service’ model of health care is tied to a curative approach; it is approached by people during times of illness and forgotten until the next episode of illness. Mehta’s concern as a social entrepreneur is to devise a business model that would make money and provide support or guidance in times of well-being.

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Based on a profile of illness and people’s desire for well-being, Mehta conducted a survey of several business models, including the Health Maintenance Organization (HMO) model. What he wanted was a model that would sustain well-being; in other words, generate a sustainable income for all based on ‘wellness’. He decided on a subscription-based and accountable system, where a SE would create and sustain integrated health (IH) which neither the state nor the private sector provides. When the economics worked out to a minimal subscription of Rs. 350 per person per month, and a sustainable scale of 25,000 members to start with, Mr. Mehta pulled in some of his own investments from the financial/stock exchange business he had just wound up, found a few well-meaning investors (friends and colleagues), and started the SE—Mycare Health Solutions in Mumbai in 2012. This SE—a business model for integrated health care, gives a clear message of personal care, well-being and accountability between the firm, its doctors and individual members.

Health Care (Case 2) The founders of Swasth India—Sandeep Kapila and AnkurPegu, from IIT Mumbai— begin their conceptualization of problems and problem statement from the fact that every year over 32 million people move from above poverty line to below poverty line levels because of morbidity in the family (this WHO finding is quoted in their web page—www.swasthindia.in). How can a business model, a SE, support well-being of the poor, especially, the urban poor? Swasth India presents a model that provides affordable, easily accessible and quality health care to low-income households, so that ill-health, leading to impoverishment and further vicious cycles, is avoided. Having seeded the idea that health care services for the urban poor needed a different approach, the SE model for Swasth India was tried out in 2011. The business model drew significantly from the context—basically four lessons that the team learnt over three years, providing technical backstopping for some donor-driven and statesupported health, insurance and social mobilization projects. For the poor, (i) Out Patient (OP) attention is crucial to avoid serious morbidity (note that villagers in locations where doctors or medical networks for OP care are limited end up with hospitalization three times more than villagers with doctors or medical networks for OP care); (ii) waterborne diseases are the root cause of 95% of infant and child morbidity, (iii) upper respiratory tract infections cause nearly 25% of total medical expenditure of the family, and (iv) a very small fraction of the unwell need surgery and hospitalization. The business was provision of primary health care and preventive health care for the urban poor, with about 20,000 families enlisted as customers, paying Rs. 700–1000 per family annually to access regular and quality OP care. Besides regular OP care which reduces annual medical bills by 30%, the model also ensured that when needed, the family gets Rs. 30,000 worth cashless hospitalization. But this model had problems—not every urban poor family was willing to pay for preventive health care. The strategy soon evolved to go beyond the micro-insurance based OP care model. The renewed business had to own the customer, reach out and

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promote the idea of well-being and preventive care, and needed social mobilization of a range of actors (besides the customer). The three pillars of this business are (i) preventive health care and primary health services; (ii) integrated approach to well-being; and (iii) technology as an enabler—in linking, monitoring, learning. The brand equity is promoting ‘good health’ and the core physical entities are ten Swasth India health care centres in the slums of Mumbai. The urban health monitoring in place now within these Swasth India centres, and their database are powerful inputs that can transform the health, medical expenses, livelihoods and skill base of the workforce in the city. The business model ensures that every rupee invested results in savings to the customer. No urban poor family must suffer economic and social deterioration because of morbidity!

Healthy Consumption (Case 3) Systemic fault lines are abundant in the food we consume and the impacts it has on health—our bodies and our ecosystems. Using the market and the social fabric, to address these fault lines, Pristine Organics is a firm that produces a range of organic foods and nutritional supplements. K. C. Raghu, founder-director of the firm, embodies the byline on the firm’s web page, always willing to unlearn so as to enable learning. In separate interviews with the founder and individual employees (Uma, who handles marketing and brand equity, and Akshatha, a nutritionist who works with the NGOs, services and support system), it is the drive to ensure ‘organic linkages’ that comes across as the key to addressing the evident fault lines in our food production, distribution and consumption systems. Ownership with accountability is built into each of the units or partners that the firm works with. A Gandhian trusteeship is evident in its dealings. But that is what Pristine Organics is about; it has no qualms about running a business with Rs. 15 crore turnover annually, and is happy about the impacts that its products and services have on immunologically challenged people, farmers, NGOs, government schemes or programmes, other private enterprises, and on the organic movement in India. Starting off in 1992 with a small food testing lab, with a bank loan and some personal finance, Pristine focused on two segments in the food industry, nutraceuticals and animal nutrition products. Having gained a reasonable market, business clientele and reputation, within a decade, Pristine was thinking about the food system (soil, water, biodiversity, cultural and culinary diversity, etc.) and the need to bring traditional knowledge and diversity, organic wholesome, healthy, tasty, lively essence of food back to the table.And this it builds with a network of actors who share the economic prosperity and social/ecological benefits.

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NSTEDB. (2011). Developing ecosystem for knowledge to wealth creation—technology business incubators. NSTEDB Department of Science and Technology and MICA: New Delhi and Ahmadabad. NSSO. (2014). Employment and unemployment Situation in India, 2011–12, NSSO 68th round, Ministry of Statistics and Programme Implementation, Government of India: New Delhi Office of Advisor to the Prime Minister. (2011). Towards a more inclusive and innovative Indiacreating a road map for a decade of innovation. Strategy Paper, March 2011, Office of Advisor to the Prime Minister, Government of India: New Delhi. Planning Commission. (2011). Report of the Working Group on Employment, Planning and Policy, for the Twelfth Five Year Plan 2012–17. Planning Commission, Government of India: New Delhi. Planning Commission. (2012). Twelfth Five Year Plan 2012–2017, Planning Commission, Government of India: New Delhi. Polanyi, K. (1944). The great transformation: The political and economic origins of our times. Boston: Beacon Press. Qazi, F. S. (2015). Vocational education and training in India (Section 4, R. Raina & K. Mandal (Eds) “Rural India: S&T for skills and employment”). In S. Pohit et al. (Eds), India S&T Report (pp. 493–495). New Delhi: Foundation Press and CSIR-NISTADS. Raina, R. S. (2000). Countering seasonal rural problems: Integrated participatory information system. Economic and Political Weekly, 35(37), 3335–3342. Raina, R.S. (2011). Institutional strangleholds: Agricultural science and the state in India. In D. Narayana & R. Mahadevan (Eds), Shaping India–economic change in historical perspective (pp. 99–123). Routledge: New Delhi. Raina, R.S. (2013) (mimeo) Innovation systems and development. Course Reader, AcSIR course material used in the AcSIR Ph.D. Programme 2013–15. Raina, R. S. (2014). Beyond supply driven science. Seminar, 654: 69–74. Robinson, J. (2010). Elites and institutional persistence. UNU-WIDER Working paper 2010/85. UNU-WIDER. Rondinelli, D. (1993). Development projects as policy experiments: An adaptive approach to development administration. London: Routledge. Tomich, T. P., Kilby, P., & Johnston, B. (1995). Transforming agrarian economies: Opportunities seized. Ithaca: Opportunities Missed, Cornell university Press. Veblen, T. (1906). The place of science in modern civilization. American Journal of Sociology, 11(5), 585–609. Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor’s perspective. In R. KatzandBrockhaus (Ed.), Advances in entrepreneurship, emergence and growth (pp. 119–138). CT: Greenwich.

Chapter 11

Learning from China: S&T and Innovation Policy Responsiveness G. D. Sandhya and N. Mrinalini

Abstract This chapter sees a strong role for governments in directing and promoting continuous interactions between the S&T organizations and policy actors for an inclusive and responsive innovation system. Different countries have depicted differences in the responsive and inclusive behaviour of their National Innovation System (NIS) providing invaluable insights to the understanding of innovation. This chapter examines India’s policy responsiveness to foster inclusive and responsive innovation through the interactive NIS framework. It does this by drawing lessons from the Chinese experience of public intervention in S&T and innovation. The issues examined include linkages of S&T with other domains of the NIS, human resource and industrial research and the innovation ecosystem. While there are complexities involved in managing S&T and innovation in India, China has successfully transformed its institutions of knowledge and learning and engaged them in the growth process through an interactive model of innovation.

Introduction Economic growth has been sustained by economies which have generated robust innovation capabilities and well-functioning systems of governance (Fagerberg et al. 2007). This is made possible only if science and technology (S&T) is perceived as a complement to effective economic policies rather than a substitute (Rosenberg 1990). If the available evidence is any indication, countries that have made huge advances in Science, Technology and Innovation ecosystem have made it possible by an appropriate policy package to create S&T infrastructure, promotion of entrepreneurship, favourable innovation ecosystem, nurturing skill base with suitable policy instruments and achievable targets and a succinct implementation of policies. G. D. Sandhya (B) 457, Sainik Vihar, Pitampura 110034, Delhi, India e-mail: [email protected] N. Mrinalini 202, Rosewood Apartments, Mayur Vihar 110091, Delhi, India e-mail: [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_11

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The experience of the economies of Japan, Korea, Singapore, Taiwan and now China suggests that there are several similarities in the linkages between the economic and S&T policies, and a roadmap supported by a proper policy package. The core of the policy package in these contexts has been a careful selection of sectors with high growth potential, developing technological and manufacturing capabilities at a global level in the selected sectors, developing required human resources, controlling the finance to direct the industries through licensing policies and steering private enterprises towards reaching the global standard in the selected sectors. The goal has been to catch-up with the best, and the policy has been to have a closely monitored regime of import substitution for export promotion (Nath 2008). Compared to these strategies, the economic policies followed by India till the 1990s were not very different from those followed by the countries like Korea and Japan, albeit with different results. Japan and Korea joined the league of OECD countries and China has toppled Japan from its long-held position of second-largest economy. In these countries, economic policies were suitably complemented by initiatives to build science and technological capabilities and foster innovations. Like economic policies, technological innovations too were made to focus on the carefully selected sectors within selected industrial segments. There was a determined drive— the characteristic of the Japanese and Korean initiatives—to attempt to be at the frontier of the selected areas of technology. India has commendable technological innovations in areas like space, atomic energy and defence. India benefited in these areas due to a targeted growth trajectory but lagged behind in innovations in the capital goods and consumer goods segments of economic activities. More precisely, this was evident more in S&T/innovation systems and industries which have to face global market dynamics. In the era of globalization, the successful exploitation of the global knowledge pool requires strengthening of S&T capabilities and a well-functioning governance structure for translating S&T capabilities to economic gains. This calls for appropriate changes in institutional arrangements commensurate to changes in economic, technological and industrial policies. This chapter addresses the gaps in India’s policy responsiveness in the attempts to foster inclusive and responsive innovation. An innovation system consists of actors, institutions, infrastructure and the relationships between the actors. The robustness of an innovation system is shaped by continuous interaction between the actors; processes that lead to and enable the effectiveness of appropriate science, technology and innovation (STI) policies. This interaction framework conceives a National Innovation System (NIS), which is composed of several domains (of policy/government, academia/S&T/university, industry/enterprise, intermediaries (finance, marketing, transport and other services), and demand (the domestic consumer and export markets)), and assumes that these domains are constantly interacting and learning from each other (Lundvall 2002; Lundvall et al. 2009). The whole process of interaction and learning fulfils the needs of specific economic actors and functions—the industry, markets, employment generation, and others who are linked to the NIS. A reponsive and inclusive NIS is assumed to cater to all this, and is constituted by a responsive set of S&T organizations and policy

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actors. Analytically, the differences in the responsive and inclusive behaviour of NIS in different countries brings important lessons. This paper draws lessons from the Chinese experience of public intervention in S&T and innovation. The Chinese case demonstrates how this interaction and learning was enabled through reform of the existing S&T system to make it more inclusive. The paper begins with a comparative understanding of India and China on competition, knowledge application and innovation. This is followed by a presentation and discussion of the actors in India’s NIS, with special attention to linkages of S&T with other domains of the NIS, and issues confronting the innovation ecosystem in India. Human resource and industrial research infrastructure are core parts of the NIS; these are presented in separate sections highlighting the process of inclusion that decision makers in the Chinese context triggered to create an enabling innovation ecosystem. We examine the complexity of these issues, without attempting a one to one comparison, through an analysis of 1. Linkages of S&T with other domains of NIS 2. Human resource initiatives. 3. Industrial research and innovation ecosystem. The purpose is to get an insight into India’s initiatives dealing with S&T and innovation system. Following this, the major gaps in S&T and innovation policy responsiveness in India are analysed, and the last section discusses strategies for maximizing growth, the economic goal, using core strengths.

India’s Position: Competition, Innovation, Knowledge Application The relative weaknesses of India’s innovation system can be gauged by the relative rankings of India and China through select indicators such as the Global Innovation Index1 (GII), Global Competitive Index2 (GCI), Competitive Industrial Performance Rank,3 Country Manufacturing Competitiveness Index4 (CMCI) and Knowledge Economy Index5 (KEI). In the Global Competitive Index, which compares countries in terms of their potential for growth, India has gone down in rank from 56 in 2003–04 to 71 in 2014–15 against China’s ascent from 44 to 28. The Global Innovation Index (GII), is a measure of the suitability of conditions in an economy, which can sustain innovation. While the GII ranked China at 29th position in 2014, India descended to 76th place in the same period. The Competitive Industrial Performance Index, which is an index that measures the ability of countries to produce and export manufactured 1 Global

Innovation Index, (http://www.globalinnovationindex.org/gii). Global Competitiveness Report for the years under consideration. 3 www.unido.org/data1/statistics/Research/cip.htm (For various years). 4 Global Manufacturing competitiveness index, Deloitte (For various years). 5 KEI reflects the suitability of the environment for using knowledge for economic development. 2 The

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Global Competitive Index Global Innovation Index Competitive Industrial Performance Rank Country manufacturing competitiveness index Knowledge Economy index (KEI)index

Fig. 11.1 China–India comparison on the basis of various index rankings over the period. Source Constructed from various sources

goods competitively, has ranked China at 5th rank against India at 44th rank. The manufacturing comparison through Country Manufacturing Competitiveness Index (CMCI) ranked China at number 1 and India at 4 in 2013, both the economies benefiting from the labour cost advantage. A comparison of the Knowledge Economy Index of China and India displays China’s improved ranking from 89th to 54th; India moved from 97th in 1995 to 76th in 2012. This index is primarily based on parameters related to economic incentives and institutional regime, education, innovation and Information and Communication Technology (ICT). On the indices of human capital and research China was ranked at 56th and India at 104th position in the same time period. Scientific outputs too place China at 9th and India at 60th position (Fig. 11.1). It is evident from the ranks of both the countries that China has consistently improved its position. The Global Competitiveness Report recognized China as an efficiency-driven economy and India as a factor-driven economy.6 Much of India’s growth has depended on services sector with manufacturing at the basic or intermediate level (Planning Commission 2014). However, if India wants to play a leading role in innovation and accomplish sustainable development, does the present innovation ecosystem complement the existing capacities and capabilities? 1. Linkages of S&T with Other Domains of NIS Innovation is an interactive process that requires intensive communication and dealings among several actors such as universities, research institutes, educational institutions, suppliers, customers, financial institutions (Lundvall 2002; Lundvall et al. 2009). Innovation requires an ecosystem that is nurtured by an active involvement of various agencies for (a) technology generation: mainly research organizations; (b) technology diffusion/marketing for marketing technologies; (c) technology consultancy organizations; (d) tools, equipments and prototype development organizations; (e) organizations providing common facilities/testing centres for testing, standards, 6 The

Global Competitiveness Report 2014–15, World Economic Forum.

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calibration, etc.; (f) raw material, machine and equipment suppliers mostly for (Small and Medium Enterprises) SMEs; (g) finance and refinance; (h) infrastructure development organizations for developing basic infrastructure facilities; (i) organizations for imparting training and skill development; and (j) entrepreneurship development programmes. In India, the support to innovation is provided by these organizations for supporting innovation (Nath et al. 2011). The inferences drawn from Table 11.1 are the following; Table 11.1 Length and breadth of the innovation support system in India Jurisdiction activity

National

State

District

Local

Technology generation

RDI (611), CMTI TDC (8) TDC hand tools (1)

RDI (918), SIRO (490), Univ (282)

Technology diffusion/marketing

NRDC, MSMEDO, IDEMI

MSMEDI, State Khadi Board

DIC

Technology consultancy

CMTI, IDEMI

TCOs

DIC

Tools, equipment, prototype development

CMTI, IDEMI, CMTI

Central tool room (10), Dir of Inds.

Common facilities/testing centres

Testing centres (4); Field testing stations (7), CMTI

TDI (30) Workshops (42)

Raw material, machine and equipment supply

NSIC, Khadi Board

State Khadi Board, MSMEDI

DIC

Finance, refinance

SIDBI, NABARD

State Fin Cor.

Lead bank

MFI

Infrastructure development

MSMEDO, RISC

State Dir of Inds. MSMEDI

Training and skill development

TI (2), CMTI CAPART, IDEMI, NIMSME, Khadi Board

MSMEDI, ITI, Khadi Board

DIC

SHG, CSR, DRDA, BDO, Coop, NGO

Firm level In-house R&D, MNCs’ R&D centres

Collaboration with Danish, German, Swiss governments

Donor agencies

(continued)

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Table 11.1 (continued) Jurisdiction activity

National

Entrepreneurship EDI, IIT, development TDI, NIT, NIESBUD, IIE

State MSMEDI

District

Local

Firm level

SHG, CSR

Source Nath et al. (2011) Notes Numbers in parentheses Abbreviations: IIE – Indian Institute of Entrepreneurship; IIT – Indian Institute of Technology; IDEMI – Institute of Design of Electrical Measuring Instruments; ITI – Industrial Technology Institutes; CAPART – Council for Advancement of People’s Action and Rural Technology; CMTI – Central Manufacturing Technology Institute; DIC – District Industries Sector; DRDA – District Rural Development Agency; EDI – Entrepreneurship Development Institute; MFI – Micro Finance Institutes; MSMEDO – Micro Small and Medium Enterprise Development Organization; MSMEDI – Micro Small and Medium Enterprise Development Institutes; NABARD – National Bank for Agriculture and Rural development; NRDC – National Research Development Corporation; NIESBUD – National Institute for Entrepreneurship & Small Business Development; NIMSME – National Institute of Micro, Small and Medium Enterprises; NIT – National Institute of Technology; NSIC – National Small Industry Corporation; RDI – Research and Development Institute; RISC – Rural Infrastructure and Service Commons; SIDBI – Small Industry Development Bank of India; SFCs – State Financial Corporations; SIRO – Scientific and Industrial Research Organization; TDC – Technology Development Centre

• There are a considerable number of organizations for technology generation in India at the national and state level (ibid). However, the numbers do not appear adequate when we look at the organizations for supporting and promoting innovation. At a local level, there is an absolute dearth of organizations, supporting technology generation, technology diffusion, consultancy, tools, equipment, prototypes, common facilities for testing, etc. • One of the major findings of the study was the inadequacy of linkages between SMEs and innovation support system. The study also noted that the participation of the state government in India is mainly in terms of the execution of government schemes and mobilization of resources. In India, the local level of performance review is directed only towards ensuring a flow of funds. It is apparent that in India the ‘Innovation Support System’ has not been created with a declared objective of promoting innovation. There is a lack of definitive arrangement for supporting innovation. The implementation of programmes and their assessment is based more on financial accounting. In the last two decades, a number of policy initiatives have been taken in India to redesign its innovation strategy. Some of these initiatives include the NMITLI (New Millennium India Technology Leadership Initiative), the TePP (Techno entrepreneurs Promotion Programme), the Technology Development Board (TDB), the Home Grown Technology Programme (HGT), the GIAN (Grassroots Innovation Augmentation Network), the SBIRI (Small Business Innovation Research Initiatives), etc. The initiatives are there but they have the limitations of scale and scope.

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A National Innovation Council (NInC) was constituted to prepare a roadmap for innovation for the decade 2010–2011 for inclusive growth under the chairmanship of Sam Pitroda. The new Indian model of innovation intended to go beyond R&D and technology to target inclusive growth. The NInC has deliberated upon this to create state innovation councils, sectoral innovation councils, an inclusive innovation fund, a national innovation portal and to promote industry innovation clusters. The agenda was to promote inclusive growth by fostering an appropriate ecosystem across domains and sectors to strengthen entrepreneurship (OAP PIII 2011). A plethora of policies proposed, dealt with issues ranging from inclusive innovation to globally competitive products, from usage of global resources to disruptive innovation, from collaborative and multidisciplinary research to getting central and state governments to engage in innovation, and from involving universities and research institutes and industry to innovate to engaging with those of the Indian diaspora abroad who are engaged in innovation. While there has been a realization of the problems confronting India’s NIS, the initiatives to tackle the structural weaknesses confronting the system require a paradigmatic shift. In India, SMEs are considered important but suffer from a lack of support, ranging from research assistance to financial assistance, which continues to depend on collaterals (Nath et al. 2011). SMEs face difficulties in innovation due to their size disadvantage and their dependence on external knowledge generating institutions. Thus, one of the most significant factors of innovation support system is the component of research support for the industry either from Government Research Institutes (GRIs) or universities at both national and local levels for the SMEs. It is acknowledged that an inclusive and responsive innovation must cater to the demands of SMEs; but in comparison to China which adopts a bottom-up approach for the implementation of innovation in the rural areas, India’s innovation support system has little capacity to cater to SMEs and rural manufacturing. 2. Human Resource Initiatives One of the most important components of innovation is human resource. Universities are instrumental in knowledge generation and innovation not only as providers of qualified labour but also for incubating spin-offs. In India, the higher education has not received the attention as it should have in the last two decades. There is a crying need for a clear, coherent and explicit long-term policy perspective on higher education in India and a vision of development (Tilak 2012). Tilak puts the blame on the absence of policy making and planning in higher education, which leads to interpreting the government perspectives through the Five-year plans and annual plans, budget speeches and statements made by ministers on various occasions or schemes announced by the government. Although there are challenges faced by countries such as Brazil, Russia and China in enhancing higher education, India faces tougher challenges. India lacks a coherent long-term policy for higher education and grapples with challenges in maintaining quality, quantity, equity and governance (Tilak 2013).

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The National Knowledge Commission (NKC) was set up to prepare a roadmap of knowledge creation in 2006 in recognition of the crisis in higher education (NKC 2006). The commission identified factors that ail higher education in India which ranged from inadequate infrastructure, unchanged curricula, learning and creativity bottlenecks, barriers in developing knowledge at the intersection of disciplines, segregation of research and teaching, etc. Thus, though the NKC has recommended several action points with regard to expansion, regulation, increased spending, establishment of national universities, etc., the outcomes do not seem to be commensurate with the recommendations. The transformation and modernisation of higher education in China following the economic reforms since 1985 has strategically targeted universities by expanding their role from education to research and commercialization. While university modernization remained a key issue to revitalize human resource, changes in curricula, autonomy in administration, incentive plans, and growth strategies with the participation of local governments were some of the others. Universities were transformed from being centres of education to those of research and commercialization. This can be gauged by the fact that more than 700 universities in China are not only involved in research but also in commercialization. The collaboration between the universities and regional governments helps in promoting regional development; and regional universities undertake more of industrial projects. The provision of support structures for technology transfer has also helped in strengthening the linkages between the industry and universities (Sandhya et al. 2012). China has facilitated gradual transformation of its crucial organizations in academia and government research institutions to create knowledge, and to counter the lack of demand from industry, it encouraged the creation of production centres. The commercialisation of university research was aided by the incentivisation of university faculty. Through a provision in the Chinese version of Bayh Dole Act, universities can retain the rights to inventions created with government funding. Financial help through the Torch Programme; dynamic environment in the science parks and high technology zones; creation of support structures in the parks, etc., have helped in strengthening the linkages. India faces problems of requisite institutions, lack of autonomy in hiring staff, curriculum development, faculties, governance, intersecting disciplines, or overall inadequacy the system to inculcate creativity (Desiraju 2008). If excellence in research and teaching are the essential elements of a world class institution, the reorientation of universities from education to research and subsequently the empowerment and autonomy of universities to attract and retain outstanding faculty would be central to this issue. One of the most important issues neglected so far is the lack of effort in strengthening faculty in higher education institutions. Indian faculty is spread all over the world in all leading global universities but initiatives by India to make use of this resource require strengthening. From 1995 to 2005, 15% of Silicon Valley start-ups were launched by Indians, the largest so far for any group.7 Attracting members of the Indian diaspora back home for both teaching as well as research purposes could go a long way in consolidating faculty in universities. China has been successful in such an endeavour, but in India, no concrete steps have been taken in this regard. 7 http://yaleglobal.yale.edu/content/silicon-valley-spur-innovation.

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To attract faculty some of the initiatives in the Eleventh Five-year plan (2007–12) included the University Grants Commission’s (UGC) Encore Scheme to enhance faculty resources of universities, All India Council for Technical Education’s (AICTE) emeritus fellowships for retired professors and fellowships to utilize services of experienced academicians, foreign scholars, and researchers. This was followed by the setting up of an Education Commission to help enhance the quality of education at all levels. Several committees were set up to look into various issues such as the Yashpal committee on renovation and rejuvenation of higher education, the Kakodkar Committee on the restructuring of the IITs, the UGC committee on academic and administrative reforms, and the AICTE’s emeritus fellowships among them. Some of the issues that require urgent attention are autonomy to the universities in India, relating to hiring of staff including Indian diaspora, low number of Ph.Ds, and governance. Inadequacy in the number of Ph.Ds is still a matter of concern. India produced 5900 S&T and engineering Ph.Ds which increased to 8,900 in 2008 in contrast to China’s rise from less than 5000 to 49,698 in 2008.8 It would be useful to learn from Chinese initiatives of the Chinese Scholarship Council which has a programme that sends first-rate Chinese students to first-rate international colleges to work with first-rate mentors. The programme funds 5000 students every year to earn a Ph.D. from other countries and deputed students are required to return and serve. Several Chinese universities have been modernized through university modernisation and upgradation programmes. These universities made use of 20% of funds to attract new talent from overseas and one-third was used to increase the salaries of faculty. Universities have the autonomy to chart out their growth strategies. For instance, at Zhejiang University, it is compulsory for university faculty to have a minimum of one year experience overseas before applying for promotion to full professor. Another strategy is to have a third of the faculty from local, a third from within China and the last third from other parts of the world. Chinese universities have been recruiting international faculty including Nobel laureates. Another interesting dimension is how universities make efforts to align university research with regional problems. For instance, it is mandated by Zhejiang University that new faculty must be sent to the industry for 2 years. This helps them understand the problems that can be taken up for further work in universities. This not only allows them to make research relevant to regional problems but also lays a foundation for consolidating links with the industry (Oblinger 2007). This is similar to the practice adopted by Japanese prefecture labs where laboratory scientists are mandated to visit industrial sites and offer free on-site consultancy, which leads to more relevant and usable research by the industry. The participation of Chinese universities with regional governments for promoting regional development and encouraging them to take up industrial projects has helped in strengthening the link between research and its application. The biggest challenge confronting India, therefore, is to give the highest priority to quality education and research. This requires not just an increase in the number of institutions, but also a paradigmatic shift in the content of education for research and creativity and faculty upgradation. It also requires a shift in the jurisdiction power of universities from central to local, and measures to attract global faculty. 8 Education,

the Ph.D. factory, Nature, 472, 20 April, 2011, pp 276–279.

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3. Industrial Research and Innovation Ecosystem The industrial research infrastructure in India continues to grapple with the problems of linkages with the industry. The government has taken a number of initiatives since the 1980s to improve the usefulness of these institutions and make them more relevant to the industry but the problems of utilization of research still persist. These continually suffer from the problems of gradually eroding human resource, weak support structures and weak innovation ecosystem. These institutions have neither been enabled to consolidate research or participate with industry strategically in a big way. The contradictions of their role, whether towards the large firms or small firms; research excellence or enhancing industry capabilities; national or regional problem solving, and several others continue to plague industrial research (Sandhya et al. 2012). The genesis of the lack of effectiveness lies in the missing concurrence between economic and S&T policies. This coupled with a financial and human resource crunch have further deviated them from engaging in meaningful research. Although both India and China have a shared inheritance of large research infrastructure (India’s is admittedly not as large as that of China), the differences between the two are located mainly in China’s attempts to overhaul its research system thoroughly, post-reforms, since 1985. The consequent policies in China have introduced measures pertaining to funding of research; commercialization of research; organizational restructuring of R&D organizations and involvement of these organizations in both research and commercialization. The withdrawal of assured financial appropriations in conjunction with brutal restructuring was attempted to make research more productive for industry and to set up global R&D benchmarks. Disassociation of the government from funding, conversion of research institutes into enterprises, the policy of creating research institutions affiliated enterprises and spin-offs, creating a technology market and creating support structures for technology transfer has helped build links between research and industry (Sandhya et al. 2012). When China withdrew assured funding as an instrument to enhance relevance of research; it launched national programmes in select priority areas from basic research to commercialization; which led to the consolidation of selected streams with support from the ecosystem through S&T parks, a favourable IPR regime and intermediary structures. Research reorganization through the making of the Knowledge Innovation Programme (KIP) has tightened the focus of research in the Chinese Academy of Sciences (CAS). In the process, the CAS has not only transferred its mature technologies to various domestic industries, but has also created high-tech enterprises of its own. Since the implementation of the KIP Programme, the CAS has cultivated around 1,000 new-generation S&T leaders and top-ranked talents; and formed highly talented scientific innovation team, which can be rated as the most useful outcome of the initiatives taken. Though there were some loose ends in the restructuring process, the tightening of focus in the CAS through the Knowledge Innovation Programme has enhanced the relevance of research in the CAS.

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In order to draw parallels between India and China, for instance, it would be useful to take an illustrative case of India’s Textile Research Associations (TRAs). How a similar practice of withdrawing assured financial appropriations in the absence of other support measures has proved to be counterproductive can be exemplified through this. There are eight TRAs under the Ministry of Textiles to cater to research and the technology requirements of the Indian textile industry. The contribution of textile industry towards the economy is enormous for it contributes 14% to industrial production, 4% to GDP, 17% to country’s exports earnings, employing over 35 million people—a number second only to agriculture (Ministry of Textiles, 2010– 11). The role of R&D in enhancing the competitiveness of this sector thus cannot be underestimated; and therefore, there is a need to strengthen it.9 A FICCI study has also highlighted an urgent need to upgrading the R&D initiatives in the industry, since China’s share in exports of technical textiles and non-woven fabrics to the USA amounted to 15% and 12% in contrast to the Indian contribution at 2.6% and 1.2% in the year 2009.10 Though the TRAs were created to cater to the research and technological requirements of the industry, they have witnessed a gradual depletion in human resource over the years and have become irrelevant to the needs of industry. The withdrawal of government funding and the pressures of earning have forced them to orient their activities around revenue generation. The inefficiencies in textile research stem from the absence of a strategy about the role of research in the innovation system. The textile industry is represented by big technologically advanced and export-oriented firms on the one hand, and decentralized low-tech small firms on the other. Since large firms have their own means of technology acquisition and upgrading, the small decentralized sector continues to suffer from technological obsolescence. The TRAs can be of very significant value to the small decentralized sector. But they have been marginalized in the post-liberalization scenario. The main concern of these organizations in the liberalized regime has been to earn money through routine activities such as testing or equipment-based services, and use money from sponsored projects to set up modern R&D intensive facilities which remain underutilized. Strengthening the research skills in the TRAs have never received the required boost and they have suffered from severe human resource constraints (Nath et al. 2001). The problem with the TRAs has therefore been the lack of strategic thinking and capacities, in terms of their role either towards enhancing research or technological competitiveness of the industry. The emphasis on servicebased activities has made the TRAs physical resource dependent. The implications are the marginalization of research associations in such an important industry. The Indian textile industry is illustrative of an industry that has built manufacturing strengths, and a chain of industrial research institutions to undertake research. But there is a demonstrable inability to strike a balance between the research agencies and industry despite a serious need for building technological capabilities. 9A

study done by NISTADS on ‘Evaluation of Textiles Research Associations’ with financial assistance from the Ministry of Textiles highlighted the need for their incorporation into the larger framework of research for the industry. 10 ‘Need to formulate R&D policy for Textile Industry: a study’, Business Standard, October 19, 2011.

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The Council of Scientific and Industrial Research (CSIR) tops the list of patent filers in India.11 Even though the CSIR system has this feat to its credit, the utilization and diffusion of patents is fraught with problems. Through the New Millennium Indian Technology Leadership Initiative (NMITLI) project in CSIR, some initiatives have been taken to forge public private partnerships to catalyse innovation centred research. The initiative has been launched in a number of areas including agriculture and plant biotechnology, general biotechnology, bioinformatics, pharmaceuticals, chemicals, materials, Information and Communication Technology (ICT), and energy by involving partners form industry and other institutions. Though a few initiatives have been taken with industry, they neither match the scale of the Chinese initiatives nor the stringency of Chinese implementation. In China innovation has been promoted by creating S&T parks. The boost to innovation was given by the Torch programme, implemented by the Ministry of Science and Technology (MOST) for developing China’s new and high-tech industry in keeping with China’s emphasis on commercialization of high and new technology. The move to create science parks was accompanied by the structural reorganization of the university system and public research institutes and creation of facilities to support commercialization for promoting innovation in these geographical clusters (Sandhya et al. 2012). The innovation support services include the creation of innovation centres, productivity promotion centres, technology transfer centres, venture capital firms, legal services firms, etc. The move has resulted in creating an ecosystem which is commendable on account of the linkages it has managed to build among the several actors of innovation. These S&T/University/Industrial parks in China have shown strong networking among the government programmes on basic research, high technology, commercialization, and physical infrastructure. The Chinese policy of focussing on priority sectors and selected technologies has encouraged competition, for funding amongst the fund seekers, and taken state-directed programmes to the next level. For promoting knowledge driven, technology intensive enterprises, India facilitated the creation of technology incubators by creating the National Science and Technology Entrepreneurship Board (NSTEDB) in 1982 by the Government of India under Department of Science and Technology. It has been operationalised through Science and Technology Entrepreneurs Parks (STEPS), Software Technology Parks (STPs) and Technology Business Incubators (TBIs). Fifteen STEPS were catalysed in India in different parts promoting around 788 units by 2010–11.12 In both India and China, the push to create TBIs had its genesis in the 1980s. Up to 2008, 670 TBIs were set up in China. The initiative to launch TBIs originated at around the same time in China and India in 1988 and 1987, respectively, under the United Nations Science and Technology Fund (UNFS&T). The initiative received only a lukewarm pickup in India. It managed to take off only around the year 2000, culminating in 120 TBIs that generated USD 125 million by 2009. China, on the other hand, had developed 670 TBIs, hosting 44,346 ventures contributing Euro 18.662 billion employing 9, 11 Indian

Patent Office, IPO (2009).

12 http://www.nstedb.com/.

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28,000 people (Tang et al. 2010). The difference in numbers and revenue generation is attributed to generous funding from the Chinese Torch Programme and support infrastructure from intermediary organizations. Similarly, the Software Technology Parks (STPI) was set up in India to boost exports and attract Foreign Direct Investment (FDI); they have succeeded in that endeavour. These parks have basically evolved in the last two decades in the areas of software and biotechnology. They started as an export-oriented scheme in 1990, integrating the concept of 100% export-oriented units and Exports Processing Zones (EPZ). Currently, there are 47 centres of which 10 are main centres and the rest are sub-centres. The success of these software technology parks acted as an impetus to the formation of around 25 biotech (BT) parks that have come into existence since 2001. The state of Andhra Pradesh leads in number of BT parks. Although the state has some of the most promising S&T organizations such as the Centre for Cellular and Molecular Biology (CCMB), the Indian Institute of Chemical Technology (IICT), the National Institute of Nutrition (NIN), the Centre for DNA Fingerprinting and Diagnostics (CDFD) and the University of Hyderabad, our personal interviews with some of the firms in these parks have highlighted the problem of weak linkages between the firms and the research institutions (Mrinalini et al. 2011). The S&T parks have been set up in India for providing the physical infrastructure. They do not match the resources and efforts made by China in creating and sustaining the linkages within the innovation system. One important point that emerges from the S&T parks in China is that it has given a lot of attention to research support and creation of linkages amongst universities, research institutions and industry with support from intermediary structures. These intermediary support institutions are a part of national strategy and have been set up for promoting innovation. In India, even though the present decade has been declared an ‘innovation decade’, the measures to create an ecosystem require further strengthening.

S&T and Innovation Policy Responsiveness and Major Gaps The first and most important lesson that can be learnt from China lies in its ability in devising an innovation policy that corresponded well with its economic policies. The essence of the Chinese policy package was industrial specialization in selected sectors. Their target was catch-up in the early phase, which was replaced by global leadership later. China mobilized its resources towards the accomplishment of the clearly set and defined targets coupled with the fundamental systemic changes in the S&T and education system through ruthless restructuring besides the fiscal, trade, finance and industrial policies. India too adopted a plethora of policy initiatives to promote S&T. But there have been major constraints that have impacted the much desired realization of industrial development and innovation. We identify a few crucial ones.

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Organization and Management of STI Policies Prior to the 1980s, India followed a model supporting creation of research infrastructure and capacity building in the public sector. The focus shifted to technology in the 1980s and innovation later in 2000s. Thus, while policy initiatives dealt with the promotion of science in the earlier phase, the concerns shifted to technology generation and innovation in the later phase. The first official S&T policy in India—the Science Policy Resolution, which was passed in 1958, led to the creation an enviable broad-based infrastructure of research institutions mainly in the fields of agriculture, industrial research, defence, and nuclear energy. The first Technology Policy, though, came into existence only after two and a half decades in 1983. Another S&T policy by the DST, providing a roadmap for integrating S&T with societal concerns came into effect in 2003. The importance of innovation was reinforced by the Government by declaring 2010–20 as the ‘Decade of Innovation’. The new science, technology and innovation policy was unveiled by the prime minister at the centenary sessions of the Indian Science Congress on January 2013. The STI Policy, 2013 has been criticized on account of conflicting goals and policies as it is high on intentions but weak on the issue of challenges of working out the methodology (Abrol 2013; Mani 2013; Krishna 2013). In India, the planning of S&T was till recently done through the five-yearly plans formulated by the Planning Commission with inputs from respective agencies. This has been replaced by the Niti Aayog in 2014. These were subsequently broken down into annual plans. The onus of designing S&T policies for each sector lies with the sectoral ministries such as IT, telecommunication, energy, heavy industry and their respective scientific research agencies. The sectoral industrial policies come from the concerned ministries; and research and academia are governed by their parent ministries of S&T and human resource development, respectively. There is a lack of synchronization among these in terms of planning and enforcement. One of the most important factors that affect the application of S&T for industrial development in India is the lack of an overarching strategy with a vision to connect the economic policies with S&T and innovation. S&T management in China is organized as a three-tiered structure, which has the State Council as the top decision-making body followed by implementing and coordinating agencies as the second tier, and R&D institutes, including universities and enterprises at the third level. China’s S&T Management, with its highly centralized structure, vests the administrative control in the Ministry of Science and Technology (MOST) that directs S&T activities by forming national strategies, guidelines, policies, laws and regulations, priority setting, creation of structures, and providing funding. It enjoys decision-making powers but the major policy directions come from the State Council which in turn is advised by the Central Committee of the Chinese Communist Party (CCPCC). The State Council enjoys decision-making powers for making S&T and innovation policy in a more cohesive and holistic manner as it has the powers to orient issues related to education, S&T, research personnel, finance,

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commerce, regulation under its ambit. The planning of S&T in China is accompanied by simultaneous changes in actors of innovation, human resource, regulatory and governance issues. The process of policy making begins with the Central Committee of the Chinese Communist Party (CCPCC) and the State Council which is the topmost policy making body in China. The policy directions usually emanate from State Council but initiatives for some of the key programmes have come from the leading scientists as well. There is a clear-cut demarcation of policy preparation at different levels. What is important is to notice the importance given to complementary policies; they have been given the same importance as the main S&T policy. In China, the efficacy of policies has been enhanced due to speedy implementation and strict governance. The major initiatives such as the 1985 Decision on the Reform of Science and Technology Management System, the May 1995 Decision of Accelerating Scientific and Technological Progress, and MLP 2006 have emerged from a lot of painstaking planning and a series of discussion workshops. One of the most crucial points in enhancing the efficacy of major policy directions has been simultaneous working on the complimentary policies. Implementation is very fast. A very crucial point is that the whole process of policy making in China is extensive and takes into its fold all the crucial, stakeholders, administered by one body and is continuously monitored. The enforcement of policies is strict as it is facilitated by the concerned central authority. The implementation of policies is timely, fast and well coordinated. The policy making reflects continuity and grows with inputs from the stakeholders It reflects a continuity of purpose; entails integration amongst concerned actors, incrementality and fast implementation. The process of policymaking is aided by the analysis of policy outcomes and achievements and is open to learning from failures. It is not financial accountability, which will judge the success or failure but the programme or project outcomes. In contrast, in India, the whole process of policy making for S&T for industrial development suffers from the problems of coordination between economic, and S&T policies and a strategic vision. The consequences are allocation of a meagre S&T budget into several streams but with thinly distributed resources towards R&D, and almost nothing spent on building linkages and enabling coordination. Coupled with a lack of fixed targets this does not lead to the building up of either R&D competencies or industrial development. There are policies and structures but they do not possess enough concurrence and connectivity. The implementation of policies in India does require a strong enforcement and objective evaluation. The lack of rational analysis of policy outcomes and achievements and learning from failures underlines the poor outcomes.

Target Centricity and Competitiveness Targeting a few sectors and technologies to excel in and attain global leadership and working towards that consistently has been the approach adopted by China. China adopted the policy of focussing on a number of priority areas to reduce the gap

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with developed countries and enhance its competitiveness. While retaining the manufacturing push, the support in terms of R&D too focussed on similar priority areas such as IT, electronics, life sciences including pharmaceuticals, medical devices and biotechnology, space, nanotechnology, environment, clean energy and food and agriculture. The heavy R&D investments in selected areas have helped China in terms of enhancing its relative position globally in research in areas such as supercomputing, nanotechnology, clean energy. The achievements are an outcome of clarity in goal setting and tight implementation. Indian government too took the initiatives to encourage domestic R&D and innovation; strengthen the links among stakeholders in the process of innovation; and reorganize and restructure R&D institutions. The absence of a target-centric and firm-oriented approach adds on to persistent lack of major structural changes, and has led to poor outcomes. The success in sectors such as space, defence, and atomic energy, however, comes from higher investments, targeted mandate and coupling of demand and supply related factors. But targeting in the industrial sector has performed below global levels (see Table 11.1). These are areas where firms have to face competition and global market dynamics. The importance given to manufacturing in India is evident from a mere 2% share it has in world manufacturing; a clear contrast to the 23.2% share that China had in the year 2013.13

Organization and Management of R&D and Technology The emerging new technologies cut across sectors with a high degree of multidisciplinarity. Their development can be very challenging not only in terms of huge R&D investments but also in terms of setting up of appropriate mechanisms for absorbing these technologies. The complexities involved in the nature of these technologies may require the creation of new organizations, unique skill sets and suitable regulatory frameworks. China exemplifies, how it has infused new technology dynamism strategically by focussing not only on R&D on new technologies but also on relevant institutions and instruments involved in the absorption of technology. The advances made by China in nanotechnology have their origin in the early 1990s when the Chinese government declared it as a priority field. R&D areas were defined, ample R&D investments made and efforts were made to mobilize advanced skill sets required for nanotechnology R&D. In the follow-ups not only R&D was intensified but also efforts initiated for developing instruments critical for nanotechnology research, creating new materials, developing parks for nanotechnology, creating standards and providing safeguards for the risk governance. One of the major lacunae afflicting Indian S&T system pertains to inadequacies in the organization and management of R&D. The R&D planning is directed more towards the disbursement of funds to existing institutions, which often does not pay adequate attention to industrial relevance and developing products out of research. 13 World

Macroeconomic Research 2013; http://kushnirs.org.

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There are initiatives taken in India too; but these are often not coordinated. Though India has made noteworthy presence yet it reflects that the concerns are still confined to R&D; there are coordination problems amongst those involved in nanotechnology development, skill shortages are significant; and it suffers from the paucity of risk governance (Jayanthi et al. 2012). The technological dimension of R&D is not simultaneously developed while planning for R&D. The disbursement of funds under any prioritized area by the funders is to the individual scientists for their proposed projects and not to the organization in the form of developing specific strategic areas. China has created new structures and organizations to defy the challenges of emerging technologies. This is done by the organizational restructuring of research institutions, academia and industry. The process of organizational restructuring is duly supported by recognizing and identifying new skills which are required for creating and absorbing the emerging technologies. In the following section, we have tried to further elaborate the lacunas confronting the S&T and innovation in India in terms of the inability of the system in even having a strategy to consolidate our strong areas.

Strategy for Maximizing Growth Using Core Strengths In India, sectors such as IT, pharmaceuticals, and automobile have emerged as the most growth intensive sectors. India has built both research and manufacturing capabilities in the pharmaceutical industry as is evident from higher growth rates and higher outputs in publications and patents along with a positive trade balance in this sector (Sandhya et al. 2012). India has a strong pharmaceutical sector (third behind the USA and Japan). India accounts for about 25% of the world’s generic drugs production and leads in FDA approved production facilities. It has shown a combination of manufacturing skills with appropriate chemistry-based R&D skills supported by the 1970 Patent Act which gave validity to process patents. This was consolidated with strengths in biotechnology skills and infrastructure creation by the Department of Biotechnology in 1985. While we have witnessed the emergence of Indian MNCs on one hand, on the other, over a period of time, the industry has developed research strengths in medicinal chemistry, biotechnology skills, a sound research infrastructure, trained manpower, a bounty of Ph.Ds, and a few dedicated research parks. The combination of all this could have been strategized to target some breakthroughs; instead, the consequences of globalization have led to the disintegration rather than consolidation of the pharma industry. This is an industry, which witnessed consolidation of linkages over a period of time since the 1970s between research institutions and the industry. Indian MNCs have emerged that have established manufacturing facilities overseas. The initial growth in the pharmaceutical industry was undoubtedly facilitated by government policies but in the last few years what has been witnessed is the major acquisition of Indian firms such as Ranbaxy, Piramal, Dabur, Shantha, Orchid and Matrix by global firms. In the absence of any state-led direction, the

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industry has gone into the mode of survival. Though a number of research initiatives are being worked upon, the consequences of globalization on domestic firms have not been duly recognized. How the Indian R&D strengths are being exploited by foreign firms can be assessed by looking at the inflow of FDI in R&D in this sector. The FDI in R&D has been brought in by MNCs indulging in contract research at different stages for drug development (Mrinalini et al. 2011). Indian firms have, over the years, developed strengths in developing molecules, synthesis, process development, toxicology, clinical trials, bioinformatics, etc. (Sandhya et al. 2014). While global firms have entered through acquisitions, mergers, setting up subsidiaries and contract research organizations, small Indian firms have emerged catering to the modular requirements of foreign firms. In this R&D intensive sector global firms are trying to access Indian strengths and the outcome is the exploitation of Indian skills with some monetary benefits. If with a fairly well-developed research infrastructure, fairly well educated and adequately skilled manpower, India chooses to focus on low-end services, even as the real value addition is done elsewhere, then the outcomes are short-term gains. India’s export performance in knowledge-intensive production comes from software. India’s engineering skills in knowledge-driven sector like ICT have put India onto a global map. ICT has the potential to generate growth through export surpluses and increase in employment and income. Countries that have done well on ICT have combined ICT producing and ICT using sectors. The focus of Indian firms in the ICT software and services have mostly been in ICT using sectors and also at the lowest end of the value chain (D’ Costa 2002). They carry out low-level design, coding and maintenance (Kattuman and Iyer 2001). India has been projected in the domains of creativity and cutting-edge research. India needs to pitch in, to move up in the value chain. China’s strategy has been to promote, both hardware and software skills. What has emerged as an important factor is a strong university base which has developed strong links with the industry. Leading technology firms in China, such as the Founder group and the Legend group, have spun off from Peking University and CAS. In India, the tie-ups between academia and industry have mostly been limited to manpower creation. By and large, Indian initiatives have targeted exports and manpower generation without addressing the issue of innovative capabilities of firms (Parthasarthi and Joseph 2002). Huge investments have flown in for R&D by leading global firms but it is mostly the low-end activities of the value chain where India is engaging to develop some of the sub-modules. When it comes to the issue of human resource for this sector, India’s approach has been reactive in terms of creation of the human resource. A huge repository of manpower has been created through a large number of educational institutions but not many researchers are created. Indian firms are increasingly used for contract research by global companies but in the absence of any R&D strategy, the benefits are short term. A similar picture emerges when we look at the FDI inflows in India. It has been seen that the FDI inflow in India has come in the most growth intensive sectors. In the industrial sector, the FDI inflow has been dominated by the software, pharma biotech and the automotive sector (Mrinalini et al. 2011). Similar trends are seen in the case of FDI in R&D too.

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In the sectors of comparative advantage over China, it can be seen that India is outperforming China in total FDI inflow in software/IT and biotechnology, R&D in software/IT, semiconductors, pharma biotech and design and development in auto, software/IT and pharma biotech. The presence of global giants in these chosen sectors is a reflection of India’s rising skills in software development, R&D and design and development. Nearly, 70% of the FDI has come in sectors such as ICT, pharmaceutical biotech and the automobile sector where India has shown some strength. India needs to intensify efforts to gain a competitive advantage from this inflow by targeting the growth intensive sectors. India has adopted a plethora of measures to boost innovation; the outcomes can become more visible with following measures that affect the process of building S&T capabilities. First, there is a need for developing an innovation system that responds to the needs of the industry. For over three decades now, sectors such as IT, healthcare, biotechnology, automobile, etc., have provided new growth opportunities. These sectors are crucial for providing growth stimulus as well as employment generation. These need to be supported well for providing future growth and require the creation of an ecosystem that stimulates the development of innovation with an able innovation support system. It is not feasible to enhance innovative capacity across all the sectors with the given the resource crunch. However, a targeted select sector approach through an appropriate S&T and innovation policy can strengthen India’s niche areas. The industrial research institutions covering a wide number of areas need major revamping through structural and organizational changes for enhancing their relevance to industry. While the globally competitive environment has necessitated a need for higher investments in R&D for technological developments and innovation, India has been unable to cross the S&T to GDP ratio beyond 1% for a long time, despite the repeated policy pronouncements. Secondly, the Indian education system, particularly the higher education system suffers from the problems of number, skills, specializations, and curricula. The system is in dire need of systemic reforms in all its elements. For instance in the higher education sector, there is a remarkable shortage of Ph.Ds in the engineering and software/IT sector and there is a vast gap in the requirements and availability of Ph.Ds. While the number of doctorates in chemistry-based skills or biotechnology is adequate, the same is not reflected in the ICT sector where the job prospects take away the students from entering research. This leads India to a contradictory situation where though India needs Ph.Ds for research and teaching, the job market compels the bright minds to take up jobs after graduation. It is ironic that some steps for promotion of Ph.Ds in the ICT sector have been taken by foreign MNCs; more recently, Indian firms are taking the initiative. India has been exporting its skilled manpower for many decades now but their repatriation has not been strategized to augment skill shortages as is seen in China. Third, India needs to create an appropriate ecosystem that does not merely result in the setting up of structures for facilitating innovation but encourages building and strengthening of linkages for an inclusive and responsive innovation.

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This chapter, by making a comparative analysis of the complexity of S&T and innovation in India and China, proves how facile many a recommendation for targeting specific industrial sector, or building competitive advantage and such, can be, if a reliable understanding of the ground realities and historical evolution of S&T and innovation is lacking. The analysis here shows that China has amassed significant capabilities in several areas of S&T by adopting an inclusive and responsive model of innovation that encourages building up of linkages amongst the innovation actors. Manufacturing has been the mainstay of economic growth in China which has been ably supported by the government by supporting innovation support institutions and encouraging its linkages with the production system. The Chinese case demonstrates how an interactive model of innovation has transformed industrial development by continuously upgrading its institutions of knowledge and learning and engaging them in the growth process. The process of reorganization is accompanied by ruthless restructuring and reorganization of its institutions of S&T and learning through a proactive approach. Yet, it is often the case that these processes of reorganization, S&T capacity building and inclusive innovation policy development and implementation receive the least or no attention at all. Acknowledgements We acknowledge the support of the sponsoring agency the Office of the Principal Scientific Advisor to the Government of India for commissioning the study. We are also thankful to the entire project team Pradosh Nath, Sujit Bhattacharya, Parthasarthy Banerji, Kasturi Mandal, Debanjana Dey, Praveen Rawat and Abhishek Kumar for their active involvement in the study. The contents of the paper are the sole responsibility of the authors.

References Abrol, D. (2013). New science, technology and innovation policy, a critical assessment. Economic and Political Weekly, 48(9), 10–13. D’Costa, A. P. (2002). Software outsourcing and development policy implications: An Indian perspective. International Journal of Technology Management, 24(7/8), 705–723. Desiraju, G. (2008). Science education and research in India. Economic and Political Weekly, 43(24), 37–43. Fagerberg, J., Srholec, M., & Knell, M. (2007). The role of “capabilities”. In Development: Why some countries prosper while others fall behind. Jayanthi, A. P., Beumer, K., & Bhattacharya, S. (2012). Nanotechnology: Risk governance in India. Economic and Political Weekly, 47(4), 28–40. Kattuman, P., & Iyer, K. (2001). Human capital in the move up the value chain: The case of software and services industry. Mimeo (Department of Applied Economics, University of Cambridge). Krishna, V. V. (2013, April 20). Science, technology and innovation policy 2013: High on goals, low on commitment. Economic and Political Weekly, XLVIII(16), 15–19. Lundvall, B. A. (2002). Innovation, growth and social cohesion: The Danish model. Cheltenham: Edward Elgar. Lundvall, B. A., Joseph, K. J., Chaminade, C., & Vang, J. (2009). Handbook of innovation system and developing countries: Building domestic capabilities in a global setting. Cheltenham: Edward Elgar.

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Mani, S. (2013). The science, technology and innovation policy 2013, an evaluation. Economic and Political Weekly, 48(10), 16–19. Mrinalini, N., Sandhya G. D., & Nath, P. (2011). A study on impact of FDI in R&D on Indian production and R&D system. Study Sponsored by Technology Information, Forecasting, and Assessment Council. Nath, P. (2008). Catching-up from way behind lessons for India. International Journal of Indian Culture and Business Management, 1(3), 360–376. Nath, P., Mrinalini, N., & Sandhya, G. D. (2001, February). National textile policy and textile research. Economic and Political Weekly, 489–496. Nath, P., Kumar, A., & Rawat, P. (2011). Innovation support system: Organisational arrangements for promotion of technological innovation. In India S&T, Vol. 2, 2010–2011. CSIR-NISTADS, Cambridge University Press. NKC. (2006). Note on higher education. New Delhi: National Knowledge Commission, Government of India. OAP PIII. (2011, March). Towards a more inclusive and innovative India: Creating a roadmap for a decade of innovation. Strategy Paper, Office of the Advisor to the Prime Minister Public Information Infrastructure and Innovations. Oblinger, D. G. (2007, November–December). Educause Review, 42(6), 128–139. Parthasarthi, A., & Joseph, K. J. (2002). Limits to innovation with strong export orientation: The case of India’s ICT sector. Science, Technology and Society, 7(1). Planning Commission. (2014). The manufacturing plan: Strategies for accelerating growth of manufacturing in India in the 12th Five Year Plan (2012–2017). Planning Commission, Government of India. QS (Quacquarelli Symonds). QS World University rankings. http://www.topuniversities.com/ university-ranking/world-university-rankings. Rosenberg, N. (1990). Science and technology policies for the Asian NICs: Lessons from economic history. In R. E. Evenson & G. Ranis (Eds.), Science and technology: Lessons for development policy. Boulder: Westview Press. Sandhya, G. D., et al. (2012, June). A comparative study on S&T, innovation and development strategies of China and South Korea vis-à-vis India. Study commissioned by the Office of the Principal Scientific Advisor to the Government of India, CSIR, NISTADS. Sandhya, G. D., Mrinalini, N., & Nath, P. (2014). Sector and cluster effects of FDI in R&D in India. Economic and Political Weekly, 49(30). Tang, M., Bhaskaran, A., & Pancholi, J. (2010). Technology business incubators in China and India: A comparative analysis. Paper presented at the Globelics-8th International Conference on Making Innovation Work for Society: Linking, Leverage & Learning, University of Malaya, Malaysia, 1–3 November. Tilak, J. B. G. (2012, March). Higher education policy in India. Economic and Political Weekly, 47(13), 36–40. Tilak, J. B. G. (2013). Higher education in the BRIC member countries: Comparative pattern and policies. Economic and Political Weekly, 48(14), 41–47.

Part III

The Options

Chapter 12

Inclusive Innovation: Realizing the Options Keshab Das and Rajeswari S. Raina

Abstract The options presented in this chapter address the derelict policy learning capacities in India. With respect to the excluded rural, the cases in Part II can be placed in three groups, (i) where the rural informal actors coevolve, learn and enable innovation, (ii) where they engage with the state and organized knowledge actors to confront prevalent exclusions and enable inclusive innovation and development outcomes and (iii) where the state and its formal knowledge actors learn and work towards inclusion and innovation. This chapter presents options for proactive learning, and institutional and technological innovation among diverse actors. By presenting a platter of options to diverse decision makers, it places the onus of choice and need for interactions and learning on them. The contents and processes of change are then ontologically different from policy makers receiving prescriptions from the S&T actors. Two strategic shifts seem necessary for inclusive innovation: (i) from artefact or input or technological innovation to ways of working, rules, norms and institutional innovation, in all the informal spaces in rural India; and (ii) from the user or beneficiary of the innovation (the rural poor) to the state and formal organized S&T as co-learners, guiders and shapers of both knowledge and the economy (its actors). The theoretically conditioned expectation in development economics and innovation systems, that policy prescriptions based on ex-post evidence will lead to innovation and economic performance, is a twentieth-century construct. Inclusive innovation demands ex-ante engagement and learning, with decentralized innovation capacities and nonhierarchical selection of innovation projects. These are projects that acknowledge and cultivate human resources with local knowledge and socio-cultural systems understandings.

K. Das (B) Gujarat Institute of Development Research, Ahmedabad, India e-mail: [email protected] R. S. Raina Department of International Relations and Governance Studies, Shiv Nadar University, Gautam Buddha Nagar, UP, India e-mail: [email protected]; [email protected] © Springer Nature India Private Limited 2020 R. S. Raina and K. Das (eds.), Inclusive Innovation, India Studies in Business and Economics, https://doi.org/10.1007/978-81-322-3929-1_12

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The Importance of Options The exclusion of rural India in the diverse walks of knowledge and policy is obvious in the chapters in Part II here. There is evidence that when actors in the innovation system choose to learn about and address the diverse spaces, forms and norms of exclusion, they do manage to change these multiple exclusions, and enable inclusive innovation and development. As an academic endeavour, this book should have given this array of evidence, and prescribed some policies that policymakers could implement to achieve inclusive innovation. But, as discussed in some of the chapters here, there is little reason for faith in the ability and willingness of policymakers to see and act on the evidence. This book, therefore, does not make policy prescriptions. What we conclude with, instead, is an array of options. Options mainly for the state and the formal S&T system, but also equally open to all the other actors, especially the excluded rural poor. Options are not policy recommendations directed at the state’s decision-makers (bureaucrats, technocrats and politicians). Options are by their very fungibility open to any or all the actors in the innovation system, and their agenda for inclusive innovation. There is just one caveat that the options here are meant for actors who desire an inclusive innovation system, arguably, beyond the status quo. For instance, some among us will not find any interesting options in this chapter; those of us who will not give agency to the rural poor as actors with their own agenda and learning processes, who still see the innovative enterprise that can profitably engage citizens at the bottom of the economic pyramid, and thereby provide goods and services that will transform their lives for the better (NIC 2011). Technically, there is no problem with the supply of goods and services for the excluded rural poor, women, tribals or artisans. But as seen in the chapters in Part II here, the rural poor are active learners and reformers. When the state becomes an active supplier of industrial organization (say, clusters), global market information and technologies, and when the S&T system and other formal knowledge actors like banks and infrastructure developers supply their knowledge without adequate engagement with the multiple spaces, forms and norms of exclusion that the rural poor face, there is little agency given to the rural poor, and no scope for learning or innovation. We have had recommendations for policy architectures for inclusive innovation in the Third World (Chataway et al. 2014; UNCTAD 2014). They emphasize the need to uncouple economic growth from development; rapid economic growth seems to contribute little to the betterment of livelihoods and living conditions of the poor. They also give prescriptions for more evidence to be generated on low-income markets and low tech sectors (which the private suppliers of the developed North are not familiar with), and more research for evidence on the nature, inducements to and obstacles to inclusive innovation (Chataway et al. 2014). Clearly, the assumption here is that it is the state’s policymakers and private (corporate) decision-makers, who are to see, learn from and respond to this evidence.

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As discussed in our introductory chapter, this generation of evidence and upward supply to enlighten the decision-making state, was not the case in Europe or in any part of the world, when they were going through revolutionary changes in industrial organization, technologies and markets. The state was an enabler (not a provider) among several actors, had respect for the institutional innovations put in place by these actors, and was an active learner with a view to making ‘enabling policies and decisions’ for industrial growth. This chapter draws attention to the derelict policy learning capacities in India, especially with respect to the small rural non-farm (whether crafts or manufacturing industry) enterprises and the potential for inclusive innovation and development outcomes. What is it that keeps this flame of ‘evidence provision to policymakers’ burning, even in the light of this dismal capacity for policy learning? This is a question that demands attention from the political sciences, policy research, management studies (especially bureaucratic norms and accountabilities), and a new economics that engages with the tensions between democracy, innovation and capitalism. This chapter brings some options to enable proactive learning and institutional and technological innovation among actors. Most importantly, by presenting a platter of options to decision-makers in the policy making and S&T arena, it places the onus of choice and need for interactions and learning on them. The contents and processes of change are then ontologically different from policymakers receiving prescriptions from the S&T actors. These very options are also open to other actors (in Part II here) who weigh, deliberate and decide their own roles in and the nature of the innovation system; the skilled artisans in handloom, coir or pottery clusters, rural labour, farmers, women (in the field or in agricultural universities), health care workers, social entrepreneurs, middlemen and other market actors. India’s policymakers have been served several ideas and evidence for inclusive innovation and development. They go back to Gandhiji’s village industries ideas during the colonial period, to the demand for labour-using technologies for rural industrialization that would lead to more inclusion and lesser inequality (Reddy 1975). There have been many recommendations to the state to equip itself with a better understanding of the institutions, rules and norms in the formal and the local informal economy, to enable reconciliation between the S&T based approach to innovation and the broader interaction and learning-based approach to innovation (Raina 2015). Acknowledging that India’s centralized and technocratic decisionmakers may find this reconciliation unpalatable (ibid.), we note how the state and its formal S&T system were always reluctant to make a democratic commitment to decentralized and location-specific knowledge and development. India’s history of decentralized planning, the prescriptions to strengthen local institutions and rules that can govern local governments better (Raj 2006), though rich in political and economic insights for responsible decentralized governance, has received little attention. The recommendations made to the state, to move out of product or artefact centric rural industrial clusters to design and experiment a Cluster Grid framework that is broadbased and inclusive (Das 2008) are yet to be considered and implemented by India’s policymakers.

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History teaches us not to expect that these ex post analyses and findings will lead to recommendations that will receive policy attention. Options are necessary; they become important tools for ex ante planning and investment strategies, for inclusive innovation and development. These options can be used equally effectively by rural communities and producer and consumers, research and policy actors (at the local and regional level), and several intermediary actors. A major option based on lessons that come through from the chapters in Part II is to enable decentralized innovation capacities and non-hierarchical selection of innovation projects. Each case here has a massive diversity of knowledge actors and donors, and a spirit of learning and ability to hear each other. Recalling our discussion of the first and second industrial revolutions (in European and American contexts), these capacities of the actors in scientific and technological research was lost when the state institutionalized public sector research for technology generation to enable industrial innovation and economic growth. We wish to reiterate that this is not a statement that dismisses the need for public sector research. It is a statement that questions the nature of public sector research; especially its understanding of exclusion (of millions of citizens) and scope for inclusive innovation. This questioning draws upon the cases presented in Part II here, where active research and learning take place, in some cases supported and enabled by the state and public sector or even private sector S&T. And this brings us to the second set of options. The options to enable decentralized innovation capacities, in turn, demand options to acknowledge and cultivate human resources with local knowledge and socio-cultural systems understandings. The state can enable public investments and policy processes to support decentralized innovation capacities. While they will be useful, in order to ensure that they will be re-enacted with ingenuity in several diverse cases of survival or improved livelihoods by the rural poor, we need options to acknowledge, register and celebrate the knowledge of spatial and temporal dimensions of each production, consumption, and exchange activity. The knowledge vested in a muga cocoon middleman, the rearing household and the yarn making household is respected just as much as the knowledge and operational skills to run a motorized ratt in a coir spinning village or the norm-making capacities of a group of women processing seasonal fruits and creating ecological and economic values. No effort or investment by the state or a formal S&T programme (public or private) can replace such informal and location-specific knowledge. There are multiple options for the state and formal S&T to plug into or to foster these: the decentralized innovation capacities and kaleidoscope of human resources that the rural poor value and use. Despite the political unwillingness of the state and its formal knowledge actors, these diverse enactments of decentralized, local and inclusive innovation, give scope for hope.

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Two Shifts Two fundamental shifts from the prevalent imagination of inclusive innovation mark the chapters in Part II. The first is the shift in focus, from artefact or input or technological innovation to ways of working, rules, norms and institutional innovation, in all the clusters, low-tech enterprises, and informal spaces of innovation in rural India. The second is a shift from the focus on the user or beneficiary of the innovation (the rural poor—farmers, artisans, women, agricultural and small enterprise workers, cottage and micro-entrepreneurs) to a focus on two actors, the state and formal organized S&T as guiders and shapers of both knowledge and the economy (its actors). From their current roles in training users to get better adoption and use of knowledge, and supplying inputs/embodied technologies, this latter shift includes the state and its formal S&T system as active learners. Table 12.1 presents a summary of the evidence discussed in Part II of this volume. This summary (Table 12.1) brings to us three ways of interaction and learning that enable inclusive innovation in rural India. In the first set, communities whose low-tech crafts or manufacturing enterprises, and social and economic means are consistently ignored or threatened by the state and its programmes, learn about and solve technological, market, institutional (norms) and product design specifications, through continuous learning and exchange among themselves. The second set, the bulk of the evidence in this book, is about how micro and small enterprises and other small producers, as well as the state and its S&T organizations learn from and with each other. Their learning enables the inclusion of and transformation of some previously excluded space, form or norms into innovation for development. The third typology of learning is where the state and its S&T system make efforts to learn about and address past exclusions that have prevented institutional change. Here we have a case where the proactive state (China) and its S&T system reformed themselves to enable inclusive innovation and industrialization. Another case is where despite the demand for change, the public sector agricultural research establishment resists opportunities for inclusive innovation. A third one is where through concerted efforts by the state’s own decision-makers, with constant support and campaign by civil society actors, major institutional innovations have been enabled in public sector health care. The evidence in the two latter categories, points to the co-evolution of changes in the state’s schemes and policy instruments with the contents and actors in the S&T system. Wherever exclusion has been problematized and addressed, the innovation system gives evidence of changes in the state (policies, schemes) and in the S&T system, where both have engaged with the local communities—producers and consumers, and their knowledge base. It leads us to the first set of options for the state and formal S&T to enable decentralized innovation capacities by identifying and problematizing exclusion. The informality and the spatial dynamics of the first category (three cases) marked by exclusion from the state and formal S&T, is marked by proactive learning and inclusive innovation within and between individuals and communities.

Clay terracotta cluster—rural Rajasthan

Coir production clusters in Kerala

Three cases of social innovation and entrepreneurship in India

Craft clusters—local resource-based artisanal production

Micro or small low-tech agro-based units in traditional industrial clusters

Social enterprises— economic and social gains

I. Learning mainly within communities and between communities—entirely informal

Evidence from

Economic segment or sub-sector

Learning communities

Table 12.1 A summary of the evidence and typology of inclusive innovation

Limited appreciation of institutional innovation that creates economic, social or ecological value. Changes in or innovations in rules, norms and institutions that enable technological innovation, and re-arrange prevalent distribution of economic, social or environmental gains

Indifference of the state to informal learning networks, despite evidence of state enabled platforms conducive to collective learning and technology upgradation, market innovations, and incomes

Increasing casualization and informalization of work and incomes. Omnipresent neglect, declining financial support and lack of business infrastructure

Innovation problem, context and ecosystem

(continued)

Capacities to question existing norms, and create their own rules and ways of working that ensure social value and prosperity for the ‘excluded’ become the game changers for social enterprises. For them scale is a concept beyond size (volumes, economic value or space) and essentially includes scope for value transformation

Sharing and exchanging know-how, mutual affinity and trust in proactive informal learning among processing units

Institutional innovations that empower artisanal clusters with access to energy, raw material, and knowledge of new markets, thereby fostering new interactions, linkages and learning

Innovation enabled among and within communities, or within the state and formal knowledge actors

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Handloom weaving cluster in Assam

Three different rural industrial clusters

E-auction in cardamom markets in Kerala

Modern genetics, and sustainability of agriculture—rice production

Small rural enterprises in response to changing backward linkages

Micro and small enterprises

Market innovation in the smallholder dominated plantation sector

Agriculture— smallholders

II. Learning between informal rural actors (communities, enterprises, networks) and the state and formal S&T organizations

Evidence from

Economic segment or sub-sector

Learning communities

Table 12.1 (continued)

Limited productivity gains, increasing environmental and social disruption by agricultural production technologies. Inability to enable open-source, shared learning and technology development

Persistence of multiple forms of exclusion faced by small growers and their incomes. Ignorance and indifference of the state to forms of exclusion

Little understanding of the push factor from backward linkages, and continuous learning processes, cross-referencing and validation of information

Supply of inputs, technologies, with limited efforts to understand changing backward linkages—labour, raw material, processing costs and productivity

Innovation problem, context and ecosystem

(continued)

Public sector-led inclusive genetic engineering methodology, creation of platforms for mutual learning between scientists, farmers, consumers; with decentralized location specific R&D replacing prevalent centralized R&D

Institutional innovations that address subordinated inclusion of small producers in modern markets; but institutional awareness and reform are needed to address other active and passive exclusions that persist

Business processes, market sources and market sophistication

Technological innovation by entrepreneurs and mutual learning and experimentation between formal S&T and weaver entrepreneurs

Innovation enabled among and within communities, or within the state and formal knowledge actors

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Gender research and education in the agricultural university in Kerala

Maternal and child health care in India

Gender equality in agriculture

Health care services

Source Drawn upon chapters in Part II

Policy reform for industrialization, S&T and innovation in China

S&T reform and industrial performance

III. Learning within the formal organized knowledge system and the state

Evidence from

Economic segment or sub-sector

Learning communities

Table 12.1 (continued)

Top-down service delivery and poor outcomes in maternal and health care, with information asymmetry, and linear operational mechanisms

Generic awareness and orientation on gender equality, lacking among agricultural research and education professionals, leading to persistence of exclusion and gender stickiness in decision-making about technology choices and preventing institutional innovations in research and in practice

Limited and highly skewed policy uptake of demand for inclusive innovation in India. Processes involved in enabling interactive learning between policy, formal S&T and industry in China

Innovation problem, context and ecosystem

Intra-community resource persons, interactive learning among several actors, and institutional changes enabled through learning with civil society and activists and health sector workers

Weak gender capacity building and inclusion in the curriculum and research agenda of the agricultural universities. Persistence of expert resentment and resistance to gender issues in the agricultural research and education organizations

Chinese vision for innovation and industrialization, and reform of linkages of S&T with other domains of the innovation system, organizational restructuring, and innovation ecosystem. Human resource development and industrial research through an interactive model of innovation

Innovation enabled among and within communities, or within the state and formal knowledge actors

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This underlines the second set of options, for the state and formal S&T to acknowledge and value the knowledge in rural communities, informal, nimble, flexible and diverse as it is. The attempt to formalize these informal spaces, people and knowledge with standard, uniform and targeted technologies, rules and structures is a major ideological blind spot (Nigam 2018) driven by the illusions of sequential economic growth (Gerber and Raina 2018). The state has several options for conscious engagement with these informal spaces and enactments of inclusive innovation by people and their local knowledge. These options are also the antithesis of much of development economics and sequential growth enabled by mass production and technologies for the same. It may be imperative to bring in, briefly though, a core complexity in several of the writings on inclusive innovation, often presented with an STI-only perspective (for instance, Chataway et al. 2014; Cozzens and Sutz 2014; Prasad 2011; Kaplinsky 2010; Centre 2010; Chandra et al. 2009). Especially, while dealing with forms of structurally rooted exclusions one needs to encounter the question if and to what extent an STI-centric policy, however ‘dovetailed’, would be effective to ensure inclusive innovation and development. In societies, with deep fissures inflicted by age-old social norms, practices and discriminations (much of which have been internalized) some of the STI-centric inclusive innovation initiatives may not work. Irrespective of their positive attributes as greater affordability, wide reach and efficiency, the rural actors remain excluded. A part of the conundrum relates to who (and based at what platform) generates or produces or supplies the solution, which gets passed on as innovation to transform the livelihoods of those at the bottom of the pyramid. This observation, especially, has a reference to what is termed frugal innovation, also aimed at securing inclusivity. Similar concerns could be linked to compromising ownership rights of indigenous communities (including artisans and craftspersons) over their knowledge (uncodified, though) typically when external agencies (read, private big capital) introduce new products drawing upon the intellectual, natural and/or physical resources of the rural poor, without even due acknowledgement, compensation or ‘social upgrading’ (Puppim de Oliveira and Fortes 2014). The ease of infringement of natural rights of the ‘excluded’ is a deeply embedded issue that ought to figure in the discourse on inclusive innovation. But several laws and unstated rules and norms that maintain this ease of infringement, especially when it comes to the intellectual assets of the excluded, are barely discussed in innovation systems literature or in development studies. As the evidence in Part II of this volume suggests even the ‘institutional’ innovation needs to be contextualized in the broader framework of the dynamics of these exclusions, built into the multiple echelons of markets and states. The two shifts from conventional innovation systems studies that we highlight here are (i) the critical role of institutional innovations with the capacity of the rural populations to participate in the generation, reform and evolution of these institutional innovations, and (ii) the role of the state and its formal S&T system as crucial actors who do (at times) enable, but can do much more to ensure inclusive innovation. But the conduct of research for technology generation by the formal S&T establishment and the content of policies and programmes for the supply (with

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subsidies or incentives or credit packages) of technologies or artefacts to the rural beneficiaries have now perfected the mutually sustaining co-evolution of organized knowledge and state policy. No amount of evidence-based policy recommendations will enable these shifts from technological innovation to institutional innovation and from the focus on the rural beneficiaries to focus on the state and S&T actors. Policy recommendations for rural industrialization, with innovations for the creation of jobs and value addition, have always been thwarted by the linear upward accountability (knowledge serving policy prescriptions to the state) and hierarchy of knowledge and power. To illustrate this, we briefly present how the state’s policies and its scientific research system have understood, learnt from and enabled (or stalled) innovation in rural industrial clusters.

Innovation Illiteracy of the State? Sidelining Rural MSEs as an Example With a huge repertoire of policies enacted for the micro, small and medium enterprises (MSMEs, although the ‘medium’ category was recognized only in 2006 through the MSMED Act), since the early days of planning, India exemplifies persistence of the state’s intent to address almost all concerns faced by the sector. Though over 90% of MSMEs are informal by registration status, the state’s intent is clear. However, as may be surmised from Table 12.2 (that shows only a few important occasions when major policy shifts took place) rural micro and small enterprises (MSEs) have been practically sidelined in terms of investments and incentives; a situation that has been exacerbated by the overwhelming informality of the enterprises. Hailed as a ‘landmark’ policy, the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 went ahead to make a strong case for external orientation of small firms and enhancing firm competitiveness. The focus was on select modern subsectors/industries with an obvious potential for participating in the global market. As a support institution, the National Manufacturing Competitiveness Council (NMCC) was promoted to look into matters relating to technology upgradation, design and intellectual property right (IPR) protection and marketing. That rural clusters/enterprises fell off the policy radar once more was not surprising. There is hardly any mention about how to render rural (and artisan and craft-based) enterprises dynamic and innovative (Das 2011b). Moreover, as Nair (2011) and Das (2017) observe, financial support from formal sources has been on the decline especially for rural enterprises during the era of reforms. The state’s understanding of and provision for enhancing the education and skill levels of workers of rural enterprises have been severely inadequate. There is a major scope for developing appropriate hand tools relevant for various needs of craftspersons (Biswas 2011: 164–165). Training workers to use these and innovating in both processes and products would, in the least, raise the labour productivity of rural enterprises. Apathy to any such suggestions is visible in policies (for instance, AHVY or

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Table 12.2 Important policy measures influencing rural industrialization Year

Major policy focus

1951

Enactment of Industries (Development and Regulation) (IDR) Act, 1951 • The IDR Act, with amendments, provided the conceptual and legal framework for industrial development and industries in India. It included determination of the licensing policy for industries and the power to specify the definition of SSI in consideration of factors relating to the investment of unit in fixed assets, nature of ownership, smallness of number of workers employed, nature, cost and quality of product, etc. Section 29-B provided for reservation of products for exclusive production in the small-scale sector. It also related to the small-scale and ancillary industrial undertakings

1956

Emphasis in the Industrial Policy Resolution (IPR), 1956 • Recognized the role of MSEs in industrialization, both independent and complementary to large firms, and need for raising the level of technology

1977

Industrial Policy Statement of 1977 • With a view to enhancing the technology and production capabilities of MSEs, the investment limits were raised (to Rs.2 lakh for tiny units, to Rs.20 lakh for small-scale units and to Rs.25 lakh for ancillaries) • A scheme for building buffer stocks of essential raw materials for small enterprises was introduced to be operated through the Small Industries Development Corporations in the states and the National Small Industries Corporation. District Industries Centres, as the one agency to deal with all requirements of small and village industries, were set up in each district

1991

Policy Statement of 1991—Structural reforms era begins • Recognition of all industry-related service and business enterprises as small-scale industries • Access to capital market for the SSI sector through 24% equity participation by other industrial undertakings • Introduction of a new scheme of Integrated Infrastructural Development to promote industrialization in rural and backward areas • Significant stress on technology upgradation • Promotion of marketing of SSI products through institutions, other agencies and consortia approach • Significant expansion in programmes for entrepreneurship development • Assistance for technology upgradation and marketing • Policy initiatives for adoption of Cluster Approach based on the report of the Expert Committee on Small Enterprises (Abid Hussain Committee)

2006

Enactment of the Micro, Small and Medium Enterprises Development Act, 2006 • Recognition of the ‘Medium enterprise’ category • Emphasis of external orientation and networking with various stakeholders (particularly, as through, global value chains) within and outside the country • Enhancing competitiveness, especially, concerning the global market space • Focus on promoting select modern sectors

Source Das (2011a: 285–286)

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SFURTI schemes); those that finally come into existence. The more important metaissue of no or limited access to basic social infrastructure in rural areas remains and that has a major implication for craft or artisan based activities looking up in India’s villages. As discussed at length elsewhere (Das 2005a, b; and Das et al. 2007), rural clusters as a special form of production organization have lacked policy support from a spatial perspective. This includes provision of various business infrastructure including electricity—what we have described as ‘empowering village enterprises’ in Das (2007)—market linkage support, design and technology networking institutions and transport connectivity. The examples of One Village One Product (OVOP) and One Tambon One Product (OTOP) in rural Japan and Thailand, respectively, suggest important strategies to elevate the standard of production and business concerning rural enterprises with innovative and involved state policies. ‘An important aspect of these efforts has been the increased emphasis on quality improvement on a constant basis. These programmes have amply established that clusters in villages and small towns must be competitive through adopting such management practices as kaizen (incremental but continuous efforts to improve quality) and that the key to business success lies in networking for product promotion and marketing’ (Das 2008: 25).

The state and the formal scientific research system in India are far from even a cursory understanding of these village-level capacities and institutional innovations for production decision-making, markets, quality control, and mechanisms for investments, networking, benefit sharing and conflict resolution. They see only a product and production technologies!

Organized Knowledge for Policy: The Bliss of S&T for Rural India The policy component in the NIS framework always comes with one fixed actor, the state. In this section, the central context for the formal S&T system is painfully evident; the flawed policies, their goals and instruments (discussed above). The S&T system that responds to and attempts to feed into these flawed policy goals and instruments, ends up reinforcing the multiple exclusions that we witness in Part II in this book. Rural India has never been a priority for India’s S&T system; blue skies research has always been the dominant interest. That this exclusion, or lack of attention to the rural, is by design, is alarming, to say the least (Raina and Mandal 2014). The major disconnect between technologies generated by the state’s formal S&T system and the actual need, access and application of the same by rural enterprises still persists. While a number of rural technology institutes (RTIs) and specialized sectoral research bodies have been facilitating technology promotion through assessing and modifying artefacts (machinery, implements or equipment mainly for processing purposes) and imparting training to select batches of entrepreneurs, the impact has been awfully limited. For instance, the Central Leather Research Institute’s training

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facilities at the Athani footwear cluster in the south Indian state of Karnataka has machines meant for boots, whereas the local skill and production is focused on ‘Kolhapuri’ leather footwear; the machines have remained idle for decades. At one level, the modifications per se have been inconsequential so far as incremental gains in productivity are concerned, and, at the other, efforts at broad-basing adoption of the same has been both limited and poorly planned and executed (Das 2015). There are options for rural industrial policy, including for clusters, to devise strategies not only to infuse an innovative ethos in the productive sphere but also to broad-base skills and productivity improvement, as discussed above. It is important to note that the policy efforts have been deeply embedded in a mode of ‘technology generation’ from formal and, at times, ‘elite’ organizations, without recognizing the dynamics of informality in rural India. Recognizing that the formal S&T system can never cater to these large low-end markets, the informal networks of production and consumption, the Department of Science and Technology (DST) in the 1980s found ways of ‘including’ S&T based NGOs to build rural technological capabilities. The S & T Application for Rural Development (STARD) scheme was an instant success in building S&T capacities in rural India (Raina 2009), and has now evolved to a major Core Support Programme in DST’s SEED (Science for Equity, Empowerment and Development) Division. The Core Support Programme provides core financial and infrastructural support to S&T based civil society organizations (CSOs) in rural India. But neither DST nor the state seems to have observed the evidence of impacts generated by this scheme, where the state plays an enabler, identifies, trusts and respects local knowledge and its response to the local spatial dynamics and problem statements. DST’s Core Groups offer an immense opportunity for inclusive innovation and can correct the severe inadequacy or absence of institutions or norms and organizations, to carry forward a certain ‘technological’ change that could be broad-based (Raina 2015). But here again, as with the evidence of existence of innovation systems that encourage the co-evolution of technological and institutional changes fostering cluster dynamism (Sarkar et al. in this volume), the state’s policymakers and the formal S&T system have neither the desire nor incentives to see and learn, from and with these Core Groups. This chapter has presented several options for the state (its policymakers) and the formal S&T actors to work together towards learning about and with the informal rural innovation, production and consumption spaces, actors and activities. No amount of policy prescriptions will convince the state and its complacent, blissful S&T system to appreciate these options and bring themselves to learn and work with the actors in these informal rural spaces. The institutions, rules and norms that maintain this complacency are too strong to be broken. What will it take for the state and its formal S&T system (including those that allegedly supply or provide infrastructural, credit, technological and market information) to learn from and with the informal rural actors and accept that they are intelligent responsible actors, not mere beneficiaries of flawed schemes? We have seen how academic assumptions are challenged in different contexts; say, theories about innovations leading to economic growth also open up the paths of reverse causality (Joseph, in Chap. 6 here), where growth leads to innovation and opens up

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options for further inclusive innovation (as in Mokyr 1990). Our evidence shows that what some rural industries like coir or other low-tech MSEs need are not clustering and technology supply but just a big slice of (Churchill’s cake) public investment in their belly! All that this needs is a set of institutions that makes local governments and producers responsible for the nature and the performance of these public investments. The public investments could also take the form of catalytic actors— platforms of formal knowledge generation mechanisms, in the form of R&D labs run by the community and the state’s researchers, or local or regional policy think-tanks and government organizations (such as the Coir Board). What the state needs to find here then is a balance between research on ‘formal’ technological output (embodied artefacts such as machinery) and informal learning and knowledge exchange mechanisms. Merely providing nodal points at various locations to disseminate technologies is not sufficient (though necessary). It is important to disseminate the ‘software’ of the technology taking full account of the institutional mesh in which local actors are involved and engaged in their daily livelihoods (as Kamath says in Chap. 5 here). But the intent has to come from within the state and its formal S&T system; getting policy recommendations to them based on the findings of inclusive innovation across diverse sectors will remain a ritualistic academic exercise till then. In essence, this chapter reiterates the fundamental proposition of several actors who can and will without doubt take up these options, of institutional and technological learning from and with actors in the informal rural spaces. Our reluctance to provide prescriptions to deeply entrenched actors like the state and its formal S&T system also draws upon a near-crisis situation that the rural and urban unemployed population in India is bringing to the fore. Perhaps the state that will be forced to wake up and confront these spaces, forms and norms of exclusion will be a quick and eager learner than a state that rolls out ill-fitting schemes for innovation and development. The reluctance of actors in an agricultural university (an otherwise learned space) to acknowledge gender biases within the agricultural research and education system is a pointer. There is no demand for them to learn or change. Many opportunities for innovation and for learning from on-going innovations in rural India are lost. This book will, hopefully, draw the attention of decision-makers to the options given here that are clear opportunities for inclusive innovation and development. Obviously, the pace of production or rate of economic growth will not be as rapid or high as it is now. The creation and distribution of wealth will also not be as it is now; it will be less skewed. Inclusive innovation by its very identification of and working on excluded spaces, work, and people, will not be the jobless growth and rural distress that we witness today. The relative indifference of India’s social sciences and humanities to the rural is a major constraint even today. Major institutional changes are possible, to enable inclusive innovation in rural India, if scholars in innovation systems research and in development economics shake off the yoke of ex post lessons for policy prescriptions. We are hopeful that a new generation of scholars and conscientious public administrators will democratically engage with options ex ante, to build decentralized innovation capacities with the rural producers and consumers; not for them.

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References Biswas, P. K. (2011). Systems of education, training and skill formation: How relevant for small enterprises? In K. Das (Ed.), Micro and small enterprises in India: The era of reforms (pp. 158– 184). New Delhi: Routledge. Centre, S. T. E. P. S. (2010). Innovation, sustainability, development: A New Manifesto. Brighton: STEPS Centre. Chandra, V., Erocal, D., Padoan, P. C., & Braga, C. A. P. (2009). Innovation and growth: Chasing a moving frontier. Paris: OECD and World Bank. Chataway, J., Hanlin, R., & Kaplinksy, R. (2014). Inclusive innovation: An architecture for policy development. Innovation and Development, 4(1), 33–54. Cozzens, S., & Sutz, J. (2014). Innovation in informal settings: Reflections and proposals for a research agenda. Innovation and Development, 4(1), 5–31. Das, K. (2005a). Industrial clustering in India: Local dynamics and the global debate. In K. Das (Ed.), Indian industrial clusters (pp. 1–19). Aldershot, UK: Ashgate. Das, K. (2005b). Can firm clusters foster non-farm jobs? Policy issues for rural India. In R. Nayyar & A. N. Sharma (Eds.), Rural transformation in India: The role of nonfarm sector (pp. 415–428). New Delhi: Institute for Human Development. Das, K. (2007). Electricity and rural development linkage. In H. Panda (Ed.), Governance of rural electricity system in India (pp. 53–66). New Delhi: Academic Foundation. Das, K. (2008). Fostering competitive clusters in Asia: Towards an inclusive policy perspective. VRF Monograph No. 437. Chiba, Japan: Institute of Developing Economies. Das, K. (2011a). Indian rural clusters and innovation: Challenges for inclusion. Economics, Management, and Financial Markets, 6(1), 283–301. Das, K. (2011b). Rural industrialization in India: Enhancing reach and returns. In K. Das (Ed.), Micro and small enterprises in India: The era of reforms (pp. 208–224). New Delhi: Routledge. Das, K. (2015). Institutional constraints to innovation: Artisan clusters in rural India. Asian Journal of Innovation and Policy, 4(2), 132–153. Das, K. (2017). MSMEs in India: Challenges of informality and globalization. In M. Chinara & H. S. Rout (Eds.), Micro, small and medium enterprises (MSMEs) in emerging India (pp. 33–52). New Delhi: New Century Publications. Das, K., Gulati, M., Sarkar, T., & Banerjee, S. (2007). Policy and status paper on cluster development in India. New Delhi: Foundation for MSME Clusters. Gerber, J.-F., & R. S. Raina (Eds.). (2018). Post-growth thinking in India: Towards sustainable egalitarian alternatives. Hyderabad: Orient BlackSwan. Kaplinsky, R. (2010). Schumacher meets schumpeter: Appropriate technology below the radar. Research Policy, 40(2), 193–203. Mokyr, J. (1990). The lever of riches: Technological creativity and economic progress. New York: Oxford University Press. Nair, T. S. (2011). Credit and microenterprise development: A critical appraisal. In K. Das (Ed.), Micro and small enterprises in India: The era of reforms (pp. 129–157). New Delhi: Routledge. National Innovation Council (NIC). (2011). Towards a more inclusive and innovative India: Creating a roadmap for a ‘decade of innovation’. Strategy Paper. Office of Advisor to the Prime Minister. Retrieved August 10, 2018, from http://innovationcouncilarchive.nic.in/images/stories/ report/Innovation_Strategy.pdf. Nigam, A. (2018). Beyond productivism: Socialism, waste and obsolescence. In J.-F. Gerber & R. S. Raina (Eds.), Post-growth thinking in India: Towards sustainable egalitarian alternatives (pp. 54–75). Hyderabad: Orient BlackSwan. Prasad, C. S. (Ed.). (2011). Piloting knowledge Swaraj: A hand book on Indian science and technology. Retrieved July 4, 2019, from https://www.indiawaterportal.org/sites/indiawaterportal.org/ files/Piloting_Knowledge_Swaraj_Ahandbook_on_Indian_science_and_technology_KICS_ 28201129.pdf.

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Puppim de Oliveira, J. A., & Fortes, P. J. O. C. (2014). Global value chains and social upgrading of clusters: Lessons from two cases of fair trade in the Brazilian Northeast. Competition and Change, 18(4), 365–381. Raina, R. S. (2009). Innovation for eco-friendly development—Towards institutional reform in scientific research and policy-making. In Guimaraes-Perreira, & Funtowicz (Eds.), Science for policy (pp. 312–327). London and New Delhi: Oxford University Press. Raina, R. S. (2015). Technological and institutional change: India’s development trajectory in an innovation systems framework. In P. Shome & P. Sharma (Eds.), Emerging economies: Food and energy security, and technology and innovation (pp. 329–352). New Delhi: Springer. Raina, R. S., & Mandal, K. (Eds.). (2014). Rural India: S&T for skills and employment (Section 4, including 23 chapters by 17 authors). In S. Pohit, et al. (Eds.) India S&T report (pp. 410–531). New Delhi: Cambridge University Foundation Press and CSIR-NISTADS. Raj, K. N. (2006). Planning from below: A note. In A. Mody (Ed.), Inclusive growth – K. N. Raj’s essays on economic development in the economic weekly and economic and political weekly (pp. 79–98). Bombay: Orient BlackSwan (for Sameeksha Trust). Reddy, A. K. N. (1975). Alternative technology: A viewpoint from India. Social Studies of Science, 5(3), 331–342. UNCTAD. (2014). Innovation policy tools for inclusive development. A note, UNCTAD Secretariat, Geneva. Retrieved August 5, 2018, from https://unctad.org/meetings/en/SessionalDocuments/ ciid25_en.pdf.

Index

A Academia, 26, 108, 185, 199, 232, 238, 244, 247, 248 Accelerator, 121, 205, 209, 210, 215, 221 Access to finance, 85 Accredited Social Health Activity (ASHA), 158–161, 164, 175–180 Active cooperation, 59, 60, 71 Active exclusion, 123, 125, 128, 135, 136 Actors, 4, 5, 8, 10–12, 14–16, 20, 21, 23–26, 34, 35, 104, 106, 110, 111, 114, 115, 120, 125, 128, 135, 142, 143, 151– 153, 158, 184, 185, 194–196, 204, 205, 207, 208, 211, 213, 217, 220, 221, 225, 226, 228, 232–234, 242, 245, 250, 256–263, 266–268 Agenda, 4, 6, 11, 14, 16–18, 20, 23, 25, 53, 151, 152, 187, 205, 212, 214, 237, 256, 262 Agenda setting framework, 3, 6, 7, 18, 22 Agra, 44 Agricultural education, 187–189, 193, 196 Agricultural Innovation Systems (AIS), 143, 185, 186, 194–196, 199 Agricultural research, 24, 25, 145, 146, 150– 152, 183, 184, 186, 189, 192–197, 199, 259, 262, 268 Agricultural University, 25, 145, 183, 185, 186, 188, 192, 194, 196, 262, 268 Alternative norms, 25, 205, 217 Anganwadi, 160, 175, 178, 179 Appropriate ecosystem, 25, 205, 249 Artisan clusters, 15 Artisan Identity Card, 47 Assam, 23, 75–78, 80–84, 88, 92, 94–96, 98, 146, 161–165, 167, 168, 170, 171, 173, 176, 261

Athani, 267 Auction centre, 125–129, 131–134, 136 Auxiliary Nursing and Midwifery (ANM), 159, 160, 178, 180

B Barriers to innovation, 35 Bhoomi project, 122 Bottom of the Pyramid, 7, 12, 212, 263 Brick-making, 46 Broad-based development strategy, 17 Business facilitation services, 210

C Capability building, 10, 15, 115 Capacity building, 25, 184, 186–188, 196, 198, 199, 208, 244, 250, 262 Cardamom market, 125, 261 Cardamom rules, 125 Casualisation, 23, 36, 37, 260 Catalysts, 38, 48 China, 9, 10, 16, 25, 26, 52, 98, 144, 146, 153, 192, 232–234, 237–250, 259, 262 Chinese Academy of Sciences (CAS), 240, 248 Clay, 23, 38–41, 46, 260 Cluster development, 36, 37 Cluster level innovation index, 57 Clusters, 6, 12, 14, 15, 23, 24, 34–41, 44, 46– 48, 52–55, 57–59, 62, 66, 69, 71–73, 75–98, 101, 102, 104–106, 108–115, 174, 208, 237, 242, 256, 257, 259– 261, 264–267

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272 Coir, 24, 101, 104–110, 112, 113, 115, 257, 258, 260, 268 Collaboration, 23, 57, 98, 121, 148, 152, 186, 205, 208, 209, 214, 235, 238 Collective action, 23, 35, 38, 44, 174 Commercialization, 76, 81, 91–94, 142, 148, 238, 240, 242 Commodity markets, 9, 119 Common Facility Centre (CFC), 47 Community-based innovation, 27 Community tourism, 94 Competitiveness, 53, 59, 120, 122, 209, 233, 234, 241, 245, 246, 264, 265 Complementary policies, 245 Constitutive exclusion, 123 Context-specific innovation, 220 Core, 35, 83, 85, 86, 91, 97, 196, 219, 220, 224, 228, 232, 233, 247, 263, 267 Council for Scientific and Industrial Research (CSIR), 242 Craft clusters, 22, 23, 34–38, 48, 260 Crafts, 22, 23, 33–39, 41–44, 47, 48, 66, 75, 85, 89, 91–93, 205, 257, 259 Creative enterprises, 34 Cross-learning and innovation system, 153 Curriculum, 25, 184, 186–189, 194–199, 238, 262 D Decentralized decision-making, 7 Defensive innovation, 102, 103 Democracy, 6, 26, 225, 257 Department of Science and Technology (DST), 5, 13, 184, 211, 212, 242, 244, 267 Development agenda, 11, 16, 184 Development economics, 4–6, 9, 11, 21, 263, 268 Development theories, 18, 207 Diffusion, 37, 66, 67, 85, 98, 103, 104, 106, 108, 111, 113, 114, 120, 122, 142, 170, 234–236, 242 Dignity of labour, 218 District Industries Centre (DIC), 47, 64, 235, 265 Domains of NIS, 233, 234 E e-Auction, 24, 120, 121, 124, 126, 131–136, 261 Engendering agricultural science curriculum, 186, 187, 198, 199

Index Enterprise, 5, 8, 12, 15, 21–23, 25, 33–38, 44, 47, 48, 52–55, 58–60, 66, 67, 69, 71, 73, 75–83, 85–92, 94, 96, 97, 132, 143, 152, 153, 184, 186, 187, 192– 194, 198, 203, 204, 208, 209, 213, 214, 216–220, 222, 223, 225, 226, 228, 232, 235, 240, 242, 244, 256, 257, 259–261, 264–266 Entrepreneurship, 13, 25, 89, 94, 95, 106, 185, 186, 197, 203–213, 215, 217, 218, 220, 222, 223, 231, 235–237, 242, 260, 265 Environmental innovation, 23 Ethnic designs, 44, 81 Evidence, 4–6, 8–11, 13, 16, 17, 21, 22, 25, 52, 54, 58, 103, 104, 112, 122, 129, 133, 135, 146, 152, 185, 187, 217, 224, 231, 256, 257, 259–264, 267, 268 Exclusion, 4–6, 8, 10–14, 16, 19, 22–24, 26, 35, 36, 120, 121, 123–125, 128, 135, 136, 141, 143, 203, 225, 256, 258, 259, 261–263, 266, 268 Export promotion, 232 F FAO (UN), 53 Feminisation of poverty, 183 Finance, 19, 20, 47, 55, 85, 89, 93, 97, 160, 184, 193, 211, 228, 232, 235, 243, 244 Financial resources, 211, 217 Five-year plans, 8, 13, 123, 144, 145, 151, 196, 209, 237, 239 Formal actors, 11, 184 Formal bureaucracy, 17 Formal knowledge, 21, 27, 115, 256, 258, 260–262, 268 Formal S&T, 4, 6, 24, 152, 212, 256–259, 261–263, 266–268 Forward and backward linkages, 23, 58, 60, 63, 68–71, 261 Frugal innovation, 7, 263 G Gender, 8, 22, 25, 160, 170, 183–190, 192– 200, 217, 223, 262, 268 Gender dimensions, 187 Gendered system, 198 Gender inclusion, 184, 195, 197–199 Gender inequality, 195 Gender integration, 187

Index Gender responsive, 187, 188, 193, 194, 196, 197, 199 Gene transfer, 147, 148 Genomics, 24, 140, 143, 147–149, 152 Geographical indications, 39, 47, 48 Green revolution strategy, 139, 140 Growth, 4–11, 13–17, 19–21, 24–27, 33, 35, 41, 46, 48, 52, 68, 76–83, 85, 86, 88, 89, 91, 93, 95–98, 119–123, 136, 140, 141, 144, 145, 161, 164, 167, 174, 187, 203, 206–208, 218, 222, 223, 231–234, 237–239, 247–250, 256– 258, 263, 267, 268 Gyan Doot programme, 122 H Handicrafts, 35, 37, 38, 48, 66 Handloom cluster, 75–78, 80, 81, 83, 89, 93– 98 Hereditary occupation, 48 Higher education, 58, 60, 63, 212, 224, 237– 239, 249 Human capital, 54, 55, 200, 216, 234 Human resource, 26, 114, 159, 190, 193, 200, 232, 233, 237, 238, 240, 241, 244, 245, 248, 258, 262 Hybrid rice, 141, 143, 146, 147, 150–153 I Illusive inclusion, 123, 128, 136 Import substitution, 141, 232 Inclusion, 4–6, 8–14, 21, 25, 26, 76, 91, 97, 121, 123, 129, 136, 140, 141, 150, 152, 183–185, 198, 200, 204, 211, 222, 225, 233, 257, 259, 262 Inclusive development, 9, 10, 12, 13, 15, 35, 122–124, 137, 140, 141 Inclusive innovation, 4–6, 8–13, 15, 16, 22– 26, 35, 37, 38, 48, 98, 140, 143, 149, 196, 237, 250, 256–260, 262–264, 267, 268 Industrial clusters, 6, 15, 23, 53, 101, 257, 260, 261, 264 Industrial organization, 256, 257 Industrial revolution, 18–22, 258 Industry, 8–11, 13, 17, 19–21, 26, 48, 56, 57, 72, 73, 77–82, 95, 98, 103–110, 113, 141, 144, 174, 205, 211–214, 218, 219, 225, 228, 232, 237–244, 247– 249, 257, 262, 265 Inequality, 8, 9, 16–18, 26, 27, 121, 142, 170, 185, 200, 257

273 Informalisation, 23, 36, 37, 260 Informality, 23, 34, 76, 111, 259, 264, 267 Informal learning, 24, 104, 106, 260, 268 Informal spaces, 104, 259, 263 Informal workforce, 206, 214 Information and Communication Technology (ICT), 120–123, 136, 234, 242, 248, 249 Innovation, 4–16, 18–27, 34–42, 46–48, 52– 56, 58, 59, 66–68, 70–73, 75–79, 81– 85, 87, 89, 91–99, 101–104, 106– 108, 110, 111, 113–115, 120, 121, 123, 124, 136, 137, 140–143, 145, 147–153, 157–161, 170, 174, 180, 184–186, 191, 193–197, 199, 200, 204–208, 211, 215, 220, 222, 223, 225, 231–237, 240–247, 249, 250, 256–264, 267, 268 Innovation and Displacement of Existing Techno-Social System, 141 Innovations in healthcare delivery, 157–161, 164, 170, 174 Innovation systems, 4–6, 9, 10, 13–15, 21– 24, 26, 27, 35, 37, 39, 48, 87, 91, 97, 98, 102, 104, 121, 141, 142, 152, 158, 170, 184, 196, 204–207, 232, 263, 267, 268 Innovative ethos, 15, 34, 37, 38, 41, 267 Institutional arrangements, 120, 232 Institutional flexibility, 21 Institutional innovation, 14, 20, 21, 23–26, 35, 38, 48, 120, 124, 126, 128, 136, 137, 149, 153, 157, 158, 170, 175, 180, 200, 257, 259–264 Institutional learning, 6, 26, 174 Institutional reform, 8, 17, 151, 220, 225 Institutions, 10, 15, 20, 25, 26, 34–37, 52, 54–60, 63, 64, 66, 72, 89, 91, 95, 97, 98, 107, 108, 141, 142, 144–146, 148, 152, 153, 158, 164, 165, 170, 174, 175, 192, 194, 204–207, 214, 222, 226, 232, 234, 237–244, 246– 250, 257, 260, 264–268 Instrumental exclusion, 123, 136 Intellectual Property Right (IPR), 47, 93, 144, 148, 219, 240, 264, 265 Interlocking innovations, 153 Intermediary support institutions, 243 International Development Research Centre (IDRC), 9, 15, 16 Intersectionality, 5 Investments in R&D, 249

274 K Kerala development model, 186 Knowledge-Policy Relationships, 4, 6, 140

L Labour, 15, 17, 20, 23, 26, 36, 38, 42, 43, 48, 66, 77–81, 85, 86, 88, 91–93, 96, 97, 101, 106, 120, 124, 184, 189–192, 208, 211, 213, 217, 222, 223, 237, 257, 261, 264 Learning economy, 35 Learning process, 23, 56, 114, 206, 215, 256, 261 Linkages, 10, 14, 18, 23, 24, 26, 34, 35, 56, 58, 67, 69–71, 76, 81, 85, 89, 91, 92, 94, 97, 98, 121, 145, 152, 161, 208, 211, 228, 232–234, 236, 238, 240, 242, 243, 245, 247, 249, 250, 260– 262 Low-Tech, 24, 101, 104, 108, 111, 113–115, 241, 259, 260, 268

M Marker-Assisted Selection (MAS) technology, 132, 140, 141, 143, 147–153 Markers, 148, 150 Market power, 126, 128, 135 Market Sophistication, 23, 54, 55, 58, 59, 62, 68, 71, 261 Maternal health, 161 Mechanisation, 40, 84, 91, 106–108, 191 Micro Small and Medium Enterprise Development (MSMED) Act, 265 Micro, Small and Medium Enterprise (MSME), 15, 52, 264, 265 Molela, 39, 40, 44, 45, 47 Multiple exclusions, 5, 8, 11, 24, 256, 266

N National Health Mission (NHM), 158, 159, 164, 174, 175, 180 National Innovation System (NIS), 5, 13, 14, 16, 25, 26, 35, 232, 233, 237 National Knowledge Commission (NKC), 238 National Manufacturing Competitiveness Council (NMCC), 264 National Systems of Innovation (NSI), 141, 142, 144, 205–207 Neighbour interaction, 111, 112

Index Networking, 38, 44, 56, 57, 104, 186, 197, 210, 218, 242, 265, 266

O Observational learning, 24 One Tambon One Product (OTOP), 266 One Village One Product (OVOP), 266 Operationalisation, 184 Organizational changes, 218, 249 Organizational exclusion, 8 Organized knowledge, 4, 5, 10, 16, 262, 264, 266 Organized S&T, 5, 15, 16, 25, 26, 259

P Participatory innovation process, 151 Passive cooperation, 60, 71 Passive exclusion, 123, 135, 261 Periphery, 17, 66, 82 Plantation sector, 24, 120, 261 Plaster of paris, 44 Policies, 4–8, 10, 11, 13–18, 22–26, 33, 35– 38, 47, 55, 76, 77, 85, 86, 96, 102, 107, 114, 115, 121–123, 140–146, 150–153, 180, 184–186, 194, 196– 199, 204, 205, 207–209, 217, 219, 220, 222, 224, 226, 231–233, 236, 237, 240–245, 247, 249, 256–259, 262–268 Price formation, 128, 129, 131, 134, 136 Priority areas, 240, 245, 246 Process innovation, 38, 41, 42, 48, 58, 65, 67, 107, 108 Product quality, 15, 41, 91 Professionals, 25, 56, 164, 185, 222, 223, 262 Public investment, 27, 96, 97, 145, 221, 258, 268 Public sector, 6, 9, 20, 21, 24, 205, 206, 209, 210, 212, 213, 220, 222–225, 244, 258, 259, 261

R Rajasthan, 23, 38, 39, 48, 159, 161–163, 166, 168, 170, 171, 173, 174, 177, 260 Ratt, 104, 107, 110–113, 258 R&D and innovation, 246 R&D benchmarks, 240 R&D strategies, 248 Regional development, 238, 239 Regional Universities, 238

Index Reproductive and Child Health (RCH), 159, 160 Resistance, 25, 106, 147, 148, 150, 153, 198, 199, 262 Responsible innovation system, 200 Responsive innovation, 25, 237, 249 Restructuring, 239, 240, 243, 247, 250 Rogi Kalyan Samiti (RKS), 175–178, 180 Role of industry associations in innovation, 218 Role of institutions in cluster level innovation, 58 Rule-making capacities, 205, 215 Rules and norms, 4, 6, 25, 204, 210, 216, 223, 257, 263, 267 Rural development, 9, 11–14, 184, 187, 193, 198, 211, 267 Rural industrial clusters, 5, 23, 115, 257, 261, 264 Rural industrialization, 24, 37, 210, 257, 262, 264, 265 Rural Technology Institutes (RTIs), 266 S S&T parks, 240, 242, 243 S&T system, 4, 9, 24–26, 233, 246, 256, 257, 259, 263, 266–268 Science, Technology, Innovation (STI), 186 Science, Technology, Innovation (STI) System, 186 Scientific evidence, 6 Small and Medium Enterprises (SMEs), 15, 37, 38, 52, 53, 235, 237, 265 Small business, 236 Small manufacturing, 14 Social Enterprises (SEs), 25, 203–205, 208– 226 Social innovation, 25, 204, 205, 211, 215, 220, 222, 223, 260 Spatial exclusion, 8, 36 Spatial infirmities, 36, 37 State, The, 4–12, 14–21, 23–27, 35–40, 46– 48, 76, 77, 79, 81, 82, 96, 102, 105, 106, 108, 110, 115, 120, 143, 144, 151, 164, 186, 187, 190–193, 203– 206, 208–224, 226, 227, 236, 243, 245, 256–264, 266–268 Sualkuchi, 23, 76–87, 89, 91–98 Subordinated exclusion, 24, 133 Subordinated inclusion, 123, 135, 261 Subsistence industrialisation, 48 Supply side constraints, 23, 38

275 T Target Sectors, Mandates, 246 Technological determinism, 5, 14, 18, 145 Technological innovation, 23, 24, 92, 105, 106, 110, 121, 136, 137, 140, 142, 178, 185, 193, 232, 257, 259–261, 264 Technology, 4, 5, 8–12, 14, 16–18, 20, 21, 23–26, 35, 38, 41, 42, 52, 54–56, 67, 79, 81, 85, 89, 91, 92, 94, 95, 97, 101– 108, 111–113, 115, 121, 122, 131, 136, 139–145, 147–153, 174, 175, 184–187, 189, 192, 194, 196–198, 206–212, 215, 217, 218, 228, 231– 238, 240–248, 258, 260–266, 268 Technology development, 25, 143, 187, 194, 206, 236, 261 Technology generation, 18, 36, 37, 142, 145, 151, 152, 234–236, 244, 258, 263, 267 Techno-Nationalism, 207 Terracotta, 23, 34, 38–41, 43, 44, 46, 47, 260 Traditional industry, 102, 104, 106, 108, 113 Transfer of technology, 97, 184, 187, 194

U University, 4, 6, 9, 58, 60, 63, 149, 186, 188, 189, 192, 193, 195, 197, 198, 212, 232, 234, 237–239, 242–244, 248, 262, 268

W Western Nation States, 39 Women, 5, 25, 66, 76, 79, 105, 109–112, 120, 124, 143, 150, 159–161, 164, 175– 178, 180, 184–187, 189–193, 195– 199, 213, 214, 217, 225, 257–259 Women as critical actors, 185 Women as vulnerable groups, 195 Women manual work, 189 Women workers, 8, 190–192 World Bank, 16, 17, 175, 185, 194, 195, 209, 223

Y Yarn, 78–80, 82, 83, 87–89, 91, 96, 98, 104, 106, 107, 109, 110, 113, 141, 258