Inclusive innovation for the BoP: It's a matter of survival!

Abstract

The private sector provision of inclusive product/service innovations to “base of the pyramid” (BoP) communities poses varied challenges to different private sector actors such as multinationals, domestic firms, and non-corporates. There is uncertainty regarding the viability of the BoP approach, that inclusive product innovation creation and diffusion can create “mutual value” by improving the lives of BoP communities, while also generating profit for innovators. Our paper contributes to this ongoing debate by highlighting the conditions under which introduction of inclusive innovations can create mutual value in BoP contexts. A framework mapping out the challenges (or chasms) encountered during the design, production, marketing, adoption, and diffusion phases of the inclusive innovation (DePMAD framework) is developed. It is then validated using 57 published case studies of inclusive product innovations, of which only 44 % of the innovations were still catering to the BoP after six years. QCA and univariate analysis show alternative paths and highlight the key role of partnerships for survival of inclusive innovations in the market. Not all chasms are equally important in explaining survival patterns, with the design and adoption chasms being most critical. Innovations introduced by non-corporate entities survive more often than those by corporate entities.