Innovation for Inclusive Growth: Towards a Theoretical Framework and a Research Agenda

Inclusive innovation, which we define as innovation that benefits the disenfranchised, is a process as well as a performance outcome. Consideration of inclusive innovation points to inequalities that may arise in the development and commercialization of innovations, and also acknowledges the inequalities that may occur as a result of value creation and capture. We outline opportunities for the development of theory and empirical research around this construct in the fields of entrepreneurship, strategy, and marketing. We aim for a synthesis in views of inclusive innovation and call for future research that deals directly with value creation and the distributional consequences of innovation.     

The Antecedents and Consequences of Affordable Value Innovations for Emerging Markets

Emerging markets offer tremendous growth opportunities for firms. While established multinational firms typically focus on premium segments in emerging markets, they often fail to leverage additional growth opportunities in so‐called good enough or low‐income segments in emerging markets. Customers in these low‐income markets have substantially different requirements and are very price sensitive. Theoretical and case‐based research suggests that innovating for these low‐income segments in emerging markets differs significantly from innovating for premium or traditional Western markets. We argue that tapping successfully into low‐income segments in emerging markets requires the development of new products that meet the low price expectations while at the same time offering also value to customers in these segments. We refer to these new products as affordable value innovations. We analyze the antecedents of affordable value innovation for emerging markets. We draw on institutional theory to derive three potentially relevant antecedents of affordable value innovation for emerging markets. These are bricolage, local embeddedness, and standardization. We test our hypotheses using multiple informant data from 47 multinational corporations involving 103 innovation projects that target low‐income customers in emerging markets. Our empirical analysis shows that all three antecedents have significant effects on the level of affordable value innovation: while bricolage and local embeddedness are positively related to the level of affordable value innovation, standardization has a negative impact. We also examine the relationship between the level of affordable value innovation and performance. We find evidence for our basic assumption that a firm's capability to develop and launch affordable value innovations is key to success in emerging markets. It indicates that a firm's investments in affordable value innovations for emerging markets pay off financially. Finally, a cross‐regional comparison of our data shows that the key findings on antecedents of affordable value innovation and its impact on performance do not vary across various emerging markets. Overall, our findings offer important implications for research on and the practice of innovation for low‐income segments in emerging markets.     

Ethics and Values

Book reviewed in this article:
Serageldin, Ismail and Martin-Brown, Joan (eds) Ethics and Values: A Global Perspective     

Joint research and development projects as technology training ventures

This paper presents an empirically derived model of the process through which industrial firms that lack internal resources in a particular technology area to implement certain research and development (R&D) projects on their own, initiale nad implement them jointly with not-for-profit research institutions. Such joint R&D projects are typically initiated by smaller, technologically less advanced firms in developing countires, with the underlying objective of training themselves in the relevant technology area and acquiring new technological resources from more advanced local research institutions, while simultaneously and rapidly completing the immediate R&D project. This process model has been developed by drawing from and synthesizing several in-depth case studies of such projects. In developing countries, joint R&D projects of this nature are important, as they can be more effective than formal technology training programmes for not-for-profit research institutions to fulfil their charter by transerning their advanced technical knowledge to the relatively less advanced local industrial firms. Participating firms that seek to their immediate interest, and therefore learn it rapidly and effectively. This paper adds to the scarce literature on ht process of organizational knowledge acquisition through contractual arrangements such as joint projects. It also enables both firms and research institutions to understand effective proceses for initiating and implementing such mutually beneficial joint R&D projects.     

An exploratory study of operational reasons to budget

Budgets are used widely but criticized, mainly for performance evaluation reasons. We find that organizations regard budgets as more important for planning and control than evaluation, thus proposing a rationale for their continued use irrespective of evaluation‐based criticisms. This finding is also important, because most extant budget research focuses on evaluation, suggesting a potential disconnect between budget research and practice. We also find that rolling forecasts are used in tandem with the annual budget in most organizations, and for the same reasons. This was unexpected, as coexistence suggests their adoption for different reasons.     

Book review

Books reviewed:
Partha Dasgupta and Ismail Serageldin (eds), Social Capital: a Multifaceted Perspective.
Georges Enderle (eds), International Business Ethics: Challenges and Approaches     

An Experimental Study on the Effect of Budget Information on Balanced Scorecard Preparer Individual Learning

We examine whether budgets affect individual learning in balanced scorecard (BSC) preparers for the purposes of scorecard target setting. Control systems research has called for studies examining the impact of multiple controls on common decision‐making phenomena. Given this, are there other cybernetic controls (budgets) that might influence the decisions of BSC preparers? From an experimental study involving 235 postgraduate university candidates, our findings suggest that the awareness of progressively greater budget information amongst BSC users in high uncertainty environments engenders greater individual learning about the organisation, altering BSC preparer target‐setting choices. Interestingly, this learning does not necessarily lead to better budget‐actual outcomes, but informs BSC preparers of the constraints facing the organisation from a funding ‘supply side’ perspective. The oft‐criticised budget, even within high uncertainty conditions, facilitates learning in a BSC system originally purported to replace or advance the traditional system. Finally, we contribute more broadly to a growing literature evidencing the appropriateness of budgets in flexible environments, by arguing for its impact on other performance management systems.     

Cost-effectiveness of ceftolozane/tazobactam plus metronidazole compared with piperacillin/tazobactam as empiric therapy for the treatment of complicated intra-abdominal infections based on the in-vitro surveillance of bacterial isolates in the UK

Aims: An increase in the prevalence of antimicrobial resistance among gram-negative pathogens has been noted recently. A challenge in empiric treatment of complicated intra-abdominal infection (cIAI) is identifying initial appropriate antibiotic therapy, which is associated with reduced length of stay and mortality compared with inappropriate therapy. The objective of this study was to assess the cost-effectiveness of ceftolozane/tazobactam?+?metronidazole compared with piperacillin/tazobactam (commonly used in this indication) in the treatment of patients with cIAI in UK hospitals.

Methods: A decision-analytic Monte Carlo simulation model was used to compare costs (antibiotic and hospitalization costs) and quality-adjusted life years (QALYs) of patients infected with gram-negative cIAI and treated empirically with either ceftolozane/tazobactam?+?metronidazole or piperacillin/tazobactam. Bacterial isolates were randomly drawn from the Program to Assess Ceftolozane/Tazobactam Susceptibility (PACTS) database, a surveillance database of non-duplicate bacterial isolates collected from patients in the UK infected with gram-negative pathogens. Susceptibility to initial empiric therapy was based on the measured susceptibilities reported in the PACTS database.

Results: Ceftolozane/tazobactam?+?metronidazole was cost-effective when compared with piperacillin/tazobactam, with an incremental cost-effectiveness ratio (ICER) of £4,350/QALY and 0.36 hospitalization days/patient saved. Costs in the ceftolozane/tazobactam?+?metronidazole arm were £2,576/patient, compared with £2,168/patient in the piperacillin/tazobactam arm. The ceftolozane/tazobactam?+?metronidazole arm experienced a greater number of QALYs than the piperacillin/tazobactam arm (14.31/patient vs 14.21/patient, respectively). Ceftolozane/tazobactam?+?metronidazole remained cost-effective in one-way sensitivity and probabilistic sensitivity analyses.

Conclusions: Economic models can help to identify the appropriate choice of empiric therapy for the treatment of cIAI. Results indicated that empiric use of ceftolozane/tazobactam?+?metronidazole is cost-effective vs piperacillin/tazobactam in UK patients with cIAI at risk of resistant infection. This will be valuable to commissioners and clinicians to aid decision-making on the targeting of resources for appropriate antibiotic therapy under the premise of antimicrobial stewardship.     

Book Review

Fred Catherwood, The Creation of Wealth: Recovering a Christian Understanding of Money, Work, and Ethics . Wheaton, IL: Crossway Books, 2002. 208 pages, ISBN 1581343523, $14.99