Methodology to Identify Opportunities for Development-Oriented Quality Innovation: Application in the Case of Least Developed Countries

Introduction

Quality innovation relates to exploitation of innovation that suits the broad range of end-users within the society. When a good, idea or process is first introduced in a country, not only the end-users of the product benefit from its consumption, potentially all society benefits if new productive capacities are created to produce that good. The introduction of garment industry in Bangladesh and floriculture in Ethiopia are examples of quality innovation that have had a spillover effect in the economies of these countries. They have provided the opportunity for more productive jobs and created new productive capacities, from management practices to logistics to machinery, which could be further recombined and exploited, increasing the potential for future innovation and growth of the economy. Therefore, when considering the wider developmental impact, the potential users of a firm’s quality innovation include the current and future population of that firm’s country.

As a process, such development-oriented quality innovation relates to the mechanism by which the creation of new productive capacities, including capital- and labor-embodied technologies within firms and in the economy as a whole, are oriented towards achieving the stakeholders’ perceptions. In principle, those stakeholders within firms seek innovation to outpace competition and maximize profits, while the stakeholders in the society at large would benefit the most if the innovation has a higher multiplicative effect on future development. A relevant question then is how to address these two perceptions – short- to medium-term profits and long-term developmental gains – given limited resources for innovation. While information regarding the potential profits is somewhat available to entrepreneurs, information regarding the long-term prospects for development gains is not.

This chapter aims to discuss some of the developmental aspects of innovation, present a methodology to identify such opportunities for development-oriented quality innovation, and illustrate its application in the context of least developed countries.