The role of new evidence in national innovation support programs: insights to chart a path forward
Context
Small and medium enterprises (SMEs) are widely recognized as one of the main engines of growth in LMICs. However, especially in developing contexts, they are often resource-constrained, unable to take on new long-term risks associated with R&D investments, and more generally lack the technical capacity and monitoring, evaluation and learning (MEL) platforms to adopt, adapt or scale up innovations effectively. Although the issues surrounding SME growth in the Global South have been extensively studied, there is still a lack of data and evidence to support effective solutions.1 In response, the International Development Research Centre has been supporting a cohort of
research projects in Africa and Asia under the Evidence for Innovation (E4I) banner to understand how to increase the effectiveness of national innovation support programs (ISPs), particularly in terms of how they benefit the many rather than the few.
Several years into the E4I initiative, a workshop in Accra brought together nine research groups spanning 11 countries in Asia and sub-Saharan Africa, identified as “least-developed countries” (LDCs), that encounter significant structural impediments to sustainable development. This was an opportunity to take stock of findings and lessons, and to chart a path forward for evidence to drive truly inclusive innovation.
1 Thorsteinsdóttir, H., & Bandyopadhyay, N. (2024). Research for understanding and promoting innovation by small-and-medium sized firms in the least developed countries. Innovation and Development, 1–25. https://doi.org/10.1080/2157930X.2024.2375485
Findings and recommendations
1. Public innovation agencies have a key mandate to support SMEs through targeted interventions to support access to infrastructure, skills and networks to facilitate innovation-enabled growth.
• ISPs for SMEs are central to the suite of direct interventions that innovation agencies can employ to significantly strengthen a country’s innovation ecosystem.
• Beyond direct programming at a national level, networks of innovation agencies have the potential to catalyze investment and enable peer-learning around shared priorities for public agencies within a given region.
• Linkages between SMEs and public research organizations (including universities) are critical on two fronts. First, for developing, adapting, and utilizing new technologies for market growth in a responsive way. For instance, programs such as R&D vouchers2 have enormous potential to help navigate the supply and demand around new technologies. Second, for understanding the nature of
The UAC Startup Valley in Benin and USAID’s Entrepreneurship & Investment (EI) program in Senegal provided incubation and training to SMEs, resulting in moderate improvements in revenue growth and labor productivity. However, these programs also revealed persistent challenges such as lack of inclusion, precarious employment and limited access to finance, underscoring the need for more robust infrastructure and more inclusive and robust support systems.
ISPs and how they can be most effective in supporting SME growth. This means tailored training, and evidence and data to inform how SMEs advocate for and use government support, and to reduce the gap between supply and demand in terms of ISPs.
• There is evidence of the effectiveness of ISPs that act as bridges between innovation ecosystems and everyday enterprise realities, especially for new SMEs as well as informal and micro-enterprises.
2. Interventions in this space should focus on embedding innovations into SME operations, regardless of whether they are technologyoriented SMEs. New tools, processes, and models can enhance their productivity and resilience. There is a need to:
The blockchain study in agricultural supply chains in Tanzania shows how digital tools can enhance transparency and inclusion but also reveals barriers such as low digital literacy and poor infrastructure that must be addressed for effective integration. This is fundamentally about enhancing transparency and trust.
• Reorient support mechanisms to deliver practical, accessible innovations that SMEs can adopt to improve operations on a day-today basis.
• Focus on technological innovations that are adapted to the local infrastructure and capabilities, and that can thrive in an SME environment with a view towards broad adoption.
2 For more information on the “Research and development impact vouchers” project, see here: https://villgroafrica.org/research-and-the-privatesector/
• Recognize that different types of innovation that focus on social changes, new processes, organizational change, etc., are as critical as technological innovation, and both often go together in helping SMEs grow.
The study on MEDPA and YSEF programs in Nepal highlights the need for evidence-based restructuring of development programs into localized, innovationoriented models.
3. Inclusive innovation cannot be achieved through isolated interventions (whether they relate to gender, youth, or marginalized communities). It requires a systemic approach that integrates equity considerations into the design, implementation, and evaluation of innovation policies and programs. In particular, this implies:
• Moving beyond tokenistic inclusion to structural integration of EDI principles in innovation governance and funding.
• Supporting innovations that address systemic barriers (e.g., gender norms, digital divides) as legitimate and impactful components of innovation systems.
• Ensuring that innovation ecosystems reflect a diversity of stakeholders, with particular attention paid to the participation of underserved populations, through mentorship, localized support, and inclusive financing models.
• Engaging in targeted training for SMEs to address deep-seated biases, assumptions, etc. that inhibit their inclusive growth and impact as organizations.
In Ethiopia, the lease financing program by the Development Bank aimed to improve SME productivity through access to equipment. However, at a baseline only 0.02% of applicants received equipment, highlighting the need for simpler, more accessible mechanisms. The study identified systemic issues like complex application processes and lack of working capital contribution, which hindered program uptake.
A compelling case for embedding gender equity into business development in Bangladesh shows that training can lead to improved gender-equitable attitudes and workplace trust, and new norms, which can in turn have lasting impacts on productivity, especially in firms owned by men.
4. Monitoring and evaluation should be at the core of ISPs and focus on balancing contextspecific data with the need to benchmark regionally and internationally. Effective innovation systems are those that are grounded in local realities, informed by robust evidence, and capable of adapting to feedback and change. They should be designed to:
• Invest in diagnostic tools and baseline assessments to enable a range of data collection and analysis activities, with particular attention paid to the distributional impacts of ISPs that go beyond a narrow vision of growth.
• Develop context-sensitive theories of change that link innovation inputs (e.g., training, finance, technology) to desired outcomes (e.g., productivity, inclusion, resilience). Special attention can be paid to the directionality of innovation activities, which implies, inter alia, being deliberate in reflecting on intended and potential unintended consequences of the work. Tracking innovation-driven growth through SMEs should also take into consideration the broader political economy of public and private sector agencies that define a national innovation ecosystem.
• Monitoring and evaluation activities need to be resourced in the design phase of the innovation support programs, with clear indicators that allow for real-time course correction and scaling of what works. In particular, there is a need for programming to include feedback loops, milestones for course correction, and opportunities for scaling.
In Ghana, it was found that women entrepreneurs had lower digital adoption and mentorship access, emphasizing the need for inclusive financing and localized support. Ghana includes midline and endline evaluations to assess the impact of digital training and nudges on firm performance.
Recent assessments of innovation agencies in Zambia and Zimbabwe reveal substantial gaps in MEL frameworks and foundational data systems. In both countries, innovation agencies often lack: (1) robust MEL frameworks aligned to national innovation strategies; (2) standardized tools and indicators to measure program outcomes; and (3) reliable data management systems for tracking beneficiary progress and program effectiveness.
These shortcomings hinder the ability to make evidence-based decisions, adjust interventions in real time, and demonstrate the impact of support programs to stakeholders and funders.
A call for action: what could new networks and research agendas look like?
The above recommendations lay out a series of actions that are informed by new evidence and the experience of scholars and practitioners engaged in understanding ISPs. Operationalizing these ideas often involves donors and governments working through public innovation agencies and working with these agencies to enhance their capacity and support their mandates as leading organizations at a regional or national level. In Africa, for example, the recently launched Innovation Agencies of Africa Network aims to do just that, through capacity-strengthening, peerlearning, joint programming by the agencies, and a strengthened evidence base.
In parallel, new research agendas must be developed to further develop a robust body of evidence. The cohort of projects under the E4I banner is providing a “proof-of-concept” that new knowledge, particularly
when produced alongside stakeholders as “actionresearch”, can be both relevant to a rapidly emerging scholarship from the Global South and be directly actionable in terms of ISP design and implementation. The is demonstrated value in meta-analyses and RCTs, but also in case studies that focus on the people, the contexts and the different pathways for ISPs.
A global research agenda and network should be focused on LMICs, and LDCs in particular, with researchers from these countries taking the lead in defining research priorities. In addition to scholarship that provides new practical frameworks and methodologies, there is an opportunity to bring to the forefront programs and policies that have had success in certain areas, in order to draw lessons and best practices systematically.
Matthew Wallace, Matilda Dipieri, Anindya Chaudhuri
International Development Research Centre (IDRC), Canada
Lesakit Mellau, Joel Matiku Joshua Mwalimu Julius K. Nyerere University of Agriculture (MJNUAT), Tanzania
Edward Asiedu University of Ghana, Ghana
Tewodros Assefa, Eyoual Tamrat Demeke Policy Studies Institute, Ethiopia
Sheikh Touhidul Haque, Nuzaira Binte Neaz BRAC Institute of Governance and Development, BRAC University, Bangladesh
Gordon Akon-Yamga, Wilhemina Quaye Council for Scientific and Industrial Research- Science and Technology Policy Research Institute (CSIR-STPRI), Ghana
Hilda A. Mwangakala, Hector Mongi University of Dodoma, Tanzania
Elysée Houedjofonon Centre d’Actions pour l’Environnement et le Développement durable (ACED), Benin
Djibril Diallo, Laure Tall Initiative Prospective agricole et rurale (IPAR), Senegal
Raj Kumar Bhattarai, Nirmita Shrestha, Rajendra Khatri
Nepal Development Research Institute, Nepal
Sylvia Mwamba
Southern African Institute for Policy Analysis and Research (SAIPAR), Zambia
Gibson Chigumira
Zimbabwe Economic Policy Analysis Research Unit (ZEPARU), Zimbabwe
