Unlocking the Creative Potential of the “Next Billion”: Idea Competitions at the Base of the Pyramid
In its February edition, Fast Company featured a fascinating piece about the way innovation seems to be increasingly “trickling up” from developing nations towards industrialized ones, and not the other way around. Indeed, business models that are able to adapt themselves to work and be profitable in base-of-the-pyramid contexts achieve dramatic costs and efficiency improvements that make them highly attractive for ToP markets.
While effectively describing the shift in itself, the article doesn’t go very deep in explaining how these innovations actually surface in low-income environments, what methods are used or which economic agents are leading the process. Some BoP literature, however, provides examples that underscore the importance of co-creating products and services with the BoP. This includes the well known Base of the Pyramid protocol and even the most recent publication of BoP and innovation thought leader CK Prahalad, who praises for co-creation with customers in his 2008 The New Age of Innovation: Driving Cocreated Value Through Global Networks.
What about concrete methods to make co-creation / innovation from the bottom-up happen? The recent popularity of competitions seems to offer an interesting method. Interesting, fun and (increasingly) popular as they are, the case still seems to be that they do not capture much attention when the challenge at hand requires them to take place in low income communities and among low income dwellers. At least that was my takeaway after reading Rob’s piece about the Incentive2Innovate conference which apparently had all the prize and competition masterminds under one roof.
Well, it seems that knowledge and lessons from prize- and competition-led innovation at BoP level is well on its way. I recently had the pleasure of meeting and spending some time talking to Aline Kraemer, who recently conducted related research in the shanty towns of a major city in Brazil. A PhD candidate at Munich’s Technical University and partner at the Emergia Institute (a think tank, research center and consultancy based in Berlin, Germany), Aline recently spent four months in Curitiba (Brazil) at the Research Center for Design and Sustainability of the Federal University of Paraná. She led a fascinating process that involved working with low-income communities in the rural surroundings of Curitiba, running an idea competition to identify viable product ideas with potential to address the urgent need of many people to increase their (perceived) living space.
The project was initiated by the recycling company Soliforte Reciclagem Ltda, a venture currently planning to offer specific products related to social housing liaised with Research Center for Design and Sustainability (Núcleo de Design e Sustentabilidade – NDS) of the Federal University of Paraná (UFPR), having received funding for the project from the Brazilian Innovation Agency (FINEP) and Fundação Araucária.
I could go on for a while about my conversation with Aline. However, I thought it would be more interesting for you to hear about her research in her own words. Without further ado, here is NextBillion.net’s interview with Emergia’s own Aline Kraemer.
Editor’s note: Find a summary of Aline Kraemer’s bio and a set of pictures of the project at the end of this blog post.
Francisco Noguera, NextBillion.net: Why did you decide to focus your academic research on competitions and open innovation at the BoP? Whose previous work/ research influenced your decision?
Aline Kraemer, Emergia Institute: Starting to research on products and services that were created for low-income consumers, I came across many well conceived products that were not accepted by their target group. I started to ask myself why so many new products fail and the answer I found was very simple: we often know very little about low-income consumers’ needs, about how they use a product, how they make decisions and why they accept a certain product or reject another. This is mostly tacit information that can be difficult to grasp.
I consulted literature from rather mainstream innovation research (e.g. Henry Chesbrough’s work on ’open innovation’ or von Hippel’s work on ’democratizing innovation’) to come across interesting answers, like the finding that the integration of consumers in the early stages of product developed process (the so-called “fuzzy front end”) is positively related to the success of new products and services. This, of course, did not seem surprising and it resonated very well with the BOP literature mantra that seeks to integrate the voices of the poor and learn “from the bottom up”.
So I went on to ask myself how we could leverage poor peoples’ knowledge and capabilities by integrating them into innovation processes, and found an interesting method: idea competitions. Online idea competitions are actually very popular in Germany and have yielded fantastic results. This made me wonder if they were also applicable in low-income environments. Asking around, I came across an inspiring example carried out by Nokia: the Nokia Open Studios. Their research effort motivated me to explore the method further, as it seemed to offer some clear advantages: Besides creating extrinsic and intrinsic incentives to participate (for example due to the prizes offered or the opportunity to expose an own idea), idea competitions seemed to help us overcome many obstacles we might face when conducting interviews or focus groups, like the fact that participants don’t have to explain things to you they have never thought about. Of course, they have to understand the topic of the competition; just not a whole set of questions.
It turns out the result can be equally rich in information. More importantly, they provide people the opportunity to express themselves in the way they are most comfortable with (e.g. drawing, describing their idea in a text or verbally explaining it). Of course, idea competitions do not substitute traditional field research methods – but are able to provide access to a different quality of information (which is rather implicit and solution-related than explicit and need-related).
NextBillion.net: How were the competitions carried out in practice?
Aline Kraemer, Emergia Institute: Of course, we first had to define a topic for the idea competition, which had to relate to the activities of our partner companies. Previous research efforts had identified the need for solutions that efficiently use the limited space available in houses and help to organize belongings (which would amplify the perceived space of the dweller). The idea competitions built on those findings, launching it with the following topic: “Create a new solution to organize your house” (“Crie uma nova solução para organizar a sua casa”).
We decided to conduct the idea competition in the low-income community “Aguas Claras” in Piraquara (Paraná), in the outskirts of Curitiba, due to established contacts with the president of the association of inhabitants (“associação dos moradores”), who provided access to the community and infrastructure. The event was intensely promoted from the 16th of May onwards (for a week). A team of 10 students spent a day in the community to distribute flyers from door to door and put posters in key spots such as the local school, bars, small grocery stores and the church. Key persons of the community – especially the president of the association of inhabitants and the director of the local school – were gained to further promote the competition. In addition, the competition was presented and explained during a free dinner organized by the association of inhabitants, in which around 80 people from the community took part. Also, a website informed about the event.
People were given a week to elaborate their ideas, which could only be personally submitted (offline). The actual idea collection was realized on the 23rd of May in the premises of the association of inhabitants, which is located in the middle of the community. The research team was present for a whole afternoon (from 14-17h) to collect the ideas. To hand in an idea, people were asked to register filling out a form, which had been distributed during the promotion of the idea competition. On the form, participants had to fill out their full name, address, phone number and their identity number. They were also asked to sign the terms of the idea competition. The form contained three spaces: one for the title of the idea, one for a verbal description of the idea and a third one for the design/drawing of the idea.
Ideas were accepted as a drawing, a textual or an oral description (which was video-taped). Those participants who had difficulties in either writing or designing/drawing their idea were assisted by a facilitator. Handing in their ideas, participants were asked to make a short description of their idea and to answer questions related to personal data (age, income etc.), their motivation to participate, how they had heard about the competition and if they developed the idea for the competition or if they had had the idea before.
NextBillion.net: Drilling down to some of the specifics, did you offer a prize? If so, what was it and why was it an appropriate incentive?
Aline Kraemer, Emergia Institute: Yes, we offered prizes, as we wanted to create extrinsic incentives for participation and also reward people for their time and effort. Having identified the best three ideas in an expert workshop, the community was invited to the association of inhabitants to enjoy a free dinner that was prepared by the research team and the members of the local community. During the event, winners were announced and celebrated. Participation in the event was large (around 80 people) and certainly created a momentum for all of us.
The first price was a piece of furniture (a multifunctional shelf that can be used as a room divider), which was the result of a former research project and specifically designed for low-income environments (good quality material, robust, multifunctional, easy to put together and in a sizes that fits the environment). As the winters in southern Brazil are cold, a thick quality blanket was chosen as second and third price.
We hoped that creating incentives would bring about the best ideas. However, interviewing the participants on their motivation to take part, we found that the incentives to participate were mostly immaterial and intrinsic in nature. The motivation to participate was often driven by the idea itself and the possibility to communicate it to others. For example, one participant stated that she wanted to make her idea “benefit all members of the community”. Of course, visibility and reputation were also perceived as incentives, as the winner of the competition was expected to gain recognition within the community.
Most people we spoke to also merely felt honoured to be asked. They had never had the opportunity to raise their voice, state their needs and wants and to contribute to the development of a product or service. They thought it was a great opportunity and felt a responsibility to grasp it.
NextBillion.net: Were the project’s results satisfactory? Did they meet your expectations?
Aline Kraemer, Emergia Institute: I have to say that the results exceeded our expectations. This was really a pilot and I remember the day of the collection of the ideas very vividly. We were nervous as we were honestly not sure if anybody would come by to hand in an idea. In the end, we received 34 ideas by people from the community “Aguas Claras”. This was quite a surprise, as the community is really small (just around 200 people). We were also surprised by the quality of the ideas and the information they carried. Most ideas made similar suggestions about the design and functionalities of a solution that would help to organize the living space without occupying it, which made it easy to derive insights we could build on.
For example, we identified a need for multifunctional pieces of furniture as well as their flexibility. People stated that a piece of furniture that has different functions (like a wardrobe with an integrated bed, which you can pull down) would occupy less space and would economize the material used. Flexibility of the solution (ease to move) would help to adapt the use of their living space according to their different needs during the day. A ten year old girl, who received the second prize, had invented a foldable wardrobe which could be folded so that it creates a little space in the corner of a room, behind which you can get changed. As you would need that space just twice a day, you could “de-fold” the wardrobe again so that it would be located against the wall for the rest of the day.
Of course, we were always aware of the limitations of such a competition: the input we received was fruitful in terms of the design and the functionalities of a product. But we did not expect highly technical solutions or suggestions for new materials, etc.
NextBillion.net: What happened next? Ideas were generated by the community, but were they also judged by the community? Will any of them turn into real enterprise projects?
Aline Kraemer, Emergia Institute: The objective of applying this method primarily was to gain insights about which solutions our target group would propose. Clustering the ideas helped the designers involved in the project to gain an understanding of their target group and build on those ideas when developing the first prototypes, which is still ongoing. The ideas were judged by the company and professors involved in the project, not by the community (although I really liked this suggestion!). The reasoning behind it is that we had to match the ideas collected with the capabilities of the company Soliforte, for whom we did this field study, and of course also the feasibility in terms of materials etc. But we guaranteed the participants in the terms for participation that if any of their ideas were to be used entirely, they would gain one third of the royalties.
When discussing future steps of the project, we also considered including participants in later stages of the product development process. Conducting interviews with the winners of the competition, we realized that we had identified extremely creative individuals and discussed the possibility to invite them to an innovation workshop to refine ideas or when testing prototypes. These are just possibilities and we have to evaluate over the course of the project if this is feasible.
NextBillion.net: Finally, what advice would you offer to other NextBillion.net readers interested in designing competitions at the BoP level?
Aline Kraemer, Emergia Institute: One of the major success factors of the competition we conducted was to partner with a community organization. The support we received from the president of the association of inhabitants (“associação dos moradores”) was invaluable. Without his enthusiasm and his support to promote the competition and mobilize participants, the competition would certainly not have been a success. Also, personal contacts while promoting the competition (e.g. through door-to-door visits or our participation during a community event) and repeated visits during the promotion were crucial success factors.
You need to thoroughly explain the objectives of such a competition to create trust. In many cases, a lot has already been promised to those communities and sometimes, people were suspicious if we would really come back to collect the ideas or award the winners. Thus, the repeated visits to the community showed that we were serious about it and committed.
All in all, I have to stress that it was simply an incredibly inspiring and very rich experiences. I can really recommend to just try it out and I will gladly answer any further questions nextbillion.net readers might have regarding the method, its application or outcome.
About Aline Kraemer
Aline Krämer is a PhD candidate at the TU School of Management (Germany) and a co-founder and director of the Emergia Institute, a research and consulting institute that aims to foster business solutions for development challenges. In that function, she works with businesses, NGOs, international organizations and academia to understand and develop inclusive business models. Aline co-authored the UNEP report ’Towards Triple Impact’ and currently coordinates case writers from Eastern Europe and CIS within the second phase of UNDP’s Growing Inclusive Markets initiative. She holds a Diploma in International Business and Cultural Studies of the University of Passau (Germany) and the Federal University of Bahia (Salvador, Brazil).
Pictures from the project