What is an Innovation Ecosystem?

It is now widely recognised that achieving and sustaining any development outcome depends on the ability of multiple and interconnected actors – governments, civil society, the private sector, universities, individual entrepreneurs and others – to work together effectively. Each set of interconnected actors whose collective actions produce a particular development outcome is a local system (or ‘ecosystem’). Improving that development outcome therefore requires an ecosystems approach.

Although innovation is a means to improving how development goals are achieved rather than an outcome in itself, the same principles apply. For innovative ideas to be efficiently generated, developed, tested and ultimately scaled for development impact they also require the coordinated, collaborative action and resources of the actors noted above – collectively referred to as the ‘innovation ecosystem’.

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Innovation ecosystems can operate at multiple levels (e.g. city, regional, national) and within multiple sectors (e.g. agriculture, health, education). Because of this breadth, it can be difficult to draw meaningful boundaries around who is or isn’t part of an innovation ecosystem. It is therefore helpful to focus first on the sector and problem that the innovation is seeking to address (e.g. “low attendance rates among girls at government-run primary schools in Nairobi”) and then consider the specific actors, resources and contextual factors that the innovation will need to engage, utilise or influence to be impactful.

Adopting an ecosystems approach to innovation recognises that:

  • An innovation ecosystem is made up of different actors, relationships and resources who all play a role in taking a great idea to transformative impact at scale;
  • The effectiveness of each part within the innovation ecosystem is moderated by other parts of the system (e.g. entrepreneurs depend on being able to access financing)
  • A change to one part of the innovation ecosystem leads to changes in other parts of the innovation ecosystem (e.g. an increase in internet connectivity will accelerate the design and testing of new technologies)

Some innovation ecosystems will already be well-functioning and will require little support. Others will be problematic due to fragility, inequity, conflict, corruption, weak institutions or political stagnation. Because ecosystems are dynamic, traditionally strong ecosystems can also decline in response to external factors. But even when local systems are weak, contested or perverse, there will likely be actors or locations committed to reform. It is important to identify and find ways to support these nodes of reform, as they are the poles around which strong and sustainable systems can emerge.