FIRST NEWSLETTER
DFID Research Project: ‘Innovation for Productivity Growth in Low
Income Countries’ (CCS-I4PG)
May 2014
Dear reader,
In 2013, the British Department for International Development (DFID) commissioned the 4-years
research project ‘Coordinated Case Studies – Innovation for Productivity Growth in Low Income
Countries’ (CCS-I4PG) to Tilburg University in The Netherlands and Dutch and Southern partners. The
research focuses on innovation systems and finance for productivity growth in 10 case countries in
Africa and Asia. It further involves policy development and dissemination.
The project has started well in July 2013 in Kenya, Tanzania, Uganda, India, South Africa and Vietnam.
A series of innovation policy stakeholder meetings was organized. The research teams developed and
implemented enterprise-level surveys instruments and explored the organization of Randomized Control
Trials (RTCs). A number of PhD students started the research. The first reports and articles are now
downloadable on the website of the project.
After a successful first term of the research implementation, we would like to present our work in this
first newsletter. Our aim is to establish a network of a larger audience of ‘followers’, with the objective
to inform and initiate interaction with the target groups of the research including innovation policy
makers in developing countries (governmental agencies, NGOs, businesses), the research community and
the broader audiences such as development practitioners and journalists of popular development
magazines. We encourage readers to share this newsletter with their colleagues and partners and to
provide feedback, ideas and suggestions to us.
For further information, please consult the website of the project: www.tilburguniversity.edu/dfidinnovation-and-growth. If you have questions, do not hesitate to contact us directly.
I hope you enjoy reading this newsletter!
Prof. Lex Meijdam, Research Director on behalf of Tilburg University.
Project in brief
CCS-I4PG aims to identify factors, institutions, and
policies that can increase innovation and productivity
in low income countries in Africa and Asia. The
project involves active involvement of policy makers
for articulating the research questions and
disseminating the research outcomes.
The project envisages firm level enterprise surveys
and randomized control trials leading to a series of
fundamental econometric research articles published
in high quality journal.
Southern partners
At present partnerships in Africa and Asia have
materialized with:
 University of Nairobi /School of Economics,
Kenya
 University of Pretoria/Graduate School of
Technology Management, South Africa
 University of Dar es Salaam/Department of
Economics
 National Economics University Hanoi,
Vietnam
 University of Ghana/Department of
Economics, Accra
Dutch partners
Tilburg University is the lead partner in this project. Dutch
partners in the project are Radboud University Nijmegen
(RUN) and Africa Study Centre (ASC) of Leiden University
and innovation policy consulting firm Technopolis.
Theme 1 ‘Innovation Systems’ (IS)
The IS group aims to understanding innovation in
the manufacturing sector (SMEs) in LICs, its
processes and critical factors for its diffusion
supported amongst others by innovation policies
and governmental institutions. The research
involves econometric analysis of a set of variables
concerning barriers at firm, regional and national
levels and their causalities with the innovation
capacity of firms.
In the past months, the IS group made progress in
the preparation and implementation of the firm
level surveys in South Africa (500 firms) in
cooperation with the University of Pretoria.
Moreover, the IS concluded an agreement with
the World Bank for firm level survey the
remaining 9 countries of study (200 firms in each
country). Linking up datasets enables the
development of panel data.
Eventually the IS group will develop the databases
for 50 regions in the ten countries under study,
using the region categorization of the World
Bank. This will allow for understanding regional
differences and their effects on innovative output
in the region and at the firm level.
The working titles of the papers currently being finalized include ‘regional differences and clusters of
innovation’, ‘understanding firm heterogeneity and innovation’ and ‘foreign direct investment and
innovation’.
Theme 2 ‘Finance for Productivity Growth’ (FPG)
This project aims to understand enterprise
productivity dispersion across the 10 case countries
in Africa and Asia. The FPG group focuses on the
effects of access to finance in determining
productivity of SMEs and how constraints to
investment finance influence the process of
macroeconomic development.
The FPG-theme group completed a working paper
entitled 'Entrepreneurial Saving Practices and
Business Investment: Theory and Evidence from
Tanzanian MSEs', using survey data provided by the
Financial Sector Deepening Trust Tanzania (FSDT).
The working paper is available to download at the
project website. The paper shows that some informal
saving practices, such as saving with other household
members, are quite inefficient in inducing
entrepreneurs to reinvest, as compared to formal
saving practices.
The FPG-theme group is currently also finalizing a working paper on 'Access to Finance and
Informality: Evidence from India', which will be available shortly.
In Kenya, the FPG group is cooperating with the Financial Sector Deepening Trust Kenya (FSDK) to
carry out a detailed nationwide representative enterprise survey. The group is currently designing a
follow-up survey and a randomized control trial (RCT) to understand the determinants of adoption/non
adoption and the impact of the use of mobile phone money on the performance of SMEs.
In Uganda, the group has worked with FSD Uganda in the design of a very detailed survey at the SMEs
level, which is expected to be in the field during the summer. The research using these data will focus on
the fact that entrepreneurs in Uganda mainly use labor from family members and friends.
Policy development and dissemination
The policy development and dissemination
component of the project is to develop
innovation policy implications from the
scientific research evidence.
This is initiated with the organization of a
stakeholder meeting in the countries of study aiming
at the identification of the policy issues and the
current innovation system. Project partner
Technopolis play a key role in this analysis, presented
the series of ‘Policy Diagnostic reports’ in each
country of study.
The one-day stakeholder meeting, an interactive consultation which brings together 15 – 20 key policy
makers is intended to assure the societal relevance and local ownership of the research outcomes.
The first series of stakeholder meeting was organized
in:
 Kenya with the University of Nairobi on 11
October 2013
 South Africa with University of Pretoria on 29
November 2013
 Tanzania with the University of Dar es Salaam
University on 6 December 2013
 Vietnam with National Economics University in
Hanoi on 22 May 2014.
The country diagnostic reports of Kenya, Tanzania
and South Africa countries are downloadable on the
project’s website.
Country general descriptions
Developing a set of relevant variables for
addressing the research questions of the themes
in a complex economic and institutional reality
in LICs is challenging. An initial and holistic
understanding of the poverty, productivity and
innovation in the political, economic and
institutional context in the various countries of
the DFID research will help to refine and
validate the research questions and relevant
variables for the econometric analysis.
Project partner African Studies Centre developed
country specific descriptive exploration and
understanding of case countries’ . The General
Country Descriptions of the first wave of countries
are available on-line:
 Kenya
 South Africa
 Tanzania
Capacity development
This project activity concerns PhD studies.
an training on innovation systems research, seminars and onthe-job training and two PhD candidates based in The
Netherlands (Tilburg and Nijmgenen) and one PhD candidate
based in Kenya have started their research in the DFID
project. In Kenya, Tanzania and South Africa, Technopolis
training a group junior research the ‘country fiche’ data
collection method the local innovation system.
In May research seminars were organized by Dutch
researchers at the University of Nairobi and the University of
Dar es Salaam.
Collaborating of joining the project?
Calls:
Call for PhD candidates in the countries of study who are interested to start PhD
within the research context of the project. Research interest and skills in innovation
econometric analysis is required. Please contact Karin Stoeten (Project Support)
Call for partners in RCTs/experiments. Organisations (Banks, governmental
agencies, NGOs) interested to collaborate with the FPG theme group for
implementing RCTs or experiments with regard to new local policies and practices,
please contact Patricio Dalton
Project Advisory Board: Prof. Erwin Bulte (chair, Wageningen University/Utrecht University), Prof.
Ton Dietz (Leiden University/Africa Studies Centre), Dr. David McKenzie (World Bank), Dr. Patries
Boekholt (Technopolis), and Prof. Marius Meeus (Tilburg University).
Key project staff: Prof. Lex Meijdam (Project Director), Prof. Patrick Vermeulen (Coordinator IS
theme), Prof. Thorsten Beck (Coordinator FPG theme), Jaap Voeten (Coordinator Policy Development
and dissemination), and Karin Stoeten (Project Support)