Knowledge Note

In light of growing concern related to climate change, local entrepreneurs are critically needed to develop businesses supporting climate mitigation and adaptation efforts in developing countries. In contrast to the traditional invention oriented approach to innovation, the potential exists to help these entrepreneurs scale rapidly through “open innovation”strategies featuring technology brokering and networking.In the invention-based approach, enterprises typically invest heavily in research and development (R&D) to be the first to develop and commercialize new ideas. They subsequently reap monopoly profits through commercialization of these ideas and claim intellectual property rights (IPR). However, this approachmay be challenging in developing countries given the highcosts involved and weak IPR enforcement frameworks, and often being first to market in the green sector does not requireradical invention. For these reasons, an innovation strategy giving prominence to technology absorption and adaptation of existing business models may represent an alternate, less capital- and time-intensive pathway to help green firms grow in developing countries. The World Bank Group’s Climate Technology Program undertook a literature review and an analysis of 14 case studies of different programs spanning more than 80 countries to understand how public programs could best support green firms to scale in parallel to government initiatives to improve innovative capacity. This research offers the following insights. (i) place the entrepreneur at the center of the innovation process; (ii) seek to cement peer-to-peer connections at the local level (e.g. by setting up networks of entrepreneurs); and (iii) help entrepreneurs connect to supranational networks and technology brokering platforms at the global level.

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