Rural Development News 1/2010
Fostering innovation networks:
the missing piece in rural development?
by Frank Hartwich and Urs Scheidegger 1
Over the last decades governments and development
agencies have placed much emphasis on discovering
and diffusing new knowledge and technologies to im-
prove agricultural production for the benefit of small
farmers in developing countries. However, there is
now sufficient theoretical and empirical evidence to
say that putting money into science projects, labora-
tories and in governmental extension and non-gov-
ernmental advisory service is not enough. Something
is missing in the rural development formula; other-
wise smallholder agriculture in developing countries
would have experienced more development and in-
novation. Why smallholders do not learn more about
improved production methods and adopt knowledge
and technical solutions that seem to sit on the shelves
unused.
This article explores new inroads for the understand-
ing of rural innovation processes, emphasizing, in par-
ticular, the role of social networks, complementing
thus conventional approaches to rural development.
It starts out discussing some of the classical studies
on farmers’ adoption and innovation that have for
so long dominated development thinking and with
this the design of agricultural development policies
and programs. It then develops a more comprehensive
model to explain innovation processes among small-
holder farmers that includes aspects of networking for
innovation. Based on this model the article develops a
number of recommendations that aim at an improved
design for rural development policies and programs.
Swiss College of Agriculture, Department of International Ag-
1
riculture, Laenggasse 85, CH – 3052 Zollikofen, Switzerland
70
What do we miss explaining innovation?
Many studies have demonstrated how innovation –
viz the successful introduction of new knowledge and
technologies in productive processes – has become a
key determinant for growth and development in to-
day’s rapidly modernizing societies. In fact, a range of
factors pervasive in today’s societies have turned inno-
vativeness into a prerequisite for sustained income.
Particularly for farmers in developing countries the
challenge to innovate has become all-encompassing:
they need to generate sufficient food and income from
smaller and more depleted pieces of land, reduce costs
of production in times of raising prices for land, labor
and inputs, and change and improve the quality of
their products to remain competitive and be able to
sell their products on local or international markets.
Crop-livestock farmers who are ready to improve tra-
ditional practices and intensify their production sys-
tems require access to modern knowledge and technol-
ogy as well as to inputs and markets.
But where can farmers pick up the additional knowl-
edge and technology they need to improve their opera-
tions? Renewed understanding of innovation processes
tells us that having single providers of knowledge and
technologies, such as governmental extension services,
advisory service agencies of development cooperations
or NGOs, may not be enough. There are also other
important players that mobilize the innovation proc-
ess and influence farmers in their decision to improve
their operations. These players include buyers, sellers
of agricultural inputs, providers of financial services,
leading producers, farmers’ associations, community
groups, traditional authorities and many others. And
often it is the repeated and joint effort of all these

agents which motivate farmers to innovate. This arti-
cle provides a concept to understand how the connect-
edness of farmers to different development agents si-
multaneously influences their decisions to innovate.
Adoption and Innovation – Building on
Past Studies
A wide body of literature exists on innovation and
the adoption of improved knowledge and technolo-
gies among small farmers in developing countries (e.g.
Feder, Just and Zilberman 1985 or Besley and Case
1993). The first studies that ventured into a better
understanding of innovation processes in agriculture
started with the observation that there is often a sig-
nificant interval between the time an innovation is
developed and available for farmers and the time it is
widely used. Processes of adoption and diffusion2 of
agricultural technologies were most remarkably stud-
ied by Rogers in the 70th (Rogers 1995) in his seminal
works on the diffusion of hybrid corn in Iowa. Rog-
ers and succeeding rural sociologists found that dif-
fusion occurs in a sequence reaching from an initial
period of relatively low adoption rate but higher rates
of change in adoption. Next is a take-off period when
the innovation penetrates the farming community in a
relatively short period of time followed by a saturation
phase where diffusion rates decrease. For most innova-
tions, there will also be a period of decline where the
innovation is replaced by a new one.
Following this understanding, many studies devel-
oped adoption indices on the basis of studies in which
farmers were asked whether, at a given time, they had
adopted certain types of technologies recommended
by an agricultural extension program. For example,
one measure of the adoption of a high-yield seed va-
riety by a farmer is a discrete variable denoting if this
variety is being used by a farmer at a certain time;
another measure is what percent of the farmer’s land
is planted with this variety. Based on their adoption
2
The term “adoption” refers to the individual behavior towards
an innovation. “Diffusion” on the other hand, has to do with the
aggregate uptake of an innovation by a community or popula-
tion. One measure of diffusion is the share of farmers that adopt
innovations in a given population.
Rural Development News 1/2010
rate farmers could be classified into innovators, early
adopters, early majority, late majority and laggards.
Agricultural economists have complemented the mod-
els of diffusion of innovation with the calculation of
economic returns on investment. A large number of
economic studies have found consistently high rates
of returns to mostly public investment in agricultural
R&D and extension, and point toward these as areas
of public under-spending. Many of these studies use
models in which agricultural output or productiv-
ity is explained by a range of socio-demographic and
economic factors including the level of technological
change. The studies commonly assume that technical
change is brought about in a process of accumulation
of advanced knowledge and technologies in the farm-
ing community and, due to lack of data, approximate
this process by the investments in agricultural R&D
and/or extension. While such economic studies are
able to provide information on strategies to increase
farmers’ production and productivity on the aggregate
level and make the point for increased investment in
agricultural R&D and extension, they are less capa-
ble to inform on options to improve the innovation
process itself.
There are also econometric studies of adoption on
a less aggregated level. The level of adoption here is
explained by a number of factors related to the farm
households’ endowment with resources and other
socio-demographic variables in a multivariate regres-
sion model. Some adoption studies are grounded in
theoretical considerations about the utility maximi-
zation of farmers. If the perceived utility of adopting
a technology is larger than a certain threshold (e.g.,
if it is larger than the utility perceived based on the
traditional technology), the innovation is expected to
be adopted.
Table 1 summarizes important factors that have been
prominently considered to influence the adoption of
innovation in economic studies of a more disaggre-
gated, say farm household, level:
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Rural Development News 1/2010

Table 1: Frequently used adoption predictors

the participation of primary
Category Variables producers, processors, buy-
1. Adoption of innovation, Use of an innovation (yes or no) ers, input providers, local
technologies, knowledge etc. Use of an innovation package (from 0 and 100%) leaders, government of-
Share of land to which the innovation is applied ficers, local development
Time lag between persuasion and adoption programs and NGOs, edu-
2. Access to and endowment Household or farm size (property and rented) cational institutions, and
with resources Wealth of household or farm many other actors.
Access to credit
Knowledge and technical capacity The idea of networking in
3. Socio demographic factors Education
innovation suggests that
Literacy the farmers’ position in so-
Gender cial networks determines
Age their access to resources
4. Socio-psychological Risk aversion needed to implement the
behavior Attitude to credit innovation. The position
Attitude to change in the network also accel-
Attitude to external information erates or limits the cogni-
Exposure to mass media tive processes of anticipa-
5. Communication Contacts to other farmers tion and absorption of new
Contacts to research, extenionists and other change agents and/or abstract knowledge
Exposure to media and technologies that come
Opinion leadership
from outside the usual farm
operations context. This, in
The factors influencing adoption depicted in Table parts, may explain why so many efforts of research,
1 have been sufficiently confirmed by a large variety extension and development agents promoting new
of studies. However, recently the last category “com- agricultural technologies have failed.
munication” has received increasing attention and it
This emphasis on interaction and collaboration for in-
appears that simple measures such as “number of times
novation is also consistent with the literature on inter-
extension staff have visited farmers” are not able to
firm alliances aimed at technological learning and new
sufficiently cover the effects of the farmers’ position
knowledge creation which argues that alliance build-
in networks of communication about the opportuni-
ing and collaboration in R&D is necessary and benefi-
ties and usefulness of adopting certain knowledge and
cial given the effects of resource interdependence and
technologies including communications among the
complementarities. The study of innovation processes
farmers themselves and with many other agents.
and related dynamics of interaction and collaboration
is also informed by the theory on “absorptive capabili-
A new Piece of Evidence – Networks ties” or “innovation capabilities”. In practical terms
absorptive capabilities can be understood as the abil-
Newer approaches in the fields of innovation systems, ity to search for useful information and to use that
participatory research, industrial organization and cor- information in productive processes.
porate management suggest that innovations come
about in systemic setups characterized by agents that Within the study of absorptive capabilities distinc-
develop, diffuse and use innovations, their interactions, tion is often made between the exploration and exploi-
and structures and rules. From an innovation systems tation of knowledge. In environments which count
perspective innovation occurs in network-like struc- with a solid knowledge base, like mature industries,
ture of interaction and continuous learning assuring producers usually will try to orient their capacities to

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the development of new knowledge whereas in in-
fant industries and underdeveloped sectors the focus
of agents may be rather on exploring and absorbing
existing knowledge. Indeed, for developing countries
generating new technologies is of minor significance
given the prevalent weaknesses of their research and
technology systems, the lack of centers of excellence in
science and technology, and the limitations in terms
of human and financial resources. Emphasis in these
countries must be placed in the absorption of knowl-
edge and technology available.
In conclusion, applying the concept of networking
for innovation to smallholder farming in developing
countries seems promising to extent current under-
standing of rural innovation processes with regard to
the following aspects:
®® It sharpens the focus on the capacities farmers
exhibit in dealing with innovation. Very valid in-
novations considered to be beneficial to farmers
may turn out to be useless for them because they
don’t dispose of the necessary innovative capacity
marked by individual constraints and socio-eco-
nomic framework conditions. Those who aim to
promote the use of such innovations face limits in
the absorptive capacity of farmers which eventually
they cannot overcame and therefore the innovation
does not get adopted.
®® It challenges the linear technology adoption which
suggests that innovations can be handed down
from research and extension to farmers and which
primarily propagates investments in research and
extension and shifts the focus to the strengthening
the capacities of farmers not only through handing
them knowledge and technology but through sup-
porting active learning process in which practical
use is trained as well as solutions are adapted. In
situations where the lack of absorptive capabilities
of potential innovators is apparent emphasis should
be first placed on strengthening the capacity in the
absorption of knowledge and technology available
(avoiding long term research processes) and only
afterwards on research and extension.
®® It stresses that farmers are part of innovation net-
works in which mechanisms of collective absorp-
tive capabilities take place, people exchange in-
formation, discuss experiences of adoption and
Rural Development News 1/2010
find solutions for a better adaptation in specific
contexts. The strength of ties to other farmers and
agents that promote innovation as well as the com-
plementarity and gradient of knowledge between
them determines to which extent people absorb
innovations.
Given these arguments, recent studies on smallholder
agriculture try to use new type of methods and data
to control for the effects of social networking. Authors
such as Conley and Udry (2001), Bandiera and Rasul
(2006), and Moser and Barrett (2006) focus on the
relations of individual farmers with specific change
actors (e.g. extensionists or product buyers) taking
into account effects of simultaneous influencing and
collective decision-making process. Such studies also
focus on various types of relationships within rural
communities and with a range of agents that support
the diffusion process.
One suggestion from the side of social network ana-
lysts is to use Exponential Random Graph Models
(ERGM) to test if certain network structures, e.g. a
farmer adopts only if there are advice relationships
with another farmer, a public extensionists and a buyer
simultaneously. Parameters that describe these struc-
tures, e.g. indicators of centrality, brokerage, core-pe-
riphery structures, etc. all which can be derived from
social network analysis procedures, are then put to-
gether with conventional predictors into multivariate
models that explain innovation. A further develop-
ment of these models are spacial or autocorrelation
models which instead of a vector depicting the farm-
er’s position in a network include the whole matrix
of interaction.
A model explaining Innovation in a
Network Context
Figure 1 depicts the various dimensions of factors that
influence innovation behavior drawing also from the
factors identified in Table 1. It implies that any adop-
tion of an innovation depends on four conditions:
The framework conditions to generate and apply an
innovation in a given situational context which also
determines the availability of resources on a macro
level.
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Rural Development News 1/2010
®® The perception on the utility of the innovation.
Important to note, the perception does not neces-
sarily equal the actual utility depending on cogni-
tive capacities and social influence.
®® The farmers’ individual absorptive capabilities
which is determined on resource endowment, ed-
ucation, cultural background and certain psycho-
sociological factors.
®® The farmer’s embededness in networking relation-
ships with other farmers and agents who provide
information on the use of the innovation.
®® A main point of the model is that the farmer’s
position in the network itself also determines the
individual absorptive capability as well as the per-
ception on the usefulness of the innovation. If a
farmer gets a credit to buy a new plough depends
on his or her social contacts. Likewise if a farmer
sees the benefit of using the new plough also de-
pends on the experience of other farmers with that
plough and the recommendations of the vendors
of the plough and other specialists. Finally there
is also continuous feedback from the process on
the framework conditions and the individual en-
dowment with resources. There is also continuous
learning taking place affecting the utility of the
innovation and the perception about it as well as
the capacity to use the innovation, viz the absorp-
tive capability.
Figure 3: Factors influencing the adoption of innovation in a network context
74
Implications of the new Model
We presented some important approaches to the
study of innovation processes from the fields of ag-
ricultural economics and sociology, borrowing also
from the schools of innovation systems, industrial
organization and business administration. In most
studies on conducted by economists and other schol-
ars over the last 50 years adoption and innovation of
new knowledge and technologies has been associated
with characteristics of the individual farmers, such as
socio-demographic attributes, access to resources and
information, access to markets and not so much to
interactions within the farmers’ social networks. Em-
beddedness in social networks (comprised of multiple
relationships a wide range of agents within and outside
the farming community) is mostly simplified by in-
troducing a variable depicting the number of interac-
tions farmers have and not so much of the quality and
interrelatedness of those interactions.
Hence it is not surprising that the principle factors
cited in many of the literature on the problems of
adoption of innovations among farmers (compare
Feder and Slade 1984 and Rogers 1995) include only
attributes of individual farmers such as: limited access
to resources, knowledge and credit, aversion to risk,
farm size, incentives associated with farm tenure ar-
rangements, supply of complementary inputs, human
 Rural Development News 1/2010

capital, absence of equipment to relive labor shortages, Literature References

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Besley, Timothy & Case, Anne, 1993. Modeling Technol-
We argue here that studying the dynamics of network-
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structures are and which specific constellations en- of Agricultural Economics 66: 312–320.
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®® The building of platforms of information exchange
and joint learning among farmers. These platforms Lundvall, B-A., B. Johnson, E.S. Andersen, and B. Dalum.
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petence building. Research Policy 31: 213–231.
innovation use. They also help farmers to better
perceive the benefits and risks of adopting the Moser, C.M., and C.B. Barrett. 2006. The complex dynam-
innovation. ics of smallholder technology adoption: The case of SRI in
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®® The creation of interfaces between research, ad-
Rogers E.M. 2003. Diffusion of innovations. 5th ed. New
visory services and farmers that provide critical
York: Free Press.
information for the generation and adaption of
innovation. The focus is not on diffuse participa-
tion but on getting the necessary information to
develop creative solutions.
®® The building of platforms of information exchange
and joint learning between users (farmers) and
knowledge providers, both public advisory services
and development agents as well as private agents
that deal with selling farm inputs provision and
buying agricultural products.
®® The installation of certain roles of knowledge
brokerage to bridge knowledge and information
gaps.
Our argument here is not that these measures alone
would bring about innovation in developing agri-
culture. Rather the existing measures of technology
transfer, participatory R&D, and extension need to be
complemented with the above to become effective.

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