Merrick School of Business professors David Lingelbach, Ven Sriram, and Tigi Mersha recently published an article, “The Innovation Process in Emerging Economies: An Effectuation Perspective,” in the International Journal of Entrepreneurship and Innovation. The trio are investigating a key question in understanding the power of entrepreneurship: What is the chain of logic that drives some to innovate?
Writing with their colleague Kojo Saffu from Canada’s Brock University, Lingelbach, Sriram, and Mersha examined the kinds of logics that innovators employ in emerging economies. They focused on two contrasting logics: effectuation and causation. Effectuation emphasizes the control of an unpredictable future through careful means assessment; investing what can be affordably lost; partnering with customers, suppliers, and investors to co-create products; and taking advantage of the inevitable surprises associated with innovation. By contrast, causation thinking focuses on predicting the future by using the planning-oriented tools commonly taught in most business schools.
Analyzing case data from the financial services industry in four sub-Saharan African countries, the authors found that innovators in emerging economies think differently than their peers elsewhere. They think both effectually and causally, but overemphasize partnering and underemphasize the need to remain flexible in response to surprises. These innovators’ use of effectual and causal logics depends on several factors, including political and economic institutions, industry structure, and resource constraints. These results are substantially different than those found when studying innovators in the United States or Europe.
“Sub-Saharan African countries are often overlooked in innovation literature—and the financial services industry is also under-studied,” said Lingelbach. “We consider this research to be beneficial to those who are actually involved in making innovation happen, as well as those regulating or incentivizing innovation. In the future, some of the most interesting innovations are likely to arise from emerging economies.”
An abstract of the paper is available is available on the International Journal of Entrepreneurship and Innovation website.