Users as innovators in developing countries: the global sources of innovation and diffusion in mobile banking services

Paul Van Der Boor*, Pedro Oliveira, Francisco Veloso

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

126 Citations (Scopus)

Abstract

This paper examines the extent to which users in developing countries innovate, the factors that enable these innovations and whether they are meaningful on a global stage. To study this issue, we conducted an empirical investigation into the origin and types of innovations in financial services offered via mobile phones, a global, multi-billion-dollar industry in which developing economies play an important role. We used the complete list of mobile financial services, as reported by the GSM Association, and collected detailed histories of the development of the services and their innovation process. Our analysis, the first of its kind, shows that 85% of the innovations in this field originated in developing countries. We also conclude that, at least 50% of all mobile financial services were pioneered by users, approximately 45% by producers, and the remaining were jointly developed by users and producers. The main factors contributing to these innovations to occur in developing countries are the high levels of need, the existence of flexible platforms, in combination with increased access to information and communication technology. Additionally, services developed by users diffused at more than double the rate of producer-innovations. Finally, we observe that three-quarters of the innovations that originated in non-OECD countries have already diffused to OECD countries, and that the (user) innovations are therefore globally meaningful. This study suggests that the traditional North-to-South diffusion framework fails to explain these new sources of innovation and may require re-examination.
Original languageEnglish
Pages (from-to)1594-1607
Number of pages14
JournalResearch Policy
Volume43
Issue number9
DOIs
Publication statusPublished - Nov 2014

Keywords

  • Developing countries
  • Mobile banking services
  • Technology diffusion
  • User innovation

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