A quantitative approach to innovation in agricultural value chains: evidence from Kenyan horticulture

In less developed countries such as Kenya, trade is increasingly occurring through, and employment is found within, global and local value chains. Yet, although innovation is widely recognised as crucial for development, the endogenous relationship between small-scale innovations and participation in global value chains (GVCs) has yet to be explored sufficiently. This endogeneity is highlighted using the 3L’s of labels, linkages and learnings as key overlapping factors that affect both the processes of innovation as well as GVC participation. Drawing on a survey of 320 fresh fruit farmers and 55 interviews in Kenya, we develop a novel method to quantify small-scale agricultural innovations, which are categorised into two overarching types. The first, formal, emanate from meeting standard requirements; the second, informal, evolve from local contexts and are less codified. We find that GVC farmers perform more formal innovations, while local farmers perform similar levels of informal innovation to GVC farmers.