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Innovative business models for sustainable biofuel production: the case of Tanzanian smallholder jatropha farmers in the global biofuel chain

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  • Annelies J. Balkema

    ()

  • Henny A. Romijn

    ()

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    Abstract

    This paper focuses on the smallholder outgrower model for jatropha biofuel cultivation in Tanzania. This model is based on seed production by small farmers who sell to a processing company that presses the bio-oil from the seeds locally, either for the local market or for export. This model has been implemented by a foreign investor in Tanzania, the social business model combines profit making with social and environmental objectives. This paper describes the trends and developments of this innovative business model in a global cultivation, production and usage chain, exploring the trade-offs between the people, planet, profit objectives (triple P) and how the business model adapts to survive through the different stages of the innovation process. The three stages that are distinguished in the innovation process are: (1) learning to be effective, (2) learning to be efficient and (3) up-scaling and diffusion. The observed trend is that in the different stages different roles are played by the company as it aims at shifting from subsidy funds to profit making. In the process of becoming efficient and starting to upscale, it seems harder to ensure the implementation of the social and environmental objectives. Therefore, other actors will have to play a more active role in capacity building and market regulation and additional funding has to be made available to the company for the social benefits it is generating for society.

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    File URL: http://cms.tm.tue.nl/Ecis/Files/papers/wp2011/wp1106.pdf
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    Bibliographic Info

    Paper provided by Eindhoven Center for Innovation Studies (ECIS) in its series Eindhoven Center for Innovation Studies (ECIS) working paper series with number 11-06.

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    Date of creation: Oct 2011
    Date of revision: Oct 2011
    Handle: RePEc:dgr:tuecis:wpaper:1106

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    Web page: http://ecis.ieis.tue.nl/

    Related research

    Keywords: business models; sustainability; biofuel; innovation;

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    1. Henny A. Romijn & Marjolein C. J. Caniƫls, 2011. "Pathways of Technological Change in Developing Countries: Review and New Agenda," Development Policy Review, Overseas Development Institute, vol. 29(3), pages 359-380, 05.
    2. Douthwaite, B. & Keatinge, J. D. H. & Park, J. R., 2001. "Why promising technologies fail: the neglected role of user innovation during adoption," Research Policy, Elsevier, vol. 30(5), pages 819-836, May.
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