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The amplified effect of market size on innovation: A comparative analysis of pea and wheat seed value chains in France

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  • Aline Fugeray-Scarbel

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)

  • Stéphane Lemarié

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)

Abstract

CONTEXT Despite their interest for agro-ecological transition, grain legumes remain poorly cultivated in France. One reason is the low availability of seed innovations for farmers which, to a large extend, is related to the low incentives to innovate for these crops which represent a small acreage. OBJECTIVE In this article, we analyze the link between market size and the efforts made to create, diffuse and value innovation. We compare two value chains related to two field crops in France that mainly differ in terms of market size, namely, pea and wheat. Our analysis focuses more specifically on the seed-related innovations created in the upstream part of these value chains. In both of these cases, innovation relies on multiple complementary activities carried out by different actors, including the creation of the innovation, the production and diffusion of technical knowledge, the production and distribution of the innovation, and its valorization by downstream users. METHODS The two case studies on the pea and wheat sectors were conducted using a qualitative approach based on public documentation, 16 semistructured interviews with various actors in the innovation system of the two value chains and data on commercialized pea and wheat varieties. RESULTS AND CONCLUSION We show that the level of investment in each of these activities is highly related to market size. This result is first explained by the fact that part (if not all) of the cost of these activities is fixed; that is, these activity costs do not depend on the diffusion of innovation. This result is also explained by the complementarity of these activities, which makes the investment in one activity less beneficial if the investment in complementary activities is low. As a consequence, the effect of market size on innovation is self-reinforcing in those cases where innovation relies on different activities managed by different actors. SIGNIFICANCE In agricultural sectors, where there is a need for innovations in both large and small markets, this result calls for an evolution of innovation funding mechanisms to attenuate the impact of market size.

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  • Aline Fugeray-Scarbel & Stéphane Lemarié, 2024. "The amplified effect of market size on innovation: A comparative analysis of pea and wheat seed value chains in France," Post-Print hal-04631965, HAL.
    • Handle: RePEc:hal:journl:hal-04631965
    DOI: 10.1016/j.agsy.2024.104051
    Note: View the original document on HAL open archive server: https://hal.science/hal-04631965v1
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    References listed on IDEAS

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    Keywords

    Market size; Innovation; Agriculture; Seed; Value chain; Lock-in;
    All these keywords.

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