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Kassahun Y. Kebede

Co-opetition: A way forward for solar actors in developing countries

During my PhD study on the diffusion of solar energy technology and associated technological innovation system building for enhanced diffusion in developing countries, I came to learn that there has been less engagement with the business strategies we often see applied in other business areas.

Random list of factors were being mentioned as barriers to the successful diffusion of solar PV systems to electrify the rural communities throughout the globe. Also, NGOs and NPOs have been the main actors and few market oriented approaches were introduced to the solar market in developing countries like that of Ethiopia.

There have been many promising initiatives that lived for a while and proved unsung success. Unfortunately, lessons learnt locally from such efforts and upscaling of those efforts have been a rare phenomenon. The local government, supposed to scale up effort, may not even know what has been going on around; in some worse cases, pertinent offices/officers were found to be ignorant of what is going on in their own field. As a result, local recognitions were reported after international media and organizations acknowledged the efforts.

A seemingly funny encounter I had during a field research in Ethiopia was that three actors (Government, NGO, and private sector) were fighting for supplying solar home systems for a village in three different ways: subsidy, donation, and market sale; it may look healthy to see such options available for the villagers but it would be unhealthy to see this redundant effort while the play-ground is so wide, having dozens of un-electrified villages in the vicinity.

Moreover, all of these 'competing' actors have got no closely available center for maintenance or after sales service delivery. Many of the solar home systems in the village were not functioning for mere maintenance problems.

In order to have successful adoption of solar PV systems in developing countries, there is a need for co-opetition among the solar actors! Co-opetition has been a prevalent business concept that emphasizes the simultaneous competition and cooperation between firms (actors). It was first introduced in the 1980s by Raymond Noorda (Luo, 2007), and the concept became popular after the study presented by Brandenburger and Nalebuff (1996). Individual firms may cooperate for different reasons; it could be: to learn more about their rivals' competencies; to solve common problems and; to influence rules and regulations (Tether, 2002). 

Solar actors can co-operate for having a common service center very close to the rural community (for maintenance and after sales service provision); they can co-operate for influencing rules and regulations related to solar market, and lobby together for creating conducive environment for faster adoption of the technology. Then, they can compete in this untapped market potential through delivery mechanisms, quality and price of their products, etc.

The idea of co-opetition among solar actors seems well practiced in very few developing countries such as in Bangladesh where NGOs, NPOs, and the private sector work closely with Government organizations in creating local Solar PV industry and enhancing faster adoption of the technology among the community, and at the same time competing for the solar market share.

 

Reference:

  • Brandenburger, A. M., & Nalebuff, B. J. (1996), Co-opetition, New York: Doubleday Currency.
  • Luo, Y. (2007), ‘A coopetition perspective of global competition’, Journal of World Business, 42(2): 129−144.
  • Tether, B. (2002), ‘Who co-operates for innovation, and why: An empirical analysis’, Research Policy, 31(6): 947–967.

 

Kassahun Y. Kebede (PhD) is a researcher and consultant based in Addis Ababa, Ethiopia. He is also an Assistant Professor at Addis Ababa Institute of Technology, Addis Ababa University. He can be reached at ykassahun@remove-this.ghetconsult.com.