Prerequisites of a market-entry strategy for a low-end innovation in the Philippines

Tannins represent an unused agricultural byproduct with the potential to become an additional source of income for local farmers in the Philippines. They can be extracted from byproducts of the forestry industry and may be considered a low-end innovation. The aim of this study was to identify (i) the conditions necessary to start local tannins production and (ii) the conditions necessary to maintain tannins production in the long term. With action research coupled with a system dynamics approach, an exhaustive discovery of market actors was conducted. Based on the available actors and their inter-relatedness as boundary objects, we developed a causal loop diagram of production initialization related to market entry. We identified two key market actors required to ignite and drive the system. First, funding agencies like foundations need to provide initial seed money to jumpstart the production. Second, a ‘green’ startup is needed to maintain the production. We have identified four conditions as prerequisites of a market-entry strategy for tannins in the Philippines: recognizing the value of a low-end innovation, seed money to get the system going, and a ‘green’ startup with a sustainable mindset and an entrepreneurial spirit as a system linchpin to energize the dynamics. With these prerequisites, the gap in knowledge transfer between academia and the industry may be reduced and low-end innovations can realize their potential for a more sustainable development in the various dimensions.