Purpose and Philosophy
The general purpose of the RUN business model is to improve the performance of the agricultural innovation system by providing an operational framework for intensified information exchange, interaction and collaboration between a large number of independent actors and organization towards a common goal, while rewarding their individual effort.
The RUN business model acknowledges the fact that each actor of the innovation system, from donor to farmer, is in exchange and might therefore be a beneficiary in one process and a service provider in another. To illustrate this with an example, the expert is a beneficiary, if farmers provide him with farm-household data for a study. Conversely, the farmer is the beneficiary, if an expert provides him with information, which contributes to the solution of a problem. The RUN business model aims at optimizing the performance of each actor, be it an actor from the research and development community (R&D) or the community of practice. A central element of the model is the definition and delivery of services. The operational framework of the model comprises a standard procedure for the definition of services and their price, a system for seamless documentation of all processes in near real time and a work-flow management system that assures delivery and the timely payment of involved actors.
How it works
The RUN business model pursues a collaborative, result oriented and demand driven approach for the provision services that aim at satisfying the particular needs of individual persons or organisations. The system takes advantage of young professionals and the Internet to pool and organise human resources and local initiatives for the provision of services that are designed by experts. Services have a specific objective and are usually launched in the frame of a coordinated action towards a specific goal. In most cases a specific service is part of a set of complementary services (service package).
The operation of the RUN-System is best explained using the example of the information exchange service (IES-service) that enables a systematic dialogue between the research and development community. The graph below illustrates the different steps from the design to the delivery of the service, the role of the different actors and the costs involved.
The RUN business model can be used for all kind of services from vocational training to making radio programmes. Please, click here to view the list of complementary services that were successfully implemented during eRAILS2 project that was carried out by the Federal Office for Agriculture and Food of Germany (BLE) following the RUN business model in collaboration with FARA and with support of the Africa Development Bank.
Benefits
The involvement of different actors with complimentary skills and institutional background stimulates learning and improves collective know-how. The graph below gives an overview of the multiple benefits of the IES-service and how it contributes to the strengthening of the agricultural innovation system.
The seven principles of the business model
1. Demand driven: The core idea of the RUN business model is to switch form a system subsidy of the offer to a system of subsidy of demand. A service fund turns the needs of rural poor into market effective demand. The system empowers beneficiaries to express their needs and to formulate a corresponding request for service. They evaluate the services upon delivery. Following the logic of the innovation systems approach, farmers are not the only beneficiaries. Other stakeholders such as researchers, statisticians, entrepreneurs, extension agents and even decision makers, are potential beneficiaries.
2. Build on the local economy: To ensure sustainability and maximum impact of the investment, the prices of services are determined on the basis of the prices of the local economy. Service delivery is exclusively organized in participation with existing initiatives, small businesses and young professionals. The various actors are engaged following the principle of subsidiary, considering their professional and social skills. The system is open for new-comers and engages actors on a competitive basis.
3. Result oriented: A service is a set of tasks involving several actors so called task managers. Each task has a defined price and result that is defined in clear quantitative an qualitative terms. Tasks mangers are paid for the delivery of the results and not for the compensation of his expenditures and efforts.
3. Cost-benefit analysis: Services are launched in the frame of a coordinated action towards a specific goal. Prior to the launch of a service, its expected benefits and its impact on the cost-benefit ratio of the entire action are carefully examined. The analysis considers the outputs and outcomes for primary and secondary beneficiaries. Work-flows are optimized to assure the economical use of resources and multiple use of gathered data, information and experience. Sequential and parallel services are carefully tuned in order to achieve optimal results. Only services with a high return on investment are launched.
4. Transparency and accountability: The supporting information system assures timely and complete documentation of all processes on the Internet, while ensuring the protection of individual rights. Hard-copies are made accessible to the community in local archives.
5. Payment upon delivery: Involved agents (task managers) are paid upon delivery of the service to the beneficiary. Each agent receives a previously fixed fee, which covers his expenses and effort. Fees are defined on the basis of the prices of the local economy and include all costs.
6. Pro poor and sustainability: All services aim at reducing the gap between rich and poor and at the sustainable management of resources. Monitoring and impact assessment is facilitated by the systematic collection of data during to service delivery.
7. Trust and reliability: Rules, regulations and fees for the tasks and the conditions of the payment of agents are negotiated at the start and remain unchanged throughout the defined period.
The Film - A bridge between science and farmers
The documentary "A Bridge between Science and Farmers" about the Information Exchange Service permits a better understanding of the business model. The length of the documentary is 14 minutes.
