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PRIVATE SECTOR The private sector has a key role to play in efforts to achieve universal access to clean cooking. Only the private sector can produce and distribute cooking equip- ment and fuels at the scale required, while adapting to the needs and preferences of different localities and market segments. This section sets out some key steps that are helping clean cooking enterprises take their businesses to scale. Understanding Local Markets: Given the highly contextualized nature of the clean cooking challenge a deep understanding of local markets is critical. Firms need an understanding of cooking practices and traditions, the dynamics of household decision-making, the needs and preferences that drive consumer choices, the size and characteristics of different customer segments and their ability and willingness to pay for clean cooking, as well as the strategic direction set by governments, among many other considerations. Successful companies undertake their own mar- ket entry and feasibility studies to inform the design of products and business models. Clean cooking advocates such as CCA also put the results of their market research into the public domain to facilitate new entrants. Driving Technical Innovation: Continual technical innovation is needed to devel- op clean cooking products that are high performing (through lower emissions and improved efficiency), affordable and attractive to consumers – a challenging set of improvements to regularly deliver. The most successful companies are continually adapting their products in response to customer feedback. Many advances in tech- nology, design and business models have been achieved in recent years, but the industry remains constrained by a lack of investment in research and development, which CCA estimates has declined by a third from 2019 levels. 112 Firms and investors need to recognize that the future of the industry lies in success- ful innovation. Industry stakeholders interviewed for this report reflected that the clean cooking space is wide open with relatively little direct competition among firms. This suggests that there is scope for more coordination of innovation across the sector to reduce duplication and accelerate progress. Financiers can do their part by recognizing the need to build research and development capacity within firms and to provide concessional finance on terms and timelines that align with the needs of the innovation process. Developing Innovative Business Models: As well as technical innovation firms need to innovate with business models that will enable them to reach consumers with products and services that they can afford in the long term (see Box 11). Many of these innovations involve extending finance to low-income customers without col- lateral or documented credit histories, which is inherently risky.
Decline in investment in research and development since 2019: 1/3
112 Clean Cooking Alliance (2022) Clean Cooking Industry Snapshot, https://cleancooking.org/reports-and- tools/2022-clean-cooking-industry-snapshot/
4. OPTIONS FOR SCALING UP CLEAN COOKING
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