Some people think innovation is only about gadgets, high-tech industries, and laboratories. But this is only the tip of the iceberg! The truth is that there are many types of innovation that can have a transformational impact on everyday people’s lives.
: refugees, rapid and unsustainable urbanization and climate change, failure to meet basic infrastructure needs, youth unemployment and disengagement, and stubbornly poor health and education outcomes, to name a few. Set against a backdrop of political and public pressure to do more with less – and see results faster than ever – even the most optimistic among us are likely to view the glass half empty.
Start-ups are transforming cities. Entrepreneurs are inspiring creative communities and transforming the social and economic landscape of the neighborhoods where they cluster.
What drives entrepreneurs together and creates these communities? To answer this question, we looked at catalysts of entrepreneurial communities in cities around the world. The team found that a range of spaces — such as innovation hubs, incubators, maker spaces and fab labs — are at the core of these communities. They represent the main link between entrepreneurs and the broader economic and social fabric of the city. We call these “Creative Community Spaces” (CCS).
How are these CCS helping transform our cities? We compiled a set of case studies from around the world and analyzed their impact. There are more details in this report.
The corporate world is at the forefront of the tech-led transformation of the economy. The democratization of technology, whereby exponential cost reductions have allowed almost anyone to produce tech-based innovations, is disrupting core sectors of the economy.
Technology disruption is not confined anymore to the digital world. Data analytics, artificial intelligence, 3-D printing, robotics, sensorization, and an ever-evolving list of technology platforms have blurred the boundaries that once-protected physical ("brick and mortar") sectors, such as the hospitality, automobile, construction and manufacturing sectors.
Business as usual has not served companies in these sectors well. Traditional innovation models to create products and services do not match the pace and agility of competitive disruption from tech actors (e.g., large technology platforms with unbeatable access to data access and capital, such as Google or Amazon, and small and agile local startups). Thus, a new corporate innovation model, “Corporate Innovation 2.0,” is emerging.
The main characteristic of this new model is that it’s open by nature, as opposed to having a closed R&D process. Established companies tend to offer good structures for marketing, distribution, processes, scaling up products, etc., but, compared to start-ups, they often have a weakness in generating and rapidly applying creativity to develop new products and services.
Using open innovation techniques, corporations are trying to address this weakness by absorbing start-up innovation. We have seen three main types of mechanisms in this emerging model: corporate accelerators, competitions to generate new ideas, and co-creation with startups of new products and services.
I’m pleased to announce that applications are now open for the second round of a new data innovation fund which was announced last month at the UN’s High Level Political Forum.
The fund will invest up to $2.5 million in Collaborative Data Innovations for Sustainable Development - ideas to improve the production, management and use of data in poor countries. This year the fund’s thematic areas are “Leave No One Behind” and the environment.
Details on eligibility, criteria and how to apply are here: bit.ly/wb-gpsdd-innovationfund-2017
The initiative is supported by the World Bank’s Trust Fund for Statistical Capacity Building (TFSCB) with financing from the United Kingdom’s Department for International Development (DFID), the Government of Korea and the Department of Foreign Affairs and Trade of Ireland. DFID is the largest contributor to the TFSCB.
Supporting statistics for development
Here in the World Bank’s Development Data group, we’re looking forward to working with the Global Partnership for Sustainable Development Data (GPSDD) again following a successful pilot round of innovation funding last year. But you might be asking - why is the World Bank’s Data team helping to run a data innovation fund?
ANNOUNCEMENT OF THE GLOBAL RIA AWARD 2017
Any visitor to Armenia can testify that the country has delicious food. But diners need to be assured that the khorovats, dolma, or basturma on their plates will not make them sick. How can this be assured?
Some 65 percent of the 320,000 inhabitants of the Brazilian city of Rio Branco use bicycles as their primary mode of transportation, and the popularity of biking is increasing across the country. But Brazil’s 40,000 annual traffic related fatalities makes protective gear a necessity. What is appropriate protection?
Helen Mwangi and her solar-powered water pump in Kenya © infoDev/World Bank
Managers of initiatives that support innovative entrepreneurs have a choice to spread their resources (and luck) among many opportunities or focus them on the most promising few. In developing countries, public and donor programs can learn a lot from how private investors pick and back innovative ventures.
In the early days of infoDev’s Climate Technology Program, our thinking was very much about letting a hundred flowers bloom: supporting a large number of firms with the hope that a few would emerge as blockbusters. Firms were selected on the basis of objective metrics tied to the innovative nature of their ideas and their economic, social and climate-change impacts. For example, while infoDev’s partner the Kenya Climate Innovation Center has more than 130 companies in its portfolio, a $50 million venture-capital fund in California would have at most six. Inspired by private investors, we have since rethought our program objectives for these centers, as well as the way we select and support businesses. The Kenya center is going through a rationalization of the firms it supports.
Like many public programs, infoDev and its network of Climate Innovation Centers had good reasons to support large numbers of companies. The main reason is the need to spread the entrepreneurship risk through a diversified portfolio. A recent infoDev literature review found that up to a third of all new firms do not survive beyond two years, let alone grow. Out of those that survive, data from high-income countries suggest that fewer than 10 percent become high-growth firms. So casting a wide net increases the chances of hitting the jackpot. The opposite approach, picking winners, is seen as destined to fail and distort the market.
Sinah Legong and her team meet at Raeketsetsa, a program that encourages young women in South Africa to get involved in information and communications technologies. © Mutoni Karasanyi/World Bank
Olou Koucoi founded Focus Energy, a company that brings light, news and entertainment to people living off-grid in his country, Benin. Its spinoff program ElleAllume hopes to train more than 1,000 women to bring power to 100,000 Beninois homes this year. “At the end of the day, [inclusive hiring] is not a gender decision, it’s a business decision,” he says.
Over the past few months, I interviewed a number of incubator and accelerator programs to compile best practices for the World Bank Group’s Climate Technology Program. The research spanned 150 programs in 39 countries, ranging from relatively new to seasoned veterans of the clean tech incubation space. The consensus regarding gender diversity and inclusion was almost unanimous; all but one program echoed Koucoi’s sentiments – in principle.
In practice, however, encouraging more women into the clean energy sector and related programs has proved challenging. Below are some of the most popular explanations for the low levels of female representation:
“We can’t find them.”
Many clean energy incubation programs said they had difficulty recruiting due to a lack of women in the industry and strong women’s networks to tap into. While there is no shortage of women in clean energy (with industry-specific examples such as clean cookstoves serving as a good example) there are few women-led businesses. This lack of visible leadership translates into lower rates of participation.
“We would love to focus on bringing more women into the program, but we have limited resources.”
Incubation programs are often lean, with little time and few resources to expand on offerings and create targeted programs for women. Instead, to create quick wins and draw in additional funds, programs often take a “low-hanging fruit” approach, seeking out the most visible companies to recruit and invest in, which tend to have male co-founders.
“Does it really matter at the end of the day?”
Many programs are pro-gender-diversity in principle, but gender-agnostic in practice. This stems from a disconnect between the “gendered-lens” approach discussed when fundraising for incubation programs and the results frameworks which judge their success. Such factors as the number of companies exited are still weighed much more heavily than gender balance.
Below are some of the best ways I have found to create more gender-diverse and inclusive programs:
Only a small fraction of women in rural India have a bank account, reinforcing existing gender inequity. Without access to financial services, women miss out on government benefits, like cash transfers. Alternative for India Development (AID) delivers financial products to women and other underprivileged populations through a unique business model. In partnership with the government and commercial banks, AID established more than 600 Common Service Centers that serve as one-stop delivery points to financial and government services. In just three years of operation, AID opened 200,000 deposit accounts, one-third of which belong to women. Thanks to these accounts, underprivileged populations was able to receive pensions, government subsidies and access free savings accounts.
AID is just one of a large and growing number of businesses that combine profits with impressive development results. These businesses are known as social enterprises, and the innovations they develop play a critical role in providing life-improving goods, services, and employment to hundreds of millions of poor people. Social enterprises can be distinguished from other public and private organizations by the fact that they pursue social objectives through commercially viable business models and are independent from the government.
In his recent blog, World Bank Group President Jim Kim urged the development community to partner with social enterprises to achieve the Sustainable Development Goals. This will require a different approach to scaling results of successful social enterprises, their inclusive innovations, and business models. In a recent Brookings Working Paper we reviewed the literature and experience with scaling up social enterprise innovations and summarized lessons for how scaling up can be best managed. Here we briefly explore the main implications for external donors.
“Inclusive growth” has been at the forefront of policy discussions in OECD and non-OECD economies. These discussions reflect a concern that economic growth does not necessarily improve the welfare of all citizens as income inequalities have risen to unprecedented levels over the past decades. The richest 10% of the population in the OECD area earn almost ten times more than the poorest 10%.
Throughout history, innovation has been the main engine of improved living standards and the current period of digital innovation offers similar opportunities. At the same time, periods of substantial technological change are known to be highly disruptive as new technologies render old technologies obsolete. This process creates winners but also losers within and across countries.