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Innovation and the World Bank

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Many in the development community believe that innovation is increasingly becoming important to achieve development outcomes. A consortium of development agencies, including the World Bank Group, jointly launched ‘A Call for Innovation in International Development’, at the Financing for Development Conference in Addis Ababa, last year. However, there are also others who think innovation is best suited to the private sector, academia, and research institutions, and that development institutions should primarily focus on financing and offering tried and tested solutions.
Here’s why I think innovation is crucial for the World Bank Group, other multilateral development institutions, and governments everywhere. Innovation no longer is just the domain of the private sector or research institutions.
Tackling massive challenges
Our client countries are facing many new challenges such as increasing inequality, fragility, refugees, rapid urbanization, the digital divide and joblessness, natural disasters from climate change, depleting water resources, and so on. At the same time, we are still struggling with age old problems such as chronic malnutrition, lack of access to sanitation and clean drinking water, food security, affordable quality education, gender inclusion, and more.
These challenges of today and tomorrow are not going to be solved by yesterday’s solutions. We need to come up with new solutions for new challenges as well as for tackling old complex problems that still persist. It’s therefore not a surprise that a recent report from the World Bank Group’s Independent Evaluation Group (IEG) found that scaling and replicating innovation was key to achieving transformational impact. The IEG report recommends to, ‘Improve the capacity to identify and scale up innovations with the potential to overcome traditional barriers to basic service access by the poor, and deploy instruments that have the potential to deliver assistance more effectively and efficiently.
I’m glad to see the new #ItsNotOnly campaign launched during the spring meetings highlighting the various innovations that are tackling the complex development challenges our clients face. I think the Bank can and should play a major leadership role in surfacing, incubating, and scaling such innovations.
Emerging technologies
Technology, ICTs and other kinds, is evolving at an exponential pace. New solutions powered by technology are fast evolving. Think about the shared economy, autonomous cars, grids powered by solar and wind technology, drones for delivering medical supplies, 3d-printers delivering low-cost prosthetics for refugees, and financial transactions powered by internet and mobile phones, as examples.
Other areas such as biotechnology, artificial intelligence, robotics, cloud computing, cryptocurrencies, block-chain, virtual reality platforms, connected smart devices (‘internet of things’) are rapidly advancing, and no longer in the realm of science fiction.
Entrepreneurs are innovating by leveraging these 21st century technologies and creating entirely new markets and value-propositions, while the awareness and adoption within governments and development institutions lags far behind - in the 20th century.
As a result, the effectiveness and productivity in services and programs delivered continues to suffer, affecting citizens, and hampering economic growth.
The IEG report finds that, ‘In transformational engagements, innovations--comprising technological innovations, new approaches, (financing) instruments, and business models—helped scale up the coverage of service delivery to the poor and/or the underserved within a country or region.
We know that the World Bank’s share of development financing has reduced as a percentage of overall development financing over time. New entrants like the NDB BRICS and AIIB have come into the market. And growing economies like China continue to increase their bilateral aid.
Therefore, it’s not too far-fetched to imagine that subsidized financing alone, may not offer a sustained comparative advantage for our institution over the long term. The World Bank needs to set itself apart, by becoming the go-to place not just for financing, but also for the most innovative development solutions.  

Agree? Disagree? Have a different opinion? Share your thoughts here or on twitter @adarshdesai

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