Setting the conditions for innovation that is in the public interest

Dr Pamela Hartigan

Director of the Skoll Centre for Social Entrepreneurship at Saïd Business School, University of Oxford

If there is one thing on which public and corporate leaders around the world today can agree, it is the ever-growing importance of in- novation. The search for innovative solutions to the world’s shared local, national and global challenges has become a clarion call, rallying people across multiple borders defined by nation, industry and academic discipline. Yet despite this cheerleading, there is a raft of institutional, legal, regulatory, and educational impediments that is stalling progress.

While not an innovation expert, I have been privileged to interact over a span of decades with the some of the world’s most recognised social innovators – from those working at the grassroots to those at the helm of new industries. This has provided some perspective on the nature of innovation and the hurdles they face daily in their search for ways to disseminate their approaches and products.

Education is a good place to start. A society’s capability to innovate arguably begins, or possibly ends, in school.1 For the vast majority of primary schools, among the qualities of ‘star’ pupils are tidiness, adherence to rules and directions, and good behaviour. In the later grades, outstanding achievement is measured in grades, standardised test scores and, sometimes, the number of extracurricular activities undertaken. These constitute the ticket to acceptance to the top schools that produce the world’s elite. But it is not clear that this is how to develop the talents of tomorrow’s innovators.

“Most organisations have a low tolerance for mistakes. Risk-averse societies and organisations keep people from failing. But they also keep them from trying”

The educational system is reinforced by employment policies in most governmental organisations, corporations and academic institutions. When reviewing candidates, recruiters invariably look for evidence of academic achievement and a steadiness that produces good exam pass rates and grades rather than for experiences that might suggest a candidate is innovative and inspired, perhaps even rebellious. This is because most organisations have a low tolerance for mistakes. Risk-averse societies and organisations keep people from failing. But they also keep them from trying. And the key to successful innovation is initial failure and persistence.

It is hardly surprising, then, that among the commonly shared experiences of successful innovators is the recollection of having been described at some point as crazy, not just by acquaintances, but by family, friends and close colleagues. Almost by definition, innovators are mavericks. Most organisational structures and their corresponding managers and civil servants deal with what is rather than what might be. Innovators do exactly the opposite. They focus on creating things the world has never seen. They systematically disregard boundaries – whether of nation, academic discipline, or social status – to the predictable annoyance of those who consider it their responsibility to keep boundaries in place. An irony results: while the world clamours for innovation, it tends to deprive innovators of the resources and recognition that would maximise their potential to transform societies for the better. The challenge of innovation in the 21st Century is therefore about reshaping societies to be not only tolerant, but actually welcoming, of innovators – particularly of the disruptive kind.

I believe that one of the greatest opportunities for innovation exists in domains that bring market-based approaches to public good provision previously left to governments. Social innovators who have taken a market perspective are pioneering new models where most would only see looming problems and risk. In doing so, they are the harbingers of the biggest business opportunities of the century. And history suggests that they have at least as much chance of shaping the 21st Century as many of today’s great incumbent businesses. Richard Foster and Sarah Kaplan note that 75 per cent of Standard & Poor’s 500 will have disappeared from the S&P index by 2020.3 In their place, companies unheard of today, using new business models, will be delivering products and services to new and existing markets, dislodging incumbents who have not been able to innovate fast enough to keep up with 21st Century needs.

Already today, there are hundreds of such innovators reaching new markets, serving unmet needs, and creating new supply chains. Innovators including Dr. Devi Prasad Shetty in India, who is spearheading a revolutionary model in health through his chain of Narayana Hospitals; Sal Khan who is up-ending the classroom model of teaching through digital technology; Sara Horowitz and her Freelancers’ Union with over 230,000 independent worker members who are giving new meaning to ‘mutualism’; Beto Veríssimo and Carlos Souza, Jr., co-founder of Imazon, the first independent deforestation monitoring system for the Brazilian Amazon, which has brought together formerly warring interests to save millions of hectares of rainforest in the state of Para. The list is endless.

“The challenge of innovation in the 21st Century is therefore about reshaping societies to be not only tolerant, but actually welcoming, of innovators – particularly of the disruptive kind”

Many, if not most, of today’s social innovators defy traditional legal pigeonholing as ‘not-for-profit’ or ‘for-profit’ organisations. Rather, they intersect both – they are social innovators with a business case, so to speak, hybrids that straddle between a charity and a profit-maximising company. Consequently, many find themselves manoeuvring through a tangled web of legal regulations to identify what benefits and obligations exist in relation to their enterprise. Our fascination with these pragmatic visionaries and their organisations lies much less in the goods and services they provide and more in the catalytic role they play in triggering innovations in the social sector. Like the business innovators who come up with major innovations for the marketplace, social innovators are the mad scientists, as it were – working away in organisations that act like social innovation laboratories. They test and perfect different approaches, and when they come up with the most effective and efficient ones with the greatest impact, it should be government and the corporate sector’s respective roles to celebrate this innovation, learn from it, and help scale it so that all can benefit. Ultimately, the innovation lies in the models devised for service and product delivery all along the supply chain – not in the provision of the good itself. It is those models that others need to take up and replicate.

Innovators in the public interest are the flames that ignite the fire of social transformation. Those flames must be fanned and nurtured by governments, publicly-traded and private companies, academia, media and individuals working together to achieve their promised – mutually beneficial – impact.