Can Innovation Labs for Reducing Poverty Embrace Failure? - OZY | A Modern Media Company


In the penny-pinching, results-focused world of aid, there’s little room for experimentation. Innovations labs are trying to change that.

Big bureaucracy, meet the innovation lab.

Tech and startup principles aren’t just for struggling business anymore — nowadays they’re popping up at poverty-reduction outfits, too. Incubators, design hubs and entities with similarly avant-garde-y names have lately appeared at venerable aid organizations like UNICEF and the World Bank. Smaller NGOs are setting up R&D departments and hiring Chief Innovation Officers. This spring, USAID, the big-daddy aid agency of them all, launched its own version, the “Global Development Lab.” It aims to bring in private partners — and their money — to help discover and incubate poverty reduction programs.

The idea is to bring some Silicon Valley spirit to “solving” poverty, and a quick-moving entrepreneurial ethos to organizations that tend to be ponderous. Up with risks, thinking big, failing small and failing forward. Down with red tape, overwrought deliberations and overwritten RFPs.

I think there’s a shared recognition that ‘business as usual’ is not good enough.

It’s a chancy move. Constant iteration might be right for a dating app, but maybe not the wisest way to feed the hungry. There’s never been much money for poverty reduction, and nowadays, worries and accusations about aid effectiveness are at the fore. Few donors are willing to fund multiple trials and errors. And even if funders do “embrace failure,” as the saying goes, measuring success is tricky. An 80 percent failure rate is solid for a venture capitalist (VC), but would it jibe in the nonprofit world? 

Yet for many organizations, the labs are an acknowledgement that the old ways of the professional development establishment aren’t working, either, that they haven’t eliminated poverty in the way intended. 

“I think there’s a shared recognition that ‘business as usual’ is not good enough,” says Aleem Walji, director of the World Bank’s Innovation Labs. “We need to find ways to improve our performance and results in delivering public value.” 

The innovation spurt follows a few notable shifts in development work. These include the MIT’s Poverty Action Lab, whose randomized control trials have laid waste to a more than a few development shibboleths. Combine that with a movement for big data in development more generally, and the truly disruptive spread of mobile phones in the developing world, and you’ve got a foundation for the innovation approach. While every lab has its own backstory, a shared hallmark is an interest in experimentation and big ideas. 

We’ve sought to remain low-profile within the organization. Innovation by stealth is sometimes easier in a place not keen to take risks in a very public way.

“It’s not so much a place with people in white coats and goggles — though that would be cool,” says Chris Fabian, who co-directs UNICEF’s Innovations Unit. Instead, he says, the Innovations Unit tries to make space for things the broader organization doesn’t have: discussions, ideas and partners, some from the private sector.

The Innovations Unit has set up 12 labs around the world, and their accomplishments include programs for birth registration via SMS and solar-powered computer kiosks that Ugandans actually use. Using mobile phones for broader access to information is the next big focus area, Fabian says. He and his team are lining up partners for an innovations fund — bringing some “VC thinking” to the U.N., he says — with a view to launching a pilot in the next few months. 

man picking up bottle along polluted water and placing in large garbage bag

Millions of Indonesians are currently living below the poverty line.

Source Nurcholis Anhari Lubis/Getty

The prospect of big VC money is a while away, and, for now, most labs have modest budgets. Even so, the certainty of failure — at least some failure — is hard to stomach. Nonprofits that rely on public funds or outside donors hate the “f-word,” observers say. “We’ve sought to remain low-profile within the organization,” says the World Bank’s Walji. “Innovation by stealth is sometimes easier in a place not keen to take risks in a very public way.”

The World Bank’s Innovation Labs have pulled off some notable feats, including helping to make the World Bank’s trove of data open and more easily accessible to the public. Its work has also given rise to a policy that Bank-funded projects include citizen feedback. It’s remarkable, considering how opaque aid can be to the people it’s supposed to help. 

Successes like that might trail many failures, though. Donors and the public want to know their money is getting results. That’s fair, innovations leaders say, but it can run counter to raison d’etre of innovation, which demands trial and error.

Success in the venture capital world means an 80 to 90 percent failure rate…

That goes for domestic nonprofits, too. “We know as a sector we want to embrace failure, but we have a lot of norms that really bootstrap the leaders of these organizations,” says Renuka Kher, head of T Lab, the in-house R&D center at Tipping Point Community. Tipping Point is an exception, she adds. (One successful innovation: early education programs held on school buses.) 

Still, even if an organization and its funders embrace the possibility of failure, how do the new labs prove their worth? Swapping nonprofit jargon for entrepreneurial jargon isn’t enough: the labs must walk the walk, too, observers say. What that looks like is hard to say. Success in the venture capital world means an 80 to 90 percent failure rate — and that’s often justified by a huge financial upside for the winners. The innovations labs say they don’t have as much room for failure, but it’s hard to identify an alternate metric. 

Forestalling potential resentment from the wider organization can be a challenge, too. Colleagues in more traditional sections may think: Why should they get to have all the fun, while we tick off boxes and sign our paperwork? 

“The biggest risk is that a lab becomes an island. That is not the intention. If we lose touch with the mothership, then we fail,” says Walji. 

The UNICEF Innovation Unit has a savvy way around this. Its core budget is $50,000. The rest of its funding for operations comes from the field. That ensures that the Innovations Unit, though ring-fenced, is integrated into the rest of the organization. “The biggest tell is that the requests are coming from our colleagues in the field,” says Fabian — and for him, that’s proof something’s working. 

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