[This week's post is a continuation from last week's post - insights from the Inclusive Innovation conference held at Rashtrapati Bhavan.]
Funding of innovation is always a challenge, and one that different countries solve in different ways.
Gilles G. Patry, President & CEO spoke about how the Canada Foundation for Innovation has invested over a billion dollars in state-of-the-art facilities at universities across Canada to help them do world-class research. The Foundation funds upto 40% of the project cost and focuses on partnerships. He suggested that the model is largely successful. The evidence? - Canada punches above its weight on research and accounts for 5% of impactful research papers [sorry, I can’t recall exactly how this was measured or over which period.]
For me, one of the big attractions of the Round Table was the participation of Nobel Laureate and Grameen Bank founder Mohammed Yunus. For someone who has brought revolutionary ideas like microfinance to the world, he was surprisingly skeptical about the availability of finance. According to Yunus, the sector needing the largest innovations is the finance sector! Professor Yunus drew our attention to what he considered the biggest achievement of Grameen Bank - in savings and not in lending! He estimated that the Grameen Bank had contributed to more than $2B savings so far.
A German participant pointed out that money is available for impact investment but not enough social enterprises are available to absorb this investment. But, other participants were skeptical of Impact investing, citing a conflict between the social mission of the enterprise and the investor’s desired outcomes
Anil Gupta said the ecosystem should support both managed innovation and spontaneous innovation. He stressed the need for both a sanctuary model that has chaos inside and order outside and an incubator model that has chaos outside and order inside.
Making Social Innovation Work
Several useful ideas emerged on this theme:
One participant made an interesting observation – most people today recognize 1000 corporate logos but fewer than 10 plant species. Parag Anand of the School of Planning & Architecture (SPA) at Delhi came up with at least one solution to this problem – the SPA organizes tours for student immersion as user experience is critical to social innovation.
Iyer from the Mumbai-based Indian Foundation for Development (IFD) spoke about the need for tinkering rooms/workshops in schools as also innovation exchange programmes. The IFD has started 185 balagurukuls that host 12500 children, and there is a need to expose them to creativity and innovation.
Anil Gupta advocated the Indian concept of samavedana – making others’ pain your own, or empathetic innovation.
Mohammed Yunus suggested targeting waste. He said that at least one out of every 6 pairs of shoes bought by customers is not worn. Can’t these be re-channelised to the poor? Can’t cloth rejected by textile mills also be used?
Some participants wondered how existing innovations could be spread or diffused better. Reaching the market is often difficult. Anil Gupta gave an interesting example of four machine tool start-ups in Ghazaiabad/Faridabad that started a common marketing company so that together they would have a broad enough catalogue and a large enough volume of products to justify marketing expenditures.
Grameen Bank uses the joint venture route to solve new problems and reach users. For example, it has a joint venture with BASF for treated mosquito nets, and uses the Grameen Bank channel including self-help groups to reach users. The scientist from LBNL advocated coming up with innovations that the corporate sector will embrace.
Corporate Sector vs. Social Sector
In fact, the liveliest debates were about the role of the corporate sector and the social sector. Lines were clearly drawn with some people like this scientist clearly preferring market-based solutions and others clearly distrusting the private sector to do anything beyond enriching itself. The word “trust” figured in many of these discussions.
Solomon Darwin of the University of California at Berkeley pointed out that while open innovation is a 2-way street involving ideas flowing both outside in and inside out, corporations have tended to focus only on the former. He pronounced that the world of high margins is over though I wonder how this can be completely true when Apple is sitting on hundreds of billions of dollars amassed through huge margins.
One of the most engaged participants in the Round Table was Jin Hyo Joseph Yun of South Korea. One could almost see his mind working as he tried to relate what he had seen in the exhibition to the discussion in the conference room! He tried to build a model on the fly – volunteers are needed to connect technology to society/market but virtuous big business is needed to make it commercially successful.
Stuart Hart cited Polanyi to make a point that was in one of his articles - production has got disembedded from the social world. People have come to distrust the business process. There is a need to re-embed economic activity in society, that is to build business models that create mutual value.
Mukesh Puri, Secretary Higher & Technical Education, Government of Gujarat believed that successful innovations have to be owned by the people . The perceived benefits need to be clear. He cited Pravesh Utsav, a celebration held at the time of girls joining school in Class 1 All political figures participate. He said that the drop-out rate has declined as a result.
It is ironic that innovation which is inherently an integrative activity is today impeded by silos. These silos are reinforced by different philosophies and worldviews. We may have to rely on other forces at work to lower these walls. Take the new requirement of compulsory CSR activity by Indian companies – this is forcing companies to work more closely with NGOs and other social organizations. Hopefully, this will create an environment in which companies and NGOs recognize each others’ worth, and lead to collaborative and inclusive innovation in the future.
[This blog has been written based on notes taken by the author. These have not been re-checked with the speakers. Views expressed are those of the individuals and do not necessarily represent the institutions they work for.]