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Innovation for the social sector

March 21, 2011

‘Innovation’ – this seems to be the current buzzword circulating around. More than a month ago, the Karnataka Knowledge Commission had invited me to a meeting called to form the State Innovation Council. A few weeks ago, the TATA group had invited me to speak at the ‘Innovista’ meet – a meeting of all their companies in the southern region to celebrate their Innovation successes and failures. A couple of days ago, I was invited by the Karnataka Chapter of CII to present my views at their Innovision: India @ 75 meet at Bangalore. Apart from Innovation being the common theme, what left me concerned was the fact that for most of them, Innovation related to only industry and technology. It somehow got relegated to breakthrough innovations in the products and services sector. I was fascinated that not many of them had even thought that one could innovate in the social sector.

The Economist defines innovation as “new products, business processes or organic changes that create wealth or social welfare” or simply “the fresh thinking that creates value”. I do concede that Innovation is a major driving force in global economic growth and development, but can we limit ourselves to this narrow understanding of the term? It generally tends to be a closed process, relying on a limited pool of human resources and knowledge (albeit expert knowledge) and largely driven by companies, individual innovators or specialized research/designers rather than by those who are ultimate users of the innovations. To understand what this term really means, we need to go back to the etymological origins of the word. Innovation comes from the Latin root ‘Innovatinem’ which means ‘to renew’ or ‘to change’ and the usage of the word came into existence in 1540. In a very basic way, it is a term used to describe a process that renews something that exists. It could be a change in the thought process or mean some change incrementally happening, or a change that is radical and emergent. But then, how did this word get limited to just the industry and technology domains? To understand this, we need to go back to the popular book titled ‘Capitalism, Socialism and Democracy’ written by Joseph Schumpeter in 1942. This was possibly the first time that Innovation was used with a very strong economic correlation and the world of ‘Innovation economics’ sprung forth. Since then, the limited use of the word became popular and gradually excluded all domains except that in relation to technology and entrepreneurship.

I would like to focus on Innovation from the present context of India and the demands of social and economic justice arising out of our sustained growth at over 8%. Is Innovation in the social sector a mere fad or could it be something that can provide answers to our numerous problems? Could it help us in reducing the enormous inequities that have become increasingly visible with such unparalleled growth? What could Innovation mean in the context of the growing conflicts and the changing role of the State, NGOs and the private sector? Should economics again be the primary driver of innovation for the social sector too? All this and other questions leaves one troubled, especially if you are working at the grassroots where the direct impact of innovations or the lack of it, is visible and palpable.

I would like to draw a parallel from the private sector on what drives most of them to be innovative. A very simplistic understanding shows that competitiveness, profitability and the desire to reduce costs constantly drives them to be innovative. A quick look at the Public or the Government sector clearly shows that these are the very factors that are missing in them. Governments have no reason to be competitive, especially in the Indian context, where they seem to have a virtual monopoly on ensuring social growth. The little space that NGOs had created for themselves has been surrendered to the Government due to changes in the policy and dependency on the Government for financial support. The only Innovation that the Government is now talking about is to move from being a direct provider of services to provisioning them through NGOs. This in fact takes away the innovativeness of NGOs as they are reduced to being mere contractors and they fall in line with non-responsive Government policies. Governments, by the very nature of their structure and function, have no space for ‘profitability’. In fact, in the Indian context, this could very well be a negative driver of the Government, especially keeping in mind the various political compulsions under which they operate. It is quite ironical that the Government in the early 1960s and 70s started numerous industrial undertakings that today are models of inefficient and corrupt administrations. They seem to exist more to pay salaries to their employees and serve as instruments to confer favours by the political class on their followers.

Many years ago, Rajiv Gandhi, the then Prime Minister lamented in Parliament that out of every 100 rupees spent on development by the Government of India, only 15 rupees reached the people for whom it was meant. How could any Innovation spring when the system permits such massive pilferage? The Performance Evaluation Organization of the Planning Commission estimates that the Government spends Rs 13.31 per kg on unintended subsidies to give an intended subsidy of Rs 5.46 per kg of food grains for the poor in the Public Distribution System. With inefficiencies and Governance-deficits to this extent, one can now imagine how much this sector needs innovativeness. It is this state of affairs that now makes it necessary for the Government and the entire Public Sector to relook at what they are doing. Can one deliver goods and services to the millions of our marginalized and less fortunate brethren who need a safety net to get out of the trap of poverty? Just imagine how much our Government could do and achieve if only it were to become more competitive, less expensive, and driven by efficient processes and systems. Millions of more needy people could be reached and the ever-widening gap of inequity reduced by making the system more responsive, accountable and responsible. But can this happen in isolation? Will Government machinery used to decades of inefficient administrative practices and with huge stakes in inefficiency be driven to change its attitude and functioning? In my own opinion, only an enlightened citizenry and an activist civil society can drive the Government to undertake this metamorphosis. By itself, the incentives to not perform are too lucrative to think of change. This is also where we truly need Public-Private Partnerships. PPPs are now traditionally limited to creating infrastructure and to profit-making ventures like building ports, airports and toll roads. The private sector has to become socially conscious in sharing of skills, competences and knowledge with the public sector.

I still find it totally unacceptable that many large companies have the best logistics management systems, ensuring that goods and products reach the shelves of their retail stores hundreds of kilometers away,on a National scale when the Government of Karnataka still maintains their inventory manually. Imagine the spoils for a corrupt system that distributes 2 lakh metric tons of food grains on a monthly basis through 17,000 fair price shops around the state. I even wonder if this ambiguity and inefficiency is deliberately maintained to benefit the many who profit from it! How easy it could be if a Big Bazaar or a Reliance Store shared their inventory management systems with the State instead of letting it re-invent the same.

What other areas could we think of in ensuring that the last mile problem in delivering services to our people – whether it is in the health, or the education or the social sector be solved?  If only we can innovatively think through solutions that combine community engagement, good governance, technology and private sector competence in solving them. We are now thinking a very simple project on these lines. We are thinking of getting community representatives to assess their own Primary Health Centers on 10-15 simple indicators and sending a text message of these binary responses from their mobile phones to a central server. These responses would be analyzed and the PHCs rated based on their performance and services and all stake holders including the Government would receive this information. Communities would be encouraged to demand the services that they are entitled to and put pressure on the health department to deliver on its governance mandate.

Considering that land is such a critical issue nowadays and that economic development is irrevocably linked to land, one needs to be innovative in thinking about land usage. Let us consider how one could have been innovative about the Singur-Tata land acquisition controversy. Instead of the Tatas being allowed to acquire farmers’ land on an ownership basis, one could have considered making all the farmers shareholders in the project using their land as equity. The land could be estimated based on the market prices and the landowner provided with a monthly dividend. This would not only create a stake for them to ensure that the company stayed productive and suffered no labour disruptions but also ensure that they have a regular monthly income.

Control of local natural resources is another area that demands innovative management. Let us consider the Taluk of Heggadadevanakote. Home to 3 rivers and 4 reservoirs, this Taluk has 3 power plants producing 27 MW between them. The peak load demand of the entire Taluk is around 5 MW, but the Taluk ends up getting only 1.5 MW and the remaining goes to the rest of the State through the main grid. In the interest of equity, fairness and to stimulate local development, there needs to be some innovativeness in how this power gets distributed to the local people. One could either ensure local distribution through micro-grids or have a reduced tariff for the power consumed by the people within the Taluk.

Another area that provides a lot of scope for innovativeness is in engaging communities in their own development. Communities can be involved in monitoring of local development projects through statutory processes. Social audits in the NREGA projects are one such innovation that is being attempted. Another innovative engagement process could be community contracting.

Innovations in access to information could be a critical means of ensuring that prevailing asymmetry is bridged. Merely having the RTI Act is by itself no longer adequate. States like Bihar are attempting using mobile technology and SMS to ensure prompt and responsive information dissemination to its citizens.

Innovation is all about looking into the future and responding to the demands that one can anticipate. And this requires a lot of courage.  Apart from this, innovating for the social sector needs public agencies to fine-tune the art of listening to communities and building their own capacities to respond to their aspirations. Widespread use of cutting edge innovation processes will increase the scale and efficiency with which social problems affecting poor and vulnerable people are solved. Public and service delivery institutions need to recognize the power of innovation processes to further their work and employ them to improve their organizational strategy and programmatic performance reflected in the quality and quantity of the services they are able to provide to poor and vulnerable people.


Categories: Musings
  1. Arun Karpur
    March 21, 2011 at 10:19 pm


    Thank you for such refreshing thoughts about innovation in the social sector. As with the western countries, we continue to remain obsessed with the economic capital related to innovation and do not consider the social capital generated as a result of innovation. Your note accurately urges systems to be responsive to people’s needs and become effective without losing its efficiency. I am also thrilled to note that among the group of economists there are activists and public policy experts like you to sound a voice that has been non-existent in the area of policy making and systems change process.

    I was talking to our students at Cornell Institute of Public Affairs about some resources that they can find on India and health statistics in India. It was interestingly pointed out by one student that India is such a huge IT hub for the world and it is unfathomable that Indian Government’s IT and information systems are so rudimentary and broke. I tend to agree with the idea that the business-world needs to strategically partner with the public sector for sharing and transferring their knowledge for enhancing the impact of public sector. Many corporate social responsibility projects believe in doling out money for projects to secure PR advantage. I think it is in their benefit for business to network with public sector to help improve their systems.

    The west also suffers with these same issues. So I would not restrict your learning only to the developing countries, as developed countries’ public sector has lot to learn to be more effective and impactful. It is time to adjust our notion of innovation and align innovation with social justice as well.


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