As part of an on-going series on social innovation, I recently interviewed Aleem Walji, Practice Manager for Innovation at the World Bank Institute. We discussed the intersection between innovation and development, the future of social enterprise, current initiatives and efforts underway in the Innovation Practice, challenges and opportunities moving forward within these sectors, and much more.
Aleem joined the World Bank Institute as Practice Manager for Innovation in November 2009. Previously, he was Head of Global Development Initiatives at Google.org and Chief Executive Officer of the Aga Khan Foundation in Syria. Aleem was trained as a social anthropologist and urban planner at Emory University and MIT.
Rahim Kanani: How would you characterize the intersection of innovation and development, and the emergence of social enterprise as a widely studied, taught, and advancing discipline?
Aleem Walji: Governments alone cannot meet the service delivery needs of all their people. They need partners, expertise and access to pools of capital. The private sector helps to fill this gap as commercial actors and non-commercial actors expand access to public goods and basic services to the poor. Social enterprise is a fuzzy term that's used to describe many things but largely refers to private actors providing goods and services to the poor and optimizing for something other than a pure financial return.
The challenge has been in measuring non-financial impact. Investors may be willing to accept lower financial returns if they can measure precisely they are achieving in meeting health, education or water outcomes. The emergence of industry standards for social metrics, industry associations like GIIN (Global Impact Investing Network) are all very promising and will help unlock additional sources of capital motivated by some combination of financial and social objectives.
Capital is often but not always the primary constraint. The challenge is matching the right kind of capital with the needs of entrepreneurs at a particular stage of development. Cash-flow based lending and access to working capital for example, are still rare in much of Africa and South Asia and yet that's what many early stage entrepreneurs need. Rationalizing the deployment of capital -- that is understanding when grants are the right instrument, when equity can play a role, and when debit is appropriate -- is key to helping the sector grow. And from the perspective of the World Bank is critical in leveraging private resources to complement public capacity in meeting the needs of the poor.
Rahim Kanani: How will social innovation and social enterprise shape the next decade of international development, and what role do you envision the World Bank playing in that regard?
Aleem Walji: Our role is to be a catalyst. We should be focusing on creating infrastructure for others to build on and use. In the world of social enterprise and social innovation more broadly we're focused on developing platforms and networks bringing global players together to solve really important problems.
For example, if we can contribute to the creation of a new asset class -- impact investing -- by supporting intermediaries, targeted technical assistance, and incentivizing investments where gaps exist today, then others will help grow the sector and expand opportunities within it. Our role may not always be most visible but good infrastructure works in ways that people sometimes take for granted.
Another example is our work around Open data. Data is fuel and good data is rocket fuel. By making information and better data available on indicators like infant mortality, GDP growth rates, and CO2 emissions, we motivate others to build applications based on our curated data sets and reach people we cannot reach ourselves. Our Apps for Development competition is a case in point. Developers built applications we would have never thought to create. They saw a pain-point and used our data to build their own aspirin solutions. It's not about vitamins and telling people what's good for them. It's about making ingredients available so people can develop their own remedies to their own problems. The right information available to the right people at the right time can be transformative.
Rahim Kanani: What do you now know, that you didn't know when you joined the World Bank Institute in November 2009?
Aleem Walji: I feel even more certain after joining the World Bank Group that no single institution can be the global repository of knowledge. Knowledge lives everywhere and is inherently decentralized. The key is to make it easy to find and accessible when and where where it is needed. In agricultural extension for example, the expertise of the best farmer in a region is often more valuable than any textbook or external expert. Making that knowledge available to large numbers of farmers is hugely valuable. That's the central goal of the World Bank Institute's practitioner to practitioner exchange. The Bank aspires to connect learning, knowledge, talent, and innovation wherever it lives. It's about South-South, North-South, and South-North learning, it's about connecting experts and expertise, and putting innovators into direct contact with each other.
As Judy Rodin from the Rockefeller Foundation eloquently says, "the world is our laboratory and the combination of globalization and information technology just accelerates the spread of innovation". If we can make innovation more inclusive, user-driven and user-centric, there will be more opportunities to tackle poverty and tap expertise wherever it lies.
Rahim Kanani: What worries you the most about the way in which international development is currently understood and practiced?
Aleem Walji: Top-down models that replicate what hasn't worked for decades. Getting more efficient at doing the wrong thing is a real risk. We have to come to terms with what simply has not worked. There is plenty of data and evidence to suggest we need to re-think traditional development paradigms.
For example, the expert-led model where knowledge is highly centralized and parcelled out from the North to the South is out-dated. We are moving towards a much flatter world in which countries and people can learn from one another no matter where they sit. A key opportunity for the World Bank Group is to connect the supply and demand sides of knowledge and talent. That implies a transformation in how we see ourselves: a move from the knowledge bank to being global connector and curator of learning, knowledge, and innovation.
Institutions like the World Bank can be powerful enablers when we partner with people and institutions in the countries in which we work. But we need to listen better, be honest about what has and hasn't worked, and move from centralized, expert-led, and linear models to collaborative, open, and networked approaches that connect experts with expertise which is widely distributed.
Rahim Kanani: At the same time, what are you most optimistic about?
Aleem Walji: That some of the most impactful innovations that improve the lives of poor people are coming from the poor themselves and from non-traditional actors. Jeff Sachs has called the mobile phone the most important technology for ending poverty in the world today. I think that's right. It's not technology alone but how people adopt and adapt technology and use it as an enabler to accelerate change. Moving the phone from the ear to the hand will unleash a revolution in poor countries that we're only beginning to understand. Eric Von Hippel at MIT's Sloan school writes about democratizing innovation and the rise of user-led innovation. I think we're seeing it all around us in how people are using mobile devices and developing off-grid solutions to access power in remote parts of the world. Perhaps the greatest value we can add is in removing constraints to people-led innovation and lubricating their path to growth. Legal and regulatory obstacles often prevent scale. Managing risks is preferable to eliminating them. The example of mobile money in Kenya is a case in point. It's precisely because the regulator was willing to take risks and allow a phone company to build on a user-led trend of exchanging phone credits, that mobile-based money emerged and drastically expanded access to financial services by the poor. The role of progressive donors like DFID was no less important in testing early stage prototypes. These are important examples we can learn from and notice that user-led innovation fueled the growth of a new industry.
When we look today at Egypt, Tunisia, or others countries in the Middle East, we see similar citizen-led social innovation. The use of technology certainly didn't create social transformation but it accelerated change from one country to another and mobilized young people in unimaginable ways. What can we do to support these people and help them move from protest to democratic transition to engaged citizenship? That's a question I hope many people are asking themselves because getting it right is so important. Technology is just an enabler but a powerful tool in the hands of a responsible and engaged citizenry.
Rahim Kanani: As the former Head of Global Development Initiatives at Google.org, what does your Google experience have in common with your World Bank experience thus far?
Aleem Walji: The World Bank and Google both think big but think about scale in different ways. At Google, scale is about developing and rolling out products to millions of users. At the World Bank, it's about recognizing and developing solutions that will affect the lives of millions of people.
In both roles, I'm interested in how innovation and technology can enable and accelerate progress in fighting poverty. I don't think incremental change is sufficient to solve the hardest problems in the world. Given the urgency of so many challenges we face today, there is a need for disruptive and transformative innovation.
Rahim Kanani: What does the word "innovation" mean at the World Bank, and how would you describe your position within the context of Bank activities around the world?
Aleem Walji: In my mind, Innovation within the context of the World Bank is about what we choose to do and how we go about doing it.
I spend the majority of my time focusing on the what and encouraging the Bank to think about doing very different things. Our Global Apps for Development Competition for example, gave us the opportunity to put development experts into direct contact with software developers. We opened-up very large data sets and challenged the world to create useful applications. We were amazed by the creativity and innovation of developers who created uses of our data that would have never occurred to us. And that was the point. People closest to problems are incredibly imaginative and if properly equipped with information and tools can offer solutions to problems that outside experts would not. And I think we've only scratched the surface of what's possible by reaching out to a world of non-traditional experts to help us move the needle on poverty.
But that simply can't and won't happen unless we create the institutional space for people to take risks and learn from failure. That's the critical how of innovation. It's less about coming up with perfect solutions and more about creating an environment where staff and partners feel free to take initiative, move quickly towards execution, rapid learning, and continuous improvement. Failing fast and learning from failure is not part of the World Bank's parlance. But it's essential if we're going to evolve as an institution and iterate rapidly. This requires our leaders to ask probing questions, be open to new ideas, and give people permission to try them. The world around the Bank is changing fast; innovation is happening all around us. Our relevance depends on our ability to adapt to it.
Rahim Kanani: What have been some of the milestone achievements of the Innovation Practice in recent past?
Aleem Walji: We've been involved in several areas that I think are worth mentioning. The first is Open Data. Last April, through a cross-Bank effort, we adopted a new policy resulting in more than 7,000 development indicators becoming available in our data catalogue at no cost. Our information and data are not just public but searchable, downloadable in machine-readable formats (including through APIs), and re-usable. And users are coming to our data catalogue in huge numbers surpassing traffic to our World Bank homepage. We've realized our clients and our users are not the same group. For most people we're as much the Databank as the World Bank. This has led to our Development Economics and Research Group to expand our data catalogue regularly. Open Data is pushing us to re-think our role in the development space: what information do we share, how do we share it and collaborate with partners, and what does it mean to create open-source solutions to development problems?
The Bank's Mapping for Results initiative complements Open Data by adding a geospatial dimension. Interactive poverty maps overlaid with information about where the Bank's projects are located and where funding flows is eye-opening at many levels. We see relationships between for example infant mortality and where we're our loans support health and water projects at the sub-national level. The question of who does what where is a such a black hole in development and Mapping for Results shows where gaps exist in development programs, the clustering of aid programs, and whether results correlate with aid flows. All of this became possible by capturing geo-data (now even possible on most mobile phones) and creating simple mash-ups. We're working with the Development Gateway Foundation to create a geo-coding manual to allow other donors and Governments to learn from our experience and develop their own geo-tools. We've learned that maps are a very powerful story-telling tool particularly when they help visualize the relationships between very large and disparate data sets.
Rahim Kanani: Walk us through some concrete examples of innovative development practices that your office was involved in, with respect to identifying the model, evaluating the model, and ultimately taking the model to scale.
Aleem Walji: Scale is everyone's goal but eludes most development actors. At the World Bank Institute, we talk about moving from retail to wholesale. In practice, this often means working through partners, supporting intermediaries, and figuring out how and where we can best add value.
The Development Marketplace (DM) program comes to mind. For more than 10 years, we've been making small grants to social enterprises globally. The program aims to complement the provision of public goods by Governments by scaling-up the provision of public goods through non-public actors. But for the World Bank to make small scale grants to social entrepreneurs is inefficient and often cumbersome for our grantees. So we want to support local intermediaries to provide pre-investment technical assistance to social enterprises and connect them to a growing pool of socially motivated investors particularly local capital.
Our goal is to use the DM Platform to connect high potential pipeline to impact investors, philanthropic capital and social investment funds. We see a major gap between the needs of most social enterprises (requiring early stage angel finance) and where most impact investors sit along the conveyor belt of capital (wishing to deploy private equity/debt). To increase deal-flow, there is a role for targeted pipeline development, reducing due diligence costs, and making early-stage finance available for a broader range of small but growing enterprises. We're working with a range of government partners, philanthropies, and social investors (including the Aspen Network of Development Entrepreneurs) to test this model in India and East Africa as a starting point. If we can leverage our convening power, relationship with governments, and balance sheet, we can help fill a key gap in the social investment ecosystem.
Rahim Kanani: If your work and the Innovation Practice rest upon one core philosophy about the way in which the world works, what is that philosophy?
Aleem Walji: Focus on the user and start with problems that matter. Too often we're answers looking for questions. And the answer can't be the same if the question is different. Scale is ultimately about the repeatability of a solution based on a homogeneous problem. The private sector has learned the importance of listening to clients. Non-profits and public agencies struggle because the incentives of their funders and their end users are not always aligned. But if you can create the right incentives for groups to be client or user-focused, I think you get better results. Getting something wrong because it's a really hard problem is understandable but getting something wrong because you don't listen to your users is totally avoidable. We can do better and we must do better in listening to our clients and ultimately our clients' client -- the citizen.
While I would not describe myself as a techno-determinist, I do believe in the disruptive power of technology to accelerate positive social and economic change. We've seen it now in the Middle East with social media and communications technologies and in Kenya and the Philippines with mobile banking and financial inclusion. But intent matters a great deal as technology is value neutral. When harnessed with positive intent, I believe ICTs can enable people to make enormous progress in timeframes that were previously just not possible.
Below is a short video marking the one-year anniversary of the World Bank's Open Data initiative.
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Previous interviews on social innovation include Bill Drayton of Ashoka, Sally Osberg of the Skoll Foundation, Eric Nee of the Stanford Social Innovation Review, Judith Rodin of the Rockefeller Foundation, and many more.
Cross-posted with World Affairs Commentary