Innovation and crisis: The six factors that spark radical innovation in turbulent times

A crisis forces people to see the world in a different way because it ruptures the assumptions on which everyday life proceeds and so creates a doorway into a different kind of world, one in which people can improvise solutions inspired by generosity and empathy, goodwill and common endeavour, resilience and resourcefulness often lacking in normal times. That is a paraphrase of Rebecca Solnit’s account, in A Paradise Built in Hell, of the field of ‘disaster sociology’. The father of that field, which emerged from the study of the civilian experience of the Second World War, the American sociologist Charles Fritz, put it this way: ‘Disaster provides a societal shock which disrupts habitual, institutionalised patterns of behaviour and renders people amenable to social and personal change.’ Crisis creates a potent mixture of disruption of the status quo, freedom from convention and tight constraints, of time and resources, which drives radical improvisation. Doing things differently becomes the only and obvious solution.

“Solnit argues that disasters are opportunities as well as oppressions, each one a summon to rediscover the powerful engagement and joy of genuine altruism, civic life, grassroots community, and meaningful work.”

When that happens six factors come together. If we can understand this combination, we might have a chance of fostering the ‘can-do’ culture of crisis in normal times.

Crisis breeds innovation because it demands a sharper, shared clarity of purpose. That is true for societies as well as individuals. Amid all the chaos, a crisis can provide what corporate anthropologists Christian Madsbjerg and Mikkel Rasmussen call The Moment of Clarity, when the point of what you are doing becomes clear: saving lives, caring for one another, putting food on the table. The trade-offs between competing claims on resources, which are normally hard to adjudicate and so slow down change, can be cut through with confidence about what really counts.

Outside a crisis it is much harder to create this sense of shared purpose. One way to do so is to frame a challenge as a crisis to garner greater commitment: just before COVID-19 emerged, campaigners had stopped talking about climate change and instead focused on the ‘climate emergency’. The need for shared purpose is one reason more governments are interested in mission-driven innovation, to mobilise collective effort to tackle big societal challenges. There are limits to how far this can be taken though: not everything can count as a crisis at the same time.

A crisis demands urgency because it can get out of hand, growing exponentially and outpacing normal responses, as the UK found to its cost by locking down later than many other countries. Crisis compresses timescales and forces people to work at speed, eliminating the steps in processes which add very little to outcomes. When time is short, we have to focus on what is really critical and not bother with the rest. That is how vaccines were developed and approved in record time. Elements in the process that are usually sequential, were carried out in parallel, compressing the time from initial prototype to approval from years to a few months.

A prime example is the way the UK’s highly praised RECOVERY programme was set up to test treatments for COVID-19 in real time in hospitals up and down the country. Normally it would take several months to set up a trial with 12,000 patients; in this crisis it took just two weeks.

Focus and urgency need to be combined to achieve results: governments should set clear, tight timescales for ‘mission-driven innovation’ to force teams to work in innovative ways. (But it is worth noting that one downside of a crisis is that it can drive out innovation which requires longer timescales and more diverse perspectives to unravel challenges and opportunities which are less obvious.)

In a crisis, one which engulfs the entire country, innovators have to find solutions that work at scale from the outset. They do not have the luxury of an extended period of prototyping to refine their solutions. Working fast to achieve scale shortcuts the innovation process, eliminating often lengthy processes of ideation, research and prototyping but also processes like ethics reviews. Instead, the emphasis has to be on what works fast, everywhere. That favours solutions which are simple and robust. (One downside of a crisis is that it can be bad for more fundamental, blue-sky research into more speculative solutions.)

Too often, public sector innovations get trapped on location: they do not spread beyond the local pockets in which they were developed. As a result, the public sector is rich in innovative solutions developed in one place which fail to scale more widely because there is no effective mechanism to achieve that.

That kind of defensive parochialism is much harder to justify in a crisis. People cannot afford to rest on their laurels; they need to show they are learning fast. Power is often centralised to mandate new solutions. Demand for and take-up of more effective solutions is driven by the scale of the need.

The need for urgency, focus and scale favours solutions which repurpose existing technologies rather than inventing things from scratch. That may be true of innovation in all settings, but crisis accentuates the advantages of repurposing and recombining what already works.

Giulio Quaggiotto, the UNDP’s innovation “guru” who is working with governments across Asia to support their responses to COVID-19, put it this way: ‘Having something to build upon really matters. Starting something from scratch during a crisis is difficult. Building on or repurposing what is already there is much more effective.’

An obvious example is the way South Korea and other Asian states drew on their experience with the SARS epidemic: that meant South Korea had thousands of epidemic intelligence officers to call upon. The Indian state of Kerala built its highly effective response on its community-based health and care system. Greece was quick to repurpose existing technologies to new ends, using a simple SMS system to regulate its lockdown. In Bangladesh, more than 11 million people have self-reported COVID-19 systems using a simple SMS system which is analysed in real time by artificial intelligence. That has allowed the authorities to spot ‘hot clusters’ of the virus 10 days earlier than they were able to at the start of the pandemic. More than 200,000 doctors and nurses went through an online training course to operate what Anir Chowdhury, policy advisor with UNDP and Member of the Prime Minister’s National Digital Task Force in Bangladesh, calls an ‘Uber pool system for doctors’.

The imperative to repurpose rather than invent explains why a crisis can lead to a sudden surge in usage of solutions that were developing only gradually in normal conditions. Indonesia has created a primary telemedicine system for 300 million people by working with a handful of startups which had been finding it hard to gain traction before the crisis. The crisis has accelerated the adoption of solutions that were developing only tentatively.

Crisis creates the conditions for the kind of open-minded collaboration which is virtually impossible in normal times, especially in highly departmentalised public systems. Crisis spurs collaboration because no one has all the resources they need to find a solution to a big, shared challenge. They have to find novel ways to share data, infrastructure, buildings and technology rather than hoarding resources. A lot is at stake: those who do not collaborate risk being called out.

Recreating that collaborative spirit is hard outside of the conditions of crisis. The conflicts common to the public sector will likely resume as 2021 unfolds. Yet the crisis might yet create a longer lasting legacy of collaboration, not least if more governments recognise the power of mission-driven innovation to create a framework for collaborative innovation around a shared, critical challenge.

Governments and digital service providers may in future collaborate more to provide critical social infrastructures. In Bangladesh, Anir Chowdhury looks forward to a future in which the country has a digital basic income, combined with a mobile-first health system and an online distance learning platform for all children. None of that will be possible, however, without a partnership between government and mobile operators who will be entrusted with what will become vital public infrastructure. The mobile operators will want to know there is a sustainable business model: someone will have to pay.

Another place where a newfound spirit of collaboration may flourish will be in local government, where councils have learned that, in a crisis, the first and ongoing responders are in civil society. Local mutual aid, care networks and food systems might live on after the crisis, as a permanent complement to the local state.

The inherent uncertainty created by an unfolding crisis means it’s hard at the outset to say what will work. That means failure is almost inevitable and therefore more tolerable. In a crisis not everything will work first time around. As Mark Rutte, the Dutch Prime Minister, puts it: you have to make 100 per cent decisions with only 50 per cent of the information. There is no option but to accept, embrace even, the radical uncertainty of the situation, and the creative, adaptive solutions that requires.

Bets have to be hedged in the knowledge that some experimental solutions have to be written off in pursuit of the one that works best. Failures are easier to write off in a fast-moving crisis.

Failure is easier to tolerate, however, so long as it leads to rapid learning and better solutions: perhaps after months of mounting criticism from the public, doctors and nurses, the UK Government has created a supply chain to provide hospitals and care homes with the PPE they need. Time will tell.

Whether all this leads to more intelligent, forgiving and thoughtful attitudes towards failure and experimentation in government remains to be seen. If it did, this would encourage innovation.

Having something to build upon really matters. Starting something from scratch during a crisis is difficult. Building on or repurposing what is already there is much more effective.

Giulio Quaggiotto, UNDP

There are plenty of reasons why it would be a mistake to model innovation policy on how we behave in a crisis. Many kinds of innovation are casualties of crisis. Serendipitous innovation is unlikely to thrive in a socially distanced world in which a visit to a café has to be pre-booked. In a crisis patient, blue-sky research often has to play second fiddle to urgent pragmatic problem-solving. A clear sense of shared focus can mobilise collective action to achieve a common goal, but a good deal of innovation comes from the plurality and diversity of values and vantage points in society. Getting government to focus on a single mission is not just difficult, it might be dangerous if less politically correct missions are neglected.

Yet a crisis like COVID-19 does show us how society can be rapidly reorganised around a different set of priorities. A profound economic and social shock provides a heightened sense of urgency and focus, which in turn creates a newfound willingness to collaborate among people and agencies used to fighting turf wars with one another. The need to work at speed and scale means that inventing things from scratch is out of the question; repurposing existing technologies, infrastructure and institutions is far more effective. All of this requires a tolerance of failure as solutions that are initially not good enough are discarded or improved.

Crisis is not a model for all kinds of innovation. Yet in these special conditions we become capable of turning what was thought impossible into everyday reality. Crisis reveals not just weaknesses but also strengths and capabilities; it creates huge costs but also unexpected dividends in all the new and different ways we find to organise ourselves that seemed out of the question just a few months ago.


 

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  • Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,

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    Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.

    This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.

    It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.

    The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.

    Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.

    India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.

    More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.

    An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.

    India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.

    Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.

    And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.

    A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.

    We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.

    We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.

    In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.