The Spike in Innovation

This blog post was part of the event Step Into System Innovation - A Festival of Ideas and Insights on Nov 9th to 13th, 2020 and sums up the sixth and last webinar of the week. Watch the recorded webinar and read about the event here.

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The Covid pandemic will come to an end when we reach a sustained spike in social learning and innovation which is significantly higher than the spike in the spread of the virus itself. We have to spread new vaccines and treatments faster than the virus can. 

Everywhere governments are obsessed with reducing the R number: the number of other people who will be infected by a person with the virus. If the R number is below one, then the pandemic retreats. R is an index of our vulnerability. 

We should have another number in mind, let’s call it the S number: the rate at which new solutions spread through a society. While the pandemic has been rampant the S number has lagged well below R. But as we traipse towards 2021 the signs are that S will be much higher than R as new solutions to protect us from the virus spread much faster. 

The most obvious ingredient of that will be the multiple vaccines which should become available, in record time, to immunise us against Covid-19. Those vaccines are triumphs of innovation built on partnerships between public and private sectors. Yet lasting social innovations will also emerge from the crisis, and nowhere is that more likely than in Pakistan.

What happened in Pakistan during lockdown was the story of the final session of our festival on systems innovation: the creation, in a matter of weeks, of a social safety net for millions of the poorest people in the fifth most populous country in the world.

We were treated to a virtuoso account of radical social innovation in the midst of crisis from Dr Sania Nishtar, special advisor on social protection to the prime minister of Pakistan. 

Pakistan has a population of more than 200m, almost two thirds of them below the age of 30. About 24m household breadwinners earn their livings in the informal economy, paid daily in cash as labourers and cleaners. There are 130m people in the families those breadwinners support. When the country went into lockdown those daily workers could not earn their livings. Their families had few savings to draw upon. Almost two thirds of the country were at risk of going hungry. It did not take long for unrest to spill into the streets. People were starving and desperate.

Dr Nishtar recalled: “We have a strong tradition of philanthropic giving. Anyone who could would take food to where the labourers congregated. I was getting consistent reports of people’s cars being attacked. The country was virtually on the verge of civil unrest two or three weeks into lockdown.”

Dr Nishtar was given a budget of about 203bn Pakistani rupees (about $1.25bn) to quell the unrest by getting emergency cash payments quickly to the people in the greatest need. A year before, new to her job, she had proposed such a system, only to be told it was “too ambitious, too out of the box, too daring.” When Covid struck she dusted off the discarded plans for a flexible and responsive digital system for welfare payments. Suddenly in the midst of the crisis, with the stability of the country at stake, there was an appetite for radical action. 

First, they had to design a super simple system for people to request a cash payment. Everyone in Pakistan has access to a feature phone even if it is one they share with other friends and family. A mass advertising campaign was launched to alert people to the emergency fund, asking them to text in their 16-digit unique citizen identification code to a freephone number. The take up was staggering. In a few days they received 139m texts. 

Those had to be sifted by an AI programme which discarded duplicate applications. That left the government with 66m unique numbers which had to be cross-checked against government databases to eliminate public sector employees or people with incomes above a certain threshold. That required not just rapid software development but also collaboration across government to make the various databases available. 

They arrived at a number. 15m people, supporting perhaps 80m family members, were eligible for an emergency payment. 

That done, they had to send out texts in batches to just the right people, so they would turn up to collect their money without forming crowds and long queues which would breach the Covid restrictions. Commercial banks were signed up as cash distribution partners. As many of those eligible for the cash did not have bank accounts, the banks were given the data they needed to automatically create accounts for them. When someone turned up to an ATM to withdraw their cash, the equivalent of $75, they just needed to use fingerprint recognition. 

This is a story of extraordinary collaboration under the extreme conditions of a systemic crisis which threatened to engulf both society and government. What longer term lessons are there for us about the nature of system innovation?

What unfolded in Pakistan exemplifies aspects of our Three Levels framework, a re-drawing of Frank Geels’ multi-level perspective model of system transition. The Covid pandemic’s arrival created a dramatic shift in the macro “landscape” level, which sets the conditions in which systems operate. A sudden, potentially overwhelming health challenge became a social and economic threat to people’s livelihoods, which in turn generated the need for a rapid, concerted response. The elements of that response were already largely available. They did not have to be invented from scratch; rather they needed to be brought together to form a coherent system.

That started the need to get government departments to cooperate with one another. As Dr Nishtar explained: “We think the government is one entity. It is not one entity. It’s an archipelago of different institutions that have a disincentive to collaborate. That’s how governments work all over the world. The trick was to get the stakeholders together to design a system, making sure that everyone understood their role and had an incentive to participate.”

But the government could not create the system on its own. Dr Nishtar also had to knit together various standalone services provided by the banks and mobile phone companies to create what we would call a “minimum viable system”: an end-to-end solution that is robust enough to work in practice and which can be the basis for lots of subsequent improvements. 

The creation of the emergency cash safety net can also be seen through the lens of the four keys we think are critical to unlock systems innovation: purpose, power, resources and relationships, as my colleague Jennie Winhall explained brilliantly in the session.

When systems are stable (and stuck) these four are tightly linked. Systems innovation becomes possible only when they are destabilised and opened up. This happened in Pakistan first through the resources route. The Covid lockdown dramatically curtailed the flow of resources of households. The government had to step in to provide an emergency influx of resources, the 203bn rupee budget. To get that money to the right people fast, the government had to draw on the resources of its own departments but also the mobile phone companies and banks. Putting those resources to use across the public and private sectors, however, required unprecedented collaboration between entities that were used to competing with one another. All of that was underpinned by a strong shared purpose - to support people in need and to save the country from civil unrest - but as Dr Nishtar repeatedly stressed, that also meant creating the right incentives for everyone to participate. Finally that reconfigured power. Competing government departments had to cede some of their power to the wider collaborative undertaking, but in the process the collaboration created a new shared power to create the payment system. The departments traded in some of their traditional power and control over their separate sub systems to be part of the combined power that came together to create a new solution.

Finally, the creation of the new system sheds light on the different roles that need to be played in system innovation. Dr Nishtar was the consummate insider-outsider, working inside systems but seeing how they needed to collaborate with outsiders; she was a visionary and an entrepreneur, she could see the opportunity to create a new system and acted in the face of uncertainty to bring it about; she was a convenor of collaboration and an investor in the new system. She was able to innovate at speed because she combined all these roles in one. Systems innovation is invariably a much more protracted process in part because these roles are played by many different people, scattered across the system; orchestrating their collaboration is often difficult.

Dr Nishtar is just one example of how systems innovation is emerging in that part of Asia in response to crises. Anir Chowdhury, an advisor to the government of Bangladesh on digital innovation, described how existing freephone numbers were repurposed to provide health advice, staffed by an army of hundreds of volunteer doctors. When people called in to report symptoms, that data was fed into an early warning system which allowed the government to spot the spread of the virus sometimes 10 days before it became fully apparent to authorities on the ground.

Anir said the multiple innovations which Bangladesh had pioneered during the crisis were down to three factors coming together: “The shared purpose created by the pandemic. The technology foundations of a mobile telephone number, linked to a national identification number with biometric data. These were like the Lego bricks for creating new systems because they could be reconfigured in many different ways. The convening authority of the government to bring together public and private institutions. For example we had to assemble a team of data scientists from the telcos and from the diaspora in the US, in academia, including epidemiologists and behavioural scientists, along with AI programmers, because we needed to understand the pattern of calling and how to respond to it effectively. A team of 30 of them worked every day for two hours on zoom from their various locations around the world to make that possible.”

Christian Bason, the former director of the Danish government’s Mindlab and now chief executive of the Danish Design Centre, pointed to one of the fundamental lessons: governments always want to be in control and yet these fundamental, system shifting innovations only come about when the government enters a zone of instability and uncertainty. More radical system-wide innovation requires more people to be comfortable deliberately stepping into zones of instability and uncertainty. 

Pakistan and Bangladesh in response to Covid have both developed “minimum viable systems”, thrown together by repurposing existing ingredients. The test is whether once the crisis has passed, the government can turn them into robust systems capable of creating yet more value. Anir Chowdhury is optimistic that one dividend from the crisis will be a national telemedicine platform serving 161m citizens: “We’ve created a fairly robust national telemedicine service during lockdown. Now we are redesigning how every single hospital works to have a telemedicine service as part of what it does. It’s little short of a small revolution.”

Meanwhile in Pakistan, Dr Nishtar is thinking big. The Covid crisis has been a portal into a world of possibilities previously thought to be well beyond reach. She imagines national welfare and social protection safety nets covering perhaps 60m people that would have been dismissed as utopian only a year ago. She concluded with an inspirational rallying cry for would-be systems innovators everywhere: 

“The cash payments system was the product of a couple of weeks work in the context of Covid. I would say it was just the tip of the iceberg. It was an illustration of what is possible, if you are willing to push the envelope, if you’re willing to be a bit daring, if you have the imagination to map out how individual pieces in an ecosystem can gel together to deliver in a systemic way… The digital landscape has brought a lot of commercial standalone solutions, but when you knit together those standalone solutions, then the sky’s the limit in terms of what you can deliver.”

Thanks to the vaccines now coming into production, the spike in the pandemic will be temporary. Let us hope that the spike in creativity and learning turns out to leave lasting dividends for people everywhere.