Hungry, foolish, Government?
As a sociologist spending four years studying ethnic identities, social capital and marginalisation, I was inherently cynical about the aims of the corporate world. Since walking through the glass doors into my first real job mentally resigned to hand over my non-profit loyalties for a staff badge, I have found myself in the ever busier intersection between the business, government and NGOs – and in no other context as much as in the last couple of years working on challenge funds.
I’ve realised that sectoral identities are at least as fluid as their social cousins: businesses focus on social responsibility; non-profits are commercialising; and there are now three seasons of Borgen on TV! Government is suddenly exciting and – innovating!
The common thread running across these intersections is Risk, yet the banking crisis has shamed the wrong kind of adrenaline, and those with a social conscience don’t want to be associated with risk-taking, and cycling in central London is as Fast and Furious as it gets (but only for the environmental impacts).
But the Government is essentially the risk-taker when funding green technologies or new gender sensitive pedagogical approaches. The monitoring and evaluation workstreams that I have been involved in are partly to demonstrate that there really is public value in a government investing in unproved ideas. Alongside Innovations Against Poverty, I have been working on the DFID funded Girls’ Education Challenge, and it is clear that most of the results will not be evident within the three years the programme is running. This is a particular challenge when testing a payments by results model, which should encourage fair risk-sharing and introduce transparency, but is also open to intentional and unintentional misuse. Finally, do the tax payers, employees (the paid and the unpaid) working on these innovations – or even their beneficiaries – reap the rewards of the results?
In a new publication from the Policy Network today, the authors argue that the collective and uncertain nature of the innovation process makes a disconnect between risks and rewards possible. You've been working all weekend on your assignment and the guy you've been paired up with (in the unwavering 21st century hype about constant team work) makes his first and last contribution presenting it to the class and gets a loud applause. As ever in life some actors by stepping in at a certain stage, are able to reap rewards from a painful process they had little contribution to. This doesn’t incentivise R&D and isn’t particularly healthy for growth.
Obviously there are the Unilevers who invest in R&D when others are cutting down. And of course the venture capitalists or the angel investors that are there to spread protective wings as we walk through the (Silicon) valley of the shadow of death. However, as the IAP experience shows, governments often play a leading role at the early stage R&D in high risk areas where neither business nor angels are yet willing to invest, as one of our clean energy projects concluded: “We received SIDA’s support at the prototyping stage and this is where we needed it the most (most donors provide support once a proof of concept exists).”
A great TED talk from the author of the report, Mariana Mazzucato:
http://www.ted.com/talks/mariana_mazzucato_government_investor_risk...