Innovation Liquidity is a force multiplier for solving the SDGs
“Nearly every problem has been solved by someone, somewhere. The challenge of the 21st century is to find out what works and scale it up.” ~ President Bill Clinton
The human species is extraordinarily creative. The history of humanity—from capturing fire to firing ourselves into space—bears testament to our capacity to invent, reinvent, adopt, adapt, rebuild, and reimagine ourselves, our world, and our relationship with it. And this is nowhere more evident than during times of crisis, when the dogma of the tested, trusted and true is frequently eschewed in favour of the heretical—when all ideas, irrespective of their source, or even their seeming implausibility, are welcome in the urgent quest for resolution.
So why then, as we hurtle into the polycrisis (the interconnected and mutually reinforcing environmental, social and economic problems that characterise these early years of the 21st century),1 when the cost of addressing the Sustainable Development Goals has increased 4x in the last five years to $176 trillion and progress on them has been too slow to reach the 2030 deadline,23 do we appear to be mired in the business-as-usual practices and protocols of addressing planetary problems, that have not evolved alongside their urgency?
It is fair to say that despite the power inherent in our creativity, and our seemingly limitless capacity for compassion, the social institutions we have created are bound by values and processes that are outmoded at best, and wilfully cruel at worst—resulting in unconscionable inertia. Worst of all, perhaps, given the magnitude of the challenges we face, is our propensity to engage in magical thinking, where rhetoric masquerades as reason, and the two kilogram logic engine trapped within our skulls cycles through dizzying levels of abstraction to construct sensible-sounding, yet mathematically and morally indefensible ‘solutions’ to these issues.
The challenges encapsulated in the SDGs are the very definition of complex adaptive problems—so vast and ever-changing that no singular organisation or intelligence, biological or artificial, has the capacity to effectively define them. And a problem you cannot define is a problem you cannot solve. And yet we continue to believe we can, without changing in any meaningful way the way that we do.
This is not a failure of entrepreneurs, funders, or policy-makers, nor of the families, communities and governments that support them. It’s a fundamental failure of systems design (as we said in our recent article about designing equitable capital ecosystems). Additionally, our sector has become increasingly compromised by the idea of a free market, with governments outsourcing their responsibility to meet the needs of their citizens to philanthropists and private enterprises. Of late, they have gone so far as to convene international roundtables of global political and industry leaders to ‘invest more’ in frontier and emerging markets;4 blind to the fact that capitalism (and its antecedent colonialism) is the root cause of global inequality, and not the solution.
Collaboration, once held to be the gold standard for working together towards shared outcomes, has been proven to be grossly ineffective at tackling planetary challenges with necessary urgency at essential scale. And clearly the non-binding resolutions made at the various UN convenings intended to provide a basis for international cooperation, are ultimately toothless.5 6
In the face of these extraordinary challenges, and the well-intentioned yet often inertia-bound initiatives to address them, a growing number of platforms have launched to address what we collectively see as a critical requirement for addressing the polycrisis—sharing, discovering adopting, adapting and combining existing solutions to more rapidly effect change.
Innovation Liquidity
We think of this as “innovation liquidity”,7 the lateral movement of innovations across sectors, geographies, cultures, and contexts. But in order for this term-of-art to make sense, we first need to be clear about what we mean by both “innovation” , and “liquidity”.
Innovation
Unsurprisingly, the International Organisation for Standards (ISO) has a Technical Committee devoted to Innovation Management.8 We’ve reproduced their definition for “innovation” from their standards documentation below because it is technical, precise, and internationally recognised:9
Innovation:
new or changed entity (3.2.5), realising or redistributing value (3.7.6)1011
This definition certainly holds true in our experience, and we contend that innovations arise at the intersection of ideas (knowledge), skills (people), and resources (capital).
(Innovation = I∩S∩R)
Where I = Ideas; S = Skills; and R = Resources
Liquidity
In economics, liquidity “refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.”12 By this definition, other than cash itself, knowledge is by far the most liquid (and potentially most volatile) asset one can hold. And innovation, at its core, is applied knowledge.
Innovation Liquidity
If liquidity is the ability for an asset to be converted into something else without loss of value, innovation liquidity is the ability to adopt and adapt applied knowledge to another context—and to do so without reducing, diminishing, or otherwise devaluing the original innovation or its creator. That latter point is important, because late stage capitalism is characterised by extraction, appropriation, Columbusing,13 and all other forms of plagiarising that fail to value other people’s ideas and contributions.
So what needs to happen to take the vast ingenuity of the human species, documented in approximately 7,000 unique languages and dialects, across millions of databases and documents, as well as preserved through oral histories, and make them discoverable and reusable for addressing the polycrisis?
To be frank, we don’t need new and better technology to foster innovation liquidity (which is not to deny the extraordinary potential in AI to discern patterns and make meaning from such a vast array of knowledge). We need to give attention to what underwrites the mechanisms we already use.
For example, let’s think about innovation in the context of SDG6 (clean water and sanitation).14 All humans, no matter where they live, need safe and sustainable sanitation. A universal design requirement is that human waste be kept separate and removed from places where people eat, sleep, and go about their daily lives. But not all sanitation solutions involve flush toilets that use plumbing and potable water as the means and medium for removal (further, the failure to separate liquids from solids not only makes black water treatment considerably more costly, it also wastes a powerful source of soil nutrients).
In fact, in many countries the installation of water-based sanitation systems may be unfeasible; and many solutions abound that use other techniques and technologies to provide for this most basic of human needs. Of note is that the Swiss Agency for Development and Cooperation has identified that “by 2025 two-thirds of the world’s population will be living in regions with scarce water supplies,”15 meaning that many of the technologies in use in frontier and emerging markets are likely to be more relevant, and hence more valuable, as time goes on.
So how do we make these innovations more liquid? And, of equal importance, how do we ensure that those responsible for these innovations are appropriately recognised and compensated for their work.
Platform ≠ Purpose
As mentioned previously, there are thousands of networks, websites, platforms, and exchanges that have at their core the idea that we need to increase the discoverability of what’s already working. And there are thousands more that have either failed, or barely eke out an existence, irrespective of their marquee partners or capital invested. Our own previous efforts are amongst them.
While there is no shortage of cautionary tales, the Global Innovation Exchange (GIE) - stands out. Launched in 2017 and shut down only four years later in 2021, the GIE was a multi-stakeholder initiative funded and supported by United States Agency for International Development (USAID), Australia’s Department of Foreign Affairs and Trade (DFAT), the Bill and Melinda Gates Foundation, and the Korea International Cooperation Agency (KOICA), GIE “grew into the largest database of global development innovations with 16,000+ innovations”.16
And yet after four years it shut down, citing “a lack of sufficient funding” as the principal reason.17
When we read the announcement, we immediately reached out to the platform’s managers at Results for Development (R4D—an extraordinary organisation we greatly admire), offering a path to keeping this data live and accessible by stewarding it at no cost in our own platform, Sphaera. And yet, despite the obvious benefits, and strong advocacy for this approach from a number of third parties, we were unable to progress this to a conversation, much less an actual collaboration. Thankfully, unlike other platforms that have shuttered over the years and simply shut off all access to the data, of those 16,000 innovations in the GIE, 7,000 were eventually published. However, they were published in a static database,18 with no contact information for the innovators, effectively thwarting any possibility of innovation liquidity!
To be clear, GIE is not the only platform that has gone this path, nor is it the largest. In 2007, zaadz.com, a social networking site with over 85,000 members working in lifestyles of health and sustainability (LOHAS) was acquired by Gaiam, and then shut down only three years later, with over 100,000 member left with nowhere to go, and all of their content and connections vaporised. In 2014 the same thing happened with Wiser Earth, a global social network of over 80,000 members and 100,000 sustainability organisations founded by Paul Hawken (a similar offer one of the authors made to this platform yielded the same results as with GIE).
In fact, we’ve personally had this same discussion with a shuttering or failing platform at least once a year over the last decade, and have grown so weary of watching good ideas get ploughed under that we decided to put Sphaera on ice while we came up with a new, and what we believe fundamentally better approach to building for innovation liquidity, starting with a set of universal design principles.
Principled Design
Design without principles results in unprincipled design. Which is not to say that any of the afore-mentioned organisations or platforms lacked principles, but that perhaps their principles were not fit for purpose.
This is why, when writing From Billions to Trillions, we laboured over a set of design principles to underscore our work in designing infrastructure to mobilise knowledge, people and capital at multi-trillion dollar scale to address the SDGs.
Those principles have stood the test of time,19 and are listed here as an example of how to think about building technology that’s intended to facilitate innovation liquidity, and mobilise ideas, skills, and resources at the volume and velocity required to achieve the SDGs:
Thrivable
Humanity-centred
Equitable
Cooperative
Adaptive
Distributed
Modular
Robust
Ubiquitous
Measurable
While most tech-for-good initiatives nowadays have a well articulated set of design principles, one of the things most frequently missed is what’s implied by ‘distributed’ and ‘modular’ above—which is interoperability. Not long after publishing Trillions we started aggregating data around solutions and organisations tackling SDG6, and discovered between two and twelve variations of the same information spread across a diversity of platforms, including the GIE, with no identifiable source of truth.
If we want to get better at creating innovation liquidity, recognising that data is a critical component to doing so, we have to recognise that innovation liquidity — or the lack thereof — is a sector-wide issue to address. It is not a matter of collaboration, but of coordination, which means that it’s not an issue of technology, but one of standards.
Standards
Standards are the universal norms, protocols and requirements that describe the safe and replicable production, operation and interchangeability of just about everything we use, be it as small as an individual screw or as large as the entire internet.
Before the creation of railway standards in the 19th century, for example, every railroad company used its own gauge. This quickly became a problem, as trains literally had to switch tracks, massively inhibiting the flow of goods and passengers. This is roughly the state of play in the social change industry today: every information platform and impact investing marketplace is currently running on its idiosyncratic “gauge” when it comes to describing innovations and deals.
Standards, in this context, are the invisible and yet critical agreements about how we collect, store and share information that makes the entirety of modern civilisation possible. Without standards, there would be no global banking industry, no telecommunications, no internet. Further, transportation, electricity, agriculture, sanitation, and healthcare without standards would be unreliable at best, and dangerous at worst. Standards, not money, make the world go ‘round.
Ask any systems designer and they will tell you that we lack appropriate incentives and mechanisms for working together at planetary scale. When it comes to incentives we’re not talking about intrinsic ones (such as our presumed mutual interest in the importance of surviving in order that we can continue arguing about everything that falls far distant to survival), but extrinsic ones (like financial gain, recognition, or reputation). Granted, impact financiers will argue that they provide necessary incentives, in the forms of philanthropy, investments, challenges, and prize pools, but not only is the aggregate of these funds a rounding error against the total required, there is little (if any) capital available to support multi-stakeholder initiatives at trillion-dollar scale.
And even if there was, there are no multi-stakeholder mechanisms that support this level of coordination.
The simple reality is that no mechanism can achieve truly global scale (banking, transport, communications, for instance) without standards. Eliminate the standards developed and maintained by The World Wide Web Consortium (W3C), for instance, and you can kiss the internet as we know it goodbye.
Standards are not sexy, or profitable, or directly impactful - you cannot touch them, stick them on a wall, or meet any of the dozens of flavours of metrics impact financiers will put upon you in order to develop them.
And yet, we contend that their absence relative to the innovations that are documented across an increasing number of private and public platforms is the principal reason why so many solvable problems remain unsolved, with little time, capital or capacity to address the currently unsolvable.
There are a number of standards we strongly believe need to be developed. Of particular note is a solution standard (for mobilising solutions across disparate networks and systems), and a deal standard (for accelerating capital placement into companies, projects and solutions). We are in the early stages of co-creating these standards with a number of aligned organisations that have recognised the necessity of this work, and will be writing more about this in an upcoming article.
Conclusion
There are a large variety of factors that influence why we have thus far been unable to coordinate our efforts at planetary scale, but the intent to do so is certainly not amongst them. The world over, systems entrepreneurs labour to make meaningful, large-scale systemic interventions, and yet they are often doing so using broken systems themselves.
At its core, the principle of innovation liquidity is seeking an answer to the question “how do we ladder up the hundreds of millions of individual efforts into a coherent force for immense, immediate and productive change?”
Our answer to this question is in the Innovation Exchange, a new standards-driven digital innovation library launching this summer. Building upon our experiences designing, building, launching, and scaling a number of these platforms over the past decade, the Innovation Exchange is a place to share, discover, remix and reuse solutions to the SDGs. Built upon a nascent solution standard, the Innovation Exchange is designed to incorporate solutions documented from other platforms to our own, increasing their visibility, making it faster and easier for practitioners to adopt and/or adapt these solutions to their particular context, and leveraging the time and effort made by other platform operators in curating solutions.
If you’re interested in joining the open-beta this summer, please get in touch. And if you have the motivation and mandate to engage in the decidedly unsexy work of informing, advising, nurturing, championing and co-creating standards to increase the speed and scale of resolving the SDG’s, please get in touch.
We look forward to hearing how you are approaching the issue of innovation liquidity.
Not to diminish the power of binding UN resolutions; UN resolution billed as a turning point in climate justice
Gratitude to Indy Johar who coined this expression in conversation with one of the authors a few years ago.
of note is that each of the italicised terms, including those in the additional footnotes below are also defined, leaving no room for ambiguity; precisely what a standard is supposed to do!
Note 1 to entry: Novelty and value are relative to, and determined by, the perception of the organisation (3.2.2) and relevant interested parties (3.2.4).
Note 2 to entry: An innovation can be a product, service, process (3.1.5), model, method, etc.
Note 3 to entry: Innovation is an outcome. The word “innovation” sometimes refers to activities or processes resulting in, or aiming for, innovation. When “innovation” is used in this sense, it should always be used with some form of qualifier, e.g. “innovation activities”
Good artlcle, especially in terms of its critique of capitalism solving the problems (that it is the biggest cause of). I also agree with the authors that the amount of finance for innovation is paltry compared to what is needed, or compared to the wasted money on consultants, reports and whatever else the Aid industry is up to. Similarly when I hear of yet another prize pool, challenge etc, I have to ask how much time will be taken from social innovators to produce yet another custom application, along with its requisite video, and is the total value extracted from the system in participating in the application process more than the value delivered by the prize, and will those prizes once again reward the person with the snazzyist video rather than the one most likely to solve a real problem at scale.
The authors make a valid criticism of ephemeral "platforms", when I hear of yet another platform being launched in the innovation / SDG space my usual response is to yawn, and pay it little attention, knowing - as you rightly point out - that is lifetime is likely to be short. But then it seems the author's solution is to propose a new platform? Unfortunately while I agree with the authors comments on the value of standards for exchanging information about solutions, the authors seem to make the classic approach of saying "we love standards, here's a new one", as a key contributor to several internet standards I can smile at how often I've seen that approach fail. If you want a standard, find two of the biggest players out there already and get them to agree on a common interchange format - if you can't do that, then your new standard is bound to fail.