Chief Executive of Nesta on the Future of Government Innovation

by Rahim Kanani | rahimkanani | Rahim Kanani Media Group, Inc
Friday, 25 July 2014 17:44 GMT

Mayor Bloomberg launching the Cities of Service model in Europe / Photo Credit: Nesta

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Our aspiration is to become a global center of expertise on all kinds of innovation, from how to back creative business start-ups and how to shape innovations tools such as challenge prizes, to helping governments act as catalysts for new solutions,” explained Geoff Mulgan, chief executive of Nesta, the UK’s innovation foundation. In an interview with Mulgan, we discussed their new report, published in partnership with Bloomberg Philanthropies, which highlights 20 of the world’s top innovation teams in government. Mulgan and I also discussed the founding and evolution of Nesta over the past few years, and leadership lessons from his time inside and outside government.

Rahim Kanani: When we talk about 'innovations in government', isn't that an oxymoron?

Geoff Mulgan: Governments have always innovated. The Internet and World Wide Web both originated in public organizations, and governments are constantly developing new ideas, from public health systems to carbon trading schemes, online tax filing to high speed rail networks.  But they’re much less systematic at innovation than the best in business and science.  There are very few job roles, especially at senior levels, few budgets, and few teams or units.  So although there are plenty of creative individuals in the public sector, they succeed despite, not because of the systems around them. Risk-taking is punished not rewarded.   Over the last century, by contrast, the best businesses have learned how to run R&D departments, product development teams, open innovation processes and reasonably sophisticated ways of tracking investments and returns. 

Kanani: This new report, published in partnership with Bloomberg Philanthropies, highlights 20 of the world’s most effective innovation teams in government working to address a range of issues, from reducing murder rates to promoting economic growth. Before I get to the results, how did this project come about, and why is it so important?

Mulgan: If you fail to generate new ideas, test them and scale the ones that work, it’s inevitable that productivity will stagnate and governments will fail to keep up with public expectations, particularly when waves of new technology—from smart phones and the cloud to big data—are opening up dramatic new possibilities.  Mayor Bloomberg has been a leading advocate for innovation in the public sector, and in New York he showed the virtues of energetic experiment, combined with rigorous measurement of results.  In the UK, organizations like Nesta have approached innovation in a very similar way, so it seemed timely to collaborate on a study of the state of the field, particularly since we were regularly being approached by governments wanting to set up new teams and asking for guidance.

Kanani: Where are some of the most effective innovation teams working on these issues, and how did you find them?

Mulgan: In our own work at Nesta, we’ve regularly sought out the best innovation teams that we could learn from and this study made it possible to do that more systematically, focusing in particular on the teams within national and city governments.  They vary greatly, but all the best ones are achieving impact with relatively slim resources.  Some are based in central governments, like Mindlab in Denmark, which has pioneered the use of design methods to reshape government services, from small business licensing to welfare.  SITRA in Finland has been going for decades as a public technology agency, and more recently has switched its attention to innovation in public services. For example, providing mobile tools to help patients manage their own healthcare.   In the city of Seoul, the Mayor set up an innovation team to accelerate the adoption of ‘sharing’ tools, so that people could share things like cars, freeing money for other things.  In south Australia the government set up an innovation agency that has been pioneering radical ways of helping troubled families, mobilizing families to help other families.

Kanani: What surprised you the most about the outcomes of this research? 

Mulgan: Perhaps the biggest surprise has been the speed with which this idea is spreading.  Since we started the research, we’ve come across new teams being created in dozens of countries, from Canada and New Zealand to Cambodia and Chile.  China has set up a mobile technology lab for city governments.  Mexico City and many others have set up labs focused on creative uses of open data.  A batch of cities across the US supported by Bloomberg Philanthropy—from Memphis and New Orleans to Boston and Philadelphia—are now showing impressive results and persuading others to copy them.

Kanani: What other programs or initiatives is Nesta involved in, and how are you deciding what to focus your efforts on?

Mulgan: We link investment in early stage businesses, research and practical programmes, for example, in fields such as digital education or the arts.  Some of the most exciting fields are ones that cut across business, government and civil society—like healthcare, or the growing sharing economy—where traditional innovation models don’t work well.   Rewiring the links between hospitals, municipalities and the public to reduce unnecessary hospital admissions is a good example.  With better prevention and everyday care, it’s possible to save huge amounts of money from the hospital system, and improve the lives of vulnerable older people who may be suffering from long-term physical conditions as well as ones like dementia.  But this requires completely different ways of working, much more sharing of information and data,  as well as much more engagement from the public.  

Another example is the recent Longitude Prize.  This year we revived a 300 year old prize, which had found a way of measuring longitude at sea, paving the way for globalisation. But we also modernized it: working with the BBC to give the public a chance to debate the relative virtues of 6 different challenges, which ranged from water desalination to paralysis.  Millions of people took part in the debate, and we will soon launch a £10m prize for the public’s choice, which was a solution to antimicrobial resistance. 

Kanani: As chief executive, what was your vision when you joined Nesta back in June 2011, and how has that vision evolved since?

Mulgan: Nesta was set up as part of the UK public sector.  Government was persuaded to spin us off as an independent charity, but with our endowment intact.  That’s given us much more freedom to experiment and to grow.  We still work with governments at all levels, but we also bring in external funds, which has helped us double in size.   We now work globally as well as in the UK, with work underway now in many countries, from China and Malaysia to the US and India.  Our aspiration is to become a global center of expertise on all kinds of innovation, from how to back creative business start-ups and how to shape innovations tools such as challenge prizes, to helping governments act as catalysts for new solutions.  To do that we’ve also emphasized being a good partner, and most of our work involves close partnership with others, who range from the UN and Bloomberg, to Rockefeller Foundation and the European Commission. 

My most recent book, The Locust and the Bee, talked of the economy as a battleground between the bees and the locusts, the creatives and the predators.  One of the causes of the crash of 2007/8 was that the predators became far too powerful, and were sucking value out of the real economy.  I see our role as being to empower the creative bees wherever they are, whether they’re starting up a new company or trying to push through a useful innovation in government. 

Kanani: Looking back at your many leadership positions over the years, inside and outside government, what were some of the most important leadership lessons you learned along the way?

Mulgan: When I worked in government, I had too much faith in the power of clever top down solutions, beautifully drafted strategies from civil servants and management consultants that appeared able to solve any problem. But I learned that the best ideas have to be grown from the bottom up, tested and improved in the hard graft of practice, and with government opened up to the best minds everywhere. 

Tapping the collective intelligence of innovators and entrepreneurs is going to be increasingly important.   That will require new styles of leadership as well as new tools. It means working more often to mobilize and not just to manage, cooperation as well as command.  There was a time when many lost faith in government. At the end of the 20th century, it became fashionable to see business and markets as the answer to everything.  We’ve now moved on. It’s vital to have laws and regulations that give the greatest space for entrepreneurship. But there are many things only government can do, and much of our true wealth rests on common goods—like knowledge or clean air—not just on the things we can buy.

I’d like to think that we’re now moving into an era when public leaders can be more confident and less apologetic.  Ronald Reagan once quipped that the most frightening words in the English language are: ‘I’m from the government and I’m here to help’.  But if public leaders remain trapped in that kind of fatalism, we’ll have little chance of dealing with the really big issues, like ageing and climate change, inequality and mental health, and the next few decades could be pretty grim. 

From 2004-2011 Geoff Mulgan was the first Chief Executive of the Young Foundation, which became a leading center for social innovation, combining research, creation of new ventures and practical projects. Between 1997 and 2004 Geoff had various roles in the UK government including director of the Government's Strategy Unit and head of policy in the Prime Minister's office. Before that he was the founder and director of the think-tank Demos. He has also been Chief Adviser to Gordon Brown MP; a lecturer in telecommunications; an investment executive; and a reporter on BBC TV and radio.