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How to build an Innovation Ecosystem

Palladium's Director of Innovation and Technology, David McGinty, shares his experiences from the Human Development Innovation Fund.

You hear people talk a lot about Innovation and Innovation Ecosystems, but what do they really mean when they say they want to build an innovation ecosystem?
In building an innovation ecosystem, we could define it by being sceptical. So a sceptic told me recently that saying ecosystem is somewhat self-defining. Well that’s true and at often times I think that we have people sitting down at the same table using the words innovation ecosystem but meaning very different things. So I think there are some ways to group what we mean by ecosystem by looking at different objectives. So objective you could have around building the ecosystem is actually around innovation itself. So if you really care about innovation, about bubbling up of new ideas across a country, across the world, across a sector—you could look at things like Global Innovation Index. And within that where your priorities are going to be when you’re looking at a system: you’re going to look at strong institutions; you’re going to look at more economic type outputs; and knowledge outputs—so research and development, expenditures as well as patent registrations. You’re going to look at building up policy environments and frameworks that would enable innovation to flourish within a specific area. That’s one use of ecosystem when people are saying it.

Another is that people will often times talk about clusters or industries. So they’ll say they want to build an innovation ecosystem but what they really mean is they want to look at new and often times new business models around say textiles. So they’re saying how can we get new industries starting, registering, doing more value addition when in a specific cluster in a specific geography. In fact, there’s a book on my shelf here that title of it is “Innovation Systems and Clusters”. So it puts synonymous Innovation ecosystem and Industrial Clusters. And for that you would have a very different type of program or objective.

The other way you can think about it is other objectives you could have is you want to have a specific impact. So there was an Innovation programme in Rwanda funded by UKAID that focused specifically on improving early grade literacy. So there they have specific targets. Let’s say (I don’t know what their actual target was) but let’s say it was improve early grade literacy by 5%. Well, then you can really look at that specific thing and really look at who the actors are, see who the individuals are, the policy enabling environment, and really build a how system around improving early grade literacy. And that would mean something very different and that your approach would be very different. So I think the final way that people use innovation ecosystem is around a specific solution. So let’s say drones. So we would say, “What is the ecosystem surrounding a drone?”, and really there I think a lot of times they’re talking about value chains. So how do I take this known product or solution and scale it up? So there you’re going to look all the way from the ideation stage to scaling, the same way you would an agricultural value chain. Map it out, look at the enablers along the way, the policy environments, and whether you want to look at it as the diffusion of drones globally or the diffusion of drone technologies in a specific country or a region. And I think that’s when people say Innovation Ecosystem they should first say what their objective is and then you can have a real conversation around what you mean and what your intended approach is on.

So if you had to visualise it, what would an ecosystem look like?
There have been a lot of attempts to visualise innovation systems. So step one 'Google' it and you can see all sorts of different graphics and images. Let me tell you about a few that I have seen and what I like and don’t like about them and then my general approach.

One is often times you’ll see like an environmental cycle, people will call it environmental ecosystems, but really it’s the water cycle. So that’s the fun side of it. Do you know this image, you’ve got the mountain, you’ve got the rain that comes down and becomes groundwater and becomes run off and goes into the lake and evaporates and becomes a cloud and it rains again—right? So you have that cycle and that’s great because it shows relationships but I think that image fails. It's a cycle that doesn’t necessarily have direction. An ecosystem should really have an output—whether it’s an idea, an institution, or an impact like we were talking about before. It also somewhat assumes the water cycle is naturally occurring and an innovation ecosystem is not. It has to be the intentional and unintentional factors that come together to create this thing and it has this forward momentum.

Another graphic that people will use is imagine if you have spinning plates which is great because you have a lot of different solutions and problems. You’ve got the stick and somebody has to create the momentum. We know that we need youth and we know that entrepreneurs and policies that we can do that and with intention we can spin the plate. And then we know that we have to maintain the plate. So we got to go back otherwise they all fall down and then it becomes chaotic and you’re running around spinning all these plates. I like that part of the analogy. But what it doesn’t show is the interconnectedness.

Another image people will use is a basket of eels—big, slimy, stinky eels in a basket. Because that represents well in an ecosystem how you put the actors together and without intention they slither and mix around. Maybe someone who was an entrepreneur and a researcher connect in unknown and different ways. And I think that’s great but a basket of eels also has no momentum and it doesn’t have an output.

So what I like to use is a vortex. An idea of a vortex, if you imagine a big vortex funnel, is that it’s got momentum that’s forward because it’s sucking things in and pushing them out. And that’s your actual objective. So let’s say that’s scaling drone technologies. But you’ve got inputs and maybe those inputs are going to have to be bright, young minds and at each stage through that vortex it gets more narrow. Maybe you need inspiration at the beginning, an ideation, education and capacity building, you need to convene people together, cluster them and link them up, then they need to form groups and register their institutions and finally you’re getting towards the end the actual instant the organization is coming around an idea that they can build and improve on to scale. Even after the output that’s where you’re scaling the idea.

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