A Transformations and Systems Approach to Innovation
Unlocking change in complex adaptive systems requires a shift in the paradigms that sit at the core of our innovation models.
At the EIT Climate Knowledge and Innovation Community (EIT Climate-KIC), where I work, we understand this from first-hand experience. For the first nine years of our organization’s existence, we have tried to address climate change with a heavy emphasis on supply-driven innovation: engaging research and entrepreneurship to develop new climate-positive technologies and products based on a belief that commercial success would produce climate impact. We operationalized this approach through competitive funding calls, using performance indicators weighted toward the creation of new ideas and businesses. The result was a potpourri of solutions in search of markets, customers, and investment.
Through this practice, we have realized that the gravitational force that emerges in such a supply-driven system leads to a techno-centric innovation pipeline characterized by incremental improvements of single-point solutions — and thus rarely to systemic solutions that promise to achieve transformational change.
Indeed, we were not alone in putting our hopes in the creation of the next big thing. Ever since climate change entered the world’s political stage in the 1970s, the world has treated it as a complicated problem. As a consequence, efforts to stem global warming have mostly focused on developing technical solutions through research and engineering. Just consider how, up until about 2015, the word “cleantech” had been used almost synonymously with the idea of sustainable innovation.
This techno-centric approach has produced many important building blocks of a sustainable future such as renewable energy technologies, advanced batteries, and biofuel production processes. Yet in 2019, climate change is no longer a problem of technology development but of technology diffusion.
Incremental improvements in solar cell efficiency and electric vehicle charging speeds will be welcome, but they will not unlock change at the scale and pace we need. Nor will breakthrough technologies like synthetic fuels and green cement or technologically mature solutions like heat pumps and carbon-neutral polymers reach any meaningful scale based on their current techno-economic merits alone. If we are to unlock the rapid and unprecedented transformations that the IPCC is calling for, we need to shift the paradigm from single-point solutions to directional systems innovation.
At EIT Climate-KIC, we define systems innovation as integrated and coordinated interventions in economic, political, technological and social systems and along whole value chains. This definition implies that we see innovation as not just limited to technological improvements. Instead, we seek to engage all levers of change: policy and regulatory frameworks, financing models, social norms and behaviors, skills and capabilities, citizen participation models, identities and narratives of individuals and collectives, business models, and production and consumption paradigms.
This definition also entails that we intervene in different social domains (e.g. cities, companies, professions), on different governance levels (municipal, regional, national, and supranational), and within different sectors of the economy (e.g. industry, energy, land-use, finance) as well within transversal regimes (e.g. capital markets, education systems, institutions).
We understand that most systems we need to transform behave in complex adaptive ways. This means that there are no right solutions and that deterministic intervention strategies are bound to fail. Instead, we believe that the best way to shift or ‘kick’ these systems is through exploration and experimentation. This is the quintessential learning by doing; testing ourselves forward through real-world experience so that we can ”learn the future into being”.
Our Building Blocks
Our approach to directional systems innovation rests on three major building blocks:
Our starting point is shaping and harnessing the power of the demand side of innovation. Working with governments, corporations, and other challenge owners that share our ambition for transformative action will help to pull through the connected, system-wide solutions we need.
We orchestrate the development and deployment of these interventions in portfolios. Portfolios are collections of deliberately chosen innovation experiments designed with — and delivered through — our community. These experiments — which represent the supply side of innovation — come in the form of diverse and coordinated innovation projects, education programs, start-ups, ecosystem building activities, citizen engagement strategies, and communication initiatives. They focus on different parts of the same problem, on different opportunities to lever change. In sourcing and shaping them, we often venture beyond the mainstream, to the edge of technological progress and social experimentation. A portfolio-based innovation shifts from individual interventions to the aggregate level of the portfolio. By deliberately choosing and connecting our experiments, we endow our whole portfolio of work with multi-dimensionality and fractality.
No single organization can address humanity’s gravest challenges alone. That’s why we work with close to 400 innovation partners from the private, public, and academic sectors. These partners operate as a diverse community that understands the specific needs and resources of different places and contexts. They bring their own expertise and experience to the systems in which we intervene, in service of our common cause: building collective intelligence.
Dominic Hofstetter is Director- Capital & Investment and Member of the Group Executive Board of Climate KIC. This blog is excerpted from a post on Medium published July 26, 2019 with the title “Innovating in Complexity (Part II): From Single-Point Solutions to Directional Systems Innovation”.