By Benjamin Kumpf, Head of OECD Innovation for Development Facility, Leila Mucarsel, Doctoral Researcher and Lecturer in Transformative Innovation Policy at Universidad Nacional de Cuyo (Argentina) and Avilia Zavarella, Junior Innovation Specialist at OECD Innovation for Development Facility
In the face of the climate emergency, around 140 countries, which emit close to 90% of the global greenhouse gas emissions, are planning to reduce their emissions to as close to zero as possible (known as net zero) in the upcoming decades. Around a third of these are low and middle-income countries (LMICs),the countries most affected by climate change. So how can countries in the Global South achieve a socially-just transition? One key element is innovation, and potentially mission-oriented innovation.
Missions are measurable, ambitious and time-bound targets. One example is the mission for at least 100 cities across the European Union, supported by the EU Commission, to become climate-neutral. Across OECD member states, mission-oriented innovation (MOI) is becoming increasingly popular, and a growing number of countries are experimenting with MOI to reach net zero targets. An MOI approach is a co-ordinated package of policy and regulatory measures specifically tailored to mobilise diverse forms of innovation. These can be technological, social, or regulatory to help make progress against a measurable objective, such as a carbon-neutral economy.
Under a MOI approach, the public sector has a key role in advancing innovation and shaping markets. In its first report Net Zero+, the OECD’s Horizontal Project on Climate and Economic Resilience highlights that “governments will need to do more than just redirect their science, technology and innovation (STI) policies, shifting instead towards a mission-oriented approach to both technology development and deployment to ensure efforts are streamlined across policy areas.” To achieve this cross-sectoral herculean task, governments need to design well-functioning and adaptive governance mechanisms across ministries and sectors . OECD research on the early stages of MOI implementation suggests a current lack of sufficient reach across ministries, as most net zero missions are led by bodies responsible for STI without a sufficiently strong mandate and lacking longer-term financing mechanisms.
In 2021, the OECD set up the Mission Action Lab (MAL), with the aim to gather evidence and advise public sector organisations in defining, establishing and governing missions. One objective of the Lab is to inform MOI approaches in the Global South with insights from mission implementation across OECD Member States and to convene exchanges between mission owners across continents.
Among the preliminary findings of our work is that MOI remains largely unexplored and untested in low and middle-income countries. Several initiatives in the Global South, while not explicitly designed with an MOI approach, feature important dimensions of the same. We call these initiatives ‘proto-missions’, and examples of them include the Government of India’s Jal Jeevan Mission (JJM) and the Family Planning 2030 Mission in Nepal. In both these cases, we observe considerable progress towards mission-goals, mainly due to strong political support, as well as government entities actively seeking, testing and scaling novel solutions. But we also see a need to test and deploy longer-term, flexible financing mechanisms and establish governance processes that break up institutional inertia.
As we witness an increased interest for MOI in donor and LMIC governments alike, we set out to inform future work and investments with the best available evidence. Based on the assumption that simply copying policy and programming formulas from the Global North – the reference point of the vast majority of academic literature on MOI – is deemed to fail, we provide some pointers for governments interested in experimenting with MOI to advance net zero transitions that are socially just. These build on work of the Institute of Innovation for Public Purpose and are derived from our research thus far:
- Align mission formulation with development trajectories. A mission on green transition can work as a trigger for smarter use of natural resources.For instance, the Latin America’s Economic and Social Commission proposes that governments could set specific conditionalities for companies exploiting resources such as lithium to ensure that rents are reinvested in innovative activities, promoting economic diversification while pursuing environmental and social benefits, particularly for marginalised and impoverished communities. Barbados’s current proto-mission towards sustainable tourism, and the recent proposal for a green shift in South Africa’s energy megaprojects are other examples of this approach.
- Assess mission-readiness and invest in strengthening local innovation ecosystems. While UNCTAD’s ‘Technology and Innovation Report 2023’ outlines opportunities for LMICs in the field of green innovation, it also highlights that most countries in the Global South lack the capabilities needed to leverage emerging technologies. Out of the 2.9 billion people who are still offline, most live in LMICs , and either do not have internet coverage or face barriers to use. National governments and development funders should therefore increasingly invest in strengthening STI systems and equitable access to digital opportunities, as well as support infrastructure to enable the local production of context-fit technologies. Development funders can support LMIC government partners with testing instruments such as innovation clusters and system demonstrator projects. Examples include the UK Foreign, Commonwealth and Development Office-supported Research and Innovation Systems for Africa (RISA) Fund and Ireland’s and Germany’s support to strengthen climate-innovation clusters in several African countries in collaboration with EIT Climate KIC.
- Support adaptive governance mechanisms: any net zero transition requires capable institutions to steer the implementation and continuous monitoring of the multiple innovation portfolios and policy-mixes. These practices are still emerging and further research is needed on how mission portfolio management can fulfil its core functions including monitoring, evaluation and learning; co-ordination and sensemaking across departments and organisations; and stewardship. For example, proto-missions in Latin America shared a range of challenges regarding monitoring and evaluation mechanisms that enable adaptive policy-making and implementation. The coordination and implementation challenges in LMICs are arguably more complex compared to OECD countries, as sub-systems comprised of bilateral and multilateral development actors, philanthropic, local and international non-governmental organisations, exist. These come with long histories of coordination mechanisms and challenges. Our analysis of proto-missions in India, Nepal, and Tanzania shows that existing governance mechanisms do not adequately involve private sector actors and engagement from STI institutions. In addition, for any just net zero transition, the inclusion of civil society organisations and marginalised groups is crucial. The use of practical tools such as outcome-oriented budgets as well as new metrics to assess distributional effects will be particularly relevant for ensuring their inclusion. For instance, Argentina’s gender sensitive budgeting and programming has proved to be a powerful tool by putting care at the center of the economic debate. Brazil’s public health policy is another example of a state-led proto-mission approach that successfully mobilised a range of public and private actors to develop and scale health innovations that benefitted people across socio-economic statuses.
Mission-oriented innovation challenges the idea that ‘efficient green markets’ can be successful with a limited role of the public sector. Such market-led approaches are unlikely to effectively redirect financing from polluting sectors towards job creation in clean energy and other sectors. MOI approaches also challenge the current focus on single-point technological solutions in response to the climate crisis.
But MOI has to be further tested and adapted across country contexts. We are not promoting them as the one and only instrument to advance net zero transitions and other transformations. Rather, we aim to understand when and how they are useful, and when not.
If you work on mission-oriented innovation in the Global South or within a development organisation, get in touch: indef@oecd.org