Building institutions that supports knowledge flows to industry

It sounds like a cliche to state that manufacturing has changed a lot in the last 30 years. Yet people often say this without thinking of how it has changed. It is not just about the size of our manufacturers, or the increased competition from Asia or elsewhere. It is also not about the sophisticated equipment and the tremendous range of products that are now available to consumers. An important aspect of manufacturing change is the dependence on knowledge from internal and external experts, or Knowledge Intensive Business Services (KIBS). These knowledge experts include engineers, product developers, process experts, industry experts or logistical experts. While in a country like Germany, there are many public, academic and private specialists to go around and assist manufacturers to tweak their processes or solve specific problems, in developing countries we have a bigger challenge. Knowledge intensive services are prone to several market failures, and therefore it is important that we consider the role, importance and challenges that these knowledge services have.

Let me just state upfront that despite my PhD research focusing on the importance of knowledge services in the manufacturing sector, I am hesitant to treat the “knowledge economy” as something separate as it is often done in the South. The increasing importance of many different kinds of knowledge throughout the economy is pervasive. Just ask a commercial farmer in Africa how they have had to change their farming practices in the last 3 decades. It is almost unthinkable that 30 years ago a person could start commercial farming without a tertiary education or at least one highly experienced supervisor. The same goes for manufacturing.

There is a big difference between generic Business Development Services (BDS) and Knowledge Intensive Services. While with BDS our problem is to get good all-rounders to provide services to enterprises where it is very hard to determine the real value of the service offering, in Knowledge Intensive Services the service is very specific to a certain (technical) problem, it is deep knowledge and the value (and cost) is usually very clear. Firms that know what they are doing need knowledge intensive service providers to fill in the gaps where deep knowledge is needed, a BDS provider is typically out of their depth with a manufacturing enterprise that are trying to be competitive.

  • The first challenge we have with intensive or specific knowledge is scale. When just a few manufacturers use more advanced equipment in a country there is a good chance that few service providers, experts or technicians will be available. In market failure terms, this is called an indivisibility (you cant divide the cost of the expert easily between different enterprises, or just take a small piece of the expert). It could also be about scale (not enough business to justify the emergence of a specialized service provider). It is often difficult for manufacturers to coordinate their use of expert service providers, or to coordinate the procurement of similar equipment that makes the development of a pool of service providers possible. This is called a coordination failure and it is pervasive in our developing economies.
  • A second challenge is that many manufacturers are hesitant to search outside their firm. This is often due to costs (which includes the time spent to find the right expert), but also because for so long manufacturers had everything they needed in-house. In South Africa, many of our older firms are hesitant to use “consultants” because they don’t trust them. This could be described as a market failure around asymmetrical information or adverse selection.

One way to increase the availability of knowledge intensive service provision in a developing country is through the connection between academic institutions, public funded industry support programmes and industries themselves. This requires that technical or knowledge experts are able to be released from certain teaching or research duties to work with firms. This is often very difficult due to the high student load in many of our African universities. I am often astounded by the world class research capacity and expertise that are hidden inside universities that are desperately needed in industry. This failure has many names, but in market failure terms it is called a public goods failure, in other words, public funds are not used to overcome persistent market failures in industry.

A second and parallel strategy should be to make sure that the Meso level organizations (which include universities and higher education institutions) are concentrating on overcoming the market failures in industries and in firms. In developing countries these Meso organizations, meant to address specific performance issues at firm or industry level, are more focused on securing and spending national (or international) funding than to become valuable and responsive to the needs of industry. To get the Meso organizations focused on the plight of firms requires an industrial and modernization policy that is focused on building the right economic and industry supporting institutions – this cannot be done just by merely implementing projects or programmes – it must be systemic. With right I mean relevant and equipped with high level experts that understand and can relate to the issues in industry.

This phenomena of the disconnect between public knowledge services and the need of industry is more widespread than you would think in our developing countries. It is a public good failure that undermines the well being of our economies. I believe this is also an ideological failure, because governments tries to use their funds to provide incentives or prioritize certain kinds of behavior both in the public sector and in the private sector. Instead of responding to what is emerging or what is needed in the private sector, the public sector tries to prioritize what it believes to be ideal. The result is that the firms that are most able to create jobs and wealth are left without public support.

In Mesopartner we will be working on consolidating our experience in bottom up industrial policy. We will work closely with research organizations and development partners around the world to strengthen and develop a body of knowledge on how some of these issues can be addressed in the developing world. We do this by developing a theme where instruments, concepts, theories and practice can be integrated. If you are interested in participating in this process, or have experience to share, please give us a shout.

I have previously written about this some years ago in the post about the service sector  and about the increased importance of knowledge intensity here.

Linking – Posts on innovation and science

Somewhere in December I started to rest and neglected reading some of my favorite blog sites. I have now caught up and here are some important posts that I would like to share with my readers.

One of my favorite authors on innovation, Tim Kastelle, made the following posts:

  • Innovation: Are you a gardener or an architect? You can guess that architects plan their innovations, while gardeners are sensitive to what emerges from their environment. When we deal with economic development, we have too many architects and too few gardeners.
  • Failure is ALWAYS an option. This post is also relevant for practitioners working in economic development. We must use our resources to assist our counterparts to experiment. Their resources are often to scarce or expensive for them to experiment with things that might just fail!

One of my other favorite authors, Duncan Green, posted an excellent summary of research on what White House Policy Makers want from Researchers? This is an important question for practitioners working on promoting science to industry and to government. He provides some interesting comments on the original research that is available from his blog article.

In future I will post articles on systemic thinking and complexity on the Systemic Insight Blog that I co-author with Marcus Jenal

Innovation happens in a systemic context

I am preparing to conduct a 2 day training on diagnosing innovation systems. The participants will be mainly from universities, but there will be also some senior government officials responsible for promoting industrialization and R & D.

I already know what some practitioners will ask me. They will ask “why bother with an abstract concept like an innovation system if we can directly help enterprises to innovate?”

This is not a trivial question. Practitioners from universities that assist enterprises to develop new products, solve problems, conduct research or improve processes have direct evidence that their services are contributing to better results, new products, new markets; in other words, they are directly facilitating innovation.

However, helping one firm at a time is costly, and takes up time. While this kind of 1-on-1 support is necessary, it is not sufficient. Innovation is only to a small extent the result of isolated actions by producers and their technological intermediaries that support them. We need to recognize that there are many other facts that makes it more likely that whole industries, countries or regions will be competitive because they are innovative.

For industries, countries and regions to innovate, a more systemic approach is needed. It must be recognized that innovation rests on:

1. The interaction between companies, which include interaction with:

  • input suppliers,
  • equipment manufacturers,
  • competitors,
  • joint ventures,
  • alliances; and
  • demanding and sophisticated customers

2. The interaction between companies and their supporting institutions:

  • Education institution and training providers that are not only responsive, but creating the skills needed for tomorrow
  • technology extension that reduces the cost of experimentation and that overcomes high costs,
  • knowledge intensive business services and technical consulting services that adds value
  • Research and Development institutions and specialists that are accessible,

3. The framework conditions that determine:

  • the incentive to innovate (which is often related to the pressure by others to compete and try harder)
  • the direction of technical change
  • the overall market conditions domestically

4. The ability to leverage unique regional demand or sophisticated demand to create innovation eco systems

In Africa, we have to focus on using the unique regional demands placed on our industries, our products and our innovation systems. We have to use these unique demands to create supporting institutions, creative firms and specific products that responds to these needs. Because our domestic volumes are often low, we have to focus on making sure that we can better integrate different disciplines, technologies and knowledge bases. This will require much more than innovative products and innovative processes, but will demand that we also create innovative business models.

Conclusion

We have many examples of entrepreneurs who have (despite some very demanding local conditions) managed to create innovative products and processes that have been successful globally. The question we are trying to ask with an innovation systems approach is “how do we increase the chances of our innovators to be successful by creating a dynamic system around the entrepreneurs?”. We recognize that a creative entrepreneur or technologist is not enough to create a new momentum. The whole system around these entrepreneurs need to be dynamic and innovative in itself.

When we get institutions, experts and policies around entrepreneurs to be more innovative, we will immediately see results at the levels of firms, industries and regions.

Moving from generic to specific and then onto systemic

When working with development organizations in the mesolevel we often find that their programmes are very generic. The same can be said of the findings of many diagnosis. The result is that firms do not really use the services of these organizations, because the value add and the impact of the services are not really clear.

For me there should always be a movement from the generic (e.g. the foundry sector is not competitive) towards the specific (e.g. the foundry industry is not competitive because it lacks capacity to do good front end engineering and design). After we have developed a sense of some specific issues that are affecting the performance of firms, there are two things we have to do.

Firstly, we want to try and figure out if there is something that we can do at a more systemic level to try and influence the specific issues. With systemic I mean that instead of addressing a particular issue repeatedly at various firms, see if there are other ways to achieve the same outcome. An example would be instead of only offering a design service to firms, make sure that the university curricula includes sufficient content dealing with design. Of course, we should always strive to have multiple interventions to address a particular issue.

Secondly, we should verify whether our specific findings are unique to the firms we have diagnosed or engaged with. For instance, and food initiative run by a university might find that the private sector is affected by a lack of a particular kind of testing lab. Then instead of designing a solution just for a limited number of producers, the university should check whether similar firms in other industries (related and not even related) are facing the same constraints. It may just be possible to design a solution that is useful to a much broader target group, making the solution more sustainable and more relevant to the private sector.

From my experience of working within many different value chains is that there are many issues that are treated as being unique (or specific) to a particular value chain that are in fact affecting many different kinds of enterprises. The South African Industrial Policy framework for instance is designed around many different sub-sectors, with many different interventions implemented by different organizations and programmes that are actually not unique to a particular sub-sector. This is expensive and also not really systemic, these interventions are not permanently changing the meso level in South Africa or the service offerings of meso organizations such as universities and other development programmes. The South African manufacturing sector is struggling with low volume, outdated designs and rapidly increasing costs across the board. I imagine that it should be possible to based on the insights from the different sub sectors to design much better programmes that are cross cutting over many different sub sectors, and that from the start are designed to improve the service offerings from meso organizations to firms.

Best case examples and benchmarking have something in common – neither is good practice

Every time I conduct training on value chain diagnosis, innovation system promotion, or Local Economic Development, I get asked the to explain important principles or ideas with examples. The question usually posed is “can you give us more examples?”. Or even worse, “this is too much theory, please give us a clue how we can use this information in practice. Give us the best practice”. The hope is that there is a magic formula, silver bullet, case study or a high standard (benchmark) that can be followed that will guarantee us some success without risking too much. Within Mesopartner, we have agreed as trainers to be very selective with our case examples, as they typically narrow down the options our trainees should go an investigate themselves. We promote that people conduct a diagnosis or analysis of their environment, and then develop some strategic options, assess their options – and then make a decision and start with their action. If they made the wrong decision, then they should detect this as soon as possible in order to make corrective action. There are no shortcuts!

The same logic goes for benchmarking. Tim Kastelle recently published an excellent blog post on benchmarking and the myth that knowing how we compare with others will allow us to improve our own performance. This post is a must read. I love the title “You can’t benchmark your way to greatness“. From a complexity perspective I must add that the context wherein you have to define your own strategy is unique, and therefore we know that blueprints from elsewhere cannot work. Somehow everybody knows this, yet everyone wants to hear how others dealt with their situation. This is a circular logic that just doesn’t make sense.

But I must add that in the early days of benchmarking there was a more explicit understanding that you benchmarked yourself with companies that were completely different from your own. So automotive manufacturers benchmarked certain processes (like procurement of components) with photocopier companies. This was then an opportunity to learn and benefit from the different contexts that the respective firms were in. The idea was not to copy the process, but to learn how others used unique factors in their environment to address a specific issue. This is still the important for innovation, as learning from other contexts can provide important ideas on how to try something different. Nowadays, customers asks me to assist with benchmarking because they want to know what similar entities are doing better in order to replicate or copy the processes themselves. The main assumption is that if we do the same things as them then we will get similar results.

So coming back to examples. In my training I like to tell stories of examples, but I try to avoid describing “the method” too much. I rather try to explain the logic, the key principles, or the choices the decision makers in “the example” had to make based on their assessment of their options. I do believe we can learn from other contexts, but I believe the real value is sometimes to recognize that “the example” had figured out what choices they had to make. This is often what my learners are hoping to avoid. It is instinctive to copy the decisions the “best case examples” have made, and not to copy the fact that the example DEVELOPED OPTIONS AND MADE A DECISION, or sometimes they skipped the options part and they just took some specific action (innovation by accident).

To connect this back to benchmarking. The problem with benchmarking with competitors or other locations, is that their current performance is in fact informed by strategic decisions made some time ago. So if we chase the numbers in a benchmark, we are essentially chasing shadows, the competitor is already today making decisions that will result in performance indicators and processes that we will have to chase in 3 years when we catch up with their current numbers (which by then is old news for them). By then, the competitor have already adapted to their new context, while we are still struggling to fully integrate this new learning into our activities.

In conclusion, benchmarking and best case examples (or good practice as it is often softened down to) are not good practice in development. We cannot copy the blueprint, the practice or the approach of someone else. Firstly, context matters. As complexity in developing countries increase, so the importance of basing decisions on the local context increases. Secondly, the thinking behind the options and the decisions made matters even more than the outcome or the visible practice that can be identified during benchmarking or in a case example.

Linking: 5 Differences between complexity & systems thinking

If you are interested in complexity and systems then you have to look at this great post by Sonja Blignaut – 5 Differences between complexity & systems thinking.

Business model innovation in manufacturers in developing countries

The topic of Business model innovation is receiving increasing attention as a solution to surviving in turbulent economic times. The discussion on business model innovation to me seems to be driven by finding ways to respond to opportunities, unmet needs, creating new markets or thinking up novel ways of doing business. Many articles on business model innovation contains phrases like “responding to change”, “rapid” and “creating opportunities”. From my experience of engaging with many typical manufacturers in developing countries they don’t identify with this literature. It seems like many firms are able to absorb external changes, partly by ignoring them or simply by being to paralyzed to change. I think in some instances this is also their saving grace in the short term, although in the long term it might erode the competitiveness and dare I use the word “resilience” of the firm.

From my weekly engagements with business, it seems like we need to get our industries in developing countries to better respond to semi-permanent or emerging long term framework conditions. It reminds me of the story of the frog in the pot of water on the stove; because the heat (negative framework conditions) is increasing slowly most firms do not realize the pending disaster of not making these external forces part of core business strategy. I think it is called conditioning.
What many of the manufacturers that I am engaged with are struggling with is finding ways of responding to some of the obstacles, irritations or constraints in their environment that seems to become established or permanent features over time. In South Africa, many manufacturers are waiting, hoping, or lobbying for electricity prices to come down, for labour to become more reasonable, for government to curb the influx of more competitive imports, for inputs to become cheaper, for government investment grants to increase, etc. At the same time, the average size of orders are going down as other countries are able to manufacture the same quality at a much lower landed cost.
From visiting more than 50 manufacturers in traditional manufacturing sectors like valve, pump and industrial equipment this year I can see that those manufacturers that take these external factors as drivers for change or key considerations in their strategy are thriving. While the rest of manufacturers seems to be making mainly small incremental adjustments, hoping that something in the external environment would change returning them to their previous levels of competitiveness. The problem is that too few firms have the will to respond to some of the slow moving changes in their environment. Those firms that do change their business models to adjust to the prevailing circumstances are doing well despite still being in the same country as those firms that are simply trying to cope.
So what I would like to see is a dialogue on how to use business model innovation to deal with these semi-permanent constraints in the external economic environment as drivers for innovation within firms. To me it seems that many manufacturers do not feel driven by opportunity anymore, especially when they perceive the prevailing economic and political conditions to be negative or anti business.
In the field of promoting innovation systems we have hardly come up with systemic models on how to induce widespread change in how business models are designed, created, changed or even shelved. At the moment the topic still seems to driven by dialogue in business schools, or by advocates of social responsibility.

Update from the field

I wondered if I should name this post “from the airport lounge” but then I realized that I still travel much less than my business partners and some friends.

Seeing that so many of you ask me where I am I thought I will give a quick update.

Since my previoSplit Team Smallus post I have traveled to Split in Croatia to conduct an LED training for a group of local government officials from Bosnia. This was a great event because I had the opportunity to conduct the training with my business partners Frank Waeltring and Christian Schoen. This event was arranged for and funded by GIZ Bosnia and took place during the first week of September.

During this event it again struck me how no matter where we work with Local Economic Development, the main principles and challenges remain the same. The people, the language and also the priorities might be different, but the issues that we are always confronted by is a breakdown in trust between business and local government, fragmentation and confusion between local and national stakeholders, and the tension between bottom up and top down priorities and intervention means.

 

 

Immediately after Croatia I traveled to India to assist GIZ India to assist with designing a Private Sector Development Programme. The mission included capacity building of local experts, consultants and policy makers on innovation systems and how this perspective can be used to strengthen cluster, value chain and regional development programmes. I traveled with the GIZ team to Bangalore and Aurangabad to assess the readiness of different clusters to benefit from an innovation systems perspective.

In Delhi, my hotel room overlooked the famous Jantra Mantar astronomy instrument. It is anJantra Mantra heritage site that dates from 1724 that was one of the great astronomy observation posts of the time. I spent a whole Saturday morning looking at the details of this site. I also spent half a day on the Hop on Hop Off Bus in India.

I am looking forward to traveling back to India shortly for an extension on this assignment.

Thinking out loud: Is aid systematically unsystemic?

Originally published on 26 August 2013, edited and republished on 23 July 2019

I am taking a risk with this post, but I am sure my regular readers will bear with me as I think out loud. I have been fortunate in the past few months to have been able to focus my praxis almost completely on the topic of complexity and systems thinking in development, with a particular emphasis on innovation systems and the technological evolution of industries and regions. Shifting from advocating for a different approach to actually assisting with the shift has been a really exciting venture.

Disclaimer: These are my own opinions and do not reflect Mesopartner’s views. 

Systems and complexity thinking is now central to Mesopartner’s,  work (see our Systemic-Insight theme page). Not surprisingly, my main customers for working on systems and complexity are not those involved with development programmes per se, but meso level institutions tasked with supporting industries and sub-sectors to innovate, grow, compete and increase employment. It is no secret to most of you that I am very disillusioned with aid and development cooperation at the moment.

When you dive into the literature on complex adaptive systems and how they tend to function naturally, you cannot help but wonder whether aid and development cooperation is in a very systematic way trying to fight the very things that make economic systems so amazing. There are several universal phenomena about complex systems that seem to be ignored (I will highlight just a few that I found personally the most challenging to deal with in my work):

  • In complex systems, resources are allocated (or taken up) by those best able to make sense of the situation, using a combination of knowledge, resources and past experience. Marcus Jenal reminded me that people also exercise power and use their influence to take up these resources. It is a reinforcing loop referred to by systems thinkers such as Donnella Meadows as “strength to the strong”. It is even mentioned in the Bible and in other spiritual and philosophical texts. This presents us with the first dilemma as we can often sense that the way resources are distributed is not fair or just, and that many agents in the system will resist any attempt at redistribution.
  • Even when systems become unstable, they do tend to find a kind of equilibrium range. This means that systems will by their very nature resist our interventions as they strive towards some natural range.
  • When a system remains in a suboptimal state (in our judgement it is not delivering what we think it should deliver), we can almost be certain that somebody somewhere is using their power or influence to keep the system in a suboptimal state to extract rents from the situation. It is unnatural for systems to remain “broken” over an extended period without someone influential in the system benefitting from it.
  • Related to the previous point, the ability of an external agent to assess whether a system is broken is debatable and not questioned often enough. Even if the actors in the system believe it is broken, the system might just be behaving in a very natural way. Examples can be found in finance (who wants to lend money to potential losers when they can guarantee returns rather by lending to potential winners) or in agriculture (brokers overcome scale and uncertainty by aggregating volumes, and in return for their risk they earn good profits). There is a second dimension to this: if we ask the actors in the system what is bothering them, they will in most cases shift the blame for their decision or indecision somewhere else.
  • What is good for the system is not always good for the agents in the system and the other way around. An example is that strategies to promote exports or employment growth might actually have a negative effect on many small enterprises while having a positive effect on medium and large-sized enterprises. Or strengthening smaller enterprises might have a negative effect on the current account (through increased imports) while at the same increasing jobs in the service sector.
  • One of the weakest points of influence in a system is the actor, while one of the strongest leverage points is the purpose (often not articulated formally) and the rules (social institutions) of the system. Although it is much harder to change, the purpose of the system is the most important leverage point, followed by rules and the nature and frequency of interrelations. Yet most development programmes target particular actors, ignoring the implicit or unexpressed meta-purpose of the system. Furthermore, most measurement systems measure outputs at the level of the actor, instead of monitoring behaviour in the system. Behaviour (informed by social rules) is a better (yet harder to quantify) measure as it tells us something about the purpose, the meta culture and actors’ attitude towards his or her own health and the health of the systems. This is also a characteristic that I find personally challenging, as it takes time to change the purpose and the rules of the system. In many cases, people simply cannot even explain the purpose of their systems or the rules they follow, which are instinctively based on their values. Changing the purpose of a system requires people to change their priorities, their values, the way to judge success (or failure) and the way they perceive their role in a system or society.
  • There is a relationship between the actors and their artifacts (equipment, assets, machines, tools, etc,). Old, broken or outdated equipment is a symptom of old, broken and outdated business models implemented or executed by the actors. Somehow this is made possible by both the social context and the social as well as the economic technologies. Giving an actor a new artifact (equipment) does not necessarily change the system in the long term, as the actor is still the same. I have often witnessed how an old factory with outdated equipment but that is managed properly can outperform a modern factory run by incompetent management (management itself is an economic and social technology). Providing incentives for an existing business to buy new equipment is to address a symptom and not a cause of sustained underperformance. But an existing actor with a new attitude, better information or different behaviour is able to use existing artifacts more effectively. In the real world, this means that upgrading the equipment in a business is the wrong place to start. Rather promote new entrepreneurs or people who can better use the existing equipment. Physical technologies co-evolve with economic and social technologies; we are not dealing with an equipment problem only.

How do we get development programmes to embrace some of the strengths of complex systems? For example:

  • In complex systems, agents make decisions in a decentralised way. They make these decisions based on their perceptions of their environment and their perceptions of alternative futures, based on the information at their disposal. Thus flooding the system with valid information and promoting the view of how new knowledge or technologies can increase returns is much more valuable than physically trying to fix the actor. Education, technology demonstration and supporting experimentation are ways to provide entrepreneurs with better information to support decision making. It is often very difficult in developing countries to find this type of information which is needed for decision making support by entrepreneurs or firms.
  • A complex system exists of agents(or actors)and their artifacts, the interrelations between the agents and their common (system) purpose. Often in development, we describe only the actors, while ignoring the fact that a system has other elements that are important to include in our description. Already describing a target system as “small farmers using outdated equipment advocating for state protection” is already a much better description of a typical system, as opposed to “poor small farmers who are suffering”. We can also not just focus on “technology” without considering social and economic technologies.
  • In complex systems, the behaviour of the system emerges from the behaviour of all the elements in the system. This emerging behaviour, in turn, has an effect on all the elements in the system, which gives rise to complexity. In complex systems there are strong feedback loops between the elements in the system and the overall observed behaviour or purpose of the system. As economies become more complex, and as inter-dependencies between different systems increase, so too it becomes more difficult to predict or anticipate how a system will change, adapt or respond to a change. This means that we have to be more sensitive to the feedback loops. Our greatest weakness is that we are outside the system, but this can also be turned into a strength if we use our distance to provide a neutral perspective on how the system seems to be behaving.
  • Even if we acknowledge that complex systems also frequently resist change, it is necessary to acknowledge that complex systems are very sensitive to small changes. Can we identify the areas where the system is least resistant to change? Can we support small safe-to-fail experiments in the areas where the risks seem high? Can we help the system to develop alternative paths that the actors can try out? Let us make sure that we increase the options available to the stakeholders and NOT fall in the trap of pushing stakeholders to adopt a “silver bullet” approach.
  • In complex systems, proximity (closeness) and connectivity (social networks) really matter. Every agent is connected to other agents and to the greater system in many different ways, and each agent typically affects every other agent through their effect on the system and their close neighbours in the system. The behaviour of any given actor affects the perspective and behaviour of other actors who are close to them. This means that we should also work with the existing structures and not create new artificial networks. If your first instinct is that the stakeholders are poorly coordinated and therefore that more coordination is needed, then you are pushing the system in the wrong direction.
  • The starting state really matters. And so does the development or evolutionary past of the system. The history of the system is still very evident in the system, and it affects how the system responds to choices, opportunities, failures and challenges. Thus the future of the system is affected by its past in unpredictable ways. This is why a solution that works in one place will almost certainly not work in another.
  • In complex systems, correlations may be strong, but causation is weak or hard to identify with certainty. In fact, what caused a particular response in the past might have no effect in the future, so perhaps trying to understand causation is in itself a future exercise. It is often impossible to figure out cause and effect and its direction in a complex system. We should not propose interventions with “guaranteed” linear outcomes. We should rather use our resources to assist developing countries to try different ideas by assisting in the creation of multiple viable paths. This is a task with very uncertain outcomes, which is exactly why our counterparts don’t pursue these risky options.

For me, development cooperation and aid need to embrace the principles of complex systems. Dave Snowden, in a Cynefin training arranged by Mesopartner in 2013, commented: “you absorb complexity, you don’t delude yourself into thinking you can eliminate it”. What I am really surprised at is how my clients in the public sector meso institutions and in the private sector find it easy to embrace the principles of complexity, while development programmes resist these same ideas. For so many of the private sector people with whom I am now working, these principles are useful as they help to explain why certain well-intentioned interventions did not yield the expected results.

My frustration is that when we discuss these same principles with aid partners or development cooperation programmes which support the very same institutions with which I am working, they find many excuses for not embracing these principles. For instance, last week I was told that “we need a clear project plan (a.k.a. an impact chain), based on a detailed assessment so that we can precisely measure our impact. We need to clearly state and then work towards our indicators so that we have evidence that we have achieved change”. Read that sentence again and count the number of times “we” and “our” are used. It seems to me that development is about delivery or applying resources and not about supporting the evolution and expansion of complex economic systems in developing countries. Never mind how sceptical development organisations are about the insights of local stakeholders as to what is really going on in the system, and how confident they are that they know exactly what the problem and the solution are.

I cannot help but wonder whether aid and development cooperation is systemically unsystemic.

23-07-2019 comment by Shawn. I decided to re-publish this post as I still find the same patterns in development. As a team, Mesopartner has moved deep into complexity thinking and have made profound changes to our consulting practice, research themes and capacity building events. Yet, much remains to be done. We are constantly also challenged by our clients in development who have to meet their funder’s requirements for predictable and quantifiable results, despite the people in these development organisations knowing that their interventions might not be addressing the real needs in a developing country.

Two links for your reading pleasure

Here are two articles for you to consider.

The first is an article by Thomas Fisher on Place-Based Knowledge in the Digital Age. Anyone working on local economic development, regional development and also technological innovation should take a look at this article. Thank you Liza for sharing it with me.

 

The second is an article by Edward Carr on the difference between innovation and technology in development. In my own words, his article highlights how the development fields focus on solutions might actually worsen the problems.

Let me know what you think.