OECD Scaling Learning Journeys Series: Scaling Innovation, Scaling Development Outcomes
By Parnika Jhunjhunwala (OECD Innovation for Development Facility) and Benjamin Kumpf (OECD Innovation for Development Facility)
Summary of the OECD i30 Event | 7th September 2022
Far too many innovation efforts in international development cooperation fail to reach appropriate and sustainable scale.
Scaling what works requires operational dexterity, knowledge and experience how to manage the long and difficult process, along with relationship management skills. It requires an understanding of suitable financing mechanisms and knowledge of the relevant local ecosystem. This ecosystem must provide a ‘line of sight’ for innovators to envision and work towards the appropriate scale, be it to reach scale through public sector mechanisms or a private sector route. Always required are access to finance, networking and mentoring opportunities, as well as supportive policies and regulation.
Writ-large, development cooperation providers know this. Staff and leadership in donor organisations are generally aware that a range of tools, collaboration mechanisms and expertise is needed to enable their organisations to not only identify promising innovations, but to support these with appropriate resources over many years and make evidence-based decisions along the uncertain journey from early stages to scale. A 2020 OECD study on the innovation capacities of members of the OECD Development Assistance Committee (DAC) showed that all of the bilateral organisations emphasized the importance of scaling. However, only a few invested adequate resources to systematically advance this process. Furthermore, a relatively large number of funders over-emphasized private sector replication. Most members of the DAC insufficiently invested in creating evidence about how innovations and interventions they supported in the past have and might reach scale.
Now, an increasing number of members of the Development Assistance Committee are investing in changing this. Organisations such as Global Affairs Canada, the Swedish International Cooperation Agency (Sida), the French Development Agency (AFD), the German International Cooperation Agency (GIZ), the Swiss Agency for Development and Cooperation, the Norwegian Agency for Development Cooperation and others are exploring how they can enhance their support for scaling based on their unique strengths, and in partnership with others.
A number of these organisations requested support of the OECD Innovation for Development Facility, particularly to convene peer-learning opportunities and to help consolidate and expand the nascent evidence-base on scaling in international development.
Accordingly, we set up a learning journey for the OECD i30 Group, the peer-learning network for DAC members on development innovation and partnered with OECD Evalnet, the OECD Results Community of Practice and with the Scaling Up Community of Practice, Million Lives Collective and the International Development Innovation Alliance. OECD Gendernet, OECD Govnet, OECD Environet and the OECD Community of Practice on Poverty and Inequalities also invited their members to join this learning journey.
The first part of the learning journey consists of three workshops to provide an overview of empirical experience and good practices, and to jointly identify suitable options for institutional change and for collaborative action to advance scaling together. The learning journey is designed to respond to the immediate needs of staff working in DAC member agencies, rather than academic theory.
This post summarizes the first event, which brought together more than 50 colleagues from 12 DAC member organisations. The event aimed to establish a shared understanding of scaling and to provide a forum to exchange experiences on good practices among development practitioners. The ultimate objective of this learning journey is to advance better practice – individually in bilateral development agencies as well as collectively at the DAC level.
Helen Samuelsson, Policy Specialist at Swedish International Development Cooperation Agency (SIDA), opened the workshop by sharing a common challenge on scaling faced across the DAC – namely, that there is now greater understanding on the ‘why’ of scaling, but still no consensus on the ‘how to’ mainstream scaling. She outlined the tendency of getting stuck in definitions and conceptual work. Questions such as ‘what is scaling?’ should be clarified as a point of departure, to then focus on the art of the possible. The lack of a shared language on scaling is a barrier for joint action, and accordingly she proposed a joint framing and eventually shared principles for scaling across the DAC.
Larry Cooley, co-founder of the Scaling Up Community of Practice with over four decades of experience leading Management Systems International, delivered the keynote speech, highlighting that relatively few development funders have a systemic and systematic approach in how they design and implement scaling innovations as well as programmes and policies.
One of the problems highlighted by Larry was the prevalent challenge of letting innovations ‘grow naturally’, following a wait and see approach. He pointed out that very few interventions scale spontaneously and even fewer are designed with an explicit focus on scale, analysed for scalability or managed to maximise the likelihood of scaling. This was echoed by Helen, who talked about the Sida Lab, which invests in piloting innovations and provides room for experimentation and testing, but also struggles to answer the question of “what happens after piloting?” Recent evidence indicates that bilateral transactions comprise 70% of the total aid flow, in contrast to the multilateral transactions comprising 30% (World Bank, 2021. p.22). This large share of bilateral funding flows also represents the significant influence that funders exert on development interventions and hence its effectiveness. As such, there is a clearly identified need for development cooperation providers to build their institutional capabilities to not only support innovations, but also bake in a scaling vision for innovation programmes from the very beginning.
Larry emphasised the importance of the timing and order of thinking about incorporating a scaling vision. The usual model of scaling up follows the path of sourcing the innovation, establishing effectiveness of the innovation, generating greater efficiency, and only then actively thinking of scaling up the solution.[1] However, there is a need to focus on scale even before one knows that scale is warranted. Aptly described as “putting one foot on the accelerator and one on the brake”, development providers must, from the very beginning, prepare for scaling and build a scaling vision for their programs, lest scaling should become a psychological and organisational barrier later on.
Additionally, this prototype/evidence/rollout paradigm is also not always the best approach for scaling, since in reality no scaling pathway is as linear. The journey to scale – which could take over 15 years – goes through several iterations and bends in the path. The product made during a pilot resembles but isn’t identical to what is eventually rolled out. This was also framed as bringing in an ‘effectiveness perspective’ by a DAC member, essentially posing the question that “projects or pilots are effective before, but not when scaled up. What does it really take to scale?” This in indeed a persisting challenge. Some evidence suggests that as scale increases, it may also change the mechanisms that produce impact; as such, it is essential that information and implementation systems recognise and reward this level of flexibility and change over time.
Several important issues regarding the operational dimension of scaling were raised in discussion from experts as well as practitioners from the global south. Larry spotlighted the pervasive ‘project mentality’ that explains a large part of the scaling conundrum. Typically, philanthropic or development projects are focused on the short-term results and the required capacity support to reach scale is often lacking. Grassroots innovators Caitlin Corcoran, Senior Lead of Special Initiatives at mothers2mothers and Colin Christensen, Global Policy Director at One Acre Fund (OAF), having scaled their operations to reach 15million people and 1million farmers respectively, attested to the importance of securing long term funding and capability support from their donors. Flexible funding allowed them to not only experiment and test innovative components of their projects, but also formed the cornerstone of their scaling journeys.
In addition to short-project durations, the literature on scaling also finds lack of coordination among donor activity to be one of the biggest obstacles. Donor focus on the same sectors, sub-sectors or geographical areas is resulting in a surfeit of funds in some areas and funding gaps in others, leading to uneven and ineffective development outcomes. Estimates suggest that between 200-500 million Euro per year could be saved if there is increased donor consolidation of project and programme activity, agreed division of labour and use of joint financing arrangements. The reduced project implementation and preparation costs could free up resources for supporting scaling efforts in partner countries. This donor coordination challenge was also echoed by Helen both as a strategy and call to action, mentioning that:
“Everything that needs to be done to scale innovations can be done only in partnerships with other development providers”
Despite several challenges around scaling innovations, there is also emerging evidence of good practice in the sector. Sharing perspectives on some concrete actions undertaken by funders to support their scaling journeys, both Caitlin from m2m and Colin from OAF mentioned that USAID, one of their major funder’s is holding them accountable to outcomes instead of activity plans. In their experience, this is specifically conducive to work towards scale as flexibility is required. Not being tied to “straightjacketed log-frames” allowed them the latitude to adapt their scaling journeys and bend, twist, or even turn around as and when required, and maintain their focus on creating greater impact for their constituencies. These flexible funding instruments redirect attention to results-oriented accountability and promotes performance over compliance.
Both practitioners also talked about the relevance of flexible funding instruments to support scaling. In particular, Development Innovation Ventures’ grant funding on a tiered-evidence based approach led to OAF receiving a 5million USD scaling grant, which allowed them to expand their program to Malawi and Uganda. The donor focus on collecting a few key impact indicators; such as sustainability number (ratio of money received from farmers versus donors) and scale number; to prove impact generated for low-income farmers was again helpful for OAF to remain laser focused on scaling and maintaining quality of impact generated. Caitlin also discussed how flexible funding has allowed m2m to be more responsive and adaptive to changing realities on ground, while giving them the time and space to evolve interventions based on community needs. Both speakers also touched upon the increasingly flexible role of philanthropic organisations and high-net worth-individuals in supporting their scaling journeys.
An interesting insight on the need to consider different funding instruments based on an innovator’s operating model was put forth by Colin. OAF follows a business model of operation, with three-quarters of its core operations paid for by farmer revenue, and one-quarter by donor subsidy. While all farmers pay market-price for agricultural inputs (like fertilizer and seed), this subsidy allows OAF to absorb the logistical costs of serving particularly vulnerable and remote communities. Functions such as product innovation and new country exploration are 100% donor funded. This is where concessional debt funding comes in handy. Business models like that of OAF, which function like a usual business, need a lot of working capital to buy inputs upfront and receive payments only after delivering services to the end user. Several costs have to be covered and paid off in the interim. Procuring markets loans to acquire such volumes of working capital and paying high interest rates over time are not conducive to their overall operations. However, concessional debts, which do not immediately emerge as an ideal instrument for development innovation entrepreneurs, could be very helpful to adequately support innovations running like a typical business.
In addition to funding, Caitlin underscored the importance of funder support for scaling in non-financial aspects. She commended several donor partnerships, including Mulago Foundation, Jasmine Social Investments, LGT Venture Philanthropy etc., which invested the time to nurture long term sustained relationships with m2m, going beyond just being a funder but also filling the shoes of “connectors and thinking partners, who challenged and helped [us] collaboratively define our scale strategy”. The crucial support from funders in building capacity and establishing connections with other implementers and funders provided critical support to m2m in their scaling journey.
A lot of these findings were confirmed by representatives of international development providers who joined the event. The picture that emerged was varying levels of understanding and practice of scaling across the DAC membership. Some funders are at the more nascent stages of mainstreaming scaling, and still identifying their roles in the scaling processes; while others are more advanced and are making progress on establishing the organisational need, ambition, and vision of scaling.
Sharing barriers and good practice on scaling in their individual agencies, a few common challenges emerged, which mirrored challenges highlighted by the speakers. Three common challenges across the DAC membership emerged during the discussions:
Lack of a systemic and systematic approach to scaling.
Lack of common language/shared understanding of the terminology on scaling.
Traditional project timelines (mostly 3-6 years) impeding the establishment and implementation of a scaling vision: “once the programme is finished, there is very little contribution we can make to scaling”.
To break out of the project mentality, Larry proposed thinking of scale and sustainability as twins, always linking the two together.
“ When talking about scale, always answer with “yes, but is it sustainable?” and when talking about sustainability, always answer, “yes, but it is scalable?.”
One observation from these conversations was that several organisations have the ambition and intention to make progress on scaling, but do not yet have respective mechanisms and structures in place. There is a shared understanding of why we need scaling, but no clear pathway of how to close this intention-to-action gap per agency nor across funders.
The final discussion focused on good practices across the DAC. Organisations such as USAID and GAC have experimented with more flexible funding instruments, including fixed amount awards, which hold grantees accountable for results but are more “hands-off in terms of activities” and are now further expanding these. A few member are increasingly providing tiered-grant-funding, with grants set aside specifically to support their partners scaling stages. The Swiss Development Cooperation (SDC) is experimenting with more long-term funding support provided to grantees over ten years in multiple tranches, however the results of such flexible and predictable long-term funding support are not yet available. The UK Foreign, Commonwealth and Development Office (FCDO) has been able to increase their risk-appetite and fund more innovations on their scaling pathways by helping to launch and supporting organisations such as the Global Innovation Fund (GIF). GIF also follows a staged-funding approach, allowing them to support scaling operations across different innovation models.
The French Development Agency, AFD, is making rapid progress with their scaling agenda and has been running capacity-building programmes on scaling within the agency for the past two years. AFD, GIZ, SDC and others are working on guidelines for scaling innovations in their agencies, other use existing guidance such as the scaling guide developed by the International Development Innovation Alliance in 2017. However, diffusing the learning and guidance on scaling from the innovation team to the rest of the organisation remains challenging.
These discussions revealed the multitude of roles that development cooperation providers can and do play in supporting scaling efforts. Larry framed this as looking at 3 different gears, namely, the innovation gear (comprising new practice, approaches, or audiences); the delivery scale (scaling via governments, or markets or their hybrid) and the intermediation gear (which bridges these two).
Greater clarity which of these three dimensions requires strengthening, and how to best collaborate with other funders can advance better scaling practice. The next workshop on scaling focuses on strengthening institutional capabilities and takes place on 4 October, again in collaboration with all partners. The i30 learning journey sessions are open to all staff members of bilateral funders organisations. If you work in a DAC member agency or ministry and are interested to learn with and from peers and experts, please send a message to benjamin.kumpf@oecd.org.
[1] Figure 2.5, pp.14. https://documents1.worldbank.org/curated/en/203681468780267815/pdf/260310White0co1e1up1final1formatted.pdf
