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Developing Innovation Production Networks: A USA Experience Peter Plastrik The Innovation Network for Communities Presentation at “Summer School for Social Innovation” San Sebastian, Spain July 2008
The INC Mission is to develop and spread scalable innovations that transform the performance of community systems. www.in4c.net Pete Plastrik 231-448-3169 [email_address] John Cleveland 616-240-9751 [email_address]
Community or place-based social innovation is an important niche within the larger social innovation field. SI field tends to focus on individual entrepreneurs who don’t necessarily focus on places .
Community innovation in us is missing critical infrastructure. CI needs supply, demand, and distribution infrastructure to achieve critical mass, efficiency, and scale; this is field building work.
Innovation is not just “change,” “best practice,” or “continuous improvement. Innovation means dramatic leaps in performance that are economically feasible (e.g., cheaper), sustainable in the long run, and scalable.
Innovation is a discipline. The process of social innovation in communities can be systematized into a replicable practice at the community level.
Systems change requires integrated solutions. Systems change at the community level requires the ability to assemble an “ensemble” of innovations and integrate them together in a place.
Complex social innovations require specialized capacity. Social innovation at the community level can be supported and accelerated by a set of well-capitalized innovation production networks that specialize in the design and development of social innovations for community systems.
Communities tend to import & launch innovations, not produce innovations. Investing in innovation development and investing in community use of innovations are two very different processes with different requirements.
Innovation Development Process 1. Concept Definition 2. Business Planning 3. Testing and Prototype 4. Production & Launch An defined innovation concept , with a written and visual description of the idea, including its primary features and benefits; and how it would change the current system. A solid business case for the innovation, including strategic, customer, market, technical, and financial analyses. A working prototype of the platform, with some history of demonstrating its core features (innovative; financially self-supporting; scaleable; transformative) . A completed set of business systems , that is ready for expansion, with established pricing; marketing plan; distribution; staffing design; governance; technology; etc.
An entrepreneur with a vision
Deep insights into the dynamics of the current system
Place-Based Social Innovation “Market” & INC Structure Supply Distribution Demand
Innovation Production Networks
Community Innovation Infrastructure
Charitable Asset Stewards
Digital Media (Social Innovation “store”)
Existing nonprofit & business distribution networks
Innovation Communities book
The Grand Design Community Innovation Infrastructure Urban Sustainability Transnational Communities Etc., Etc., Etc. Urban Education Adult Workforce Development Civic Engagement Double Bottom Line Investment Early Childhood Family Empowerment A set of well-capitalized innovation networks with a defined innovation agenda for community systems Living Cities Network Detroit Northern California Etc., Etc., Etc. West Michigan Boston Pittsburgh Northern New Hampshire NW Louisiana A network of communities that are intentionally building community innovation infrastructures Bay Area Distribution systems that efficiently connect communities with innovation sources.
Community Innovation Infrastructure Place-Based Transformation of Community Systems
Social Innovation Investing
Shared standards & practices
Capital continuum --(Angel; Seed; Growth; Operating)
Definition An organization or network of organizations that is focused on the identification of innovation opportunities within a sector, and the design, prototyping, incubation and scaling of innovations to meet those opportunities. An innovation network is the social equivalent of commercialization entities within the private sector. An innovation net is part R&D lab; part best practice networker; part business incubator; and part intellectual property commercializer.
Innovation Networks Under Development RW Ventures (Chicago) Community economic development approaches that expand economic activity in urban communities and reconnect underinvested assets, people, and places to the mainstream economy Market-Driven Community Economic Development Council for Adult & Experiential Learning; Jobs for the Future; National Association of Manufacturers Innovations that contribute to development of place- and sector-based integrated systems for adult WFD Workforce Development Alvaro Lima, Madeleine Taylor (Boston) Innovations that improve outcomes for transnational immigrants in US and other countries Transnational Immigrant Communities Sustainable Systems (SF Bay Area) Private equity funds for “double bottom line” investments in real estate and business development Double Bottom Line Equity Funds New Urban Learning (Detroit) Transformation of urban school districts with low-income, minority and immigrant students Urban Learning Systems Center for Neighborhood Technology (Chicago) Innovations that simultaneously improve environmental performance and advance equitable economic development Urban Sustainability Lead Partners Innovation Focus Network
Getting the boundaries right. It is often difficult to define the boundaries of a sector or content area at a scale that is most useful for revealing and acting on innovation opportunities.
Many sectors are defined too broad to be useful (for instance, the “economic development” sector encompasses an enormous range of activities), while more narrow definitions miss opportunities for cross-disciplinary innovation.
In other cases, it is tempting to define a sector in terms of its traditional constituencies (for instance the “workforce development” sector thought of in terms of training providers) that fails to encompass the likely sources of future innovation (e.g. changes in private employer practices; or the emergence of the Free Agent economy).
Adequate capitalization. Most current or potential hubs are deeply under-capitalized and lack the development resources to really “push the envelope” on innovation in a sector. Many philanthropic and government investors do not really know how to invest in innovation, as opposed to investing in programs and activities.
Leadership Talent. There are a limited number of NGO leaders with the combination of deep system knowledge; networking capacity; and rigorous business discipline required to manage a genuine “innovation pipeline.”
Long-Term Perspective. Most serious social sector innovations take a decade or longer to go from concept to broad acceptance. This requires persistent strategic focus and patient investors – two elements that are often scarce commodities in the non-profit world. Innovation development not a “class” of investing that is well understood or differentiated from other kinds of philanthropic investments.
Innovation production networks are a special class of social innovation work. As such, we believe the work of collaboratively developing “families” of social innovations constitutes a “field of practice” within the broader field of place-based social innovation. We believe that building this field will require investing in the following kinds of work:
Creating a robust network of Innovation Networks focused in the key area of social innovation (e.g. early childhood; K-12 education; adult workforce development; community economic development; community investing; urban sustainability; etc.).
Establish Innovation Production Networks as a differentiated class of philanthropic investment, and educate funders about the requirements for success in making these investments.
Develop distribution systems that connect the developers of innovations with places that have demand for them.
Build a shared set of “best practices” for innovation development and management to advance the professionalism of the field.
Transnational Opportunities Create an International “Urban Learners” Innovation Network Explore Transnational Social Innovation Development
Fields have some common elements; the work on each elements changes over the stages
Building a field is not the same as building an aspirational movement; nor is it the same as building a market, or building an innovation
Healthy fields create the “ecology” out of which many innovations emerge
Ultimately, clusters of innovation are the core of field development
Some Elements of A “Field” Element Description Identity Definition of the “boundaries” of the field and the content it encompasses. Frameworks Intellectual structures for organizing field content and knowledge, including core field hypotheses. Practice Innovations New ways of doing things that emanate from the field hypotheses. These might be practices; processes; technologies; enterprises; or systems. Standards Professional standards of quality that can be encompassed in Best Management Practices; credentials; certifications; etc. Reward Systems Ways in which practice innovations are incentivized through public or private market mechanisms. Networks Connecting, aligning and production networks of players within the field. R&D Investments in field innovations.
Evolution of “Practice Fields” Stage 1: FRAMING. Stage 2: NETWORKING. Stage 3: MATURATION. Stage 4: STANDARDIZATION. Conceptual framing and isolated practice examples. Networking of innovators and the proliferation of practices. Practices are fragmented and often considered “proprietary.” Maturation of practices; convergence around common methods and tools; integration of previously differentiated practices; development of a professional implementation support network. Practices become highly standardized, and incorporated into formal training; credentialing and certification systems. Practices are considered “commodities.” Reward systems reinforce desired behaviors.
Characteristics of “Young” & “Mature” Fields Element Young Fields Mature Fields Identity Confused/multiple identities Well defined boundaries; easy to know what is “in” and “out” Frameworks Lack of integration between multiple frameworks Strongly shared frameworks (theoretical premises; principles; ways to organize knowledge) Practice Innovations Competing “gurus” each of whom consider their ideas and business models to be “proprietary” Standardization of methods, tools, enterprises, etc. for implementation Standards Lack of standards in all areas Well-defined professional standards for defining competence & quality (regulatory; skill certification; testing of innovations) Reward Systems No real feedback mechanisms from the market Market feedback matches best practice thinking Networks Isolated individual practitioners Well developed networks for sharing knowledge and best practice R&D Investment happens on a haphazard basis Well organized R&D infrastructure to support innovation