Last week, Geoff Mulgan, the chief executive of Nesta in the United Kingdom, visited Toronto for a whirlwind tour that included an awe-inspiring 22 commitments in four days and four public talks. The diversity of his speaking topics is worth noting: aging, social entrepreneurship, public strategy, and innovation and austerity.

The tour was organized and presented by Social Innovation Generation as part of its Inspiring Action for Social Impact speakers series, in partnership with MaRS, the University of Toronto’s School of Public Policy & Governance, and the Centre for Social Innovation.

Two of Mulgan’s talks were held at MaRS: one was the closing keynote of the Business of Aging conference, and the other was the MaRS Global Leadership lecture on innovation and austerity, the highlight of the trip.

As a frequent advisor to the UK government, Mulgan is familiar with austerity, and as a leader within the think-tank Demos, The Young Foundation and, currently, Nesta, he is also a leading social innovator.

It was no surprise, then, that the MaRS Auditorium was packed full of Canadians fearing the pinch of budget cuts as the government tries to bring down a deficit. Indeed, this was a truly pan-Canadian conversation, with attendees watching a livestream from nine cities, as far away as British Columbia and Nova Scotia.

Mulgan, however, was a man on a mission: to reframe the debate around austerity and show that fear and fatalism are flawed responses to the crisis at hand. Rather, he posited, embracing the possibility of failure and creating safe spaces for risk are key to dealing with spending freezes and building a sustainable future.

Mulgan began his talk with the question: “Is innovation a luxury of the boom years, or does it become more important during times of austerity?

He proceeded to note that while the private sector routinely leverages innovation to increase productivity and savings, there are no equivalent measures for the public sector. The government usually thinks of research and development, but only a fraction of the benefits from innovation can be attributed to R&D. This highlights a glaring gap between how we think of innovation in the economy and how it is practised by the public sector.

There seems to be a lack of new ideas that can drive positive change, as evidenced by a chart in Mulgan’s presentation showing that as healthcare spending has risen in OECD (Organisation for Economic Co-operation and Development) countries, adult mortality rates have actually gone up, instead of down.

To deconstruct different approaches toward austerity and highlight opportunities for innovation, Mulgan presented a framework of 12 economies that governments pursued. These can be divided into three broad groups:

  1. Traditional, such as selling off assets and freezing hiring
  2. Organizational, such as aggregating back-office functions, automating work and reducing failure demand (preventative investment)
  3. Relational, such as empowering citizens through community asset transfer, reducing regulation and tapping into social enterprise

Clearly, there are opportunities, but how do we make the most of them? The audience was taken through a six-step process for doing just that, starting with prompts for innovation and leading toward systemic change as the selected approaches scale.

Throughout, Mulgan presented a number of practical tips and examples of how Nesta has applied these six steps to a range of problems in the UK. One tip, for example, was using competitions and prizes to incentivize and foster creative thinking. There are a number of resources available to speed up the prototyping process as well. (See Mulgan’s presentation embedded below for more examples.)

One of the most relevant aspects of the talk was how closely it aligned with current MaRS initiatives. For example, Mulgan emphasized the importance of investing in social innovation—which the MaRS Centre for Impact Investing is encouraging by supporting social enterprises and providing recommendations to unlock private capital for public good. He also highlighted the need for institutionalizing innovation in a safe space for failure, and the upcoming MaRS Solutions Lab is as good a start as any, borrowing from the best ideas around the world.

The thing is, shortcuts don’t really work, and innovation is at least partly about destroying things that we love—which is a hard but necessary pill to swallow. Ultimately, Mulgan’s point was that the economic crisis is an opportunity for transforming public service, and that looking at this change with hope, rather than fear, can enable a different—and ultimately more productive—public discourse about austerity.

Watch the presentation video below:

Click here for presentation slides.

Nabeel Ahmed

Nabeel is the Managing Editor of SocialFinance.ca at the MaRS Centre for Impact Investing and an Associate at SiG@MaRS. He also manages media and online marketing for the Association for the Development of Pakistan, a microphilanthropy organization that identifies and funds sustainable development initiatives in Pakistan. See more…