USAID's Department of Innovation Signals Shift towards Social Enterprise

Last week the United States Agency for International Development (USAID) announced the official launch of "Development Innovation Ventures," a new department devoted exclusively to fostering innovation in the delivery of global aid. The department, to which the acronym "DIV" has been applied, is part of President Barrack Obama's comprehensive scheme to encourage innovative approaches to improve the delivery of social services.

The President has publicly acknowledged that "government cannot solve our nation's problems alone" and that "it is critical to partner with citizens, nonprofits, social entrepreneurs, foundations and corporations," according to the Whitehouse's official blog. Echoing this sentiment, Secretary of State Hillary Clinton, while speaking to San Francisco's Commonwealth Club, reached out to technology innovators and entrepreneurs to help address the world's most pressing issues.

Earlier this year, Mr. Obama spearheaded the effort to create the $50 million Social Innovation Fund. One organization to receive funding is Jobs for the Future, which will receive $7.7 million from the Social Innovation Fund over the next two years to support a massive expansion of its job training and capacity building programs for low-income workers.

DIV, which will be led by Harvard Economist Michael Kremer, intends to seek out and invest in "high-risk, high-return projects" that offer inventive and scalable solutions to global social challenges. DIV has already chosen eight U.S.-based investees to receive between $99,000 and $230,000 of USAID's $21 billion budget. Among the investees are a mobile reporting platform for Afghanistan, a solar lighting framework for Uganda, and a rapid pregnancy-induced hypertension diagnosis test for Nepal developed at Johns Hopkins.

In announcing the department's launch at the Columbia Business School Social Enterprise conference, USAID Director Dr. Rajiv Shah said that it is a "top priority" to shift policy towards the encouragement of innovation. "Those of you who know our history," said Shah, "know that USAID used to be the world's leader in applying science and technology to the issues of development. We helped develop the innovations that produced the Green Revolution [in India] and pioneered Oral Rehydration Therapy in Bangladesh. By the time I took office, that science and technology capacity had almost completely eroded. We are currently working hard to rebuild that tradition, establishing a science and technology policy division and hiring more scientists and engineers."

USAID's public embrace of the innovative spirit comes at a time when governments in the Global North are experimenting with shifting responsibility for the delivery of social services to non-public organizations and enterprises. The shift has been particularly notable in the United Kingdom, but the creation of DIV signals that the United States may not be far behind.