Summary
International development organisations manage significant global resources, with Official Development Assistance (ODA) totalling around $212 billion per year. Despite this, innovation efforts often suffer from “”perpetual pilotitis”” and remain uncoordinated and scattered, leading to a misalignment between goals and actual investment practices. Scaling successful interventions in this complex environment is a messy, non-linear process that can take 10 to 15 years in sectors like health and agriculture. The traditional “”raise funds, give to those in need, rinse and repeat”” model is proving insufficient for achieving the ambitious Sustainable Development Goals by 2030. Recognising this need, the OECD’s Innovation for Development Facility (INDEF) collaborated with consultancy EDA to apply an Enterprise Design approach at the level of National Development Agencies, specifically leveraging EDGY for collaboratively developing the “”Innovation Portfolio Service””. This service is a structured, iterative process designed to help international development agencies rethink and evolve their portfolio of innovation investments. It guides development agencies through key strategic conversations: “”what matters,”” “”what we are doing,”” the crucial “”so what?”” (analysing alignment), and “”now what”” (planning future action). Beyond designing for multiple layers of users all the way to aid recipients and beneficiaries, understanding these public enterprises, their organisational systems and investment processes, their deeply interdependent programs compared to stated strategic purposes proved crucial. Since rolling out the service, it has a significant uptake, by now visible in Iceland’s diversification of innovation investments, and other observable portfolio redistribution. Our service also facilitates transformational scaling, moving beyond “”more of the same”” to shaping local market conditions and ecosystems, exemplified by cases from Kenya, Ghana and Uganda. It empowers innovation teams to advocate for policy and process changes, leading to a more strategic and impactful use of development investments globally. This work directly engages with both organisational performance (overcoming barriers to strategic investment) and service performance (influencing how aid programmes deliver measurable outcomes at varying scales).
Key Insights
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Public sector innovation portfolios are often fragmented and built from opportunistic micro-decisions rather than strategic planning.
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Applying private sector innovation models directly in public agencies often fails due to language and cultural mismatch.
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Enterprise Design Associates' 'Edgy' framework breaks down organizations into four elements: identity, experience, energy, and organization to guide design coherence.
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The OECD innovation portfolio service helps national development agencies map, assess, and strategically realign investments for better impact.
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Role play and lightweight prototyping ('scaffolding') enable testing intangible aspects like organizational capabilities without large IT builds.
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A key challenge is aligning innovation investments with stated strategic ambitions, avoiding mismatches in risk appetite and focus areas.
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Users of the service are organizations themselves, including innovation teams, other departments, and ecosystem partners—not individual consumers.
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Visual metaphors such as 'sausages' made it easier for organizations to understand their own funding distributions and identify gaps.
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The service supports clients in co-developing custom investment models to shift decision-making towards portfolio logic.
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Public sector innovation requires addressing bureaucratic and political economy constraints creatively, rather than being stopped by them.
Notable Quotes
"Public sector is not known for innovation, but frankly, there is a lot of important innovation happening in the public sector and driven by the public sector."
"Our clients all have innovation portfolios, but if you zoom out, it's many micro decisions over time that are often opportunistic, lacking strategic connection."
"We didn’t want to develop yet another model but rather a customizable approach to support diverse clients with innovation portfolio management."
"Edgy asks three fundamental questions: Why are we here? What’s the role this enterprise plays in people’s lives? And what do we need to make it work?"
"Any service is a configuration of enterprise elements, reshaping and enabling the enterprise to deliver that service."
"Scaffolding is like the wireframe in the physical world, it’s what we do just enough of to push the experience forward and challenge constraints."
"When we showed the Iceland Ministry of Foreign Affairs their portfolio, the Foreign Minister said, we have to pivot our innovation investments to early-stage catalytic innovations."
"The challenge is co-developing a custom investment model that alters decision making based on portfolio logic rather than project-based thinking."
"We often don’t prototype everything ourselves; instead, we role play with client team members to simulate complex organizational aspects."
"Service design and enterprise design are not just for digital or government—they're applicable to complex organizational change and B2B market entry."
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