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Systemic change

The most transformative innovations have been the ones that combine many elements in a new way. The car for example can be thought of as a combination of many innovations – from combustion engines, tyres and electrical systems, to road traffic management and driving schools. The mobile phone combines microprocessors, transmitters, networks of masts, payment models and so on. The welfare state combines legal rights, service delivery systems, assessment tools and tax collection models.

Systemic innovation is very different from innovation in products or services, and usually very different from innovation in business. It involves changes to concepts and mindsets as well as to economic flows: systems only change when people think and see in new ways. It involves changes to power, replacing old power holders with new ones. And it usually involves all four sectors – business, government, civil society and the household.

Systemic innovations can be suddenly pushed forward by a crisis, or a disruptive technology. More often they are the result of slow but cumulative processes entailing changing infrastructures, behaviours and cultures. Examples include the creation of welfare states after the Second World War; the spread of comprehensive early years’ programmes in Europe; dramatic expansions of higher education; and the spread of democracy.

In this section we look at more fundamental innovations that are systemic in nature. By this we mean innovations that radically transform some of the fundamental systems on which we depend – how food is provided, health, housing or learning – according to fundamentally different principles. We look at some of the organising ideas that are generating systems change at the moment, and then some of the methods which contribute to making change happen. The key is that in every example systemic change involves the interaction of ideas, movements, models and interests.

Ideas that energise systemic innovations

Right at the beginning we showed how new frames and ideas can prompt innovation. These can be even more important in giving shape to systemic changes – helping the participants to make sense of their changing roles. Here we list a few of the generative paradigms that are prompting systemic innovation in some fields.


Infrastructures and interstructures to support new systems

Some new systems depend on infrastructures. Widespread broadband infrastructures for example are the precondition for some new models of care in the home; mobile phone infrastructures may be the precondition for new models of low cost banking organised over the phone.

Formation of users and producers

Users and citizens often need to play a part in the design and implementation of new systems. They may require new skills and approaches (what the French term ‘formation’) as may professionals and managers. This is evident in many of the examples listed above – such as personalised health care which requires patients to become more expert in monitoring and managing their own conditions, and health professionals to expand their skills of personal support.

Regulatory and fiscal changes

Almost every systemic change involves legislation and the state at some point. There are a few exceptions, such as the rise of new online infrastructures for retailing. But every movement involved in profound change, from the environment to equality, has depended on recognition of its principles in law. New legislative and regulatory architectures can be the keys to unlocking systemic change, whether through new rights or new trading or building standards, social and environmental performance requirements, or new ways of handling or measuring value.

Information, accounting and statistics

Information and accounting systems can block innovation; in many cases, they will need to be re-organised to enable or re-enforce systemic change. What gets measured shapes what gets done. In many fields, attempts are underway to reshape measurement to better handle holistic systems effects.

Progressive coalitions and social movements

Social movements often act as champions of systemic alternatives, for example mobilising people with disabilities to engage in the redesign of cities, and lobbying for reforms to legislation and regulation. Progressive coalitions play a critical role in mobilising support for systemic changes.

Systemic finance

We describe many different finance tools in other sections which can contribute to systemic change. For investment funds to finance truly systemic ideas they need different methods to those used for investment in established systems. At an early stage there is unlikely to be any clear revenue model, or any benchmarks to draw on. Instead assessments need to include some judgement of the broader direction of change in the field as a whole; some judgement about the qualities of the key individuals; and some rough assessments of the relational capital they bring.