As the Chief Executive of an innovation organisation, I probably shouldn't admit that I sometimes wince at the word ‘innovation’. It can suggest hype and bluster, and fetishising novel solutions that are no better than existing ones.

But with the country engulfed by major challenges on several fronts, ‘good’ innovation has never been more necessary. New solutions must be central to any hopes of building ourselves a fairer, healthier, more sustainable future. So the question I keep returning to is what, exactly, makes good innovation – at least as far as Nesta's work is concerned? This has been the drumbeat behind the development of our new strategy, which we will launch in March 2021.

In this blog, I explore four tests that guide my thinking about innovation, particularly when developing services or products.

A standard critique of innovation is that it is not focused on the right things. Many dynamic companies create solutions that are relatively trivial or even harmful to society, but commercially valuable. Meanwhile, some social innovators are caricatured as being drawn to shiny objects that are ‘solutions looking for problems’, rather than those that are grounded in the aspirations, values and needs of people. So I think the first test of good innovation is: are the solutions focused on outcomes that will substantially benefit society and address people’s needs and aspirations?

Second, innovation is often criticised for obsessing over novelty. But innovation is not the same as invention; it commonly involves borrowing, adapting and recombining familiar ingredients, often through a process of trial and error. As we’ve seen with COVID-19 treatments such as Remdesivir (originally a Hepatitis C drug) and Dexamethasone, it can involve repurposing existing materials or solutions – a process known as exaptation, based on how species evolved new functions for old parts (such as birds using feathers to fly). In these cases, the novelty was not in the product but where and how it was deployed. So my second test is: can you demonstrate that the solution adds value to what already exists within a given field?

Third, many solutions garner claims and hype that are out-of-kilter with the degree of evidence available about their effectiveness. It’s long been true in health care that we would not trust a drug created by a pharmaceutical company unless it had gone through a clinical trial. Yet the standard of proof in other fields – from research into productivity and industrial policy to social care and public health – is much lower.

Strangely, the evidence threshold has been raised dramatically in the last decade in international development, where more than 5,000 rigorous evaluations – randomised controlled trials (RCTs) or evaluations using quasi-experimental methods – have been conducted. We’ve learned a vast amount about what works in improving governance and learning, and how to deliver assistance in humanitarian emergencies. If we can evaluate the fraction of public spending that goes on international aid so rigorously – often in challenging conditions – we can surely apply the same approach to the much greater amounts spent in the UK on public services and economic interventions. So my third test of good innovation is: has the solution been proven, through rigorous evaluation, to be more life-changing or more cost-effective than existing practices?

Finally, good innovations have the potential to grow and become solutions that match the scale of the problem. In contrast, solutions that are costly, complicated to deliver, or do not have a viable business model or support from citizens and practitioners will struggle to grow even if they are effective. So my fourth test is: does the solution have a credible route to large-scale adoption?

Nesta’s new strategy is informed by all these tests. We will focus on some of society's biggest challenges (test 1). We will aim to develop solutions that add value to what already exists in each field, without fetishising novelty (test 2). We will use experimental and quasi-experimental methods to rigorously evaluate the effectiveness and cost-effectiveness of our innovations (test 3). Finally, we will focus on routes to scale from start to finish (test 4).