When visitors arrive at the headquarters of the World Bank Group in Washington, DC, they are met by a large stone wall inscribed with the following: “Our dream is a world free of poverty”. For many decades, the ambition to eliminate extreme poverty has driven the agenda of the international development sector. It underpinned the Millennium Development Goals (MDGs) - a set of global targets and actions designed to help the world’s poorest - and has been the focus of numerous international campaigns, funding initiatives and development programmes.

By many measures, these efforts have been very successful. In 2013, just under 11 per cent of the world’s population was estimated to be living in extreme poverty - down from around 35 per cent in 1990. It is possible to imagine a future where this number could drop further, to become almost negligible. As we learn more about how to reduce poverty, attention is therefore shifting to the next frontier in global development - tackling entrenched inequalities. These statistics are currently going in the opposite direction, with income inequality thought to have risen by around 11 per cent in developing countries between 1990 and 2010.

The new set of global Sustainable Development Goals (SDGs) which succeeded the MDGs in 2015 have embraced the idea of reducing inequality (and importantly, have made it a target for every country). Innovation is also hard-wired into the SDGs. It is mentioned explicitly in goal nine, which focuses on technological innovation, infrastructure and industrial development, but infuses the rest of them as well, given that achieving all 17 goals will require transformational change at many levels.

All of this is music to our ears as an innovation foundation interested in global development. However, seeing innovation as a route to achieving the reduction of inequality isn’t as straightforward as it may at first seem.

New technologies can play an important role in reducing poverty and improving life chances and outcomes. There are numerous examples of this, from insecticide-treated bednets that can prevent the spread of malaria, to mobile applications that widen access to banking and healthcare information, to solar-powered water pumps that are increasing the supply of clean water in remote communities.

It’s also clear that the process of innovation is becoming more inclusive, with a whole range of new techniques emerging that aim to get a much wider range of people involved, such as open innovation, user innovation, and social innovation. Some forms of innovation have an explicit focus on creating more inclusive outcomes, as well as processes: we’re studying the role of frugal innovation in opening up access to goods and services to many more people.

But innovation can exacerbate inequality too. The concept of ‘skill-biased technological change’, where new technologies create jobs for the highest-skilled people while others get left behind, has received considerable attention. Places with high levels of innovation are often more unequal - take San Francisco for example - and the presence of innovative companies in a city or region can create a cycle where these places become more and more successful while others drop further and further behind.

While technological innovation has driven impressive growth in several low and middle-income countries over recent years, the effects of this on poverty reduction and inequality have varied considerably. In China, for example, absolute poverty has dropped but inequality has been on the rise until very recently, while in India, poverty levels have shifted little even as the country has transitioned from low-income to middle-income status  And of course, at a global level, technologies don’t spread across the world equally - creating gulfs, for example in life expectancy, between rich and poor countries.

So rather than just assuming innovation will reduce inequality, the global development sector - and others - need to consciously explore the extent to which it is inclusive in process and outcome, how to boost its role in promoting greater equality and how to minimise or mitigate any negative effects. These are issues we plan to look at in more depth at Nesta in the coming year.

We are also particularly interested in spotting and working with new players developing innovations that might contribute to reducing inequality, even if they do not formally identify as being part of the development sector. We have described them elsewhere as ‘development mutants’ - startups, social enterprises and citizen-organised collectives (often originating in the global South) who are coming up with new ways of doing development and bringing different voices into the process as they do so.

Our specific ambition over the next six months is to get a lot clearer on who these ‘mutants’ are, and to learn more about both the innovative potential of their approaches as well as some of the challenges they might face, for example, linked to accountability, representivity or getting the right balance between generating social impact and economic profit. We also want to explore how to build useful relationships between these and more ‘traditional’ development agencies. So if you know - or you are! - organisations or individuals who fit this description, please do leave a comment below or get in touch at [email protected] / [email protected]

Image credit: Global Festival of Ideas for Sustainable Development/ Flickr