Where are we at?
How to accelerate innovation nationally
How to engage the world.
Digital Diplomacy is a series of interviews compiled by a public affairs officer at the Italian Embassy. I will never forget the first time I met him. He hosted an all-women panel with the coolest social impact pioneers in DC – Frances Holuba from the Obama White House, Nicole Isaac from LinkedIn and Anastasia Dellaccio of WeWork Creator Awards at the time. I remember this was one of my most favorite events to this day..
This is an important book of our time for many reasons. There are not many books told from the perspective of a public diplomacy practitioner of how to navigate the waters of the changing time today. He cherry-picked the innovation leaders across the administration and those at the front seat in Washington DC from the World Economic Forum, United Nations, TEDx, and the New America Foundation. His questions are well-researched and poignant. He pulls from history and covers different perspective specific for each interviewee for what it means to innovate, what conditions create the culture to innovate from respective organizations, and how to conduct it with vision, strategy and for good.
It is a guidebook to treasure for all thinkers and practitioners in government, business, and private partners interested in working at an international level. I am still a fan of his Medium, and I recommend you all to check it out, if you haven’t done so already. 🙂
Anne-Marie Slaughter was the former Director of Policy Planning Staff at the Office of Secretary at the State Department. She starts off the book by challenging the reader on the traditional notions of statecraft and standard foreign policy procedures, which is mainly in person – holding conferences or convening task forces.
This book is a call upon global leaders to respond to differently to the threats today whether you are fighting disinformation, assembling an army against Al-Qaeda, or bringing concerted mayors for climate change.
She provides three main frameworks: resilience, task, and scale. She employs theories from psychology, economics, and of course, foreign policy. The tools were on “how to pursue its interest and affect the behavior of others….how to assemble coalition of nations [and] how, when, where to advance specific types of goals.”
In this era of remote work and staying connected online, her strategies made me think about how I was utilizing my own network – if I could employ some of her strategies to effectively use it to my own.
I think this book is what it does to the readers – it gives us thought experiments. As she finishes off with the section on the grand network power, she writes those who can garner the strategies in today’s world can unlock innovation and sustainable growth and can nurture our own power in the networked age.
The Information Technology and Innovation Foundation (ITIF) is led by its president and founder, Robert D. Atkinson, Washingtonian Magazine has called a “tech titan,” and it is a nonprofit think tank. “Its mission is to formulate, evaluate, and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.”
It’s august research publication produced recommendations on accelerating “Collaboration Between Start-Ups and Federal Agencies”
The climate-tech start-ups take more “patient capital,” and this report aims to identify “approaches that help ease barriers faced by climate-tech start-ups can ultimately catalyze their role in accelerating clean energy innovation.” The report claims collaboration with federal agencies and laboratories, such as co-development and technology-licensing agreements to yield better results than their collaborations with universities or other firms, as measured by patents received and follow-on financing.
The authors also note the willingness of the policymakers and the wealth of federal research expertise, infrastructures, and technologies to mandate more effective technology transfer policies for federal agencies and laboratories. “But present practices have not fully capitalized on the synergies between start-up potential, federal resources, and the technology transfer mandate.“
Here are the summarized recommendations.
Most start-ups don’t have access to federal experts or laboratories because they lack networks and knowledge, or they confront bureaucratic barriers and high costs. Federal agencies have weak incentives to work with start-ups, with no metrics to reward collaborations and few ways to cover costs. Finally, there is a lack of coordination on climate and energy technology transfer within DOE and its laboratories and across other agencies.
Public diplomacy is where I began at the State Department. My first boss was the Public Diplomacy Officer for Japan and Korea at the East Asian and Pacific Affairs. I remember he carried two name cards – one that had Japan come first and the other that had Korea come first like “Public Diplomacy Officer for Japan and Korea” and “Public Diplomacy Officer for Korea and Japan,” because the order of the name of the country mattered to the recipient.
I remember the PD meetings were the most upbeat and the most delightful out of all the meetings at State. Others tended to be more uptight more stiff.
U.S. Public Diplomacy is one of the five cones of the Foreign Service Officer career tracks, that attempt to “promote mutual understanding and support for U.S. policy goals.”
One thing to clarify is the difference between Public Affairs and Public Diplomacy. Public Affairs focuses on the news and delivering information on the policy issues and engages with domestic and international media to communicate its talking points. Public Diplomacy can involve PA, but it frequently involves exchanges and cultural activities. Those out at the posts or the embassies engage with the programs directly with the support of other bureaus, Education and Cultural Affairs and Center for Analytics. They engage with the international public via a variety of digital platforms and programs.
Some of their daily duties include writing speeches for Deputy Assistant Secretaries and above, writing Presidential notes for national holidays, hosting a delegation of exchange students, to creating programs like Food Diplomacy with top culinary chefs. PD practitioners have to think about how to present the U.S. position in nuanced and eloquent ways orally, writing, and digitally. An interesting event I was involved in was where high ranking U.S. official had handed over an artifact to Korea – an artifact a veteran had uncovered years ago.
One of my favorite PD leading thinkers is Joe Nye. Check out the Aspen report on reforming American Public Diplomacy in the tech world and the American Security Project report on communicating digitally strategically.
Other Public diplomacy website and blogs include:
For more PD resources consult:
The government hearings with tech leaders led me to thinking about how to lead out of confusion, complexities, and challenges of a hyper-connected today.
Citizens are better informed, networked, organized, and demanding with enormous influence.
Businesses, in this case, Facebook, struggle with the speed in which companies’ reputations, consumer values, and expectations evolve with greater transparency.
Governments face greater constraint to solve a whole set of problems without much room for maneuvering – missing the mark for effective leadership or judgment. By struggling to strike the right tone to please-all, they feel insecure about adapting to the speed of ideas to lead and govern.
I think it starts from having enough insight, vision, and humility to recognize that what they offer from a business or the government standpoint is to meet the needs of consumers, citizens, and the environment in a collaborative working sense.
When a disruption is so large, it is more about changes in the method of implementation than political rhetoric or vision.
Be both a visionary and a realist. Create the conditions for tackling those problems within and in partnership with implementation strategies that are feasible, practical, and operational.
Government officials need to work with business or non-profit not only as a way to reduce cost but also for innovative and long-term solutions to manage multi-dimensional public policies.
Business leaders will need to balance responding to short-term solutions and long-term strategic policies part of the larger political reality by anticipating risk, clear social goals with flexibility and independent expert advice.
Leaders with responsibility towards the community working across sectors with empathy for humanity and trusted relationships will help bring innovation and delivery skills to the work of government, nonprofits, and citizens for profit, growth, and societal benefit.
Now this is one of my favorite books.
It was not an easy read. It is a little more dense and challenging. But as a former recovering govie, it is speaking my language. Her book is written to debunk the public opinion of a “lumbering, bureaucratic state versus a dynamic, innovative private sector.” She writes on a series of recognizable case studies – Apple, Tesla, the Internet, and dissects how every tech invention we have in our hands came from the high-risk investments the government had initially had made. This also bled into other sectors in biotech and nanotech.
She also goes into comparing different models in China and the UK of their public-private approaches. She writes that the necessary movements and the tech advancements we need to see in this world, including the green revolution, needs to be backed by “patient capital” – the kind VCs do not always have the time for, and public sector and de-financialized private sector, that got the IT revolution off the ground.
To me though, it does seem like historical and observational accounts than experiential. As someone who had been in government and had seen innovation and partnerships firsthand, I am not as optimistic.
I did enjoy the in-depth examples and the case studies.
In clean tech, VC funding is focused on some of the safer bets rather than radical innovation for the sector to transform society. The public sector money is currently funding the riskiest and the most capital intensive projects in clean tech -in the upper right corner.
Clean tech companies can face a number of challenges transitioning from R&D to commercial production and the amount of capital require to reach economies of scale is typically higher than in the IT sectors where VC wealth is originated in the first place.
Climate change could not be a primary justification for investing in energy technologies, as it could be partially be “solved” with other non-renewable technologies like nuclear power.
Given the risk aversion nature of businesses, government need to sustain funding for the radical ideas to push the green industrial revolution to support the research and development of clean technologies to their commercial viability. VCs provide the capital to bridge the transition into commercialized production, but cannot provide the capital into IPO, merger, or acquisition. Commercial banks perceive clean tech firms or renewable energy projects as too risky. Public finance firms or State development banks may foster such innovation, as they are committed to be patient. Businesses and State has been historical partners in the process of economic and technological development.
There are different types of firms and types of policies that interact to shape to meet the desired ends. It is important to be innovative about the process and to understand the division of labor between the actors in the system, the role and commitment of each actor in the context in which they all operate.
Mazzucato shows that in modern capitalism the State has also actively shaped and created markets. This required financing not only basic research but also applied research and early stage financing of companies. In doing so, the State sometimes wins and sometimes fails. This book considers how to change this dysfunctional dynamic so that economic growth can be not only ‘smart’ but also ‘inclusive’. It is a conversation the U.S. desperately needs to have.
Impact is measured in its outputs of measurement, which I believe is reported back on platforms like Philanthropedia, GiveWell and others.
However, challenges persist in measuring impact for traditional investments, such as time period for returns. I think it also stems from changing the narrative of how to make investments accountable for impact than for a simple value sacrificing compensation.
There’s more and more talk of blended capital – a host of investors out there awaiting the emergence of profitable enterprises that will improve the lives of the poor in fundamental ways. We’ve been waiting for a while. In the real world of the poor, real change still means stepping up with money that you don’t expect to get back while demanding maximum returns in the form of impact.
There are serious challenges for improving efficiency in measuring impact – the existing power dynamic between donors and grantees prevents a feedback loop for foundations to know what is working and what is not. Investors, philanthropists, and for everyone else, people are more likely to achieve results that they intentionally seek.
The interest of the public sector is that foreign policy often equates to economic policy. An economic prowess of promoting growth and development is a drive wedge for sustainable growth, stability, peace, and prosperity.
Governments’ traditional roles have been to strengthen the reach by opening foreign markets, improving governance, transparency, as well as conditions for private sector-led growth. Governments and some foundations now provide funding to improve the social, political, and regulatory environments in which social enterprises and their investors operate—essentially a market building activity.
Today’s political environment is often described as “smart power,” using means of trade, diplomacy, aid, and others for a value-driven policy where individuals, businesses, and institutions act through global networks.
For any government to secure national interest upon economic industrial links and trades, it needs to deliver solutions to sustainability and scalability in impact investing as well as advancing conditions for private sector-led growth.
National interests are no longer simply delivered through applications of intelligence and tact to moderate relations between governments; it rather embraces solutions to cross-cutting socioeconomic challenges.
The ability to understand the evolving environment and capitalize on trends is a crucial skill of today enabling leaders to convert power resources into successful strategies.
I hope by continuing to work on a platform – we begin to understand that for more difficult problems, more nuanced and ambiguous solutions are. More ambiguous the solutions, the more diversity of voices there needs to be. Through convening of intelligence, I hope to continue the work where we cultivate conditions wherein collective wisdom emerges over time.
Investing in sound value-driven opportunities that can significantly reduce global threats are “good” investments, not only in a humanitarian sense but also in driving monetary value.
So how do we know what lies ahead of our future? What is the greatest crisis of our generation? What is relevant to us?
There is a lot of noise to screen out what is certainly dangerous or not. I would personally refer to the World Economic Forum’s The Global Risks Report. The attached link is the version for the 2019. A quick primer on risk management is that it starts with identifying and estimating the probability and impact of a given threat.
The first thing you will see is a map of different colors into the following categories of risks: economic, environmental, geopolitical, societal, and technological.[1] It will also show you the likelihood of the event happening as well as the magnitude of the risk inherent. On the top right of the corner of the graph, you can view the events that are most likely to happen with the greatest magnitude.
For your interest, the top three items all belong to a single category – Environmental. They are – “extreme weather events, failure of climate-change mitigation and adaptation, and natural disasters.”[2] Another one that is close to the three is cyber-attacks under the category of Technological. There are other interesting graphs in the report, but I’ll leave them to you for your own pleasure.
The companies with the new promise of a future are often misunderstood. Another way that we value the “good” or a potential “impact” of a company might be the assessing the potential of the companies to hopefully bring the imminent risks (indicated above are natural disasters, extreme weather events, and failure of climate-change mitigation and adaptation) lower on the graph spectrum. In other words, to have less impact when it happens or less likelihood of happening.
One thing I would note is that these categories refer to systematic challenges, where the identified problems are interconnected in every field of human activity. Therefore, the attempts to solve one issue may unintentionally contribute to another – like a technology that attempts to predict extreme weather events may put government employees out of work or potentially contribute to asset bubbles in a major economy.
In how companies create value, perhaps the first way of looking at sound companies is whether or not they are aimed at tackling systematic challenges or in a way to maximizes efficiency in a respective industry. In today’s globalized economy, often this is built upon a bedrock of transnational production, an inflow of people, goods, money, and ideas through multiple networks and other economic decentralization movements.
Here’s an example. Cyber-attacks are happening more often in prevalence and disruptive potential. They present serious strategic critical infrastructure damage across the world including the government, railways, banks, and telecommunications providers, as the vulnerability to attacks increase with radical and systematic shocks.
One that may be well and alive in people’s memories is the North Korean government-sponsored hacking of Sony Pictures. North Korea could potentially hack into intelligence about nuclear deterrence in the United States or South Korea. Another adversary can also thieve nuclear material or sabotage nuclear facility by knocking out digital systems in nuclear facilities.
A growing trend that could mitigate this increased risk is the adoption of blockchain technologies. Blockchain technology can be used to protect systems and devices from attacks. They can protect data exchanges between IoT devices without a centralized authority and a data verification mechanism.[3] Implementing robust processes is essential for effective management of complex systems and is at the heart of long-standing quality management programs across the industry.
However, often technologies have been swept up in a web of restrictions, regulations, and international conventions. Innovators and investors can address the barriers in different ways, but more effective partnership mechanisms may be prudent. As technologies have been subjected to regulatory regulations or in scrutiny for a positive pricing environment, it might be more effective to identify shared priorities across stakeholders or finding a way to reduce costs in streamlining the industry.
For investors, this means having to navigate the policies of governments of uncertainties that require expertise. Perhaps this means providing early-stage risk capital for entrepreneurs to de-risk business models.
New technologies and dynamics have improved our ability to identify trends and assess risks. In investing into emerging markets, the way to realistically mitigate risk is to obtain insurance through Overseas Private Investment Corporation or partnering with government institutions, like USAID, which provides loan guarantees to encourage banks in poor countries to lend to targeted groups.
The goal for OPIC is to provide innovative financial solutions for private investors and provides upfront due-diligence to assess the ability to raise additional private equity capital. What is really interesting is that OPIC goes to the country to ask the locals for trends in local deregulation and indicators on how open the economy is to understand how returns will be made. They then connect with investors with the right skill set to capitalize on the opportunity in operating experiences, locale, and in the ability to add enough value for the entrepreneurs.
The proper risk mitigation starts with due diligence. Once we have vetted out what “issue” is interesting and is relevant, the investors conduct comprehensive due diligence covering legal, economic, technical, and others to assess eligibility criteria.
So, how do we invest in our most emergent crises? In sum, I would point to a business that can is operationally sound to curb its own organizational risks and systematically tackles inefficiencies in an industry in a given area – for instance, environmental or cyber. Match them with investors that are well-equipped for the operating environment to achieve its business objectives.
The role that promote a common platform for deals with risk profiles may be needed to build a momentum to build and scale. Investments could be better classified by factors such as performance, risk, expected return, and an exit timeline for investors preferences.
Greater collaboration among players can help lower due diligence expenses to realize synergistic potential. From a policy perspective, often this means supporting a more balanced analysis that helps companies and stakeholders to make strategic decisions about investment and collaboration opportunities.
[1] http://www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf
[2] Ibid.
[3] https://www.forbes.com/sites/andrewarnold/2019/01/30/4-promising-use-cases-of-blockchain-in-cybersecurity/#7a7eba293ac3
