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Seeding markets to grow transformational innovations

Government as a catalyst

The transformations that are needed to solve society’s largest challenges today are unlikely to be solved by technological innovations alone. Government has a phenomenal history of catalyzing innovations that shaped the modern world, but the challenges of the 21st century are beyond the power of any single player. It needs to understand who plays what role, when, and with what tools.

Seeding Markets to Grow Transformational Innovations
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Many of the features of modern life are the result of government-driven innovation and investments. The reach of government innovation goes far beyond just digital technology. The biggest problems of today demand both technological and non-technological innovations. Societal challenges such as climate change or eroding public trust cannot be solved by new technology tools alone. Rather, they will take new ideas and new technologies working together to improve people’s lives. Government needs to play an important role in shaping and supporting innovations to these massive problems.

But in today’s environment, where the private sector has emerged as a dominant source of funding for both technological and social innovation, finding these solutions requires government to work in a more integrated, agile way with the private sector. To catalyze the innovations of tomorrow, government needs new tools today.

This report considers lessons for government’s market-seeding efforts that can be applied to the search for transformational social innovations.

The Challenges Of Social Innovation

Social innovations present unique challenges to those trying to cultivate them. The transformations that are needed to solve society’s largest challenges in the 21st are unlikely to be solved by technological innovations alone. Take some of the wicked problems in today’s world as an example. Problems such as the opioid crisis or affordability in higher education all may include some element of technology. For instance, AI can help identify over-prescribers or at-risk populations to ease the opioid crisis or virtual learning can help bring higher education to a wider population4. But, even in these cases, the technologies will only make meaningful impact on the problem when paired with social innovations as well – new enforcement and diversion mechanisms in the opioid crisis and new business models and forms of student support in higher education. The transformational innovations of the future, then, will likely depend on catalyzing both technological and social innovations. And while you can look to your smartphone or air travel for evidence of government’s success in catalyzing technological innovations, there are fewer clear examples of social innovation. 

The second challenge for social innovations is that without measurable outcomes, it can be difficult to create markets for those outcomes. Technological innovations are typically catalyzed to scale by markets – consumers want to buy transistor radios, companies want the latest business intelligence software, and so on

Meet our leader

William D. Eggers

Deloitte - United States
William D. Eggers is the executive director of Deloitte’s Center for Government Insights where he is responsible for the firm’s public sector thought leadership. Eggers is the author of numerous books. His new book, Bridgebuilders: How Government Can Transcend Boundaries to Solve Big Problems (Harvard Review Business Press (2023), shows how governments at all levels can more effectively tackle society’s toughest challenges by collaborating with bridgebuilders who bring together different parts of government and tap into other sectors of society. His other books include: Delivering on Digital, The Solution Revolution, named to ten best-book-of-the-year lists, The Washington Post best seller If We Can Put a Man on the Moon, The Public Innovator’s Playbook, and Governing by Network (2004), the winner of the Louis Brownlow book award, which recognizes outstanding contributions in the field of public administration. He coined the term Government 2.0 in a book by the same name. His books have won numerous other national best-book awards. Eggers also serves as a fellow at the National Academy of Public Administration, a governance futures council member at the World Economic Forum, an advisory board member at What Works Cities and chairs the Leadership Council for New America. His commentary has appeared in dozens of major media outlets including the New York Times, Wall Street Journal, The Washington Post, and The Guardian.
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