The power of data-driven social investment

New Zealand is internationally renowned and domestically appreciated as a great place to live, work, and play. However, underneath the surface, we face significant economic and social challenges and persistent inequity that need urgent attention.

This is where the concept of ‘social investment’ comes in, representing an evidence-based outcomes-led investment approach to public policy and resource allocation. This ‘investment’ seeks to intervene proactively in societal issues, resulting in long-term benefits rather than short-term fixes. It involves directing public and private resources to initiatives expected to generate positive socio-economic and environmental returns for the community, the country, and future generations. This evidence-based investment approach is gaining traction as it offers a more long-term outcome-focused method of policymaking, which is crucial when organisations are under pressure to deliver more with less.

New Zealand is faced with rising healthcare costs, an ageing population, and poor life outcomes, alongside low productivity growth, education disparities, and a cost-of-living crisis. All these have prompted a refreshed understanding of the social investment approach and how to turn this into policy interventions that would help alleviate these challenges.

Prioritising interventions based on data and evidence

Social investment can help organisations target resources and prioritise focus in an environment full of the complexities of ballooning fiscal responsibilities and mounting social needs. For social investment to work, it requires a cross-agency, evidence-based and data-driven approach to policymaking. Understanding the drivers and risk factors leading to sub-optimal outcomes would allow organisations to invest in early interventions and preventative initiatives.

Using data and evidence from previous and existing programmes and services enables organisations to be more insightful about managing the challenges and barriers to success. This, in turn, allows them to target their approach and interventions that could result in positive impacts and higher long-term returns on investments.

Why leverage data?

Using data and analytics is a cornerstone in advancing social investment initiatives. By leveraging data, policymakers and practitioners can improve decision-making processes, enhance the accuracy of predictions concerning social wellbeing issues, improve resource prioritisation and deliver more targeted services. Data analytics allows for identifying trends, patterns, and causal relationships that might only have been discovered with cross-sectional and cross-sectoral evidence. With this information, decision-makers can develop tailored strategies that are more likely to provide positive outcomes for unique communities or population cohorts and discontinue ineffective ones.

While data analytics capabilities have matured in many parts of the public sector, there are still capability and workforce gaps and constraints across smaller and community-based organisations. We must accelerate using digital and data enablers to help advance all-of-government and cross-organisation data exchange and operationalise social investment approaches. It would include an increased focus on data exchange and an uplift in analytics capabilities for all organisations involved, including smaller and community-based organisations. These organisations hold vital information about disadvantaged communities and cohorts who are exposed to risk factors that lead to sub-optimal outcomes for generations.

In addition to modernising data and data exchange environments, keeping up with the latest technology is essential to enable more efficient data processing and analysis. Organisations should seek a better understanding of artificial intelligence (AI) to augment our limited human resources, helping them handle and interact with both quantitative and qualitative longitudinal data efficiently and effectively.

AI remains an area that needs to be fully explored, with the need to establish proper data ethics and governance to mitigate risks. It is a fast-growing capability worth considering in the context of social investment, particularly how the breadth of its capabilities can be realised to achieve investment outcomes while also understanding any implications of its use and cross-sectoral accountability arrangements.

Global trends of data-driven approaches and social investments

Data-driven approaches and investments have been gaining popularity worldwide, and several success stories have emerged that can attest to the potency of this strategy.

In Finland, the use of comprehensive data allowed the government to substantially reduce homelessness through the Housing First programme, which proved to offer better outcomes in contrast to traditional models.¹

In the United Kingdom, the Troubled Families Programme harnessed data to identify and assist families in need, preventing social issues from escalating.² These examples showcase best practices, such as the necessity of cross-sector collaboration, the use of real-time data for ongoing policy refinement, and the importance of setting clear, measurable objectives for each initiative.

The way forward for the public service

The key lies in embracing data analytics capabilities for public sector practitioners who want to maximise their impact. It could involve upskilling in data literacy, investing in robust data collection and analysis tools, and fostering a culture that encourages data-driven decision-making.

New Zealand is at a tipping point where social investment could help navigate us through looming financial challenges and strengthen our country’s social fabric innovatively and sustainably. As stewards of the public good, policymakers, public practitioners, and all involved in public sector administration must adopt a forward-thinking mindset that recognises data as an invaluable asset in our decision-making toolkit. The most logical way forward is to embrace data in our social investment strategies and recognise it as a smart, sustainable, and effective pathway towards a brighter future for our nation.

Endnotes

1. Finland ends homelessness and provides shelter for all in need 10 November 2020. https://thebetter.news/housing-first-finland-homelessness/
2. Troubled Families Programme – Evaluation Overview Policy Report December 2017 by the Department for Communities and Local Government. https://assets.publishing.service.gov.uk/media/5a820863e5274a2e87dc0cb8/Troubled_Families_-_Evaluation_Overview.pdf