Multilateral Institutions: Innovation or Oblivion
Geneva – Multilateral institutions are currently under immense pressure, especially in the realm of global development, as startups and tech giants rapidly develop digital solutions, while donors increasingly demand flexibility as a condition for continued support. Institutions that derive their legitimacy largely from their ability to bring parties together must now adapt to remain relevant and credible. This means shifting from slow consensus-based approaches to more dynamic frameworks that encourage rapid experimentation.
For example, multilateral bodies like the organization I work for – the Group on Earth Observations (GEO) – have long focused on ensuring an open, reliable data system. However, with the pace of innovation in the private sector accelerating, we must develop the ability to innovate quickly, though in a transparent and inclusive manner.
Multilateral organizations like GEO, UN agencies, and development banks face difficulties in keeping pace with developments because they were not designed to be flexible. The governance of multiple member states leads to excessive bureaucracy and risk aversion, combined with highly restricted funding. Moreover, only a few multilateral initiatives incorporate mechanisms to close ineffective projects, while outdated structures and incentives make it hard to shut down legacy programs and reallocate resources to new ideas. This results in painfully slow innovation.
Nonetheless, these institutions can encourage experimentation and calculated risk-taking by adopting an accelerator model that enables rapid testing of proposed solutions. As Alex Osterwalder, founder and CEO of Strategyzer, noted, treating initiatives as a portfolio of bets – expecting some failures – lays the groundwork for breakthroughs. A private sector example is Bosch’s accelerator, which has invested about $30 million in 214 projects, viewing each as a potential impactful investment. This approach to calculated risk, which significantly differs from the conservative models of multilateral financing, has resulted in the success of 19 business projects.
Encouragingly, some multilateral institutions have begun to embrace this model. The United Nations Development Programme (UNDP) has established a massive development innovation network, comprising 91 accelerated labs for experimentation and adaptation aimed at improving outcomes in 115 countries. The World Food Programme has enhanced its impact through its own "Innovation Accelerator," which has raised approximately $300 million since 2015 to use AI-powered tools and strategies for adapting to climate change. Additionally, GEO’s "Global Ecosystem Atlas" initiative has moved from concept to prototype in just nine months, demonstrating that rapid innovation is possible with the right support.
The challenge now is to implement systematic reforms that make innovation a core competency within multilateral institutions. This begins with creating accelerators or innovation labs or project teams within these institutions and granting them a clear mandate to seek out and develop new ideas, with some autonomy from traditional bureaucratic channels. For instance, the UNDP’s accelerator labs provide a safe environment for experimentation, enjoying relative independence from political oversight while maintaining transparency and clear governance.
Multilateral institutions must also establish mechanisms for periodic project reviews. Alongside defining milestones, any initiative that does not deliver results within a set timeframe should be either ended or modified – a common approach in the tech sector that prevents resource drain on unproductive projects. Embracing a “portfolio approach” guarantees a healthy flow of initiatives: high-risk ideas enter the portfolio, then are scaled if they succeed or discarded if they do not achieve the desired outcomes. As highlighted by the UK’s stringent funding alerts to inactive agencies, stopping or reforming a failing program may be necessary for progress.
Equally important is allocating funds for high-risk, high-reward experiments. A “project fund” within a multilateral institution can be used to co-finance experimental projects or technology trials without impacting core programs. In addition to introducing venture capital, these institutions should adopt "innovation accounting" practices that focus on learning and early impact, such as the number of prototypes tested or the number of course corrections made. Inspired by agile startup methodologies, these metrics allow for data-driven decisions about which projects warrant scaling or termination. Rather than avoiding failure at all costs, multilateral institutions need to learn how to fail productively.
Moreover, innovation will falter if staff fear punishment for every mistake. Leaders should foster a culture that tolerates risk. This means celebrating teams that try bold ideas (even if the outcomes are mixed), offering rewards for creativity and problem-solving, and training teams to manage risks intelligently. Organizations like the World Bank and the UNDP have begun nurturing this type of environment by sponsoring innovation challenges and honoring "intrapreneurs."
Finally, traditional hierarchies and lengthy planning cycles hinder the innovation process. Multilateral institutions should adopt more flexible organizational structures, such as cross-functional teams capable of swiftly responding to emerging issues, or project management techniques that allow for adaptive planning, including short cycles, iterative design, and feedback loops from users. Procedurally, this might involve streamlining approval processes for experimental projects or granting teams greater freedom to test innovations without needing approval for every minor modification. The UNDP has moved away from the traditional hierarchical approach in favor of a more flexible network model suited to its accelerator labs.
To continue addressing global challenges, multilateral institutions must innovate – or risk losing their position to more agile entities. With their legitimacy, neutrality, and the trust they have built with governments and communities, these institutions have a unique opportunity to adopt viable, scalable, and sustainable technological solutions. But first, they must adapt to the era of rapid innovation.
