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Peter Ramsden on social innovation: "It's not only a question of resources; it's also about how we spend them."

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Ahead of the EUROCITIES Social Affairs Forum in Nantes 16-17 March, which will focus on ‘Involving citizen in social innovation’, we spoke with our keynote speaker Peter Ramsden.

Peter is a leading thinker and activist in the field of local, urban and regional economic development. He has worked for the European Commission, regional development agencies, local governments and in the URBACT EU programme helping cities to exchange and learn from good practices. He also works for think tanks and leads the company Freiss ltd, a niche micro-consultancy focusing on social innovation and local development. Peter Ramsden co-wrote the new guide to social innovation in cohesion policy and the guidance for community-led local development for all four European Structural and Investment Funds. He helps direct the European platform Social Innovation Europe (SIE) and this year he was appointed to the advisory group of Seoul Innovation, which will advise Park Won-soon, mayor of Seoul, on social innovation.

Here he answers our questions on what social innovation actually is, how Europe’s cities are promoting it, and the role national and EU funding can play in supporting social innovation at local level.

Peter, to start off, what is social innovation and why is it important?

Peter Ramsden: “There are many definitions out there – there is the EU definition of social innovation as socially oriented in both ends and means. However, I would go further and borrow from the TEpsie definition by the Young Foundation: ‘social innovations are new solutions (products, services, models, markets, processes etc.) that simultaneously meet a social need (more effectively than existing solutions) and lead to new or improved capabilities and relationships and better use of assets and resources. In other words, social innovations are both good for society and enhance society’s capacity to act.’

The key difference is about enhancing society’s capacity to act. In the past we often had state welfare and social systems that disempowered communities. Social innovation is important because it gives us a term that enables us to examine existing products and services in the social sphere and see how they can be improved. In the past we had social innovations but they were often random or organic or relied on heroic individuals. Now we can analyse how things change and take steps to improve them. We can be organised about it.

What are some of the benefits of social innovation to society and the wider economy?

 “We have a problem that many of our existing social systems were developed in a different period for different needs. We need to improve these systems so that they are relevant for today. Most of our services were never prototyped, and didn’t develop much once they were introduced. It was a sort of take it or leave it model. At the time the provision of social care, universal education, child protection, healthcare, social housing, or social welfare by the state were huge advances.

Now we find in each case that there are problems with our social models. They have unintended consequences – sink estates, welfare dependency, school drop-out etc. The existing ‘silo’ models of delivery make integrated responses difficult. So the benefits to society and the wider economy are in better services, that are more efficient and effective and almost always more personalised, that is to say ones that are customised to the individual’s needs.

What are the challenges of or barriers to social innovation?

PR: “The biggest challenge in Europe is the existing structures and policies. Angela Merkel famously said that Europe accounts for just over 7% of the world's population, 25% of its economy, and 50% of global social welfare spending, although deeper analysis shows that much of this welfare is spent on pensions. However, it is clear that we have the resources to address our problems, it is more about how we spend them. Much of our expenditure goes on forms of welfare that are not working well. So finding ways of using existing resources better is a major issue.

Social policy lacks the force of what the economist Joseph Schumpeter called ‘creative destruction’. Over ten years we saw the market for mobile phones transformed by the smartphone. In that process Apple and Samsung triumphed with their phones and with new operating systems. Nokia and others failed. We don’t see the equivalent replacement of old models of social care for example when new methods come along. 

We know that for instance our approach to child protection is often ineffective. Too many agencies are involved often with no results for the family. We know that early intervention and peer support is very important but we do not see radical change to care models. Similarly, with diet and health, we seem incapable of regulating the food-industrial complex to provide us with safer food, instead the media deploys blame culture to tyrannise people who are over-weight while our health bill for diabetes and other problems is exploding. Housing is another looming crisis where affordability has been sacrificed to the market, even though it is communities that create housing value, not developers. 

In local government, in many parts of Europe we still see bureaucratic cultures built around a 19th century culture of ‘signing’. This is a form of hierarchic accountability that does not belong in the 21st century. I remember joining the European Commission in the 1990s and meeting a ‘signataire’ for the first time. A process whereby a letter is created by a junior official, put in a cardboard folder one cm thick with a cover sheet of all the signatories and passes up through the ranks. Each change at each level would bring the letter back to me as the junior official. Sometimes it would take months for a letter to go out. During a visit to the director’s office you would witness stacks of signataires, all waiting for one man to go through them and it was just one man. We wrote marvellous letters and his rewrites were always better than mine, but you can’t run a modern organisation like this. 

We also need to recognise that the capacity to do new things has often been squeezed out of local administrations. If they have not been recruiting for 20 years, they have no new blood. If they are still structured in hierarchic departments with seniority based on time-served rather than talent it is very hard to achieve change. These new capacities are about openness, working with broad coalitions, bringing in talent from outside in team based approaches – and focusing on results rather than inputs. 

What social innovations have you seen in European cities that you have found particularly striking?

Focusing on participative approaches, I’m impressed by a range of EU cities that have used participative techniques for a wide range of problems. In the past these were often focused on issues like deprived neighbourhoods. We have good examples from German and Dutch cities, like Duisburg and Rotterdam, that have made sensitive interventions in neighbourhoods over nearly two decades. However, I would also criticise some of the older approaches because they sometimes failed to bring the learning back into their institutions. They tried to transform their cities without transforming themselves. The new forms of creativity that are clearly visible in the most dynamic businesses involve multi-disciplinary teams, task and finish groups, horizontal forms of management. You see this type of approach more in arms-length economic development agencies owned by municipalities than in the cities themselves. Swindon in the UK has taken some steps in this direction by integrating their delivery departments into a single directorate. 

In finance, we are seeing more and more experiments with forms of participatory finance. Some of these, like participatory budgeting, are on the spending side – Paris and Gdansk have their own versions of this drawing more or less from the Porto Alegre approach in Brazil - it can open up the municipality’s black box of finance to citizens and starts to raise more fundamental questions about spending priorities. On the financing side we see new ways of raising money from crowdfunding – for example in Rotterdam for a foot bridge over a busy road. Crowdfunding is exciting but has its limits – you might ask why some of these things hadn’t been paid for out of taxes, which are also funded by the ‘crowd’. The same goes for business improvement districts (e.g. London boroughs) where local businesses pay a supplementary charge to improve a street or centre. In austere times they may make sense. More direct engagement of citizens and businesses in local decision making might make these projects a priority.

Some of the most interesting developments are happening in service design. I’m impressed by how cities are using some of the new techniques like co-production and co-design, as well as hackathons and competitions to develop new services or apps. The idea of co-production is very important here, where citizen users are directly involved with professionals in redesigning services. Users bring an expertise and insight that professionals do not have. There are some great Dutch models. Slimmer Leven in Eindhoven has created a new emergency service for the elderly. I’m also very impressed by what Amersfoort in the Netherlands has done with its officers encouraging them to become ‘free-range civil servants’ and go out into the community and listen.  The results are already visible in their work on a new park located on the site of a derelict hospital and on sustainable food. They have recognised the need to transform themselves and the way that they work in order to transform their city. 

I also like the approach to crisis taken by some of the Greek cities. Kavala in Crete as part of an URBACT network developed a new prescription model working with clinicians and patients to address the problem of the cost of prescription drugs. The Bloomberg city challenge winners are interesting, like SynAthina which is creating a new form of dialogue with local people in a very poor quarter of Athens rife with homelessness and drug addiction. I’m attracted to the principles behind the first Social Innovation Factory, which works across Flanders.  They are hoping to develop a more city based model where Ghent and Antwerp – already very innovative cities that could play a key role. Barcelona’s urban lab is also very interesting.

Looking internationally, everyone is inspired by what Park Won-soon has done in Seoul which is perhaps the leading social innovation city worldwide at the moment. They have given a Korean twist to the sharing economy and have a strong focus on inequality. In the US New York’s Centre for Economic Opportunity and Izone, as well as the mayor’s fund for NYC, are investing in and testing social innovations. Boston has an office for New Urban Mechanics. Bogota and Medellin are taking radical steps in the barrios around connectivity, literacy and gangs. A key feature in these cities is that they have set up social innovation units inside their administration. 

What role could national and EU funded programmes play in supporting local social innovation?

First we need to be much more radical with our EU programmes – especially with the Structural Funds – the regional fund (ERDF) and the social fund (ESF). They are often used to prop up holes in national budgets, and are used for projects which make no sense – the famous roads to nowhere and bridges in the sky. We should be using both these funds as innovation funds. They should be investing in those things that local and regional authorities find hardest to do, developing new policies and approaches which are much more demand-led, more personalised and relational and more digital. We need to see investment as not just about investment in hard infrastructures but about investment in our own capability to solve problems. 

The new Article 7 on integrated sustainable urban development as part of the European Regional Development Fund regulations, which devolves a minimum of 5% to city authorities is a big opportunity, but it requires a lot of trust to be built between levels and it needs new capacities in the cities, which struggle to find the right staff to deliver.

We should be using technical assistance funds for capacity building – especially around the difficult issues like integrated approaches and partnership working. 

I’d also like to see the smart cities pilots funded under Horizon 2020 becoming more participative. The problem is no longer about the technology and sensors; it is about how we use data to change behaviour – for example around driving, eating and heating. These are at the people end of the problem and we need a citizen-focused approach. 

Most of all we need to create vibrant and dynamic social innovation ecosystems at city level which are linked to regional innovation strategies. I like what Turin, Brabantstad and Tampere are doing in this field. We need to bridge the gap between technological and social innovation – this will be the real opportunity for Europe – nowhere else in the world has the potential to create a new sustainable production/consumption system built around an inclusive social model. China, India or the United States cannot do this, Europe can. 

You can follow the conversation of the Social Affairs Forum in Nantes 16-17 March at #SAFcities