The Innovation Fund for Development (Fonds d'Innovation pour le Développement) is a new and ambitious funding mechanism. It offers grants to innovators and researchers to experiment, take strategic risks and demonstrate the impact of solutions aimed at reducing poverty and inequality. It enables teams from all types of organisations to test new ideas and put innovation and research at the service of transforming public development policies.
The Innovation Fund for Development (FID) was born out of the desire to modernise France's international solidarity policy. The FID gives substance to this ambition by allocating resources dedicated to experimentation using more agile and partnership-based methods.
It is an instrument for financing innovation that:
- Supports innovation, wherever and whenever it comes from: the IDF is based on a call for projects that is continuously open to a very broad spectrum of sectors, geographies and structures.
- Has specific and demanding selection criteria: rigorous proof of the impact on improving the lives of people living in poverty, the cost-effectiveness of the innovation and the potential for scaling up, widespread adoption and sustainability.
- Holds a close link with research to rigorously validate the potential impact of the solutions funded.
The aim of the FID is to stimulate, accelerate and deploy innovative solutions with high impact potential to meet the challenges of combating poverty and inequality and transforming public development policies. The FID has a broad definition of innovation in the fight against poverty and inequality. The Fund contributes to the development of technological, social, financial, methodological and environmental innovations that accelerate the implementation of the Sustainable Development Goals in partner countries. Priority is given to innovations that address the challenges of poverty and inequality. The fund is open to applicants proposing a project in any low- or middle-income country. Although this geographical scope is broad, the announcement of the launch of the Fund and the calls for proposals encourage applications proposing work in priority geographical areas, including the 19 poor priority countries for French aid. The ultimate goal of the FID is to accelerate high-impact solutions for sustainable development, which can be deployed on a large scale to improve millions of lives, provided they are financed over the long term by the public and/or private sectors. The FID's ambition is to expand the scope and nature of its activity to invest in transformative solutions to some of the major development challenges facing the world.
The IDF offers funding via 5 grant levels at key stages in the development of innovations: Stage 0 (up to €50,000) funds project start-ups and promising applications that would otherwise have less chance of securing subsequent funding; Stage 1 (up to €200,000) funds the pilot phase of innovations that are in the early stages of development, have already passed the prototyping phase and are ready to be tested in real-life conditions; stage 2 (up to €1.5 million) finances in-depth experimentation and the scaling up of innovations; stage 3 (up to €4 million) finances the transition of solutions that have been rigorously and scientifically validated to widespread use; and the "Public Policy Transformation" stage (up to €500,000) finances the institutionalisation of specific innovations or the strengthening of government capacities.
What Makes Your Project Innovative?
The Innovation Fund for Development stands out from other instruments for financing innovation for development because of the link it develops between research, experimental methods and the evaluation of the impact of the innovations it finances on public policy. To achieve its mission, the Fund is developing new partnerships for development, particularly with the private sector and philanthropy, drawing in particular on diaspora networks. It can also implement financial innovation for development.
What is the current status of your innovation?
By 2022, the IDF had received approximately 1,800 applications and selected 40 innovative projects. The Fund is attracting interest from other bilateral donors and the European Union, who are exchanging ideas with FID teams and considering the development of similar initiatives in other countries to meet a real need that has been identified
Collaborations & Partnerships
The FID is an independent structure, hosted by the French Development Agency (AFD) under an agreement between AFD and the French State, represented by the Ministry of Europe and Foreign Affairs (MEAE) and the Ministry of Economy and Finance (MEF). The fund was inspired by the methodology of existing innovation funds such as USAID's Development Innovation Ventures, developing its own signature through its own methodology and financing methods.
Users, Stakeholders & Beneficiaries
The direct beneficiaries are the innovators, who may come from any type of organisation (e.g. research institutes, universities, NGOs, governments, businesses). If their project is selected, they implement the activity developed through FID's funding. This activity, which may take the form of a study or experiment, has a direct impact on the beneficiaries targeted by the experiment, which may sometimes include scaling up.
Results, Outcomes & Impacts
By 2022, the IDF had received approximately 1,800 applications and selected 40 innovative projects, 80% of which are located in an African country, particularly in West Africa. The sectors financed include: health, agriculture and food security, education, employment and governance. Half of the projects funded involve NGOs, 10 involve universities, 7 involve businesses and 4 involve public bodies. The projects were all assessed on the basis of the 3 criteria developed by the FID: 1) The impact on improving the lives of people living in poverty (or a clear strategy for generating it/them), and a clear strategy for evaluating it rigorously; 2) The capacity of a development innovation to demonstrate more impact per euro than the status quo or the alternatives; 3) The capacity of an innovation to be replicated and deployed rapidly or effectively to reach a very large number of beneficiaries.
Challenges and Failures
The FID considers solutions that offer an improvement on existing approaches in terms of cost, speed of implementation or feasibility, with a strong potential for impact on large-scale development. The aim of the FID is to bring new organisations to a good understanding of the selection criteria, in particular the notion of rigorous impact assessment and cost-effectiveness. In order to attract key players in the fight against poverty and inequality, such as public and development ecosystem players and researchers from the South, the FID organises awareness-raising activities (in the form of workshops) and capacity-building, such as the co-organisation of the "Summer School" in Abidjan last July, which aimed to strengthen the impact evaluation knowledge of more than 70 African researchers and decision-makers.
Conditions for Success
The conditions necessary for the success of the FID:
- The embodiment of the IDF by an eminent personality enabled the rapid implementation of the FID, the development of a solid methodology and the recognition of the Fund.
- Strong support from the French government via the official announcement of the creation of the IDF at the "Presidential Council for Development" on 17 December 2020
- Financial support from the French Ministries (MEAE and MEF)
- Support from legislators for the launch of the Fund
- Hosted by the French Development Agency - AFD (Agence Française de Développement): the FID benefited from the already established structure and processes in place, while retaining its independence with its own management board.
FID's ambition is to nurture and inspire the activities of development players through the prism of innovation, by identifying new players, new solutions and new approaches. Eventually, some of the projects incubated at the FID that have demonstrated their impact could be scaled up and replicated by other public funds. The Fund is attracting interest from other bilateral donors and the European Union, who are exchanging ideas with FID teams and considering the development of similar initiatives in other countries to meet a real need that has been identified. This interest could result in the creation of innovation funds based on the FID model, or in the development of the FID itself, with new partnerships that would help to increase the FID's funds.
The embodiment of the FID, government support and hosting by an existing structure (AFD) are criteria to be taken into account as conditions for the success of the Fund. Ideally, these conditions should be replicated for the creation of similar structures. After a year and a half in existence, the FID has realised that there is a huge demand for this type of funding. There are a large number of applicant projects and the quality of the projects financed is very high, which means that other funds with a similar configuration could emerge.
- Implementation - making the innovation happen
- Diffusing Lessons - using what was learnt to inform other projects and understanding how the innovation can be applied in other ways
4 August 2023