GLOBAL INNOVATION FUND

THE GLOBAL INNOVATION FUND (GIF) WORKS TO SUPPORT INNOVATIONS THAT WILL IMPROVE LIVES FOR HUNDREDS OF MILLIONS OF PEOPLE ACROSS MULTIPLE DEVELOPING COUNTRIES. WHILST MANY INNOVATIONS ORIGINALLY CREATED FOR DEVELOPING COUNTRIES HAVE HAD A VERY SIGNIFICANT IMPACT IN DEVELOPING COUNTRIES, DEVELOPING COUNTRIES FREQUENTLY FACE UNIQUE CHALLENGES REQUIRING SOLUTIONS WHICH MEET THEIR SPECIFIC NEEDS AND CIRCUMSTANCES. GIF DEFINES "INNOVATION" BROADLY: ANY SOLUTION TO A DEVELOPMENTAL CHALLENGE THAT HAS THE POTENTIAL TO IMPROVE THE LIVES OF THE POOR IN DEVELOPING COUNTRIES MORE EFFECTIVELY THAN EXISTING APPROACHES. THIS COULD, FOR EXAMPLE, INCLUDE THE DEVELOPMENT OF NEW PRODUCTS, SERVICES, BUSINESS MODELS, OR POLICY PRACTICES THAT BENEFIT POOR AND VULNERABLE COMMUNITIES OR THE DEVELOPMENT OF NEW WAYS TO DELIVER OR TO ADAPT EXISTING PRODUCTS, SERVICES, BUSINESS MODELS, OR POLICY PRACTICES IN ORDER TO ENSURE THAT THEY BECOME MORE EFFECTIVE AT REACHING THE POOR. THERE ARE HIGH COSTS IN DEVELOPING AND BRINGING AN INNOVATION TO SCALE YET SUCCESSFUL INNOVATORS TYPICALLY ONLY CAPTURE A SMALL FRACTION OF THE BENEFITS OF THEIR WORK. THIS IS PARTICULARLY SO IN THE CONTEXT OF INNOVATION FOR THE BENEFIT OF THE POOR IN DEVELOPING COUNTRIES. THIS RESULTS IN MARKET FAILURE AS POTENTIAL INNOVATORS ARE NOT INCENTIVIZED TO MAKE SOCIALLY BENEFICIAL INVESTMENTS, LEADING TO UNDERINVESTMENT. THIS LIMITS INNOVATION BY BOTH THE PRIVATE AND THE PUBLIC SECTOR. IN THE PRIVATE SECTOR, INNOVATORS CANNOT CAPTURE ALL INVESTMENT RETURNS AS SUCCESSFUL INNOVATIONS OFTEN INVITE EARLY IMITATION BY COMPETITORS WHILST THEIR DEVELOPMENT IS OFTEN TIME CONSUMING, RISKY AND EXPENSIVE--THIS CAN DISCOURAGE INVESTMENT OUTRIGHT. IN THE PUBLIC SECTOR, THERE IS EVEN LESS RETURN TO THE INNOVATION INVESTOR. INNOVATION DEVELOPERS MAY FIND THEMSELVES BLAMED FOR FAILURES THAT ARE LIKELY TO ARISE AND CANNOT CAPTURE ANY FORM OF MARKET RETURN. SUCH MARKET FAILURE PROVIDES A KEY IMPERATIVE FOR THE PUBLICLY FUNDED SUPPORT FOR INNOVATION WHICH IS DIRECTED AT THE PROBLEMS AFFECTING THE WORLD'S POOREST.