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Massachusetts Institute of Technology Legatum center for development & entrepreneurship

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Below is an article from the Legatum Center

System-Changing Innovation and Entrepreneurship in a Post-Covid-19 World

It is January 2020 and I am looking at data about broken markets: One in nine people in the world go hungry each day and hundreds of millions of children are malnourished, even though there is enough food to feed us all. About two billion people lack access to safe water, including millions in cities and rural areas in the United States. 1.7 billion people are unbanked and rely on cash for their survival. The number of non-elderly individuals who do not have access to health insurance in the US continues to increase, reaching 27.9 million in 2018. Economic inequality and wealth concentration are at a historical high in most countries.

What will those numbers look like in 2021? Probably several multiples of that, as the world will be battling not only a pandemic, but also an unprecedented global economic crisis that will certainly deepen these – until now – intractable problems. The magnitude of the challenges in front us, together with a new awareness of the interconnectedness of these problems, will be a game-changer for all of us. Finding new solutions in a post-COVID-19 world requires that we all embrace and cultivate the worldview of system-changing innovators and entrepreneurs.

System Change Entrepreneurship

We tend to associate systemic challenges and issues of unequal access to goods and services with the role of governments and public policy makers. However, fixing ‘broken markets’—those markets that systemically exclude many of us—requires more than new rules and regulations or the allocation of unprecedented financial resources.

Fixing capitalism starts with a new worldview in all of us—one leading to a new kind of innovation and entrepreneurship. By this, I mean businesses and social entrepreneurs and their teams who are capable of envisioning and building the new architecture that could take us from the ‘business as usual’ of broken markets to the emergence of ‘a new future,’ and a more resilient and better world for all.

The post-COVID-19 world will certainly face several years of recession worldwide and, unless each of us start acting differently, there will be a deepening of inequality and, as a result, a likely weakening of democracy and freedom. None of us would like to live in that world if we can avoid it. But, can we?

What is the arrival of COVID-19 teaching us?

If COVID-19 has taught us anything, it’s probably that we are all connected, and that systems will be fixed if we all behave responsibly and finally learn the value of cooperation and the common good. Most of us have heard this before, but now it has a very different ring to it.

For starters, the way we frame value and assess risks and rewards needs to change. The very essence of most business models needs to evolve. Imagine that you are:

  • an airline executive and you are offered the choice to develop airplane cabins designed to improve airflow and minimize passengers’ exposure to a virus. Would you do it?
  • a health practitioner facing the choice to spend more time with a patient to help improve his wellbeing – not with drugs but by encouraging new behaviors. Would you do it?
  • an IT designer involved in K-12 education and you have the opportunity to re-imagine access to the digital world for every child and youth, though you know it is likely to take years to be profitable. Would you do it?

COVID-19 has made the answer to these and other related questions very personal. In just two months, the airline executive has seen her company collapse; doctors and health practitioners have witnessed hundreds of thousands of patients with chronic diseases die because they were more vulnerable to the virus; and millions of children and youth are out of school without access to remote learning solutions.

What it has also changed is that more than ever before, we see these types of complex problems as worth solving. The number of us sharing a sense of urgency for the emergence of systemic solutions is increasing fast. But still few of us realize that, to increase our ability to solve these problems together, we need to acquire a new mindset—a new worldview.

What is the worldview of system changers?

Research co-led by McKinsey and Ashoka, one of the world’s leading communities of social entrepreneurs, shows that many system changers share important beliefs or assumptions: that any problem is solvable, that individuals and organizations can contribute to society when empowered to do so, and that people are well intentioned. As described in a recent McKinsey Quarterly article, in this new worldview, systems changers view every problem as solvable, and understand that there is more than one path to the solution[1].

Given the complex nature of the change they are trying to make, not only within a specific value chain but across an entire system, the journey of most system-changing entrepreneurs and their teams becomes a long, messy, creative journey—requiring co-creation with partners and multiple iterations of ideas to craft a solution and build value-creating systems that benefit all. The clarity of their intent in terms of the problem they want to solve, as well as their sense of purpose and determination that the right solution will eventually emerge promotes their individual and collective resilience to keep looking and iterating.

While this worldview on its own does not necessarily predict success, it is an ingoing mindset that successful system changers share as they work to scale their reach and impact. Their ability to “see differently” leads them to “do differently”: they lead from within, as they find new areas of growth; motivate others to be part of the solutions; build partnerships and alliances based on a true alignment of goals; and, design highly effective interventions that benefits everyone.

As they explore partnerships, systems changers approach other individuals, even organizations, with the assumption that they are well-intentioned and can contribute to society when empowered to do so. Combining this with the belief that alliances drive systems change creates a powerful ability for social changers to forge unlikely partnerships that can be game-changing with a wide array of players, whether end consumers, social sector organizations, CEO’s of other companies, or local governments.

How can we instill the worldview of system changers in everyone?

According to Ashoka, the community that has been my home for many years, instilling the worldview of system changers in everyone is about the combination of building peer communities of leading system changers and, at the same time, building pioneering partnerships to enable everyone to self-identify and practice change-making. And everyone here truly means everyone: children, youth, university students, teachers, corporate teams, as well as those who work in government and civil society. For Ashoka, change-making is like literacy a hundred years ago—a basic skill quickly becoming the new normal.

At the MIT Legatum Center for Development and Entrepreneurship, my new home since February this year, experiential learning is at the core of the more than 200 Legatum Fellows’ journeys. Every year, 25+ new Fellows join a community of peers to co-develop their start-ups and practice the art and science of entrepreneurship in emerging markets. At the MIT Sloan School of Management, the Legatum Fellows and MBA students are engaged in classes that provide not only new knowledge, but opportunities to apply this knowledge to real problems. (My favorite so far has been Innovation Ecosystems where we learned a new approach for assessing “innovation-driven entrepreneurship” in Ecosystems).

I have no doubt that communities like MIT and Ashoka will continue deepening their ways and means to instill in everyone the awareness and the worldview of system changers—and I sincerely hope that every type of institution does the same around the world as we all explore and learn better ways to create and sustain value across systems. The post-COVID-19 world requires all of us to creatively reframe problems and transform the very systems that created them. Are you ready to contribute to this challenge and make the world ahead of us a better world for all?

Valeria Budinich is a system change entrepreneur committed to helping others transform their business and social ventures into high-impact opportunities that make the world a better home for all.  Her ambition is to transform the practice of system changing into everyone’s business. She is currently a Scholar-in-Residence at the MIT Legatum Center.

[1]    “Answering society’s call: A new leadership imperative.  How do transparency, empathy, and meaning work in practice?,”   Co-authored by Anita Biaggio, Nora Gardner, Valeria Budinich, and Fernande Raine.  McKinsey Quarterly (November, 2019).

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