Pareto Problems for Digital Innovation?

Photo Credit: http://www.flickr.com/photos/pigpencole/1264620687/
Going for the High Hanging Fruit?

[Summary: Local by Social author Andy Gibson is working on a new paper for NESTA on how digital innovation can save public services, and has asked for reflections on ‘obstacles and their solutions’ to adoption or more social technology. I’ve written on practical barriers to digital technology in government before, but here I’m exploring an economic argument that sets out a potential challenge to many digital-social innovation projects*.]

The Pareto Problem
The Pareto Principle (named after the famous Italian Economist, but often known just as the 80-20 rule) suggests that in many real-world situations 80% of the features required in a project can be gained with just 20% of the effort**.

In software development and much of the business world, focussing on the 80% of features you can build easily makes sense. For each bit of effort put in at the start there is a large marginal return and benefit; but as you get to the trickier bits of a project, the marginal benefit (the number of people who will use a feature; how much benefit each new feature will bring etc.) relative to effort put in falls. The last 20% of features might cost four times as much as the first 80%, and in many cases, implementing them simply isn’t cost effective. So, the rational developer or manager never provides them.

Public Services don’t work like that. The tricky 20% of a service to provide is often the service to the most in need. Into that tricky 20% might fall providing services in remote rural areas; educating children from more challenging backgrounds; providing transports services for the elderly; making sure education classes are accessible to those with additional needs and so-on. When social innovators hold up technology driven innovations – new ways of providing public services – we have to ask: are they just solving the easy 80% and ignoring the tough cases?

Is the promise of more efficient and cheaper digital services simply the result of a slight-of-hand – measuring the costs of a service based on it’s provision in the easy cases and bracketing out the tough cases which would require re-engineering systems and adding significant cost and effort if a digital service were to be a universal service?

Possible Solutions
The Pareto Problem isn’t an argument against digital innovation per se. Innovation can shift where the Pareto Problem kick’s in (e.g. Can we serve 90% of the people on 10% of the cost and make savings that way?) and innovation can help the public sector to challenge the frequent over-design of processes and systems around the tough cases. However, the Pareto Problem is significant. A few possible ways to address it in thinking about digital innovation are addressed below.

  • Account for a universal service – any digital innovation needs to show its cost and benefits not just in the easy pilot cases – but also if it were to provide a universal service. Or if it can’t provide a universal service it needs to explain it’s limitations, and allow the public sector to properly cost provision to those the innovation will not work for.
  • Take the tough cases into account – Conventional design of services in the public sector often starts with tough cases. Staff have in mind the cases they faced recently where a service user had complex needs – and they design from the tricky cases first – building all sorts of processes and systems to cope with the complexities. Agile developers often start with the easy cases – and far too often the tough cases get ignored. For example, how does your service work for young people who need additional privacy because of a custody battle currently taking place? Or how does your service work for people with learning difficulties and other additional needs? ??Find the balance between over-engineering processes, but having processes that work for those with the greatest needs, is the key challenge for social innovators.
  • Design with social justice in mind – digital innovation in the public sector shouldn’t just be about creating ‘better stuff’ and ‘better services’ for individuals to consume: it should be about creating a ‘better society’ – and that involves thinking about the distribution of benefits from innovation as well as the nature of the innovation itself.
  • Collaborate and listen – the most important way to make sure social innovations don’t fall into a Pareto Problem trap is to design with the people working at the frontline.

A metaphorical summary
I started writing this post a while back under the title ‘What happens when we’ve picked all the low hanging fruit?’. Many digital innovations come showing as basket full of the low hanging fruit and explain how easy it was to pick. The key is asking – how are you also planning to get the stuff from the top of the tree as well?



* I’m posting this very tentatively, not sure that I’ve quite managed to express the idea I’ve been reflecting on – but aware that Andy’s paper is currently in progress and that working on the last 20% of tweaks to get this blog post spot on is, um, well, going to take at least four times as long as what’s been written so far… (#paretopost)

** Pareto’s original observations concerned the distribution of wealth in Italy, but the principle has been applied much more widely since. The actual numbers don’t matter here. The 80-20 ratio is simply used because Pareto observed it as a ratio that applied in many real-world situation. Take any ratio in the region of 70-30 towards 99-1 and you will see the argument above still broadly holds.

Guest post: Using data to highlight poverty and social justice issues in the World Cup

Today brings two firsts for this blog. The first ever guest post on the blog. And the first (and possibly only) instance of a post here dedicated to football. So, please welcome Pontus Westerberg from the World Development Movement, introducing this summer’s most essential data driven website…

Pontus WesterbergWho are you going to cheer for in the World Cup? Most people in the UK will probably support England, but what if you’re from Scotland, Wales or Northern Ireland and your team didn’t qualify?

Even if your team did qualify, who do you cheer for when they’re not playing? Perhaps a team that plays attractive football, like Brazil or a team that contains players from the club team that you support.

At the World Development Movement we wanted to take this idea a bit further and get people to discuss issues of social injustice, poverty and unfairness that we care a lot about.

The result is the site www.whoshouldicheerfor.com which ranks the countries playing in the World Cup based on a range of development and social justice indicators such as maternal maternity rate, carbon emissions per capita and income inequality.

The statistics for the indicators have mostly been taken from the UN’s Human Development Report and place Ghana as the most supportable team. To get the ‘league table we ranked each team for each indicator, then worked out a mean position for each one.

We’ve had some questions about the rankings. ‘Why is Nigeria so high up?’, has been a common one. The answer is that Nigeria has comparatively low carbon emissions and military spending, but also that it is the poorest country playing in the world cup.

That’s right – to highlight the gross inequalities that exist in the world we’ve ranked teams with low GDP per capita higher than teams with high GDP per capita. In our view, the underdogs – teams such as Cote d’Ivoire and Nigeria – from the poorest countries in the World Cup deserve our support more than richer countries.

Of course, the ranking does not represent the official view of WDM on the countries themselves. It’s meant to be a fun and interested way to think hard about serious issues. How come Nigeria is the poorest country in the World Cup, yet has one of the world’s largest oil reserves? Why does the United States – the richest country – give so little money in aid?

So, go ahead, get involved. Who are you going to cheer for?


A campaign that’s time has come: Robin Hood Tax #rht

I’ve long supported the idea of a Tobin Tax some form of Tobin-like tax (update 11th Feb) – taxing financial market transactions a minute amount to fund development and investment in poverty reduction (and more recently, climate change prevention, adaptation and mitigation). The trouble is, talking about a financial transaction tax isn’t the easiest thing to do.

So it’s fantastic to see the launch today of the Robin Hood Tax campaign. If you support one campaign this year…make it this one.

Getting T-Shirts printed? Make sure they’re Fair Trade…

A common checklist for planning an event or promoting a new project:

  • Think up a name [CHECK]
  • Design a logo and brand [CHECK]
  • Find someone to print t-shirts with the logo on [CHECK]
  • Check that the t-shirts are made with fairtrade cotton……. um, check?

When I started campaigning for Oxford University to only sell ethically traded clothing back in 2003, we had to dig around and research a lot to find out how to source ethical clothing. The FAIRTRADE Mark for cotton didn't exist then – and choosing ethical clothes meant a six-week lead time and a lot of extra cost.

FAIRTRADE Mark

Things are different now. You can get ethically sourced and FAIRTRADE t-shirts printed for minimal extra cost – easily arranged and quickly delivered through any number of suppliers. And yet – and many events I go to – even those organised by 'ethical' organisations – I find I'm handed a t-shirt made by 'Fruits of the Loom'.

I was planning to use this blog post to share research I did three years ago on where to source ethical and FAIRTRADE t-shirts, as I thought it must still be tricky to find the right suppliers. But, looking at that document I realised a) that it's out of date, and b) a quick search for fairtrade t-shirt printers turns up almost all you need to know.

Top of the list right now, T-Shirt and Sons, certainly come recomended as I've been nothing but happy with service from them in the past, but chances are you can also find a local supplier near you now offering Fairtrade garments. In fact, I was pleasantly suprised to find Shirt Works in Oxford now also offer Fair Trade options – eliminating the final excuse of Sports Clubs and Societies in Oxford who formerly claimed it was too complex to opt for ethical when getting team tees printed.

And even if you find yourself with a complex purchasing need for a large number of ethical goods – there are people around to help. Salta Sustainable (formerly Fair Trade First) are, in my experience, certainly really helpful in supporting ethical procurement.

So, next time you're at a project meeting where someone says 'We need t-shirts' – just make sure you CHECK that they will come with the FAIRTRADE Mark…

P.S. If you're wondering why this is important, you can do worse than to start by looking at the Clean Clothes website here.