Spotlight: How innovation challenges can help solve local problems

Coming out of the biggest public health crisis in generations, after grappling with years of austerity, local authorities are under pressure to deliver quality services to communities whilst also growing the local economy. Kathy Nothstine, Head of Future Cities at Nesta Challenges, explains how running innovation challenges can help local authorities solve problems and design new products and services in a creative, nimble and outcomes-focused way.

What is an innovation challenge?

At Nesta Challenges, we start out with a problem that needs to be solved and then we invite innovators – start-ups, SMEs, technologists, social enterprises and more – to find a solution. Entrants are judged against a public set of criteria, and the winners are awarded a cash prize and benefit from public recognition. Competitors are supported along the way with small grant awards and capacity building.

Challenges enable the most promising innovators to mature their solutions and become competitive in the marketplace, bringing benefits to the public long after the challenge itself has ended.

Nesta Challenges runs open innovation challenges to support innovators to solve complex problems and help shape new ways of delivering services for social benefit. More and more, we’ve been partnering with local authorities to run city-based, open innovation challenges.

The London Mayor’s Resilience Fund used an open innovation challenge to help prepare the capital for future shocks. Source: Khris Morgan.

Future-proofing London: the Mayor’s Resilience Fund

In 2021 we ran the £1 million London Mayor’s Resilience Fund in partnership with the Greater London Authority and 10 ‘problem-holder’ organisations, including several local authorities and other public bodies. The fund was targeted at building London’s resilience as we emerge from Covid-19, to make sure the capital is prepared for future disruptions.

In the first phase of the Mayor’s Resilience Fund we launched an open call to problem-holders (local authorities, charities, government agencies) to share the complex challenges they wanted to see solved. We heard about issues like public transport access, small business support, mental health and high street regeneration.

Finding the problems

We selected 10 cross-cutting topics that were well suited to the innovation challenge process. We then worked closely with each problem-holder (we called them ‘Resilience Partners’) to fine-tune the brief and map out the support they’d be able to provide to innovators along the way.

Innovators were asked to create:

  • a better way to track and analyse vacancies in order to regenerate high streets with LB Ealing
  • new ways for local businesses and community organisations to easily, and affordably, occupy new space in commercial developments in LB Hackney
  • a data service that models and visualises air quality data and the health impacts of interventions for vulnerable residents in LB Lambeth.

Other challenges addressed things like optimising freight movement in central London, better managing food donations in LB Barnet, and working with TfL to help people feel safer on public transport. (You can read more about the challenges, the Resilience Partners and the winning solutions here.)

Finding the solutions

We then opened up the challenges to the public, asking people to submit their solutions. In April 2021, we worked with an expert judging panel to select 35 innovators as semi-finalists. Each of these innovators received a modest amount of funding (£10k each) to refine their solution.

They then engaged in a five-week design sprint, working closely with the Resilience Partners, to learn more about the challenges, meet stakeholders and end-users, access data-sets, and develop their product further. We also provided capacity building support, with specialised 1:1 training offered to each innovator in service design, user experience, pitching and other business support services.

In July 2021, 10 organisations were announced as winners and awarded £40,000 each to further develop their solutions. The winning innovations included:

  • generating renewable energy at the Royal Docks
  • a financial management tool to support gig workers (developed by Finmo with the Living Wage Foundation)
  • and a door-to-door journey planner and companion app created by JCNTION with TfL, which integrates health and travel data to enable people to travel confidently when using public transport.
Cranes next to river thames
One of the Resilience Fund’s winning innovations was a way to generate renewable energy at the Royal Docks. Source: Future of London. 

Lessons for local authorities

From this experience, we have four key lessons to pass along to any local authorities that are keen to use open innovation challenges to drive local change.

  1. Engage your stakeholders from the start

Running an open innovation challenge can be a highly effective way to solve complex problems and support your local innovation ecosystem. But to do it well, all the different players need to be involved from the beginning.

Start with your problem. Who’s affected by it? The people in your community who need better ways to travel? The residents and businesses of a declining high street? Ask them what their problems are and what would make things better.

Then talk to the innovator community. What ideas do they have? What problems are they having turning their ideas into a reality?

  1. Know what you can offer innovators

Companies might enter a challenge because of the promise of a cash prize, or the glory of being named the winner. But innovators will need more than that along the way, like additional data on bus ridership, or a chance to talk to the people who run the food banks. Work out what you can provide to help innovators succeed.

  1. Identify a strong call to action

Not all problems are suited to a challenge like this. Plenty of things can be solved through a standard procurement process. But if you want to bring in unusual suspects, solve something that has not been solved by a ‘business as usual’ approach, and foster new products with long-term commercial viability, a challenge might be your best route.

Consider what we call the ‘green light criteria’ to shape your challenge:

  • make sure there’s a clear goal
  • determine if you need fresh thinking
  • decide what you can offer to make it attractive to innovators to enter
  • identify whether there will be a market for the solutions that come forward
  • check to see if your challenge will accelerate progress in a way that normal grant funding wouldn’t.
  1. Be prepared to work!

Challenges aren’t a shortcut to solving problems. They can accelerate solutions, bring in new expertise and create new opportunities for your innovator community, and, ultimately, help to shape transformative change.

But they require a lot of behind-the-scenes activity: engaging with the problem-holders, shaping the challenge, running a communications and outreach campaign, developing the offer to innovators, securing assessors and judges, writing the application and criteria, managing the review processes, delivering the support to innovators – it’s a lot! Be prepared to invest the time and energy that’s needed.

For more information, get in touch with Kathy Nothstine. If you have a new initiative or idea for a Spotlight, please get in touch with Sophie Nellis.