From analog to digital (network) institutions

Umair Haque has an interesting piece from his blog, Edge Economy that pretty much sums up the state of the art company/institutions at the moment:

“The real problem isn’t stimulus, it’s responsiveness. We’re trapped in a zombieconomy: one full of brain-dead organizations who are about as intelligently responsive as Homer Simpson.

Want better clothes? Don’t ask the Gap. Want better software? Don’t ask Microsoft. Want better cars? Don’t ask Detroit. Want better music? Don’t ask record labels. Want better healthcare? Don’t ask big pharma. Want to hold on to your money? Don’t ask a banker. Welcome to economic Bizarro World.

The economy has gone catatonic. Unresponsive corporations are just the tip of the iceberg. Markets can’t allocate. Investors won’t invest. Banks can’t value, or hold onto anything of value. People don’t trust, much less consume. What’s going on? The real problem isn’t how or what we stimulate – but that almost none of our organizations could respond in the first place.

Yesterday’s institutions have left today’s organizations unable to respond to an increasingly turbulent world. What’s responsiveness, and what does it have to do with institutions? Here’s a recent talkI gave discussing net-generation institutions…..Today’s organizations need a responsiveness upgrade. To that end, we need a new kind of stimulus: an institutional stimulus, not just a financial one, that makes our lame, brain-dead, zombified organizations more responsive. Gap, Detroit, Microsoft, big pharma, record labels, banks, evil corporations of the world – hello? Anyone home?

We can stimulate trade from here until Doomsday – but without more responsive organizations, today’s failure to create new industries and renew old ones will simply recur at an accelerating pace.

Money, value, and wealth are an outcome of having responsive organizations in the first place. Yesterday, the Manhattan Project renewed America’s technological base. Today, we need a Manhattan Project to renew our institutional fabric – because yesterday’s rules and principles are limiting the responsiveness of our organizations.

Haque thinks what we need is better contracts and standards, better governance and management. Maybe so, but perhaps the problem is even deeper. If I take this and look at banking and health, I think there is a lot more to this. Brilliant insight into the problem but we could do better in terms of solutions. I still think that there is much we can learn from the P2P, open innovation, cooperation discourse that we’ve merely scratched the surface of in recent years. My challenge in thinking about collaboratories and eco-systems of stakeholders who could create networks to drive disruptive innovation is to develop the tools to make these contracts/relationships flexible yet strong enough to generate the trust to build “organizations without walls”, how to make breakthroughs in a field such as healthcare where secrecy around IP is the norm and to open this up to enable new business models derived from the IP commons. Furthermore, what about an unsustainable market mechanism that works on the basis of the quarter rather than long-term, sustainable health outcomes?

Fragments of an open health economy…

Here’s a recent abstract from Health Affairs: During the projection period (2008-2018), average annual growth in national health spending is projected to be 6.2 percent–2.1 percentage points faster than average annual growth in gross domestic product (GDP). The health share of GDP is anticipated to rise rapidly from 16.2 percent in 2007 to 17.6 percent in 2009, largely as a result of the recession, and then climb to 20.3 percent by 2018. Public payers are expected to become the largest source of funding for health care in 2016 and are projected to pay for more than half of all national health spending in 2018 (Health Affairs 28, no. 2 (2009): w346-w357).

Everyone knows that the status quo is unsustainable given the worsening financial crisis and the fact that employers are growing less willing to pay more and get less in terms of health outcomes. In global health we’ve seen a great deal of innovation in terms of PPPs for neglected diseases but we’re coming up against similar problems with inefficiencies, fragmentation and a long way to go in terms of improving health outcomes. Health systems are performing poorly and the vertically driven approaches of the last decade are viewed as one of the problems.

We clearly need to rethink what innovation in health and public health look like. We can no longer just view new technologies as the answer. Just being new is not innovation. Furthermore, the mindset of the health professions must change; we need new tools, new ways of thinking about systems and then implementing an entire assemblage of new/old norms, technologies, social technologies. Health reform, well, if you aren’t tired of the same old set of health wonks boring you to tears with why nothing works, why universal or consumer-driven healthcare is the way of the future, then, I don’t know what to tell you. Several years ago while working on a Pioneer Grant for the Robert Wood Johnson Foundation that was to help RWJF think about how they could leverage the tools and technologies of cooperation to become a better catalyst for health system transformation, we interviewed a number of other Pioneer grantees. The most interesting thing they had to say was that the first step was to NOT do another blue ribbon panel with the same voices that have benefited from a dysfunctional health system. If only….

For the past year I’ve been thinking about what a paradigm for health system transformation, not “health reform” (those words make me somewhat ill), might look like. My last gig at IFTF in 2007 was to run a conference on what we called “Open Health”. I now think their are enough pieces of the puzzle in place that we can see some hope for a nascent “Open Health Economy” if we start putting the pieces of the puzzle together and work to disrupt the current system and not allow “health reform”, the rather anemic and euphemistic “consumer-driven” healthcare and its various guises to become the only available discourses for how we think about health and healthcare.

We live in a networked world whether you’re a fan of Manuel Castels or not. And no, to my friends in public health who at times flinch at the mere mention of technology and like to speak for “the community”, that is “technology-less”, the poor are not too stupid to use technologies, appropriate them and cannibalize (and here) them for their own ends.  We can certainly raise issues of access and the processes of technology development (see Melissa Leach and Ian Scoones on this topic here).  In fact, ‘innovation’ should include new innovation systems that bring end-users of technologies and systems into the equation earlier. As our knowledge of health grows we know that there are complex interactions between the environment, genetics, social networks, etc.  However, our institutions are still in an analog form and poorly equipped to deal with chronic health issues, food safety (eg. the current peanut butter/salmonella crisis is showing how our food system is in tatters when it comes to food safety), ecological health, and the myriad connections of factors that influence health outcomes. etc. We’re hit the limits to single slice solutions and prevailing economic conditions place limits on how we approach complex problems. 

The paradigm of “Open Health” that leverages the insights from open innovation (eg. InnoCentive, Nokia’s open platforms, Henry Chesbrough, Global Brain, Index Award), peer-to-peer production (eg. Yochai Benkler, the Foundation for P2P Alternatives), calls for open data (eg. Free Our Data, Open Data Commons), co-created health services (eg. RED Project’s Open Health initiative), new commons (eg. Social Venture Commons, Science Commons, Knowledge Commons, Health Commons, Entrepreneur Commons), social media in health or health 2.0 (,Patients Like Me, etc.), social business models and social entrepreneurship (Narayana Hrudayalaya, Aravind Eye Hospitals, Health Launchpad, Participle, ), open access publishing, medicine 2.0, the mobile web, geoweb, government 2.0, collaboratories, cooperation (eg. smart mobs, Peter Kollock) and citizen science (here, here, here).  From the world of design there are organizations such as Think Public  ( and more hereherehere, and here) and new urbanism and learn from Varnelis how to think about cities, health and networks:

 “networked ecologies,” plural “infrastructures” that are “hypercomplex” and as likely to consist of legal mechanisms and barely visible cell-phone networks as the heavy stuff of tunnels and bridges. Inherently less apparent than the infrastructure that came before, they’re also as likely to be owned by corporations as by governments—meaning these networks can’t really be controlled, only “appropriated” according to their own logic. With traditional planning made impotent by capitalism and NIMBYism, rebuilding the city now requires a “new type of urbanist,”

 What we have here is a vast and growing network of projects, experiments, technologies and new ways of framing problems that can be brought together to RETHINK HEALTH and drive towards health system transformations in the US and abroad.  What is lacking is a synthesis or, for lack of another term, a health innovation portal for bringing these various strands of thought together, think through the politics of open health and develop new strategies, business models and approaches.  For example, the public health community has generally been in an antagonistic relationship with the food industry and its role in marketing junk food to children, use of HFCS, etc. However, the market drivers are pushing food companies toward more sustainable and nutritious food systems and we can only change these systems by engaging with the food industry for new “healthy” partnerships that get better food into communities and bodies.  Food companies have had to deal with the call for healthy foods but often these fail in the marketplace.  Can we work together to create better food eco-systems without the finger pointed at us as sell-outs?  I believe so and feel that we must.  There are lost opportunities here if we don’t.  The list above is by no means the sum total of what can be done. But there are important political insights if one thinks critically about the tendency towards techno-libertarianism and the “market solves everything” mentality that runs through much of the social entrepreneurship and technology innovation fields.  We’re in a period of restructuring of markets and thought.   A strong dose of policy entrepreneurship is needed as well. The next generation of social entrepreneurship will have to address the issues of the politics of social businesses and political life in general and how to cooperate with government for win-wins. Critical thought here would aim to unpack the taken-for-grantedness of some of the concepts and approaches and look for ways that disruptive innovation through novel forms of cooperation and network organizations, rather than analog institutions, could make us healthier and avoid the immense degree of unnecessary suffering that health systems worldwide continue to tolerate.