GAO-16-375SP: International affairs: 12. U.S.-Funded Development Innovation Programs

International affairs > 12. U.S.-Funded Development Innovation Programs

The U.S. Agency for International Development should establish a joint approach to collaboration among its Development Innovation Ventures program and other similar U.S.-funded programs in India to better manage overlap.

Why This Area Is Important

In October 2010, the U.S. Agency for International Development (USAID) established the Development Innovation Ventures (DIV) program as a key component of the USAID Forward initiative to strengthen USAID by pursuing a more results-oriented approach, developing new partnerships, and investing in innovative solutions to development challenges. DIV’s goal is to create a portfolio of innovations that improve the lives of millions of people around the world within 10 years, especially those living in poverty or extreme poverty. DIV seeks to test new approaches to development assistance and identify those that can deliver more impact per dollar spent. DIV also aims to manage risks by investing relatively small amounts of funding in new and innovative ideas for solving development problems and investing larger amounts in ideas that have been proven to work through rigorous evaluation. From fiscal years 2010 to 2015, DIV obligated approximately $72.5 million for innovation projects to reduce poverty across a range of sectors, including energy, health, and education.

Managed at USAID headquarters, DIV takes a venture capital approach to investing in innovations by awarding grants through a three-stage funding model. The model is intended to identify, evaluate, and scale up development innovations that demonstrate widespread impact and cost-effectiveness. In stage 1 (proof of concept), DIV provides small grants for testing the viability of an innovation in a real-world setting. In stage 2 (testing and positioning for scale), grantees determine through rigorous evaluations whether the solution can achieve greater impact and can be implemented successfully at a larger scale. In stage 3 (transitioning proven solutions to scale), DIV funding supports innovations that seek to transition a solution from large-scale implementation to widespread adoption in one country or to replication in an additional country.

What GAO Found

In a December 2015 report, GAO found that DIV and other U.S.-funded innovation programs in India supported similar objectives and beneficiaries among poor, underserved populations in India. For example, in 2012 the USAID mission in India (“USAID India”) established the Millennium Alliance, an innovation grant program modeled on DIV. This program provides funding to Indian grantees that demonstrate cost-effective solutions that address the needs of the extreme poor in India. Like DIV, the program uses a staged funding model to make relatively small initial investments, test more developed solutions, and scale up those that have proven development impact through rigorous evaluations. USAID India also created the India Partnerships program in 2013 to overcome critical development challenges through new technologies and other innovations that can be rigorously tested, shared, and scaled up in India and abroad.  In addition, in 2012, the Department of State (State) began funding innovations to support economic growth for underserved populations in India through the U.S.-India Science and Technology Endowment Fund.

GAO’s review of project data for these programs identified instances where DIV and other USAID and State innovation programs funded similar projects in India, as shown in the figure below. These included projects to test the viability of “clean” cook stoves in rural markets, the provision of inexpensive eye care and eyewear for poor and underserved populations, and multiple projects to support the development, testing, or implementation of micro grids for people living in rural areas who are unconnected to the power grid.

Innovation Projects Funded by Development Innovation Ventures and Other U.S.-Funded Innovation Programs in India

Innovation Projects Funded by Development Innovation Ventures and Other U.S.-Funded Innovation Programs in India

USAID and State officials who GAO interviewed in India stated that they generally supported the implementation of similar innovation programs in India by different organizations if the programs resulted in additional resources being made available to poor and underserved populations. According to these officials, there is a vast need for innovations such as clean energy and off-grid electricity that improve the lives of the poor in that country. These officials said that as a result, in some cases it may be necessary to fund several similar or competing solutions in an effort to identify the few that demonstrate widespread impact and cost-effectiveness. However, GAO has previously noted that without enhanced collaboration, overlap may have a negative effect in that limited resources may not be used in the most effective and efficient manner.[1] GAO has also previously found that several key practices that enhance collaboration—including articulating a joint strategy and common outcomes, agreeing on roles and responsibilities, and identifying and addressing needs by leveraging resources—can help manage programs with similar objectives and beneficiaries.[2]

Collaboration among DIV and U.S.-funded innovation programs in India has not routinely or systematically included the key practices GAO has identified that enhance collaboration and, with some exceptions, has been limited to USAID India’s providing initial input to DIV regarding grant award decisions. For example, during USAID India’s technical reviews of DIV applications, DIV communicated with USAID India officials, requesting that USAID India review applications for projects that DIV subsequently funded in India. DIV officials also provided some additional examples of communication and consultation with USAID India beyond the initial consultation on DIV applications, such as joint funding of a project to rigorously test an innovation to increase full immunization rates in rural areas.

However, according to DIV officials and a wide range of USAID India and State officials GAO spoke with in India, collaboration among programs beyond these examples has been limited. These officials indicated that after award decisions were made, DIV and the other programs did not systematically share information about project results or reach agreements on their respective roles and responsibilities, such as roles in coordinating planning for the use of grant funds or in monitoring the implementation of grants. State officials who manage other innovation programs in India also stated that while they were aware of some of the activities that DIV supported in India, DIV had not communicated with these programs to collaborate on ongoing or upcoming efforts.

USAID India and State officials who GAO interviewed in India who manage innovation programs that are similar to DIV said that limited collaboration among these programs and DIV had resulted in missed opportunities to share information and leverage USAID India resources. These included missed opportunities to provide outreach to DIV grantees and monitor project implementation and to market DIV innovations to government of India officials and other stakeholders with the means to scale them up, if appropriate.

During the course of GAO’s review, DIV officials acknowledged that collaboration could be improved and began implementing an action plan to improve collaboration with missions and bureaus within USAID. The plan outlines steps to share information on DIV’s activities across the agency, including establishing DIV points of contact for outreach with missions and bureaus and developing tools for providing more frequent updates on DIV projects with the missions. However, DIV’s action plan, while a promising step toward improving collaboration, does not yet represent a joint approach among the overlapping innovation programs that GAO identified in India or include key practices of successful collaboration. For example, DIV has not extended its action plan outside of USAID India to include State’s U.S.-India Science and Technology Endowment Fund. DIV also has not harmonized its award selection processes with those of the other innovation programs to help ensure that funding for similar projects is appropriate and not duplicative. Thus, DIV cannot maximize the likelihood that the benefits of its initial outreach efforts will be realized.



[1] See GAO, Fragmentation, Overlap, and Duplication: An Evaluation and Management Guide, GAO‑15‑49SP (Washington, D.C.: Apr. 14, 2015) and Results-Oriented Government: Practices That Can Help Enhance and Sustain Collaboration among Federal Agencies, GAO‑06‑15 (Washington, D.C.: Oct. 21, 2005).

Actions Needed

To help ensure that DIV is making progress toward achieving its global development goal, in December 2015, GAO recommended that the Administrator of USAID take the following action:

  • Establish a joint approach to collaboration reflecting agreement with the USAID mission in India and with other related U.S. agency programs in India, and consider where such a joint approach would be beneficial in other countries.

Data are not available to quantify the financial benefit of establishing a joint approach to collaboration among USAID’s Development Innovation Ventures program and other similar U.S. programs in India and considering such an approach in other countries. However, taking these actions could strengthen coordination among U.S.-funded innovation programs and help result in more efficient use of U.S. financial support for innovation projects in India and other developing countries.

How GAO Conducted Its Work

The information contained in this analysis is based on findings from the product listed in the related GAO products section. GAO examined DIV’s collaboration with other similar U.S. development assistance innovation programs, using India as a nongeneralizable case study. GAO selected India as a case study based on analysis of USAID project data. As of 2014, India was the largest recipient of DIV funding representing approximately one-third of the program’s portfolio. To determine the extent to which DIV overlaps with programs from USAID and other U.S. agencies in India, and the extent to which it has funded projects that could overlap or duplicate projects funded by U.S. agencies in India, GAO obtained and analyzed program and project data and information for fiscal years 2010 to 2015 from DIV officials in Washington, D.C., and from USAID India and State officials in New Delhi, India. To examine DIV’s collaboration with similar U.S. development assistance innovation programs in India, GAO interviewed officials at USAID, State, the Department of Agriculture’s Foreign Agricultural Service (FAS), and the Department of Energy, in Washington, D.C., and traveled to the USAID Mission in New Delhi, India, to interview officials from USAID, State, FAS, the U.S. Trade and Development Agency, and the Department of Commerce. During this fieldwork, GAO identified programs at USAID India and the U.S. Embassy in New Delhi that had innovation and development components. GAO interviewed program officials from these agencies, including the Chief of Mission and the Deputy Chief of Mission, to obtain information on the programs and their experiences in collaborating with the DIV office in Washington, D.C.

Table 7 in appendix V lists the programs GAO identified that might have similar or overlapping objectives, provide similar services, or be fragmented across government missions.  Overlap and fragmentation might not necessarily lead to actual duplication, and some degree of overlap and duplication may be justified.

Agency Comments & GAO Contact

In commenting on the December 2015 report on which this analysis is based, USAID agreed with GAO’s recommendation, stating that GAO’s review had helped identify areas for improvement. USAID also discussed steps it is taking to respond to the recommendation. Specifically, USAID discussed collaboration and coordination between DIV and the USAID mission in India that had occurred during the course of GAO’s review. USAID also stated that it would build on these collaboration efforts, discuss where improvements could be made, and take action to formalize them.

GAO provided a draft on this report section to USAID and State for review and comment. Neither USAID nor State provided comments on this report section.

For additional information about this area, contact David B. Gootnick at (202) 512-3149 or gootnickd@gao.gov.