Julie Bishop to create $140m ‘hub’ to revolutionise aid

THE Coalition will commit $140m for an innovation hub to tap private-sector expertise to tackle international aid.

Foreign Minister Julie Bishop at the Australian High Commission in Port Vila yesterday on a cyclone aid inspection trip. Picture: Mark Calleja

THE Coalition will commit $140 million to create an innovation hub designed to tap private-sector expertise to revolutionise the delivery and effectiveness of Australia’s international aid.

The innovationXchange project, to be announced today by Foreign Minister Julie Bishop, will draw key international practitioners from private enterprise to a centre in Canberra.

Its first program will be a joint collaboration with international philanthropist and former New York mayor Michael Bloomberg to spend $US100m ($130m) helping 20 most-at-need nations improve their basic health records, such as the number of births and the causes of deaths. Ms Bishop believes this is a key, structural impediment to improving health outcomes.

The purpose of the innovationXchange project is to find new and innovative ways of tackling intractable social, health and poverty problems that have proved resistant to traditional aid approaches.

The former New York mayor’s Bloomberg Philanthropies will contribute $US85m towards the cost of the Data for Health project.

The Australian government will contribute $20m, of which $15m will come from the new innov­ationXchange budget and $5m from the health segment of the remaind­er of the aid budget.

The $140m outlay over four years for the innovationXchange centre will come from the overall aid budget, which The Australian understands is likely to suffer a further small cut in the May ­budget.

Ms Bishop will announce today the composition of an international reference group to advise and assess the innovation­Xchange, bringing together private-sector figures and leaders from relevant non-government organisations.

The group will be chaired by Ms Bishop and will include Mr Bloomberg, Seven Group chief operating officer Ryan Stokes, Bjorn Lomborg of the Copenhagen Consensus Centre, senior MasterCard US executive Tara Nathan and prominent company director Sam Mostyn, the president of the Australian Council for International Development.

It will also involve Chris Vein, the chief executive of Dome Advisory Services and a former chief information officer for the World Bank. Before that role, Mr Vein held a senior position in science and technology policy in the White House in Washington DC. Mr Vein will join the inno­vationXchange hub full-time in Canberra for two months.

Ms Bishop hopes innovation­Xchange will develop a hi-tech start-up mentality that will draw in expertise from government, the private sector and NGOs to tackle the most intractable problems of poverty.

It consciously draws on the model for developing innovation in Silicon Valley technology start-ups and will be licensed to embrace more financial risk than a normal government bureaucracy in trying new solutions.

It will fund new projects — sometimes in collaboration with organisations such as Bloomberg Philanthropies, sometimes on its own — and where it strikes success the Australian aid budget will be able to quickly scale up projects. Where an approach does not work, it can be dropped quickly.

If it uncovers successful new models for aid, a great deal of Australia’s $5 billion annual aid program could be improved in its efficiency and effectiveness. The first project — Data for Health — will work in 20 countries in Asia, the Pacific, Africa and Latin America.

However, the general focus of innovationXchange efforts will be heavily on the South Pacific and Southeast Asia, in accord with the Abbott government’s aid priorities. The South Pacific, in partic­ular, has not benefited from recent innovations in aid delivery.

Mr Bloomberg said the Australian project would “challenge the status quo and use innovation to solve tough problems”.

Justine Greening, the British Secretary of State for International Development, has flagged London’s interest in collaborating.

“Australia’s new innovation­Xchange will be an important vehicle in driving new approaches, new products and services and new international partnerships,” she said. “We look forward to continuing our close work with Australia on this important agenda.”

Ms Bishop, writing exclusively for The Australian today, points out that 65 per cent of all deaths worldwide, about 35 million each year, go unrecorded.

It is believed that Data for Health will focus on the potential for mobile phone technology to aggregate and record key health data, allowing governments and aid agencies to tailor programs more effectively.

The innovationXchange project will also give effect to the government’s priority, pioneered by Ms Bishop, for the aid program to more effectively enable business capability to tackle entrenched poverty.

International investment flows dwarf aid flows but, even with billions of dollars of aid, certain areas of poverty and disadvantage have so far proven impossible to tackle. Connecting the anti-poverty prior­ities of aid with the power of private enterprise at all levels is a central part of Ms Bishop’s vision for Australian aid.

The innovationXchange project plans to be unprecedented in its openness of information and willingness to collaborate, as well as its ability to move quickly and undertake controlled financial risks in trying out new solutions.

It will be headed by a senior Department of Foreign Affairs and Trade bureaucrat but will seek to draw heavily on the expertise of its reference group and the collaboration of the widest group of policy experts possible.