About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

SDGs: Two tools to achieve them

The world faces huge challenges in terms of social and environmental sustainability. Climate change and inequality are arguably two of the best-known examples. Traditional efforts from the international community to tackle these problems haven’t been fruitful, because of the complexity and scale of the issues. Their cross-border characteristics, which require a constant review of the implied trade-offs, demands a systemic approach to finding solutions. An alliance between the public, private and third sectors to address these is now essential.

Even though sustainable development efforts have historically come from the public and third sector, the size of the threat on social and environmental sustainability has grown to an extent that now requires all sectors to join forces to tackle it.

The relevance of the private sector to the global economy, and its potential to help solve these problems, makes it a critical actor for the design and implementation of strategic plans across the world. These plans centre around addressing the Sustainable Development Goals (SDGs) - “the blueprint to achieve a better and more sustainable future for all”, developed by the United Nations in 2015.

Joining forces

As such, the importance of multi-actor collaboration was recognised within SDG 17: “Partnership for the goals: Strengthen the means of implementation and revitalize the global partnership for sustainable development”. NGOs and development agencies are now increasingly collaborating with private companies, and pioneering initiatives that tackle sustainability challenges have been multiplying over the last few years. These initiatives go beyond traditional Corporate Social Responsibility, like Vodafone’s partnership with Blueprint for Better Business or the partnership between the Ellen MacArthur Foundation and a number of significant fashion retailers.

Solving these wicked problems

Beyond the alliance of all sectors, innovation is paramount to solving these “wicked problems”: either through designing new products and services; implementing new, more sustainable business models and supply chains; or testing creative methods to solve these problems. New technologies, such as artificial intelligence and drones, have the potential to radically amplify the impact of development initiatives. Innovative business models focused on providing basic services to the “bottom of the income pyramid” may revolutionise the lives of millions of people (whilst taking into account the constraints of this demographic). The relevance of innovation to achieve the SDGs is also clear in SDG 9, which encourages all nations to invest in and drive innovation.

While most of the SDGs focus on desired outcomes, SDGs 9 and 17 focus on the approaches to adopt to achieve the goals, and there are two main instruments which combine collaboration and innovation: grants and challenge prizes.

How can grants help?

Traditional grants are well-known in supporting the emergence of innovative solutions, especially when the funder has an existing idea around the way the challenge should be tackled, and what the solution should look like. As a result, they often fund ideas which are at a fairly advanced stage in their development. But what happens when the problem faced cannot be framed in a narrow enough way to clearly identify eligibility criteria for awardees from the outset? Or when the innovators working on solutions need to develop their skills first before reaching the required level of eligibility?

Some grants now include community building, or the participation in an accelerator programme, to ensure that innovators don’t become dependent on grants or funding. However, these only exist as occasional add-ons. When facing these questions, some organisations prefer running challenge prizes.

Why challenge prizes?

This method stimulates innovation in cases where the solution is less obvious, or the level of progress in the field less advanced. They award one final grant, and sometimes intermediary ones. But most importantly, they comprise of an academy stage which consists of workshops and training for the innovators. This ensures that the latter have at their disposal the same skills to take their solution to the level of complexity or excellence required. These academy events operate like the research and judging phases and involve the temporary participation of other actors in the relevant field, convening numerous organisations towards the resolution of one same issue.

Both traditional grants and challenge prizes can positively impact the SDGs through innovative ideas. One recent example: the Data Driven Farming Prize supported the emergence of tech solutions, enabling smallholder farmers in Nepal to improve value from agricultural productivity, therefore addressing the issue of food resources in local communities.

With regards to collaboration, SDG 17 on "Partnership" highlights five targets: finance, technology, capacity building, trade and systems change. By definition, traditional innovation grants are a transaction with no expected pay-back or return on investment to the funder, and therefore mostly address the financial element of the goal. In contrast to this, challenge prizes enable capacity building and can foster broader system changes. The Longitude Prize is a powerful example: over the last four years, organisations from all sectors have been working on raising awareness around antibiotic resistance,shaping a new approach to the diagnosis of bacterial infections, while building capacity amongst medical professionals across the globe.

What's the best way to achieve these goals?

Challenge prizes offer an environment where the collaboration is multilateral, and the support provided is vocational just as much as financial, but they can’t be effective for all issues. Some challenges remain best tackled through the traditional grants. The problems our world faces vary in nature and complexity: it is important to be flexible in the way we tackle them, and to provide all sectors and organisations with an extensive range of methods and tools.

Do these two methods set out complement each other perfectly, or should we be looking to develop additional ones to ensure we achieve our societal goals? We welcome your thoughts.

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Challenge Works


Victor Gimenez

Victor Gimenez

Victor Gimenez

Senior Consultant, Challenge Prize Centre

Victor was a Senior Consultant for the Challenge Prize Centre.

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Pauline Eloi

Pauline was a Project Manager for the Challenge Prize Centre focusing the enhancement of service delivery.