DFAT's innovation resource facility: What it means for Australian aid

InnovationXchange, or iXc, is a unit within the Department of Foreign Affairs and Trade that provides support for innovation across the Australian aid program. They have launched a new resource to assist with their mandate of improving the impact and value for money of the Australian aid program — the Innovation Resource Facility. For iXc and DFAT, setting up this facility was the preferred approach of delivering innovative solutions to the aid program because of the need for flexibility in the context of a rapidly evolving market, and a likely diverse set of needs. The IRF provides Australian aid with access to high-quality technical advisory services. “A key part of iXc’s mandate is to increase the impact of Australian aid through finding and testing new ways to address long held problems,” a spokesperson for DFAT explained to Devex. “This might be new technologies, the application of new scientific findings, or new ways to influence behaviours to improve development outcomes. AECOM, a large Australian-based development service provider, has been contracted by iXc to provide all management and support services for iXc for a two year period, with services available not only to the aid program but to all of Australia’s federal government agencies that may require innovative solutions in the delivery of government services. DFAT estimates the cost of the IRF to be less than $1 million Australian dollars per year ($0.76 million), dependent on the volume of requests for assistance IRF receives. “Agencies outside of DFAT which seek support from the IRF will meet the costs of this service,” the DFAT spokesperson explained. But how does iXc work and can it provide a more effective Australian aid program? The gap IRF aims to fill When AECOM were first awarded the contract to manage IRF in November 2016, they were given the directive of providing DFAT, iXc and other Australian federal government agencies with “new ways to find, test and scale innovations, including through tools such as design thinking and collaborative approaches to problem solving,” according to DFAT’s spokesperson. “Teams can seek expertise on a broad range of innovations, such as different models of development finance, social impact investing, innovative techniques for defining and solving problems, new monitoring and evaluation techniques, and advancements in digital technology,” the spokesperson for DFAT said. “The IRF has been designed to respond to new demands as they emerge over time.” The IRF process The DFAT spokesperson explained the process of engaging the IRF to assist in designing and developing innovative aid programs to Devex. An initial request is sent through the IRF by the client, such as a program area within DFAT developing a new aid program. The scope of the request is clarified to ensure the requirements are understood. If the request is easy, AECOM’s IRF officer, who is based within iXc, can respond directly with advice. For more complex requests, the IRF may need to supply specialist or longer term expertise. In this case, they will source several options from the market and the user can select the preferred option. A value-for-money based agreement is also entered into between AECOM and DFAT. AECOM is then responsible for overseeing the delivery of the service and providing support, including quality assurance, as required. AECOM, as IRF’s managing contractor, runs and staffs all help desk requirements associated with this program. According to DFAT, the IRF has been designed to respond to new technologies and approaches as they emerge over time. “We will continually evaluate our individual IRF advisory services to capture and disseminate lessons learned to DFAT and other parties,” the DFAT spokesperson said. Although the IRF is currently available for use of the aid program, it is not yet a mandatory requirement for all aid programs to consult as part of their development phase. “The IRF is one of several tools available for use by DFAT and other government agencies in developing and implementing aid programs,” the spokesperson from DFAT told Devex. “The IRF doesn’t change internal DFAT aid management processes, but it does make it easier for those delivering Australia’s aid program to access technical support on innovation.” Prioritizing the needs of the aid program There is already strong interest in services of the IRF from Australian government agencies entitled to use the services. “Several agencies across government are already exploring how the IRF can help them meet their innovation objectives, paid for on a fee for service basis,” the DFAT spokesperson explained. But the priority will remain the aid program, and AECOM is prepared to deal with demand both from within DFAT and without. “The IRF business model allows for expansion in response to high demand, including short-term surges in requests, enabling all requests for assistance to be met,” the DFAT spokesperson said. Currently, the IRF is only available for Australian government agencies, although NGOs partnering in the aid program can utilize it through the IRF-managed Australian Development Accelerator, a new $12 million Australian dollar ($9.2 million) pilot program designed to support development innovations identified by in-country DFAT teams. “ACFID [the Australian Council for International Development] and several INGOs were engaged in the design of the ADA, and are assisting the IRF to source mentors for the innovations supported under the program,” the spokesperson for DFAT said. “A number of INGOs, as well as other organizations, have submitted ADA funding proposals through DFAT posts, which are being reviewed.” Further ability for NGOs to utilize the IRF has not been ruled out if it means better supporting Australia’s aid program. Monitoring progress with strong hopes for success The IRF is a new service, which AECOM is currently only contracted to provide for two years. Its progress will be closely monitored by DFAT and a committee. “The iXc is currently finalising a results framework which will be used to assess performance,” DFAT’s spokesperson said. “A quarterly progress report is provided to DFAT, and an IRF Steering Committee meets quarterly to review progress.” Innovation is an important agenda of the Australian government for both Foreign Minister Julie Bishop and Prime Minister Malcolm Turnbull. It is hoped that positive outcomes can influence both the delivery of aid programs and innovative government programs globally. Read more international development news online, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you free every business day.