LocationsPrototyping the future: what R&D teaches us about systems change
July 18, 2025
By Alberto Cottica and Gina Lucarelli
“It’s more complicated than that.”
For as long as we can remember, would-be reformers – including development professionals – have been struggling to anticipate the consequences of their actions. Policies that look solid on paper fail or produce unforeseen side effects. Starting in the 1980s, the science of complex adaptive systems gave us new concepts to talk about these phenomena: “rebound effects,” “feedback loops,” “tipping points,” “phase transitions,” and so on.
Understanding that systems transformation is complex is one thing. Knowing how to transform systems with reliable success is quite another. With this in mind, we at UNDP designed the plenary session on “Alternative Economic and Financial Models” at the Istanbul Innovation Days 2025 to foreground the how. We wanted to hear from people that were approaching systems transformation as practitioners and could tell us about what transforming a system looks like seen from the field. We were privileged to land on an all-stars panel. Eduard Müller explained how Costa Rica Regenerativa intervened on food systems value chains to create prosperity and regenerate the region’s biodiversity. Natalia Arjomand showed us Second Muse Capital’s novel financial instruments to channel patient finance to shared-ownership businesses. Giacomo Pinaffo gave us a taste of Fondazione Comunità Messina’s approach of endowing local communities with productive assets to enable the production of “relational goods” that encode values of solidarity and dignity. Miles Kubheka recounted Wakanda’s work to use food as a relational good to create employment and social cohesion.
The panelists’ contributions resonate with UNDP’s own work on how to bridge the gap between the theory and the practice of systems transformation. We do this work with research and development (R&D) activities, many of which live in the Accelerator Labs Network. Through our 2024 R&D Raves we surfaced and curated innovations and prototypes whose common trait was that they emerge from local communities, as they see new ways to improve their own lives and well-being. Like those in the panel, these innovations are driven by bottom-up need and ingenuity rather than top-down strategic decisions. They point to clearly defined theories of change, and to questions that those communities (and we with them) can address to consolidate their initial results and gain more options.
Lilian Masiye, once a thriving market trader in Zambia, adapted to COVID-19 challenges by pooling resources with others to sustain her business. Supported by the UNDP and the Africa Borderlands Centre Innovation Challenge, she gained vital digital, financial, and entrepreneurial skills.
Learning from R&D on digital financial inclusion: how social cohesion can substitute for credit histories
Development financing is one of the three enablers of UNDP’s strategic plan 2022-2025. In 2019, UNDP established a Sustainable Finance Hub to better enable partners to accelerate financing for the Sustainable Development Goals. With 1.4 billion adults still lacking access to bank accounts, the Accelerator Labs’ work in this area has focused on financial inclusion. Just as the digital revolution is leading to financial institutions shutting down local branches and concentrating activities at headquarters, UNDP documented how proximity and community can enable inclusion.
Traditional forms of community saving are present everywhere in the world, and even the poorest have access to them, simply because their neighbors know them well enough to share a common pot of savings. R&D allows for the prototyping of digital tools to scale these initiatives and connect them with the more formal financial system. For example, somebody’s participation in a neighborhood savings group – once digitally recorded – might be accepted by a regular bank as credit history, allowing that person to open a bank account and accessing credit. Early successes in South Sudan and Zambia showed that approaches combining digital technology and proximity networks of trust between neighbors can enhance financial inclusion. The R&D Rave on digital financial inclusion identified promising ways to build on such successes. For example, we discovered low trust in digital financial services, which is likely to slow down their uptake. The Accelerator Labs are considering a global hackathon to explore new ways of creating trust between communities and service providers.
After a devastating injury left him unable to work, Namdag and his wife started a small recyclable collecting shop in Erdenet City, Mongolia. They joined the waste management system change pilot, supported by UNDP Mongolia’s Accelerator Lab.
Learning from R&D on the circular economy: how waste management lays the groundwork for circularity
UNDP and its Chemicals and Waste Hub take the view that it is no longer possible to separate the ”development and growth” agenda from the “environment and climate” one. Rather, economies must be transformed to incorporate environmental agendas. UNDP’s R&D work in this area has highlighted pathways to bootstrap circular ambitions into economies at various stages of industrial development. Solid waste management is one such path. Global Majority countries are awash in single-use plastics. As they set out to modernize waste management services, they become exposed to the idea of a circular economy. Unfortunately, information about the location, composition and circular potential of waste is often incomplete.
This has prompted many Accelerator Labs to localize illegal dumpsites; analyze the composition of waste streams; assess its recycling potential; map the daily runs of informal waste collectors. Once this information is organized – often in rich, complex maps, such as this one in Panama – opportunities emerge to make those economies more circular. Additionally, extending health insurance schemes to informal waste-pickers turns out to be a way to increase volumes and quality of collected waste, as well as to protect the health of vulnerable informal workers. In Tanzania, the Lab partnered with the Taka ni Ajira Foundation on the Waste Banks initiative which collects daily waste data from pickers and creates a credit score matrix based on the data. The result was a bespoke microinsurance product for informal waste pickers.
R&D has also surfaced pathways to circularity in unexpected places, like the buildup of the industrial capacity of small businesses to close some materials loops (Mongolia), or the elevation of informal networks of waste pickers and sorters into full-fledged green businesses (Ethiopia).
Our bottom-up R&D process pointed to several promising directions for future work to make the economy more circular. For example, the Accelerator Labs are looking to systematically map indigenous practices of sustainable resource management, and to learn from them. The idea is to develop an array of culturally intuitive practices that can be integrated into modern circular systems. Another promising direction is prototyping digital tokens to enable citizens to directly invest in “their” circular infrastructure – like community composting facilities or hydroponic agriculture systems. This has the potential to create community ownership of a circular approach and share its benefits, while reducing upfront costs.
Learning from R&D on food systems: local pathways to systems change
UNDP sees food systems as deeply connected with the efforts to combat climate change, protect ecosystems and ́support livelihoods. Its Food Systems team focuses on forest positive agriculture, sustainable production landscapes and food systems transformation, via a systems thinking, multi-stakeholder approach. R&D work in this area explores roads less travelled. The Accelerator Labs support “local moonshots” for regions to become more self-sufficient when it comes to food production, in the interest of food security (Philippines): build up solar-powered processing capacity for food produce, enabling farmers to capture a higher share of its added value (Malaysia): shape consumer markets so that they will demand climate-resilient crops (Egypt); experiment with locally sourced non-chemical pesticides (Zimbabwe, Lesotho); produce and aggregate open data, and curate data collectives to support precision agriculture and investment (India).
Going forward the UNDP Accelerator Labs Network envisions activities such as integrating food waste and orphaned crops (which have an inherent local dimension) into various value-added streams like local cuisine, artisanal products, and tourism. The goal of these initiatives is to learn how to build on under-utilized, local foodstuffs and contribute to regional economies. Another highly promising direction for work is to build a knowledge- and data base of food waste, since food waste has a high potential for circularity.
Community members from Keningau, Malaysia were trained to operate the SMART solar dryer and to process and dry produce from their farms.
Towards a manageable systems transformation through R&D
As we reflect on our R&D Raves, we find ourselves feeling more hopeful than when we started. Systems transformation is a hard task, but it need not be impossible. R&D offers a possible way forward. The UNDP Malaysia Accelerator Lab, for example, supported a marginalized community in Moyong, in the state of Sabah in 2021 when local producers lost access to the market due to COVID restrictions. The Lab responded by developing a simple e-commerce platform and supporting local businesses to learn to use it to sell their products online. Once that was up, and working well, those producers quickly realized that they were no longer limited to selling their products locally: they could ship anywhere – in theory. In practice, though, that meant getting the logistics right: long-distance shipping was quite expensive with respect to the price of the products themselves.
To address this problem, the Lab had the e-commerce platform pivot from retail to wholesale, to take advantage of economies of scale in shipping. Solving this challenge immediately created a new one: some processing was needed to lengthen the shelf-life of products, as well as increase their added value. In the case of dried fruit, one of the best-selling products, it became apparent that oven drying was too expensive and operated at an insufficient scale.
Partnering up with the government of Japan, the Lab developed an open source solar dryer, ruggedized and optimized to operate in tropical climate. At this point, the local food system had become unrecognizable: their markets, business model, processing technology and value chain had all changed. In the space of 18 months, system change had happened.
Notice how this process differs from the reductionist approach decried by economist Yuen Yuen Ang. It does not break down a large problem into independent pieces that can be tackled one micro-intervention at a time. On the contrary, systems change in practice uses system connectedness as an asset. Each intervention leads the system into the next one, always keeping the Sustainable Development Goals as their north star, always working to open more opportunities where fewer, or none, existed before.
According to French economist Thomas Piketty, bold reform needs social experimentation: start with an idea, test it in a sandbox, improve it, and iterate, until it’s ready for broader deployment. This sounds much like R&D. While scholarly debate and theoretical models are certainly valuable, systems transformation might be one of those things that are easier to do in practice than to fit into an elegant theory. For this kind of work, every experience and every partnership are precious. The R&D Raves on digital financial inclusion, the circular economy and food systems have resulted in a list of practical actions meant to kickstart system transformation. As we prepare to execute them, we are looking for partners willing to do it with us, so that we can learn together. If that sounds appealing, let’s talk. (You can reach us at accelerator.labs@undp.org)
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