Nesta started out as a quasi-autonomous non-governmental organisation (quango) and was created in 1999 with a £200m endowment from the then relatively new National Lottery. The organisation survived reforms in 2010 but underwent significant changes and went on to become an independent charity in 2012.
Today, Nesta has 230 employees and an endowment worth £400m, and the organisation’s £17.6m Impact Investments fund exists to back innovations and technology aimed at addressing important social issues.
“Our raison d’être is about understanding what the future holds, and using that understanding to support innovation that can change how we live to make the world a better place,” explains Nathan Elstub, a chartered accountant who worked at Arthur Andersen, Barclays Private Equity and Social Finance before joining Nesta as chief investment officer in 2015. Making the world a better place is a big task, he adds, so it focuses its investment on five areas: healthcare; education; the creative economy and culture; government; and the understanding of innovation.
“We build sector knowledge, and we have excellent researchers looking at things like shifting skill patterns in those areas. Then we have teams turning that research into policy advice, and we have people who are strong at running grant programmes building evidence bases to see if projects are feasible,” explains Elstub. “I run the investments team, and we are there to provide capital and support to ensure the projects are effective for society as a whole.”
Nesta’s process of working from the idea stage through to realisation at scale is broadly based on what it calls the Innovation Spiral. Starting by identifying a need, the spiral moves out to demonstrate effective solutions and provide evidence they can work, then reels out to design ways in which a solution can be provided at significant scale.
Within the healthcare sphere, for example, Nesta has carried out extensive research on how policy might be adapted to meet future needs, including a report entitled The NHS in 2030, which it calls an “optimistic take on what the health system would look like in 2030 if new knowledge is used differently and more people play a role in managing health”. The report is built on four areas of change: “The promise of precision medicine; a health knowledge commons stretching beyond traditional actors; a system powered by more people and new kinds of relationships; and taking advantage of contemporary behavioural insights.”
Elstub explains: “Through our research, we have identified that increasingly, people-powered work – community engagement, people taking collective responsibility – would be a critical factor in prevention. What that really means is turning it into a health service, not an illness service. So we have been running grant-funded activities to help develop capacities to give communities resilience and help healthcare professionals build skills in preventative action.”
One key project within the healthcare sphere is People Powered Results, in collaboration with the Rapid Results Institute. This is a 100-day challenge where teams of frontline health professionals devise ideas for healthcare practices and new approaches that will suit their own local communities, testing the results along the way to see which work and which don’t, and covering anything from providing exercise classes to changing the way medical referrals operate.
In a separate project, Nesta is collaborating with the Toyota Mobility Foundation on the Mobility Unlimited Challenge. Launched in 2017, the challenge is a call for groundbreaking innovations that reduce mobility barriers for people with lower limb paralysis. Ten entries have been selected for a $50,000 Discovery Award, to enable them to take their project far enough to become finalists (though entries for the final round were also welcome from those who did not receive the award). In January 2019, a shortlist of five finalists will be selected and awarded a Finalist Development Grant worth $500,000 to progress and fine-tune their project. In September 2020, the overall winning team will receive $1m.
On the education side, Nesta has worked on more than 300 initiatives, taking many of them into the mainstream. It has backed innovation in education since its launch, and its partners in the field include the BBC, Nominet Trust, Mozilla, the Raspberry Pi Foundation, the Scout Association, Microsoft and the National Foundation for Educational Research.
Many of the innovations Nesta backs through its Impact Investments fund are linked to technology, and one recent success story in the classroom is Sumdog, an application that turns maths into a game, which tends to win over even the least enthusiastic students. “Sumdog is an innovation that came from outside Nesta,” explains Elstub. “We’ve had a real interest in maths for a long time, and sometimes when we identify an area that is important, we will go and find organisations who are already doing interesting things in that area. We found Sumdog and approached them to see if we could help deliver what they offer at scale.”
It turns out they could – Sumdog is now used within 26% of UK primary schools and 22% of elementary schools in the US. “What is great is that you talk to teachers who have students who have never engaged with maths, and they can’t stop them playing the game,” says Elstub.
Nesta’s scope reaches beyond the classroom. In 2017, the organisation worked with Pearson on a report called The Future of Skills: Employment in 2030, and in July 2018 it worked with analytics firm Burning Glass Technologies to analyse millions of job adverts to assess the digital skills that are required in work today, and will be in demand in the future. The results suggested that certain digital skills would see a decreasing demand – invoice processing and management of accounts using accounting software, data input and preparation of payroll and tax reports, for example. Meanwhile more creative digital skills, such as animation, multimedia production and design and engineering, being less open to automation, had more promising futures.
“Our analysis uncovered that the jobs of the future require creative digital skills – those used in non-routine tasks, problem-solving and the production of digital outputs. In order to set the current workforce and school leavers up for future-proof jobs, we need to invest in the right digital skills development and training,” said Nesta’s Eliza Easton, principal policy researcher, creative economy and data analytics, who worked on the project.
The organisation is encouraging policymakers to shift the focus from a push for generic digital skills within schools, to more specific areas that will be relevant to the workplace of the future. “We played a key role in changing policy to bring coding into schools,” says Elstub. “Now we are focusing on key areas such as collaborative problem solving, communication skills and resilience.”
Supporting people in the transition from education to employment is something Nesta takes seriously, and in 2015, it chose to back an initiative called Get My First Job, a platform dedicated to bringing young people and apprenticeship opportunities together. At the time, with persistently high unemployment among young people, and the number of people starting government-backed apprenticeships falling, Nesta saw a need for improving the way in which people were navigating the vacancies, to bring employers and would-be apprentices together more efficiently.
The scheme places an emphasis on young people who are not in education, training or employment, and works on the basis that matching people’s skills to the right apprenticeship is the best way to find the right candidate for an employer, and so it is more likely to lead to long-term employment for the apprentice. “Very often, apprenticeships can be short-lived because they are not a good fit,” says Elstub. “This approach helps them to find a business that matches skills, through a digital platform that kids engage with.”
Get My First Job is built around enabling jobseekers to search for work based on criteria that will, it is hoped, lead them to a job that will really suit their abilities and areas of interest; another example of Nesta’s focus on people-powered innovations. “When you get people engaged personally with their own futures, people feel empowered and take responsibility,” says Elstub.
Two decades after it was created, Nesta has been instrumental in a broad range of projects that have had a real impact on society. According to Elstub, Nesta’s capacity for success is largely based on the way in which the operation is structured and funded. “Because we have a perpetual endowment – a pot of money that will hopefully exist for a very long time – we are not restricted and can think very long term – and independently – about what we want to do,” he says.
And its collaborative approach allows the foundation to carry a far greater influence than it might otherwise. “While we have got this endowment, we are a relatively small organisation,” Elstub explains. “Almost everything we do is in partnership with other organisations.” Partners come from all areas of the economy, some are for-profit, some are public bodies, some are charities, foundations and philanthropic organisations. These collaborations open the doors to increased funding capacity, but they also help enhance Nesta’s scope for innovation by inviting people with a whole range of different skills in from other organisations to collaborate on projects.
Of course, there are challenges. Nesta is based in the UK but its work, and its partnerships, are international. “We have always worked all over the world, and since the vote to leave the EU, we have been concentrating on developing relationships globally,” says Elstub. “The challenges we face in the UK are global and we are working hard to connect overseas, and work with partners all over the world. We are not closing any doors.”
Its sister organisation, Nesta Italy, has been set up in partnership with Compagnia di San Paolo, one of Italy’s oldest philanthropic organisations, placing a foot in continental Europe for the long term.