The World Bank Group is moving beyond one-off experiments to embed innovation systematically across its lending, digital platforms, and community programs, signaling a long-term shift in how it delivers development outcomes.
An internal review of 7,576 project evaluations conducted by the Independent Evaluation Group between 1998 and 2025 shows that projects using novel approaches consistently outperform conventional interventions. According to the Bank, innovation has evolved from a peripheral activity driven by individual champions into a structured, institutionalised strategy shaping its core operations.
The findings, published in a World Bank Group blog post, trace how experimentation in the early 2000s was supported through Learning and Innovation Loans and initiatives such as the Development Marketplace. Momentum strengthened in the 2010s with the creation of global departments, innovation labs and a growing emphasis on digital development. By 2020, one in six World Bank projects incorporated some form of innovation, reflecting a steady rise in institutional commitment.
Today, innovation is embedded across financing models, digital delivery systems and community-driven development programmes. The Bank said this marks a decisive break from the past, with new approaches now central rather than complementary to development efforts.
The analysis found that innovative projects achieved higher and statistically significant outcome ratings than standard interventions. Although only about 11 per cent of projects over the 25 years were classified as innovative, they consistently outperformed others on the Independent Evaluation Group’s evaluation scale, underscoring the value of structured experimentation.
The study also shows that the Bank has improved its ability to scale new ideas. In the 1990s, only one in five pilot projects was replicated elsewhere. By the mid-2010s, nearly half of pilots achieved some level of replication, supported by more flexible financing, digital tools, and stronger capacity-building for client countries. This shift has important implications for small businesses and local economies, as scalable solutions increasingly reach MSMEs through improved procurement systems, digital payments, and community-based programmes.
The use of technology, new approaches to operational delivery, collaboration with civil society and the private sector, and novel financing models drove successful innovation. Context mattered significantly, with simpler and more frugal innovations performing better in fragile environments, while more complex digital systems proved effective in middle-income countries with strong local ownership.
Several long-running initiatives illustrate how early experimentation has matured into scalable platforms. E-procurement systems that began as cautious digital pilots in the 1990s are now standard practice in many countries, supported by open contracting portals, remote verification, and artificial intelligence-driven risk analytics. Community-driven development programmes have expanded by combining local decision-making with digital tools and livelihoods support, while conditional cash transfer schemes have evolved into global delivery platforms using mobile wallets and climate-triggered payments.
The Bank noted that leadership and organisational culture remain decisive. Projects were more likely to succeed when leaders encouraged learning and protected experimentation, while rigid processes and excessive risk aversion often slowed progress.
Looking ahead, the World Bank Group is positioning innovation as central to its response to climate shocks, fragility, pandemics, and the need for inclusive job creation. Under President Ajay Banga’s knowledge bank vision, the institution aims to move from fragmented experimentation to a more coherent, data-driven innovation agenda focused on measurable impact for people’s lives and livelihoods
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As part of this push, the Bank launched a Department for Innovation in 2024 to accelerate and scale new solutions. The move forms a core pillar of the Knowledge Compact for Action, designed to translate ideas and evidence into faster, more effective development outcomes, particularly for communities and small businesses seeking sustainable growth.
