ADB Needs Institutional Changes to Transform into a Knowledge Solutions Bank

Manila: The Asian Development Bank (ADB) needs to make significant institutional changes to strengthen its role as a knowledge solutions institution if it wants to continue to be relevant to the needs of the region, says a report published by ADB’s Independent Evaluation Department (IED).

The report, Knowledge Solutions for Development: An Evaluation of ADB’s Readiness for Strategy 2030, evaluates ADB’s past performance and its current and emerging knowledge management practices to identify gaps and opportunities for improvement. It identifies good practices, issues, and recommendations to help ADB deliver knowledge solutions more effectively.

“ADB is at a significant crossroads. While rapid changes in Asia and the Pacific have transformed economies and lifted millions out of poverty, they have also created new and complex development challenges,” said ADB’s Director General for Independent Evaluation Marvin Taylor-Dormond. “The unprecedented crisis the world is experiencing with COVID-19 highlights the need for innovative and knowledge-based solutions to such complexity. ADB is first and foremost a development bank but its continued relevance will also depend on its role as a knowledge institution that can provide adaptive knowledge solutions to the region.”

The report notes that developing member countries are looking for more integrated and sophisticated solutions than in the past. As seen in the case of a pandemic, most challenges faced by countries, and by the region, reveal that urbanization, pollution, environmental degradation, food security, regional health, and inequality, are all interlinked while all economies need to deal with rapidly changing production processes. Countries seek development partners that can provide expert support and more novel and innovative programs as they transition into knowledge economies.

ADB has long been a regional champion on the use of knowledge for development, going back to its establishment. To address the new challenges of the region, ADB has the commitment of senior leadership to expand the role of integrated knowledge solutions throughout its operations. The evaluation found that recent investment in information technology greatly strengthened ADB’s capacity to collaborate and share across the institution. This has proved crucial to facilitate its response to coronavirus disease (COVID-19) pandemic.

The report, however, highlights some institutional issues that constrain ADB’s endeavor of becoming more of a knowledge solutions institution. ADB has strong silos within and between its operational and geographical departments that hinder the flow of knowledge. Internal competition for resources can limit cross-regional collaboration and teamwork. ADB’s consensus-based and risk-averse culture, and its focus on fast preparation of infrastructure projects, limit the space for thorough investigation, debate, and innovation needed for integrated knowledge solutions. Absence of a system to capture, codify, and store knowledge means most of its tacit knowledge remains undocumented.

“ADB’s comparative advantage in financing is diminishing and it must provide more value addition through knowledge solutions. While ADB is strongly committed to its knowledge goals, it faces structural, infrastructural, and cultural constraints. To meet the region’s changing needs, ADB must change how it operates—becoming less siloed, less hierarchical, and more teamwork-based.” said IED Director Walter Kolkma. “Although ADB’s culture is changing, it is not changing fast enough.”

The report recommends that ADB makes institutional changes based on how it chooses to implement its knowledge ambitions. If ADB decides to intensify its emphasis on the provision of knowledge solutions to complement development finance and partnerships, then it recommends that ADB significantly deepen the reform of its culture, structure, and human resources. This deeper change may entail an incremental cost. In case ADB chooses instead to emphasize the provision of cost-competitive development finance, with moderate emphasis on knowledge solutions, several actions need to be undertaken to strengthen the current pace of incremental reform while continuing to modernize its culture. The report emphasizes the need for ADB to take ownership of its choice at all levels, commit to a sustained change process and develop new tools to benchmark the contribution of its knowledge solutions.

About Independent Evaluation at ADB

ADB’s Independent Evaluation, reporting to the Board of Directors through the Development Effectiveness Committee, contributes to development effectiveness by providing feedback on ADB’s policies, strategies, operations, and special concerns in Asia and the Pacific.

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