Annex 1 Terms of Reference

Activity Title:

Country/Region:

Duration:

Start date:

Implementing Partner:

Budget:

1. Background

Pulse Lab Jakarta &

DFAT

Data Innovation for Development

Indonesia

2 years

01 April 2015

Pulse Lab Jakarta

Total: USD 5,134~530 million

The dramatic increase in access to communication tools, a vibrant IT developer community, a new government with focus on innovative tools and efficiency, and the existence of large government programmes that are yet to use real-time monitoring and feedback mechanisms for targeting, adjustments and improvements, make Indonesia an ideal candidate for testing and deploying data innovation tools.

In August 2014, a Data Innovation mission led by Bappenas and including teams from DFAT and the World Bank identified trade and competitiveness, frontline service delivery, govermnent information management, and social protection as priority areas in which innovations in information and communication technologies can support the Government of Indonesia's use of evidence in development planning and policymaking.

First formed under a G-20 global initiative, the Pulse Lab Jakarta (PLJ) is a joint programme of the Government of Indonesia and the United Nations to explore new sources of data and real-time monitoring for better policy formulation and implementation. Other Pulse Labs have been formed in Uganda and New York. A key pillar of the Pulse Lab's mandate is the identification of opportunities for private sector partnerships.

The mission recommended support to Pulse Lab Jakarta as a way to use cutting edge information technology and analysis to improve the quality and effectiveness of Indonesia's development partnerships. This proposal sets out what support Pulse Lab Jakarta would require to deliver on the mission's recommendations over a two-year period.

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2. Pulse Lab's approach to data. innovation

Pulse Lab Jakarta is set up to tum ideas on how information required for decision-making can be collected, processed, presented and shared into practical software applications that government institutions and partner programmes can then adopt and build into their processes.

PLJ's approach to data innovation can be summarized as follows:

1. Find and reflect: PLJ identifies examples of innovative practices both nationally and internationally, with a particular focus on the "edges" - practices that are not yet mainstream or well-known. PLJ then transmits the experience of these examples to client organisations in government and the development sector through regular updates, presentations; workshops, and "learning by doing".

2. Prototype: Whenever possible, PLJ follows the "agile" rapid prototyping methodology which involves releasing early proof of concept quickly so that stakeholders can provide feedback and PLJ can modify and improve accordingly, rather than spending time and resources on extensive needs analyses, specifications and proposals. Once the prototype has been deemed fit for purpose, it is handed over to client organisations for implementation.

3. 'Work out loud': research has shown that opening up the ideation process at early stages of development significantly enhances the opportunities to deliver better results and identify opportunities for innovation. PLJ therefore employs communication tools not as a way to "push the message" but as a way to "pull in ideas". Collaborative development, pru1icularly between government and non-governmental partners, is a new idea in Indonesia.

4. Community building: PLJ networks innovators in Indonesia so that they can tap into new ideas and resources to maximize their impact and building a community of local implementers are also key to PLJ' s mission to build data innovation capacity in the country. PLJ can act as an incubator to networking innovators in Indonesia and provide them with an opportunity to trial their innovative approaches to development programmes.

5. Private-sector partnerships: PLJ works very closely with the private sector and has forged close links with national and international private sector companies where interests are aligned. Data innovation expertise and datasets are drawn from private sector and incorporated into the work of development programmes as a new form of data philanthropy. Entrepreneurs who are already developing new innovative techniques also help to drive the innovation input to development programmes.

6. Support for donor programmes: The PLJ model of undertaking trials collaboratively but handing over prototypes for implementation does not only apply to government but also to donor programmes. PLJ and DFAT have already established productive activities with DFAT programs, including the Knowledge Sector Initiative, Empowering Indonesian Women for Poverty Reduction (MAMPU) and the Australia­Indonesia Partnership for Decentralisation (AIPD) under separate arrangements. PLJ will continue to collaborate with other investments, potentially including but not limited to DFAT's support for commllllity development, decentralization, women's empowerment, economic governance, knowledge and civil society sectors, in addition to Gol and other donor programs.

7. Regulatory Reforms: PLJ is committed to helping the government draw specific expertise from around 9

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the world in planning its regulatory reforms in this new area of data innovation, open government and egovernment practices.

3. Project Goal, Objectives and Key Principles

The long-term goal of the project is to embed data innovation in the way Gol undertakes analysis, sets policy and delivers programmes. It is therefore well-aligned with DF A T's Knowledge Sector Initiative. The project will work to create agility and organisational capacity within Gol to continuously adopt new approaches to data collection and analysis. The immediate objectives are:

• to equip the government with tools to generate and analyse data in real time so that it can provide timely responses, engage effectively with citizens, evaluate policy effectiveness and better address the development challenges Indonesia faces

• to demonstrate that adopting innovative IT-based methods leads to better development outcomes, as measured by the government's own indicators; and

• to build pai1nerships across the technology and private sectors; civil society; and government in ways that can raise productivity amongst the poor by using each partner's comparative advantages.

The proposal goes beyond simply improving goverrunent data management. This programme is also intended to support the ongoing process of democratisation in Indonesia. Global and national experience already shows that the smart deployment of information technology promotes citizen access, increases government accountability, and lets government services become more responsive to the needs of people. The proposal therefore aligns very closely with the core objectives of the Government's draft Medium Tenn Expenditure Plan as well as the Australia-Indonesia Partnership strategy.

Finally, a growing body of literature is documenting how the successful deployment of new information technology improves productivity and increases trade competitiveness. The focus of this proposal will be on increasing the productivity and improving the competitiveness of poor people. Data innovations will be developed that help improve market production, public production and household production either through increasing the quality to price ratios of commodities produced by poor people, or else by increasing the efficiency of poor people's market production in ways that lead to increasing incomes.

In line with these objectives, PLJ will focus on the priority areas identified by the Data Innovation Mission. It will also seek to address three cross-cutting issues, i.e. improving government systems, reducing barriers to poor people's market access and strengthening the enabling environment. At present, while Indonesia is rapidly improving the quality of its information management systems, systems are not well integrated nor has there been much progress on making government infom1ation available to the public at large. Similarly, largely because of New Order legacies, restrictive Indonesian regulations and jurisprudence leave Indonesia at a competitive disadvantage even when compared to other developing countries in terms of developing and deploying infonnation technology.

The priority areas will be reviewed in consultation with GOI on an annual basis.

JO

P.O. 2338 Jakarta. Indonesia I Tel: +62-21-2980 2300 I Fax: +62-21-314 5251 I Email: regislry.idl(nmdp.org I Website: hllp:/iwww.un.or.id

Activities are initiated through discussions between PLJ, GOT, and the corresponding DFAT project teams. Activities will be a combination of strategic and topical priorities that get built around a simple statement uf objectives endorsed by each working group.

Activities

1. Initiation This will involve recruiting the additional staff required and identifying the specific issues to be addressed in the different priority areas.

2. Development of a project portfolio for each of the priority areas For each priority area, a portfolio of prototypes to be pursued in the first year will be fonnulated. Each portfolio is expected to include quick wins, incremental activities as well as a percentage of more experimental activities on particularly tough challenges.

3. Incubation PLJ will study the feasibility, test concepts and develop prototypes, drawing on external expertise where necessary. The process will be iterative with versions presented to the future users for feedback as they are being developed.

4. Execution Completed prototypes will be handed over to existing GoI and DF'AT programs for piloting and full-scale implementation. PLJ oversights their tweaking.

5. Periodic evaluation Given the dynamic context, the priority areas and issues to be tackled within them will be reviewed at least on an annual basis. The project portfolio is expected to evolve gradually as loo ls are deployed to new areas, and as new ideas and opportunities arise. PLJ will also need to be able to respond to unexpected needs and requests.

6. Establishment of a community of innovators and partnerships PLJ will strive to become an interface between the local and international innovation scene and the Indonesian development community so that the latter will be able to tap into a vast pool of resources and approaches depending on the needs of the working groups.

7. Policy advocacy and services PLJ is building up a repository of tools and knowledge about innovation and big data for use in development and its impact on policy making.

5. Outputs

In the first year of incubation, PU plans to conduct around 20 prototyping processes (both delivering working prototypes and testing promising concepts, some of which will be shown not to work) in support of the follmving purposes (with likely tools indicated in brackets):

In support of improving frontline service delivery: Map village infrastructure and show changes (remote sensing); Digitizing village development plans under the UU Desa (2014 village law);

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Provide detailed village-level infrastrncture information upoo request (human sensor m:Lwurk); Introduce on-line citizenship document access Increase geospatial information about service needs for people with disability (new software) to increase allocative efficiencies for service providers Act on service delivery issues (system for complaints processing and analysis); Measure level of satisfaction with services (social media sentiment analysis);

In support of poverty reduction and social protection: Provide coherent and comprehensible poverty data for local-level decision-making (horizontal and vertical data integration, advanced analysis and visualization); Report changes across multiple dimensions of poverty and vulnerability in real time (big data proxies); Measure levels of satisfaction with social protection programmes (social media sentiment analysis); Introduce online software for reducing exclusion error in social protection Cooperate with ongoing disaster risk redt1ction and response efforts (AIFDR)

In support of improving trade and competitiveness: Identify and resolve obstacles for the timely movement of goods along a transport corridor in real time (combining remote sensing, big data, data integration and advanced analysis, social media, data visualization) Map the effect of reducing corruption and other obstacles on the level of traffic and relative costs of moving goods to market (data analysis, surveys) Monitor levels of commercial integration, particularly in areas of high poverty incidence Analyse labour market mobility for poor people (data analysis and mapping)

Similar numbers of prototyping processes should be conducted in subsequent years.

in addition to this, in the first year, PLJ will facilitate the provision of technical assistance to analyze the needs for enhancing Bappenas' SIMPADU information management system to increase its effectiveness. This is expected to be the feasibility study for a larger programme to digitize government information systems following a GDS (Government Digital Services) partnership model.

6. Delivery Mechanism and Governance Pulse Lab Jakarta operates under the overall supervision of the UN Resident Coordinator. Strategic guidance is provided by a high-level Steering Committee comprising government, donors and members of the UN Country Team. Bappenas and the United Nations Resident Coordinator chair the Steering Committee. PLJ currently has a national Technical Advisory Committee representing the partners. Funding will be directed through UNDP. A mechanism to allow other donors who might be interested in joining the data innovation platform will need to be identified and agreed upon by DF AT and PLJ.

7. Monitoring & Evaluation Strategy and Reporting PLJ is subject to the standard financial and substantive reporting requirements set out by UNDP. A monitoring and evaluation plan will be determined in consultation with DFAT. Ongoing costs for high quality monitoring and evaluation are reflected in the budget attached. PLJ will commit to

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high quality progress and results reporting to the Steering Committee and to the public at large.

PLJ will provide to RTI a six monthly report of project progress for the duration of the Agreement where the initial progress report submission may be less than six months to align with KSI's reporting schedule to DFAT. The progress report itself should include a statement of most up to date financial expenditure of the contribution funds.

S. Modifications to priorities Indonesia's new administration is keen to accelerate the use of digital management tools. It is expected that priorities will need to be adjusted and opportunities to introduce new thematic areas allowed in simple and flexible ways. The chief means for adjustments to happen will be through "exchanges of letters" prepared on an as-needed basis. Re-allocations larger than 25% of an annual work programme budget will require Steering Committee approval.

9. Risks The major risk for this activity relates to sensitivities, especially at the sub-national level, around a programme seeking access to big data sets for the purpose of data mining. Mitigation of this risk requires effective communication from the outset that all data is anonymous and analysis is conducted only with government consent for the purposes of improving government capacity to deliver services. Bappenas as the central government ministry responsible for development planning will assume the lead in the subnational rollout, being responsible for socialisation with local provincial and district governments in order to inform them of the work of Pulse Lab Jakmta.

However, there is a risk that some data sets remain inaccessible even with effective communication and government suppoit. Where prototypes are dependent on specific types of data, PLJ will only launch the actual prototyping process when access to the relevant data is guaranteed and will otherwise pursue altt:rnative approaches, even il"tliey risk being less efTe<:Live.

The growing interest in innovative and big data approaches comes with the risk that similar work on them is conducted in parallel. PLJ already maintains an extensive network of different institutions with an interest in such innovative work and will conduct specific scoping for each idea it prototypes. When development is successful or fails, PLJ will disseminate this information and the tools widely to avoid duplication of work.

A demand-driven research Jab such as PLJ risks being subjected to rapidly changing priorities that would negatively impact the overall coherence of its research programme. However, turn-around times for individual prototypes are expected to be short, the portfolio is subject to regular reviews and intended to evolve in a dynamic and opportunistic well and PLJ will maintain some spare capacity to respond to urgent emerging needs so that this is not expected to become an issue.

The fiduciary obligations of UNDP, whose administrative procedures PLJ follows, could pose a risk that contracting external expertise when required would add considerably to the turn-around times of prototyping processes. However, the development of prototypes are such small individual projects that the size of the contracts concerned is not expected to exceed the threshold of the country office delegation.

The activity recognises that personal information on individuals may potentially be misused, and affinns that harnessing big data to protect vulnerable populations can and must include protecting

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their privacy. Accordingly, the activity will never knowingly and purposely receive, store, analyse, ur lran:smil privak: data (;OUtaining personalty identifiable information gathered from mobile subscribers or any other source of digital data. The confidentiality of interpersonal conversations and personal data must be respected in accordance with the UN Global Pulse principles on privacy and data protection. Accordingly, the activity will never knowingly and purposely receive, store, analyse, or transmit the content of any communications that the participants assumed to be confidential at the time it was created.

9. Benefits

Potential benefits from this programme to GOI and DF AT are very large. Many of the most egregious problems that poor people face today in Indonesia fall into one or another category of poor connectivity. While connectivity has unfortunately become equated with infrastructure investments alone, in fact it is the high costs of linking people to markets and to productivity enhancing services that perpetuate poverty.

The proposed model of technological innovation coupled with large scale-delivery platforms offers a promising way to reduce these costs. Better mapping information would allow government programmes to assign and monitor their scarce resources - teachers, health workers -- more efficiently. Better market information would allow producers to capture benefits rather than losing as much as 40% of total value simply by not reaching the right markets at the right time. Indonesia has been tormented by the high costs and logistical difficulty of monitoring service providers, resulting in low performance and very high rates of absenteeism; whilst technology alone will not solve these problems, by reducing monitoring costs it can increase monitoring's effectiveness once the political will is present.

Previous efforts to introduce modern technology have not always failed, but often they have been overly tied to high-cost projects on the one hand, or else developed in isolation from real operational needs on the other. The model being proposed here at least potentially avoids both of those pitfalls. The business management design is based around principles of government and user demand, simplicity, and immediate application of prototypes to real world conditions. Because they will be developed in tandem with ongoing national programmes, there is no need for PLJ to develop free-standing delivery systems of their own, which then also leaves thein free to play to their comparative advantage as innovators. Using "agile" technologies that rely on quick prototyping, open-source code, public release, and real-time modification means that PLJ can be innovative, fast and cost-effective.

The primary indicator of success will lie in whether the corresponding programmes increase their ability to deliver results and whether these results then translate into welfare improvements for the poor. However, for this specific proposal a detailed performance management and results framework will be developed within 30 days of startup. Key topics to consider are how to measure optimal levels of risk taking and innovation; quality of internal processes; and responsiveness of the PLJ to programme requests.

10. Resource Requirements

Budget USD 5,134,530 million

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Annex2 Budget Summary

Name Of Organization : Pulse lab Jakarta - United Nations Development Programme

Project Title ; Data Innovation for Development

Project Period: April 1, 2015 -March 31, 2017

Core Funding for Pulse Lab Jakarta· Staff and Operational Costs M.®:W.W-~mfZi.t~l#.

Core staff

Consultants

if iiffi,~fui:iriffi{/{~ \'

Data and Infrastructure

lnctudlng international staff, national staff and support. team

Experts hired on an ad-hoc basis

Travel to gather data, source innovative ideas, conduct Travel ltield research - budget also required to fund field trips for I

government officials, NGO partners

Advocacy & communications Design, production and dissemination of project material, I multi-media productions, etc.

Operational Expenses Office rent, supplies and consumables I

Events Dissemination events, training workshops and capacity I building

Design Costs Costs to develop a proof of concept tool (prototype that I may be trialled but not scaled up)

Government Information Cc·sts to assess the Gol information systems related to I Systems Consultancy poverty data, Le. SIMPADU

10,000 I

5,000 I

3,500 I

10,000 I

30,000 I

I

Note:

Monthly Unit Currency

12

12

12

6

6

1

I

I

I

I

I

I

FTE = Full time employee

12 USD

Yearl • 1,203,000

220,000

120,000

60,000

42,000

60,000

180,000

100.000

I

I

I

I

I

I

Year2 Fda

1,263,150

220,000

120,000

60,000

42,000

60,000

180,000

100,000

2,466,150

440,000

I 240,000

I 120,000

I 84,000

I 120,000

I 360,000

I 200,000

Support to e-Blusukan actlv!tles as requested by DFAT. rapid validation and prototyping for select OFAT

Strategic Activities Support I programmes and scaling up of private sector outreach and I I I 250,000 I 250,000 I 500,000 components.

The rate of 8 per cent is set at the corporate level based on an aggregate calculation of UNDP indirect variable

General Management costs, and the required proportional contribution of other

SupporUUNDP Project Support Resources to UNDP total operational costs. This is based I I I 162,640 I 188,412 I 371,052

Costs on Article 4 of the Executive Board decision dated 1st February 2013 No 201319.

Core Grants I I I 60,000 I 65,328 I 125,328