Historically, Louisiana has been one of the lowest performing states in the U.S. over the past decade; between 2003 and 2007, Louisiana was part of the ten lowest performing states in 8^th grade math and reading test scores. To make matters worse, Hurricane Katrina created an extraordinarily challenging set of circumstances that left approximately 65,000 students and 7,000 teachers displaced.

In the summer of 2009, the Louisiana Department of Education launched the Superintendent’s Delivery Unit, which Dr. George Noell, Executive Director, describes as a “process where we have clear, explicit goals, we’re going to organize all of our resources and energy around achieving those goals, and we’re going to benchmark ourselves against that constantly.” The Delivery Unit research produced nine such goals for student outcomes, starting with graduation rate.

As the video shows, the challenges have been great, but the impact has been significant. In just the first year of the program’s full implementation, the graduation rate jumped from 67.2% to 70.1% – the single greatest yearly increase since the state began collecting grad rate data. Louisiana’s overall standing in U.S.state rankings jumped from 35^th to 27^th.

However, recent history has shown that, even given the same set of national conditions, the ability of cities to deliver growth can vary tremendously. Broad economic trends have changed the fortunes of cities throughout history, with Venice, Seville, Manchester, and Detroit as just a few examples. Yet quite often, the difference in growth comes down to how cities are managed. Rapidly growing cities are highly complex, demanding environments that require effective policy over a long period. Many fast-expanding urban areas are not prepared for their burgeoning populations, and as a result they experience pollution, congestion, and localized water and energy shortages. If leaders and policy makers do not properly tackle the management challenges of rapid growth, they risk having their cities become synonymous with gridlock, slums, urban sprawl, and a deteriorating quality of life. However, the relative decline of weakly managed large cities is not irreversible.

Over the past several years, the McKinsey Global Institute has extensively studied the challenges associated with urbanization, particularly in the leading emerging urban markets: China, India, and Latin America. Most recently, we developed a tool, the Urban Performance Index (UPI), that allows cities to benchmark themselves against their international counterparts on four critical criteria: economic performance, social conditions, sustainable resource use, and finances and governance. This article focuses on our findings regarding finances and governance in the three regions we studied. Without a strong foundation in these areas, cities will have difficulty achieving their policy goals related to sustainability and delivery of services, which have obvious implications for economic performance and social conditions. We hope that by highlighting some of the past problems, successes, and future challenges in China, India, and Latin America, we can help rising cities in these and other areas develop insights on how to keep their finances healthy, ensure that they have accountable governance, and see that urban planning is done over a sufficiently long-term period.

This research, conducted in partnership with GSMA, sizes the potential market for mEducation and offers insights into its potential to improve education delivery. The report shows that mEducation has the potential to improve learning outcomes in several ways, including:

• It simplifies access to content and experts, overcoming traditional constraints of time, location and collaboration
• It personalizes education solutions for individual learners, helping educators customize the teaching process, using software and interactive media that adapt levels of difficulty to individual students’ understanding and pace
• It addresses specific challenges that lower the efficiency of educational systems worldwide. Case in point: MIT’s Education Collaboration Services gives teachers access to best practices.

Furthermore, we estimate that by 2020,  mEducation could be a USD 38 billion revenue opportunity for mobile operators. To read more, download the report.

With that in mind, What Matters set out to gather a roster of world-class thinkers and practitioners to write about new models for tackling the world’s toughest problems during, what social innovator Blake Mycoskie calls “this volatile moment.”

The social innovators you’ll find in this volume are bringing similarly fresh perspectives to a breathtaking array of problems. Matt Damon and Gary White of Water.org borrowed from the microfinance movement to help individuals solve problems of water access with novel, customized approaches. Ian Craig of The Northern Rangelands Trust made sustainable job creation part of his model for wildlife conservation in Kenya, making local communities collaborators in the success of his programs, rather than adversaries. Other writers, such as Tim Brown of IDEO, and David Kilcullen and Alexa Coutrney of Caerus Associates, write about the very nature of innovation. And lest anyone think that innovative thinking is strictly a new phenonmenon, Armida Fernandez, a neonatologist in Mumbai, writes movingly of how she cut infant mortality at her hospital, which serves the city’s slum dwellers, almost in half in the 1970s, by being very methodical, very creative, and extremely driven, despite chronic underfunding and understaffing.

> Download copy of What Matters
> Read What Matters online
> Explore our Social Innovation Video Contest
> Watch ViewChange’s “Unleashing Innovation”

The world is struggling with 21st century challenges: poverty, economic decline, global climate change, an exploding population, and more.  Enter “social innovation,” a way of thinking that draws upon the expertise, entrepreneurial spirit and commitment of many sectors working together – nonprofit, private, government – with truly unexpected ways of doing business. We know the work from Product (Red), KIVA, Ushahidi, TOMS Shoes – but there are so many more.

Inspired by last year’s video contest, Link TV’s ViewChange.org project produced a half-hour documentary that premiered online in March, 2012 on The Huffington Post. In honor of the Skoll World Forum for Social Entrepreneurship (March 28-30), this TV special about social innovation has also been broadcasted on Link TV and Hulu.

The documentary special, “Unleashing Innovation,” includes interviews with leaders in social innovation – including ONE chairman Tom Freston, top Obama counterinsurgency strategist Dave Kilcullen, and a video selection featuring Bill Clinton – along with highlighted stories of “social innovation” at work around the world, including the winners of the McKinsey social innovation video contest.

Join the conversation on Twitter with #Innovate2012

> Read more about McKinsey’s Social Innovation video contest

1. Technology and the changing nature of work
2. Skill mismatches
3. Geographic mismatches
4. Untapped talent
5. Disparity in income growth

The result of these five trends is a jobs and employment challenge in advanced economies that extends beyond restoring jobs lost to recession—many of which will never return, even with robust economic recovery. The jobs that will be created will not look like those that have been lost and may not be easily filled by today’s unemployed. The fundamental challenge is to understand how the nature of work is changing and to prepare as many workers as possible for the jobs of the future.

> Download the discussion paper
> Read more at the McKinsey Global Institute

It is not just banks in emerging markets that should grab the opportunity. Western banks will find innovative practices that they can use to refresh and adapt their traditional banking models back home.

> Read more about Global Financial Inclusion

But only a handful of these deployments have reached a sustainable scale. We sought to find out what drives on-the-ground success and to develop a preliminary set of prioritized, actionable recommendations. We interviewed and conducted workshops with more than 40 leading mobile-money providers (primarily mobile-network operators and banks) and industry experts, which we supplemented with a survey of about a dozen providers. Among the experts we consulted was Michael Joseph, the former CEO of Safaricom in Kenya and “father” of the M-Pesa money-transfer service, which has inspired many recent deployments around the world.

This article discusses what our research revealed to be the three most critical success factors to implement after a provider has launched its deployment and starts to face execution problems:

1. Pay close attention to managing the agent network;
2. Create a compelling product offering; and
3. Maintain corporate commitment.

The article also includes an interview with Michael Joseph about some of M-Pesa’s early moves and a few of the barriers on its road to success.

MGI finds that between 2005 and 2010, an expanding labor pool and the structural shift away from agriculture contributed two-thirds of Vietnam’s GDP growth. The other one-third came from improving productivity within sectors. Vietnam has globally competitive niches across the economy from textiles and footwear and coffee and rice to tourism.

But the first two drivers now waning in their power to drive further growth and Vietnam needs to boost its overall labor productivity growth by more than 50 percent, from 4.1 percent annually to 6.4 percent, if the economy is to meet the government’s target of 7 to 8 percent annual growth by 2020.  Without such a boost, Vietnam’s growth is likely to decline to between 4.5 and 5 percent annually. The difference sounds small, but it isn’t. By 2020, Vietnam’s annual GDP would be 30 percent lower than it would be if the economy continued to grow at a 7 percent pace.

MGI identifies areas where new measures could boost the nation’s economic performance:

• Stabilizing the macroeconomic environment to address investor concerns about inflation, currency instability, and rising interest rates. Measures could include greater transparency and the monitoring of banks’ performance and systemic risk.
• Strengthening productivity and growth enablers to enhance competitiveness. Measures could include long-term infrastructure development focused on private-sector needs and addressing shortages of skilled workers through the introduction of common standards for public- and private-education institutes and a certification system for graduates.
• Shaping a coordinated, industry-specific government growth agenda by targeting investment to raise agricultural productivity; higher value-added in manufacturing; and energy efficiency. Vietnam can also establish an enabling environment at the level of individual industries and sectors by enhancing domestic competition and helping industries move up the value chain. Offshore services such as data, business-process outsourcing, and IT appear to be promising areas. Building on its expanded pool of university graduates, Vietnam has the potential to become one of the top ten locations in the world for offshore services.
• Improving government performance to deliver a growth agenda. The government should continue to adjust its role in the economy and strengthen its organizational effectiveness and the delivery skills necessary to execute reforms. Because state-owned (SOE) enterprises still hold enormous weight, accounting for about 40 percent of the nation’s output, the report finds that continued reform of the ownership and management incentives for these enterprises is likely to be crucial to long term growth, as will the need to improve the overall capital efficiency of SOE operations.

After 25 years of strong and stable growth, the Vietnam economy is moving into a more challenging period. Although many of its economic fundamentals remain strong, companies and policy makers need to shift their thinking and approach.

> Read more at the McKinsey Global Institute