Paro, Bhutan

The business case for innovation for Gross-National Happiness in Bhutan

By Azusa Kubota, Resident Representative, UNDP Bhutan

Innovation is perhaps not the first word that comes to mind when talking about Bhutan. And yet, the Kingdom of Bhutan has been known for challenging the conventional growth-focused development paradigm and innovated its holistic and human-centered pathway called the Gross National Happiness, in short, GNH. The GNH is the type of narrative that is needed for attaining the ambitions 2030 Sustainable Development Agenda. Long before many have realized the need to fundamentally re-think and change our approach to development, this small kingdom had already figured it out.

Nested in the Himalayan mountains and sandwiched between the two giants, the Kingdom of Bhutan for sure finds itself in an interesting space. It is due to graduate from the LDC status in 2023. Its open-minded and young government announced the country’s aspirations to shift its investment focus from aid to trade. The country is already carbon negative and has announced the plan to meet all SDGs ahead of the 2030 deadline. Bhutan’s thought leader, His Majesty the King, has set a vision for the country to embrace innovation, technology, digitization and digitalization. Bhutan is spearheading the establishment of the Super FabLab.

Against the backdrop of rising youth unemployment, the country has been investing in start-up centers and tech parks and promoting the entrepreneurship culture. UNDP has been supporting start-up weekends and hackathons. While they generated positive energy, we quickly realized their limitation. What is needed in Bhutan now is an eco-system that nurtures the required mindsets, culture and institutions. We, therefore, have decided to take a step back and support a comprehensive system mapping to get a more in-depth understanding of the employment issue as a whole. This is not an issue that can be solved with “silver bullets”. Therefore, we will invest in a portfolio of experiments that touch upon varies facets of the employment question in the hope to make a change in the eco-system.

2nd day of Workshop on Systems Mapping of Youth Unemployment held in October this year

Innovators are not only found in the private sector or tech space. Increasingly, the governments around the world are embracing innovation, and Bhutan is no exception. The Royal Government of Bhutan remains as the single biggest employer, and they are ready to infuse new ways of delivering services. The Royal Civil Service Commission has been planning to establish an innovation and creativity officer in every Ministry and build a critical mass of innovators in the civil service system.

In a small country of 700,000 plus people, the ecosystem for innovation is slowly, but surely bubbling. Its smallness offers a fertile ground for accelerating the rate of experimentation and learning, particularly in the public sector.

Now, the question is for what does the government innovate? The answer for Bhutan is clear. Whatever direction innovation in the public sector takes, it must have an articulated intent and be directed towards the full attainment of GNH and the efforts to narrow the gap. Global experiences have shown that some centers of excellence for innovation such as the Silicon Valley have resulted in a widening gap in terms of access to information and technology, and then growing inequality.

How do we avoid this unforeseen outcome of an increasing gap between the capital and rural communities, and between those with access to services and those without?

The capital city, Thimphu, is growing fast. Waste is becoming unmanageable. Bhutan’s brand as the last Shangri-La is at risk due to booming mass tourism. Youth unemployment is on the rise. Urban-Rural migration is rapidly picking up. Rural communities are in dire need of revitalization. These are all complex challenges that require multiple institutions coming together to experiment a series of possible solutions. These solutions must collectively and organically contribute to the contentment of every GNH citizen in terms of their inherent respect for nature, spiritual and cultural maturity, and social cohesion and harmony.

Recognizing that Bhutan is at an important crossroad when it comes to pursuing an approach to innovation underpinned by the GNH, UNDP is investing its humble resources to support the government to innovate, experiment and learn faster. We believe this is an opportune time for all stakeholders to come together, shape and articulate the direction that innovation should take in the country if it is to lead to greater equality, inclusiveness, and well-being.

Concretely, this would mean, for example:

  • Facilitating a series of national dialogue, in partnership with the Royal Civil Service Commission (targeting the civil service) and innovation actors such as Fab Lab, DHI and Thimphu Tech Park (for start-ups and incubators) on “innovation for GNH” among different institutions involved in promoting innovation. Bhutan could once again break new ground and be the first country to have an innovation policy, which is clearly directed towards the achievement of holistic development towards happiness. Existing efforts, be it the various labs or accelerators, or entrepreneurship programs, would then be consciously framed towards the attainment of GNH goals (practically, this might mean, for example, putting additional efforts in the promotion of social enterprise, impact investment and socially driven start-ups).
  • Creating platforms for the bottom-up players in the nascent innovation ecosystem to meet and engage with decision-makers such as government officials, state enterprises, and thought leaders/academia, etc. These platforms will be coupled with a facility that will result in ‘Innovation challenges’ towards identifying and experimenting solutions for a selected GNH/SDG target. This facility will be working closely with our proposed innovation challenge fund for local governments and CBOs.
  • Promoting grassroots, citizen-driven innovation and indigenous knowledge as a legitimate component of the country’s innovation efforts, alongside technology parks, startup program, etc. This would also entail assessing citizens’ understanding of innovation (and what it might imply for their happiness) and involving them in the definition of a national innovation policy.
4th Royal Highland Festival in Laya, Bhutan

The workshop we recently organized in Thimphu showed a great level of appetite from the local innovation ecosystem for opportunities to shape the national innovation agenda and accelerate the path towards the SDGs. There was also a palpable sense of urgency since it is obvious that if we are moving at the rate of the past, we would not get to where we want to be by 2030.

At UNDP Bhutan we are keen to build on this momentum and explore collaboration opportunities with interested parties in The Royal Government of Bhutan and beyond who are interested in concretely pursuing the link between innovation and GHN. These are some examples of investments that we are making for the future of the country. We are leveraging on the opportunities for pivots or big bets to make systemic changes around complex challenges such as waste, youth unemployment, to name a few.

Watch or contribute to this space with us- you can see more of our latest on Twitter @UNDP_Bhutan, @AzusaKubota and @ricap_undp!




Doing development differently through designing, developing, curating, collating and championing innovation and digital across the Asia Pacific Region.

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