Innovating to Evolve

As a global society, we have much more information, than at any other point in time, about the possible externalities and ripple effects of business and commercial activities. In this week’s articles, we see many cases of how companies and investors are harnessing this information to make bold innovations, insights and developments to increase access to resources, provide more incentive for social impact and plan for industry shocks that may occur. In each of these cases, much of the focus is on the gains of innovations without much consideration as to how these ventures and approaches can also incorporate strategies to mitigate the losses and/or prepare for the physical and social landscape they are creating.

Increased Internet access:

Facebook and Google’s aerial solutions to provide broadband internet access to over a billion people will have a major impact on all sectors of industries and life at large. To make sure that the power of this access is used for positive purposes such as education, commercial and entrepreneurial resources and exposure, there will be a need to involve institutional regulations, maintenance and monitoring of this technology. For the market at large, having easier and increased access to the internet may cause market prices to decrease. What effects and shifts will we see for major internet providers and that industry? To increase social impact beyond developing/isolated communities, can the impact of aerial based internet be analyzed and used as a case study or argument to for more wealthy nations to provide internet access for their low-income and limited income subpopulations?  primarily serve a subset of the global population

Electric and automation in the auto industry:

The auto industry has consistently played a major role in the development of planned landscapes and commercial advancement in the United States and globally. We have also seen how this industry was able to evolve and respond to its effects on the environment, urbanization and health through design innovations. However, as the technology review[1] article suggests, with a shift to automation and electric, the automobile industry will have a dramatic effect on the social and commercial landscape that was built around its growth the first time around.

To make sure that innovation occurs at a reasonable and conscious pace, the auto industry could offer training and educational programs to bridge the gap for skills sets that will be needed for automation and electric maintenance and repair.  

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[1] https://www.technologyreview.com/s/604047/self-driving-and-electric-cars-are-going-to-have-tons-of-strange-effects-on-society/

Purpose Over Patriotism

My submission this week pertains to America’s uncertain future as a leader of the free world. This relates to this week’s readings because America’s uncertainty as a global leader parallels the uncertain future of social innovation and enterprise.

Eric Roston’s article detailed America’s position as a “second tier” country when it comes the overall well-being of it citizenry. Particularly, the article notes that our nation received its lowest marks in the categories of “tolerance and inclusion” and “health and wellness.” The irony is striking that “the Land of the Free” would be failing to live up to its core tenets of “liberty and justice for all.” Most abhorrent is that our nation was ranked 92^nd out of 128 nations in “religious tolerance.”

I believe that the future of social innovation and enterprise can help foster a more inclusive and tolerant America. The “purpose over profits” movement that was highlighted in Marsha Hunt’s article offers promise in the form of socially conscious consumers and businesses. There are no major corporations in the United States that do not have an explicit commitment to diversity and inclusion. Undoubtedly, no major corporation could survive, legally and public relationally, without such a socially conscious commitment that may or may not benefit their bottom line. I confident that this will remain unchanged in our future.

On the other hand, our nation is facing huge internal challenges as race relations are at the worst that they have been in decades and an opioid epidemic is devastating communities all across the country. Additionally, the nation’s leadership is abandoning America’s role as a global leader for a more nationalistic doctrinal policy. These harsh realities risk curtailing the impact that social innovation and enterprise may have in the future. America needs leadership that puts purpose over patriotism (or what is being portrayed as patriotism). Even the most innovative ideas, as illustrated by the Daniel Terdiman article, can be stymied by the government, and to a larger extent, the executive branch. American leadership will be essential in pioneering this new socially conscious and impactful world. Simply put, if the world becomes a better place, then America will become a better place.

One final question: As promising as the future of social innovation and enterprise can be, will it be able to overcome the uncertainty around America’s lack of global and national leadership?

The Future of Social Innovation and Enterprise:Is this the Light at the End of the Tunnel?

Social Enterprise represents a means of putting something greater next to the bottom line of a business. Double and triple bottom line companies provide environmental and social impact as part of their mission and link it to the success of their business. Companies such as Facebook, Tesla, and Patagonia show a trend of large companies have adopted social and environmental impact as part of their bottom line.

These companies are changing the landscape for what it means to be a successful company. For example, according to an article on Fast Company, Facebook’s Solar Drone project seeks to provide otherwise inaccessible to infrastructure areas with internet access(Terdiman). In addition to providing this service the project seeks to take advantage of solar power due to its environmental benefits. While watching to Facebook drone take-off with Mark Zuckerburg and his team smiling, I began to wonder if that is what the face of social innovation is meant to be: a CEO of a successful tech giant who has turned his efforts to social causes. This is not to belittle the impact of large companies and their social impact. In fact, these are the more public faces that propel social enterprise to the front pages of the news which is beneficial in gaining traction. I am concerned that this may be the only public face of ‘successful’ social entrepreneurship.

Studies that show America at the bottom of developed nations in terms of “tolerance and inclusion” and “health and wellness”, as pointed out by the Bloomberg article “America Is Now a ‘Second Tier’ Country”(Roston). The question is can social innovation solve this problem? Currently social innovation is represented by the Patagonias, Facebooks, and even Goldman Saks, but seems to be lacking a voice from the average American. The success of social innovation in addressing the social problems the United States faces depends on whether social enterprise is accessible to the people. The people being not only the large well-funded companies or the highly educated. This is where social impact investing can have its greatest effect. Funding enterprises that aim at the source of social inequity and are made up of the constituents that face it represents the direction social innovation must travel.

In this way social enterprise must serve as a mechanism to the American Dream. That is no matter where you are in the social ladder you can achieve a greater status through business. Aiming this at the general population seeks to provide more people with less resources the means of starting social ventures. Therefore, it should be the goal of social impact investors to propel innovation not just among the already successful. 

References:

Terdiman, Daniel. Facebook Completes First Test Flight Of Its Giant Internet Drone. Fast Company. 2016.

Roston, Eric. America Is Now a ‘Second Tier’ Country. Bloomberg. 2017. 

Is the Prize the Future? (Week 6)

It was recently announced that one of Elon Musk’s social investments, the funding for the XPRIZE in Global Learning, had selected its finalists for its grand prize of $10 million, which is to be awarded to the endeavor that shows the greatest gains in basic academic skills after a field-testing component in Tanzania.[1] Amongst those finalists is a machine learning group from here at Carnegie Mellon who have created a RoboTutor focused on reading and math. While the readings this week focus on creating innovation ecosystems that are amenable to social ventures, the overarching question seems to be whether or not the way forward lies in public-private partnerships, governmental interventions, or perhaps the kind of competitive model represented by the XPRIZE.

The future has deeper roots in the past than what we might realize. An article from The Wall Street Journal in 2010, specifically highlighting the (at the time) fifteen year history of the XPRIZE, noted that the practice of awarding funding as a reward for innovation could be traced back to the Longitude Act, when the British Parliament offered financial rewards to anyone who could figure out how to calculate longitude while at sea.[2] The same sort of incentive was on offer for the first transatlantic flight (thanks to funding from a New York hotelier). What the article seems to conclude is that the prize model spurs innovation, precisely because it takes much of the financial risk of innovation off of society: “With an inducement prize, the sponsor pays only for ideas that actually meet the prize criteria. In other words, technology contests shift the risk of innovation from the patrons to the solver community.”[3] In economic terms, this model increases the total value to society because it anticipates that a producer would never act irresponsibly with respect to its own surplus.

One of the questions that I find myself grappling with, though, is whether the prize model has the potential to exploit participants, or at least to create a scenario ripe for financial ruin on the part of aspiring innovators who are so determined in their pursuit of a prize that they put too much on the line in the process. All of the risks of innovation are borne by the individuals or teams, or their sponsors; not everyone has major institutional affiliation, such as the aforementioned CMU folks, or generous research funding. Even with the potential ethical drawbacks, though, the prize model is one that seems ideal for leveraging the vast wealth of forward-thinking philanthropists with a particular interest in a specific field (such as Musk’s in education). It creates momentum, generates positive publicity for both supporters and beneficiaries, and focuses significant intellectual resources on a single problem until a viable solution is found. With so many complementary ways to support innovation, the prize model may be a truly effective way to continue to diversify the funding portfolio.

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[1] https://www.forbes.com/sites/peterhigh/2017/09/18/possibly-elon-musks-biggest-idea-yet-revolutionizing-education/#4cf9dd184888

[2] https://www.wsj.com/articles/SB10001424052748704505804575483423120157674

[3] Ibid.

Goal Shifts Resulting From Government Shifts

This week’s readings regarding policies and ecosystems for social innovation ranged over ten years of publication dates from 2007 to 2017. The political climate has changed significantly over that timeframe, which inevitably led to a shift in federal policy. After reading Michele Jolin’s “Innovating the White House” article from the Stanford Social Innovation Review published in the spring prior to the 2008 election, I was curious as to how the sentiment and goals might have changed between that publication and the most recent election and turned to the same source for clues.

One of the main ideas for new White House Office solutions in the 2008 article was the suggestion to create a “White House Office of Social Innovation and Impact” in order to coordinate the reorganization of the federal government and its resources. A year later, the “White House Office of Social Innovation and Civic Participation” was indeed created. As Claire Dunning explained in her November 2016 “Advocating and Giving During the Trump Administration: Five History Lessons for the Social Sector” article immediately following Trump’s election, this implementation encouraged a private charitable sector using governing tools. I felt that one of the most relevant lessons from history that Dunning identified was the idea of considering personal donations part of a mass movement. Often donations will be made as “a means of participating in a progressive movement,” such as the current surge of donors to organizations like Planned Parenthood. It seems possible that social innovation might receive funding based on similar motivations in this current government situation.

While the 2008 election centered on the creation of programs for social innovation, the challenge in the most recent election pointed to the importance of nuancing these developments from the past eight years. Another November 2016 article, “Structuring Innovation in the Next Administration,” noted that it was time to shift “social innovation policy from pilot programs and one-off experiments toward an embedded practice in government.” To improve policy for the future, both articles noted that these changes would require taking lessons from history and building on past success. However, one of the biggest differences in suggestions from 2016 vs 2008 was the new idea of embracing a culture that enables risk. Historically, governments are typically risk averse by nature. On the other hand, social innovation requires a certain level of trial and error. Overall, it seems as if the goal of social innovation in government has evolved from filling gaps to promoting experimentation and creativity. Embracing this shift would require a significant amount of buy-in from the current government officials. Unfortunately, while the previous administration was making significant progress in this direction, there is definitely a concern unique to this political climate that the new administration will allow these efforts to evaporate.

Assuming these efforts do continue, is the future of social innovation policy limited to focusing programs put in place over the past 8 years, or is there room for evolution, expansion, and risk over future presidential terms?

https://ssir.org/articles/entry/advocating_and_giving_during_the_trump_administration_five_history_lessons

https://ssir.org/articles/entry/structuring_innovation_in_the_next_administration

Innovative Policy Matters

Innovative Policy Matters

Non-profits and social entrepreneurs have the flexibility and know-how of how to address the issues and topics facing their immediate and targeted communities. By financing their evaluation and impact strategies, governments will not only gain more information about which best practices and models are most effective, but they will also contribute to the investing trends that reward the work that works! 

Evidence-based research on program performance[1] can allow the United States and other nations to make more informed decisions about funding and investing in the social innovation and non-profit sector. By not taking into consideration the vast range of possible approaches to help specific and unique challenges, governments run the risk of wasting millions of dollars while also not helping groups and citizens solve the problems they face. Even in instances where policy like basic income could very well help mitigate loss of income with workforce displacement, we saw in the reading that [2]this policy’s design cannot be applied on a standard basis across the board. Some governments just do not have the financial bandwidth to support the costs of carrying out the policy and evaluating its effectiveness. However, governments can take advantage of the smaller scale of social entrepreneurs and nonprofits to experiment and test out new approaches. Feedback on these projects can inform policy makers on how successful methods can be applied at a larger scale or be suggested as a best practice model.

There are hundreds of thousands of non-profits, civic groups and social entrepreneurs domestic and abroad tackling a wide range of issues, using various methods to do so. It seems to be less than probable that one or a few methods of supporting these initiatives will best meet the needs of all.

Policies regarding funding social innovation must be dynamic in design in order to work within the budgetary constraints of the government and meet the evaluation and feedback loop needed to assess the impact. Obama’s administration was on the correct path with the creation of the White House Office of Social Innovation and Civic participation. This group’s research, funding and presentation strategy has allowed them to build bipartisan support around social impact and draw attention to both the social and economic benefits to investing in social innovation.

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[1] https://economix.blogs.nytimes.com/2014/04/14/equal-opportunity-and-social-innovation-obamas-policy-agenda/

[2] https://www.theguardian.com/world/2017/jan/03/finland-trials-basic-income-for-unemployed