Can social innovation reverse the concentration of wealth?

Social innovation in the 21^st Century is finding itself located between two conflicting forces.

On the one hand, Western-style democratic capitalism leads almost invariably to greater income inequality. This is partially due to the fact that political power is typically concentrated in the hands of the wealthy, who modify the rules of the game to enhance their economic position. As an example, take the U.S. tax system, which is dramatically less progressive than it was 50 years ago.

On the other hand, social innovation, as we’ve read about and discussed in this class, is often geared toward the bottom of economic pyramid, whether the innovation is in the realm of microfinance, mobile phones, or health care. The fruits of social innovation are lifting millions of people out of dire poverty.

Given these two competing forces, it will be interesting to see whether social innovation can succeed in narrowing income inequality.

This, I predict, will play out in the form of political turmoil. As people at the bottom of the pyramid achieve greater economic capacity – not to mention better health – they will demand better political representation. In fact, the same mobile-phone or smart-phone technology that is improving people’s economic lives can also be used for political organizing.

The real dream of a better future for humanity is rooted in social innovation that improves both the financial status and the political status of the previously disenfranchised masses.