The future of social innovation, enterprise, and the
policies that aim to enhance and regulate them is an uncertain one. The current
financing landscape is dynamic and policies are changing under peoples’ feet.
There are no standard practices and finding ways to assess and measure both
fiscal and social returns on investments poses questions that are not just math
problems but also moral ones.
As I examine government strategies to select, foster,
implement, and expand on proposed social ventures, I find myself battling preconceptions
of how I believe government and innovation to interact.
Government: a huge,
slow-moving, money beast that funds reliable and essential infrastructure.
Although I am a firm believer in the essential organizations that maintain
public roads, manage the judicial system, and support our police and military,
I also associate these organizations with bureaucratic nonsense, paperwork, and
long lines at the Department of Licensing. Regulation, rules, lines, and all of
the essential evils of a hyper-structured organization that has to keep 300+
million people coexisting in the same country.
Social enterprises: the antithesis of government in my mind.
They epitomize nimble, dynamic, and innovative endeavors that are unbound by
the endless hierarchy and process of government. Although taxes and laws apply
to them just the same, these ventures benefit from creativity and defying
convention.
Although these stereotypes are undoubtedly a sign of
inexperience in closely examining public policy or business, my awareness of
these biases at least reassures me that I’m learning. The challenges that face
policy-makers and social innovators have more in common than I had expected. How
do you get funding? How do you decide what’s successful or not when money in
vs. money out is not the only metric?
Small realizations on policy have cropped up throughout the
course of this class, the catalyst in really altering my conceptions is the Big
Society Capital funding platform. I hate to admit it, but I found myself surprised
to hear about it. This platform uses money from long-dormant bank accounts to
fund social enterprises.
(Excellent overview and discussion of the investment mechanism here.)
So not only was there a really unique, interesting idea that the government not
only came up with, but they actually implemented it. So here’s the catch: it’s
in the UK. So unfortunately, my skepticism remains: the US government isn't taking the kinds of risks that seem to be crucial in making headway in the social venture space. Our
current response is the Social Innovation Fund, which is still precariously supported
by a government in debt. So while the UK has money in-hand, the US asks that
their money be matched but continues to send the US further into debt. This doesn't inspire the same kind of excitement in innovative policy that the Big
Society Capital Fund does. Or am I missing something?
Yet the original question remains: is this preconception of such a severe mismatch between social innovation and government a personal bias, social belief, or
an actual problem with the US government?
Does High Cost Always Imply Better Quality?
ReplyDeleteWhile comparing the article “GE Remodels Businesses in India” with the article “New Business Models in Emerging Markets,” I found that a common theme was that businesses were trying to reach the masses that were further down on the pyramid. GE’s business model however, focused on the aspect of health, an area in which quality cannot afford to be inferior due to “cost-cutting.” Although the cubicles for the babies in India and now other parts of the world such as Brazil, Russia and Egypt would be significantly cheaper than those in America, they still carry out their purpose and are functional. For cost-cutting to imply that these products would be inferior would pose a major health risk to the clients in which they serve. So we see that the production of inferior products is not allowable for healthcare related issues. But in terms of products as a whole why should they be allowable at all? Must the trade-off of lack of quality always have to exist in order for companies to make money or even break even, according to the article “New Business Models in Emerging Markets?” For example, the reading and in class discussion talked about the “cheapest” car in the world which was the Nano. It is still functional, serves its purpose of getting the person from point A to B and is has met most if not all safety measures. Of course the car is not as high quality as say a Mercedes or BMW, but it serves its purpose and even more importantly it reaches a target population that would probably not have had access to the car if it had been more expensive. So we must also examine how we even define quality. Is something of quality only delegated or synonymous with something which implies luxury or can it also include goods that “properly” serve an adequate need. For example, the “Nano” can be labeled as a quality good “relative to its price.” So the the definition of quality shifts, and can then be defined as something which is relative to price.
So in order to capture a bigger portion of the economic pie from people in the lower economic spectrum are companies in any way cheating the middle class by not providing alternative consumer goods which appeal more to them as opposed to either the lower class or the high class?
I would say that the middle ground becomes very fluid in this case because the lower class will have the same basic needs as the middle class. A car is a car is a car. Nano or Mercedes as long as it gets one from point A to point B safely, it has served its purpose. Therefore, appealing to the middle class can become a sort of luxury. For example, having a car that is just a bit better than the Nano but at the same time more expensive than the Nano and still much cheaper than say a Mercedes may not be necessary. It’s only when it comes to the point that things such as nutritional value in foods are being sacrificed or health safety measures are being risked that cost-cutting becomes a major problem. One of the main purposes of social innovation is to bridge the wide gap between the things that the rich and poor have access to. The result of this is a middle ground that becomes very wide and may not always appeal specifically to the middle class. However, in my opinion with all vanities and luxuries aside, if an essential good has addressed the specific needs of the lower class then it has also addressed the needs of the middle class, and in some cases better positioned them to even be able to afford higher quality goods with time in the future.