So I'm a little small-minded. Who knew?

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? 

Conditional Cash Transfer

The focus of my  blog this week  is ‘Conditional Cash Transfer’. This is an example of why this program is more successful in rural area as opposed to that of urban area.  The article “Condition Cash Transfer” flops in NYC by  John Derbyshire. It cites reasons for why this programme  could not  succeed in metropolitan city like New York.  Conditional Cash Transfer program was designed with an objective of eradicating poverty. As a part of the program, government would transfer money to the persons who meet certain criteria defined by the government.  According to the world bank report.

 “ Conditional Cash Transfer programs provide cash payments to poor households that meet certain behavioral requirements, generally related to children’s health care and education. Poor families are aware of the benefits of investing in their children but cannot afford the monetary costs of attending school or the opportunity costs of sending children to school (the income or value of income that children would earn if they were working, rather than attending school). Since families need this income for current consumption, they take their children out of school at early ages and send them to work.”

This shows that the CCT programme was designed on a premise that institutional and social barriers prevent poor people from having an access to education and health facilities. However, author informs in the article that no such barriers exist in NYC. Healthcare is free (through Medicaid and emergency room service. There are lots of public funded job training opportunities. If the poverty is there , is not the result of any social or institutional barrier but because of low intelligence and  lack of drive.  In such cities, programmes like CCT are bound to fail .On the other hand this programme is a big success among rural population in  Philippines, Mexico and  Brazil.

 The only concern I have at this point is ‘Do we have any model in place that ensures sustenance of the impacts of this program?

The way forward

"The future depends on what we do today." - Mahatma Gandhi

Since the turn of the century, the field of Social Innovation and Enterprise (SI&E) has taken significant strides.  Entrepreneurs and innovators have demonstrated in varied geographies and cultures that SI&E can foster economic growth and social change. Undeniably, a part of the responsibility to strengthen this momentum is with the policy makers in our governments. There is no dearth of great ideas or enthusiasm with in the community of innovators. However, the chances of SI&E making a widespread impact depends on having a sophisticated support framework like in business or in academia.

According to OECD, Innovation policy is seen to have an important role in influencing innovation performance. In the long run, a collaboration between the innovation efforts in business, academia and the social paradigms  have a potential for tremendous pay-offs for the governments. EU's 2020 agenda recognizes the need for  framework for financing and mobilizing social change. The need of the hour is policy decisions which propagate these initiatives. As discussed in this article, making internet access universal is one such crucial decision.

Skeptics of SI&E often argue about the ability of it to make a large-scale change. It is important for us to understand that without the supporting infrastructure, it would be unreasonable to expect SI&E to do wonders at a mega-scale. Imagine, a place with no infrastructure to conduct business or a system of universities to conduct research. Would it be possible to have sustainable businesses or institutions of learning? Barring a few exceptions, perhaps not! The economic growth and social well-being in the coming decades will be determined with the decisions we make today. The choice is with our leaders, policy-makers  and most importantly us. Will SI&E be a solution to a number of the world's problems or just a utopian dream?