Innovating Freedom Within the Free Market

If we want to innovate, and to better understand what it means to innovate, one mustn’t hold on to conventional ideas, even those we have known to be the longest standing. Sometimes to innovate means to tear up the very foundation of how innovators and those who feel the effects of the innovation interact. Because the most powerful innovations are those that disrupt the most basic ideas we hold and either completely alters them, or at least blazes a trail for other thinkers to follow. For those who innovate with social impact in mind, this can sometimes include a transformation of how we and those we serve interact with the market.

There would seem to be an overarching conventional idea about markets and social impact, in that those that those companies and organizations which engage with the free market are more interested in profit than a social good, whereas not-for-profit companies are the only organizations making real impacts. The pre-conceived notion then becomes that large private companies will only make decisions to maximize profits and disregard social impact, where non-profits will never really have sufficient enough funds to make the impact they want. So it would then stand to reason that a social need that must be addressed is our own markets themselves. Luckily, innovations aimed at this issue have been happening over the past several years in an attempt to blur the idea of this dichotomy and create new models which integrate these two supposed antithetical views.

One model for social impact that has been growing in a major way is the social enterprise model, wherein a company is designed to have an intentional social investment with their profits. This is a model used by many companies, maybe most famously by Blake Mycoskie of Toms Shoes, which uses a one for one model where a pair of shoes is donated for every pair purchased. While this is an interesting model, it has also been criticized for not address larger issues such as “lack of access to fair-paying, sustainable employment”. But this is only one approach to morphing profit into social impact. Where Mycoskieis criticized for a lack of emphasis on investment in communities, other social ventures are focused solely on the idea of bringing those in need money of their own. For example, Hugh Whalan’s Persistant Energy Ghana, which sells energy to very low income Africans and does so for a profit. But his intention with this is so that the people of Ghana can feel a greater sense of independence and more of a drive to create their own profits by investing in these basic infrastructures such as energy. By being given access to consume, Ghanans are promoting investment in their country. This greater sense of independence for those who are in need of the social impact is also a core component of MuhammadYunus’s famous work in Microfinance, which invests in small enterprises for low income people to create a profit of their own.