Enablers for social innovation

In order to be successful, socially innovative policies, products, and ventures must have impact, be financially stable and sustainable, and should use concrete metrics as benchmarks for success. But how do social ventures get to that point? In order to achieve stability, the venture needs financial support, and in order to gain financial support the organization needs evidence, but the venture cannot generate evidence without the funds to implement their ideas—we’re in a vicious circle. Theoretically, in a system of supply and demand, investors interested in supplying the funds should be able to match and transact with the social ventures seeking those funds. But what if this doesn’t happen? This is where the government can step in and correct these market failures.

Governments have the ability to help innovative ideas achieve their true potential and allow others to recognize that potential. Governments, while they can be flawed and problematic (take a look at our current state of affairs in the US), can steer research and development; they can also provide huge sources of funding compared to even the largest private donors.[1] There are already several federal funds and organizations in place to do just this, including the White House Office of Social Innovation and Civic Participation, the Small Business Administration Impact Fund, and the Pay for Success Incentive Fund.[2]

The idea for government involvement in directing investment and research is one that is discussed by the author Anthony B. Atkinson. His book Inequality: What can be done? discusses policies to reduce inequality and help improve society.[3] One of his points is how important the government’s role is in research and development in technology, the sciences, and in socially responsible ventures. It is important to recognize not just the profits to made, but also the impact to society—both negative and positive—and the government is in a key position where they can steer the nature of investments. In fact, government-supported research has led to some of the biggest breakthroughs in technology and innovation, such as GPS and cellular networks.[4] Government involvement is important not just to fund projects, but also to direct the course of innovation and change.

Compromise seems to be rare in Washington these days, but I wonder if government programs for social investments have the potential to bridge that gap. It is a way to combine big business, government, and social initiatives—three things that don’t always work well together in politics. Do these social innovation funds and organizations have the potential to be non-partisan and truly focused on creating a benefit to society, or will they become politicized and polarized like everything else?

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[1] Carttar, Paul, Why We Aren't Getting the Full Benefit of Social Innovation -- and What the Government Should do About it (2012), Forbes, http://www.forbes.com/sites/skollworldforum/2012/11/12/why-we-arent-getting-the-full-benefit-of-social-innovation-and-what-the-government-should-do-about-it/

[2] D’Andrea Tyson, Laura & Greenblatt, Jonathan, Opportunity for All and Social Innovation: Obama’s Policy Agenda (2014), The New York Times, http://economix.blogs.nytimes.com/2014/04/14/equal-opportunity-and-social-innovation-obamas-policy-agenda/

[3] Atkinson, Anothy B, Inequality: What can be done? (Cambridge, Massachusetts: Harvard University Press, 2015).

[4] Atkinson, Inequality, 118-119.