Interventions, not just for the sake of them.

It is extremely rare to have a mechanism which, without any support from the government machinery, is able to succeed on its own. Whenever we talk of any major industry, big or small, some sort of direct or indirect state support is implicit. 

Social Innovation, as we see in the present form, is very different in its avatar from most other enterprises. A huge share of ‘innovative practices’ in particular have been the result of private individuals intervening in the society by creating a product or a service which is beneficial to the community at large. There are many examples but “The Khan Academy” and “Microfinance” are two of the examples wherein single individuals were able to achieve something so dramatic, it made the rest of the world sit up and take notice. 

But sadly, these are exceptions to the general rule. Most of the social innovators struggle with their ideas, either to put them in motion or to scale the level of impact they are bringing at their current levels. Among the host of problems faced by these innovators, two very significant ones are a clear ‘barrier to entry’ and ‘lack of financial support’. 

To give an example for the first one, think of a market for energy. Historically, a lot of interventions which require huge investments in non-conventional methods like non-renewable sources of energy have often not been supported by government or financial institutions alike. For the second problem, we have almost every other social innovator struggling with that one. 

The role of governments in this area hence, becomes increasingly important. They can provide not only directed financial support to corporations & individuals but can also with the right level of policy intervention, reduce barriers to entry. If done wisely, the governments can almost certainly be sure of generating some positive value from their interventions. 

But, if you ask me, not a lot happens beyond giving ‘Tax Incentives’ given to non-profits, if we can speak metaphorically. Even if we include other interventions like sometimes giving land/office space at relatively cheaper rates or having specialised funds for supporting such measures, a lot more can be done and in a much better, efficient way. An example which could drive this point here would be the Corporate Sponsorship Programme in which ‘big’ organizations need to contribute a minimum number of hours to community service. Under this programme, companies are supposed to devote a fixed number of employee hours to community service each year. Most of this happens with employees visiting an NGO or other such organization and spending some time doing a useful activity like teaching or taking workshops for the less advantaged. A clear issue here is the inefficiency with which most of this is structured since firms routinely take it as more of a ‘scheduled activity’ which they have to get done with. Hours given are broken and are often not to the best of the interests of the consumers which could be children or adults. This is not surprising since there is a ‘clear lack of incentives’. But, a more effective mechanism of deploying the exact ‘same number of office hours’  would drive a much larger impact, and with the same level of investment. What the governments can do beyond making 'interventions for the sake of them' is an interesting policy question waiting to be answered to its optimum capacity.