A Stake in Social Innovation for State Governments

The establishment of President Obama’s Office of Social Innovation and Civic Participation (SICP) seemed to answer the call for federal involvement in social innovation proposed in this week’s readings from McKinsey&Company, Center for American Progress, and the Stanford Social Innovation Review. By investing directly into nascent ventures as well as existing ventures, the Office of SICP supplying much needed capital in the social sector where impact is likely valued higher than profit (if profit is valued at all). Additionally, the Office of SICP pursues various public-private partnerships to as another means of building capital and encouraging innovation. So far, it has acquired “Innovation Funds” with hundreds of millions of dollars and created multiple public-private partnerships (1).

With this apparent success at the federal level, development of administrative capacity focused on social impact ventures at the state level would be a logical next step. Given that over 20 states are considered financial insolvent due to budgetary concerns (2), state governments could benefit greatly from reducing costs related to social. Since many social initiatives strive to impact lives of constituencies in need, raising capital for successful initiatives to innovate and become more successful would ultimately lower the cost of social problems to the primary spender, the government.

However, support to develop the administrative capacity for developing social impact ventures seemed to have stalled the federal level. While it is true that some states have explored implementing various initiatives aimed at developing social impact ventures such as Utah, North Carolina, Washington, and Colorado, these states all subsequently failed to move passed the consideration stage of the process (3).

More recently, New Jersey's Department of State, a department in a government that owes over $40 billion in debts (2), is accepting applications for faith-based and community organizations to receive funding to help develop social ventures. Notably, the outreach for development of social ventures comes not from a centralized office with sole purpose of doing so, but instead the executive branch of the state's government. While this program may work well and reduce costs for the state, the potential for developing social ventures may be stifled in lieu of a more central administrative capacity. Thus, it may prove important for state governments to take the example of the federal government and create such an authority to achieve the highest level of development for social impact ventures.

 

(3) Cohen, R. (2014, July 25). Social Impact Bonds: Phantom of the Nonprofit Sector| Nonprofit Quarterly. Retrieved September 27, 2016, from https://nonprofitquarterly.org/2014/07/25/social-impact-bonds-phantom-of-the-nonprofit-sector/

New Jersey Department of State. (2016). Social Entrepreneur and Enterprise Development Project (SE2D) Project and Social Innovation (SI) Grants. Retrieved October 4, 2016, from http://www.nj.gov/state/programs/dos_program_faith_based_funding.html

(2) Norcross, E., & Gonzalez, O. (2016, May 23). Ranking the States by Fiscal Condition 2016 Edition. Retrieved October 4, 2016, from https://www.mercatus.org/statefiscalrankings

(1) The White House. (n.d.). Office of Social Innovation and Civic Participation. Retrieved October 4, 2016, from https://www.whitehouse.gov/node/11163

If not a magic wand, maybe a magic pill?: How governments can create conducive ecosystems for health care social innovations

Changing global business dynamics, bureaucratic hurdles and restrictive regulatory regimes have made it increasingly difficult for social innovations to sprout in industries like healthcare, where ironically the need for such innovations is all the more germane in the context of cost, quality and accessibility challenges. What is interesting is that most governments have not yet fully tapped the potential to truly transform innovation ecosystems for the healthcare and life sciences sector, despite facing cost pressures eating into a major chunk of their GDPs!

Their distinctive status as primary funders in the social arena, not only the prime regulators makes them uniquely poised to engender an ecosystem conducive for the various stakeholders in the healthcare industry. Deriving insights from multiple research journals, which elaborated on the Federal government's key role in health care innovation, I found that in order for governments to create lasting social impact in the healthcare sector, they need to play a ‘strengthened’ role in the following 3 areas-

• Provide targeted funding in cases of product and service model innovations, wherever private funding is inadequate

Examples in this case are the Public Private Partnership models in the healthcare industry, where central government insurance schemes in India are reimbursing cardiac procedures performed at Sawai Man Singh Hospital in Jaipur, a prime model of low-cost social innovation focusing on operational excellence in health care service delivery. Centralized procurement of various low-cost medical devices such as the Swasthya Slate for the widespread adoption by the front-line public health care workers in India is an example of governments encouraging innovative companies researching on low-cost technologies for the purposes of diagnosis & treatment.

• Leading the development of collaborative platforms for the various stakeholders by setting standards and information exchanges

The government is in a unique position to frame standards & guidelines for information exchange while maintaining patient privacy as the cornerstone of their initiatives.The American Recovery and Reinvestment Act (ARRA) by the US government aimed to promote IT implementation in hospitals & physician offices by channeling funds for the development of exchange capabilities within states and across the state government jurisdictions.The Health IT components of the stimulus package, the Health Information Technology for Economic and Clinical Health (HITECH) Act offered payments for the “meaningful use” of IT, which also involved collection of quality performance indicators by the government to facilitate quality improvement in healthcare over the long term.

• Developing policies and easing regulatory hurdles to bolster innovation and provide assistance for the scaling the adoption levels of technology or services that demonstrate quantifiable gains in health quality outcomes and quality

The Indian government last year spearheaded the Make in India initiative to encourage domestic manufacturing in the medical device sector, which involved an array of measures ranging from permission of 100% FDI in brownfield manufacturing projects, mandatory labeling of devices to increase product competitiveness and adoption of a uniform national tax code.

These case studies are thus indicative that whenever governments have taken proactive measures, they have had a significant impact on the development of social innovations to transform the health care landscape in their nations.

References:

https://www.boozallen.com/content/dam/boozallen/media/file/The-Federal-Governments-Key-Role-in-Healthcare-Innovation-wp.pdf

http://webcache.googleusercontent.com/search?q=cache:http://socialinnovationinhealth.org/downloads/India.pdf

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/#68ba8e0e5c6d

Does money really kill need?

One of the readings we got this week was about Finland wanting to replace their welfare program with a minimum income for all residents. Since I am german the whole debate about general income is a "hot" and important issue that is currently discussed in all over Europe.

What does that exactly mean? Finnland is known as one of the best working welfare states in the world, but they are thinking of changing their system to pay everyone a monthly amount of number, no strings attached. Actually, since the article is already one year old, Finnland is already in the next phase of their plan. They are testing basic income for 2,000 unemployed citizens for a period of two years. These citizens are supposed to get 560€ a month and most importantly this money is bound to no other conditions. They will get this money, even if they find employment during this time, which is supposed to increase the incentive for a job search.

Basic income has a couple of advantages. First of all it will lead to much less beaurocracy, which growing up in a social democracy can be a lot and also costs quite a sum of money. Since everyone will get the same amount of money regardless of what, the whole apparatus controlling welfare money, would cease.

Many argue as well that it would pose as an incentive for lowering the unemployment rate, since people who already have a secure income source don`t have to worry anymore about getting less than maybe before.

The third argument would be that some say it would solve a lot of social problems, since everyone would be cover for minimum income. Switzerland, for example, had a referendum this June about whether it would implement a basic income for everyone with the key argument that it would be fair for everyone to have the security of a generell, though minimum, money flow. The referendum was dismissed.

Despite this positive points a lot of people are still critical about the actual benefit of the system, since no one has really tried it out. The main argument against basic income is that some don’t believe it would serve as an incentive but more as demotivating for job searches of unemployed person, since the already have the guarantee of a monthly check.
However I don`t believe that money will kill the need for a job, because nowadays a job isn`t just a workplace, where you earn money to eat and pay for the nice things in life. Many see their job as fulfilling and really want to work. People define themselves through their work. As Marx once said: "From each according to his ability, to each according to his needs". I think basic income would achieve that everyone could work according to their abbilities and needs and not take any job just for the money. Therefore people would be more content with their work and would likely enjoy going there.

Finland - the world will be watching your "trial phase" and I am really interested what will come out of it. I hope this will give us some real evidence whether or not money kills the need for work.

The Future of Social Innovation and Enterprise

The readings for week 7 cover contents related to the future of social innovation and enterprise. There are many cases about new innovation practice. Although there are many problems and challenges, opportunities and progress are inspiring.

So where the future of social innovation and enterprise will head for? Although we cannot depict the future in detail, there is one thing for sure: resources all over the world will be better utilized. By optimizing resources that are idle or are omitted, we can create more value and benefit more people.

In the “Reverse Innovation”: GE Makes India a Lab for Global Markets, the author introduced us the changes of GE’s healthcare industry. In the first, GE imported the system for Indian customers, after which GE focused on products that are made specifically for India customers. Then GE India started organizational changes. India offered not market share, but also human resource, infrastructure, cultural interaction and specific needs. The focus on underserved areas is not only beneficial for Indian people, but may also bring opportunities for GE’s whole healthcare industry.

From another article Nestlé: Agricultural Material Sourcing Within the Concept of Creating Shared Value (CSV), we can learn another approach of optimizing resources. To meet its vision within the limitations, Nestlé started to explore Creating Shared Value(CSV) method. SAIN and the SAI platform are created for sustainable agriculture. The bottom-up approaches made both farmers and big-name partners involved to produce agricultural products both efficiently and environmental friendly.

Those two cases are good examples for innovation. Globalization and high-techs indicates huge potential for change making. Because of the innovation, our life is totally different with people’s life ten years ago. Take CSV as an example, we now have lots of relatively newly established companies like Uber and Airbnb to change how people live and travel. There are also many outstanding companies in China. Huijiachifan is a homemade food online ordering app. This app helped many young people who are too busy to cook to keep healthy diet, and also offered opportunities for elderly retired senior citizens to start a small business of selling homemade food. Another example is OFO, which raised fourth fun recently. OFO is a bike sharing system in campuses. The OFO company saved money for students and also encouraged people to use green transportation methods.

So the direction of the future development for social innovation may be quite simple. Just try to satisfy people’s needs and try to share resources, and we can generate positive effects in the world. Although we have to admit that the mechanism and approaches of giving and sharing remains to be explored.