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.

Social Impact Investment at a Global Scale

This week's readings focused on the government's role in implementing policies to support social entrepeuneurs and social innovations. The Obama admnistration created the White House Office of Social Innovation and Civic Participation in 2009 to combine nonprofits, the business community and investors to develop successful programs by getting the "best bang for taxpayers' bucks", by tapping "new resources", expanding what "works and  "developing market-based models". (1)  In order to do so, the admnistration developed the Social Innovation Fund that "makes grants to social sector intermediaries like foundations, nonprofits and social enterprises on a competitive basis". (1)

 While exploring social impact investmnent, I read a report on a G8 Meeting in 2013 and found that the countries in the G8 Forum discussed how to make social impact investment more global and sustainable. (2) Three important goals were highlighted:  "To build a global social impact investment community" thus create the Social Impact Investment Taskforce to focus on that topic. Secondly, "to create common frameworks to understand the potential of the market and move towards standardisation in impact measurement" supported by experts and reports. Finally,  "to develop and share best practice" through the Global Learning Exchange and by setting some principles for policy makers. (2)

From what I concluded reading the articles, social impact investment relies on relationships, between the goverment, the intermediaries, the nonprofits, the business community and the list goes on. President Obama attempted to build relationships between these different entities by creating the White House Office of Social Innovation and Civic Participation. The G8 is reproducing this idea at a larger scale by building new ties between the different "entities" or countries in this case. Indeed, more that 150 leaders were present to discuss social impact investment ranging from politicians to philantropists, to academics to social entrepreneurs. I believe that every country has its strenghts and that combining knowledge and skills to come up with innovative ideas will have a larger and more sustainable impact on social issues.

(1) http://economix.blogs.nytimes.com/2014/04/14/equal-opportunity-and-social-innovation-obamas-policy-agenda/
(2 )https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225547/G8_Social_Impact_Investment_Forum_-_Outputs_and_Agreed_Actions.pdf

I Got 99 Problems - So Give Me Funds!

When it comes to social enterprises, fundraising is always given immense importance. However, in this race to generate capital for social ventures, the aspect of efficient utilization of resources often tends to take a back seat. A social enterprise that raises a significant amount of dollars automatically tends to view and use that number as a metric of success. I believe that acquiring/raising monetary capacity is undoubtedly a necessary step towards achieving a firm’s goals, it is definitely not a sufficient one.

As stated by Professor Zak two weeks ago, Bill Gates also came to the realization that despite having a bulk load of money to dedicate to social enterprises, he could not solve problems as quickly as he had initially anticipated. It takes a nuanced approach dedicated to problem-solving that results in successful social ventures.

Similarly, it is common practice for developed countries to feed a chunk of their money into developing countries in the name of progress. However, the actual goal gets lost in translation if the emphasis is just on the transfer of funds and not on implementation. A pertinent and recent example of such practices comes from my home country, Pakistan. In October 2015, Michelle Obama announced that Pakistan will receive $70 million as part of her education venture ‘Let Girls Learn’ (USAID Press Office). On paper, this collaboration between USAID, UNDP, UNICEF and the government of Pakistan sounds promising. However, due to low accountability, this money has not been used to its full potential. Having personally talked to several teachers of public schools that were supposed to be impacted by this program, I have heard personal accounts of how government officials painted schools, provided new furniture, took pictures and did not focus on improving the standards of education. The biggest blame of this half-hearted implementation undoubtedly lies on the rampant corruption at various governmental levels in the country. But can the USAID or the UN do a better job of measuring impact and increasing accountability of such ventures? I think yes.

Having worked in Pakistan’s non-profit sector in collaboration with the government, I can claim with certainty that lack of financial resources is not the most pressing problem of the country. Every year, millions of dollars are injected into the country with good intentions, but good intentions are not enough to create impact. A government setup that is inherently corrupt will always find ways to ‘inflate’ costs and get away with doing less for more money. This structure is nowhere near realizing the complete potential huge amounts of aid can have in the country – or any other country for that matter. As pointed out in the reading ‘Why We Are Not Getting The Full Benefit of Social Innovation’ the USA also faces this problem: “As for resources, while there certainly are constraints, our core problem is not the amount of money per se but its allocation.  Simply put, too many funders – including government agencies and foundations – are not maximizing the benefits of their spending, because they do not base major funding decisions on disciplined assessments of a program’s likely impact on people’s lives.”

Work Cited

USAID Press Office. "White House Announces $70 Million for Girls Education in
            Pakistan." U.S.Agency for International Development. N.p., 22 Oct. 2015. Web. 04
            Oct. 2016.

Wonks, Talking Heads and Social Innovation

When I was working in DC there was often a divide between my friends that worked in governance and policy, and my friends that who worked on campaigns.  My wonkier friends in governance and policy would voice frustration about how talking points diluted the understanding of policy issues and the projects they were working on.  Alternatively, my friends who worked on campaigns continued to hone their communication strategies, always trying to reach new audiences with practiced phrases that could distil nuanced ideas for general consumption.

 As someone who has worked in both fields, I’ve grown to appreciate that they have to work together.  Policy needs political support to be implemented and political dialogue strengthens policy by connecting policy makers to the people they are affecting and the mechanisms that help implement effective programs.  Michelle Malkin’s piece on the Obama administration’s Social Innovation Fund is a reminder of how a political interpretation can affect a policy decision and the public perception of it.

Malkin describes White House investment in social innovation as “a permanent taxpayer-backed pipeline to Democratic partisan outfits masquerading as public-interest do-gooders.”  While I believe most people would agree the end goal of a program should be it’s most defining feature, it is understandable that the methods, leadership, and affiliation of an organization will impact the perception of it.  However, Maklin displays a distrust of accountability measures from the Obama administration, making virtually all funding from the administration skeptical, including the Pay for Success financing model. 

It is clear that the White House is working to shape the political perception of the President Obama’s policy agenda for social innovation, including a well placed article in the New York Times that was co-written by the director of the Office of Social Innovation and Civic Participation at the White House.  But as government continues to explore innovation as a means of combating social issues, the political fight may only get more pronounced. Despite recent bipartisan support for Social Impact Bonds I wonder if there will be a partisan divide in future government efforts to fund social innovation.