Innovators…focus on creating things the world has never seen. They systematically disregard boundaries – whether of nation, academic discipline or social status – to the predictable annoyance of those who consider it their responsibility to keep boundaries in place.
An irony results: while the world clamours for innovation, it tends to deprive innovators of the resources and recognition that would maximise their potential to transform society for the better. The challenge of innovation in the 21st century is therefore also about reshaping societies to be not only tolerant, but actually welcoming, of innovators.
Social Innovators with a Business Case
Klaus Schwab and Pamela Hartigan
What do these ideas and organisations have in common:
• The Open University in the UK
• Bringing the prospect of cataract operations within the range of the poorest people in the world as a commercial operation
• Finding a way to make a viable business out of making and selling drip irrigation systems to poor farmers in Mexico
• The Big Issue organisation that helps homeless people to make money by selling magazines
• A program that uses the internet to connect volunteers and funding to help a village in Africa to install and maintain a pump for clean drinking water and another village in Sri Lank to set up a new bee and honey-making business
• The Grameen Bank, a pioneer of microcredit for poor, rural people
• Putting computers in a “hole in the wall” of some of the poorest slums of India and waiting for children as young as 6 without any education to teach themselves Web browsing and computer skills
• A plan to teach former child soldiers in Mozambique to collect and destroy weapons, counsel former child solders and offer ideas about preventing crime?
At one level, the only thing that unites them is their temerity, confronting profound and apparently intractable disadvantage with an idea that couldn’t possibly work. And they are so different too – some large and global, some small and intensely local, some in health, some in economic resilience and jobs, some in education.
But at another level, they share some important attributes:
• They invent a capability to confront and overcome complex social problems that didn’t exist before
• They grew from an entrepreneurial capacity not just to look but to see, bringing to bear a “tenacity of observation” to a set of problems that appeared to be intractable (why on earth would you think the way to eradicate poverty was to lend money to poor people when everyone knows that poor people can’t repay loans?)
• They betray a knack for connection and collaboration, snapping together the pieces in a social change value chain, if you like, that links people, communities, money and institutional capacity (basically the ability to organize and manage)
• They start from the premise that change has to be sustainable, create new economic opportunity and, in the process, give people a chance to connect to mainstream economic activity
• They exploit the sweet spot that lies at the intersection of individual drive, seeing a chance for change, harnessing economic motivation and using institutional capacity
• And they tend to break the mould of what is possible by using constraints and inherited barriers as a spur to purposeful invention and deep, often radical social change.
Welcome to the wonderful world of social innovation, fuelled by the ambition to find mould-breaking ways of confronting unmet social need by creating new and sustainable capabilities, assets or opportunities for change.
There’s a school of thought that suggests that, over the next 20 years, the things that will impact most on our ability as individuals, as communities and as a nation to survive and prosper will not be economic but social. Our ability to fix some of the big, complex problems that impact us as people and communities – improving education and skills, preventing illness and improving the productivity and quality of health care systems, eradicating poverty, improving opportunities for people with disabilities, designing and managing more liveable cities – will have the greatest impact on how well we live and how successful we can expect to be. That doesn’t make economics suddenly unimportant, of course. In the Cabinet room, in boardrooms and around the proverbial kitchen tables across the country, no one is suddenly going to be less concerned about interest rates, inflation and wages. And sound economics often feature prominently in the mix of policy and reform from which deep structural social reform emerges.
But the key to sustainable prosperity turns out to have two dimensions – a strong and resilient economy and a society that holds out the prospect of a decent life for everyone in communities that are inclusive, fair and rich with opportunity. So, just as we have spent the best part of the last 30 years refining many of the tools, capabilities and policies on which we now rely to guide our economic thinking and action, we have to turn our attention to a similar program of purposeful investment and reform that will sharpen our capacity for deep and sustained social invention.
Which is why we are hearing more and more about the concept of “social innovation”, an idea whose implications are set to reverberate powerfully over the next few years in Australia and around the world.
But here’s the problem.
There would be few prepared to volunteer opposition to an idea like social innovation which sounds not only benign but positively wholesome. Who could possibly not be in favour of being more socially innovative? Whatever it is, it sounds great and we obviously need more of it, and fast. But when you press harder to pin the idea down, its inherent appeal and the legitimate search for clarity and precision is tested by conceptual ambiguity and frustrating definitional flexibility.
So, what is this idea of social innovation all about, why is it important right now and how does Australia get better at it as quickly as possible?
Social innovation is about the systematic and persistent search for mould-breaking ways of confronting unmet social need by creating new and sustainable capabilities, assets or opportunities for change. Like innovation in any other area – science, industry or commerce – it is about creating a new dimension of performance.
Why it has become so important in recent times is the growing realisation that failure to deal effectively with these problems undermines our ability to offer people a chance for individual growth, social cohesion and economic opportunity. The longer we leave these problems unattended, the more we will continue to waste money, time and energy, fail to offer people a chance to make the best of their lives and, importantly, erode our willingness and commitment to keep trying.
How do we entrench the art and practice of social innovation as a real motive force for change in Australia and what are the conditions we have to create to make that happen?
There are many but these six are chief amongst them.
Speed, scale and sustainability
The great innovation three-card trick is to accelerate the rate at which good ideas and brilliant insights into solving a problem can connect with the money and organisational capacity they need to be tested and then scaled so they quickly become entrenched as a new dimension of good practice. Whether it’s a new drug or a new industrial process or a new gear box the instinct is the same – to get the good idea into “production mode” as quickly as possible.
As well as moving fast, the challenge is to take the idea to scale so that it makes a difference not just in a few trials but becomes widely available to millions of people. Which is, of course, part of the key to the other challenge, making the idea and its production at a scale that is sustainable.
The same instincts apply in the social space. Finding a way to lift the conditions in a few poor neighbourhoods in cities or turnaround a cluster of failing schools is good, but the good ideas become great when they spread. A word of caution here – this doesn’t equate innovating for a new drug or car component with innovating a school turnaround strategy or an urban renewal program. The challenges, context and conditions for success will be different and full of distinctive complexities.
But that recognition notwithstanding, the search for speed, scale and sustainability should fuel our new social innovation models.
The growth of the social innovation sector
The spark of invention or the new insight can emerge from anywhere – a government agency, a non-profit organisation, the research program of a university or from within a commercial organisation large or small. But it is equally true that taking that insight and doing something with it demands an approach that will inevitably cross organisational and professional boundaries.
Community organisations are often closest to the problem and can draw on deep reserves of trust and credibility. Banks and financial institutions have access to financial skills and capital, governments can bring the policy and often the orchestration skills to stitch large projects together. Also, they can provide money and institutional ‘grunt’. The Young Foundation, a nonprofit social innovation organisation in the UK, describes this combination as linking the “bees” (individuals and small organisations with insight and knowledge) with the “trees” (larger institutions who have the resources and power to invest and to scale).
What we need to see is the steady emergence of a social innovation sector, belonging naturally in none of the existing sectors with which we are familiar – community, business and government – but a resilient hybrid creature that draws on the best of each and, in the process, adds value of its own. In that sense, the social innovation challenge in Australia is partly a task of institution building - steady, pragmatic, purposeful.
Social innovation and public policy
A third task for the social innovation movement in Australia is to work out how it impacts and influences public policy.
That challenge works at several levels. It is partly about making it easier for innovators who do not work in the formal structures of the bureaucracy to be heard and to engage in policy conversations. It is partly about finding more productive ways for innovative ideas to engage with the mainstream institutional processes of government including policy formulation, budgeting and performance management.
It is about working out new regimes of investment and risk taking that can test new thinking for complex social problems and accelerate the innovation cycle. There are plenty of questions to resolve. How does government fund and support the innovation process? How much of the work should we expect to be done inside government and how much will be done outside? If we can predict that much of the early work of innovation will happen at the edge of large organisations and systems, how do we systematically connect the small organisations and individual entrepreneurs likely to be leading the process with larger systems of investment and management?
Just as importantly, it is about new policy frameworks in which social innovation is not just tolerated but expected and actively encouraged. As Klaus Schwab, the founder of the World Economic Forum, puts it “what set of incentives will lead to the deep diffusion across society of the capability to innovate and the inclination to respect and value innovators?”
Social financial services
There are examples in Australia of the search for new, more flexible financial tools and capabilities that fit the contours of the social entrepreneur and provide a flow of funding that is predictable and sufficient, given the often complicated and long-term nature of the new approaches to be funded.
One recent analysis (William Drayton Everyone a Changemaker) puts the need for new social financial services as one of the two or three most urgent institutional reforms needed to support the work of a surging ‘citizen sector’ of social entrepreneurs and innovators. There are opportunities for the “enormous, highly competitive, client-focused for-profit financial industry” to step up to the task of crafting a whole slew of new financial instruments and services that can live with the needs social innovation and still make money. Governments and larger foundations rarely have the necessary skills, flexibility and discipline and are often too slow and cumbersome to meet the demands of smaller entrepreneurs.
We have to draw on work around the world to rapidly build the capacity of the financial sector to enable the social innovation capability in Australia.
Everyone a changemaker
The same analysis makes a powerful case for the spread of the innovation ethic to embrace and empower not just an elite of entrepreneurs or social leaders but whole communities. The challenge is not just to solve problems that press on our capacity for open, fair and inclusive societies but to “increase the proportion of humans who know that they can cause change.”
This is actually quite a radical idea, of course, reducing reliance on an elite, usually external few bringing change into communities and setting ourselves instead the task of engaging and extending a much wider instinct for self-directed change. This is not just a task confronting the traditional development and aid community in areas of the world seeking to escape the constraints of absolute poverty and persistent economic disengagement. It applies equally to developed societies where the business of “multiplying society’s capacity to adapt and change intelligently and constructively and building the underlying collaborative architecture” is, unequivocally, “the world’s most critical opportunity now.”
Look, listen, learn – and lead
The final task for Australia is to dramatically lift our capacity for social innovation leadership, whose defining characteristics will be a capacity to look, listen and learn. We have to find better ways to really see what is happening in specific communities and to understand what they are experiencing. That will involve seeing and nurturing skills and capabilities within those communities that are the foundation for sustainable solutions.
We have to listen very carefully to people’s experience and their aspirations. We have to pick up the signals from within communities and from across the world so we have powerful access to the best and smartest thinking and experience that relates to the issues we’re trying to solve. That requires new tools that offer quick and simple access to people, to ideas, to projects that have worked elsewhere around the world that can lead and influence our thinking.
And we have to fashion new opportunities to learn not only in the sense of educating ourselves about what works and who has the skills and experience we need to draw on but also in the sense of quickly processing the signals we pick up from the wider environment that helps us to adjust and change when we need to.
None of these challenges is new. Nor are some of the instincts for reform and invention especially original either. Australia has done its fair share of innovation when it comes to new social capabilities – aged care, surf life saving and the flying doctor service just to name a few. But the instinct for invention linked to social change has to be renewed and reframed for contemporary conditions. We need a social innovation model that is “fit for purpose” given the world we live in, the problems we want to fix and the opportunities we want to create.
There’s a sense that in Australia, as in other parts of the world, people are regrouping around these ideas and looking to extend the best of what we have or, in some cases, make a fresh start. There is a new sense that the capacity to make a difference is itself changing, shifting from a time when we assumed only a tiny elite could cause change to a situation where “probably 20 to 30 percent of the world’s people and later 50 to 70 percent, not just today’s few percent, will be changemakers and entrepreneurs.” Social innovation on that scale might well mean that “the world will be fundamentally different and a far safer, happier, more equal and more successful place” (Drayton, Everyone a Changemaker)
For most entrepreneurs, of course, the best time to get started on the new venture is now. It’s a not a bad lead to follow.
