Welcome back. I hope you all enjoyed my last blog, on a People Planet Economy, in which I conceptualise a values-based, inclusive economy that puts people and the planet before productivity and profit. Thank you for taking the time to comment, share, and support this process of brainstorming a new economy through a series of weekly blog posts. Some of you felt the name PPE suggested COVID and requested that I call it the P+P Economy instead. I like it. What do you think? I would love more of this kind of feedback. After all, we are building this new economy together.
The Role of the Social Innovation Sector in Driving a People and Planet Economy
In this blog, I delve into the stakeholders in the social innovation sector and the contributions they can make to the new P+P Economy.
So, envisioning the overall concept, I see social innovation as a house, with the social innovation sector serving as the container that envelops the house. This representation, though not exhaustive, is my initial attempt to describe the container and its contents.
Diving deeper into this analogy, think of the sector as a flourishing garden that nurtures different plants blooming together, a teeming forest that allows elements in an ecosystem to coexist, or a fruit basket that displays a variety of fruits. Our social innovation sector is the container that holds a mix of visionary businesses, bold innovators, and resolute policymakers.
However, despite shifts in recent decades towards a more human-centric, environmentally conscious approach, all these stakeholders remain focused on profit, politics, or power, rather than prioritising what benefits people and the planet.
The social innovation sector encourages them to collaborate around a collective vision, one that advocates for a people- and planet-friendly approach
Together, they have all the attributes the sector needs to establish a new P+P Economy that can drive holistic systems change, from the grassroots level service delivery, to government and private sector provision of resources, to shaping policy.
Collaboration among businesses, government, and civil society that cuts across boundaries is essential for the social innovation sector to impact whole systems.
The social innovation sector, with its goal of systemic innovation for the good of all, has the potential to bring together traditionally distinct sectors - private, public, and civil society - to collectively work towards a new, inclusive economy and systems transformation for all. However, it lacks an enabling ecosystem that can support the sector to optimise stakeholder collaboration towards this end.
With a supportive ecosystem, the social innovation sector could drive businesses, government, and civil society to collectively create solutions for everyone, including those traditionally marginalised. Enterprises driven by this collective goal can take various forms, such as the nonprofit First Book, which provides books for children in need, or for-profits like the outdoor clothing company, Patagonia, which embeds a social mission in its business.
Who constitutes the Social Innovation Sector in the People and Planet Economy?
Social innovators:
Social innovators range from those on the frontlines leading the delivery of much-needed social, humanitarian, and development services, to those who influence systems through policies and market-level interventions, to those working in ecosystem-wide networks. There are those whose primary goal is creating profits subject to socially conscious constraints and those who maximise their social impact mission subject to financial constraints.
Social innovators include:
Direct service social workers: They work in communities needing services, food, or direct benefits for their wellbeing. Direct service has a clear and concrete feedback loop - you see hungry people being fed, students gaining skills through mentorship, or clients getting legal help. Examples are soup kitchens, small-scale student mentoring programmes, and community legal services.
National and transnational nonprofit organisations providing scaled direct services: They unlock efficiency and impact through well-managed logistics for interventions or solutions, benefiting large numbers of people. Examples are the Red Cross, Doctors Without Borders, and large-scale refugee resettlement programmes.
Systems change innovators: These are innovators whose solutions address the root cause of problems through shifting policy, creating new markets, changing market incentives, transforming resource and power structures, and/or shifting mindsets. One example is Muhammad Yunus and microfinance.
Networks: Issue-based networks like the Global Alliance for Vaccines (GAVI) or Child Helpline International weave together members with shared goals, aggregating their efforts, and providing technical support and resources to reach scale.
Ecosystem Intermediaries: Organisations like Ashoka, Echoing Green, Skoll Foundation, and the World Economic Forum are examples of global intermediaries with a shared goal of supporting and amplifying social change by bringing together social innovators and changemakers. Social impact consulting firms like Bridgepsan also exist in this space.
Fiscal sponsor and fee for service organisations: This category includes organisations like Panorama Global, Geneva Global, and others who act as fiscal sponsors for donors. They connect philanthropists to social innovation funding opportunities and also support the incubation of new initiatives.
Movements: Like Catalyst 2030, Black lives Matter, or MeToo are created and led by proximate leaders who want to shift systems that impact their daily lives. Their collaborative impact accelerates shifting the needle.
Corporations
Traditional corporations: Various types of corporations - from small partnerships to local businesses and global corporations - operate to maximise profits and stakeholder wealth.
B Corps: Corporations with B Corp Certification meet high, verifiable standards for performance, accountability, and transparency in areas from employee benefits and charitable giving, to supply chain practices and input materials.
Social businesses: Social businesses, social enterprises, or impact-first businesses are private organisations that use business methods to advance their social mission in a financially sustainable way. They focus on maximising the public good as opposed to maximising short-term profits for their shareholders and private owners.
Traditional and emerging innovations in philanthropy:
Philanthropy is a uniquely flexible, risk-taking, and innovative part of the social change ecosystem that can inspire breakthroughs to help solve challenging societal problems. It can range from efforts by wealthy individuals to large-scale public foundations to improve communities. In recent years, the spectrum of philanthropy has expanded to include a variety of blended capital options that allow foundations to facilitate their philanthropic efforts.
Individuals: Individual philanthropy can range from as little as $10 contributions to social and development projects around the world via websites like Kiva and GlobalGiving, to hundreds and thousands of dollars in individual action.
Institutional philanthropy: These include family offices, private foundations like the Ford Foundation, public foundations like Make-a-Wish Foundation, and local community foundations. We can also include Donor Advised Funds in this category, currently valued at $230 billion and growing fast.
Impact investing: Impact investments are investments made to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals.
Traditional market investors and institutional capital
Private investors ranging from angel funders to venture capital to equity firms are key to seeding new social businesses.
Banks and wealth managers: They determine the direction of business and social investments by individuals and institutions. An example is the fossil fuel divestment movement that has emerged in recent years.
Stock exchanges: These include the bond and equity markets, and publicly traded commodities. Corporations are traditionally designed to maximise shareholder wealth.
Policymakers
Governments: Local, regional, and national governments remain central actors in policy development and enforcement. Policy change is a key lever for system impact and integrating stakeholders whose needs are meant to be tackled by a policy solution helps deal with the root cause of problems. Systems change innovators facilitate policy development that centres the needs of the end-user - the community - making it more effective.
Academia
Universities: Not only do universities provide a growing pipeline for talent, but they are also key partners in developing and scaling innovations through research and practice.
Researchers and think tanks: They collaborate with social innovators to conduct wide-ranging research across any number of social and development impact models. In collaboration with others, they play a key role in advancing knowledge and tools for developing new models of social impact.
Multilateral and bilaterals:
A bilateral organisation is a government agency that provides development assistance such as medical assistance, disaster relief, economic aid, and military support for people in developing countries worldwide.
Multilateral organisations, such as the United Nations (UN), International Monetary Fund (IMF), World Bank Group, etc. are formed by three or more nations to work on issues of common interest. A multilateral organisation is typically established through a treaty, a resolution, or an agreement between the participating member states. They are key players in scaling innovations and weaving together sector-level support for social innovators.
Media and storytellers:
Storytelling is a powerful tool for persuasion and shifting mindsets, and changing narratives is a key strategy for systems change. How can stories be told differently? How can we weave in the voices of communities when discussing issues that impact them? Traditional media platforms can be powerful actors in the social innovation sector.
I am sure that I have missed some key actors so please add your examples and perspectives.
Also, should I separate impact investors from traditional investors/ funders as some who call them sleeves impact investors ask for market returns? Feedback is welcome!
In the next blog, I will be talking about the characteristics of social innovators across all sectors, so stay tuned.