Innovating for a Better World

Innovation critical to SDG success

What is social innovation and why does it matter?

Whilst there have been improvements in sustainable livelihoods over the past 15 years, much remains to be done. Making significant progress towards the achievement of the Sustainable Development Goals by 2030 will require innovative solutions and innovative partnerships. Social innovation can help bridge this gap - but only if done at scale.

Not Yet Uhuru

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United Nations (2015). Transforming Our World: The 2030 Agenda for Sustainable Development

High levels of poverty and inequality, rising unemployment, lack of access to basic services and continuing gender inequality. After almost 15 years, progress towards achieving the Millennium Development Goals has been uneven, particularly in Africa and other emerging markets.

As states within these countries struggle to fulfill their developmental role, the negative impacts of weak state institutions continue to be most felt in the services and underlying infrastructure that have the most direct impact on human development e.g. education, health, water, sanitation, energy and human settlements. Hence, as we look towards 2030 and the achievement of 17 Sustainable Development Goals (SDGs), it is clear that a radically new approach will be required if these goals are to be met.

The historical response to state institutional capacity gaps has been the development of partnerships with the private sector to undertake certain tasks on behalf of the state. However, the developmental effectiveness of these traditional public-private partnerships has been invariably undermined by the focus of the private partners on their own commercial interests and the inability of state actors to define and manage the contractual relationship in a manner that drives developmental outcomes. This has often resulted in a backlash against privatization amongst progressive governments and movements. What is required is a new paradigm of multi-stakeholder service delivery arrangements which goes beyond dialectical concepts of public and private to embrace new forms of partnership centered on a common commitment to social outcomes.


Social innovation has the potential to redefine how communities gain access to economic opportunity and vital services

A New Approach

Over the past decade, more and more governments have moved away from traditional public-private partnerships to the use of pay for performance contracts that focus on value for money and social impact. These governments are redesigning service delivery arrangements and using collaborative intermediary organizations to drive performance and act as a bridge between the state and private sector service providers, either through outcomes-based commissioning (OBC)1. or social impact bonds/funds (SIB/Fs)2.

At the same time, with the dawn of the millennial generation, the private sector has begun to play an increasing role in bringing about social change. This has seen a global surge in social entrepreneurship i.e. for-profit businesses whose core purpose is to address particular social outcomes. This has been accompanied by a growth in impact finance whereby investors seek to generate social and/or environmental impact alongside a financial return. Many philanthropic foundations are also moving beyond traditional welfare models to focus on high-impact initiatives that lead to tangible, measurable social outcomes. A growing number of commercial companies are also re-purposing their businesses to focus on creating shared value3. No longer just concerned with maximizing returns for their shareholders, these companies are restructuring their internal gain-share models or vertically integrating their value chains or developing multi-stakeholder collective impact4 initiatives to ensure that the benefits of success are shared with their workers, suppliers and/or the communities they serve.

Collectively, these initiatives are referred to as social innovation i.e. efforts to develop novel solutions to social problems that are more effective, efficient, sustainable or just than current solutions5.

Social innovation has the potential to redefine how communities, particularly the poor, gain access to economic opportunity as well as the social services and underpinning infrastructure vital to their economic and social advancement. In addition, in societies that are dominated by state-centric patronage systems, expanding the routes through which people can access such services and build their own asset base has the potential to re-ignite the individual and community agency crucial to stamping out patronage-based corruption and deepening democracy.

Size Does Count

To date, however, such social innovations have tended to be undertaken in relatively wealthy, developed countries and at a relatively small scale e.g. a 2015 Brooking Institute Study of 38 social impact bonds across the world found that the number of targeted beneficiaries ranged from 500 - 10,0006. This is a drop in the ocean compared to the size of need in developing countries. Moreover, the study also revealed that, whilst there has been a growing prevalence of impact bonds in North America and Europe, the use of these instruments in developing countries is still at its early stages7.

A recent report by the Economist Intelligence Unit also highlighted that - while the prevalence of social entrepreneurship is growing across the globe, including the African continent, along with an impressive array of specialist funds and incubators aimed at promoting the growth of social entrepreneurship - the number of social entrepreneurs in Africa is still small compared to their survivalist or purely commercial counterparts8. Furthermore, the scale and reach of these social enterprises remains relatively limited, which in turn limits their transformational impact9.

Lastly, while a number of businesses have embraced the concept of shared value and/or collective impact, this trend is still at its infancy in many developing countries.


Scaling the reach and impact of social innovation requires work at 3 mutually reinforcing levels

Journey to Scale

Hence, the key task at hand is to scale-up the reach and impact of social innovation in order to significantly transform people’s lives. This will require effective intermediation, working at three mutually reinforcing levels:

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  • Facilitating systems change by:
    • Identifying, disseminating and advocating for social innovations that work.
    • Supporting governments to develop national strategies, regulatory frameworks and market incentives that encourage social innovation.
    • Supporting multi-stakeholder initiatives aimed at bringing about collective impact.
  • Working at an organizational level to develop and implement strategies to enhance the effectiveness of social innovation initiatives.
  • Helping individual change-makers through action learning-based programs and coaching to deepen their systems leadership10 capabilities in order to bring about measurable change.

Moreover, addressing socio-economic challenges at scale will require much more than the individual efforts of state institutions, socially conscious corporates, social entrepreneurs, impact investors and non-profits. Meeting these challenges at scale requires a multifaceted response involving a multiplicity of role-players at different levels and in different spaces. Hence, the importance of developing more and more collaborative, intermediary organizations that can support social innovation across the spectrum and provide critical independent backbone support to large-scale, multi-stakeholder change processes.

The SDGs constitute "a call to action to change our world"11. By coming together to drive social innovation at scale, we can make a significant contribution to answering that call. Now and for generations to come.


SI Global is a collaborative intermediary organization dedicated to scaling up social innovation in Africa and other emerging markets.
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END NOTES

  1. See Bridges Ventures (2016). Better Outcomes, Better Value: The Evolution of Social Impact Bonds in the UK.
  2. See Social Finance (2013). A Technical Guide to Developing Social Impact Bonds.
  3. Michael E Porter & Mark R Kramer (2011). Creating Shared Value: How to Fix Capitalism and Unleash a New Wave of Growth. Harvard Business Review. January - February. Retrieved from https://hbr.org/2011/01/the-big-idea-creating-shared-value.
  4. John Kania & Mark Kramer (2011). Collective Impact. Stanford Social Innovation Review. Winter.
  5. Definition by Stanford Business School Centre for Social Innovation.
  6. Brookings (2015). The Potential and Limitations of Impact Bonds: Lessons from the First Five Years of Experience Worldwide, p16.
  7. Brookings (2015). The Potential and Limitations of Impact Bonds: Lessons from the First Five Years of Experience Worldwide, p22.
  8. Economist Intelligence Unit (2016). Old Problems, New Solutions: Measuring the Capacity for Social Innovation Across the World. Social Innovation Index.p28.
  9. McKinsey (2016). Social innovation: A Matter of Scale. Retrieved from http://voices.mckinseyonsociety.com/social-innovation-a-matter-of-scale.
  10. Peter Senge, Hal Hamilton & John Kania (2015). The Dawn of Systems Leadership. Stanford Social Innovation Review. Winter.
  11. United Nations (2015). Transforming Our World: The 2030 Agenda for Sustainable Development. p14.