NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

What is the role of the government? How can public resources leverage the replication of successful social innovations at the grass roots? This was the theme of the opening session at SOCAP 09, which followed the welcome speeches delivered by conveners Gary Bolles and Kevin Jones. The opening keynote speaker was Sonal Shah, who leads the newly created Office for Social Innovation at the White House. In her speech, Ms. Shah highlighted the goals of this new public effort, aims to identify private sector-led initiatives that can be brought to scale and replication by investing government resources.

The Office of Social Innovation has at its core an idea that sustains the social enterprise movement as a whole: it is the realization that government alone cannot address all the social problems, nor can markets or private sector activities; it’s the idea that bridges between silos are needed and that fundamentalisms of any kind constitute barriers to practical solutions; it’s the notion that cross-sector collaboration are in most need and innovative allocation of government’s resources can facilitate it to leverage the strengths of each.

The challenges for the Office are as great as the expectations that surround anything related to the current US administration. As Ms. Shah rightly said, the success of her team (herself and only three more, by the way…) should be measured in terms not only of direct, tangible impact of programs on social metrics, but by the institutions and collaboration processes its actions help install. Instead of picking winners and striving to show quick results, the energy and time of the Social Innovation team can be best invested in laying the ground and building the institutional infrastructure that allows for greater collaboration among sectors towards social impact.

This institutional infrastructure includes issues like setting up a set of common social impact metrics, as well as a regulatory framework that facilitates collaboration and incorporates different institutional types that allow various types of capital to flow and leverage each other into impact investing. The fact that the US government is the one leading this conversation makes its potential implications enormous, not only on a domestic level but also internationally. Although the scope of the Social Innovation Office is limited to issues within the US territory, it is plausible that the frameworks and ideas that support it are later applied to the way aid resources are allocated in the developing world.

Shah’s intervention was followed by a panel discussion that went in more detail into the issues described above, providing the SOCAP audience with an overview of the issues that will be discussed throughout the conference but with an emphasis on the challenges faced with in the US which is often absent in the conversations that take place in the social enterprise circuit.

Last year’s SOCAP conference kicked off in an environment of political uncertainty (the US election was merely a month away) and economic uncertainty caused by the meltdown of financial markets. These two ingredients made social enterprise and impact investing look like alternatives where a shift in values and priorities could materialize into tangible projects. This year’s SOCAP kicks off with a different feel, which I would describe as more mature. A coherent industry seems to finally be coming together around the idea of social enterprise; impact investment and collaboration seem to be becoming a less difuse terms and actual mechanisms now exist to encourage and facilitate it. The fact that social innovation is now in the agenda of the world’s most powerful office is another one of many signs that point in that direction. This made Sha’s intervention and the follow up panel a wise choice for opening the floor to many interesting discussions.

Stay tuned as we contrinue to develop NextBillion’s coverage at SOCAP 09.