The following article originally appeared in:
In a world of unpredictable change, what the world needs most is Resilience
Written by Tim Brodhead, Senior Fellow (SiG) National & President & CEO, J.W. McConnell Family Foundation (1995-2011)
Printed by The J.W. McConnell Family Foundation in 2011. The full publication can be downloaded here.
Social Innovation Generation
Canadians are trying to meet 21st-century challenges with institutions and policies largely fashioned in, and for, the 19th and 20th centuries. We live in a post-industrial world and yet our education system is as regimented, standardized, and top-down as yesterday’s factory. We have a knowledge-based economy, yet our health care system lacks proper information management, a comprehensive approach to allocating resources, and adequate support for the critical roles played by patients, their families, and community-based services. We have an increasingly sophisticated understanding of ecological threats, yet we continue to treat the environment as both a limitless resource and a dump for our waste.
It is time for fresh thinking and bold actions. We must unleash the creativity and resourcefulness of Canadians in all parts of society so that we can tackle the complex and interrelated challenges of the early 21st century.
A resilient society, by definition, is open to change. New problems arise, old methods no longer work, and fresh insights develop that lead to new thinking and innovative responses. Political and economic pundits have warned us for years that Canada has a “productivity deficit” that threatens our continued prosperity. Kevin Lynch, the former Clerk of the Privy Council, has repeatedly called attention to the importance of productivity and innovation to our standard of living; he refers to innovation as “a public good and a private necessity.” In 2011, yet another federal panel was created to recommend ways to improve Canada’s performance and to achieve better results for the considerable government investment in commercial R & D.
Yet, in the mainstream discussion about productivity and innovation, the role of social innovation has been largely ignored. It is as though science and technology alone, along with more stringent intellectual property laws, could make Canada productive and prosperous. There is no question that lagging productivity is an economic problem, but a lack of capacity to innovate and to create large system change in the present context poses an even greater challenge to Canadian society as a whole. In so many of the areas addressed by the Foundation’s programs – the sustainability of our food system, the participation and sense of belonging of all citizens, the creation and application of new knowledge, to name but a few – what is needed is not just incremental improvement. We are living at a time of transformational change and it demands long-term vision, support for innovation in all domains and at all scales, and a commitment to experiment, learn, and adapt.
The Foundation believes that for Canada to fully embrace and nurture innovation, all sectors must be involved. Social innovation is both a destination – the resolution of complex social and environmental challenges – and a process – devising new approaches that engage all stakeholders, leveraging their competencies and creativity to design novel solutions. High-impact innovations create a dynamic interplay between new products or processes, and the user (in his or her role as customer, client, citizen) and co-creator.
In 2004, the Foundation launched Sustaining Social Innovation. Working with some two dozen social entrepreneurs, this program aimed to increase the impact and durability of their innovations. Social innovators, such as business entrepreneurs, start with an idea or insight, but they need support in the form of advice, training, capital, and so on. It quickly became clear that working on an individual basis was inefficient and that there was much value in convening participants to share experiences and insights, and to develop a greater understanding of how their initiatives could bring about systemic transformation.
To create an ecology that supports social innovation, the Foundation in 2007 partnered with the MaRS Discovery District in Toronto, the University of Waterloo, and the PLAN Institute in Vancouver to establish Social Innovation Generation (SiG). SiG is based on the premise that the major challenges we face require the focused attention of all sectors of our society – government, business, academe, and community – and a wider range of resources than what the Foundation alone could provide.
To date, SiG has focused on three priorities: building Canada’s capacity for social innovation, mobilizing new sources of capital to meet community needs, and creating a culture of continuous social innovation as a way to engage all sectors in meeting some of Canada’s most intractable social and environmental challenges.
For many years, the Foundation regularly convened meetings of some of Canada’s most experienced social innovators to enable them to share their knowledge and increase their impact and effectiveness.
In 2011, a graduate diploma program in Social Innovation will be offered at the University of Waterloo for participants from government, private sector, and community organizations. This program is designed to equip practitioners with tools, strategies, and networks to tackle complex problem domains. The first course focuses on the challenges of increasing Canada’s productivity by bringing into the mainstream people who have been systematically marginalized and excluded, including new Canadians, seniors, and those with mental health issues.
Increased capacity by itself, however, has limited potential, unless we also address the chronic underfunding of activities that create public value. Voluntary and not-for-profit bodies in Canada depend largely on only two revenue sources: private donations, and government grants and contributions. Community organizations, often led by highly entrepreneurial individuals, may innovate as they improvise approaches to meeting local needs, but typically such efforts rarely get beyond the pilot project stage. There is growing awareness that new forms of hybrid financing that combine a financial and a social return, now called impact investing, are urgently needed.
Social enterprises can use private investment along with philanthropic and government funding to provide the capital they need to increase their effectiveness and impact. In the words of Judith Rodin, President of the Rockefeller Foundation, “While there is not enough money in foundation and government coffers to meet the defining tests of our time, there is enough money. It’s just locked up in private investments.” In 2010, the Foundation, through SiG, launched a Social Finance Task Force chaired by Ilse Treurnicht, CEO of the MaRS Discovery District in Toronto, and made up of prominent Canadian business and community leaders to make recommendations to promote impact investing to (in the words of the Task Force Report) “mobilize private capital for the public good.”
The Task Force issued its report in late 2010 and it was subsequently presented to the federal Minister of Finance and several of his provincial counterparts. It calls for measures to mobilize new sources of capital, to create an enabling tax and regulatory environment, and to build a pipeline of investment-ready social enterprises. Specific recommendations have been the subject of discussions by private and community foundations, and there is growing interest among investment managers. MaRS is following up with the establishment of Canada’s first Centre for Impact Investing, which will serve as a national focus for research, capacity-building, and prototyping new funding models, including community bonds and pay-for-performance experiments, such as Social Impact Bonds. The McConnell Foundation, in common with several other private and community foundations, is beginning to engage in impact investing as a way to leverage its assets and to provide capital in a form and on a scale that meets community needs. Social finance, it must be emphasized, is intended to complement, not replace, other revenue streams and it is not viable for many types of activity.
As the ongoing national productivity and innovation debate makes clear, the final aim of SiG, to create a culture of continuous social innovation, is no short-term goal. New social, economic, and environmental realities call into question many aspects of how we do things, and not least the role of government. The widespread notion that the public sector is incapable of innovation because it lacks incentives or due to its risk-averse culture, ignores a legacy of pioneering achievements, including publicly funded health care, registered education and disability savings plans, and, at the municipal level, BIXI bicycles, and so on. SiG, in collaboration with the Public Policy Forum (PPF) and others, has brought many of the leading thinkers and practitioners of public-sector innovation to Canada in the past 12 months to stimulate fresh thinking about the roles of government and civil society, but much remains to be done.
SiG is experimenting with concepts such as “change labs,” “innovation hubs,” and so on as “safe’” spaces where people from all sectors can experiment, test, and prototype solutions to complex problems without all the risks inevitably involved in change. Key to these is the notion of “co-creation” of policies and programs, where citizens or users contribute to defining the challenge and possible solutions. This reflects a basic community development tenet, the principle of ownership (as exemplified by the approach of Vibrant Communities and other programs), and the need to develop skills of collaboration, design thinking, and other tools to promote innovation that are being addressed by the University of Waterloo program. The availability and use of new IT technologies allows for sharing of data sets, “crowd-sourcing” solutions, leveraging market forces for desirable social and environmental outcomes and other ways by which communities mobilize their chief assets – local knowledge, deep engagement, and entrepreneurial drive – to solve problems and to revitalize democracy.
SiG’s goal is to help to create a culture that welcomes and supports innovation in Canada, beyond discrete solutions to particular problems. “Culture” sets the limits of what is possible, what is viewed as “realistic” or doable. In a time of accelerating, unpredictable change, being realistic is not enough. We need to free our imaginations, to ask what is desirable, and then to engage as many of Canada’s creative, diverse, and talented people as possible to build the society we want.