By Geoff Mulgan and Peter Plastrik
Geoff Mulgan is director of the Young Foundation in the United Kingdom, and a former head of policy for Prime Minister Tony Blair. Peter Plastrik is president of Innovation Network for Communities in the U.S. and co-author of Banishing Bureaucracy and The Reinventor’s Fieldbook. The U.S. is a global leader in social innovation by many measures, just as it continues to lead in innovation in technology and business. A vast and growing amount of philanthropic capital—from billionaire institutions to tiny community and family funds—fuels the development and testing of new ideas; battalions of mission-driven not-for-profit organizations and networks form almost daily to combat social ills; a new generation of inventors issues an endless stream of Internet-based tools to empower people in new ways; social-change visionaries build national-scale programs to support social entrepreneurs and their ideas; and more and more, society honors people young and old who commit their time and resources to address social ills. This explosion of diverse experimentation is often exhilarating. But we believe that the U.S. now needs to raise its game to the next level. Social innovation in America still has some of the characteristics of technological innovation back in the 19th century. Much of it operates as a cottage industry, with little systematic learning, over-dependence on charismatic individuals, and insufficient impact. This matters not only because it means that many good ideas never realise their potential. It also matters because there are many fields where America needs nothing short of large-scale systemic transformation—in early childhood development and education, environmental and energy sustainability, health care, poverty-reduction, just to mention a few—that won’t happen if we simply do more of the same. America’s existing social innovation capacity plants thousands of innovative seeds, but too few of them mature and yield fundamental change. Many seek out the root causes of problems, but very few succeed in marsh alling strategies and resources to change them. There is a wealth of human and financial capital and organizations, but the whole is much less than the sum of its parts. Civil society is creative and energetic, but has been poor at connecting to and aligning with the policy-making capacity of the federal, state, and local governments that often hold the keys to systemic change. It acknowledges the power of market forces to spread innovation, but has not fully tapped the capacities of corporations; as Bill Gates notes in his recent description of “creative capitalism,” the nation needs “a system that draws in innovators and businesses in a far better way than we do today.” U.S. foundations tend to invest in projects that can be implemented right away, while putting relatively little funding into the research and development from which potent innovations emerge; indeed, there is a paucity of good research about social innovation itself. When funders do invest in social innovation, the lack of well-conceived and disciplined innovation processes too often leads to poor results. Finally, philanthropy tends to focus substantial resources on the individual social entrepreneur or organization, while under-investing in developing the crucial structures that provide the special expertise needed to drill down on a particular sector’s innovation potential or to connect the supply of innovations to demand for and distribution of them. As a result, at a time when the stakes are rising for social innovation, America’s social innovation system is underdeveloped, too prone to failure, too risky for entrepreneurs and investors, and poor at reflecting on its own limitations. National Strategic Priorities Interestingly, we’ve been here before. All the characteristics of social innovation described above were true of scientific and technological innovation more than a century ago. Yet during the 20th century, the institutional foundation of science went through a revolution. Corporations and governments learned that science and technology depend on much more than fragmented initiatives and creative individuals. They also need systems and structures; specialist intermediaries; mature, tested methods; and substantial long-term funding. That transformation helped America lead the world in technological and business innovation, turning the germs of ideas into great tools, enterprises, and wealth. We have not hesitated as a country to invest vast public and private sums in commercial innovation as a matter of national competitiveness, and that has helped our economy keep its edge during long periods of ferocious competition from around the world. The condition of the social sector is in sharp contrast to the robust commercial innovation infrastructure that has developed in the U.S., U.K., and other nations to support process, product, and business design innovations in the private sector. The system for identifying, screening, developing, prototyping and launching (“commercializing”) private market innovations is well evolved and well financed. Rewards for success are competitive and the field attracts some of the best human talent in the market place. Systems for due diligence and screening have been well honed over many years of trial and error. Both the public and the private sectors have invested in a continuum of R&D capacity, from basic research (such as America’s national labs for science and health) to applied R&D and commercialization enterprises. These enterprises have relationships with many different sources of capital to match the stages of development of an innovation. And a robust set of different business designs for innovation commercialization is constantly evolving. Social innovation, by contrast, has never been seen as a national strategic priority. During some periods that was because of a misplaced faith that policy experts in Washington knew all the answers, making it unnecessary to engage in the kind of systematic experimentation that is common in medicine or science. During other periods, social innovation was sidelined because of scepticism about the virtues of any kind of public/civic action. The result is that America’s extraordinary economic success is not mirrored in terms of social success. There are now few, if any, fields of social performance where the U.S. tops global league tables. Instead many social problems have persisted over many decades. These include high student dropout rates and poor educational results; unequal yet quite costly health care; energy-inefficient transportation systems; vastly expensive and ineffective criminal justice; stagnant urban housing. Manufacturing, financial, retail, and other for-profit sectors have experienced dramatic productivity improvements, in part because of massive investment in innovation over many decades. By contrast, these social sectors have not. With so much at stake, governments in other nations are already acting to ratchet up their capacity for social innovation, extending traditional support for high-technology research and development to support for R&D in social fields and in services. The European Union recently made social innovation a priority for action as part of its Lisbon agenda for combining economic competitiveness and social success. The United Kingdom is investing millions in boosting social innovation in health care and other sectors, and has already invested some $800 million in social entrepreneurship. Australian national and state governments are investing in boosting social innovation organizations. China has set up a social innovation laboratory, and there are similar ventures in countries as diverse as South Korea and Denmark. The World Health Organization is looking closely at the potential for disciplined social innovation to speed up the evolution and diffusion of better models for solving problems as varied as the rising incidence of chronic disease and public health. Many of these organisations now come together in increasingly dynamic global networks like the Social Innovation Exchange coordinated by the Young Foundation. All are seeking to make the most of past traditions of civic action, technological innovation, venture philanthropy, and social entrepreneurship, while also taking further steps to realise genuinely systemic change. Some of these approaches have taken models from science and technology and applied them in the social field. But some are also symptoms of a fascinating convergence between the business world’s growing interest in the power of collaborative, social forms of innovation—networks—that have grown up around the Internet and World Wide Web and a sea-change in how commercial innovation happens. As recent research from the Information Technology and Innovation Foundation confirms, whereas in the past most commercial innovations in the U.S. were developed within large firms, the great majority are now developed collaboratively and with some federal funding. An Acceleration Agenda for Social Innovation A new Obama administration in Washington could provide a new source of leadership for social innovation across America—and for applying lessons in social innovation to the nation’s compelling needs. There’s a risk that the ideological habits of Republicans and Democrats—respectively, their worship of the market’s “invisible hand” or of government’s “helping hand”—could lead national policymakers to discount the importance of social innovation or default to government policy as the primary means of social policy. But the conditions look propitious for a step forward that would enable America to make the most of innovation that cuts across old sectoral boundaries and connects public power, private enterprise, and social initiative. Some institutions, including major private foundations and large, national nonprofits, have launched internal processes of strategic change that question their habits and seek new ways to achieve better results. Some social-change funders, advocates, and traditional organizations have been building networks to share information, learning, competencies, and funding. Some have invested staff and money in small efforts to develop and test new types of social-innovation institutions. Meanwhile, many in the public sector have become more adept at organizing systematic experimentation. So far these efforts remain promising fragments rather than anything resembling a concerted strategy. Few if any have the requisite scale and collaborations to achieve genuinely transformative results. And few if any are aware of emerging best practice in other sectors, let alone globally. But a new administration, encouraged by the leading foundations, could commit to catalyzing a far-reaching program of social innovation focused on some of the biggest challenges we face over the next few decades—like early childhood development, climate change, or the development of poor communities. These tasks are the modern equivalent of getting a man to the moon and back—and they require a similar investment of resources and energy. Unlike the moon landing, however, they are tasks that have to be carried out in partnership with society at every level, from large foundations to community organisations. We therefore urge U.S. leaders in the foundation and non-profit world to focus intensely and urgently on accelerating the development of the nation’s social innovation capacity, and to make the case for a national focus on deep-seated social priorities. In the short term—even before the inauguration of the next president in January 2009—these steps could be undertaken: 1) We need a detailed “map”—a strategic analysis—of the nation’s existing social innovation capacity: its strengths, weaknesses, gaps, and opportunities. 2) We need to understand social innovations and social innovation capacities in other nations that might have promise for importation and adaptation in the U.S. 3) We need some shared understanding about the process and discipline of social innovation. What are the best practices? What capacities are needed? 4) We need a national leadership summit focused on social innovation as a national development strategy, which should provide opportunities for participation by thousands of people (face to face and on-line) to identify key strategies for building social innovation capacity. 5) Finally, we need to articulate a commitment of substantial resources to advancing a coherent, focused social innovation acceleration agenda and a challenge to the government and business sectors to match and collaborate. We have our own ideas about what might appear as priorities on an acceleration agenda, especially the creation of new intermediary structures—sometimes called “incubators,” “accelerators,” or “innovation production networks”—to boost the supply and scaling up of social innovations in particular sectors such as early childhood or energy sustainability. And we believe there is much the social sector can adopt from commercial innovation. But the point is to create a high-level space in which these ideas and others can be identified and sorted out. Then, perhaps, social innovation can become as robust a force as technological and business innovation has been for change and improvement in the U.S. Despite its current problems no one doubts the robust underlying strength of the U. S. economy. Sadly that strength isn’t matched in the social field, and the U.S. is much less of a role model for the world than it once was. To be a truly great nation, we will have to embed innovation, dynamism, and performance in our schools and hospitals, communities and environmental projects, as much as they are in our great businesses. | 
