Weekly Roundup: SOCAP11, the Green Jobs Debate and Boosting Small Business
Every week, we report on the conversations surrounding the big issues in the world of social entrepreneurship and change.
SOCAP11, the four-day conference that brings together global leaders in impact investing and social enterprise, wraps up today in San Francisco. If you didn’t get a chance to attend this year, you can sift through what you missed with the hashtags #socap11 and #impinv. @adincmiller and @Rapetzel have also been doing some nice tweeting on-site. If you have a question that no one’s yet answered, head to SOCAPmarket’s VYou channel. And finally, in honor of the conference, SOCAP and MITs innovations journal partnered for a special quarterly e-edition devoted to impact investing. You can download it to your Kindle/iPAD/Cloud reader here.
The big ancillary debate surrounding this year’s conference was impact investing’s astonishingly quick rise to popularity. In Forbes, Elmira Bayrasli noted that SOCAP’s attendance rate has risen dramatically since the first conference in 2008. Whereas that conference attracted strictly impact investors, this year’s conference has lured more traditional venture capitalists, like Union Square Ventures. “Given today’s hesitant investing environment, I found that remarkable,” she wrote.
Anthony Bugg-Levine, incoming CEO of Nonprofit Finance Fund, explained that it made sense, telling Bayrasli that investors across the board are looking for more stable and socially-conscious, if conservative, vehicles for investment.
But, he noted, the US government must revamp economic policy to support these socially-conscious investors. “Our legal and policy system currently frustrates impact investors who have to work around both charity rules and investing rules that largely assume for-profit investing cannot legitimately contribute to social good,” said Bugg-Levine.
Others were a voice of caution. The entrepreneur and writer of BOPreneur was a little hesitant to glorify a model that, ultimately, is “still very much exploring boundaries, still very emergent.” The writer noted that the term impact investing didn’t even emerge until 2007. And in start-up years it is still a baby that needs space to grow. Young models, the writer argued, need to be tested and measured, which hasn’t happened fully with impact investing. “The right way to view a start up is as an experiment,” the writer noted. “But I don’t think that this has happened with impact investing. Instead, I think many are treating it more as a baby they want to go to Harvard.”
The Green Jobs Debate
This year’s Labor Day sparked some serious debate about the possibility of simultaneously creating jobs and protecting the environment. Tensions were high due to a report that a whopping zero net jobs were created in August, as well as Obama’s controversial move last Friday that abandoned the Environmental Protection Agency’s new air pollution regulation. A raging partisan debate over green jobs ensued.
Motoko Rich and John Broder published a thoughtful explainer in the New York Times, on the debate in Congress over job creation versus environmental regulation. Part of the problem, the article shows, is that few studies research the cost of doing business under new regulations. Without numbers, many fear profit loss. Many executives, for example, claimed they overreacted to the 1990 Clean Air Act, and that it wasn’t as detrimental to business as they’d predicted.
Regardless, some pointed out that imposing regulations may not be the short-term fix we need. John Graham, dean of the Indiana University School of Public and Environmental Affairs, told the Times that even if environmental benefits outweigh the cost, this “precarious time” may not be the moment to impose new regulations. “These benefits, which are often quite substantial, tend to be long term before they are incurred,” he said.
The NY Times’ David Brooks pointed out that new green jobs, which Obama touted as an economic booster in 2008, didn’t materialize. Instead, green energy companies are either producing fewer jobs, using technology or outsourcing to cheap-labor locations like China.
“California was awarded $186 million in federal stimulus money to weatherize homes,” Brooks said. “So far, the program has created the equivalent of only 538 full-time jobs. A $59 million effort to train people for green jobs in California produced only 719 job placements.” The lesson, Brooks said, is that government simply isn’t good at creating private-sector jobs.
On Triple Pundit, Jonathan Mariano agreed with Brooks. His case study: Solyndra, a clean tech company with over $1 billion in private VC funds and $535 million from the Department of Energy that recently filed for bankruptcy. Mariano argued that start-ups, particularly green, are a gamble — and that the government should stay out. “The government is growing ever more in debt,” Mariano wrote. “It can’t even keep a balanced budget. It cannot afford to take the risks that private venture capital can. And that is the real lesson here.”
Nevertheless, the U.S. Energy Department is issuing two large federal loan guarantees to solar energy companies, with the hope that these will successfully create jobs. And investor interest in the green economy appears to be strong. Ethical Markets Media’s 2011 Midyear Update reports that more than 2.4 trillion dollars of private sector investment has gone into green companies and technologies, worldwide, since 2007.
In an otherwise flat economy, wrote Rosalinda Sanquiche on CSRWire, the green sector is growing– particularly in R&D and clean tech M&A. “This jump,” she wrote, “may reflect greater management awareness of the need for redesigning products and services for increased energy and materials efficiencies – criteria now driving innovation.”
Meanwhile President Obama’s much-anticipated jobs talk prompted debate on Twitter with the hashtags #Obama and #Jobsspeech. Some expressed excitement over money promised to community colleges to help youth find vocations. The White House Press Corps tweeted that it was a bunch of talk but no walk – no actual jobs plan. And the Administration responded by tweeting a link to their official American Jobs Act press release, which promises to help small businesses grow through tax cuts, prevent layoffs and increase hires in specific sectors. In addition it proposes reforms to the unemployment support system and tax system for working families – all to be paid for in advance by Congress without increasing our national debt.
Reducing Barriers To Entrepreneurship
Late last week, the US Small Business Administration released a new report called Startup America: Reducing Barriers, which surveyed more than 1,000 entrepreneurs and investors. The report’s five big takeaways are pretty, well, obvious. Entrepreneurs need: people, ideas, money, customers and lean government.
But in an accompanying piece in Fast Company, Karen Mills, administrator of the US Small Business Administration, wrote a roundup of the US government’s current work to fulfill the entrepreneurs’ recommendations. Many, for example, said we need to revamp our visa system so that “bright minds” can stay in the country.
“That’s why,” wrote Mills, “the US Citizenship and Immigration Service recently announced revisions to some visa programs to allow entrepreneurs with advanced degrees or specialized expertise to stay here in order to start and grow great job-generating companies.”
Mills also pointed out that the Small Business Innovation Research program annually delivers $2 billion in grants to small firms doing cutting edge research and development.
Fast Company also ran a nice profile on Kiva City, an initiative launched in June that brings its global micro-loans to struggling American cities. In its two launch cities, New Orleans and Detroit, the program’s nineteen initial loans, which add up to over $135,000, have been re-payed. Author Ariel Schwartz pointed out that this may be one alternative to America’s faltering economy. “The success of entrepreneurs like Jakes is important in New Orleans, which the Kiva and Visa Study of Small Business Trouble Spots pinpoints as one of the US cities struggling the most with small business stress,” Schwartz said. “Any struggling local economy–whether it’s in the US or Uganda–can use some strong small businesses.”
The Global Impact Investing Network released their first Impact Investing Reporting Standards (IRIS) data report, which includes aggregated data from a diverse set of organizations working with impact investment intermediaries.
Worthwhile weekend reads
NetSquared shared some helpful advice on how to use LinkedIn’s nonprofit solutions.
A new study shows that mobile phones helped to target disaster aid in the aftermath of Haiti’s devastating 2010 earthquake.
John Gray wrote a provocative piece in the BBC Magazine suggesting that Karl Marx was right about the perils of capitalism.
Sarah Bartlette, Director of Communications and Research at Esoko, explains in National Geographic why communication technology is crucial for helping farmers access agricultural markets in Africa.
David Carr investigates complications surrounding Michael Arrington’s role in TechCrunch as both investor and journalist.