Kevin Jones of SOCAP on 2011 and What’s to Come in the Year Ahead
This is the third part of our Year in Review Series, in which we reconnect with our group of experts about the trends they forecasted for social entrepreneurship in 2011 and look forward to the year ahead. The father of SOCAP, Kevin Jones, has spent much of the last year strengthening the social entrepreneurship sector outside of its U.S. borders. Here he discusses the progress made in building an international community of changemakers, and what we can learn from our European counterparts about accelerating social impact.
Dowser: What is your overall assessment of the progress that the social entrepreneurship sector made this year?
Jones: I think we’ve come a long way this year and many things are more real and less conceptual. There’s been a validation such that people’s ability to risk and try new things has been realized. Before there was some fear of failure because no one wanted the sector to look bad, but now people are saying it’s ok for there to be failure because that’s part of the evolution of the space. The people at Monitor [consulting group] categorized the phase we just went through as uncoordinated innovation. I think now we are starting to fill the gaps with more coordinated phases of infrastructure.
How do you think this increased comfort with failure has propelled the social entrepreneurship sector this year?
The category is validated enough to encompass some failures, and ready to take some risks. There’s always going to be a cost to doing good; you get lucky sometimes where the mission enhances the margin, but in a lot of places you have to get some other sort of subsidy. I think if we do this at all right, we will end up with some type of collaborative design process for people funding social enterprise, and the eventual acknowledgement that it enhances livelihoods.
We need to be altering consumer mindset in order to cause more to be created in social enterprise. People are funding enterprises, but nobody is working on the underlying issues of expanding consumer demands. To me, that is just as important.
You held the first SOCAP Europe conference this year and since then, have been working closely with other European constituents to foster widespread social change. What have you learned from collaborating with European leaders in this space?
We’ve proved that social enterprise works, and if we’re going to scale it we have to do it collaboratively. That’s one of the reasons we’re holding the next SOCAP Europe in Sweden [in 2012] because there they work collaboratively around problems. That’s one of the big new pieces of infrastructure that we need to be working on — learning to play well together and work fast to implement solutions that work. Intrinsically, social entrepreneurship works more easily where there is an acknowledgment that things are broken. But, most things are working in Sweden — institutions work there and they demand that they work.
We should be looking at the Nordic way of doing things as something to learn from. For example, if a banker committed an ill against society and led people astray then they hold them personally accountable and don’t let the bankers off. Sometimes that means you throw the bankers in jail like Iceland did. Next year in Sweden, we want to have the folks from Iceland there to talk about how do you raise the political will to get something like that done. We have the validation that we need for the sector. So let’s figure out how to optimize for cooperation now.
So, you’re saying that we need to look beyond our borders at what other countries can teach us about models for advancing change that works?
We are realizing one of the necessary pieces of infrastructure is a forward-looking way of doing things. When people come to SOCAP Europe, they will find things that are working outside the U.S., and one of our goals is to make those models more available for people to adapt. That’s why we’re calling the conference “Designing the Future.” In the Nordic countries, they are not endlessly dealing with problems that are overwhelming them today. Instead, they want to look at how to make healthcare equitable around all ages, for example. They will soon have a majority of their population over 60. That’s not a problem they are dealing with today but they know it will be in six to seven years. The thought here in the U.S. has been to wait for a crisis, get nearly crippled by it, and then try to figure out how to keep the wheels on. But social entrepreneurship is evolving beyond that. The sector has gotten on base, and now we can finally take a breath and say, What’s next? Until now, we haven’t been able to stop and take a breath and ask those kinds of questions.
That’s a really important point about the evolution of the sector. Do you think this newfound perspective in the sector has positively affected the funding pipeline for social enterprises?
There’s a lot of innovation on the low end, meaning the early stage deals where there is lower return and higher risk. Seed funding is riskier than traditional types of investing, and it’s also riskier when you add on a social cost. There is no quick flip for really deep social problems. However, I am seeing the market maturing on both ends, so there are also more big deals being done and that makes more liquidity possible on the low end. We need some level of corporate capacity building – to figure out how do we build that ecosystem at the high-end of the market where impact investing takes place, which doesn’t need risk takers in order to catalyze. There needs to be some type of subsidies or grants, but who should do that and in what way is still an interesting challenge. We still need to build in the necessary infrastructure to move beyond the buzz.