“Chasing the Next Big Idea” — Innovating Old Ideas to Further the Development of Social Finance

Social Finance - Wed, 06/19/2013 - 09:05

By Polina Minkovski

The past few years have been replete with debate surrounding aid effectiveness strategies and their impact on social growth trajectories. Prompted by trials and innovations among investors and charitable altruists alike, new social impact models have emerged, adding to the toolkit for those working for sustainable economic development. It is precisely this innovative spirit which inspired the dialogues at a recent World Economic Forum on East Asia; held in Nay Pyi Taw Myanmar on June 5-7, 2013. 

Subtitled “Courageous Transformation for Inclusion and Integration,” the sessions brought together actors from the public, private and third sectors in order to dissect and shape Myanmar’s ongoing social and economic transformation, as well as its future role as chair of ASEAN in 2014. Yet, aside from highlighting opportunities for growth in Myanmar and East Asia, the conversations which took place at this forum opened my eyes to a new perspective altogether—the notion that while innovation is imperative for social growth, it does not necessarily require entirely new ideas.

In essence, one of the biggest takeaways for those of us seeking to make significant contributions within the social finance space is that instead of focusing on generating entirely new ideas, we should concentrate on engineering new ways to use existing ideas more effectively.

Of the more than twenty panels comprising this event, one, “Chasing the next big idea”, sought to illuminate some of the lessons and models coming out of and propelling development in East Asia. Moderated by Deloitte’s Managing Director Gary Coleman, April Rinne (Chief Strategy Officer, Collaborative Lab), Fazle Hasan Abed (Founder and Chairperson, BRAC), Haider Rashid (Regional President, South Asia, ABB), Heizo Takenaka (Director, Global Security Research Institute), Hang Do (General Manager, Thien Minh Group) and Tony Blair (Middle East Quartet Representative), each put forth their big ideas for resolving some of the challenges plaguing East Asia today, including:

  • The necessary investments in infrastructure, innovation and technology;
  • The actions required to engage citizens in these efforts; and,
  • The role played by East Asia in world markets.

Panelists were not short of recommendations for growth and development of the East Asia region and Myanmar, including: investment in infrastructure, increased access to technology and to education, emphasis on government effectiveness and partnerships with the private sector, and more developed social networks. These ideas, however, have frequently appeared in conversations surrounding economic growth, and have repeatedly been put forward as key socio-economic development strategies around the world. Numerous studies have showed explicit relationships between each of these elements (access to Information and Communications Technology (ICT), educational attainment, etc.) and a country’s level of prosperity. 

But, what I’m most excited by is that there could be a real opportunity here to make use of these ideas in an entirely new way—as proxies for evaluating the performance of another big idea—impact investing.

The relatively nascent field of social finance has struggled to establish universally relevant and useful performance indicators for either investors or investees. Despite the lack of streamlined definitions for success, social investors are united by their desire to improve the well-being of those around them—precisely the objective shared by the WEF panelists. Could these "big ideas" not then be used as a framework to measure the extent to which social investments contribute to economic development? Perhaps, when evaluating outcomes of social investments, we should be asking some of the following questions:

  1. Has the investment resulted in strengthening the network of public and private enterprises? 
  2. Have the resulting relationships improved government effectiveness
  3. Has the investment helped to increase access to infrastructure or services, which were otherwise not available to the local/national community?
  4. Has the investment encouraged information and knowledge sharing?
  5. Has the investment provided opportunities for collaboration?

It is clear that the big ideas for economic growth and development discussed during the WEF’s June panels in Asia have stemmed from success stories. It is important to create economies of scale for such success, and to be innovative in how ideas can be reframed to generate further positive outcomes in varying contexts. Hence, as we continue to shape and redefine the field of social finance, we should know that old ideas with new outlets can be the innovation we need, in order to support and harness the social growth we want to achieve both locally and globally.