The search for scale

A guest post from Dan Gregory.

For a few weeks now, an exchange I read on social media has been nagging away at me.

Venerable Australian academic and social innovation expert Nicholas Gruen was quoted at a conference saying that “No country has significantly scaled a piece of social innovation”. Then US social impact investment expert Steve Goldberg heartily seconded this, saying that “Social innovation has not scaled.  Full stop.”

At the time I thought this was just a bit strange. I wondered for a moment how schools and hospitals fitted into Nicholas and Steve’s worldview but didn’t think much more of it. Perhaps something was just lost in translation. But the thought still nagged me.

Then David (who is kindly hosting this blog as, unlike me, he knows how to enable comments on WordPress) mentioned he had seen the same exchange. Then this week I discovered my proposal to be part of the Maintainers Conference was successful. For more on the conference see here

My proposal is focused on how charities, voluntary and community groups and social enterprises across the UK undertake essential maintenance work every day, sometimes ignored and forgotten. Yet meanwhile, the Government and many funders and financiers tend to get rather more excited about innovation and the digital, creative, incubator-based social ventures which all sound very exciting and promise radical change and transformation. The UK seems to be in the midst of a pandemic of disruptive social innovation hubs, accelerators and incubators. This seems to me like a sort of fetishisation of innovation.

This prompted me to wonder – is my confusion at Nicholas’s and Steve’s comments linked to these two very different perspectives?  Perhaps the quiet work of suburban or rural community-based charities is being ignored? Perhaps what happened 100 years ago when social action led to the birth of the welfare state is just all a bit boring and far away? Perhaps it’s just not interesting to Steve and Nicholas? Does a passion for a narrower, more instrumentalized version of social innovation today distract us from the wider, more organic role of social action and social enterprise in shaping markets and the state over the long term? Urban tech disruption hubs are cool and exciting, right? Right?

Perhaps always looking forward for the next exciting innovation explains Steve’s and Nicholas’s blindspot for how schools, hospitals, food banks, homeless shelters, charity shops, recycling projects, credit unions, citizens’ advice bureaux, fundraising marathons, bike workshops, co-operatives, unions, libraries and babysitting circles have reached such a scale today to become part of the very furniture of our lives. Perhaps scale is boring?!

Or are Steve and Nicholas right that social innovation has really never scaled? Is the blindspot mine? What am I missing? Steve? Nicholas? Help!

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9 Comments

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9 responses to “The search for scale

  1. I think a lot of this comes down to varying definitions that seem to dog social innovation, which you’re already alluring to in the blog.

    I found there seem to be two main camps of thought with regards to what social innovation actually is. The first camp see it more as a ‘sector’, and one that has developed fairly recently, defined by the rise of social entrepreurship, accelerators, incubators etc. Something quite radical and exciting, powered by the emergence of various organisations over the last 20 years or so, such as UnLtd, SSE, Nesta, Impact Hubs.

    Then the second camp view at as more of a process, and once which has existed pretty much as long as society as existed. To innovate and create in a socially beneficial way is a fundamental part of who we are, and something we’ve always done. You’ve given plenty of good examples and you could even hark back to the very first systems of basic human governance thousands of years ago as an example of social innovation in action. Perhaps the Greeks were the greatest social innovators of all, given how many of their creations underpin what we see in societies across the world today…!?

    Obviously two people debating social innovation who are in different camps with regards to how they define social innovation could see things very differently.

    I’m thinking (writing) out loud now…but perhaps both are correct? The process of social innovation is very old, and is what is responsible for many of the innovations which genuinely have scaled and shaped society enormously, such as schools, hospitals, governments etc. But also we have seen the emergence of a social innovation sector, which is based around the idea of quite radical experimentation, and which is perhaps best known for its influence over the world of business i.e. social enterprises in their myriad of forms. Yet the sector, being young, is yet to really impact on society that people working within it would hope. And maybe with it being something that exists more on the fringes, it never truly will. Or maybe its true impact will be that this radical, experimental way of approaching social problems filters into larger institutions like business, government, finance etc. For example I see social impact measurement mentioned all over the place these days, and this is something the social innovation sector has worked hard on.

    That’s my two cents.

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  2. He may be right Dan. in the context of social innovation as its come to be known in recent times and government driven initiatives. Big Society?

    I found this reference to Gruen’s work:

    “As the former chair of the 2010 Government 2.0 Taskforce, the Australian government’s industry-wide examination into how to use new technologies – such as social media, mobile apps and wikis – Gruen has a wide range of ideas that re-imagine the way governments work.

    “How can we build institutions that create the economic resource flows necessary to do the incredible things that now look possible [with new technology]?” he says in an interview.

    The essay examines how web 2.0 platforms and peer production have combined to create an ‘explosion of emergent public goods’ which have benefited citizens on a massive scale. It also suggests alternative ways to make use of the public goods derived from private and public ‘endeavour’, focusing less on profitability as a motivation and more on the economic benefits of doing social good. ”

    Lots of us are doing that.

    Is social innovation just a new label? asks Mckinsey

    http://voices.mckinseyonsociety.com/social-innovation-a-matter-of-scale/

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  3. Dan aptly describes the “essential maintenance work” of “schools, hospitals, food banks, homeless shelters, charity shops, recycling projects, credit unions, citizens’ advice bureaux, fundraising marathons, bike workshops, co-operatives, unions, libraries and babysitting circles.” These voluntary, charitable, civic, and social organizations are vital to civilized society. Without them, any semblance of a safety net would not exist, and life would become barbaric for many people.

    While their work comprises the baseline of modernity, it does not advance social progress for the millions facing deprivation and poverty. Virtually all poor children can attend school, but their educations don’t enable social mobility or economic self-sufficiency. Food banks provide sustenance, but they don’t overcome widespread food insecurity. Homeless shelters respond to rough sleeping, but they don’t afford stable housing. Charities provide desperately needed supplies and services, but they can’t keep up and they don’t roll back the need.

    These aren’t criticisms. Their work is heroic and indispensable. Essential maintenance work isn’t glamorous, and it’s extremely costly and labor intensive. But it’s not designed to solve or overcome pervasive and intractable social problems. That’s what innovation is for.

    Social innovation is simply better, faster or cheaper ways to address a widespread need. The primary test for innovation is: does it work? Is it effective at overcoming a disabling social problem that baseline responses cannot? This has been the great achievement of social entrepreneurship over the last couple of decades. We now have effective solutions to wicked problems like homelessness, illiteracy, hunger, isolation, and chronic illness. Social enterprise is an industry comprised of innovation factories, and we’ve become very good at unlocking solutions to intransigent barriers and building accountable organizations to deliver them reliably.

    Many of them grow steadily, year over year. But they don’t move the needle.

    What we have not done is make any of these remarkable innovations widely available. That’s the scale problem. Scale means expanding effective innovations commensurate with unmet population needs. In researching my book, Billions of Drops in Million of Buckets: Why Philanthropy Doesn’t Advance Social Progress, I couldn’t find one example of a proven social innovation that reaches more than 5% of the target population.

    Maintaining the social safety net may be boring (just like maintaining bridges and guard rails), but it’s no less hallowed for that. Innovation is both exciting and really hard to do well, and thank goodness for tenacious social entrepreneurs. But scale remains completely elusive; indeed, it’s so hard we rarely even pursue it.

    I think solving the problem of scale is the next great challenge for our sector. I’m cautiously optimistic because the advent of social impact bonds and other kinds of impact investing could make the difference, but only if mainstream capital markets take a leading role.

    Scale requires much more than greater funding for innovation, but the task of financing geometric expansion of successful solutions to widespread challenges is the business of capital markets. As always, I agree with Sir Ronald Cohen: “if investors can find the same courage the early institutional backers of the venture capital industry found, we will see talented social entrepreneurs build large, effective organizations that move the needle on a social issue.”

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    • Steven, As one whose work in social enterprise has focussed on targetted econonomic development to tackle intractable problems like terrorism and organised crime. I share a paragraph of our appeal to US government for a national scale social innovation initiative in February 2008

      “There is increasing congruence and synchronicity in play now, to the point of attunement. What Ms. Fore is describing has been central to P-CED’s main message, advocacy and activity for a decade. That, and helping establish an alternative form of capitalism, where profits and/or aid money are put to use in investment vehicles with the singular purpose of helping the world’s poorest and most vulnerable people. The paper on which that is based is in Clinton’s library, dated September 16, 1996, author yours’ truly. That is reflected in P-CED’s home page and history section. In fact, you might notice a number of ideas and writings there that have now made their way into the mainstream of economics and aid thinking, how to make business and aid work smarter and more effectively in relieving poverty and the misery and risks that result. Bill Gates – as hard-edged a capitalist as has ever existed – reiterated the same things in Wall Street Journal a couple of weeks ago (ref below.) It sounds as though Ms. Fore’s remarks very much reflect this sort of thinking. Now it’s time to move forward and get it done.”

      We didn’t get it of course. Yet the arguments made for re-imagining capitalism for social benefit have rippled through business thinking since.

      It’s out of our hands now but it doesn’t go unnoticed that more recent advocates including Richard Branson Paul Polman and Klaus Schwab have all expressed a will to use business to redevelop the economy of Ukraine, where the call was made.

      Another group, including 3 peers have lent their support to another ‘Marshall Plan’ with a projected cost of $300 billion.

      An article describing this “new bottom line” has become one of the most popular on the subject of long term capitalism at McKinsey;

      http://www.managementexchange.com/story/re-imagining-capitalism-new-bottom-line

      If you can find an answer to the question why none of the above were willing to support our initiative, you may have found the answer to the question why social innovation doesn’t scale.

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  4. Hi Dan,

    Thank you for this post.

    I suspect that funders (both independent and statutory) are significantly responsible for putting scale and innovation so prominently on the agenda. Austerity budgets and their social consequences have, I believe, increased the already high demand available funding sources. Funders for their part are faced with the question of how to ensure their funds make the most difference (‘what’s our theory of leverage?’ – to put it more formally). Independent funders are often reluctant to put funds straight into established service provision as what ever resources they can bring to the challenge generally pale compared to the size of social need and the scale of statutory funding cuts they face. Scale and innovation (if successful) promise a high rate of social return on funders limited resources.

    For what it is worth, my impression is that the main barrier to scale and innovation are not technical, financial or political, but rather it is culture and habit. In my limited experience charities and social enterprises are very good and developing new and effective solutions in constrained circumstances (as well as plugging on with what they need to – whilst demonstrating a healthy contempt for fads and hyper activity policy wonks such as myself). People and organisations tend to stick with what they know, even when presented with technically superior alternatives.

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  5. Thanks Dan,

    I fear I have started a whole debate based on a misunderstanding. My comment on ‘social innovation’ not really a term I like much because of its white out vagueness was a reference to contemporary attempts to reconfigure social services around the needs of users. It wasn’t a claim that social innovations – like community schooling for instance – have never scaled. Clearly they have.

    My comment at the end of the interview was about attempts to do social policy differently. I was discussing Family by Family, a radical and powerfully successful family mentoring program which you can read about here. The government buys into the rhetoric that it wants to do things differently, gather the evidence and scale up what works. But then we do it – produce the evidence and then … nothing happens. The UK has been well ahead of us (Australia) for a long time – at least in terms of energy even if my guess is that some of it is misdirected. Outfits like Participle pioneered the kind of work that Family by Family is. You can read of their projects on-line, which predate ours. Yet I don’t know any of these projects, or projects like them the funding of which has been scaled by government and used to transform what it’s doing. I’d love  be proven wrong here, but that was the nature of my claim.

    Regarding innovation in schools, I don’t know about the UK, but the maths curriculum my kids have just completed in Australia is the same I did. Trigonometry is still in (with examples of triangulating flag poles), stats, data science and coding are still out. I did more coding at my high school in 1971 than my kids have done and the schools they went to were ‘better’ than the one I went to. But that’s a kind of side issue to my original claim.

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  6. I think we may be talking about two different things. My original reply to Nicholas Gruen’s tweet that “No country has significantly scaled a piece of social innovation” was that “Social innovation has not scaled. Full stop.” I did not assume that Nicholas was going back to the dawn of civilization, and I certainly wasn’t.

    Instead, I was referring to an idea that I first learned about from Eric Schwarz (@ericschwarz1984), formerly the Co-Founder of Citizen Schools and now the Co-Founder and CEO of the College for Social Innovation. Eric wrote a brilliant paper in 2005, “American Dream Scorecard, 1970-2003,” which surveyed dozens of published studies of 28 indicators of social progress concerning economic opportunity and security; educational opportunity and achievement; and public health and safety. Finding that 7 improved, 2 remained the same, 19 declined, and 1 had mixed progress and decline, he concluded that “the final decades of the 20th century were especially discouraging ones for less fortunate Americans and for the American ideal of ever-expanding opportunity.”

    In my book, I looked for examples of American social innovations that had scaled, and found many examples before 1970, including rural electrification, Social Security, the GI Bill, the Interstate Highway System, the eradication of polio, drastic reductions in smoking, and increased used of seat belts. The problems they addressed were effectively overcome for millions of people. I found no similar examples from the 1970s to the publication of my book in 2009. We’ve had many remarkable social innovations, including Building Educated Leaders for Life (BELL), College Summit, Jumpstart, Nurse-Family Partnership, Raising a Reader, Teach For America, and Year Up, but none reached more than 5% of the population-in-need, even after decades of continuous growth.

    My point wasn’t that social innovations can’t scale, but that they don’t anymore. Social entrepreneurs are doing their job, but as Sir Ronald Cohen so aptly put it, “Government is out of money and out of breath.” And philanthropy does a good job of funding innovation, but with rare exceptions (see the Edna McConnell Clark Foundation’s astonishing $1B capital aggregation fund through Blue Meridian Partners), it’s not in the scaling business.

    Northwestern University’s Robert Gordon reached a similar conclusion in his recent book, “The Rise and Fall of American Growth.” He says that “the life-altering scale of innovations between 1870 and 1970 can’t be repeated” due to “four headwinds that are just hitting the American economy in the face: They’re demographics, education, debt and inequality, [and] they’re powerful enough to cut growth in half.”

    I believe that scaling evidence-based prevention and early intervention programs by orders of magnitude using social impact bonds backed by mainstream capital markets could greatly mitigate three of Gordon’s headwinds: demographics, education and inequality. Peterborough was a watershed event, and now we have to capitalize on it to an extent that only Wall Street and The City can make possible.

    Nicholas made an extremely important observation that we need to face squarely. Innovation and scale are two different processes, and the former doesn’t guarantee the latter. Over the last several decades, social innovation has become a disciplined and highly successful undertaking, but scale has been effectively nonexistent. We know how to overcome a number of pervasive social problems, yet we don’t make them widely available to effectively eradicate the underlying problems as we’ve done in the past. It’s time for mainstream capital markets to put their shoulder to the wheel and finance exponential expansion of innovative social programs that work.

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  7. I offer an example similar to the family initiative Nicholas describes.

    Arguing for social investment in childcare reform, we had persuaded a foreign goverment that by transitioning institutionalised children to foster and family type homes, they could reduce the state budget while giving all children the benefit of a loving family home.

    We made impact in that by April 2007. two of our recommendations had been made government policy. Foster allowances were doubled which in itself increased the number of domestic adoptions by 30% on a national scale. They had also agreed to creation of 400+ rehabilitation centres for disabled children based on a successful model documnented by the international charity Everychild.

    Our argument had been that this innovation would free up state financial resources to be applied to other forms of social benefit. It was a nil “overall cost” strategy, where forwatd thinking businesses were invited to participate.

    A decade earlier, we’d argued against the fiduciary duty business to maximise financial return to shareholders, proposing a business model which operates primarily for the benefit of community. The existence of the Benefit Corporation today is evidence that this was not a lunatic concept.

    When social impact bonds were later conceived, the arguments we made about re-investing cost savings for social benefit became an argument that investors could make money from investing in social transition. Some even applied the argument to transition children from institutions to foster care, as we had.

    In some local authorities this represented a cost reduction of more than 60% a profitable endeavour with far greater margins and considerably less risk than our own.

    Sir Ronald Cohen has even re-iterated our argument for investment with social rather than financial return.

    You may hear PM David Cameron claim that money is available for social investment, even praising a social investment project to place children in loving familiy homes.

    So why does in never reach us?

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  8. Jenny

    Love this blog, Dan. I find ‘innovation’ chat highly tedious. Much more interested in implementation, incremental improvement, consolidation. Most ideas/services in the bit of the sector I’m in are ‘good enough’ in theory and are then implemented in practice in a way that means they never have the results intended – and the infrastructure around them just doesn’t seem interested in that.

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