Social Innovation Summit, SSIReview

Pointing out the importance of international collaboration

Karen Wilson works at the OECD, focusing on innovation, entrepreneurship, finance and social impact investment. As one of the keynote speakers at Sweden’s upcoming Social Innovation Summit we asked Wilson to shed some light on social impact investment and policies for setting this in place.

Karen E WilsonKaren Wilson is also a Senior Fellow at Bruegel, an international economics think tank based in Brussels, an Associate Fellow at Said Business School at Oxford University and a Visiting Lecturer at the Stockholm School of Economics in Riga. A part from this she has many other engagements, such as being a Board Member and Advisor of the European Foundation for Entrepreneurship Research (EFER) and an expert on the European Commission Horizon 2020 Access to Risk Finance Advisory Group and on the World Economic Forum’s Global Advisory Council on the Creative Economy.

What does it take to make social impact investment work fully?
– A well-functioning ecosystem is needed, with intermediaries helping to connect investors and investees, as in the mainstream financial market. It takes time to develop an ecosystem, and the social impact investment still is new in many countries. The government can play a role in facilitating the development of the market.

What administrative authority should ideally be in charge of social impact investment?
– This question is difficult to answer because social impact investment cuts across many areas of government (welfare, economy, finance, environment etcetera). Social impact investment should therefore be set up in a way that engages the relevant ministries and agencies across the government. Different countries have approached it in different ways, which is appropriate given the varying contextual factors.

– However, there are several commonalities such as the role of key high profile champions. An example is Sir Ronald Cohen, who not only lead efforts in the U.K. but went on to Chair the Social Impact Investment Taskforce, established by the G8 under the U.K. Presidency in 2013, which has spearheaded a global effort to develop the market. It is important that the public and private sectors work together in facilitating the development of the market.

What are the possibilities for social impact investment in “welfare states” like Sweden?

– The opportunities for social impact investment vary from country to country based on existing social systems, social needs and other factors. The key to social impact investment is not about bringing in additional (private) money, it is about bringing innovation and measurement into existing systems of social service provision. Therefore, social impact measurement is critical. Often inputs and sometimes outputs are measured but not necessarily outcomes. Social impact investment can help change that.

Could you give us three “take aways” from the OECD-report “Social Impact Investment: Building the Evidence Base”, that you edited?
– First of all: It is important to build a well-functioning ecosystem. This means having appropriate framework conditions in place that enable the effective functioning of the market. As discussed earlier, these ecosystems and framework conditions will vary across countries. Secondly: There is a lot of enthusiasm about social impact investment, but it is important to look beyond the hype to actual data and examples, to understand what works and what doesn’t in different sectors and contextual situations. And last, but not least: It is important to remember that social impact investment is about addressing social needs and in more efficient and effective ways. It is not about the financial instruments. Social needs are growing and public budgets are getting smaller. We need innovative new approaches to solve social needs.

How do you suggest we go about this, making politicians and policy makers understand what impact investment is all about?
– Policy makers need data as well as examples of how social impact investment works. Currently there are various efforts to collect data within countries, but these are not internationally comparable. Also, there are too few examples of how social impact investment works in different sectors, within different country contexts and using different financial instruments. Organizations like the OECD can play an important role in defining the data and indicators needed and setting up a process for international collaboration on data collection. In addition, the development of more detailed case studies would be useful, ones that delve beyond the surface into the real lessons learned.

What is Social Innovation Summit?
SI Summit website

VIDEO: UK Minister for Civil Society Rob Wilson hosted an event to announce the OECD publication of ’Social Impact Investment: Building the Evidence Base.’

 

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