In our Big Ideas series, we check in regularly with top thinkers in the field of social innovation. We want to know what they're working on, what questions they're wrestling with, and what opportunities and challenges they see up ahead for the sector.
Today we hear from Alex Nicholls, lecturer at the Skoll Centre for Social Entrepreneurship at the University of Oxford's Said School of Business. He's the co-author of the influential book Fair Trade and the editor of Social Entrepreneurship: New Models of Sustainable Social Change, the best-selling academic book on the subject globally. He's currently working on a new book on social investment.
On why he's focused on social investment: "It really matters in the field: When I meet social entrepreneurs and ask what's the thing that's most difficult, they say, 'Getting money.'"
On why it is so hard for social entrepreneurs to raise capital: “There's probably not a shortage of capital, which I think is the assumption people make. I think the problem is twofold: First, many social enterprises are just not investable--many are too small, too early-stage, and they often don't have a high level of financial literacy. Second--and this is the biggest missing piece--there's a lack of intermediary structures. If you think about conventional capital markets, they function by dint of having an enormously developed set of mechanisms between the investor and the investee--markets, legal firms, accountancy firms, consultancies, MBA programs, and so on. And that's just barely there in social investment.“
On why, when we build it, the money will come: “When you've increased the capacity of the sector to receive investment, and built the intermediary structures, it'll be like a dam bursting. It's not going to happen overnight, but this area is changing incredibly fast; there's a lot of experimentation and action, because I think everybody realizes that if you get this piece right, you could really have a revolution.”
On improving accountability and governance for social entrepreneurship: “Many social entrepreneurs come into this space because they're dissatisfied with the status quo. They see organizations doing stuff, and they think they can do a better job, often with the same resources but with more innovation. Improved accountability and governance -- most obviously around an increased attention to impact -- is one of the defining features of social entrepreneurship.”
On the intersection of social entrepreneurship and politics: “I think there's been insufficient attention paid to the political context of social enterprise. In Britain we've just had a change of government [after] 13 years of a government that did a lot of legislation on fiscal and economic policy around social enterprise. So now's a good time to do a reassessment.”
On who’s making waves with social enterprise: “If you're looking at social investment, the pathfinder by a million miles is the U.K. If you're looking at government policy, it's also probably the U.K. Grassroots action, probably India. Institutional opportunities, probably Bangladesh. If you're looking at academic research and courses, historically it's been the U.S. And some of the big pin-up models, like Teach for America, have been in the U.S. But you can't talk about the U.S. [as a whole]. There's a lot happening on the coasts, but not in, say, Arizona.”
On why social entrepreneurship is entering a tougher period (and why that's good): ”We're moving into a period of much more critical analysis of social entrepreneurship. We've ridden a wave of consensus; we're all hugging each other and patting ourselves on the back. There's been lots of money pouring into this and support from governments. I think all that's changing. We've had an economic calamity, governments are looking at austerity, foundations are pulling back, the media and others are getting more critical. I think we're going to have a critical decade for social entrepreneurship, and that's great. It's high time we looked at the stuff that's useful and does have impact and the stuff that has no impact at all, and I think we're going to have a big reality check. The hero-worshiping, self-congratulatory period's over. I don't see that as a challenge; I see it as a sign that we're growing up.”
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