When he was in town last week Patrick pointed us to an article in the Economist discussing Obama's Social Innovation Fund which launched this summer. Although small money from the perspective of the US government, 50 million USD is a substantial vote of confidence for the social innovation community. The Obama initiative is aimed at ramping up existing projects, a necessary tool as members of the SI community attempt to prove the viability of their methods at scale.

Obama's fund has a lot of potential to enable groups delivering new efficiencies in situations where a problem is known but not well solved. Solution X, a better alternative comes along, so let's find a way to make sure Solution X has the capital it needs to get started. This includes privatization with an emphasis on competition and new social ventures positioned between the market and 3rd sectors, in effect augmenting both (think microfinance or the Omidyar Network).

But what about those situations where the problem itself is unclear? This is the context of systemic failures—all parts might be functioning very well, but they're not sufficiently coordinated as a group. The glue is missing, and maybe some key parts too. The American healthcare system (if it could be called that) is a prime example of this.

To create strategic impact in these areas there are three critical dimensions which need to be addressed.

• Team: problems that exist at the intersection of multiple areas of interest always require teams of multiple expertise.
• Money: good will only lasts so long.
• Legal and regulatory support: Stephen Goldsmith, now chairman of the group that oversees the Social Innovation Fund, hit the nail on the head: “I can think of 1,000 innovations. I have not yet had an innovative idea in any meeting that was legal.”

To work on those kinds of problems a different approach is needed because they are 'pre-market.'

This is kind of thing that our brains are churning on these days.

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Posted by Bryan Boyer
November 8th, 2010