Breaking out of the current economic dilemma needs radical innovation

I gaze through unbelieving eyes at the continued rise of unemployed in Europe. Unemployment in the Eurozone has reached another record high with the seasonally-adjusted rate for April  2013 going to 12.2%, up from 12.1% the month before according to the European Commission’s statistics office, Eurostat:Eurozone Unemployment May 2013 EurostatAn extra 95,000 people were out of work in the 17 countries that use the Euro, taking the total to 19.38 million. Both Greece and Spain have jobless rates above 25%. The lowest unemployment rate is in Austria at 4.9%.

It seems never-ending.

Youth unemployment remains a particular concern; you simply have to wonder what we are storing up in the longer term with this situation. Can the youth ever catch up, can our society as it is positioned give them the opportunities to turn today’s grim world into a world of optimism and contentment, or is it a lost generation?  In April, 3.6 million people under the age of 25 were out of work in the Eurozone, which translated to an unemployment rate of 24.4%.

Why does this issue of growing unemployment seem to be drowned out by events that seem important on the day but realistically pale in their significance against something as damaging as this present crisis?

Examples of persistent economic and social challenges

We are facing significant society challenges. These include declining Economic competitiveness, deepening Social inequalities, rising Mental ill-health, increasing Crime and social disorder and we see growing Alcohol and drug abuse, to name some of the issues being increasingly tackled as part of the consequences of these tough economic and social times.

We must increasingly recognise that the cost of deferring concerted action to confront these growing set of social challenges is beginning to rise – and could easily outpace our ability to respond.

Can we afford to wait? There are so many pressing questions.

The cost of lock in

More fundamentally, our existing approaches and institutions are also inadequate because, in the main, they lack the capacity to develop the new approaches we need through innovation.

We are faced increasingly with the ‘innovator’s dilemma’, identified by Professor Clayton Christensen, where a company or in this case whole nations can’t seem to address the changes (rapidly) going on around them.

Their existing models become obstacles in the face of changing conditions, deepening issues, new threats from emerging nations, rapidly changing technologies and a growing inability to overcome rapidly changing circumstances wrought by deteriorating economics, (infra) structures and upheavals.

Any organisation or system or even nation is susceptible to ‘lock-in’, whereby it loses the ability to develop novel ways to serve its customers or clients or markets because it has invested so heavily in its existing processes and technologies. This is part of one of the fiercest debates on the future of the European Union we have yet to have.

Our understanding of innovation has broadened

Today innovation is increasingly being understood in a broader perspective than just products alone. We are in a period of major transformation in what we mean by ‘innovation’. We need to push innovation across its broader understanding to explore new business models, unique services, greater collaborative techniques and community engagement.

Traditional innovation is insufficient for the challenges we face, this will not resolve climate change, an ageing society or reinvent public/ private services that match demand and need. We need greater connections across society.

There is a growing buzz around the Quadruple Helix of Innovation, where Government, Institutions (Academia, Foundations and NGO’s),  Industry and Citizens need to collaborate together to drive structural changes far beyond the scope of one organizations and what it can achieve on its own. These will be increasingly through innovation engagement platforms where people use the designed structures to purposefully intensify exchanges to co-create value to solve our growing bigger problems.

Seeking out unconventional solutions through more radical innovation

These are times when we need some visionary leadership and thinkers out there. Those that dare to breach present accepted boundaries of rigid beliefs and conventions. Those that push beyond the normal practices and can depart from the commonly held goals of establishment, by looking for non-conventional novel solutions that can draw in more of the disenfranchised, we are seeing today.

Facing New Challenges: Promoting active inclusion through social innovation

Social inclusion is a pre-requisite for the creation of a just and cohesive society in which each individual can fully participate and realise his or her potential. Active inclusion, as one strand of the broader social inclusion concept is looking to draw in and deal with inclusion into society of people furthest away from the labour market.

We need to make new markets full of engaged young people.

 There is clearly a latent demand building in our societies and we need to turn this into a more ‘effective’ demand, to forge the links between supply and demand that will generate new value and opportunity. For example, who can invest in effective supply by supporting promising projects and collecting evidence of what works that shows promise of broader societal impact?

Then who can we involve who can invest in effectively ramping this up. Perhaps focusing the different Foundations already set up can turn this latent demand into effective demand. This might mean shifting resources from other parts of the world, back into Europe to get the economic engine kick started again.

Applying innovation intensity to what we do.

We need to rapidly accelerate a rigorous experimentation mentality by focusing far more on major societal challenges that need addressing, before it is too late. Ones that can encourage and embraces local solutions needed and engagement within communities but the learning can be rapidly absorbed and the winning concepts can be scaled up to benefit more communities or areas of need and resolution.

Different type of economic statecraft are needed to position ourselves

How can we encourage and accelerate more of our companies to pro-actively integrate environmental and social impact into their business models? To put into place better measures of investment performance over the long-term that ties into greater social good?

There is also a real challenge today to lay out a different position for government. One that is more the facilitator, setting out the conditions for  the impact economy ecosystem and  supporting in ways that invest in the longer-term infrastructure and platforms that can scale the innovations and partnerships needed to achieve sustainable, long-term growth.

Government cannot ‘play’ in all three horizon investment areas, it does not have the capacity, experience, capital and resources. We need leaders who not just make tough decisions but set about putting in place the different conditions, incentives and clarification of who does what and why. The more the short-term crisis extends, the harder it becomes for Governments to participate in mid-term future innovation activities. They simply can’t easily.

A time and place where we are converging to make social innovation a critical element

We are in a current battle to address both short and long-term economic and growing social challenges. We are faced with growing unemployment still, especially here in Europe. The youth of today need to engage, otherwise we are in a great danger of losing a whole generation and that has such significant impact on or nearly everything we have in place today.

How are we going to draw upon the imagination and expertise of a broader set of innovators and tap into the entrepreneurs that are out there, to tackle some of these significant societal challenges?

Are we at the early stages of a new economic order with even more disruption?

Of course we might be in the beginning of a very different set of economic factors. We might actually be heading to a completely different type of economy that melds features which are very different from economies previously based on the production and consumption of commodities. Today we are already seeing blurred boundaries between production and consumption.

We need to think about repeated interactions, care and maintenance and not one-off consumption; and a strong role for values and missions that are far more inclusive for society and less focused on individuals; otherwise we end up with a divided society that clash in ways reminiscent of past revolutions where the majority finally rebel.

Are we facing even more instability in the coming years?

The present value equation in our societies is rapidly getting unstable; we need some fairly radical solutions to reverse the existing trends. I think the challenges will only get harder in the months ahead.

We do need to positively disrupt before we get more unexpected disruption occurring. Innovation needs to play an ever increasing part in this to explore alternatives and allow those lost from current economic activities to begin to participate and make a contribution where they see there is a future for them.

The Flickering Light of Social Innovation

Without doubt one of the most exciting areas of innovation, social innovation, that is developing initiatives that are attempting to tackle the real societal issues, has had a very tough time in the last year or so.

The need for social innovation and where it is contributing and aspires to resolve, has not gone away but it does seem to me, some of the energy and passion seems to have drained away in this time. Perhaps, in recent weeks, there are some signs of some emerging initiatives that are beginning to be ‘rekindle’ this social innovation flame but it seems in such incremental ways. Surely what is needed, is making bold leaps at this time not token gestures? We need to mobilize with a real intensity around many of the present social ills we are facing.

Recent losses in the movement for social innovation

Firstly for those involved in the social innovation movement the sad loss of Diogo Vasconcelos, who tragically died last year took away the champion of social innovation. Equally the move of Geoff  Mulgan from being the CEO of the Young Foundation into a broader CEO’s role at Nesta, where they certainly have shifted their recent focus in helping people and organizations bring great innovation ideas to life has altered where the emphasis needs to be placed for innovation in general, less so for social innovation.

This focus has been through providing investments and grants to mobilize research, explored through networks and building the skills necessary as the UK’s innovation foundation.

My feeling is that the focused energy, commitment and passion both of these individuals brought to social innovation has not been replaced as yet. It seems both organizations (Nesta and the Young Foundation) are actively exploring novel ways to support social innovation. Yet in these tough economic circumstances, at the very time these really need accelerating at a pace, it must be very hard to deliver the level and depth of solutions society needs and is crying out for? What we do need is more champions to be visible to keep social innovation shining in the headlights for our leaders to see and support.

I’m certainly not so encouraged that a recent competition announced  greatly accelerates and meets today’s real, pressing social needs in the ways we should be doing. We need a lot more movement and commitment than this, when we are facing over 25 million people out of work across Europe and up to 50% of young people in Spain and Greece unemployed and large parts of Ireland, Italy, Portugal, France, the UK all struggling to hold the level of the young, unemployed below 30%. The constant closure of businesses, the hardships of millions all caught up in the economic distress is causing us to face some of the most  serious economic hardships across most of Europe in our lifetime.

Perhaps we have had a void in this time? Has it got harder or easier in the past 12 months?

As I have sensed the energy has been seemingly lost in social innovation. Its past ‘raw’ passion has been replaced with a very different type of animal. There has been a major event in this time, in that the EU commission has taken social innovation into the heart of its future programmes. It wants to make the fixing of society’s most severe problems as central.

This, they are suggesting, needs to become a people-centred movement, which aims to create a more participatory practice-based process to find sustainable strategies for a socially and sustainable future. This planned adoption, this shift in the emphasis point of being more open and participatory, is actually a really daunting task to achieve.

The EU by taking hold of social innovation, might actually be squeezing out the very forces, the passion, the individuals commitments to social issues at a grass root level and replacing this with “people power” might be more volatile than they think. The shift suggested is perhaps beyond bold but reckless, unless it has a clear model to replace the existing, as these existing models are breaking down under the strains being imposed by austerity cuts.

Is this EU adoption a possible distraction, deflecting vital resources and commitment from the issues needing to be resolved in the here and now and attracting the ‘organizing’ resources away at a vital time to work on alignment and policy forming issues. Those that have actual experience to resolve social issues themselves get distracted away in aligning with the EU on its application of taking on social innovation. Can we afford that in these times? Unless we have emerging a Social Innovation equivalent of a Marshall plan as a Social European Recovery Program, SERP.

A real concern is that Brussels, the centre for EU policies and planning, has even less in common with the very real people that are actively engaged in the social solutions needed today. They march to a very different ‘beat’. Social innovation is by its very nature and attempt at tackling complex social problems experimental, cross-cutting, highly collaborative and very dispersed into pockets of local need and application.

It is going to be a struggle to fit social innovators with the Bureaucratic nature of the EU, less than risk-embracing, grappling with the severe economic problems across the EU community. So far the EU or national governments are not finding easy solutions to complex economic issues, can they add even more to their crowded agenda of social innovation. There is just too many questions being asked of the existing success or failures around the EU as an economic and financial block ? Adding social innovation at this time when the EU is defensive and under increasing attack is questionable.

We are facing austere cuts across many European countries, social initiatives are being caught up within all these economic cuts demanded. How can social innovation help solve the very issues when it is equally being starved of money, resources and focus?

There are countless acute needs for solutions

There is a growing need across the EU for support, both in material ways (creation of jobs) and psychological needs (to manage in these austere times). Is social innovation rising to these twin challenges to help resolve these urgent needs of today?

Deep within this ‘catch all’ of social innovation we need to prepare many for the most difficult transitions they are facing within their lives:  in loss of jobs, in their self-esteem, in their future and in their rights of choice, as these are being taken away from them in so many different ways. The destiny of many is being pre-determined by so many events out of their control and when people feel powerless, they ‘react’. Perhaps a very different type of “people power” than those in power would desire.

The ability to build ‘resilience’ is currently heavily shackled by a lack of money entering the system; the debt burden at individual, state and EU level is restricting options. Hard choices are casting more out of the participants of wealth creation, into being dependants upon others. Many are spiralling down.

In a world of networks and instant connections we are witnessing a growing sense of isolation, physical isolation. There are fewer people to turn too and ask for advice, for help, for recognizing their needs for support, because these people are becoming more hidden from plain view. They are increasingly on the margins, caused by policy revision, austerity cuts and become increasingly small in scale as they can’t find the voice of the past, that would stand up for them.

Social innovation is complex and challenging but it needs to deliver solutions today.

There are many ways to sketch an increasingly complex picture of social ills. There is a vicious spiral, turning to greater tensions and increased pressure points. There are moments of transition and social innovation needs to respond and respond quickly to these pressures.

We are facing growing health issues, ageing challenges, youth disenfranchisement, and communities breaking down, a growing sense of injustice, and lowering of well-being.

The social innovation light needs turning on brightly, it can’t simply flicker like it is now. There is no future if we can’t find pathways and real solutions to the problems we are facing today. Society needs to engage before it is “too little too late” and I fear we are far too close to the social equivalent of the doomsday clock of midnight.

Societal Innovation-challenging our future thinking

There needs to be this major shift from market-led to more socially-lead organizations occurring. We see pockets of this in a number of business organizations offering clearer governance and sustainability outlines as part of their annual reporting. We need to push them a lot harder. We need to move away from business- only innovation into society based.

The shifts taking place

Society has shifted, is shifting; the consumer is becoming the supplier of content, of meaning, of their taste preferences, their emotions and the goods and services they will buy. Mass consumption, the model honed in the 20th century doesn’t work anymore. Customers are actually saying “less choice, more say” and seeking deeper self-determination. This personalising of preference can seem like more complexity for organizations but there are many ways to manage this but it requires real change in organizations, oriented to society more, serving them more.

The marketing thinking is in need of adapting also.

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