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I want to start where Francis almost ended.
And that's with the sort of underlying idea behind social
innovation, which is in a way so obvious we don't really
talk about it, but is worth remembering.
I think there is an implicit assumption
in this field that--
an idea about human creative potential that people in the
right circumstances have vastly more capacity to make,
to shape, to design their world, to run their societies
than past eras imagined.
And that for various reasons, which range from the spread of
education and democracy, to technology, we are at an era
when it's much more feasible for people to actually take
over their lives, their worlds, their organisations,
their economy.
And this is, in some ways, a deeply democratic ideal, and
social innovation is one expression of that ideal,
which has all sorts of other manifestations.
One of the things that ideal is beginning to do is to
reshape the two mature innovation systems which took
shape in the last century.
One of them is the science system--
now very organised, full of millions of people,
institutions, metrics, protocols--
now interestingly being influenced by citizen science
and all sorts of new ways for millions of people to take
part in shaping science.
And at the same time, the market innovation system,
which also became systematic, mature, well-funded, fairly
well understood, is also changing in the same way
through ideas of user-based design, open
innovation, and so on.
Ideas essentially imported from the social sector.
So there's a lot interesting happening around human
creative potential.
And in a way, our task is can we make the social innovation
system as developed, as mature, as systematic as those
systems in the economy and science, which scarcely
existed in that sense in the late 19th century.
Now, if I'm right and Francis is right about the values
mission, which lies behind social innovation, that
implies that what we're talking about today and
tomorrow is not a purely detached
empirical social science.
It's in that way quite different from the economics
of innovation, which does tend to be
quite cool and empirical.
It's not really animated by mission.
And it's different from many other parts of social science.
And if I'm right about that, then I think that makes some
things easier and some things harder for us in developing a
research field.
The part, which in some ways is [INAUDIBLE]
the connection which Francis talked about to practise.
How does the intellectual task of understanding intersect
with the work of thousands of people around the world trying
to do social innovation, to develop ideas, put them into
practise, find out of they're working.
And I can see that very much day to day in the sort of work
we do at Nesta, where most of our work is practical, not
research-based.
How, for example, do you apply innovation methods to labour
markets and jobs.
We're doing a lot on that.
Fairly novel.
This week we launched a fund on innovation in public parks.
Again, a sort of new application of innovation
method to a field where perhaps they
haven't been used before.
How do you in practise tap collective intelligence, crowd
sourcing platforms, prizes, accelerators.
An enormous lab experiment going on around the world,
surprisingly little real understanding or evidence
about what works or not.
We have an impact investment fund.
How do we know what really works in applying investment
methods to social enterprises for social purpose, commercial
businesses?
We're in the latter stages of a study looking at innovation
teams within governments around the world, national and
city level.
Again, this is a new area of practise.
Surprisingly, little real research on what works, what
doesn't, how do we learn the lessons from the heroic
failures, and the often sort of lower key successes.
We have a joint team with the cabinet office called the
Centre for Social Action, which is all about scaling,
finding really good social initiatives which tap public
time and energy for public services.
How do we make those much bigger, fast.
And there again, we're talking about a practical set of
skills, a sort of synthesised experience.
A lot now happening around data, which again, was on your
penultimate slide.
Using new big data data tracking tools to understand
the adoption of innovations.
A fascinating project we've been doing in the health
service tracking adoption.
Or web scraping to find and understand new patterns of
social activity.
These are tools which weren't around even really three years
ago, let alone 10 years ago.
But allow us to map activity in novel ways.
And then there's the practical issues around systems change,
which again Francis talked about.
We've been trying to do this in parts of the health
service, and to commission research and theory and
understanding, and it's very difficult.
Very hard to connect through a systems thinking to what do
you actually do in a real public health system, a
city, and so on.
Now, to the extent that the research agenda is so
intertwined with an emerging field of practise, in some
ways, as I say, that makes things simple.
The test of research is whether it's useful, whether
it's relevant, whether it's applicable, whether the
practitioners can, in fact, make use of those insights.
Does the research guide busy people and help them avoid
unnecessary mistakes?
And given that most of the practitioners are quite
unfunded and relatively powerless, it's really
important to help them avoid unnecessary mistakes.
How, for example, do we help the hundreds of incubators
around the world not repeat the many mistakes past
incubators made?
Or if a mayor's trying to set up a social innovation team,
how do you help them avoid the errors of other mayors?
Or if you're setting up a crowd sourcing platform, and
there are literally hundreds of them around the world,
again, how do you tap in to the craft knowledge of what
makes these actually work and not fail.
And most of them don't really work at the
moment, so it's important.
All of this I think is a kind of craft knowledge.
It's a practical knowledge, which is grounded in practise
but is reflection back on that practise.
And in terms of epistemology, I think that takes us to the
philosophical approaches of pragmatism, in its 19th
century sense.
The pragmatism of Dewey and James, which Roberto Wonga
will be talking about later today.
And that's the notion that ideas aren't things waiting
out there to be discovered.
Ideas are tools people devise to cope with the world
as they find it.
Most of those ideas are socially generated, not coming
from individuals.
And because they are provisional, responses to
particular situations, to quote Louis Menand's book on
the pragmatist, "Their survival depends not on the
immutability, but on their adaptability."
Now, I think this is quite a coherent view of our
epistemology of social innovation, and it's not so
different from other areas of social science.
Macroeconomics mainly grew up as a set of craft tools to
help governments manage economies, before and after
the second World War.
We think of it as a theory, but actually, it was very much
tools to help practitioners running government economic
departments.
The best recent book I think on science and technology in
the 20th century shows very clearly how most of the big
theoretical breakthroughs in physics and chemistry and
biology, were responses to working world problems.
They didn't come in a detached ivory tower.
You can only understand their dynamics in response to these
practical problems of the real world.
And much of the sort of theoretical distinction
between basic and applied research, which became
institutionally embodied in the late 20th century, in many
ways misread that history.
And this is, I think, a very important issue
for us to talk about.
Now, to extent that is the right way of thinking about
epistemology, it doesn't imply any less need
for research rigour.
We still need falsifiable hypotheses.
We still need measurement.
We still need to sharp theory.
But we need to sort of get the right balance, in terms of how
we think about the link between the
mission and the research.
The Italians in the room will know the famous Antonio
Gramsci comment on politics, that we should cultivate
pessimism of the intellect and optimism of the will.
Well, I will slightly adapt that to our task.
I think we need enthusiasm of the spirit and scepticism of
the intellect.
And in a way, that's the kind of balance needed in all of
our work, because as Francis said, so many of the
researchers in this field are also involved in the practise.
Now, if in some respects that's the easy bit to think
about this field as evolving in lock-step with a global
practise, the heart of it I think is about some of the
deeper theoretical questions of how we understand the place
of social innovation in much bigger
processes of social change.
And in some definitions, social innovation does become
really all of social change.
And I think we do need to immerse ourselves with sets of
theory and understanding which won't all be
that useful in practise.
And I'll just draw out sort of two or three clusters of
issues which I think of are very live here.
One is, again, which Francis mentioned, how do we
understand where ideas come from?
You can understand them coming from technology breakthroughs
or from big problems.
I actually think there's a common pattern in a lot of
social innovation where the real root of the ideas is
actually experience, or
observation, or pain and suffering.
And people, then, observing how, at the informal level, we
respond to those things--
in love, or care, or learning, or cure.
And then trying to replicate those in institutional form or
with technology.
And a lot of social innovation, at its root, I
think is that it's grounded in say observation, experience
and replication in more formalised forms.
Others, of course, then are the adjacent possibles.
Once you have a school, or a hospital, or a microcredit
organisation, then other innovations flow almost
logically from what they do.
Unfolding, rather than creating.
And, of course, there is then fast adaptation, et cetera,
from other fields.
But I feel we need better theories of understanding
where the ideas come from.
And I'm not quite satisfied by most of the literature out
there on this.
Then the next set of questions, which we will be
talking a lot about today and tomorrow, are
how do ideas spread?
Scale, grow, whether it up or out, or even down.
And there's a practical side to that.
How we understand organisational forms for
scaling, licencing, franchising, federations,
finance, et cetera.
But probably the deeper question is how we understand
in what conditions some ideas spread and others don't.
And at one extreme, that can take you to the sort of
theoretical traditions, the regime theory, for example,
which say in particular circumstances, some ideas have
an alignment with the dominant technologies, political
systems, et cetera.
In which case they spread fast and others don't.
I think that's a bit over-determined, but there
clearly is a significant grain of truth in that sort of
systemic view.
Equally, they'll be some national cultures, and social
innovation has very different national cultures in a
Denmark, or a Bangladesh, or a Brazil, or a US, which enable
certain kinds of ideas to spread and
others to get nowhere.
Likewise, political conditions allow some ideas to spread and
others not.
And I think the real challenge is how do we understand both
the constraints of innovation, understood as nested within
nested systems, of environment, culture, policy,
but also, what elements are autonomous within that.
We've been doing a lot of work this year on systems, and
systems thinking, and systems change.
But I came across, a few weeks ago, I have a really nice
quote from Italo Calvino from his letters, which is quite an
interesting, sort of turns this on its head.
And he wrote that, "Imagining the world as a system, as a
negative, hostile system, brackets, a symptom that is
typical of schizophrenia, prevents any opposition to it,
except in an irrational self-destructive raptus,
whereas it is the correct principle of method to deny
that what one is fighting can be a system, in order to
distinguish its components, contradictions, loopholes, and
to defeat it bit by bit."
So discuss, as it were.
How do we avoid--
I mean the risk of systems thinking, which you see
everything is so interconnected, you're
disempowered.
You can't act.
You become fatalistic.
But equally, how do we understand correctly the
extent to which things are interconnected.
Just two final points.
One is really about time.
It's now at least 50 years since the innovation studies
field started taking shape.
And we'll hear this evening from Mariana Mazzucato who's
one of the holders of the flame of the innovation
studies school of Chris Freeman, Carlota Perez,
Giovanni Dosi and others, who did an amazing body of
theoretical and empirical work in the '60s, '70s, and '80s.
And in some ways we are, perhaps,
following in their footsteps.
It's kind of heartening, though, to realise that even
50 years on they don't have any agreement on definitions
of innovation.
They don't have any agreement on how to measure it.
Everyone agrees the current measures in the economy,
things like patterns and R&D spent, are completely
misleading.
And there's not much agreement on what works.
We've just finished--
we commissioned at Nesta a global study of innovation
policy evidence.
Innovation policy for the economy.
And there's remarkably little consensus on what actually
works in things like R&D tax credits, intellectual
property, and so on.
So we need a sense of time and perhaps realism about the
field gathered here.
And probably not to get too hung up on definitions.
The other point I wanted to make is about argument.
The people in this room and people involved in social
innovation are, by nature, quite generous, and kind, and
collaborative, probably most of you are.
And yet, fields often advance through argument, through
people getting angry and taking different positions and
arguing things through.
And I want to suggest three arguments, which I think would
be really useful for us to have.
One is about investment and social investment, and this is
a field, say, we're involved in in the practise of.
There is, around the world, every day another conference
premised on the claim that the application of investment
methods, from venture capital, private equity, and so on,
will deliver better social outcomes than traditional
grant funding or government action.
I've got a hunch this is right.
I've yet to see the faintest shred of
evidence to support it.
And this is fairly remarkable, given how much energy is going
into this field.
And one little symptom of this--
I sit on the board of the new bank here in the UK.
It's a 600 million pound bank investing in social
enterprises.
We have a 4% target return.
That was set as a low rate of return.
Who in this room knows what the average return of venture
capital is in Europe or North America?
Does anyone know?
Sir?
[INAUDIBLE].
It's actually gone up in the US to 3%.
But it was zero.
And the UK is now negative and so on.
Banks, if you look at banks, retail banks, in a real
economic analysis, their returns would be negative.
So there's a really important empirical task to compare the
social sectors financial returns against other asset
classes, and to work out what is realistic, what's
plausible, and what do investment methods deliver.
But this is almost completely devoid of evidence, and it's a
field which needs arguments, needs sceptics to be saying
this is all hype and ***.
And others to be trying to counter them.
But at the moment, that argument
isn't yet really happening.
A second really good argument would be our version of the
one happening in innovation studies, where the most basic
argument is innovation slowing down or speeding up?
People like Tyler Cowen and Peter Thiel have been issuing
claims that innovation has been dramatically slowing down
compared to 20 or 30 years ago, which is why we travel in
1960s airplanes, for example.
We don't have jet packs on our back and so on.
Pharmaceuticals has not come up with a good drug for as
long as anyone can remember.
I slightly exaggerate.
Another others say we're in the golden age of the internet
of things and AI and so on.
Now, I've got views of which bits are right or which are
wrong, but I think it's really interesting to think what's
the social innovation version of that argument?
Do we think things are speeding up or slowing down,
and do we have a model for understanding in what
conditions would social innovation
speed up or slow down?
And the third argument I think we need is even more basic,
which innovation studies are only just beginning to grapple
with, is to understand which innovations are good and which
ones are bad.
We are on the edge of the city of London here.
A high proportion of financial innovation in the last 20
years destroyed more value than they created.
Paul Volcker, Head of the Federal Reserve, said he could
only think of one financial innovation which created any
public benefit and that was the ATM.
Now, that may have been a little bit unfair.
But it's clearly the case in all fields of innovations,
innovations create value for some people and destroy it for
other people.
And it's also true of social innovations.
They create value for some people, destroy it for others.
And yet most of the analytic tools for understanding
innovation have no way of distinguishing these.
And you can read book after book, journal after journal on
innovation studies, the strategies of innovation
agencies, like Nesta, and not even get a hint that it
matters to know whether you're destroying
value or creating it.
It is simply not the case that all innovations are good.
Some are good, some are bad, some are good for some people,
and bad for other people.
And we need an argument about that.
We need a passionate, empirical, rigorous argument.
That takes me to-- so very final point, which almost
loops back to where I started.
I think that sort of the deep, underlying idea of social
innovation is an optimistic one about human potential to
govern your own lives, to create, to design the world
around you.
And that it is still the case that our society has
dramatically underutilised the creative, innovative potential
of the people in them.
I think alongside the more micro, detailed research, we
shouldn't lose sight of this really macro question of
social innovation.
And I would love to see some work almost trying to measure
at the societal level or the city level, what is the state
of human potential, how much is it tapped into?
And I think we've got some really
interesting examples here.
20 years ago, the world's leading social
entrepreneurship organisation said you can only have one
serious social entrepreneur per million of population.
Now, I think that was a ridiculous thing to say.
And what's really interesting, if you look at the last 10 or
20 years, is how particular places have all shown how
ridiculous it is.
Like Estonia with a population of not much more than a
million, bursting with innovative creativity, and the
economy, and technology, and society.
Or Iceland, 300,000 people.
We had quite a few people from Iceland at Nesta
earlier this week.
And what those tell you is that in the right
circumstances, with the right environment, there's
dramatically more human potential for innovation than
you could possibly imagine.
But we have no ways of mapping it.
No ways of measuring it.
And I think, so alongside our micro research agendas, let's
spend a little bit of time thinking about how we get to
that macro set of questions about human potential,
creativity, and innovation.
Because I think that's also the way we loop our agendas
back to, as it were, high politics, and really the top
concerns of society, rather than being an interesting but
fairly marginal concern.
Because, in fact, this question, how do you, as a
government or a foundation or a business, really maximise
the creative potential of your society and tap it?
It's hard to think of a more fundamental question for the
21st century.
And we should be--
we're the shapers and guiders of both how that question is
framed and how it is answered.
Thank you.
[APPLAUSE]