Putting the Social in Infrastructure

Federal Government infrastructure spending in response to our economic crisis is expected to produce multiple wins: jump-start the economy, provide employment, repair our aging sewers, roads and bridges and expand transit services.

Given that the Federal Government's budget for infrastructure spending hasn't been spent and they have extended their deadline from March 31st until October 31st 2011, I propose a new spending category: Social Infrastructure.  Let's have a one time investment in Canada's ageing, out of date social infrastructure.

The voluntary sector in Canada is a key part of Canada's economic engine. It employs 12% of our active workforce, as many full time workers as all branches of the manufacturing sector combined and has an annual payroll of $22 billion. Its $120 billion in annual expenditures is more than Canada's retail, mining, oil and gas sectors combined.

But it is caught in a double bind. It faces the same challenges as other sectors of our economy – lack of investment in infrastructure and access to capital.  At the same time existing problems are proving more complex and hard to solve and new challenges are emerging.  The sector is like an old bridge built from timber handling more traffic than it was ever designed for.

Like other industries the voluntary sector needs to attract new sources of capital to invest in good people, good ideas and improved solutions that work.

On the human resources front, this includes replacing an aging workforce and making the voluntary sector an attractive career choice for younger workers. Technology is also critical: no business or government department would make do with the basic computer hardware and software the voluntary sector uses. Equally important is innovation. A new breed of creative social entrepreneurs has emerged in Canada who is changing the way we tackle our toughest social problems.  However they lack the resources to invest and scale up their innovative solutions for widespread benefit.

Infrastructure Funds could be used to:

1. Establish the Canada Impact Investment Fund.  In the UK and US this first loss capital from government made it attractive for large private investors, including foundations, to participate in social impact investing.  This fund would enable over 30 small social finance funds in Canada to reach scale.  It would also respond to the estimated $500 Million to $1.5 Billion in unmet demand for start-up and growth capital for social enterprises and social purposes businesses.  See Recommendation Two – Social Finance Task Force.
2. Create an Innovative Solutions Change Lab.   This would be a virtual laboratory specializing in tackling our toughest and hardest to solve public problems, like carbon emissions and poverty.  They would enable multi-sector teams to come together to produce breakthroughs that really matter on tough social and environmental challenges.  And they could teach the rest of us how to design our own.  These 'change labs' are emerging all over the world as government business and civil society recognize existing solutions aren't working and they can't solve the tough problems on their own. See my previous post on the variety of social innovation labs emerging around the world.
3. Establish a network of university and community based Centres for Social Innovation and Resilience to improve the social sector's capacity to become more innovative. Building on the work at the University of Waterloo it would generate and disseminate interdisciplinary knowledge about social innovation and social innovation processes; train staff for positions in the new social economy; establish a graduate certificate in social innovation at Canadian Universities, invest in collaborative research and expand the reach of community Institutes.
4. Create a Youth Innovation initiative which would make social enterprise a viable career and volunteer option and support a generation of young social entrepreneurs with mentoring, advisory services and start up capital.
5. Seed a series of Social Innovation Hubs across Canada.  These buildings would become epicentres for social enterprise in major cities across Canada.  Aside from providing space for social entrepreneurs, they could access business advisory services, mentoring and social investments.  This would build on the work of the Centre for Social Innovation and MaRs Discovery District in Toronto,

European Union studies suggest a high correlation between investing in social solutions and economic recovery and  job creation.

If we want poverty, homelessness, abuse, climate change, species extinction, child hunger, pollution and exclusion to be consigned to museums we need to modernize our social infrastructure and mobilize our young generation of social entrepreneurs.