Canada, like many other jurisdictions, is at an innovation crossroads. The global economy is finding a new normal. Increasingly complex societal challenges are crippling communities, education and health care systems and the environment. These challenges require a renewed commitment to innovation, not just in academia or in business, but in government and the community sector. Sustainable solutions to our most pressing problems will require new thinking and new ways of working together.
In this context, I am excited to announce that Social Innovation Generation (SiG), a national project partnered with MaRS, has launched an independent Task Force on Social Finance. It’s modeled after the UK’s Social Investment Task Force chaired by Sir Ronald Cohen. The UK Task Force played a key role in catalyzing that country’s social finance marketplace a decade ago, influencing the investment of significant government and private capital in a new breed of funds building blended-value enterprises. Similarly, the Canadian Task Force, which I am proud to chair, aims to help accelerate the development of a vibrant social investment sector focused on addressing social and environmental challenges in Canada.
Over the past decade, social finance, also referred to as impact investing, has picked up steam globally. Today, it is widely recognized that this emerging asset class has the potential to mobilize very significant amounts of private capital and put it to work in new ways for social purpose.
At MaRS we’re passionate about supporting entrepreneurs and the emerging enterprises that renew our economy to create rewarding jobs for future generations. Our work focuses on converting important ideas into new companies; into solutions that will improve the quality of life of Canadians and others around the world. This is not just about technology. We are equally passionate about scaling new ideas that tackle the more amorphous social challenges we face. Over the past five years, MaRS has advised over 550 social entrepreneurs, working with them to get long-term unemployed into the workforce, reduce bullying in schools, strengthen support for caregivers, support sustainable food systems programs and much more.
This work confirms the high level of creativity and enterprising energy bubbling in the social sector, particularly among young entrepreneurs. However, it also highlights the significant structural and investment barriers that often confront social entrepreneurs as they attempt to maximize the impact of their efforts. Access to risk capital is a critical hurdle, since these ventures often do not neatly fit the investment criteria of traditional funding sources and the funding climate even for young tech companies is at an historic low.
While Canada’s impact investing marketplace is nascent, a number of factors are coalescing to advance this initiative:
The Monitor Institute phrases this imperative well. “There are moments in history when the needs of an age prompt lasting, positive innovation in finance. Evidence suggests that many thousands of people and institutions around the globe believe our era needs a new type of investing.”
US Secretary of State, Hilary Clinton, a Globe and Mail editorial and Canada’s former Prime Minister and Task Force member, Paul Martin, have all delivered calls to action on this opportunity. I feel honoured to be working on this Task Force with some of Canada’s leading business and non-profit minds who have answered this call. This strong interest and commitment across the country represents a unique opportunity to build an enduring network.
The time is ripe for social finance to move onto Canada’s innovation agenda as a critical driver for our country’s future prosperity and the well-being of its citizens. By building a new kind of cross-sector coalition, we can make great strides in cementing the critical infrastructure, removing the barriers, stimulating the formation of new pools of capital and supporting the innovative enterprises that will move the market forward. However, it will take bold leadership in government, the finance community and in the social sector, if Canada is to become a leader in this global movement.
This week marks the public launch of the Task Force, however research and consultation to distill learning from national and international activities has been underway for several months, in support of the development of actionable recommendations that will be released by December. Between now and then our Task Force members will be using SocialFinance.ca as a platform to profile issues being explored by the group. I look forward to your participation in this important conversation.
Visit Task Force on Social Finance for more information about this initiative and our members.