Silicon Valley has become synonymous with “innovation,” “investment,” and “success” as its served as a beacon for social entrepreneurs to build their ventures. As other cities across the U.S. attempt to roll out strategies for which they can similarly foster local innovation and technology, there is a great opportunity for leaders to “fill this market gap and build ‘Silicon Valleys of impact’,” explains Kate Goodall (COO of S&R Foundation) and Ryan Ross (program director for Halcyon Incubator).
Goodall and Ross highlight the impact that social enterprises can have on a community, as startups have the potential to address complex issues through innovative (and sustainable) methods. But in order for social enterprises to realize this potential, cities must be able to provide a healthy ecosystem, in which governments, philanthropists, and nonprofit leaders are willing to learn and implement new ideas and models.
But what factors make up a supportive environment? In partnership with Capital One, Goodall and Ross sought the answers, surveying almost 400 social entrepreneurs throughout the United States. Results showed that healthy ecosystems are comprised of four pillars:
- Funding—including seed funding, grants, and venture capital (representing both public and private sources).
- Quality of life—everything from cost of living to the “energy” of a city and social spaces determine an entrepreneur’s experience.
- Human capital—finding great people (mentors, team members, employees, and advisors) is the engine of any venture.
- Regulation and receptivity—regulations, market receptivity, and even perception and attitudes toward a social enterprise can create an environment that either nurtures or stifles social enterprise.
Upon studying data that surrounds the four aforementioned pillars, Godall and Ross provided recommendations that funders and policymakers could use in order to drive social change. The recommendations include:
1. “More investors, accelerators, foundations, and governments need to take advantage of new funding vehicles to provide quicker, more equitable access to capital” (i.e. – access major funders such as the Gates Foundation)
2. “[Increase] cultural offerings, making housing and workspace affordable, and having plenty of transportation options”
3. “Create a regulatory environment supportive of ventures that are creating impact” (i.e. – utilize mechanisms like social impact bonds)
4.“Create more on-ramps for the full diversity of social entrepreneurs” (i.e. – provide support for early investment and diversity among investors)
Through these practical recommendations and listening to the needs of social entrepreneurs, cities can begin to create environments in which innovators thrive.
Source Link: https://ssir.org/articles/entry/building_silicon_valleys_of_impact
