Some notes from Tuesday's SoCap08 opening session with Katherine Fulton and a panel with Jed Emerson, Matthew Bishop, and David Chen.
Locked in drivers of change - the things we know are going to happen, because they already are:
- money seeking diversification
- values driven investors
- growing inequity and environmental crisis
- track record of early success
- talent pushing new careers
- openings for policy change
The question for the impact investing, social capital markets: Can they take off? Or will they
remain small, disorganized, undercapitalized niche for decades to come?
Stages of evolution of industry (Nice graphic. See my book for same point made 4 years ago)
- uncoordinated innovation,
- marketplace building,
- capturing the value of the marketplace,
Impact investing is now moving from stage 1 to stage 2. This can take a LONG time. e.g. microfinance took decades to get through stage 2, same with Community Development Finance.
What we need: New collective structures - new supply side network, institutional investors and family offices, that structure is necessary to drive policy change,
The moment will come soon for fiscal stimulus and policy change - open moment is very soon (**Perhaps between now and January 20, 2009? - and then in 100 days thereafter? Footnoted thoughts of a wishful American voter) (See note above on book)
All investing 60 trillion USD, impact investing $2 trillion USD, US philanthropy 0.3 trillion USD. Impact investing in 5-10 years? Fulton guesses impact investing could grow to ~1% of total managed assets, approx ~$600B of capital.
Time out! How can we sit in a gathering discussing markets, in October 2008, and still discuss growth as a key goal, meaningful metric, or some kind of end in itself? How can we assume growth = good? My questions from 5 am seem even more important (to me at least) now that I'm awake. Here they are again:
"The news in recent weeks has been full of "lessons we should be learning" - from the Great Depression to Norway and Sweden's banking crises, Japan's decade of malaise, what Iceland can learn from Argentina and so on. So I think this is the perfect time to ask some harder questions of social markets than "are we here yet?"
- What is the long term vision?
- What does failure look like?
- What would social market collapse look like?
- What ancillary supports - regulatory, market-based, research, metrics - do social markets need to succeed?
- What safeguards and checks/balances do we need?"
If there is a SoCap09 here's what I would hope for:
- Reflections on a year of significant policy change about markets - social and otherwise - in US and global financial systems, and plottings for further improvement;
- Clear sense of (and support for) the major policy actors working on behalf of market forces that promote and sustain public benefits;
- Much clearer sense of what types of capital work for what stage of public benefit;
- A community that has moved beyond assumptions that "growth is good" (or any kind of end in itself) and is making real conversations happen about what social capital does, where its leverage can be on other forms of capital (especially public resources), and how the different sources of capital work together to advance public benefits.
- And lots of other great stuff...