Is social innovation the future of the economy?

In Take 5, Sheridan's thought leaders share their expert insight on a timely and topical issue. Learn from some of our innovative leaders and change agents as they reflect on questions that are top-of-mind for the Sheridan community.  

Although a number of businesses have suffered during the COVID-19 pandemic, many entrepreneurs have relied on education and creativity to pivot their efforts, persevering to innovate amidst uncertainty. Here, Renee Devereaux, Director, Entrepreneurship and Changemaking at Sheridan’s EDGE Entrepreneurship Hub, discusses the future of entrepreneurship and the role social innovation will play in strengthening the economy.

1. You’ve worked with social entrepreneurs and changemakers for a few years. How have you seen social entrepreneurship – the act of doing business for a social cause change, both in approach and focus?

I was introduced to the concept of social entrepreneurship 12 years ago. At the time, it seemed like an exciting new way to look at social impact, entrepreneurship and leadership. In some ways it still feels new, not because there hasn’t been evolution, but because it’s still unfamiliar to many. The absence of a defined legal structure for social enterprises isn’t helping.

Some early questions persist: How do we ensure those with the lived experience of the challenges ventures hope to address participate as leaders and experts in the solutions? To what extent does social entrepreneurship challenge existing barriers for historically underrepresented communities? How does social enterprise fit into a wider picture of systemic change that requires collaboration across sectors?

I’ve also seen encouraging changes. Social or environmental impact goals have become an increasing priority for the entrepreneurs walking through our (currently virtual) EDGE doors. The events of the past year have fueled interest in social enterprise and triple bottom line (people, planet and profit) approaches from both startups and established businesses. Increasingly, we see founders responding to climate change, addressing equity and justice issues, and disrupting government, education and large corporations with impact-first innovations.

Momentum is growing for social finance and impact investing, including from investors, entrepreneurs and the federal government. They say the largest wealth transfer in history will occur over the next few decades as wealth is transferred from one generation to the next. It’s exciting to imagine what could happen as those inheriting the wealth ask tough questions about the impact their investments are having on society and the environment. Social enterprises will have an important role to play.

2. The past year has been unpredictable for Canadian businessowners. What do you think the lasting economic impact of COVID-19 will mean for entrepreneurs and startups?

Economic downturns have historically contributed to a surge in entrepreneurship. I’ve heard Shopify founder Tobias Lütke attribute his company's early success to the 08/09 recession and the surge of interest in entrepreneurship it created. Though many entrepreneurs have suffered over the past year, I know they’ll continue to see new opportunities as the economy recovers.

In our local ecosystem we’re seeing new entrepreneurs who may have had job losses or are exploring entrepreneurship as they re-evaluate their lifestyles, priorities and career goals in the context of a year of upheaval. Impact entrepreneurs, which includes social enterprise founders as well as those entrepreneurs adopting a triple bottom line approach, will play a crucial role in recovery as they develop ventures that simultaneously respond to the social, environmental and economic trends and concerns that the pandemic has exacerbated.

Pre-pandemic, new entrepreneurs were encouraged to think about their ventures in the context of global markets and challenges. If they weren’t technology-based, they were encouraged to find ways to leverage technology to scale their impact and revenue growth. The past year delivered hard lessons as ventures scrambled to incorporate overdue digital approaches. I think the mindset of tech-enabled, globally aware and impact-focused venture creation has sunk in for good now.

3. What supports are required for social innovators to succeed?

Social innovation is a vast landscape, with innovators working throughout society in a variety of ways to create change. Within the economy, social entrepreneurs and intrapreneurs – individuals working to promote innovation within a company – are appearing in all sectors. Our focus is on impact entrepreneurs, and for this group alone the needs are very wide-ranging. This is a question that’s a constant preoccupation for us at EDGE. In the same way that social innovators of all types must shift and respond to what’s emerging in society, EDGE is also constantly learning and experimenting with the supports that will most benefit impact entrepreneurs. 

Some of the key ingredients include supporting innovators to work alongside the impacted communities as they address social and environmental challenges, to help them plan for the sustainability and scalability of their solutions, and to understand what change they’re seeking and know how they’ll measure and tell the story of the change their intervention creates.

Incubators like EDGE provide networks, learning opportunities, funding, mentorship and – in brighter times – collaborative and co-working space. Access to a supportive community can powerfully accelerate learning and progress. Some of the most meaningful supports help people see they have as much right and ability as anyone else to be a leader or founder. They remind people of their incredible capacity to learn, their ability to take risks and bounce back from failures. They also help people uncover their biases and conditioning so they can better hear and incorporate differing perspectives into a stronger solution.

Finally, if we want social innovators to succeed, they also need to be buoyed by an enabling ecosystem that recognizes the value of social innovation to healthy communities and economic development. Supporting social innovators means working at all levels – from developing individual skills to collaborating across and advocating for the innovation ecosystem as a whole. 

4. What role do you think entrepreneurs – especially social entrepreneurs – will play in developing solutions to challenges presented over the next five years? 

Given that small and medium-sized enterprises represent 99% of the Canadian economy, it’s clear entrepreneurs are shaping society. Social entrepreneurs will continue to bring new innovations forward and entrepreneurs – broadly speaking – will increasingly adopt triple-bottom line approaches.  Entrepreneurs will continue to take risks and move quickly in ways that our public institutions and large corporations aren’t able to. They’ll prove models for impact that will need collaboration across sectors to scale. Social entrepreneurs will continue to disrupt outdated ways of working and help blur the lines between sectors, and in doing so, enhance much-needed collaboration.

5. There are monumental challenges facing the world today. Innovators have been called to action to collaborate on efforts that will help the world not only recover from the health and economic effects of COVID-19, but also address some of the most pressing problems society faces, such as the climate-change crisis and rising inequality. What recommendations do you have for social entrepreneurs when it comes to balancing the scope and size of their projects? 

Within entrepreneurship and social impact work we focus on early pilots that stay close to the customer or end user and are attentive to the local context. We take an experimentation-based approach as we pilot, iterate and gather evidence that the solution fits. At the same time, everyone in the innovation economy loves scaling. Scaling can look like global tech companies that create thousands of jobs and billions in revenue. These are great for the economy but – as we’ve seen with the rise of social media giants – there may be costs to society.

Scaling can also mean expanding and deepening the positive social or environmental impact of a venture to reach more people, impact a wider geographic region, or in some way substantially move the needle on a needed change. Imagine a local innovation addressing homelessness that eliminates homelessness across the country, for example.

There’s lots being said about scaling these days, but it seems to me the path hasn’t changed – you still need to prove your model, and to do so you need a deep understanding of the problem you’re trying to solve and its stakeholders. You need to experiment until you know you’re creating something of value; something someone will pay for. My advice remains to think big and start small. Prove your model locally but keep imagining – and planning for – what it might look like on a global scale.

Renee leads Sheridan's EDGE Entrepreneurship Hub, which supports impact entrepreneurs across the Halton-Peel region. Renee has a 20-year background in social innovation and adult education, having held leadership roles in two education-focused social enterprises before joining Sheridan. She believes building impact ventures can be transformative learning experiences that benefit both founders and society. For more than eight years she's focused her time on developing programs, partnerships and ecosystems that enable these experiences. She holds a Master of Adult Education from St. Francis Xavier University.

Interested in connecting with Renee Devereaux or another Sheridan expert? Please email communications@sheridancollege.ca.  

The interview has been edited for length and clarity.