“We needed to tear down the silos that prevented us from working creatively and smartly together. We needed to facilitate and scale up the impact economy. And we needed to make it clear that we were over the separation mentality that for too long has guided our efforts.”
Hilary Clinton, US Secretary of State, 26th April 2012
This April saw the US Secretary of State Hilary Clinton host the Global Impact Economy Forum, gathering high-level investors, business executives, entrepreneurs, philanthropists, academics, and policymakers from across the globe to discuss how to create greater coordination and collaboration in this emerging industry.
Euclid Network’s advisor on Social Investment Karl Richter was invited to present at this Global Partnership Initiative event to share the European story with the 400 delegates and US State Department during the session ‘From Niche to Mainstream: New Frontiers of Policy’. The day also featured input from Hillary Rodham Clinton herself and the famous advocate for “business as unusual”, Sir Richard Branson. Read the event agenda here, or find a comprehensive overview of the event in The Stanford Social Innovation Review article “Accelerating the Impact Economy Through Investment and Innovation”.
Secretary Clinton used her keynote address to ask governments to harness their power to mobilise key stakeholders and promote deeper cross-sector partnerships. In convening this inaugural forum, Clinton is taking the lead in supporting the development of a global impact economy – a vision for an international development agenda that does not yet have an equivalent in Europe. Yet her agenda is clearly aligned with principles of the social and solidarity economy as well as the third sector.
The USA, Europe, and the world.
Although Clinton’s vision for an international development agenda resonates strongly with new EU policies on social innovation and social business, the US approaches the topic with a profoundly different strategy to that of Europe. In particular, the EU has been slow to recognise the need for international investment, in contrast to the effective and large-scale international focus of the USA’s impact economy. The State Department’s Overseas Private Investment Corporation (OPIC) has recently issued a call for proposals to catalyse a greater commitment to impact investing, so far approving $285 million in financing for six new funds that will invest in socio-economic projects - just one example of the US State Department’s high-level international investing.
For European stakeholders such as Euclid Network, involvement in the conference could prove a useful springboard to facilitate the move towards a more inclusive European global strategy in the field. Combining the strengths of the USA’s international outreach and Europe’s position as a leader in impact investing presents a unique opportunity for great mutual learning.
Moreover, engaging in this discussion provides the opportunity to shape the emerging global narrative on the impact economy. With the current EU narrative being at best fragmented, there is a pressing need to shape a cohesive and well-articulated global movement if the impact economy is to become a reality; there is a need to bind the EU voice so that collectively we can continue to lead on the impact economy and build momentum in creating a Global Europe.
As European organisations and institutions pilot new ways to finance social impact and move away from traditional funding avenues, opportunities for knowledge sharing from around the world can prove to be invaluable in developing the European impact economy. This was recently demonstrated in our work with the Pakistan Poverty Alleviation Fund, whose dynamic approach to social investment focuses on outcomes rather than processes, implementing the most suitable social finance mechanism - be that grants, mezzanine finance, microcredit or loans - for the given situation to ensure successful delivery. Most importantly, this achieves the greatest possible social impact, and on a huge scale (read more here).