Introduction

Are the roadblocks described earlier best dealt with at the level of a whole nation or at a more granular scale? In this chapter I suggest the value of action in particular sectors in particular places.

One of the big hopes in social entrepreneurship was that a wave of productivity-improving innovations would transform how well societies dealt with social and public problems. Social entrepreneurs would be far more dynamic than governments, tap the energy of markets and cut through the constraints of bureaucracy. The hope was that expenditures in philanthropy and government could then be shifted from less to more productive ends.

But, for the most part, that seems not to have happened. To the extent that data exist, productivity improvements have been marginal in most social fields. Although many individual social entrepreneurs have achieved a lot, both the diagnosis and the prescription were inadequate. The time is ripe therefore for a rethink.

The approach I take here draws on Joseph Schumpeter's views of innovation and productivity gains and the work of Robin Murray on social and industrial sectors. It means applying the insights of the field of industrial organisation to the industries responsible for producing and improving such things as child rearing, health, education, care and readiness for work, and reducing various harms, from homelessness and excessive use of plastics to drug addiction and crime.

What is the best unit of analysis and action?

Successful social action requires the right level of granularity. Most analysis, advocacy and funding focuses on:

• the individual social entrepreneur, providing them with money and freedoms;

• the enterprise or NGO, helping it to grow;

• the individual innovation, helping it to spread and scale.

Meanwhile, at the opposite end of the spectrum much energy has gone into very generic approaches, such as encouraging all businesses to adopt corporate social responsibility obligations, or ‘bottom of the pyramid’ ideas, new tax incentives or legal forms.

These different levels of action and analysis all matter. But they may miss out the most crucial ones. Here I suggest that the most important unit of analysis and action is what in economics would be called the industry or production system: the capabilities that together produce such things as democratic voice, education or care for the elderly.