By erasing boundaries between the public and private sectors, the solution economy has the potential to unlock trillions of dollars in social benefit and commercial value.
As the recent recession and the resulting damage made clear, creeping social problems, such as crumbling roads, safe and affordable housing for lower-income families, and crowding schools, do not yield when markets slow and government budgets tighten. Fortunately, as Paul Macmillan and I argue in our new book, The Solution Revolution: How Business, Government, and Social Enterprises are Solving Society's Toughest Problems,1 government is no longer the only game in town when it comes to societal problem solving.
This collection of articles explores how, in today’s new “solution economy,” solving social problems is becoming a multidisciplinary exercise that challenges businesses, governments, philanthropists, and social enterprises to think holistically about their role and their relation to others—not as competitors fighting over an ever-shrinking pie, but as potential collaborators looking to bake something fresh that serves as many stakeholders as possible.
Even while so many have struggled during the historic economic downturn, we’ve also seen a massive growth of economic activity targeted at solving larger social problems. A burgeoning new solution economy has emerged where players from across the spectrum of business, government, philanthropy, and social enterprise converge to solve big problems and create public value. Over the last decade or so, a dizzying variety of new players have entered the societal problem-solving arena. Lyft and Relay Rides, Acumen and Ashoka, Kiva and Kaggle, SpaceX and M-Pesa, Branson and Bloomberg, Buffet and Gates—the list is long and growing briskly. Where tough societal problems persist, these new problem solvers are crowd-funding, ridesharing, app-developing, and impact-investing to design innovative new solutions for seemingly intractable issues.
This phenomenon points to a crucial lesson: namely, that thorny, complex problems can become immense opportunities when industry, philanthropy, and government start thinking entrepreneurially, leveraging their respective strengths to take on pesky challenges. This occurs when leaders in all economic spheres change their lens to see opportunities that others don’t see; look for ways to create new value by trading in different currencies (e.g., data for work or carbon credits to reduce emissions); or develop new business models that help solve problems and can be rapidly scaled.
Among the many forces that are coalescing to advance the solution economy:
Driven by these and other forces, “wavemakers” like the organizations and individuals named above—and the solutions they’re developing—are increasingly aligning around common objectives such as reducing congestion, providing safe drinking water, and promoting healthy living. By erasing boundaries between the public and private sectors, the solution economy has the potential to unlock trillions of dollars in social benefit and commercial value.