While international and domestic problems bombard us daily, strong signals indicate that a new kind of revolution is afoot that has the potential to open doors to people who have been left out of jobs, and the mainstream economy.
At the cutting edge of new social innovation financing are social impact bonds (SIBs), a potentially transformative idea. The deals transfer risk from the government to the private sector and generate new capital to invest in evidence-based interventions that would otherwise go unfunded.
State, county and municipal governments are mainly in the business of buying services for their constituents, paying providers to tackle a broad spectrum of social problems. But these governments face significant barriers to reducing costs and delivering high-quality services.
While groundbreaking inventions may not have been at the fore of the commercial tech sector this year, new movements and trends in the social change realm (some related to tech, some not) have definitely been beneficial to humanity.
Impact investing has emerged as one the most important new instruments for creating social value at the disposal of governments. The London Principles have arrived at a time of unprecedented energy and experimentation.
While social impact bonds are not going to cure all of America's social problems, if implemented wisely and slowly, these bonds could promote the kinds of public-private partnerships that politicians are good at praising but not at creating.
It is not easy to develop a working relationship between investors, nonprofits, and related government funding bodies, but there is potential here to create the kind of partnerships that are needed to make a difference.