Now is the time to invest in innovation

While a flurry of different interpretations of last week’s election results clog the airwaves, one thing seems pretty clear from coast to coast – voters are in no mood to spend more taxpayer dollars.  And it’s hard to see anything but shrinkage in the size of government as a result.

From my point of view that means the time is ripe right now for innovation.  Maybe I’ve been breathing the Bay Area’s air for too long, but living in a business climate whose investments in innovation have resulted in some of most far-reaching and positive impacts on job creation and economic growth of the past several decades, I have witnessed first-hand the value that can be generated by old-fashioned risk-taking and investment combined with innovative ideas and entrepreneurial people.

For decades I’ve had the privilege of working with hundreds of people at the community level who have invented and expanded win-win approaches that maximize independence and self-reliance, use public resources efficiently, have proven results, and adapt private sector operating principles and financial tools to achieve beneficial social outcomes.

Innovation in both the social and business sectors happens at the local level – motivated, engaged people who are not daunted by current circumstances or constraints, and see the possibilities over the horizon.

The most optimistic and realistic (I hope) piece I’ve seen on the economy was Gretchen Morgenson’s in Sunday’s New York Times noting that the economist Ian Shepherdson (who accurately forecast the mortgage meltdown)  sees significant job growth at the end of 2011 because there are positive signs of increased lending to small business – the engine of job growth.

On the ‘social’ side of the small business equation, the local nonprofit-run innovative social enterprise run by Community Housing Partnership (CHP) just received a $439,000 investment to grow.  The funds came from a very small and virtually unknown federal program (as seems to be the case with many of the more impactful things the government does) administered by the Office of Community Services.  The funds will leverage private sector support to expand CHP’s businesses and create jobs for many formerly homeless people in San Francisco.  CHP has been part of REDF’s portfolio, and we were fortunate to be able to provide assistance to them in securing this welcome job-creating investment.  Los Angeles-based Coalition for Responsible Community Development and five other California nonprofits also were funded, hopefully fueling job creation around the state for chronically unemployed populations.

For the US to thrive, clearly the next few years must be all about job creation.  Finding the most efficient ways to use increasingly scarce public resources and private financing to grow businesses and expand jobs for everyone in our community is the key.  There is one thing people should be able to agree on across the political spectrum despite the obvious risks during a time of uncertainty characterized by volatile politics and an anemic economy.

Smart investments in entrepreneurial people, ideas, and businesses (for profit and non profit) will create the basis for a better future.