Smarter Impact

Alex Hannant, Yunus Centre - A modern decarbonised economy, exponential tech, equity and empowerment

February 01, 2022 Philip Bateman Season 3 Episode 1
Smarter Impact
Alex Hannant, Yunus Centre - A modern decarbonised economy, exponential tech, equity and empowerment
Show Notes Transcript

Join the Professor of Practice & Co-Director of Yunus Centre at Griffith University, Alex Hannant, as deep dive into the necessity for and steps towards a systemic overhaul of our financial system.

Discover more by visiting the Griffith Business School Yunus Centre and following Alex on LinkedIn.

Smarter Impact is presented by Philip Bateman, who you can connect with on LinkedIn to see shorts of all our interviews, along with associated material - and the show is produced by Bravo Charlie.

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For the latest insights on leadership, impact investing, global challenges, business strategy and storytelling, make sure to join me on LinkedIn, and get the newsletter, Smarter Impact - Every Thursday!

- Welcome to Smarter Impact. It's Philip Bateman here, and I'm really excited to be having this conversation with Alex Hannant. I'd like to welcome you, Alex.

Hi, Philip. Thanks for having me.

Pleasure. Alex, you're the Professor of Practise and Co-director of the Yunus Centre for Social Business at Griffith University. I've also got here you serve on the board of B Lab, Australia and New Zealand, and previously have been the CEO of the Akina Foundation, which was new Zealand's primary support organisation for social enterprise, and New Zealand government strategic partner on sector development and you've been the founding member of the New Zealand Advisory Board for Impact Investment. So it sounds like you care, for want of a better term. So it sounds like you care, for want of a better term.

I do. It's almost sort of pathological, I think really, but I don't really know what to do if I wasn't doing this.

What really struck me is in your.. You've got an impact finance R&D programme I was looking through. And you said, how can the incumbents of a system that have been highly successful, be motivated to transition or indeed help build a new financing system that operates with very differently and more democratically determined goals, norms, and rules? When I look through all of the stuff, I'm like, well, there's that fundamental tension, we're talking about shifting impact, we're talking about shifting finance to impact. How do you wrestle with that?

I think our role at the moment is really to open up that conversation because while you say that's a kind of a key tension, because while you say that's a kind of a key tension, I'm not sure how commonly we recognise that is a tension. I'm not sure how commonly we recognise that is a tension. I think some amazing progress has been made I think some amazing progress has been made from the origins of social finance since the emergence of impact investment and the mainstreaming of impact in finance more broadly, but we're still essentially using a set of structures, tools and mindsets which have been developed to serve a different purpose. So to think about how we allocate capital effectively to maximise returns, is a different task to thinking to maximise returns, is a different task to thinking how we understand and foster systems change. how we understand and foster systems change. While, I think, it's incredibly encouraging the kind of movement into impact and the recognition that we need to use finance to create a broader range of value, I still think we're some way away to thinking, well, actually, if we're going to really be transformational about this, we might actually have to take a deeper look at the structures and tools and approaches that we've developed for that previous more commercially minded purpose.

Yeah. I'm going back to Layer Cake, the action movie from 15 years ago where he talked about the different layers of how things are. And I think we've got, making money and then people are becoming aware of making money, align with ethics, and then we've got transitions of entire making money funds into making impact. We were previously in the research, I was looking at you talking to the need to invest in the edges of the system to transform the system as it were, and how to go about creating that transition. Are there any more layers that you see, like we were just talking through the macro level of systems, what's the nuance that you see?

I think there is a layer there, I'm not sure if it's on top or sits somewhere, amongst the icing and the sponge, but around, who is considered investible, and who gets access to finance and how many people are we actually enabling, including in the process of transformation or the impact movement and are there also inherent biases and constraints and are there also inherent biases and constraints with the way that we think about credit worthiness and investability, which are actually holding back resources and investability, which are actually holding back resources to a range of different actors and activities who if supported in a way which was enabling to them, could actually be far more powerful in the change that they want to create for themselves, their communities and the places around them. So I think that the democratisation and the accessibility around finance is a layer within that. But coming back around to the point that you mentioned about the system, and I guess this is another area where I think there's a key difference in the way that we've previously thought about finance, to how we might want to think about finance in impact going forward. Insomuch as quite often we diversify our portfolios to manage risk, right? So we actually avoid things which potentially have contagion between them, but when we're thinking about systems change, we know that all the big challenges we're trying to address we know that all the big challenges we're trying to address have these deep interdependencies and interconnections. So if we're going to shift them, we actually have to harness those interconnections and synergies rather than avoid them to manage the exposure of any good of an investment. So it's just another example of how our mindsets have to shift if we're going to be more successful in really shifting the big things that we need to get right over the next 30, 50 years.

So, who are you talking to there? Is it governments or is it individual? So I was sort of running this theme in the background of like, well, we need layers. The question I was going to ask is: Time and money are the constraints for change per se, and I don't think money is that much of a constraint, it's more about values because people will find the money when it's needed. And then, essentially we're all on universal basic income for the past two years in Australia as a response to COVID. And I was like, oh, wow, that just happened. If you were focusing the next 20 years of people's lives, do you think it's the regulation that's going to bring about this change, or is it the for-profit enterprise or not-for-profit enterprise per se?

Again, we have to have a sort of a systems lens on this. It's going to be no one thing. It's going to be the combination of things working better together. Absolutely, policy is incredibly important; regulation, legislation, the parties and actors regulation, legislation, the parties and actors who have accumulated significant wealth and want to invest, but also the structures which allow a broader participation; crowdfunding, the emergence of decentralised finance, all those kinds of things are going to be equally important. And then, there's no point having a supply of finance, unless we've also got an enabling environment for people to be more creative and to actually create the possibility of new projects, ventures, programmes, activities, which can take on board that resource and then foster change. It's a whole ecosystem of interventions It's a whole ecosystem of interventions which are needed to foster systems, transition and change. You mentioned, who are we speaking to? Pretty much everyone, I would say. Again, it's about trying to link the different actors in the system. For people who are engaged in impact, there is an increase in anxiety that we're not where we need to be. We've never had more capability and resources, but a lot of the big indicators around the things which are fundamentally important, be it climate, inequality, degradation of land, health systems, are worrying, and many of them are going in the wrong way and we're not responding to them with the trajectories that we need. I think that anxiety and that pressure to think like we are going to have to do things differently, because the things we're doing now, aren't sufficient, is creating curiosity around what the new things might be. I'd have to say, Philip, we are in the business of exploration and experimentation; we don't have answers, but we are trying to step back and say, what might be the possible directions to do things better. And how do we actually test those things to see if they can realise the outcomes that we're hopeful for.

You kind of cut off my next question because I was going to go, if we're making this layer cake, let's go to the ingredients. What are the things, what do we do? How do we make this? But it does stand as a question because, I mean, what are you testing? What are you measuring? How do we make this relatable for people who aren't way up at a systems level?

First thing, I think, the first layer is an appetite for change. And the second layer is an imagination of how things might be done differently. That may sound a bit soft, but imagination is a precondition of any change. We actually have to create pictures of how we might do things differently before we can act and do things differently. So in the first sense, we're trying to build coalitions of people who are, I suppose, adventurous around experimenting, around systems innovation and that includes approaches to finance. What we're doing at the moment and we hope to release it in the new year, is almost like a blueprint that if you were to design a systems approach to a financing fund or intermediary or vehicle, to a financing fund or intermediary or vehicle, what would that look like? What would the design considerations be for that thing, which could allocate capital in a systems context? And then hot on the heels of that, we want to do some demonstration projects, which actually give this a go. So what might they look like? For me, there's a couple of basic models in my mind, and there are many more. One might be thinking around, what does a green transition or an energy transition or net zero transition look like in a place or a city or a region? When we talk about systems lens, what that means is, how do you make sure that when you're thinking about stranded assets, when you're thinking about new industrial investments, how would you also allocate capital to satellite activities, which might come from more of a community level or a social and impact enterprise level? How do you also allocate capital into the development of new skills? How do you make sure that everyone gets access to those programmes, which might build new skills? How might you support the acquisition by community of different assets, which they can generate new economic models around? Rather than.. And at the moment.. And this is, of course, incredibly difficult, but at the moment, most of those things happen in silos and they're blind to each other. What we're saying is, even if we were just to do a few of those things, how might we actually think about the thigh bones connected to the knee bone, which is connected to the hip bone and recognise if we put a certain form of finance in that, that would be supported if we put a different finance over there, and the synergies and interconnections and feedback of these things working well improves the chances of the whole system moving more quickly and more successfully. The other example might be where you have a network of actors who are already working in a systems way quite effectively. One group comes to mind, the Moving Feast network of social enterprise around the food system in Melbourne and greater Melbourne. They have also crowded and attracted a lot of supporters from corporate sector, philanthropy, government. You've got a system there of any number of social enterprises who are already starting to work as their own individual organisations, but also recognise they're a kind of value system; they're a systems enterprise, as well as a collection of individual enterprises. So how might you think about investing in that whole network So how might you think about investing in that whole network rather than just individual enterprises, recognising that some enterprises, if they increase their capability, might increase supply and demand to another point in the system. And if that part isn't capitalised, then this bit might not work. Do you see what I mean? It's understanding where the inter-linkages are and then allocating capital in a smart way, which raises everything up together. They're the two demonstration projects. I'm not saying we would do that with Moving Feast, but how do we capitalise a system or a network which is already functional, to strengthen its work and increase its liquidity and velocity of activity. And then how might we take a place-based approach to a key system, be it energy transition or health or what have you and think around, what are the key actors and what are the key interconnections, which if we capitalise intelligently they would support each other.

I've got three questions in my mind. To capitalise something, I'm assuming the person capitalising it wants a return on that capital. So when we talk about capitalising on a systems level, how do you see return being generated?

I think this is a bigger mindset shift,

I think this is a bigger mindset shift, and it comes back down to the idea that we are.. The world works with a lot of, obviously, there's a lot of public capital, governments and some community capital, held by certain foundations or other entities. But a lot of that capital moving is private, particularly in the impact investment space. One of the problems, even enlightened impact investors have their own interests. They have their own structures, they have their own application and due diligence processes, and all that noise actually creates a lot of friction of working in a systemic way. I often think about, if I was doing a DIY job at my home, I really need a toolbox where I can use all the things to do the job I need to do. But at the moment, I have to go around all my different neighbours and borrow individual tools on different terms and the job takes a long time to do. If it was a boiler, I might have flooded my property before I can get the job done. So the fact is, it's not only the return profiles, it's also how individual actors operate as well. What we're thinking about is like, how can we create pools of capital, which are fit for purpose for this sort of systems allocation? I've seen some people.. it's not that we're alone working on this system finance. This is going on. It seems like quite a lot of these things. Like, something comes up and suddenly it's happening all around the world in different expressions. I've seen some people say if we get enough different sources of capital, we can aggregate that, which gives us flexibility. I'm sceptical about that because I think you would need a significant amount of capital to actually get to the point where you really do get that free flowing ability. where you really do get that free flowing ability. So might we either have investors So might we either have investors who have a really enlightened view and are basically saying, we are going to decouple our own interests to basically.. Because we know, or we have a sense that this systems approach actually might be really powerful. So we basically remove ourselves from the governance management of funds. I think other ways are, how do we use decentralised finance and the third iteration of the internet is going to be a profound game changer in this. Small amounts of money or maybe some large amounts of money from lots of different parties who are appreciative of different forms of value, and a lot around that token economies, has got that liquidity. So people can come in and out rather than be beholden to being locked into a fund for a long period of time. And the third, I think we should be more creative in actually generating new forms of capital. To a limited degree, although it did get politicised, the establishment of Big Society Capital in the UK was based on this. So dormant bank accounts, the government leant on the banks who had their tails between their legs because of the financial crisis. And you had suddenly a bunch of liquidity brought into play, which effectively was new capital because it didn't have individual interests attached to it. Although in Big Society Capital, obviously, the government had an interest. We've just seen, Philip, in the last year and a half, about 16, 17 trillion US dollars worth of quantitative easing. Might some of that quantitative easing actually be allocated to specific areas of transformation? actually be allocated to specific areas of transformation?

Rather than printed by a lever to flood the financial system back to a level of price parity to stop interest hikes.

Again, politically incredibly hard, but if you step back and look about what we've done, we've basically inflated asset prices and increased the wealth of the wealthy from the public purse. And there might've been some more enlightened things we could have done with that significant amount of quantities in which was particularly around decarbonisation or specifically around reconciliation or specifically around equity and levelling up. or specifically around equity and levelling up. We create money all the time and the problem there is, you're inviting government, and the problem there is, you're inviting government, which has huge amounts of inertia around what it feels it can and cannot do to do something which is pretty risky and progressive.

You're essentially flipping the core values of gross national happiness rather than gross domestic product and trying to increase that is probably a.. we get what we measure per se.

A specific example of that, it's interesting the new Scottish Investment Bank is built on a mission-orientated innovation approach and is thinking around, we are going to think about returns in this far more enlightened, broader view and financial returns are important, but also within our portfolio, social returns and environmental change are equally as valuable. I think a lot of this is trying to be bold and radical in the things that we need to do, but also being patient and pragmatic, recognising these things might take a long time to filter through. But where we are now, the university is an institution, that's kind of our job in some ways. We need to be working a number of years in advance to try and create the pictures and the possibilities for then practise to move into.

Especially from an education standpoint where you've got people who are entering what's going to be the mental zeitgeist that they're going to create themselves inside of, and self-actualising. So to me, painting our horizon 10, 20, 30, 40 years out, that's based on the fruitful success of our society, rather than just saying, this is, learn how to be an investment banker and go off into the world, is so critical. and go off into the world, is so critical.

You raise such an important point there. A lot of the things which seem hard now are hard because we work in certain paradigms and certain mindsets. because we work in certain paradigms and certain mindsets. We know from history that that's very fluid and dynamic things. One thing you can be certain about is, change happens. So some of the things that seem hard now, will seem easier as mindsets and paradigms and to a certain degree consciousness shift. So again, like, Milton Friedman, arguably on the other side of the fence, he had that quote, have ideas lying around in a crisis. I think that's the thing; we need believable, credible stories around how we can do things differently for when those inflexion points come. You used quite positive framing, which I think is really important. I think that's part of it. But I also think over the next 30 years, there are going to be some real crunch forces, which will also push us to have to think differently as well.

For me, simply, population migration.. I think borders will relatively dissolve when we have population migration, due to climate impacts predominantly based on water. I think that's going to be the massive thing that's going to just.. borders won't exist when you've got a million people walking across them. We're privileged that we're an isolated island down here, but if we get into cyclical bushfires and our season creeps in so we can't get the wildfire equipment from California on a rotational basis, we've got real problems.

I kind of play with this idea of three forces which are going to define the spaces that we act in over the next 30 years. One is the great transition, which I think is..

Can you explain that for me?

The great transition, which will be fundamentally a net zero transition, but I do think we rationalise that as an economic but I do think we rationalise that as an economic but I do think we rationalise that as an economic and technological process that as long as we get right will go well, but it's not just around the energy system, right? It's the food system, it's logistics, it's materials, it's behaviour, it's urban environments. The push to effectively have a decarbonised modern economy The push to effectively have a decarbonised modern economy will change everything. And I think it will swallow up everything as well and move faster than perhaps we can imagine at the moment. So that's one of them. The second is going to be around exponential technologies, general technologies, AI, how that's applied to really all productive sectors. That's going to realise plenty of breakthroughs and opportunities. Some of the stuff around how that will impact biology and health is really exciting, but it's also going to play out in military and we're seeing that already, but maybe a bit further along the line. But quantum computing, the possibility of nuclear fusion, the new generation of the internet and how that's unlocking this huge surge of creativity and innovation and a lot of that's actually around how we organise and govern. And then the third force..

I forgot about fusion. I was like, oh yeah, we were going to get free zero-point energy, we've been working for over 20 years just in a lab somewhere, you know.

I mean, it's one of those things, it's always 10 years away. But minimally it is, but there is progress being made there. And again, one of the things that we know about technology is that they tend to be non-delivery changes and breakthroughs in other areas, then, overlap with.. Well, it's as I say, this all goes back to interconnections between things. But the third force is around equity and empowerment. This build up of inequality, This build up of inequality, very visible inequality around not just wealth, very visible inequality around not just wealth, but resources and opportunity. And that's been amplified, we spoke earlier and it's sort of about the asset increases through COVID. So, that's amplifying as well. Again, history tells us you tend to have breaking points; when inequality gets too high, there is a self-correction. Some of that inequality, of course, is around who gets the benefits of technology and who gets the impacts of climate. So I think those three forces are going to interweave and actually have a very strong influence on the space that we act and innovate within. that we act and innovate within.

There's so much here. Kind of feel like I'm looking at all the different aggregate things I get fascinated by that roll up into this magic carpet that we're flicking into the future and all the crap's coming off it, and it's going to settle at some point. I've been working on projects in vertical farming, in circular economy, in all sorts of renewables and things. I remember my vote when it was like democratised voting, so participatory democracy and this sort of transition. I think of a Pete Seeger song where he talks about, nobody expected the Berlin Wall to fall. Nobody expected this, nobody expected that, nobody expected the Soviet Union to collapse overnight. And the Cold War to basically stop, these things we hold so, like, "aaargh", and then they *snap* and off we go. That, to me, is hopeful because at the start of this conversation, I was in the back of my mind, I was just going to say, how do you keep going? I remember doing Beyond 2020, Beyond Zero Emissions stuff I remember doing Beyond 2020, Beyond Zero Emissions stuff, 20 years ago now. Getting all excited that this was the climate change decade and stuff. And I guess it just.. I look at trees outside and I think about their timeframes and how they grow and how they watch us meander around underneath them. I guess it's just about avoiding critical tipping points, but.. I'm on a bit of a roll here.

I think what I take from that is,

I think what I take from that is, again, coming back to this idea of imagination, how do we cultivate mindsets which are going to be more open to thinking around ways that we could do things differently? It's increasingly dawning on me that we tend to see innovation has been the province of the business sector, highly aligned to technology. But I think there's a different understanding of innovation, which is far more democratised, which is like, collectively, how do we start to imagine more positive futures that we would like to inhabit ourselves and like to leave for future generations? Because the mindset to engage in change, again, is the thing which is going to enable the possibility of change. So how do we amplify those preconditions? I think there's great work that goes on in the education system now. The amount of programmes and they may be framed around entrepreneurship or innovation, I think we could definitely lean more into the arts and culture as well and not see that necessarily as a poorer cousin. But it seems to me that we are enabling a lot of young people to think about the futures they want to create for themselves. But there's also this interesting movement now talking around museums of the future and collective imagineering. We do the past pretty well. We do the past pretty well. Every even small town has some form of museum, but are we creating the spaces where we can actually think in time towards the future as well? So it does come to me, again, part of our ability to foster positive futures and change part of our ability to foster positive futures and change is going to be investing in the infrastructure. Whether that's the intermediaries and platforms which enable the allocation of capital, or the platforms which enable people to organise and think about the things that they might want to change in their lives and the places around them. At one point, I know this didn't happen quickly, but after the Second World War, there was this significant jump to public health systems and universal welfare and education for all. There were these quite profound step changes. And if speed of transition and change is a societal priority And if speed of transition and change is a societal priority for the 21st century, what's the infrastructure which actually backs that up? Certainly here, I think it is likely that government has to play a key role, I think it is likely that government has to play a key role, but not alone. One of the conversations we like to have is thinking, what is the innovation infrastructure for this century? How do we literally create the conditions for more people to change the world around them and to experiment, develop new ideas, projects, and ventures? Because that would seem a good investment to me.

Yeah, definitely. When I was listing the three things, the circular economy, the vertical farms as well, the thing in the back of my mind was as well, rites of passage for culture, like our actual culture, our people, how do we develop our people in this sense? Earlier you were talking to basically proof of work Earlier you were talking to basically proof of work as an example, like creating examples to show a larger systems change.

Demonstrations.

Demonstrations. Yeah. To me, the idea of going to a town that is say, predominantly fossil-fuel orientated and taking that sector and that postcode and just being like, all right, let's transition these people into a renewable powerhouse and then being like, great, see, that town got it done. Town next to them, Hey, do you want this done? Those models of scalability, it's fascinating to me.

You're onto something here, which is really important insomuch as the value of a demonstration is non-linear, because once you can show because once you can show that something else can be possible, that can become contagious and that learning can be taken on board horizontally very quickly. We had a chat with the Head of Design We had a chat with the Head of Design at the Swedish innovation agency, a guy called Dan Hill. They adopt this challenge-led innovation approach, in very much a systems lens. They called their value of demonstrations "rehearsals"; rehearsals for the future, which I think is quite lovely. But there was something that you said there, which I'm going to take issue with. Going to place, again, a lot of this thing around innovation infrastructure has to be facilitating this bottom-up empowerment. Rather than the provision of services or the imposing of stuff, we have to unlock the latent human capital that we have, not least because if you want things to stick, you need there to be a sort of a broader sense of ownership. So I do think that's a key part of this process. It's creating the conditions for more people to participate, rather than just coming up with the new systems or rewiring our industries.

Your conversation is going to appear just after me speaking with Mark Ingram, who's the Chief Impact Officer for the Brightlight Group. I think the thing I published yesterday was him saying that community driven, community-outcomes focused, market-rate returns in that order of priority. So going and finding people who actually do want to do what they want to do and then saying, great, how do you guys want to run this and then operationalising it for them rather than coming and, as you say, imposing, or as I said, imposing on a place, "You guys are now going to change for the future," because it doesn't work. You need people, it doesn't work. Are we talking about your National Social Enterprise Strategy? Back a bit? Is that what you were when you were talking about this blueprint or is that..

No, that's something different. The National Social Enterprise Strategy is a project, The National Social Enterprise Strategy is a project, which we have been supporting as a partner, which we have been supporting as a partner, so, certainly not ours. Social enterprise has been going on in Australia forever and a day, but it's a very, very diverse sector. We've lots of different views, models, approaches, We've lots of different views, models, approaches, and it's largely been underserved as well. So while there has been organisation with sectors at a local level, and increasingly we've seen that happen at a state level, there's never been a national strategy for social enterprise. So the social enterprise sector is like, this would be really helpful, but how do we go through the process of standing it up? So we've been working with organisations and leaders So we've been working with organisations and leaders across the sector to think around how we can pull together, self-organise and then create a direction which is actually going to make a really strong case to government and other partners which might want to see the development of that strategy and to see a gap and running, but also something which is going to serve the best interests of the diversity of social enterprise for the long term. So that's been a lot of fun actually.

Fantastic. I was going to say, because to me that speaks to just before we started this, I was showing you the work I've been doing for youth mental health intervention based on neuroscience. Basically to get in with the kids, heal them from trauma, and so they can go on to lead productive lives. As a part of that, not only did my team map out the cost that the Australian government is currently spending on all these different areas of society from youth detention and then long-term welfare and mental health support and disability, and massive, massive funding. When we look at the national rollout costs of these programmes, they're tiny and they disintermediate the chain of intergenerational welfare dependency and getting to speak to people who do foster care, like CEOs of foster care organisations, who contrast the amount of funding and support they get as a social enterprise compared to the expenditure of the government on the impacts of not treating the problems they're dealing with. There's this massive gap, and to stand back and take that systems lens to say, OK, we've got all these different funds, if you will. Impact funds, basically people who are wanting to do good. Endowment funds, for example, who say that this is what they want to achieve, and they have a whole lot of invested money in an asset base that isn't potentially aligned with their values and that transition of their asset base to their values. There's so much scope to re-imagine how the capital moves by getting everybody in the same room and going, look, we all share the same values; we all want the same things. How do we operationalise that? And then for the government to come in and say, yeah, we'll asset-back that because social impact bonds, you pay for performance. If you can reduce that, off we go. It seems like such an honest problem to solve. It seems like such an honest problem to solve.

One of the things there is, getting everyone in the room is, I'm not sure if even that's possible. One of the key points that's coming out, a lot of the new mission-orientated or challenge-led or systems-based innovation processes, it's kind of saying, we're not going to try and make this tight and highly coordinated, but what we do want to do is get broad alignment but what we do want to do is get broad alignment and direction towards the big things we want to solve, and recognise where key intervention points might be. So, we have a Southern Cross, we have this constellation understanding of, while we work in very different places, geographies, sectors, or other contexts, if we can have some degree of coherence towards the big things we want to change, that would be helpful. And then we create this enabling environment, which just allows more bottom-up innovation to happen. One of the big shifts that I think needs to happen, going back to the role of the government and related to social enterprise, what you mentioned there about the huge amount of resources, which go in to basically trying to change really difficult intractable problems. But it's very much this dominant view around service provision. If we just put more money into the delivery of things, that will solve it. But of course there are so many different services and they're working in incredibly complex environments and they cross over and run past each other. and they cross over and run past each other. I think there's a lot to be gained in a relatively modest investment into things like community and social enterprises, which are trying to engage with the same problems, but in a more holistic way from a bottom-up point of view. Thinking about, how do we connect the environment, employment, education, social capital within a place? employment, education, social capital within a place? How do we bring connectivity, confidence and self-esteem? They naturally are geared to include people and develop solutions, which work for that specific context. They can deliver the same things that some services can, maybe not all, but some services, but the way of facilitating their success is very different. It's not command and control, it's creating this enabling environment. I would like to think we would see a shifting in government and policy over the next decade towards that. Governments do it very easily when it comes to business and technology, they're more prone to fund innovation systems they're more prone to fund innovation systems and incubators and various different investment funds, and potentially they should take a broader stake in those and realise public value from their risk taking, as Mariana Mazzucato would say. We do that kind of enabling much more easily in the business and the technology sector, but when it comes to the social sector, we still think that the direct delivery of services is the appropriate way. It would be good to balance that out because I think if you did create a more enabling environment for these enterprise models which put social purpose and social change at their heart, you could unlock this flourishing of diverse and inventive approaches across the country.

I think I just want to caveat what I'm about to say with a preface and that is, I really like money. I think it's great. I think having money as a reward for providing value at scale is a great thing. That said, are we really just like stuck down here in the mire of privatisation? Because to me, the government has just been privatising for a long time. And so I don't see.. Do we need to pull that back? I don't even know how you would do that apart from appropriating assets. Is that a fundamental challenge here? because government is business and they're like, great, here, tender, to be a service provider.

I'm going to say two things. Firstly, I think we just have to be more sophisticated in how we harness different human motivations. Matthew Taylor, who's the previous CEO of the Royal Society of Arts in the UK, of the Royal Society of Arts in the UK, speaks a lot about this in terms of three motivations around individualism and entrepreneurship and personalised incentives, then our need for belonging and solidarity and community and connection. And then the motivation around more directive control, And then the motivation around more directive control, top-down authority and coordination. I think we've seen these as ideological positions, which are in opposition to each other. So people basically invested in one camp and therefore decrying those other approaches, and therefore decrying those other approaches, I think we need to blend those motivations and recognise that we are individuals and we do things for personal gain, but we also want belonging and connection, and also sometimes top-down control and co-ordination is really useful. when we come to thinking around what is privatised, what's done by public and what maybe should be enabled through support of community, I think it's just like, well, what's the right approach for the thing which is in question? I can remember something which I just found so self-evident, I think it was in the UK where you have a big multi-national service for delivering meals on wheels, which is basically installing in a microwave and dropping off 30 lunches once a month versus a social enterprise approach, which is recognising, the food is the business here, but a lot of the value is around the connection and care, which goes alongside the provision of that. Having a social enterprise, which is delivering meals on wheels and is financially sustainable, but doesn't have to generate profits other than ensure that it's delivering good quality service because it's held in community trust, seems to me a really appropriate model to contract out to, for government to contract out to, because the approach fits the need. If you're going to contract that service out to an organisation which is driven by a profit motive, well of course they're going to go towards efficiency and may miss all that value around that human connection and care, which is possible if you take a more thoughtful approach. That was a long answer, but I don't think it's one or the other, but I do think we need to be more sophisticated in thinking what organisational forms, what incentives, what levers do we use for what purpose, and then going back to where we started. How do we make sure that those things join up and support each other rather than work in opposition to each other?

I think it's a great answer because the black and white idea of capitalism versus the US interpretation of socialism, is incorrect. It's not that. That said, do you feel we have enough people waving the flag for, I'd say, our holistic worldview of empowerment in lobbying in Canberra, fighting against the various lobby groups who are pushing, like, I don't know why. I see figures about what we give to certain people for subsidies and it kind of blows my mind. I'm like, well, but that's what you get. If you have really effective people lobbying on your behalf over time, leveraging vested interests, that's what you get.

This raises a really interesting point, and I'm glad you did, that there is a naivety in some aspects of the social change movement or even actually the technology movement that we can just develop good solutions. And if we develop better businesses and better solutions, then we can make the change we want. Power is real. And there are a lot of people who are very successful in the way the world works now, whose interests it is to maintain things as they are. I was really taken with the expression "predatory delay." I think you can see that happening around climate policy in Australia at the moment, there are actually a relatively small number of parties who are overrepresented in how policy is being shaped and deployed. So I do think power is real. And if you're wealthy and you have power in the current system, that increases your ability to influence change or not change as it may be. Going back to this idea of systemic approaches, we need business approaches, we need financial approaches, we need community-driven approaches, we need social-movement-based approaches, but we also need activism and policy change as well. All those things have to be part of a transition movement and potentially we don't have enough people either lobbying or actually in power. I must admit one of the things I always come back to, that if someone was to say, what's your game-changing idea if budget isn't an issue for the next 20 years, it might be to identify, curate and support, a range of highly thoughtful, bold, gifted communicators a range of highly thoughtful, bold, gifted communicators to be our next political generation, not holding a particular view, holding a diversity of views.

What school generation?

Political generation.

Political generation. Yeah, absolutely. Yeah. If anybody's interested, I've got a little four-pager called "Let's Take Over", which is a manifesto of about 20 different aspects I think that should change Australian society that I would like a whole bunch of people to read, agree to, go on to become independent candidates and take over the Australian Senate because it's necessary.

It's necessary

It needs to be community-driven. I've got "Cathy Goes to Canberra" on the shelf, I've got "Cathy Goes to Canberra" on the shelf, Cathy McGowan going and being an independent. Because it's what needs to happen because the fish rots from the head per se. It's not that we need to take over, that was me being a bit flippant, but it is a requirement to.. We've got to take over. People run things. So if people want change, then they need to run the things. It doesn't have to be combative because there isn't a fundamental value system there. Even when I was like 20 years old, I would be out with hardcore activists who were doing their cycle of getting really involved for three years and then burning out, going away for two to three years recouping and coming back to the fight as it were. I just say to them, I don't understand how you expect somebody who's 60 or 70 in a boardroom, who's looking at a golden parachute, who has grandkids, whose decisions relate to whether or not their grandkids are going to have their university and their housing paid, how you expect them to just gut that and say, you know what, burn it all down. They're just not going to do it. But such is the tension of living. The old Roman senators would sit there; there'd be the warrior class, the diplomats, the artists, it's never been different. I think an appreciation for that is a really beautiful thing.

There's that quote, I've forgotten who said it; politics advances one funeral at a time.

Yeah, there it is. There's a few people I'm waiting to kick off the coil, to get involved. I've got here the.. We've already done the strategy. What are you excited about at the moment? I think there's a lot of things you're excited about, but if you were to..

I am excited around Web3. I'd been avoiding it for a while, and blockchain and cryptocurrency and thought it was quite frivolous. I think many aspects of it actually are. But I think something has shifted in the last year or so, where enough things have come together to create an infrastructure, which gives the potential for really quite radical and profound change. I literally don't feel I've come across something as potentially disruptive in pretty much the whole time I've been working around change. It's not a guarantee, but it's the glimmer, it's the possibility of something which feels really substantive. I'm going down a learning wombat hole at the moment and feeling very exposed and very stupid, trying to get my head around the mechanics of the new world, trying to get my head around the mechanics of the new world, but I've had the opportunity to join a learning community, which has been set up by some really thoughtful people in Canada by some really thoughtful people in Canada who recognise the potential of Web3.. who recognise the potential of Web3.. [Doorbell sound] Sorry about that, the potential of Web3 for impact, but also recognise a load of people who are working in impact and innovation are not literate in that potential. So they've created this learning community to basically try and up-skill a range of people to be, more cognisant of the potential that the third generation of the internet will bring, and actually then, start to think about creating a Dao which starts to curate the emerging range of impact-led initiatives in that environment. So that's really exciting me.

Fantastic. I'll send you a short video I made, which is like a four-minute thing of the history of the internet from pre-modem to today with blockchain. Because I've observed it, I was an MC for a blockchain conference. It got cancelled at the last minute, but I've done mining on my local computer. I've been very anti-Bitcoin from an environmental perspective for a long time, and it being a speculative currency. Basically if you want to be a day trader, go do it, but promising financial freedom to single mums if they invest, probably my community bias from what I've seen, I'm always a bit "Hmmm " That said, I've done a blockchain course with Massachusetts Institute of Technology. I'm looking regularly at different blockchain solutions because there's this fascinating ability now to.. Just the decentralisation of information is a fantastic thing. And there's no idea what technology things are going to be invented, but when I look at the different Civic Ledger and Water Ledger and things, Katrina and the team, it's really smart stuff and I'm excited about something I'm working on. To me when you went back to.. I was going to ask a question previously about impact measurement standards and having an underpinning framework and how you suggest we measure the value transition, or at least the input transition and the evaluation of value creation towards a goal across the different players. When we talk about capitalising a systems-change impact, When we talk about capitalising a systems-change impact, and then to me there's "Oh here's blockchain". But bringing those two things together right now in a quaint way is probably going to be really hard. in a quaint way is probably going to be really hard. But that is the decentralisation of information. We could measure those inputs on blockchain. But my core question was, how do you suggest we measure across the sectors, how do you suggest we measure across the sectors, across the sphere, if you will, of inputs in a way that's going to be useful for us to actually tell where we're capitalising the sector to actually tell where we are capitalising the sector and we are creating positive impact.

One of the things I often talk about

One of the things I often talk about in respect to impact measurement is, I don't think it was until the early 20th century that we came up with a generalised theory of accounts.

I've got Rosemary Addis saying exactly that, that it was only in the forties or something that people are like "Ah, the ledger system!"

I think the framework and the thinking,

I think the framework and the thinking which would go alongside a more universal interpretation which would go alongside a more universal interpretation and evaluation of impact is not within our view at the moment. A lot of people look for the holy grail, standardised metrics and frameworks and stuff like that. standardised metrics and frameworks and stuff like that. I think it's really hard. I think good practise and good impact literacy we talked about; getting people to actually understand the nuance and being able to design impact frameworks for the activities or portfolios that they're engaged in. for the activities or portfolios that they're engaged in. I think principles, things like transparency are really important, how we're sort of capturing measurements and how we're interpreting them, and if it's the case, how then we're exchanging them for more financialised forms of value. So that's one thing. I think it's more a capability set than a specific system or framework. I also think when we talk about systems change, we don't want to just talk about metrics from an accountability point of view. We want to think about signals from a learning point of view. So, think about our bodies, right? It's really useful to sense lots of things, pain, colour, light, distances. When we're engaging in change, we should be thinking around how do we build sensing systems, which enable us to understand what's going on and the interlinkages between things, because that then enables us to adaptively manage. So I think that's one element of the impact measurement So I think that's one element of the impact measurement and management discussion, which is really underplayed.

To me, that's the TCM, Traditional Chinese Medicine versus Western Medicine approach to looking for a problem in the body and fixing it rather than seeing everything as a consistent balancing act.

Yeah, and also they're not mutually exclusive. For some times, accountability is really important, For some times, accountability is really important, particularly if that is going towards choices around transactions or what have you, but it shouldn't be necessarily dominant to that balancing and understanding where we are in relation to other things and the change we're creating. I'd like to see a balancing up there. And then also being more creative around where we can get those signals from. There's a lovely story. I'm just finishing this book called "Tarzan Economics", a guy who was the chief economist at Spotify. And he mentions how the governor of the Bank of England went into Spotify's office to try and see if they could work with Spotify to get broader insights around sentiment, an economic sentiment. So rather than outdated manufacturing statistics, if they had large data set, which referenced people's interests and moods through podcasts and music, might that provide a signal? And you wouldn't want to necessarily rely on that, but building up layers of signals and information is a good way to navigate change, just as the way that we navigate our own lives. We're constantly receiving and interpreting data and I think we should think about that as a story or metaphor around impact measurement rather than just accounting.

I was just having a giggle thinking about how Amazon give you recommendations for all the things you'd like as a post breakup, when your Facebook status changes, that kind of algorithm. The idea that the head of the Bank of England was going, "Show me all the people that listen to depressed music when we've just released the latest budget." What's the swing, does everybody just go, "Awww". It's crazy.

It is crazy, and what those big colossal platforms have signals on and what those big colossal platforms have signals on is quite a mind blowing. I remember hearing a few years ago that basically you're most likely to split up in a relationship before a summer holiday or Christmas.

And coming out of winter, you come into spring, it's like, am I going to spend the next summer with this person? And then the end of the autumn, it's like, oh, I better lock down for the winter.

So that's quite frivolous. But I do think in anything that we do, we should be not just thinking about hard metrics and accountability, but be really open to the other signals, which give us intelligence, which then enable us to do things better.

The conversational joy in me wants to flip over to how China's integrating an algorithm policy to say to people, look, show us how you actually going to use this. You need to register your algorithms with us. And I've seen the general response of like, "Community...you can't do that...freedom." In another sense, I see how Instagram has destroyed the mental health of youth and a whole bunch of other things. I'm sure it's got positives. There's a lot here. So what I'd ask you, as we've got to really wrap this up. So what I'd ask you, as we've got to really wrap this up. For people who want to do more, what would you say? Come to your course and learn? What would you say?

Flippantly, if people want to do more, do more. I think it's a case of, again, I think it's a case of, again, I'm going to butcher a quote here and I forgot who said it, but, it's not hope that gives course to action, but, it's not hope that gives course to action, it's action which gives course to hope. And I just think the positive feedback loops between caring about something, learning about something, trying something.. learning about something, trying something.. The world is so big, it's overwhelming. The scale of everything is overwhelming. That kind of broad visibility, I think, is really disempowering. But we can do small things in our everyday lives and those small things.. I'm not getting into a sort of Pollyanna, do your recycling, we'll change the world. I think, from a mental health point of view and the possibility for people to be more open and the possibility for people to be more open to engaging with others, I think that's probably part of it as well, doing things on our own lives, but being open to taking more responsibility, either in an organisational context or a community context. But being more active and activist around the things that we care for and would like to see more of in the future. Ultimately a lot of this does come down to choice. It's not like, just because we choose to have a better future that we'll get one, but that orientation to want to change things is, but that orientation to want to change things is, it's avoiding fatalism. We don't know whether we're going to be successful in changing and bringing forth the futures we want, but we do know if we don't try, we won't. So for me, it's just like, care about something, lift something, engage with others who want to do similar things and that's probably quite an enjoyable life as well as feeding into the potential for better futures as well. But sure, do come and study with us or do something. There's so much stuff out there now, it's really a choice; it's not about access to stuff.

And so, by following your own advice, as you hit me as somebody who has done this and got involved, what have you got out of it personally?

I've just got a great life.

I've just got a great life. I guess the thing around change, it's the creative process and creativity is a nice place to be. One of the other things as well is, I put boundaries on it as well. I put boundaries on it as well. Enjoy the world and this one life that we have as well. So I don't think.. I have to be careful here because I might be contradictory, but some people, all they can do is the change agenda. But I think for a lot of people, it's just, again, the small things at the right time and don't invest in creating positive change at the expense of loved ones, personal interests, the beauty of the natural world, other experiences. Because if nothing else, that's likely to lead to burnout, and no doubt, I've seen quite a lot of that in the social-change field.

For the audience out there, I'm a huge film fan, surprise, surprise. And I think I've got a new favourite film. I saw it like two days ago, it's called "Nine Days". It's the best visceral, what it means to exist and what it means to live and the nuance of this joy of the flowers behind you and the sunlight and things. It's on YouTube. You can rent it, go have a look.

I will.

So let's leave it there. Thank you so much for your time. It's been a real pleasure. There's a whole bunch we could talk about. I've still got pages and pages of all the amazing work you're doing in the world. So maybe we'll check back in again. Thank you so much for your time.

Anytime, Philip, thanks for the conversation, the hour's flown past.