With the economy (and all of “us” who the economy exists to serve) increasingly needing government triage through new disruption and crises that seem to be growing more frequent and unpredictable, maybe we should finally re-think the link between innovation funding and impact.

Innovation in times of disruption and crisis

One of the defining pivot points through disruption and crisis (whether economic or natural) over the past 10-15 years, is the turning on the axis of many beliefs and myths around innovation, what it’s for, who it serves, and how it’s funded.

Before a “disaster”, novelty always seems more important than usefulness – investment in innovation is almost always directed at lifestyle or technology innovation with a focus on convenience and profit respectively, rather than solutions that improve the lives of the majority.

Then there’s a shock to the system,  a supply chain breaks, or an industry does and people lose their jobs.

With another year upon us, and with it, inevitably more ‘crisis’ of some kind (whether it be financial, flood, fire, conflict.. or AI).. 2026 surely also has to bring with it an awakening on the yawning gaps in the innovation funding space. Social (human and community) outcomes need  be accounted for in innovating. 

Impact Innovation

There’s a growing trend in organisations creating “Innovation and Impact” executive roles..  This isn’t an accident or anomaly, it’s how it always should have been. 

Innovation with impact is one of the most potent forms of business innovation because it addresses people, communities and environment. Social enterprise, social innovation and impact finance were born for this time.

The economic value and social impact of investing in local economies, local manufacturing and jobs through community owned businesses and employment based social enterprises is an example that can’t be underestimated. These businesses create resilience in the system.

How can government and philanthropic funders help drive community led innovation?

In a sense, everything done in the social investment and community space is about mopping up the mess left by disruption and crises.. economic, technological, social, health, environmental or otherwise.

Social innovation and regeneration outcomes can take 5-10 years. Funders at all levels and sectors including government can move on from tired old short term, 1-2 year, or worse, election cycle and PR-piece oriented grant and project funding, and forward onto long term, trust-based  funding that builds capacity within communities and industries for regeneration and economic diversification.

Election cycle reports, acquittals and PR opportunities are often at cross purposes with the long term systems change outcomes funders are seeking from their investees.  We would also do well to lose the frustrating and sometimes counter-productive or even punitive ‘matched funding’ requirement of many funders in the next phase.  The innovators, entrepreneurs, connectors and capacity builders needed to support communities forward shouldn’t be hobbled by running around and trying to cobble together matched funding.

Impact innovation can transform economies and build resilience

• investment in social and worker cooperative enterprises
• developing diversified, resilient, regenerative, social, circular, local economies
• supporting local and social procurement and business

In an era of social and economic disruption, corporate and government social procurement could finally diversify a ‘one trick pony’ economy. If this effort is also leveraged with investment from a not-for profit, government, and philanthropic sector who are typically the first-responders and ‘first-loss-funders’ to the people experiencing disruption in communities; then the systemic impact, and economic diversification for positive social and environmental impact could be truly transformational.