Priming the pump of impact entrepreneurship and social finance in China
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Priming the pump of impact entrepreneurship and social finance in China Xiangping Jia1 Accepted: 13 July 2020 © Springer Nature B.V. 2020
Abstract In recent years, a significant revolution has begun in social entrepreneurship, with public funding organizations and private investors beginning to pursue social purpose. At the heart of the revolution is the ambition of these entities to use innovation and entrepreneurship to sustain and scale impacts in support of social and environmental objectives. This article provides a framework that conceptualizes social innovation and finance as a multi-level and evolving complex system. Two trajectories of transformation, niche-regime and within-regime, are used to frame a broad range of examples of impact entrepreneurship and social financing. Social finance is viewed as the key to release the ‘lock-in’ of social innovation, as it is able to gather and coordinate capital, resources, knowledge and ability. Using meta-analysis, the article explores the characteristics, dynamics and ecosystem of social innovation, impact entrepreneurship in China. The study maps the landscape of social finance in China and estimates there are untapped social finance opportunities worth from US$93 to US$208 billion. Keywords Social innovation · Sustainability transition · Multi-level perspectives · Niche management · Impact investment · Blended finance
Introduction Emerging social challenges in China and their implications for innovation and impact entrepreneurship China has experienced rapid economic growth and rural–urban transformation since it initiated reforms to liberalize the economy in 1978. The country’s urban population increased from less than 20% of the total population in 1978 to 52% in 2012, an increase of more than 500 million people (World Bank 2014). This is in line with a global migration from rural to urban areas; 54% of the world’s population lived in cities in 2014 compared with only 30% in 1950 (United Nations 2015). The World Bank projected that China’s urbanization rate will surpass 70% in 2030, and 76% in 2050. The country’s agglomerated cities, with abundant cheap labor, robust infrastructure, and strong public
* Xiangping Jia [email protected] 1
Agricultural Information Institute, Chinese Academy of Agricultural Sciences, Beijing, China
investment, have created an environment that has been highly conducive to job creation and income growth. Entrepreneurship and innovation now contribute sizably to China’s continued economic expansion. Since the beginning of the 2010s, China has shifted away from relying on massive public investment (such as spending on infrastructure and technology research) and international trade to drive economic growth (McKinsey Global Institute 2017). Since then, the Chinese government has introduced incentives for entrepreneurship and innovation to unleash new growth drivers at the national scale (The State Council 2016). A class of audacious, innovative and globally minded entrepreneurs is emerging. The new ge
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