Neither top-down nor bottom-up approaches have yet had a major impact on wicked problems such as climate change or poverty. Oxford Saïd alumna Suzette Dumfries is focusing on a third way.
By definition, wicked problems do not have easy or straightforward solutions. Their complex and interconnected nature means that efforts to address one aspect of a problem can often have unintended consequences and a negative impact on another – or, indeed, on a different problem altogether. For example, government policies to deal with the challenge of climate change often focus on using taxation to discourage the continued use of fossil fuels and encourage the adoption of more sustainable energy sources. However, these policies end up having a disproportionate and harmful effect on the poor. Lacking the capital to take advantage of incentives to install solar panels and other renewable energy generators, low-income families and individuals have no choice but to pay ever-higher fuel bills, leading an increasing number of households into fuel poverty, with serious implications for health and wellbeing.
So with well-intentioned but top-down policies likely to prove a blunt instrument, smaller charities and social enterprises attempt to approach problems from the bottom up, starting with community-based interventions and experiments. While many of these are effective at that level, they prove hard to scale. This leaves a large gap in the middle of the social impact eco-system.
The approach taken by Suzette Dumfries, an alumna of the Oxford Impact Investing Programme, suggests one way of bridging that gap. With the belief that ‘combining capital with intention’ is the way to redefine wicked problems and tackle poverty, she is fundraising for a master impact investment fund and three feeder funds to invest in three sectors in the Caribbean: agriculture, clean energy, and tourism.
An economist by training, Dumfries found her way to Oxford through a desire to tackle broad questions of poverty. While exploring case studies on the programme, she was struck by the importance of place – which reflects the small-scale, bottom-up approach – but also by the way that thinking differently can open up enormous opportunities.
‘One very striking story I often share comes from an approach taken in Nigeria by Heirs Holding,’ she said. ‘A group of smallholder farmers produced good fruit crops but the lack of infrastructure – particularly roads -- meant that the fruit could not be taken to be sold in the nearest market as it would rot on the way there. The company raised money to build a juicing plant near to the farmers. This meant that the fruit could be juiced and packaged near to the produce. It created jobs, a supply chain for the smallholder farmers, and produced what could become a useful export for Nigeria.’
She pointed out that the focus of traditional international development would have been on ‘the road that wasn’t there … but if you have an individual who can see round corners in this way, and then give them the access to capital to realise their vision, they can make a very big difference.’
This is behind her focus on the Caribbean. ‘Few people consider the Caribbean to have potential in agriculture because it is a group of islands with no obvious integration,’ she said. ‘But it’s bigger than you’d think and there is the capability to bring agricultural land back into production. Individual islands may be small but we can take advantage of that: we can test new ideas and create models that can be applied in other markets.’
The other funds will also aim to invest in projects that make the most of the Caribbean’s distinctive characteristics. ‘It has the ocean, lots of sun, and lots of wind,’ said Dumfries. ‘If we get the right investment, we have the potential to harness the power of the sea to make us 100% fossil-fuel-free, and even to be able to export energy.’ The sustainable tourism fund will build on work that has already been done in the Caribbean in this field and, again, aim to create models that can be replicated around the world.
The likely strength of this modular-type approach is that it builds in room to experiment – and possibly fail – without endangering the project as a whole or creating unrecoverable unintended consequences. It is also designed to make successful projects easy to scale by replicating them in similar environments. It is still at an early stage, but Dumfries is confident: ‘The power of capital with the right intention can redefine (though not necessarily solve) wicked problems.’
Suzette Dumfries attended the Oxford Impact Investing Programme, a programme designed to develop a deep and broad understanding of the impact investing sector, and to support participants in creating an action plan that will lead to the formation of a strategy. Oxford Saïd is now launching a second programme, the Oxford Social Finance Programme (6 to 10 November 2017), which aims to look at the social finance ecosystem more broadly and examine more ways in which to take ‘good to scale’.
How can we use finance in creative ways to tackle global problems such as climate change? How do we take all the good work that is being done in social enterprises and scale it?