Social innovation solutions that integrate racial and ethnic equity into business practices have potential to unlock economic growth worldwide, a report from the Schwab Foundation’s Global Alliance for Social Entrepreneurship finds.

Based on six case studies, the report, Innovating for Equity: Unlocking Value for Communities and Businesses (37 pages, PDF)—published in partnership with Echoing Green, the GHR Foundation, and Dalberg—provides pathways for collaboration between social innovators from racial and ethnically marginalized communities, governments, and companies to harness largely untapped opportunities for the global economy. According to the foundation, in the United States alone, the widening racial wealth gap will cost an estimated $1.5 trillion in economic growth by 2028, translating to a 6 percent cap on GDP growth.

To leverage diversity and foster economic growth, the report presents three scalable pathways, each combining a socially innovative approach to value creation that also addresses inequities at the root level. Pathways include: expanding markets, which is centered on social innovators providing products and services that better meet the needs of communities and geographic contexts, and features “last-mile” delivery models that empower local asset owners and provide access to new customer bases; unlocking talent, which spotlights how more equitable hiring practices can unlock untapped talent pools, reshape employment opportunities, and remove existing barriers; and broadening networks, which is focused on the importance of building more diverse and inclusive supplier ecosystems, and equitably engaging with the skills and assets of vendors that have been historically excluded and economically marginalized.

“This report represents a call to action for leaders from across the public and private sectors to address racial and ethnic equity—not just as a moral imperative, but as a clear and compelling business case,” said Schwab Foundation director and World Economic Forum head of foundations François Bonnici. “By doing so, they can contribute to a more just and equitable society and unlock new avenues for sustainable economic growth and innovation.”

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