BOSTON–Innovation is most often spoken of in terms of product and service development, but it can also be effectively applied by credit unions to addressing income and wealth inequality, CU leaders here were told.
Dr. Jeffrey Robinson, who leads Filene’s Center for Innovation and Incubation, urged attendees at Filene’s Spark Conference to think more broadly about how innovation can also be used in response to issues facing CUs and their communities.
Robinson, who is Prudential Chair in Business at Rutgers Business School, said during a session titled “Encouraging Entrepreneurship and Racial Economic Opportunity” that while co-authoring with Filene’s research manager, Staci Duros, a 2023 report titled “Innovation Matters: Creating Competitive Growth in Credit Unions,” one of the main findings that was brought to light was the “power of social innovation.”
Part of that involved breaking the process of innovation into pieces, as shown in the graphic at right, Robinson explained.
Noting it was appropriate the Filene Research Institute was holding its meeting just blocks from the offices of its namesake and credit union pioneer Ed Filene, Robinson observed, “If you trace the history of the credit union movement and cooperative movement…that history involved a community engagement, a community orientation and making a social impact. One of the things we wrote about in that report is that the superpower is social innovation. What do we mean by that? That's those three wedges towards the bottom there (in the graphic) in the darker green. It has three aspects to it: economic inclusion, community partnerships and microfinance.”
Debt & Racial Disparity
The challenge of debt and racial disparities in the debt held by white, Black and Brown Americans is an issue the Center led by Robinson has tackled. It’s an issue, he noted, that has a big bearing on the ability to afford a home and accumulate wealth.
“When you disaggregate the data to understand what's happening in your communities, you may follow some of these trends and patterns,” Robinson said. “If you have these kinds of trends and patterns you say, ‘Well what can credit unions do to make a difference here?’ That's what we were talking about in some of the work that's in that.”
What Can Be Done
What can credit unions do?
According to Robinson, some of the things credit unions can do include:
- Connect with the business community
- Participate in small business organizations, (Chamber of commerce and other organizations). “This is a great way to build trust.”
- Take an ecosystems approach to economic development in your community. “You don’t have to do it all. What partners in the community can you collaborate with to make something happen?”
Two Practical Examples
To illustrate some practical examples of what credit unions are doing, Robinson also introduced the first two finalists for the Racial Economic Equity Awards during which two CUs shared their initiatives (see related story).