Social media is creating a social impact. But is all this sharing and caring really creating the next economy? Like Tyler Cowen, author of The Great Stagnation, I would argue that social media investments are not like historical game-changing innovations that have truly driven economic growth for the poor and the middle class.

Looking at history, economic growth comes from job growth across the education spectrum. The most recent impact investment was the Internet in 1969, which resulted in significant IT investment and economic growth through the late 1990s. Before the Internet, in energy, the electrical grid was a game changer. In transportation, there was the advent of highway construction, the affordable car, and—more importantly—automobile financing even for the poor.

Each of these inventions did not create one industry; they created dozens of industries. Each created a new economy powerful and pervasive enough to employ millions of people—even high school dropouts and those without a college degree.

The truth is that real game-changing investments, or impact investments, are harder to come by—this is the premise of Cowen’s book. Our economy's “low-hanging fruit” is scarce.

The new brilliant business leaders in social media want people to think that what they do actually matters to the overall economy. A week after Thrive Capital’s investment in Instagram, Facebook bought Instagram for $1 billion in cash and stock. Paybacks like this are a dream to investors. They get a handsome return-on-investment and social media buffs get a cool new app. But do we end up with businesses that drive a new economy? Instagram had about a dozen employees at the time of its sale. In theory, its jobs could possibly be unnecessary and duplicated at Facebook, contributing to a jobless economic recovery.

How do we get Silicon Valley and other investors interested in being part of deploying impact solutions, which typically don’t offer the same kind of adrenaline rush? Cowen suggests that we come up with innovations that look like infrastructure and that really put people to work. These technologies improve water, sanitation, transportation, electricity, and other core expenses of every household. Most importantly, they provide meaningful employment to the poor and the middle class—versus eliminating jobs by increasing efficiency. The opportunity and challenge with this area is that progress is measured in trillions of dollars of investment, not millions.

While infrastructure opportunities approach $10 trillion globally, they have to be pursued in a financially compelling way to inspire other investors. Impact investors need to prove to other investors that they can provide:

  • Compelling risk-adjusted returns for investors
  • Solutions to pressing problems
  • Development and economic growth
  • Sustainable jobs and sub-industries

I cannot emphasize enough that impact investments must first generate financially compelling risk-adjusted returns. In fact, that is how renewable electricity projects grew to more than $175 billion in 2011. Mainstream investors from Goldman Sachs to Blackrock now consider renewable energy a low-risk way to generate profits in their portfolios and achieve the aforementioned criteria.

Our next great frontier is deploying existing, decades-old technologies, not new ones, in agriculture, transportation, building efficiency, and other areas. These are stable investments that generate 300 percent cash-on-cash returns over 20 years, not the VC returns that groundbreaking new technology promise in Silicon Valley. They might not fit Thrive Capital’s definition of “rapid user and sales growth,” but with 1.3 billion people without access to electricity, rapidly reaching 100 million new users is certainly achievable. Like Henry Ford before us, we must find financially compelling returns while providing wage growth and opportunities to the poor and middle class.

My contention is that we are at a critical point in time. Whether you are an environmentalist concerned about climate change, a development expert working to meet the needs of our poor, the US military looking to reduce fuel convoy deaths, a retiree looking for solid low-risk returns, or the US president looking for 4 percent GDP growth, deployment of existing solutions to energy holds the key. And the only way we are going to achieve that is if smart Silicon Valley-type investors admit defeat in their incessant pursuit of the “perfect game changer” technology. We need to start deploying better, cheaper energy sources for the next generation and beyond.

To unlock these opportunities, we need business model innovation, not new technology breakthroughs. I agree with Cowen that we need technology that looks like infrastructure—much of it has been waiting on the shelf, unused for 20 years. My company SunEdison helped unlock the multibillion dollar solar services industry in the US and globally through business model innovation. Converting 30-year-old solar technology—from a capital purchase into a services contract—was the breakthrough. It has unlocked hundreds of thousands jobs that will last for decades.

The impact investments we choose to make now can continue to be socially irrelevant investments that will lead to great stagnation, or they can inspire mainstream capital to unlock the great next economy.