Defining Social Innovation: How the World is Responding to Social Challenges

Social Innovation (SI) is an emerging concept employed by social organizations at the grassroot to turn the current African youth unemployment crisis into an opportunity for sustainable growth in Africa. Following the failure of the market-based, profit-seeking models, SI as a new concept has become very attractive as an alternative model for dealing with current global social crisis to address the current social and economic challenges that are being coupled with the growing and diversified needs of society. Renowned leaders are currently spearheading the agenda of SI as a solution to address the social and economic gaps that governments and unfettered market left behind.

In 2009, after assuming the presidency of the United States, President Barack Obama created the Office for Social Innovation and Civic Participation (SICP) to identify successful programs that have proven to tackle social problems such as education, healthcare and poverty. In this light, the the Social Innovation Fund (SIF) was established with seed money of $50m to mobilize public and private resources with the purpose of promoting innovative, community-based solutions that have made compelling impacts in three areas of priority need: economic opportunity, healthy futures and youth development. In 2012 in the United Kingdom, Prime Minister David Cameron launched a £600m social investment fund for the Big Society Initiative to support grassroots social projects. At the European level, the president of the European Commission (EC), Jose Manuel Barroso, launched Social Innovation Europe Initiative in 2011 to tap innovative potential of the social economy sector across Europe. The EC has since 2009 invested up to 70 million Euros into research projects on social innovation in the EC Framework Programme (FP) 6 and 7.

With the popularity of social innovation soaring, so has the debate and literature exploded around its growing importance. Social innovation has gradually gained roots into the academic curriculum of many universities, leading to the establishment of Centers for Social Innovation. The concept has also become the subject of numerous professional and academic conferences, summits and workshops. Prominent journals such as the Stanford Social Innovation Review, Philadelphia Social Innovations Journal, Japan Social Innovation Journal,  the Baltimore Social Innovation Journal and many more have been dedicated to the realm of social innovation.

While social innovation is generating a lot of excitement across the African continent and beyond, many people still grapple with exactly what social innovation is and what its tangible outcomes may be. Is it "old wine in a new bottle" or a new and radical approach to dealing with complex social needs? Is it a politically expedient message or a discursive fad that will wane over time? Better still, is it a one-size-fit phenomenon that holds promise of changing the status quo? What makes social innovation a promising concept and what sets it apart from the traditional or technological innovation we know? In practice, what are some of the existing social innovation initiatives that are transforming lives?

Defining Social Innovation

A brief historical perspective shows the concept of social innovation has a long heritage. In fact, author M. Mumford traces back the first analysis of social innovation to Benjamin Franklin who, at the time, linked social innovation with changes in societal structures. The two fathers of classical sociology, Max Weber and Émile Durkheim are prominently credited as originators when they dealt with the issue of social innovation in relation to transformations of social relations or social organization. The 1970s saw the first journal publication on social innovation by James B Taylor, who drew his perspective from the change that occurs through local experience of social practice when commitment and cooperation among members of a diverse society are put in action. References to social innovation were rare in the 1980s, except for J. Gershuny whose presentation detailed the influence of social innovation on the structure of developed economies. Around that time, P. Drucker identified management as an example and agent of social innovation. He argued about the overemphasis on the role of science and technology as change agents by managers during the 20th century to the disadvantage of social innovation.

Several definitions of SI have emerged. However, from all of them it is clear that social innovation is regarded as a novel idea (products, services and models), solution, production process or technology (much like innovation in general). It is also said to be a piece of legislation, a social movement, an intervention or a combination of them that are more effective, efficient, and sustainable than other alternatives. Its function must be to meet social needs or solve social problems, bring about social change such as new institutions and social systems, and establish new social relationships or collaborations and values that improve the collective wellbeing of society rather than private individuals.

Of course, other types of innovations contribute to social wellbeing, primarily through the provision of jobs, enhanced productivity, and economic growth. In fact technological innovations, such as the computer and automobiles, have generated social values beyond the obvious economic impact by enhancing individual productivity, learning, and creativity, and promoting freedom of movement. However, a truly defined social innovation leans "towards social values – benefits to the public or to society as a whole – rather than private value – gains for entrepreneurs, investors, and ordinary (not disadvantaged) consumers". Economic outcomes from social innovation are thus not inclined towards profit maximization but more to the added value directed to the satisfaction of needs.

Categories of Social Innovation

Based on the foregoing account and a broader perspective of accounting for the uniqueness of social innovation, I outline two different categories of social innovations. The first category is the so called 'pure' social innovation also referred to as 'non-profit-seeking' social innovation. This category of SI seeks to address needs that are not satisfied, and values not created through market mechanisms. Pure SI organizations usually thrive on public funding subsidies and grants received from donors and foundations. Such innovations require the backing of a specialized policy framework that would shore up investments, especially in a free-market society where investments will be limited to not-for-profit social innovations. A classic example is the Charter School system (primary or secondary schools) that receive public funding, but operate free from some of the regulations that typically apply to public schools. This system allows administrators, teachers, and parents to develop innovative teaching methods. Another excellent case from Ghana is the Ashesi University, founded by multiple-award winner Dr. Patrick Awuah, Jr. This school is transforming the face of higher education in Ghana. Ashesi's model is grounded the principle that a "transformative higher education, focused on ethical leadership and innovative thinking, is a leveraged path to a new Africa." Many of organizations in the United States, such as GreenLight Fund, Venture Philanthropy Partners, Corporation for Supportive Housing, Jobs for the Future, Inc.,  and many more that are receiving grants from the Social Innovation Fund are found within this category.

The second category of SI is characterized by both social and economic incentives. They are economically sustainable; thus, they have the ability to generate adequate financial resources to fund their operations and production without necessarily being profitable. Many social enterprises and institutions fall in this category, having initially been supported by seed money from donor organizations and special public funds like the Social Innovation Fund in the U.S. and Venture Capital Trust Fund in Ghana. At some point, some social innovations transition to exhibit some tenets of business innovation. A good example is microfinance, which was pioneered by the Nobel Peace Prize-winning organization Grameen Bank, a community development bank founded by Nobel Laureate Professor Muhammad Yunus in the 1970s. Microfinance is principally based on two models of financial service delivery namely – the relationship-based banking for individual entrepreneurs and small businesses, and the group-based models, where several entrepreneurs come together to apply for loans and other services as a group. Today, micro-financing has become a global phenomenon, serving millions of rural and urban communities. Such innovation is profitable and has a positive impact on societal well being.

Concluding Remarks

The ideals of social innovation seem to have resonated favorably at all levels with individuals, private sector actors, funding agencies, non-governmental organization, national government and even continental bodies such as the European Union and the Organization for Economic Cooperation and Development (OECD), developing strategies around social innovation. Private sector actors are partnering with non-profit organizations and government to blend market and non-market approaches, and models of funding to create a more efficient, effective, and if not profitable, at least sustainable social innovations. More important to this cause is the ability to replicate and up-scale models that ensure the deployment of social innovation at a large enough scale to have significant impact on the social problems being dealt with.

Ernest Acheampong is a Southern Voices African Research Scholar with the Africa Program at The Wilson Center and a Researcher with the African Technology Policy Studies Network (ATPS).

Photo Credit: World Bank via Flickr