Reana RossouwWritten by

Social innovation: Contributor and driver of future value and capital

Social Innovation| Views: 135

Even today, many development practitioners find it hard to prove the value (and the business case for that matter) that social and community development delivers and contributes to the future sustainability of a business.

However, because we have proved through impact assessments that measure both the impact (on beneficiaries and investment portfolios or themes) and return on investment for the funder, those days are over.

These days, practitioners have many options and opportunities. If they are prepared to really focus on strategic and catalytic development, they can prove that the value that is being created contributes to the future sustainability of their organisations.

Concepts in the social innovation space that are really making this possible include:

  • Inclusive economy, circular economy, social economy, conscious capital
  • Shared value, blended value, collective impact
  • Socio-economic development, social enterprises and entrepreneurship
  • Impact investment and socially responsible investment

Social innovation:

  • Is directly aligned with a company’s innovation agenda and business strategy.
  • Leverages a company’s core for-profit assets, such as human capital, value chains, technology or distribution systems.
  • Is managed from within a company’s core operations or business units to become a competitive differentiator that create future economic value.

Social innovation, for instance, means being more strategic, more ambitious and more collaborative in how access and opportunity can be provided for billions of low-income people to participate in the global economy.

What distinguishes social innovation from traditional (business) approaches is the pursuit and resolution of societal challenges in ways that create tangible business benefits.

The focus of social innovation is on finding solutions to local and global social issues and creating new values for society, a task that is traditionally associated with government and non-profit organisations.

Social innovation is multifaceted and an integral aspect of a new innovation paradigm. Simultaneous social and economic value creation is aptly demonstrated by the emergence of hybrid innovators and the blurred boundaries of social innovation. Complex problems, such as youth underemployment, quality healthcare, shelter for all (access to housing) and environmental challenges as a result of climate change demand cross-sector collaboration, a more universal appreciation of shared value and a holistic understanding of innovation.

It is not about sharing the value that has already been created – that is philanthropy.

It is about a deliberate attempt to address social/economic/environmental needs and challenges through new, innovative, commercially viable and purposeful opportunities. It is also about using social investment funds as seed capital to drive social innovation.

The following questions can assist practitioners in using social innovation as a contributor to social value:

  1. Where are the key opportunities for you to be more innovative and socially inclusive?
  2. Can social innovation help manage risks that will affect your business?
  3. How can you use existing assets and capabilities to solve societal challenges?
  4. Can you engage and collaborate with your key stakeholders – customers, suppliers, distributors, retailers, governments, NGOs – to create greater financial and social value?
  5. How can you embed the social innovation agenda into the strategic vision?
  6. How can you mobilise the creativity and entrepreneurship of your business teams to identify and pursue opportunities?
  7. Have you spent enough time to understand the new stakeholders you are trying to serve? Can you serve them through existing capabilities and business models?
  8. Are existing structures blocking socially innovative ideas from progressing? What new structures could you create to support the design process?
  9. What can you do to incubate more socially innovative ideas (e.g. ring-fenced funding or longer incubation times)?
  10. Is the business model ready to be replicated to new contexts? What elements should you review and adapt regularly to keep it relevant over time?
  11. Can you find new sources of value in an already successful social innovation initiative?

This presentation provides context for social innovation as a driver and contributor to social capital. It also provides extensive case studies of how to go about it and what is already being done, specifically in the African development context.

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