Understanding the concept and value of social innovation

20th July 2018

Understanding the concept and value of social innovation

20th July 2018

Understanding the concept and value of social innovation

The term social innovation has been used in a number of ways. Some of the earliest references, dating back to the 1960s, use it to refer to experimental research in the social sciences and humanities. Since then, the term has been used in reference to social enterprise and social entrepreneurship, technological innovations which yield social benefits, corporate social responsibility and open innovation.

Social innovation has also emerged as a response mechanism to solve growing social, environmental and demographic challenges – often called “wicked” problems because they are complex, multi-faceted, involve a range of stakeholders and are, by their nature, impossible to solve. These challenges are numerous and include the failure of the modern welfare state and of conventional market capitalism, resource scarcity and climate change, an ageing population and the associated care and health costs, the impact of globalisation and the impact of mass urbanisation.

Broadly, the term social innovation has been used to describe:

  • societal transformation
  • a model of organisational management
  • social entrepreneurship
  • the development of new products, services and programmes
  • a model of governance, empowerment and capacity-building

Drawing a distinction between social and economic innovation seems impractical and restrictive. There are many cases of social innovations that are also economic innovations, for example, the fair trade and microfinance movements. Social innovations can include new types of production and new markets for social or environmental goods. It can be about employment, consumption or increased economic participation, but also about ownership and production (for example cooperatives or community-owned wind farms).

For Next Generation, this means that social innovation is the best construct for understanding – and producing – lasting social change. To gain more insight, we redefine social innovation: A solution to a social problem that is more effective, efficient, sustainable or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals or businesses.

Social innovation across four sectors

Social innovation does not refer to any particular sector of the economy, but to innovation in the creation of social outputs, regardless of where they emanate. As such, social innovation can take place in all four sectors:

  • The non-profit sector – for example, taking youth at risk and pairing them with university graduates in challenging schools to inspire, motivate and encourage them to become worthy citizens. Another initiative is offering homeless people a home by teaching them to work with recycled materials or giving them a job renovating and reselling donated furniture, enabling them to become home owners.
  • The public sector – both in terms of policies and service/business models. Examples include providing unemployed youth with entry-level positions (including job shadowing, learnerships or apprenticeships) after a process of job readiness or skills development and government providing incentives for companies and employers to provide opportunities for unemployed, uneducated youth.
  • The private sector – for example, ethical finance, markets for social or environmental goods, or what the social entrepreneur and civil society leader Muhammad Yunus calls “social businesses”. In essence, to create new forms of businesses that offer social return on investment as opposed to pure for-profit businesses.
  • The informal sector – which plays a critical role in the creation of social movements such as the slow food movement, which started in Italy but has swept across the globe. Another example is restaurants using surplus food to distribute to homeless people, or donating it to schools to use as part of feeding schemes, in essence creating a circular economy.

Next Generation draws heavily on this analysis in formulating our own typology for social innovation which we outline as follows:

  • New products, such as assistive technologies developed for people with disabilities, e.g. voice synthesisers and Braille readers.
  • New services, such as mobile banking platforms, e.g. MPesa or Zoona in Kenya.
  • New processes, such as continuous improvement methods and crowdfunding, e.g Thundafund.
  • New markets, such as Fair Trade, or responsible investing indexes.
  • New platforms, e.g. Tyze, which helps older people track informal and formal care available to them.
  • New organisational forms, such as community foundations or trusts, cooperatives, community owned interest/shareholding in companies or networks, e.g. empowerment funds or accelerators and incubators.
  • New business models, such as social franchising, or just-in-time models applied to social challenges, e.g. the Aravind Eye Care System in India, which carries out 175 000 free and low-cost cataract surgeries and some 100 000 other eye surgeries and laser procedures every year at its five main hospitals.

Social innovation in Africa

Many African social innovations arise in response to unmet social needs and the lack of access to basic resources. It is common knowledge that Africans are “creative” when it comes to finding ways to face and overcome their problems. This echoes the social innovation theories which recognise the creative capabilities of ordinary people to be “heroes” of everyday life by creating and developing new solutions without expert guidance or government support. African social innovation initiatives are also not strictly related to income generation for low-income or poor groups, i.e. they go beyond what we know as entrepreneurship, based on offering new products or services.

The main social innovation focus in Africa is on alleviating poverty, marginalisation and exclusion, while ensuring that progress is sustainable in economic, environmental and socio-economic terms. Most social innovations in Africa are bottom-up and focus on empowering women, the youth and other disadvantaged groups, as well as developing human resources and knowledge.

At the moment, and in relation to social innovation, aspects of development are the primary focus, especially employment and job creation. Both are essential for the medium- to long-term prosperity of the continent, and therefore also for societal stability, tackling migration and providing resources for welfare.

Social innovation in Africa also encourages contribution and participation from the public, private and civil sector. The traditional way of dividing responsibility between politics, business and civil society is obsolete. Social innovations are much more than just social entrepreneurship or supplying solutions the market cannot solve itself.

In addition to directly addressing social problems and needs, social innovations serve to develop the skills, competences, awareness and confidence of individuals and groups, so they are better able to address their own problems and, perhaps more importantly, create and exploit their own opportunities in the future.

Author Reana Rossouw is one of Africa’s leading experts on social innovation, sustainable development, shared value and inclusive business strategies. As director of Next Generation Consultants, a specialised management consultancy, she believes strongly in contributing to the development and capacity-building of the sector. She presents practical, useful, interactive master classes on (1) Stakeholder engagement and management, (2) Human rights management, (3) Strategic social investment and (4) Monitoring, evaluation, impact and return on investment assessment. See the full brochure (including dates and booking details).

Social innovation is the core of Next Generation’s work. Through our advisory, research and strategic work, we aim to solve social problems through social innovation, and in the process create shared value and social capital.

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