Social Innovation

Prof Ute StephanAston University

SEFORIS Research Consortiumu.stephan@aston.ac.uk

Nottingham, 15 April 2015

Social innovation

The introduction of new or significantly improved services, products or processes, typically with the aim to enhance social and environmental impact.

Focus here: innovation in social enterprises

Why innovation? What triggered this reserach ...

Pressures on the welfare state and societal cohesion (Enormous sovereign debts, double-digit unemployment rates; 15% of the population are “officially” poor,…)

We must keep an eye on innovation & growth (social entrepreneurship benefits mainstream business/commercial entrepreneurship, can create new markets, e.g., Estrin, Mickiewicz & Stephan, 2013)

We need new solutions and experiments to generate sustainable and inclusive growth in Europe and beyond

Informed by evidence …

• from two ambitious international research projects 2008-2017

Rich, cross-country comparable panel dataset documenting the behaviors of over 500 social enterprises in 5 countries at two moments in time, currently extending to 9 countries including Russia and China.

• ‘what-works’ evidence review on how to drive social change funded by NBS

Social Enterprises are more radically innovative than Commercial Enterprises

Social Enterprises

Commercial Enterprises

%

What are they innovating?

N=309 SELUSI radical innovators

75%innovate Services

Social Enterprises are more radical Service Innovators than Public Administration Organisations

Social Enterprises

Public Administration

SELUSI vs. EU 27 benchmark

%

Innovating – with what effects?

• Innovations enhance social enterprises’ revenues and social impact

• UK social entrepreneurs estimate that

10% of current revenuesdue to service and product innovation in past year

5% of current revenues due to process innovations in past year

20% of current social impact due to service and product innovation in past year

10% of current social impact due to process innovations in past year

Key drivers (and barriers) to innovation in social enterprises

Innovation Drivers

social and environmental impact (78%)(increasing quality/spreading social impact, reducing environmental impact)

increase range and quality ofproducts and services (37%)

financial sustainability & market expansion (44%)

pressure from competitors and financing organizations (19%)

process improvements: flexibility, capacity, cost reduction (9%)

responding to regulatory change/requirements (12%)

Main driver of innovation for for-profit firms

(CIS 2006, Parvan, 2009)

(UK social enterprises, SELUSI data)

Innovation Barriers

2/3 of social enterprises experience problems to

get started with innovation activities

Cost-related - 35%lack of availability of finance 25%

cost of finance 5%excessive economic risk 5%

Internal resources - 20%lack of time 11%

lack of qualified personnel 9%(lack of IT, information about markets etc.)

Market-related – 8%uncertain demand 3%

lack of acceptance of social enterprises (SE) in the market 4%

Regulation - 5%lack of institutional support: unfamiliarity with SE 8%

government regulations 5%(UK social enterprises, SELUSI data)

How to innovate and increase impact?

How to innovate and increase impact?

Inclusive organizing Collaborating with other organizationsEncouraging employee ParticipationInvolving stakeholders and beneficiaries

Understand behaviour change to make innovations stick

Example: Collaboration with other Organizations

90% of social enterprises contribute to another organization’s innovation

80% social enterprises collaborate when innovating

By comparison, 25% for-profit companies collaborate when innovating (EU-27 benchmark, Parvan, 2009)

(UK social enterprises, SELUSI data)

Example: With whom do social enterprises collaborate for innovation?

Collaboration partners involved in social enterprise innovation processes in the past 12 months (UK social enterprises)

29%

27%

20%

14%

5%

4%

2%

non-profits

public sector

for-profit businesses

social enterprises

individuals

universities/ higher ed

professional/ industry associatons

Understand ‘behaviour change’ to make innovations stick

• Innovations for social impact typically involve changing the behavior and habits of beneficiaries, customers, individuals, or other organizations

• Field-experiment with a large telecommunications & media provider contrasting innovations suggested by social entrepreneurs, commercial entrepreneurs and company employees & managers

– entrepreneurs were better than employees at integrative thinking (solving complex problems)

– ideas of social entrepreneurs were unique in understanding and incentivizing behavior change

(Stephan, Huysentruyt & van Looy, in preparation)

So how to change behaviour …?

Our comprehensive evidence-review revealed that we already know a lot about ‘what works’

Located 10,509 literature sources  (8054 academic and 2455 business)Located 10,509 literature sources  (8054 academic and 2455 business)

Identified the 123 most relevant sources

(107 academic and 16 business) 

Identified the 123 most relevant sources

(107 academic and 16 business) 

DevelopedSocial Change Framework 

DevelopedSocial Change Framework 

Stephan, Patterson & Kelly, 2013

Social Change Framework

Motivation Capability Opportunity

Stephan, Patterson & Kelly, 2013

Example: Grameen Danone Joint Venture

• Founded in 2006 to fight child malnutrition• Nutrient-enriched yogurt at $0.07 a cup• Distributed via salesladies who get 10%

commission• Small plants use solar energy, local inputs,

biodegradable packaging• Created 1,600 jobs within 30 km of plant

Stephan, Patterson & Kelly, 2013

Example: Grameen Danone Joint Venture

Stephan, Patterson & Kelly, 2013

Key components:

Motivation, Capability, Opportunity

19 mechanisms and

13 practices of

successful change projects

Framework for creating social change

Stephan, Patterson & Kelly, 2013

Stephan, Patterson & Kelly, 2013

Example: Grameen Danone Joint Venture

Personal Reflection:Higher Education and Social Innovation Universities in privileged position to support social innovation

• New societal trends (aging, health, poverty/inequality, environment, diversity, community) beyond technology/IT first hand knowledgein HEI and wider remit for university Technology Transfer Offices to create and support social enterprise spin-out’s

• Embedding enterprise skills in the curriculum: untapped potential, esp. humanities and social science majors

• Knowledge Transfer Partnerships (KTP’s)

• Student placements in social enterprises

• Source of inspiration: Crowdsource social innovation ideas from bright students and staff, volunteering opportunities

THANK YOU - Questions? Prof Ute Stephan

Aston Business School Birmingham, UK

U.Stephan@aston.ac.uk

EU-funded Social Enterprise Projectswww.selusi.euwww.seforis.eu

Social Change Project (Social Change/Impact Wheel, Stephan, Patterson & Kelly, 2013)

http://nbs.net/knowledge/stakeholder/social-change/executive-report/