A Deeper Look at Social Innovation

Social innovation and the social entrepreneur are increasingly being referred to as one of the bricks of a new, fairer and more bottom-up capitalism. In the run up to a focus article on the Brazilian Instituo Palmas and its successful digital social money venture, Prof. Mario Aquino Alves of FGV-EAESP Brazil explores the many facets of social innovation to share a clearer view of what it is and how it works.

By Prof. Mario Aquino Alves, FGV-EAESP. Based on the research paper Digital Social Money Implementation by Grassroots Organizations: Combining Bottom-Up and Top-Down Strategies for Social Innovations, by Mario Aquino Alves, Eduardo Diniz, Adrian Kemmer Cernev, Eros Nascimento.   

It all seems so simple at first glance. There is the word social. And there is the word innovation. Not surprising then that we might initially tend to understand social innovation as innovation aimed at improving the lives of the poorer members of our society. But that interpretation may indeed be influenced by both our own culture – be it Latin or Francophone or English-speaking – or whether we work in the field of business, an NGO, or local government. In fact, as with many fields of study, its facets are multiple, each seen in a different light depending upon school of thought, policy or even values. Let’s look closer at these.

Social innovation seen from academia

Academia has traditionally associated social innovation with the literature of social and economic development with particular focus on communities. It means working directly with – and within – these especially with people living in a vulnerable context. As such, it is often the structural causes of this vulnerability – poverty, unemployment, illiteracy – that are emphasized, as well as the influence of political power and the need to mobilize people to create social change. Social innovation therefore carries with it a notion of change in behaviours and the striving to implement initiatives aimed at freeing people from their limiting social contexts and environments.

Social innovation seen from business and management

Social innovation from a business dimension tends to see things in two ways: firstly, the link to the social character of a venture, with the firm’s transactions linked to and benefitting society; and secondly, the potential of social innovation as a tool to boost entrepreneurship, collaboration between companies and NGOs, and the dimension of social business. Moreover, the role of the social entrepreneur is emphasized – those entrepreneurs who have a vision for social change, have the financial resources to support such ideas and all the skills of successful businessmen, as well as a great desire for social change. Seen from a business and management angle, the social entrepreneur may also be seen as someone who seeks an opportunity to fulfil demands that the State’s social initiatives and policies can’t or simply won’t provide.

Social innovation seen from different languages

It is interesting to note that differences in definition occur through different cultural dimensions. The French tradition of social economy, for example, sees social innovation as a keystone to representing a new response to an unsatisfactory social injustice that in all likeliness will occur across all sectors of society. It aims at the well-being of individuals and the community. American scientific research circles, however, have tended to use the notion of social innovation to sustain different theoretical and ideological positions on the nature of innovation in contemporary society. These include such concepts as Porter and Kramer’s notion of shared value creation: doing good for society is fine, but profit for business should also be a pre-requisite; or the notion that social innovation should be encouraged because its end effect is increased shareholder value.

How does social innovation work?

It is argued that social innovation may take several forms. The first, and perhaps most obvious, is that of a product or technology. Such innovations include WHILL’s new generation of wheel chairs in Japan, the Wikipedia Zero project in South Africa, where Wiki can be accessed free of charge on any mobile phone, or digital social money developed by the Instituto Palmas in Brazil. On the other hand, some researchers also define social innovation as a process, the result of cooperation between a variety of multiple actors and a collective process of learning and knowledge creation. This may also include what still other researchers see as the need for user involvement – opting to buy fair-trade products or those where a percentage of profit is transferred to community or education initiatives or even participating in the development of the social innovation itself.

Apart from its form, much depends on social innovation strategy – how it sees the light of day, is developed and sold. This inevitably involves the question of governance. Traditional approaches to social innovation have forwarded the argument that in order to achieve impact, scaling up and replication, social innovations are necessarily a process of top-down governance, especially to overcome problems in communities with low social capital or where even in the presence of some sort of social capital, rent-seeking behaviour occurs. On the other hand, the argument for bottom-up strategies also finds its place in the social innovation debate. Here, bottom-up stands for grassroots organisations, citizens, NGOs or cooperatives seizing the initiative over government or firms and taking the lead in development strategy.

Mario Aquino Alves advocates that a mix of strategies can occur – and indeed be used – to develop social innovations. His argument is that if social innovation aims to improve both the individual, the community and/or the organization/firm, then it can occur from any of these, in different forms, and from different players interacting at all levels in a relational process. Social innovation is therefore both bottom-up and top-down in nature.

By Pmorizio – Own work, CC BY-SA 3.0

Prof. Alves attempts to prove this through research into the grassroots organization Instituto Palmas in Brazil, which first grew from organizing its community and later became recognized nationwide as a model of social innovation, community empowerment and collaborative collective learning. Basing research on the relational model of social innovation, he and fellow researchers Eduardo Diniz and Adrian Kemmer Cernev, studied the non-profit organization over time, from a bottom-up period covering Instituto Palmas’ beginnings and the development of a local Community Development Bank (CDB), to a top-down period that saw it employing a replication strategy to disseminate social innovations, and finally a ‘tech venture’ period in recent times that has seen the development of digital cash – or digital social money.

As such, Mario Aquino Alves’ research provides a telling case study of how an organization that grew from local community to nationwide recognition and dissemination of social innovation employed a number of strategies that combined multi-stakeholders and multi-level involvement driven from both the grassroots up, and top institutions down. Indeed, Prof. Alves sees this combination as an essential element in the success of such an organization and its projects. A complementary, in-depth article on the Instituto Palmas experience will be published on the Council Community in early December.

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