We hear a lot about social impact these days without being quite sure what it means. Social impact is a consequence of social innovation, because social innovation sets out to answer social needs of every kind.
Social innovation is another concept we do not always grasp. It has been around a long time, but it keeps gaining visibility. There is more funding for social innovation projects, and more companies paying attention to it.
In this article I want to clear up what social innovation actually is, and introduce a few projects working in the field.
What social innovation is
Social innovation happens when the process of social entrepreneurship succeeds, meaning a new, fitting, creative answer has been found to a social problem. The consequence of that answer is positive social impact.
So we can say that social innovation is the process of developing and implementing effective solutions to social and environmental questions, often systemic ones, in order to drive social progress.
Social innovation assumes there is a social problem, that these problems affect our collective life and our quality of life, and that they vary with geographical, historical and socioeconomic context. Solutions generally demand active collaboration between government, business and the non-profit world.
What is the difference between social innovation and social entrepreneurship?
The process of developing and implementing innovative social solutions (products, services, even processes), is also known as social entrepreneurship. Social entrepreneurs still grow their businesses, and still take profits from them.
Social innovation, meanwhile, is the set of people and organisations that practise and promote social entrepreneurship.
So the value of social innovation lies in delivering better quality of life to communities, to society and to the world.
Social innovation in companies, CSR and CSI
Once you understand what social innovation is, the first reaction is often that it must be hard to apply, especially inside a company. There is a tendency to picture something internal, aimed at employees, with no outside public involved… but that is not quite how it works. Beyond applying the idea to the organisational structure, companies can extend the strategy to customers, suppliers and a good deal more. Let us take it in order.
Corporate Social Responsibility (CSR) is a concept many companies already know well: a social commitment the organisation takes on voluntarily.
These days, though, people talk about CSI, an evolution of CSR. CSI stands for Corporate Social Innovation.
Corporate Social Innovation (CSI), a relatively new term, describes companies that build social innovation into their corporate activity. Growing complexity and the accelerating pace of change in society demand a new role from companies. Given those conditions, corporate social innovation is a route to long-term business growth, resilience and prosperity.
Plenty of multinationals and recognised global brands are already investing time and resources in shifting business practice from top-down to bottom-up. That shift towards more sustainable and inclusive social business practice (co-creating innovative solutions to economic, social and environmental questions, using corporate resources efficiently), is what we call corporate social innovation.
Companies need to know which needs they are answering. Some go further, to understand the social conditions underlying those needs and what they could do to change them. Out of that process come business models, and a clear view of the resources required to put a solution in place.
My own view is that companies have a central part to play in social change. Which is why I argue that social innovation should be built into a company’s vision, its management and its ethical values, whether the thinking is about sustainability or about the impact on someone else’s life.
What companies get out of it
Companies create more long-term value by integrating a corporate social innovation strategy, and it shows up as:
- Stronger brand value
- Business growth
- A more competitive workforce
- Innovation
- Return on capital
How corporate social innovation gets implemented varies from company to company, and shows up in different areas:
- Corporate philanthropy: the company giving directly to charities;
- Corporate volunteering: letting employees volunteer with NGOs, or contributing the company’s own product to support them;
- Corporate marketing: communicating with impact on behalf of different causes, to educate the audience and grow profit;
- Strategic philanthropy: making philanthropy, marketing and volunteering part of the company’s objectives;
- Business integration: using the company’s resources to have positive social and environmental impact;
- Business as social leverage: business strategies that lead to positive social change;
- Business with a social mission: using the business as the vehicle for solving social and environmental problems.
Examples of social innovation in companies
CISCO
The technology company started by donating its products to a local school, and found they ended up unused, by students and teachers alike. Cisco realised it needed to train teachers and students, because having the products was not enough on its own. So it launched the Cisco Networking Academy, which provides education, technical training and career guidance for students and teachers, alongside the donated products. The programme is now a global movement across 180 countries.
NATURA
This Brazilian cosmetics company is a good example of a business that turns its purpose into a value proposition for the customer. Its mission (bem estar bem, roughly “well-being, well”), guides product innovation towards preserving biodiversity and the traditional knowledge and culture of the Amazon. The Ekos range is sustainable and biodegradable, and Natura set up agreements with each of its 2,500 small suppliers to guard against “biopiracy”: the unethical commercialisation of the region’s genetic and cultural heritage.
IKEA
IKEA works to increase its impact by optimising its value chain. The starting point for lasting change with suppliers is investing in them and in their employees, the average supplier relationship runs to 11 years.
It has also worked with UNICEF and Save the Children on child labour in India, developing, with their support, a code of conduct and a monitoring system that holds every supplier to that agreement.
DANONE
The Danone group built several projects on the back of research covering nutritional, socioeconomic and cultural data, looking at the habits and health problems of populations across 52 countries. One project was aimed at young people in Brazil, where Danone reformulated a best-selling cheese, cutting the sugar and adding vitamins. Another was in Bangladesh, where children eat 600,000 portions a week of Danone’s Shokti-Doi, a yoghurt rich in essential micronutrients that helps tackle malnutrition. In Senegal, Danone developed a product made from local grains and a little milk that can be stored at room temperature.
COCA-COLA
In 2009 Coca-Cola launched the Coletivo initiative in Brazil. The model works through local NGOs to run training programmes for young people in retail, business development and entrepreneurship. It also involves strategic partnerships with local retailers to handle specific improvement projects. Coca-Cola’s expectation was that incremental sales through stronger retail channels, plus brand recognition in the target communities, would outweigh the investment needed to produce a measurable change in young people’s skills and employability in the sector.
Social innovation in Portugal
Social innovation began gaining recognition in Portugal largely thanks to Portugal Inovação Social, an initiative coordinated by the Portugal Social Innovation Mission Unit (EMPIS), set up to promote social innovation and build the social investment market in Portugal. The initiative is a first in Europe: Portugal was the only country to set aside part of its EU funds up to 2020 specifically to test new forms and instruments of financing meant to encourage social innovation and social investment.
As of writing, the initiative has approved 523 projects and 73 million euros of funding. Its main objectives are:
- Promoting social innovation and social entrepreneurship in Portugal;
- Supporting innovative answers that complement the traditional ones;
- Building the social investment market;
- Building capacity among the people working in social innovation and entrepreneurship;
- Improving the answers social organisations offer, contributing to their economic sustainability.
A range of players (in incubation, capacity-building, business and investment), take part in growing and establishing social innovation from the north of Portugal to the south. Among them: Casa do Impacto, IRIS, Santa Casa da Misericórdia, IES, Go Parity, Maze, Speak, the Calouste Gulbenkian Foundation, the EDP Foundation, Human Power Hub, Palhaços d’Opital, and many, many others.
Social innovation projects in Portugal
Thanks to the investment going into social innovation, more and more projects are appearing across the most varied fields, education, health, digital inclusion, justice, employment and plenty more. A few examples:
JOBS AIRPORT
The Jobs Airport project set out to build a youth incubator for social entrepreneurship and to help with youth unemployment in emerging areas of the municipality of Almada. It has capacity for up to 300 young people, so they can contribute to the economic development and the social values of the communities they come from.
PORTA 55+
A project aimed at creating the conditions for ageing to be lived as well as it possibly can be. It trains older people to work alongside other older people, easing loneliness and isolation through mutual support.
CUIDAR DE QUEM CUIDA
This project (“caring for those who care”), sets out to support the informal carers of people living with some form of dementia. These are people society often forgets: they carry an enormous daily load, and their priorities are built around someone else’s care.
There are many more projects beyond these, spread across the country, and they are worth getting to know.
To finish: social innovation matters, and it can be taken up by communities and by companies alike, because both have a central and complementary part to play.
So if you have an idea, or a company, do put forward and build social innovation projects, the result is a sustainably better quality of life for everyone.
