Stanford has a magazine dedicated to it. The EU has a competition about it. The Bayer Foundation has an award dedicated to it. Social innovation: it’s the word on the tip of everyone’s tongue (or fingers, if they’re typing about it). Coverage of social innovation has reached a fever pitch in recent years. Don’t be fooled into thinking that the concept is new, though. Ashoka has been funding what we would now call social enterprises since the 80s, and institutions as renowned as Duke University have been publishing on the topic since at least the late 90s.
Though the general public may remain hazy about the exact age of the concept of social innovation, no one is questioning that it will stick around. The (admittedly justified) breathless coverage of this topic often leaves the most basic questions unanswered. This article will take you through three of the most common misconceptions people have about social innovation and entrepreneurship.
Social innovation is local.
Community. It's a word you will definitely encounter as you dive deeper into the subject of social innovation and entrepreneurship, and for good reason. As noted above, central precept of such initiatives is that they address the most pressing social and environmental issues. Often, this means going against the grain of today's global-is-the-new-local, debt-funded expansion frenzy of the predominant startup culture. Social innovations address problems in their own backyard.
Whether that's addressing obstacles to treating diabetes for bottom of the pyramid patients in Mexico or the labour force integration of the deaf community in Slovakia, social innovators don't look far to find the problems they dedicate their time, energy, and resources to.
Social innovation is not about one-size-fits-all solutions.
The need to confront some of society’s most pressing problems in a range of sectors means that the very foundation of social innovation and entrepreneurship is the willingness to continuously adapt their solutions to best address problems that society has deemed too difficult or expensive to address. Social innovators employ a whole range of tools and methodologies to accomplish this. Design thinking methodologies, for example, include a range of stakeholders, including end-users, in the design process. This allows social innovators to ensure that the solutions they propose are adapted to the needs of their end-users and don’t unintentionally exclude or overlook affected populations.
Impact management is another good example of this characteristic. Social innovators continuously monitor and evaluate the progress they are making towards effecting change in the communities where they work. This process allows them to alter their approach to keep up with changes in their implementing environment and ensure that they don’t remain stagnant in the face of dynamic complexity.
Social innovation is not just a code word for non-profit.
Make no mistake: social innovations can have a business model behind and turn into social enterprises. What distinguishes them from traditional businesses, is the willingness to let the generation of private value play second fiddle to the generation of social value. Social enterprises can take loans, form partnerships, and invite capital investments just like any other business.
That being said, social enterprises that are set up as non-profits distinguish themselves from their counterparts by their dedication to the development of a sustainable income stream. Grants and charitable contributions may support the enterprise’s operations, but they should not comprise the sole revenue.
This flexibility allows for innovative concepts, like the revenue-sharing model of Project Soar. Education programs for young girls are funded through revenue generated by the business of a boutique hotel and fashion line in a nearby town in Morocco. No matter what the case, social enterprises seek out funding from both the government, the private sector, and the public at large to accomplish their goals. They’re not limited by any one model.
So, are you hooked on the topic? Are you interested in seeing how social innovation works in practice and how you can be part of the movement? Join our new online course that will lead you through all the steps to take action and make a change in your community. It’s easy and it’s free, so what are you waiting for?