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Social Innovation

August 17, 2012

What is social innovation?

A simple answer might be new approaches to addressing social or environmental issues. Sometimes combining profit-generating mechanisms with environmental or social purposes in new, hybrid organisational models. The concept of an emerging fourth sector captures the distinction nicely:

There’s certainly a sense that the division of society into three sectors isn’t working out that well. Do we think of these as legal or conceptual categories? If they refer to the tax status of an organisation, the fourth sector is imaginary in many countries. But legal categories say little about the real motivations of people directing the actions of organisations.

I’ve been interested in how these dynamics show up in people’s lived experience. Why do people choose to dedicate their time and energy to work in a sector that doesn’t (yet) exist in many jurisdictions?

Jim Collins developed his ‘hedgehog’ framework in his book Good To Great to explain why some companies are more successful than others. This has sometimes been adapted as a way of considering individual career aspirations:

I’ve thought about the challenge of the social entrepreneur in a similar light, although I’d add another facet:

A simpler way to put it might be serving your evolutionary purpose, or simply finding you place in the world. But then what did we invent venn diagrams for?

As a historical narrative.

It is now twenty years since the Berlin Wall fell and Francis Fukuyama pronounced his now infamous end of history thesis. Although much ridiculed he was correct in the sense that the chief ideological struggle of the twentieth century – the argument over the best economic mode of organisation between capitalism and communism – was over. The problem has been, notwithstanding the environmental consciousness that emerged in the 1970s, citizenry were left largely with a hollow vestige of a two-pronged political compass. The old big government and public services Left, sceptical of encroaching privatisation of State services under arguments of market efficiency and consumer choice joined forces with the environmental movements in blaming big business and multinational companies for rapidly increasing environmental destruction and toxic industrial emissions (part of the Left tried to navigate this divide through the Third Way politics of Tony Blair, Gerhard Schroeder and Bill Clinton, but there was ultimately little ideological integrity or a convincing narrative over the long term).

The political Right, or at least the business community confronted with the claims of ecological and community destruction of a pathologically individualism and market driven social model saw genuine problems as an attempt by the Left to impose older social and economic models (or the conservative and traditional Right – threatened by shifting populations and power dynamics of the twenty-first century retreated into xenophobia couched in a mythic nationalism and a return to ‘values’).

Under the radar of these macro-dynamic movements, quietly and largely ignored by established commentators and the mainstream media has been a loose network of individuals and organisations under the umbrella title of ‘social innovation’.

This holds promise on several fronts – markets, capitalism, marketing, innovation and design. Capitalists have argued the superiority of their model on two fronts. Firstly, that human planning could never compete with the organic flexibility and emergent properties of markets. Secondly, that individual agents freely engaging in voluntary exchange was the most ethical way of structuring society (over say imposing taxes and redirecting resources).

Social entrepreneurs aim to emulate the small scale, flexible, niche market dynamics of start-ups – many having to refine their costs, communications and practices through facing the discipline of the market.

Yet they recognise that simply pursuing profit is not enough. Adam Smith’s dictum –‘it is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest’ is as pithy summary as any of the philosophy of modern capitalism. Perhaps in the high age of eighteenth century mercantilism and State intervention (and what many today would consider widespread material deprivation) a powerful argument for the social utility and wealth generation of free trade may have been an insightful public challenge. But today the context is different. In the developed world we largely face social problems that the market alone can’t solve, in fact many seem to be created by the encroachment of the market into almost all domains of human experience . Equally, many individuals are looking for greater meaning through their work than mere financial compensation or corporate status. Many want to leave a greater legacy than maximising shareholder profit. At least attempt to leave the world a little better than when they entered it.

For what it’s worth, I don’t see social innovation and entrepreneurship as the ‘answer’ to our current civilisational crisis, I believe we will need a radical restructuring of economic and social architecture towards localised creation, production and consumption. I do however believe the field signals an important transition towards a culture where people creatively align their personal gifts with their understanding of planetary need.

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