| |
Ethos Perspectives
Social Innovation
In 1976, a professor of economics from Bangladesh gave a total of US$27 in tiny loans to 42 people. From those humble beginnings, he founded a bank which today serves over 6 million poor families with loans, savings, insurance and other services, having disbursed some US$6.6 billion in micro loans, and has been an inspiration and model for microfinance institutions around the world. In 2006, the Grameen Bank (GB)—its name derived from gram, the Bengali word for "village"—and the founder, Professor Mohammad Yunus, were jointly awarded the Nobel Peace Prize for their astounding achievement and vision in alleviating poverty.
GB reinvented conventional banking practice by removing the need for collateral, and created a banking system based on mutual trust, accountability, participation and creativity. Credit becomes a cost-effective tool against poverty, and serves as a catalyst in the overall development of socio-economic conditions of the poor. By making financial resources available to the poor on terms and conditions that are appropriate and reasonable, Prof Yunus envisioned that "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder."
In this issue of Ethos Perspectives, we look at some ideas in "social innovation", and how everyday and seemingly insurmountable social challenges—those that conventional means and wisdom have fallen short of addressing—are creatively tackled and solved by individuals and organisations with the ingenuity and tenacity to overcome them.
WHAT IS SOCIAL INNOVATION?
Social innovation, at a basic level, refers to innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly distributed through organisations whose primary purposes are social, as opposed to business innovation, which is generally motivated by profit maximisation and distributed through organisations primarily motivated by profit maximisation. This straightforward definition provides a reasonable theoretical starting point, even as we recognise that distinctions may be blurred in reality; for example, models of distance learning that were pioneered in social organisations were later adopted by businesses, and, conversely, for-profit businesses that have innovated new ways of integrating disabled employees at work. Philis Jr. et al elaborate that a social innovation is "a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions, and for which the value created accrues primarily to society as a whole rather than private individuals". Recent examples of social innovation include: microcredit and consumer cooperatives; holistic healthcare and hospices; the fair trade movement; and Wikipedia.
Social innovation often manifests as social enterprises, which are businesses which fulfill social causes—they have a second bottom line in addition to profit maximisation, using business principles and methods to achieve social change. Apart from bringing in revenue, social enterprises may also provide skills training and/or employment opportunities to the disadvantaged (i.e., those who have higher than usual barriers to employment, such as ex-offenders, disadvantaged women, or persons with psychiatric conditions) as a means to reintegrate them into society and encourage them to be self-reliant. Social enterprises are however not charities, but revenue-generating businesses.
Although a social enterprise need not necessarily be predicated on innovation (it just fulfils a business need), and important social innovations are not necessarily revenue-generating, social innovations tend to have greater impact when they manifest as successful, sustainable social enterprises. The social entrepreneur, using business principles to run a venture to make social change, aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large. The social entrepreneur’s value proposition targets an under-served, neglected, or highly disadvantaged population that lacks the financial means or political clout to achieve the transformative benefit on its own. This does not mean that social entrepreneurs shun profit-making value propositions. Ventures created by social entrepreneurs can certainly generate income, and they can be organised as either not-for-profit or for-profit. What distinguishes social entrepreneurship from commericial entrepreneurship is the primacy of social benefit.
I I I |
|
