Social Innovation

  • Irina KrasnopolskayaEmail author
  • Gulnara Minnigaleeva
Living reference work entry



Social innovation is a process that results in a new and better solution (products, services, models, markets, processes) to meet social needs. It is specific for a particular territory or context and leads to new or improved capabilities, relationships between participants and end-users, or use of assets and resources.


Social innovation is the application of new solutions to social problems in areas such as welfare, health, education, youth unemployment, adaptation of migrants, and territorial integration of regions. Social innovations allow nonprofits and other organizations to meet needs of society more effectively than existing options, respond to social challenges, offer new solutions to social problems, develop social interaction, and create alliances (Caulier-Grice et al. 2012). There are different types of social innovations. Most commonly the distinction is between product or service innovations and process innovations.

Social innovation is a multistage process rather than a new idea or a result. Other typical features of social innovation include a social purpose, perception of being new in a certain context, close cooperation and new modes of interaction between different stakeholders, joint creation with end-users, and, to a less extent, an entrepreneurial character.

Social innovations may take place in all sectors of economy as a response to a crisis or as a result of a mismatch between the social needs of citizens and available options to satisfy their needs. More often they emerge at the hybrid intersections between different sectors of economy. Today even in the countries where state traditionally assumed the primary responsibility for providing social services, other interested parties, such as nonprofit organizations, voluntary associations, enterprises, and individuals, are starting to actively participate and cooperate in the process of creating new solutions to satisfy social needs together.

Nonprofit organizations are very important for creating social innovation. They possess a set of distinctive characteristics that contribute to their high potential for producing and distributing social innovations. In particular, nonprofit organizations follow social mission and represent the interests of certain groups, recipients of their services, who are end-users (Anheier et al. 2014). During the process of social innovation nonprofit organizations often form new relationships and networks, modify the ways of interactions, and may contribute to changes in organizational structures.

If an organization embarked on a social innovation process also has a purpose to maximize and distribute profit, it acts in the realm of social entrepreneurship. Business organizations, which have both a social mission and a goal to maximize profit, are called social enterprises. Social enterprises may implement social innovations independently or participate in a social innovation process with other organizations.

Types of Social Innovations

Social innovation is the application of new solutions to social problems. As such it may be categorized depending on whether the innovation involves new service concepts, new interfaces for client communications, or new systems of service delivery. Other classifications include differentiations by the source of leadership which may be driven by the supplier, the client, the company itself, the service user, or more general paradigmatic changes. Some other approaches distinguish product, service, social, organization, governance, system, and marketing innovations. Most often typologies distinguish between product and process innovations, but some social innovations might cut across more than one type.

Service or product innovations offer new interventions or enhanced services or products to meet social needs. Product innovation refers to innovation as an outcome that manifests itself in new products, product features, and production method. The proposed solution should be specific for a particular territory and beneficiaries. New professional competencies in the field of social services are evolving in the innovation process. Examples of such innovation are car-sharing, zero energy housing developments, and new labor opportunities to reduce unemployment of people with disabilities or youth.

Process innovation, instead, concerns the organizational and social processes that produce innovation, such as individual creativity, organizational structure, environmental context, and social and economic factors. Process innovations are mainly related to сoproduction of new services as well as to reorganization of the decision-making process which previously either did not take into account interests of all relevant stakeholders or was imbalanced. Innovations are associated with power relationships as delegation of authority, for example, from the state to new actors, including representatives of civil society. Process innovations produce new patterns of cooperation that facilitate community activities. Examples of a processs innovation include participatory budgeting, crowdfunding, or online systems of participation in decision making, via which interested parties may suggest a particular course of action in a project of a nonprofit organization or government, or vote for them.

Characteristics of Social Innovations

Social innovation is a social phenomenon with several distinctive features. In particular, these features include a social purpose, perceived novelty of socially innovative practices in a certain context, significant changes in procedures of stakeholder interactions and in relationships between them, engagement of end-users and beneficiaries in the process of co-creation and entrepreneurial nature.

First and foremost, social innovation is rooted in a social purpose, helps to solve social problems and provide social services in the community. Social nature of innovations implies meeting neglected social needs and orientation towards well-being of beneficiaries.

Furthermore, social innovations create practices perceived to be new in a particular context or community. Social innovations address actual and legitimate social problems, which means there is a basic agreement within the community that a particular social problem needs to be addressed.

Social innovation is a multistage process rather than a stage of initial creation of a new idea. After its initiation a new idea needs to go through several stages: developing of a viable plan, testing, implementing, and, if successful, scaling and diffusion for the benefit of recipients. The process implies specific challenges for managers of all interested organizations, who must incorporate special procedures to allow the aforementioned stages in their daily routines. Moreover, for the success of a social innovation it is crucial to take into account the interests of all stakeholders.

Close cooperation and changes in the existing models of stakeholder interactions and relationships are essential for a social innovation to take place. Private companies, nonprofit organizations, and citizens operate jointly in the social field (Osborne and Brown 2005). Organizations no longer innovate in isolation but do so through a complex range of interactions with external actors. So-called hero-innovator whose creative genius allows creating and promoting innovations is more a myth than a reality. Individuals and separate organizations cannot convert an innovative solution to the next stage of development independently by working insilos. Innovation depends on the willingness of governments, nonprofit organizations, and other interested parties to participate in an open process of exchange and joint use of experience, knowledge, skills, technical support, and other resources.

Social innovation often happens at the hybrid intersections between different sectors of economy (Sørensen and Torfing 2015). The era of clear separation between sectors is over. Business and the third sector are actively acquiring new roles in provision of social services. The implementation of social innovation increasingly depends on the joint activities of government, nonprofit organizations, and business. There is a considerable current overlap between the nonprofit sector and the market which modifies existing patterns of operation and introduces new actors to the field. Such hybrid organizations as social enterprise and new forms of cooperatives fulfill various functions in the social sphere, along with or instead of traditional nonprofits and public organizations.

Entrepreneurial character is also an inalienable trait of social innovation. In this concern social innovation is similar to social entrepreneurship. Both phenomena infer social missions, involve modification of existing socioeconomic arrangements, and contribute to economic growth. For example, some social enterprises solve the problem of unemployment, especially for vulnerable groups, like persons with disabilities, provide or expedite access to services, and reduce inequality. The difference between social innovation and social entrepreneurship is that the latter also implies goals to maximize and distribute profits.

Co-creation with end-users is another important characteristic of social innovations. Co-creation, which is sometimes called coproduction, means active engagement of multiple agents, including end-users, in various stages of the social innovation process. End-users’s experiences, needs, and desires are incorporated in the process of social innovation and therefore contribute to solving their own social problems. Co-creation may involve interested parties from nonprofit organizations, public sector providers, policymakers, as well as businesses. Co-creation implies crossing boundaries between organizations and sectors, as well as minimization of vertical, bureaucratic, and paternalistic principles in formation of public policy.

The Role of Nonprofit Organizations in Driving Social Innovations

Nonprofit organizations are believed to be the primary sources of social innovations. It happens due to such inherent characteristics as their social mission, high aptitude for experiments, sensitivity to the needs of their clients, and capacity of engaging volunteers, different stakeholders, and attracting assets from various sources. Innovativeness of a particular nonprofit organization largely depends on its management.

Two basic characteristics of nonprofit organizations are their social mission and high aptitude for searching and using experimental approaches to serve social needs and create common good. Nonprofit organizations are able to develop and implement innovative services or new methods of delivering community services even in such cases when expenses are too high. In such situations governmental organizations and businesses might withdraw themselves because they act in the conditions of more strictly regulated system. The revenue structure of nonprofits is usually quite diverse, which contributes to their flexibility in using the funds, and therefore allows for experimental approaches to satisfying the unmet needs.

Also, the nonprofit sector is more effective in being sensitive and responding to societal signals neglected by the other sectors. Nonprofits are more responsive to the needs of vulnerable target groups and are generally more successful in reaching marginalized population. Direct proximity of nonprofit organizations to beneficiaries increase validity of produced social innovations to the beneficiaries’ interests and values.

Furthermore, nonprofits have a capacity to involve various actors and volunteers in their interactions, even if these actors have not cooperated in addressing any social issue or their communication has had a hierarchical nature before. Volunteers play a central role in creating social innovations, as they constitute an additional link between nonprofit organizations and communities, their values, objectives, needs, and competencies. From the institutionalism and human agent change perspectives volunteer engagement is considered to be correlating with an individual’s role in social transformations and modifications of current institutional practices. Individuals problematize, redefine, and restructure social and organizational boundaries of institutions and roles (Edwards-Schachter and Wallace 2017). Individuals and grassroots play multiple roles in innovation processes both as consumers of social services and as actors involved in discussions of social problems and potential solutions. In accordance with these arguments it is not an organization but rather individuals who play a key role in producing social innovations. Social innovations are believed to have a higher level of bottom-up and grassroots involvement than other types of innovations.

From the organizational perspective, certain aspects of nonprofit management to a large extent define the level of innovativeness of an organization and therefore its capacity to participate in social innovations. For example, external stakeholders’ participation in the strategic management processes of a nonprofit organization (Parsons and Broadbridge 2004), close relations and frequent communications of the leader with external stakeholders, participation of the organization in professional associations and networks have a positive influence on the overall innovativeness of a nonprofit organization. Internally, more innovative nonprofit organizations appear to have enough professional employees to let them specialize in a particular job and set up a motivation system so that it promotes innovation among employees and volunteers. Well-organized communications systems between employees, volunteers, and different levels of management also contribute to higher levels of innovativeness. The board, if present, is especially important for nonprofit organizations: diverse board and the board’s inclusion in the process of decision-making increases innovativeness of an organization. The role of a leader is tremendously important in starting and advancing innovations in an organization. Besides the need for the leader’s unambiguous support for an innovation to happen, his or her personal characteristics, such as communication skills, or number of years in a leadership position may influence the organization’s innovativeness. Organizational culture fosters innovations when it is explicitly oriented towards tolerance to others’ ideas and works (Jaskyte and Dressler 2005) and hinders innovations when there is orientation towards stability, safety, and nonconflict (Jaskyte and Riobó, 2004). Inclusion of initiating and implementing innovations in the strategic plan and vision of the leader and the whole team, as well as active use of the best practices, purposeful allocation of human resources, time, and other resources specifically for innovations will also contribute to a nonprofit organization’s innovativeness (Thom 1990).

Social Innovation Research

The complex phenomenon of the social innovation has recently become the area of focused attention of researchers and is therefore still at the stage of initial understanding and conceptualizing of social innovation. The research differs in focus, methods and approaches used, scope, and regional distribution. Due to high aptitude of social innovations for solving social problems, understanding the phenomenon has become very important for governments, policy makers, and social service providers. The researchers have been able to identify the aforementioned types of social innovation, its major characteristics, and some conditions of its appearance. For example, some of the conditions include large size of the nonprofit sector and high level of grassroot activity.

Social innovation studies are conducted on at least three levels. On the first level, a case and characteristics of single innovations can be measured. On the second level, scholars analyze the societal potential of territories or societies to produce social innovations which includes analysis of framework conditions as ecosystems to social innovation. On the third level, a social effect of social innovations on the societies can be investigated and examined.

Studies can be done in quantitative, qualitative, or mixed-methods perspective. Qualitative approaches such as case studies, and interviews, allow for initial exploration of the issue and acquiring a better understanding of its nature. These approaches lead to a better grasp of the current rise and spread of social innovations. They help clarify how social innovations appear in different sectors, what policy conditions, financial and nonfinancial incentives foster social innovations, and what contributions are made by end users. Case studies of examples of social innovations are collected in such projects as Boosting the Impact of Social Innovation across Europe through Economic Underprintings (SIMPACT), Combating Inequalities through Innovative Social Practice of, and for, Young People in Cities across Europe (CITYSPYCE), Learning Innovation in Public Sector Environments (LIPSE), and Public Participation in Developing a Common Framework for Assessment and Management of Sustainable Innovation (CASI), and in the global context such projects as Social Innovation – Driving Force of Social Change (SIDRIVE) and Transformative Social Innovation Theory should be mentioned.

It is especially important for policy makers to understand to what extent public institutions, nonprofit organizations, businesses, and communities are ready or able to participate in social innovations, to what extent they already participate. Quantitative approaches help to measure that. They are typically used to identify social innovation indicators and compile indexes. For instance, Theoretical, Empirical and Policy Foundations for Building Social Innovation in Europe (TEPSIE) project proposes more than 15 different indexes, which to some extent allow to judge about the development of social innovations in a country or to make a cross-country comparison. Some global innovation measurement projects include Innovation Union Scoreboard, and Global Innovation Index. Another research approach suggests mapping of social innovations. The method implies different ways of visualizations and observation of dimensions of social innovation.

The major challenge in current social innovation research is that scientists do not have a common ground in identifying the object of the study. Its manifestations are quite diverse and scientists are still trying to clarify the most important characteristics and the way to measure them.


Social innovations are an increasingly prevalent social practice aimed at solving social problems both locally and internationally. Social innovation presents opportunities for citizen participation and cross-sector cooperation, which has high future potential for serving needs of the society. Social innovation is a complex phenomenon with a set of distinguished characteristics. It is based on a social purpose, creates practices new for a community, and is a process rather than just a new idea or a good result. It involves close cooperation of different stakeholders and often leads to changes in relationships and modes of interaction, which leads to merging of the different economic sectors, entails new forms of governance, and implies a process of co-creation with end-users of social policies or services. Entrepreneurialism is an essential trait of a social innovation, which uncovers its similarities with social enterprises. The critical distinction between them is that social enterprises besides pursuing social goals set profit maximizing targets.

A special role in driving social innovations belongs to nonprofit organizations. Besides the important role of the governments, which create favorable social, political, and economic conditions, nonprofit organizations by themselves become drivers of social innovations. It happens due to such characteristics of nonprofit organizations as their social mission and high aptitude for searching and using experimental approaches, efficiency in responding to societal signals, capacity to involve various actors and volunteers. The way an organization is managed and particularities of the management process and structures may play an important role in its innovative capacity.

Types of social innovations include innovations categorized by source of leadership, changes in products, processes, or organizational structures. Despite a lot of information already available about social innovation, it is still a relatively new concept and therefore is a focus of vigorous research and a challenge for social scientists, who are still trying to clarify the concept, its major characteristics and metrics.




Support from the Basic Research Program of the National Research University Higher School of Economics is gratefully acknowledged.


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© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.Center for Studies of Civil Society and the Nonprofit SectorNational Research University Higher School of EconomicsMoscowRussia
  2. 2.Institute for Management ResearchRadboud UniversityNijmegenThe Netherlands
  3. 3.Department of Strategic and General ManagementNational Research University Higher School of EconomicsMoscowRussia