Social innovations: paths toward positive change

Social innovations aim to improve people's lives by combating social injustice, increasing educational opportunities, protecting the environment, and much more. Accordingly, social innovation can be defined as follows:

What are social innovations?

Social innovations are creative ideas and measures for overcoming social challenges that address both known and new problems. They are accepted and applied by the social groups concerned, promote the common good, and make a positive difference to people's lives.

By working on corporate social innovation, companies can have a positive impact on society and increase their commercial success at the same time. Once this facet is added, the following definition of corporate social innovation emerges.

What is corporate social innovation?

Corporate social innovation simultaneously pursues corporate goals and achieves a social impact. This type of innovation aims to contribute to business development and profit growth as well as to specifically address certain sustainable development goals (SDGs).

The importance of social innovation

Social innovations differ from purely technical innovations in certain ways. This makes it more difficult to assess their degree of novelty. As this type of innovation relates to social processes, it is particularly concerned with changing existing practices or establishing new ones. 

Social innovations have a strong normative character and are an expression of a conscious examination of ethical principles and social needs. For this reason, social systems, networks, and relationships must be dealt with more intensively during the innovation process. Innovation managers who aim to create social innovations must therefore work with a very particular trade-off, because corporate social innovation means

1. creating something new that contributes toward commercial success. 
2. creating something new that aims to have a social impact. 

Under such conditions, it is challenging to create something new, as the demands on the innovating company go beyond traditional innovation goals, such as tapping into new markets or increasing profits. 

Corporate social innovation: businesses and their social responsibility

Ideally, corporate social innovation is about finding innovative solutions that have a positive impact on people's lives and create social benefits. This aspiration to improve living conditions or to achieve SDGs, for example, must be reflected in the innovation strategy of a company that is geared towards the future. And this brings another type of innovation onto the stage that an innovation team must master, in which social intrapreneurs, for example, become part of innovation management. 

But before we get to that, let's take a closer look at corporate social innovation. Let us clarify two related terms: 

• Corporate Social Responsibility (CSR) comprises the voluntary assumption of ecological and social responsibility by companies over and above legal requirements in order to maximize positive effects for society and stakeholders. Studies show that Corporate Social Responsibility is beneficial in the long term, as it improves relationships with stakeholders, and companies are perceived as being responsible. There are increasing legal requirements, such as a CSR reporting obligation, which entail more commitments.
• Social entrepreneurship goes beyond CSR and combines economic efficiency with social goals. It aims to offer customized solutions to social problems and is run by both nonprofit and profit-seeking companies to assume social responsibility and evaluate social benefit.

Companies can fulfill their social responsibility in various ways. For example, they can enter into partnerships with nonprofit organizations, provide resources for social projects, support social entrepreneurship, or implement sustainable business practices. Through these measures, companies can make a positive contribution to society and increase their business success at the same time. 

Innovation managers should ensure that social innovations are understood to be part of the corporate strategy and values. Otherwise, the results of corporate social innovation initiatives can have the opposite effect if, for example, accusations of greenwashing or fig leaf measures are raised. 

Examples of successful social innovations

Grameen Bank is regarded as one of the most successful examples of social innovation in the field of microcredit. Founded by Muhammad Yunus in Bangladesh in 1976, Grameen Bank has provided access to finance for millions of people in disadvantaged communities, particularly women who have traditionally been excluded from conventional banks. The following example of social innovation from Fronius illustrates that industrial companies can also boost added value and business success with social innovations. 

Example: Fronius, education initiative in India

The increasing demand for qualified welders in growth markets, in countries such as India, poses a challenge for manufacturing companies. However, the Austrian company Fronius, which specializes in welding technology, photovoltaics, and battery charging technology, developed an innovative approach to the shortage of skilled workers in India, which was presented at the Zukunftsforum Oberösterreich 2024 (Upper Austria Future Forum 2024). 

In response to the shortage of skilled workers, a training program was launched for women and men in India. The concepts for promoting the vocational training of welders were developed taking into account national circumstances and implemented in cooperation with educational institutions, government organizations, and industry partners. In my opinion, this is clearly a social innovation. 

The program meets two requirements for corporate social innovation: 

1. People are offered training opportunities that open up better job prospects for them (SDGs).
2. The program contributes to corporate goals and indirectly contributes to the company's success. 

The second point provides the economic advantage for Fronius. The training of skilled workers by the company strengthens the business relationship with customers and at the same time increases brand awareness among skilled workers. This is why this particular social innovation is a good example of corporate social innovation.  

Social intrapreneurs – ways to implement social innovations

Each type of innovation places its own demands on the development process, including corporate social innovation. Intrapreneurship programs that focus on social innovation, for example, can make it easier for companies to work on new things that combine entrepreneurial interests and social impact. Intrapreneurship programs are suitable because

1. the framework within which work is to be carried out on new things is defined in advance and
2. the participating intrapreneurs are professionally supported and trained. 

The last point in particular is important, as the implementation of social innovations requires a deeper understanding of existing social practices, the prevailing system, networks, and relationships. Successfully establishing something new under these conditions requires

• a holistic observation and analysis of social structures,
• the identification of needs and challenges within society,
• the ability to develop incentives to change an existing situation, and
• the creation of cooperations and partnerships with relevant stakeholders.

In such programs, social intrapreneurs (and thus the organization) learn to work out the quintessences from these basic requirements and to develop an idea for a social innovation into a marketable concept.

Social and innovative can become a formula for success for companies in the future. Companies that integrate social innovations into their business model have the opportunity not only to bring about positive changes in society, but also to ensure long-term sustainability and competitiveness. By focusing on social responsibility and developing innovative solutions for social challenges, companies can create added value that goes beyond financial profits.

Conclusion

The complexity with which we are confronted in the economy is increasingly reflected in the types of innovation that are in demand. Nowadays, the answer is no longer necessarily the next product, service, or process innovation. And developing a new business model is not always the right answer. Progressive companies have to deal with system innovations or social innovation.

When implementing social innovations, a holistic and integrative approach is required that goes beyond conventional product or process innovations. The aim is to identify current societal challenges and offer a response to existing social, communal, or environmental problems with forward-looking solutions. These must be implemented in close cooperation with relevant stakeholders in order to achieve a sustainable and positive impact on society. At Lead Innovation, we are at hand to provide support by offering tailor-made solutions for the strategic orientation, organizational development, and concrete implementation of social innovations. Our expertise and experience enable companies to effectively and efficiently realize social innovations and thus make a significant contribution to social development.

Sources: 

[1] Alexander Kesselring, Michaela Leitner (2008): Soziale Innovation in Unternehmen. 

[2] Jeff Snell (2020): Social Innovation.