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«OECD Innovation Strategy ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies ...»

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Market processes and the “invisible hand” are, even more than in other innovation activities, inefficient to co-ordinate these innovation activities that aim directly to address social challenges. The prospects of large profits in the social area are limited which hinder incentives to invest and commit resources to these activities − The development and diffusion of social innovation faces the traditional and well-established frontiers between disciplines, sectors, as well jurisdictional boundaries in government and administrations.

− Addressing social challenges through innovation requires the integration of competencies that are still to a large degree


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Policies need to reflect innovation as it occurs today Meeting social challenges calls for innovative solutions at all levels, from the micro-level of individual action to macro systemic solutions.

Public involvement has an essential role to play to initiate this paradigm shift and to integrate social value into incentives mechanism for innovation.

Policy makers are asked to be innovative themselves to provide new support mechanisms and instruments.

The required characteristics of the new mode of public involvement are challenging: long term forward-looking intervention, inter-ministerial, demand-side instruments combined and co-ordinated with supply-side instruments, participative, and based on foresight.

Experimentation is underway. Implemented in different environment and toward various social challenges, it should pave the way for new modes of involvement which will enhance the policy maker’s ‘toolbox’.

A wealth of dispersed, uncoordinated, experiments involving various stakeholders in different learning spaces are already in place and provide key lessons on which to build future actions. Providing research funding and maintaining the research system as well as bringing together the natural sciences and the social science are essential. The aim of the two OECD workshops was to exchange and learn from these initiatives.

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Science, technology and innovation (STI) have long driven advances in productivity, and one cannot but notice that much of the thrust and efforts to mobilise STI for society have focused on economic objectives such as competitiveness and economic growth. However, the current economic crisis reminds us of the importance of mobilising STI not solely for generating economic benefits, but for anticipating and responding to societal needs. Therefore, it is opportune to look into ways to nurture scientific and technical “seeds” that may later bear fruit in addressing social challenges, but that may need more than the invisible hand of the market to begin flourishing. In order to explore these issues and provide practical recommendations, Japan as Lead Country assisted by CSTP Steering Group Members: the Netherlands, Norway, Germany and the EU decided to lead an OECD project to clarify concepts, assess social innovation needs and barriers and review a range of local and national initiatives to promote STI with a view to address social challenges (e.g. structures, means, incentive and reward systems, sets of actors, and ways of governance). The key milestones of this project were two CSTP Workshops on Fostering Innovation to Address Social Challenges.

A first CSTP Expert Workshop on Fostering Innovation to Address Social Challenges was held at the OECD in Paris on 25-26 May 2009. The aim was to assess the current understanding, as well as the opportunities and barriers, of innovation to address social challenges. Participants also discussed a number of recent initiatives and specific instruments that could enable governments and other stakeholders to address social challenges


through research and innovation. Following this first Workshop, limited to delegates and experts with relevant professional experience and/or academic expertise, a second larger Workshop was held at the OECD in Paris on 9-10 November 2009 to go deeper into the policy challenges and solutions so as to derive practical lessons for policy makers.

The rationales and opportunities to foster innovation to address social challenges The growth of modern economic systems has generated more numerous, complex and urgent social challenges. Today, there is a growing consensus that the disconnection between economic growth and social welfare is increasing. Growth does not automatically lead to social welfare anymore, or not as much as it used to be under the previous growth regime. This results in the persistence of social challenges even in countries with significant economic growth and a growing social division between different population classes and countries.

However, social innovation is not only a constraint, it is also an opportunity. There are business opportunities and synergies to be exploited in better integrating social challenges at the core of innovation activities.

Social challenges have a strong mobilizing effect, which would allow gathering of competences and resources, beyond sectors and disciplines boundaries.

The modes of knowledge production have already experienced considerable changes. It has been well documented that the innovation process is now less linear, more interactive, with a multitude of short-term and long-term feedback loops between the different stages of the innovation process. These feedback loops carry the different elements of social demand toward upstream stages (e.g. R&D). New collective experimentations involving multiple stakeholders, including users and concerned parties, have been developed. Although mainly restricted to information technology innovation activities, these initiatives are now spreading to other domains.

The terms such as “user-induced” or “community-based” innovation now become widely used to define this tendency. Private and public actors have clearly understood that these social needs conveyed to the core of the innovation process add value to their product and services and are now acknowledged as competitive assets.


Box 1. The first step of the collective reflection: clarifying concepts One of the first steps of the collective reflection in workshops has been to review the diverse definitions and understanding of concepts underlying innovation to address social challenges. “Social innovation” itself is manifold and its definition is hardly consolidated nowadays.

The most pervasive definition of social innovation encompasses to all social impacts of STI activities and progress. Indeed, regardless of their objectives, all STI activities have direct or indirect social impacts. Evaluations of research and innovation policies and programmes aim to assess these impacts, along other effects (scientific progress, economic and policy impacts). The significant methodological issues to be tackled as to best assess social impacts (imputation, timescale of effects,) are not the only limitations of this definition of social innovation. It is far too narrow as it relates to the understanding of social progress as an unintentional by-product - not as strategic driver - of STI activities.

A more comprehensive definition of social innovation is therefore needed. Social innovation refers to a group of strategies, concepts, ideas and organizational patterns with a view to expand and strengthen the role of civil society in response to the diversity of social needs (education, culture, health). The term covers, inter alia: new products and services, new organizational patterns (e.g. management methods, work organization), new institutional forms (e.g.

mechanisms of power distribution by assignment, positive discrimination quotas), new roles and new functions, or new coordinating and governance mechanisms.

The OECD LEED Forum on Social Innovations has endeavoured to clarify the situation and provide a common understanding of innovation to address social challenges. The key principle of this definition is that social well-being is a goal, not a consequence. Thus, « there is social innovation wherever new mechanisms and norms consolidate and improve the well-being of individuals, communities and territories in terms of social inclusion, creation of employment, quality of life ».

Key actors in this early period where social innovation is still weakly institutionalised are socalled “social entrepreneurs”. A social entrepreneur is someone who:

• Intends to create systemic changes and sustainable improvements with a view to sustain the impact.

• Assesses success in terms of the impact s/he has on society.

• Identifies a social challenge and has stepped up to make social change with social mission, to find innovative, immediate, small-scale and large-scale solutions that produce sweeping and long-term change, transforming the system, spreading the solution and persuading entire societies to take new leaps.

• Is encouraged to produce social impact with a selfless, entrepreneurial intelligence and innovative drive.

• Can simply manage to apply an existing idea in a new way or to a new situation, simply need to be creative in applying what others have invented (designed?). On the funding side, social entrepreneurs look for ways to ensure that their ventures will have access to resources as long as they are creating social value.

• Intends to provide real social improvements to their beneficiaries and communities, as well as attractive (social and/or financial) returns to their investors.


Challenges to overcome Despite the current trend of a growing interest towards innovation as a means to solve social challenges, there are still a number of barriers to be overcome. These barriers stem from the very nature of social challenges and their specificities.

First, the traditional concepts and systems are not adequate to understand properly these activities. Addressing social challenges by means of innovation requires setting clear and agreed definitions and the creation of a new framework to better understand the changing nature of innovation and the multiplicity of economic, social and technical drivers.

Social innovations are by nature multidimensional insofar as a variety of issues are addressed as social challenges, which entails a significant degree of diversity in terms of knowledge basis in science and technology. The complexity derives from the wide scope covered by « social innovations », as social challenges are related to demographic changes, climate change, poverty, employment, health care, education, … The multidimensional package of existing social challenges and the systemic failure in fostering social innovation clearly call for a reform of the research and innovation system governance.

Social challenges are also multi stakeholders (e.g. universities, research institutes, private companies, government, civil society, citizens). This calls for more research activities on multidisciplinarity and promoting stakeholders’ involvement, in particular by favouring the implementation process of research priorities (while avoiding lobbyism). To do so, the development of a new governance system, in particular participative tools aiming at facilitating partnerships, is still to be strengthened in order to be effective.

Moreover, new actors have emerged and challenge the current established innovation support institutions and instruments. These actors range from social entrepreneurs and enterprises to amateur scientists, International Organisations, NGOs and private foundations, and new ways to establish proper and fruitful cooperation between them have to be found.

Their respective role in the social innovation system has to be reshaped so that they become an effective driving force of technical and social progresses. In particular, as a new actor, social entrepreneurship proves to be more and more essential to promote this trend but still have to be fully recognized and supported by governments.


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