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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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The OECD definition of social innovation

FSI’s first achievement was the definition of social innovation. The FSI stakeholders, through a consultative process with international experts carrying out field analysis in several countries to identify its main features, agreed upon a working definition which was used to identify the different social innovations to be analysed within the Forum’s framework. This definition was the first ever provided by an intergovernmental organisation and, more generally, amongst the first to be produced. Its elements have been taken into account by other, later definitions.

For the OECD, social innovation implies changes in concept, process or product, in organisation and in financing, and can deal with new stakeholder

and territorial relationships:

“Social innovation seeks new answers to social problems by: identifying and delivering new services that improve the quality of life of individuals and communities; identifying and implementing new labour market integration processes, new competencies, new jobs, and new forms of participation, as diverse elements that each contribute to improving the position of individuals in the workforce.

Social innovations can therefore be seen as dealing with the welfare of individuals and communities, both as consumers and producers. The elements of this welfare are linked with their quality of life and activity.

Wherever social innovations appear, they always bring about new references or processes.

5. Brazil, Russia, India and China.

6. For an interesting example of social innovation in Brazil, see Chapter 5 on social entrepreneurship and social innovation in “SMEs, Entrepreneurship and Innovation”, OECD, (2010).

–  –  –

Social innovation is distinct from economic innovation because it is not about introducing new types of production or exploiting new markets in themselves but is about satisfying new needs not provided for by the market (even if markets intervene later) 7 or creating new, more satisfactory ways of insertion in terms of giving people a place and a role in production.

The key distinction is that social innovation deals with improving the welfare of individuals and communities through employment, consumption and/or participation, its expressed purpose being to provide solutions for individual and community problems.” (OECD LEED Forum on Social Innovations www.oecd.org/cfe/leed/forum/ socialinnovations).” What is distinctive about this definition is that it clearly links social innovation to local development. Social innovation is, in fact, essentially seen as a way of improving the welfare of individuals and communities.

Moreover, the definition makes explicit reference to the new relationship with territories as a social innovation feature. In spite of this reference to the local dimension, the so-called “global challenges” - even if not explicitly mentioned in the definition - are not excluded from the field of social innovation, the final aim of which is to provide social change for improving people’s quality of life.

Why social innovation is needed and what it is changing

Social innovations are innovative responses to unsolved social problems and needs, which have not been successfully tackled by the State or the market. Social innovation is needed because many social challenges are resistant to conventional approaches to solving them. They require novel approaches, inventive actors and new forms of co-operation among them, thus bringing together different kinds of expertise, skills and tangible and intangible assets. Social innovation’s major aim is therefore to tackle complex social challenges by providing innovative solutions.

Social innovations may be complex yet at the same time simple:

sometimes new ideas just needed to be conceived! The whole idea of microfinance, which is certainly one of the most well-known and successful social

7. The distinction between economic and social innovation made inside the definition seeks to make clear that the final goal of economic innovation is different from the main goal of social innovation that is the improvement of the quality of life of individuals and communities, which, on the contrary, is not the articulated goal of economic innovation.

Social innovation is often the consequence of a market failure. If markets intervene later, this does not mean that the innovation is no longer social.


innovations, is a simple one - lending small amounts of money to poor people without demanding collaterals - but nobody had thought of it before Yunus. The same applies to ideas such as that of social business (a wellknown example is Grameen Danone Foods). The concept is simple but its implementation requires innovative thinking and processes. It is the result of the hybridisation of different actors (in this case a joint venture between a community development bank and a large multinational) and approaches (the business approach used to meet social goals without personal enrichment).

Social innovation is addressing several challenges and having positive impacts. One of the most important is that of contributing to the modernisation of public services. Innovative actors, such as the so-called social enterprises, are doing so by delivering new welfare services at both national and local levels, often in partnership with the public sector. They are shaping new processes and services – a more tailored approach – thus enabling increased public sector efficiency. In addition, users are increasingly involved in the design of these services and user-driven social innovation is undoubtedly better suited to meeting user needs.

Social innovation is also directed at producing social change. The change can be of different intensities: incremental or radical. Changes are incremental when they build on what already exists and are radical when they produce a total change compared to the past. Obviously not all social innovations can be radical and evidence shows that the majority of them are incremental.

8. Mohammad Yunus, economist and Nobel Peace Prize, developed the concepts of microcredit and microfinance. He founded the Grameen Bank. In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, “for their efforts to create economic and social development from below”.

9. A social business is designed to address a social objective. The profits are used to expand the company’s scope and improve the product/service. It is a no dividend company, in the sense that the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. The company must cover all costs and make revenue, at the same time achieving the social objective. Grameen Danone Foods, launched in 2006, provides daily healthy nutrition to low-income nutritionally-deprived populations in Bangladesh.

10. The OECD provided a definition of social enterprises in 1999. “Social enterprises are organisations taking different legal forms in different countries which are organised in an entrepreneurial spirit and pursue both social and economic goals.”(p.9). Social enterprise refers to “any private activity conducted in the private interest, organised with an entrepreneurial strategy but whose main purpose is not the maximisation of profit but the attainment of certain economic and social goals, and which has the capacity for bringing innovative solutions to problems of social exclusion and unemployment” (p.10), OECD, (1999)

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Where and how does social innovation happen?

Social innovation can take place everywhere, at national and local levels, but it does not simply “happen”. It is the result of joint effort, creativity and a shared vision: that of a sustainable and people-oriented future. Social innovation is not one sector’s monopoly. Some innovations appear in the public sector, others in the private sector and others again in the non-profit sector. Social innovations are sometimes absorbed by a sector different from the one in which they were created. For social innovation to proliferate, cross-pollination is needed; to spread and upscale social innovations, “bees and trees” are required.

The “bees” are …. “small organisations, individuals and groups who have new ideas and are mobile, quick and able to cross-pollinate to find big receptive ‘trees’, i.e. big organisations such as governments, companies or non-governmental organisations which are generally poor at creativity but good at implementation and have the resilience, roots and scale to make things happen. Much social change is a result of a combination of the two”.

(NESTA, 2007, p.3) Connecting “bees” and “trees” is often a problem, which is why “intermediaries” are needed. There is, however, a notable absence of these and this is certainly an area to be addressed by policy makers.

Social innovation inside the OECD Forum on Social Innovations

Over the years, the FSI has explored many topics related to social

innovation. The principal ones can be grouped into these main categories:

• Access to capital and changes in financing;

• employment, targeted insertion, delivery of social and community services;

• balanced growth approaches to development;

• social cohesion in the “New Economy”;

• social enterprises and social entrepreneurship;

• corporate social responsibility;

• community capacity building;

• study visits, events, international conferences, and publications are the output of these activities.


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Antonella Noya (ed.) (2009) The Changing Boundaries of Social Enterprises, Paris:


Antonella Noya and Emma Clarence (eds.) (2009) Community Capacity Building:

Creating a Better Future Together, Paris: OECD Antonella Noya and Emma Clarence (eds.) (2007) Social Economy: Building Inclusive Economies, Paris: OECD (available in French in 2009, published by Economica, France) NESTA (2007) Innovation in responses to social challenges, wwwnesta.org.uk/assets/uploads/pdf/Policy briefing/innovation_in_response_to_social_challenges_policy_briefing_NESTA.

pdf OECD (2004) Entrepreneurship: A Catalyst for Urban Regeneration, Paris: OECD OECD (2003) The Non-Profit Sector in a Changing Economy, Paris: OECD (also available in French and in Spanish) OECD (2003) Asset Building and the Escape from Poverty: A New Welfare Policy Debate, (on-line booklet also available in French, Spanish and Italian) OECD (2001) Corporate Social Responsibility: Partners for Progress, Paris, OECD OECD (1999) Social Enterprises, Paris: OECD (also available in French and Spanish)

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Summary The ELTERN-AG Project. The ELTERN-AG approach suggests that it is crucial to work with the parents of disadvantaged children as early as possible, because they most influence their children in the formative years before they enter school. According to these assumptions ELTERN-AG helps these children by making their parents a part of the solution rather than the problem.

The Method. The program contains a carefully developed training method, in which moderators focus first on the things that these parents do well, and let them learn from each others’ successes. Trainers quickly involve the parents in running individual group sessions. Working with local partners, the moderators then link the parents into self-perpetuating community networks — which include doctors, schoolteachers, kindergartens, and childcare organizations. Thus the trainers help the target groups overcome their social isolation and improve their children’s prospects. Evidentially ELTERN-AG succeeds in reaching poor, undereducated parents in depressed areas allowing parents to seek help and advice while avoiding the stigma of institutional welfare dependence.

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