The missing variable in innovation
Anne Laure Fayard and Sofia Lai Amândio make the case for bringing social into the equation
Innovation often rhymes with progress and profit. Over the years, it has remained the holy grail for companies and governments alike. When we think of innovation, images of inventions and technological breakthroughs, scientific laboratories and engineering firms, successful startups often come to mind. When asked about innovation, people tend to think of technology and science from Eddison’s light bulbs to Fleming’s penicillin, from the steam engine to the automobile and the airplane, from the telephone to the personal computer, the Internet and the smart phone. The list is long, but at the core, there is always a technology or a product, and often economic success.
In this context, social innovation is often overlooked, misunderstood, or perceived as a minor or fuzzy form of innovation. When we mention ‘social innovation’ outside of our professional circles (of academics and policy makers) people might look puzzled, or ask, “but what is social innovation?”. While they know what innovation is, they don’t see what social innovation can be. Simply put, social innovation is the development of new ideas, services and models to better address complex social issues such as poverty, social exclusion, or health – in order to create a more just and sustainable world. Social innovation aims to develop new solutions as well as to encourage new behaviors and systems for sustainable development.
Social innovation in action diverse pathways to change
Let’s look at a few examples to illustrate how diverse social innovation is. First, consider Florence Nightingale, whose obsession with cleanliness in military hospitals in the nineteenth century not only dramatically reduced the mortality rate, but also fundamentally transformed nursing and patient care practices, leading to sanitation reforms. A second example is Uni-Cité, a French association, which invites youth from diverse backgrounds to work on issues such as the environment, inclusion, and education. Their model provides a transformative learning experience to over 140,000 young people annually while producing change in the local communities where they work.
Products can also generate social innovations. Take the cell phone which has produced innovations in diverse fields such as mobile banking, disaster relief and health. Mobile banking supports the financial inclusion of people in the Global South who live in remote regions with no access to traditional banking services by allowing them to easily transfer money. For instance, M-Pesa, a Kenyan mobile-phone based financial service created in 2007 and now the leading African mobile service allows its customers to instantly and safely send money, pay bills, make in-store payments and access financial services such as loans.
Lastly, social innovation is inherently environmental as illustrated by the work Friendship, a Bangladeshi NGO, does with the most-climate vulnerable communities in Bangladesh. Their efforts, recently recognized with the prestigious global environmental Earthshot Prize, is built on a holistic model, which acknowledges that climate adaptation cannot be achieved without giving access to healthcare, education and livelihood opportunities. Friendship’s holistic model illustrates how social and environmental go hand in hand with programs like their mangrove afforestation project in the Sundarbans: with more than 600,000 trees planted, they strengthened coastal protection, created sustainable livelihoods, and impacted more than 130,000 people.
From 2 variables to 3: completing the innovation equation
Innovation is often conceived as a two-variable equation. First, innovation needs to be new – to the users or to the context. Second, it needs to be useful – creating value by turning new and useful ideas into practice. When it comes to social innovation, innovations need to also be more just and sustainable. However, this third innovation variable is more than a nice-to-have addition. Imagine a solution addressing poverty by creating new income opportunities, that in turn lead to extractive practices (e.g. fishing, un-sustainable farming practices) which in the long term hurt both the planet and the humans! In fact, without the social variable, the innovation equation is incomplete.
Echoing those who argue that all entrepreneurs should be social entrepreneurs, that we should create zebras (who prioritize sustainability, profitability and social impact) rather than unicorn startups (that focus on rapid growth, exorbitant valuations and massive profits), or that all investing should be impact investing – we argue that all innovation should be social. The fundamental question we ask to support this perspective is: how can we consider a product or service that creates (or increases) inequalities, harms some groups of people, and / or participates in the destruction of the planet as viable innovation? Arguing that to be social is a necessary condition for any type of innovation, we therefore propose a three-variable innovation equation: New X Value X Social = Innovation.
Transforming narrow economics to comprehensive impact
The social variable (that an innovation needs to be also just and sustainable) is in fact an important reminder of what value creation – innovation’s second variable – should be. While innovation was originally conceived as creating value to benefit individuals, organizations, or societies – over the years, value has taken a narrow economic meaning of profit for only a few, pushing to the background the long-term value for employees and society. The 3-variable equation asks us to understand value creation comprehensively and to take a system view where negative unintended consequences are not ignored.
Today, in the face of the multiple societal challenges, we need to move away from innovation practices that tend to prioritize economic returns over social and environmental returns. More than ever, it is important to embrace a holistic perspective on innovation – one with social at its core. This represents a necessary evolution in the innovation discourse given urgent global challenges such as climate change and growing inequities. It leaves us with important questions to consider if we want to walk the talk and move from theory to practice: what policies, regulations and institutional changes would encourage innovations to be more holistic, satisfying the social variable? How can we assess whether innovations truly fulfill the three variables of the innovation equation? How can financial systems be restructured to reward social innovation rather than greenwashing? Answering these questions is more than just a technical exercise. It means deciding what future we want to build and for whom. Because, ultimately, innovation is not just about creating something new. It is about creating something new that makes sense for people and society.
Written by Anne-Laure Fayard and Sofia Lai Amandio
Lovely reminder about the many useful products and services born from "mistakes". Every process that is carefully observed and reflected has the potential to bring about collective change.