The study of social innovation: theory, practice and progress
Geoff Mulgan, December 2013
How should social innovation be researched? And what should be the relationship
between research and action? There are many competing definitions of social innovation
that attempt to delineate a field of study. My preferred one – which defines the field as
concerned with innovations that are social in both their ends and their means – captures
the essence of how practitioners think about their work, while deliberately internalising
some of the argument and ambiguity, since all societies argue about what counts as social
good or social value.
This seems to be the right stance because social innovation is a movement founded on
ideas: above all the idea that in the right circumstances people can make, shape, and
design their world. That idea is not new – and there has been writing on social
innovation for nearly two centuries. But the spread of education and democracy, and new
generations of technology, have made it much more feasible for people to take control of
their lives and their world, and have helped turn the deeply democratic ideal of selfgovernment into a more practical possibility.
That is why social innovation has attracted interest and adherents. The last five years
have seen the spread of social innovation funds (from Australia and Hong Kong to
France), incubators (many hundreds), offices (from the White House to City Halls),
Mayors (such as Seoul), networks (such as SIX, the social innovation exchange), and
prizes (from China to the EU). Corporate social innovation is beginning to displace
corporate social responsibility within some large firms, and in a sign of the times several
of the biggest consultancies have set up social innovation teams.
Innovation for social purposes is beginning to catch up with the two great systems of
innovation that modernity has brought to maturity. One is the science system, which now
employs millions of people, and is rich in money, institutions, rules and procedures. The
other is the market innovation system, which is also rich in money, institutions,
procedures and ideas, and combines some elements of openness with the strict hierarchy
of the large corporation and the worlds of finance.
Social innovation is far less developed. It happens all the time. But it happens without
the massive public subsidy that accrues to science, or the dense web of research, practice
and profit which sustains innovation in business. As a result much of the potential that
people have to imagine, to create and run their own lives is unrealised.
So how should social innovation be studied? If I’m right that social innovation rests on
an idea – an idea about possibility - rather than being a field with clearly defined
boundaries, then the study of social innovation can never be just a detached, empirical
social science, in the way that the empirical study of the economics of innovation is. It’s
inevitable – and healthy – that research is coupled with practice.
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This makes some things easier and some things harder. The part which is easier is the
connection to practice. The intellectual task of understanding intersects with the work of
thousands of people around the world trying to do social innovation, to develop ideas, put
them into practice, and find out if they're working. How do you tap collective
intelligence, and make the most of tools like crowd sourcing platforms, prizes, or
accelerators? How do you involve citizens in generating ideas? How do you shape
business models, or scale ideas? How should governments internalise innovation?
All of these are live questions for Nesta, the organisation I work in. So we fund the
scaling of many social ventures but also study the patterns; we support new tools like
crowd-sourcing or accelerators but also study the evidence; we analyse the experience of
innovation teams within governments around the world, national and city level, and also
run a joint team in the Cabinet Office called the Centre for Social Action, which works to
find and scale social initiatives that tap public time and energy for public services. We
try to promote adoption – while also using data tools to study adoption patterns in
healthcare. We try to influence systems – while also researching the broader patterns of
systemic change.
To the extent that the research agenda is intertwined with an emerging field of practise,
the test of research is whether it's useful, whether it's relevant, whether it's applicable,
whether the practitioners can, in fact, make use of those insights. Does the research guide
busy people and help them avoid unnecessary mistakes?
All of this is a kind of craft knowledge. It's a practical knowledge that is grounded in
practise, but is reflected back into that practise. In terms of epistemology, that takes us to
the philosophical approaches of pragmatism in its 19th century sense, the pragmatism of
Dewey and James, which argued that ideas aren't things waiting out there to be
discovered. Ideas are tools people devise to cope with the world as they find it. Most of
those ideas are socially generated, not coming from individuals, and because they are
provisional responses to particular situations, their survival depends not on their
immutability, but on their adaptability.
This is quite a coherent view of the epistemology of social innovation and it's not so
different from other areas of social science. Macroeconomics mainly grew up as a set of
craft tools to help governments manage economies before and after the Second World
War. We think of it as theory, but it evolved as much as a set of tools to help
practitioners running government economic departments. Similarly, the best recent book
on science and technology in the 20th century (‘Science and Technology in the 20th
century’ by Jon Agar) shows very clearly how most of the big theoretical breakthroughs
in physics, chemistry and biology were responses to working world problems. They
didn't arise in a detached ivory tower; you could only understand how they came about as
a response to the practical problems of the real world, and much of the theoretical
distinction between basic and applied research, which became institutionally embodied in
the late 20th century, in many ways misread that history.
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To the extent that the study of social innovation is a craft knowledge that doesn't imply
any less need for research rigour. We still need falsifiable hypotheses, measurement and
sharp theory. But we need to get the right balance in terms of how we think about the link
between the mission and the research. The Italian philosopher and politician Antonio
Gramsci famously commented that we should cultivate pessimism of the intellect and
optimism of the will; I’d adapt this and suggest that we need enthusiasm of the spirit and
scepticism of the intellect.
The harder task for social innovation research is to understand the place of social
innovation in much bigger processes of social change. How do we understand where
ideas come from? How do we understand why some flourish and others wither?
I would suggest that one root of much social innovation is the experience or observation
of pain and suffering, and the experience and observation of how people respond with
love, care, learning or cure. Out of that observation grow attempts to replicate these
things – the love, care or learning - in institutional form or with technologies.
Another root of social innovation is the exploration of evolutions (sometimes described in
a very ugly bit of recent jargon as ‘adjacent possibles’). Once you have a school or a
hospital or a micro credit organisation, then other innovations flow logically from these –
extending, adapting, or combining them in new ways.
But with any idea we need to under what conditions it might spread or scale. There has
been a lot of good research on the dynamics of scaling: the crucial interaction of
‘effective demand’ and ‘effective supply’, and the various organisational options ranging
from growth through licensing, franchising, federations to takeovers. But the deeper
question is what makes the ‘effective demand’ possible in the first place. In one view
(for example, the theoretical traditions of regime theory), some ideas in particular periods
align with the dominant technologies and political systems. Another lens emphasises
national or cultural particularities, which may explain why some kinds of microcredit
worked in Bangladesh but not India, why some models of mentoring worked in the US
and not the UK, or models of childcare worked in Denmark but not Spain. Clearly
systems and structures create constraints, nested structures of environment, culture,
policy that shape what spreads or not.
Yet there is a risk in all of this analysis to see too much order. I like the comment from
Italo Calvino in his recently published letters: ‘imagining the world as a ‘system’, as
a negative, hostile system (a symptom that is typical of schizophrenia) prevents
any opposition to it except in an irrational, self-destructive raptus; whereas it is a
correct principle of method to deny that what one is fighting can be a system, in
order to distinguish its components, contradictions, loopholes, and to defeat it bit
by bit.’
This is the constant challenge with systems thinking – how to see the interconnections
between things without becoming intellectually overwhelmed, and trapped by them into a
fatalism which presumes that change is impossible.
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As the field of social innovation grows, and becomes more subtle and complex we should
be patient. It’s at least 50 years since the innovations studies field took shape, led by such
great figures as Richard Nelson, Christopher Freeman, Carlota Perez, Giovanni Dosi and
others. We owe them a big debt. Yet it is in some respects heartening to know that after
half a century there are few agreed definitions of innovation; few agreed metrics (and
some certainty that the dominant ones, like patents and R&D spend, are misleading);
little confidence about what works when it comes to policy. Indeed one of the
conclusions of a very major review of global innovation policy evidence commissioned
by Nesta shows fairly conclusively that how policy is implemented matters as much as
the policy itself.
Alongside patience, however, we also need argument. The people involved in social
innovation are, by nature, quite generous, kind and collaborative. Yet fields often
advance fastest through argument. So here I suggest three arguments that could be
useful.
One is about investment and social investment. There is now great interest in the
application of investment methods from venture capital and private equity to social
problems, and a claim that these can deliver better social outcomes than traditional grant
funding or government action. I've a hunch this is partly right. But I've yet to see the
faintest shred of evidence one way or the other. Remarkably we lack any serious
research on the financial returns of the social sector so far across major economies. Even
more remarkably there is only flimsy evidence on returns to other asset classes. Stock
markets do seem to rise several percentage points each year on average. But many are
surprised to discover that the average returns to venture capital are barely 3% in the US
and 0% in the UK; that private equity appears to offer no advantages once tax subsidies
are discounted; and that, of course, many banks have achieved negative returns in real
terms in recent years. So we need sceptics arguing that social investment is all hype and
others countering them: but with facts, analysis and evidence rather than just assertion.
A second really good argument would be a variant of the one happening in innovation
studies: is innovation slowing down or speeding up? People like Tyler Cowen and Peter
Thiel have claimed that innovation has dramatically slowed down compared to 20 or 30
years ago, which is why we travel in 1960s aeroplanes, for example, and don't have jet
packs on our backs, and why the pharma industry struggles to develop useful new drugs.
Others say that we're in the golden age of perpetual digital invention, benefitting from a
flood of new ideas in fields like genomics and new materials. I would argue that some
parts of both argument are right (there has been a slowdown in fields like pharma, but the
generalisations tell us more about the late-middle aged male authors than they do about
the facts). But we need an equivalent dialogue on social innovation: are things speeding
up or slowing down, and do we have a coherent model for understanding in what
conditions social innovation might be expected to speed up or slow down?
The third argument should be about which innovations are good and which ones are bad.
This is a glaring gap in innovation studies and indeed in most of economics. History
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shows that most innovations create value for some people and destroy it for others. The
car was good for drivers, but not much good for pedestrians who didn’t own a car. A high
proportion of financial innovations in the last 20 years destroyed more value than they
created (and Paul Volcker, Head of the Federal Reserve, said he could only think of one
financial innovation that created any public benefit and that was the ATM). Military
technologies fairly obviously destroy value for the people they kill or maim. The same is
true of some social innovations – and even very benign ones like hospices or
kindergartens may put some other people out of work.
Yet most of the analytic tools for understanding innovation have no way of distinguishing
these. You can read book after book and journal after journal on innovation studies and
read the strategies of innovation agencies, and not even get a hint that it matters to know
whether you're destroying value or creating it. Even the fashionable analyses of
disruptive innovation are wholly silent on these issues – assuming that disruption is
basically a good thing - even though a moment’s reflection shows that many innovations
are disruptive in bad ways, destroying more than they create. If mainstream innovation
lacks the intellectual resources to think these things through, then it’s all the more
important that we get passionate, empirical, rigorous argument about these issues in
social innovation: both for the sake of understanding, and to ensure that money goes to
the good innovations and not the bad ones.
Finally, if the deep underlying idea of social innovation is an optimistic one about human
potential to govern our own lives and design the world around us, then we need to
understand how societies make the most of that potential. 20 years ago, the world's then
leading social entrepreneurship organisation Ashoka suggested that there would only be
one serious social entrepreneur per million of population. But history shows that this is a
very flawed way of thinking. Estonia with a population of not much more than a million
is bursting with innovative creativity in the economy and technology in society. Iceland,
with not many more than 300,000 people, has also been a powerhouse of new ideas.
Meanwhile places that were thought to be lacking in creativity have within the space of a
generation transformed themselves – like Taiwan, or South Korea. These examples
confirm that in the right circumstances there is dramatically more human potential for
innovation than we might imagine.
But currently there are no ways of mapping or measuring this innovative potential. It’s
not so hard to imagine how it could be measured. And if it was, social innovation would
be helping to set a very high level agenda, through posing the question of how a
government, a foundation or a business, could truly maximise the creative potential
available to it. It's hard to think of a more fundamental question for the 21st century.
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