Building Resilient Economy, Zagreb, Croatia 241 SOCIAL INCLUSION AS INNOVATION Alessandra Morgado Ramiro de Lima Federal University of Rio de janeiro, Business Administration, Brazil
Building Resilient Economy, Zagreb, Croatia 242 children in need, with the motto"No money in the world can afford the smile on a child's face.
"The Cafu Foundation Project does not seek profit, therefore it is connected not to the market,
Building Resilient Economy, Zagreb, Croatia 243 The consolidation of these ideas is reinforced by the analysis of the other two examples mentioned in the introduction.
and services motivated to meet a social need, predominantly disseminated through an organization with social goals."
since they are clearly innovative services characteristic of nonprofit Non-governmental organizations. Regarding André and Abreu (2006, p. 125),
as facilitators of balance between cooperation/competition, allowing the optimization of resources and continuous learning with the reduction of information exchange costs.
Building Resilient Economy, Zagreb, Croatia 244 each of these NGOS, participating in the Service Society that pervades our time,
one can deduce relational capital as a key resource. All those responsible have that quality,
we found that most of the capital used for its operations derives from civil society.
but depending on the relational capital of its entrepreneurs, the space-network is noted also, either by using the internet,
detachment from profit with a social vision toward a fraternal attitude with those excluded, the perception of a relational capital to be employed not for its own benefit,
stripped of vanities, used with intelligence and insight. Those responsible for this new idea are mostly people who emerged from the lower classes of society
based on a service economy and sustained by civil society, which is being generated territorially in the small community,
Building Resilient Economy, Zagreb, Croatia 245 LITERATURE 1. André I, Abreu A. Dimensões e espaços da inovação social.
cdepartment of Accounting, Finance and Economics, Manchester Metropolitan University, Manchester, UK (Received 10 april 2013; final version received 28 august 2013) Social innovation discourses see in social challenges opportunities to make societies more sustainable and cohesive through inclusive practices, coproduction and proactive grassroots initiatives.
In this paper we are concerned first that the concept has been stretched in so many directions that it is at breaking point.
neo-liberalism Introduction Advanced economies face a growing number of social, economic and environmental challenges.
The 2007/2008 sub-prime financial crisis led to deep recession in many European economies. Europe's economic woes further intensified with the sovereign debt crisis and subsequent deficit-cutting policies.
The economic crisis hit vulnerable people particularly hard. Unemployment is acute among young people. Over one in two people aged 15 24 are out of work in Spain and Greece;
progress in nations where the benefits of economic growth accrue to all (Friedman 2006). In contrast, declining living standards for the majority and the lack of employment opportunities for young people are two of the foundations of the renewed spectre of political extremism
and demands of society's most vulnerable groups (including the unemployed, the elderly, women, non-educated persons and young people;
The European Journal of Social science Research 437 its use of new social processes to deliver products and services.
Thus, social innovation may refer to new products and services that address social needs, that is,
products and services which help to build more sustainable, cohesive and inclusive societies. We call this type of innovation goal-oriented social innovation.
Mulgan (2006), for instance, terms social innovation as innovative activities and services that are motivated by the goal of meeting a social need.
However, social innovation may also imply new processes that make use of social relations to deliver products and services in more efficient ways.
Europe and Australia were made available specifically for social impact investment. 2 The term social innovation has been embraced also broadly among socioeconomic scholars.
In organizational studies, social innovation may refer to social capital as a resource for creativity,
and capacity-building to make organizations resilient to rapidly changing external environments. The social innovation concept is employed also to research management structures
Bakhshi and Throsby 2010) and the development of (cooperative and shared) business models (Ridley-Duff and Bull 2011.
According to Florida (2002), one of the three institutions of the creative economy is interaction and proximity,
or a broad social, cultural and geographic milieu (the other two being technological creativity and entrepreneurship).
and more specifically Atlanta's urban informal stakeholder networks is noteworthy in this respect. Simplified, Stone argues that,
Entrepreneurship scholars have embraced the notion of social innovation and conflated it with social entrepreneurship (Bull 2008;
Ridely-Duff and Bull 2011. Social entrepreneurs, like their commercial counterparts, are said to recognize opportunities (Renko 2013).
Zahra et al. 2009) categorize social entrepreneurs along the dimensions of ambition, resources and capacity to scale,
from seeing entrepreneurship in terms of individuals'attitudes and behavior towards processes of discovering and exploiting opportunities,
and the many contexts in which that happens (Down 2006). Entrepreneurs and their stakeholders, in the words of Sarasvathy and Venkatraman (2011), often end up co-creating new opportunities.
Co-creation may occur in business, public services and community settings (Sundin and Tillmar 2008; Amin 2009;
where users shape services, make decisions and may indeed actually be the same people as providers (Needham 2007).
The rising interest in co-production comes from a number of areas including the enhancement of the citizen orientation in public services, the promotion of the role of the underprivileged and the encouragement of the actions of a civil society (Pestoff and Brandsen 2010.
The development of the Internet and more particularly social networking sites opened up vast opportunities for user-led innovation that ranges from political activism (the Arab spring,
and develops capacity and soft infrastructure (intangible assets such as know-how, intellectual property, social capital, etc.)that endure and can be utilized by other sectors and forms of innovation.
rather than mere incremental improvements in products and/or services (Transform Consortium 2008). These aspects of social innovation presuppose much more proactivity from people who use services and new dynamic relationships between user and provider.
Let us now move on to the creative and cultural industries. Some influential observers (Florida 2002) argue that the joint expansion of technological innovation
and creative content is the motor of today's economy. The role of culture and creativity as drivers of growth and employment is high on the European commission's agenda.
For instance, the European Capital of Culture scheme served as a stepping stone toward post-industrial Innovation:
In the hope to start up a creative enterprise culture, there has been stimulation from above through the establishment of designated zones of cultural consumption and production with initiatives such as affordable workspace, information technologyinfrastructure and business start-up advice (Landry 2007;
and depends on high levels of human capital. There is therefore increasing pressure for continuous professional development
and the skills gap may offer routes to inclusion, economic activity and financial independence for the most disadvantaged groups in the population.
Ultimately closing the skills gap will create multiplier effects in terms of increased consumer demand, purchasing power, reduced welfare spending and better health and social outcomes.
We move on to the broader economy and economic policy. Some social innovation can be and is delivered in the framework of the market.
The neoliberal economic paradigm argues in general that markets are placed best to deliver economic growth and widespread prosperity.
and the lack of opportunities and information to engage meaningfully in society. Advocates of social innovation argue that societal challenges offer new opportunities for economic growth.
Key growth sectors for many European economies in the coming years will be health education and social care (Mulgan et al. 2007.
For example, spending on healthcare is currently between 5 and 13%of GDP for EU countries
In 2006,20 million Europeans worked in the health and social services sector (Communication from the Commission 2009.
These sectors are characterized by mixed economies, the strong involvement of public policy and a need for models of innovation that are very different from those that have worked in the technology and finance sectors (Mulgan et al. 2007).
Against this background, successive UK governments placed more expectations on social enterprise as a delivery vehicle for welfare
Over the past 15 years, social innovation in the UK has been supported systematically through public investment and new regulatory frameworks.
More than £350 million of public money has been spent on social entrepreneurship, charity capacity-building and social ventures (Young Foundation 2007), helping to develop an estimated £24 billion social enterprise sector that now employs 800,000 people (Social Enterprise UK 2011).
In the UK, particularly in England, social enterprise has become elided with delivery of public services under contract to state agencies (Teasdale, Alcock, and Smith 2012.
Parts of health care were outsourced to the private sector and the Work Programme, the Conservative government's program to help welfare Innovation:
The opening up of the delivery of justice to greater involvement from the private and not-for-profit sectors has, according to the government,
In the UK, 50%of all social enterprises trade with the public sector and social enterprises operating in the most deprived communities are more likely to have the public sector as their main customer.
Current budget cuts will directly impact on the viability of social enterprise sector, affecting service provision and employment in most deprived communities over-proportionately (72%of social enterprises reported a negative trading outlook;
24%of all anticipated redundancies will fall within the most disadvantaged communities compared with 9%in the least deprived areas;
Social Enterprise UK 2011. Funding streams have to be diversified to make social innovation resilient and sustainable in cyclical environments.
Innovation implies systematic research and development. R&d is often capitalintensive and it is skill-dependent. An innovative environment has to offer access to seedcorn capital;
this can be provided through market mechanisms and public listings. Some medium-sized technology start-ups and pharmaceutical research companies raise capital in the Alternative Investment Market at the London Stock exchange for instance;
another example is the Social Impact Bond or the Big Society Bank in the UK.
However, public listings will be beyond most social enterprises and may contradict the social enterprise ethos.
Socially innovative individuals and organizations often do not fulfill the traditional funding criteria of private institutional creditors.
They lack collateral (current assets or futures) and social return on investment; their organizational strategies do not follow traditional financial ratio modeling.
Social innovators therefore find it difficult to draw on the credit facilities of the traditional banking system.
In other words, the demand and supply model of the traditional (credit) market fails to underpin social innovation investment.
However, alternative funding can be made available within the not-for-profit sector. Significant private and philanthropic funding has been encouraged through the introduction of tax incentives
In recent years, so-called microcredit has become an important source of finance for small innovative initiatives and entrepreneurship 444 R. Grimm et al. specifically in international development.
the opportunity to use part of their EU Structural Funds to finance small and medium-sized enterprises (http://www. eif. org).
Innovative finance can also seek inspiration from business models which have proved historically successful. For instance, the first successful cooperative was formed in 1849 in the north of England
since been preferred a legal status for businesses operating in the social economy. Other examples of innovative finance are complementary local currencies such as the Brixton
and Bristol pound (see, for example, Lietaer and Dunne 2013) or crowdfunding (Ordanini et al. 2011). This latter is a way of pooling money from smaller investors to support community initiatives
and reward will all shape the opportunities for social innovation to take place. Claims are prevalent that innovativeness is the main distinction of the nonprofit/third sector
Much of innovation therefore continues to depend on creative and opportunity seeking individuals. Regulation and legislation are cited often as a barrier to social innovation.
For example, in the UK micro-enterprises which meet local social care needs face regulatory, legislative and other barriers as a result of
Yet new regulatory and legal frameworks can also provide opportunities and impetus for social innovation.
requirement that a proportion of services commissioned by government are provided by small and medium-sized enterprises
and profits are dedicated to community purposes (Department for Business, Innovation and Skills). 3 While the Community Interest Company is relatively new, some very old legal forms,
providing opportunities for cost savings, greater community control and the development of innovative new services and ways of funding libraries (BBC 2012).
To conclude, although social innovation has become an important policy instrument, there is a lack of systematic research about how markets,
legal provisions) work to encourage social innovation that will deliver on its promise to create sustainable economic growth and benefit those groups of society
due to the fact that few commissioning and procurement structures are suited to social innovation ventures. In addition, there is a dearth of skills across sectors
and regulatory systems create distinct circumstances and environments for social innovation. There is therefore an urgent need for research on the relation between social innovations and economic policy,
models of financing and welfare state regimes as well as regional and local institutional contexts, including tangibles such as regulatory frameworks and intangibles such as networks, embeddedness and soft infrastructure.
In this way we can start to explore in what kinds of environments social innovations are created
What kind of environment and what kind of settings are most favorable to the emergence of social innovations?
Activity taking place across the public, private and not-for-profit sectors, involving social entrepreneurs,
or impede social innovation Markets are embedded in unique national institutional arrangements, macro-level economic policy, regulatory and legal frameworks, welfare regimes and modes of production.
At the meso-level, social innovations require alternative business models of financing, distribution and/or employment and so these factors will be important in facilitating
and offer different opportunities for provision that facilitate social innovation in particular ways. Social and cultural norms will play equally a part, for example,
At the micro-level attitudes to social entrepreneurship and organizational cultures will shape opportunities for individuals
individuals'financial and personal capacity, their ability to access social capital and their willingness to take risks will influence opportunities for innovation.
On the one hand, research on market forces, economic and fiscal policy, welfare systems and regulatory frameworks might seem to fit comfortably with economic positivist models and methods
Theory of change encourages all stakeholders, including the groups who are intended to benefit, to articulate expected achievements.
social innovation emphasizes the value of social capital for building sustainable and resilient societies that have the capacity to act in an environment of permanent change.
we suggest perceiving social innovation as boosting collaboration and partnership between various stakeholders (the public sector, private enterprise and the free market, civil society,
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A Prototype Design Bih-Ru Lea Wen-Bin Yu Prashanth Kannan University of missouri Rolla ABSTRACT Innovation is the process by
which knowledge is transformed into products and services which in turn fuels economic development to create wealth
including access to social environments, community services, and e-commerce to its infohabitants. This study investigates how social network theories can be used to design
, supply factor, demand factor, industrial support activities, business strategies and structures) and consequently enhances the innovation process.
design principles and an implementation prototype are discussed and presented. INTRODUCTION With the globalization of economies and competition, innovation has become the most important factor in development, employment,
and prosperity (Komninos, 2002). Innovation is defined as the transformation of science and technological knowledge into products, processes, systems and services (Luxembourg,
1996) that fuel economic development to create wealth and generate improvements in the standard of living. The process of transformation often follows a linear trajectory from generating intellectual properties/innovation ideas during the basic research stage to production
or services from innovation could serve as an objective means to evaluate impact of innovation on economic development (Komninos,
Social networks provide participants with opportunities of finding social support, establishing new social or business contacts (Hogg & Adamic,
2004), exchanging social capitals or resources (Garton, et al. 1997), and enabling knowledge transfer (Argote & Ingram, 2000;
With the advancements in communication technology, social networking model can be applied in developing a digital city.
demand factors, industrial support activities, and business strategies and structures (Reagans & Mcevily, 2003). The supply factors include human resources, knowledge and information, and funding.
The demand factors include existing and potential demands/needs, and local and international markets. Production, products, employment strategies and flexibility are part of the industrial support activities.
product evaluation, intellectual property advice, patent application, financial advice, and market research. The dimension of skills transfer includes finding liaison between research institutions/universities/individuals and industries, locating R&d resource, performing skill search, recruitment,
Social networks It is believed that innovation success is correlated positively with the opportunity to mobilize and direct resources/support to a solution from different support dimensions during the innovation process.
However, an individual's opportunity to mobilize and direct resources is a function of the strength of his/her social network.
With application of information and communication technology, social networks become flexible and can be sustained over distance
Benefits of having a strong social network include opportunities of finding social support, establishing new social
2004), exchanging social capital including financial resources, goods or services (Garton et al.,1997), and exploring
1999) is a place where a group of people are drawn together by an opportunity to share a sense of community with like-minded strangers having common interest (Lea et al.,
including access to social environments, community services, municipal information, and e-commerce to its infohabitants (Ferguson et al.,
) and is an environment of learning and innovation on real and virtual level and is a center of knowledge, information management, technology,
A digital city often provides three basic types of services including content services and information dissemination, communication and social services,
and business transaction services (Lea et al.,2005). ) The construction of a digital city is built often upon social network concepts including common interests or shared goals (Akahani et al.
and resources in the system and to provide its users with opportunities for social support, business collaboration,
communication with users having similar interests, resource sharing, information/knowledge exchange, and resources needed for innovation success without being presented physically in a social exchange process.
for innovation success Providing a framework for timely communication and distribution of experiences, contextual information,
Garrison & Posey, 2006), easy-to-use environments, social computing, and services for collaboration and communication and how all these aspects of technology are needed to produce stable digital cities for everyone's benefit.
For the implementation, Oracle 9i Forms (DS Release 9. 0. 2. 9. 0) was used because of its flexibility in reporting
and cooperative environments and to give the user a sense of belongingness in the community (Ferguson et al.,
2001) as social interaction can form influential circles that transform innovation into a successful business plan.
a user's initial social network information is maintained by four entities including communication group, social group, influential group,
All communication among users after joining the system are tracked and used to monitor changes in social network parameters and network evolution of users.
and intangible/intellectual resources and are offered as part of the content services to registered users to improve innovations success (Lea et al.,
2004), and exchanging social capital (e g.,, financial resources, goods or services)( Garton et al. 1997). ) However, access to sources of resources through person-to-person social networking is laborious, time consuming,
and often unfruitful and is not efficient or effective because of geographic distance, topical distance, concept communication, potential advantage recognition,
and individual bias. Therefore, one of I3's objectives is to facilitate communication between people in the scope of resource exchange,
an important function of a digital city suggested by the literature (Akahani et al.,2000; Argote & Ingram, 2000;
For the prototype, administrators focus on the threads of messages (chain of related messages), as shown in Figure 13,
and analyze contents of more complex messages for potential collaboration opportunities. For instance, a user may require 1000 sq ft. space resource
and can provide equitable decision-making opportunities to the user. In I3 several graphical representations are provided with many reports to give the administrator a different direction for analyzing data.
Case manager renders service sessions (Service Session entity) for any communication that the case manager might have had with the member requesting the resource.
and provides social support to improve opportunities for innovation success. 15 B. R. Lea, W. B. Yu & P. Kannan 2007 Volume 16, Number 3 Figure 16:
An important feature that must be supported by a digital city is communication and collaboration among large groups of participants over computer networks and to encourage the participation of the key players of the digital city to improve cooperation
) I3 recognizes the need for communication and collaboration in digital cities and provides an internal email system
and opportunities to access critical resources to support the innovation process. The communication and collaboration services in I3 enable users to develop their direct
or indirect connectedness to improve his or her social network. Table 5. 1 summarizes the key functionalities implemented in I3 and its effect in advancing Social networking and innovation.
several essential functions are yet to be developed to improve efficiency and effectiveness of the proposed social network based digital city prototype.
Business and transaction services are yet to be provided. Also as part of future enhancements, software agents can be developed
and Search User profiles Facilitates collaborative environments and gives the user a sense of belongingness in the Information City User Management Manage user's business information
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A Prototype Design Bih-Ru Lea is an Assistant professor of Business Administration at The university of missouri at Rolla.
Dr Lea has published in numerous journals including International Journal of Production Research, International Journal of Production Economics, Industrial Management and Data systems, Technovation,
University of missouri at Rolla. Dr. Yu received his Phd in Computer science and Engineering from University of louisville. His research interests are in the fields of data/text mining, business process simulation, software agent applications,
and demand forecasting especially in a supply-chain environment. Prashanth Kannan conducted research in the area of Social networking/Digital Cities and business innovations and received his MS degree in Computer sciences from University of missouri at Rolla.
An Examination of Internet Effectiveness for Non-work Activities Pruthikrai Mahatanankoon is an Assistant professor of Information systems at the School of Information technology at Illinois State university.
He received his Ph d. in Management Information systems from the Claremont Graduate University. He holds a Bachelor's degree in Computer engineering from King Mongkut's University of Technology Thonburi, Thailand, A m. S in Management Information systems,
He has published papers in journals such as Communications of the ACM and Human Systems Management. Reproduced with permission of the copyright owner.
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