8th International Scientific Conference on Economic and Social Development and 4th Eastern European ESD Conference:
Building Resilient Economy, Zagreb, Croatia 241 SOCIAL INCLUSION AS INNOVATION Alessandra Morgado Ramiro de Lima
Federal University of Rio de janeiro, Business Administration, Brazil alessandramrlima@hotmail. com Gabriella Morgado Ramiro de Lima
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
"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
activities 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 Nongovernmental Organizations Regarding Andrã 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
Building Resilient Economy, Zagreb, Croatia 244 each of these NGOS, participating in the Service Society that pervades our time, act with
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,
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
new Social welfare State, 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. Andrã I, Abreu A. Dimensã es e espaã§os da inovaã§Ã£o social.
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 pro
Advanced economies face a growing number of social, economic and environmental challenges. More concretely European nations are currently undergoing major demo
economies. Europe†s economic woes further intensified with the sovereign debt crisis and subsequent deficit-cutting policies.
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
the basic societal needs and demands of society†s most vulnerable groups (including the unemployed, the elderly, women, non-educated persons and young people;
its use of new social processes to deliver products and services. In other words, social innovation can refer to both the means and the ends of action.
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 â€oeinnovative activities and services that are motivated by the
goal of meeting a social need†The Young Foundation understands social innovation as those â€oenew ideas that work
relations to deliver products and services in more efficient ways. As Mumford (2002) put it, social innovation is â€oethe generation and implementation of new ideas about
Australia were made available specifically for social impact investment. 2 The term â€oesocial innovation†has been embraced also broadly among socioeconomic
In organizational studies, social innovation may refer to social capital as a resource for creativity, learning
organizations resilient to rapidly changing external environments. The social innovation concept is employed also to research management structures
development of (cooperative and shared) business models (Ridley-Duff and Bull 2011 One important site for social innovation is the workplace.
the creative economy is interaction and proximity, or a broad social, cultural and geographic milieu (the other two being technological creativity and entrepreneurship
Castells (2000) argued that technological innovation in the second half of the twentieth century took place because like-minded innovators with complementary know how
Atlanta†s urban informal stakeholder networks is noteworthy in this respect. Simplified Stone argues that, in order successfully to implement change in an urban setting, local
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,
a shift, especially in the so-called European school, 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), â€oeoften end up co-creating new opportunitiesâ€. Co-creation may occur in business public services and community settings (Sundin and Tillmar 2008;
where users shape services, make decisions and may indeed actually be the same people as providers (Needham 2007.
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
social networking sites opened up vast opportunities for user-led innovation that ranges from political activism (the Arab spring,
property, social capital, etc. that endure and can be utilized by other sectors and forms of
-ments 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.
creative content is the motor of today†s economy. The role of culture and creativity as
the European Capital of Culture scheme served as a stepping stone toward post-industrial Innovation: The European Journal of Social science Research 441
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
and the skills gap may offer routes to inclusion, economic activity and financial independence for the most disadvantaged groups in the population.
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.
paradigm argues in general that markets are placed best to deliver economic growth and widespread prosperity. Thus Adam smith in 1759 coined the (much overused) phrase
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 and is set to rise by approximately 4%by 2050.
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.
social enterprise as a delivery vehicle for welfare and public services than was observed elsewhere else in Europe.
systematically supported 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 European Journal of Social science Research 443 claimants back into the labor market, was subcontracted to private providers and
voluntary groups. The opening up of the delivery of justice to greater involvement from the private and not-for-profit sectors has, according to the government,
explicitly been linked to promoting greater innovation in developing solutions to reducing re-offending Fox and Albertson 2011.
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
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 capital -intensive and it is skill-dependent. An innovative environment has to offer access to seed
-corn 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.
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
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 and reforms of legal and regulatory frameworks as well as lobbying. Wealthy philanthropies and their respective foundations such as the Soros
important source of finance for small innovative initiatives and entrepreneurship 444 R. Grimm et al specifically in international development.
national or regional Managing Authorities, the opportunity to use part of their EU Structural Funds to finance small and medium-sized enterprises (http://www. eif. org
While microcredit offers some positive outcomes, it has also been criticized to the extent that it buys into a neoliberal narrative which offers individualized solutions to
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 and
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
to risk 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
depend on creative and opportunity seeking individuals Regulation and legislation are cited often as a barrier to social innovation.
in the UK micro-enterprises which meet local social care needs face regulatory, legislative and other barriers as a result of which many fail (Sharedlivesplus 2011.
regulatory and legal frameworks can also provide opportunities and impetus for social innovation. These can take a wide range of forms including policy instruments (e g. targets
for employing people with disabilities, requirement that a proportion of services commissioned by government are provided by small and medium-sized enterprises and
incentives to install renewable energy) and new legal forms such as the Community Interest Company designed to ensure that assets
and profits are dedicated to community purposes Department for Business, Innovation and Skills. 3 While the Community Interest
handed over its 44 libraries to an Industrial and Provident Society, 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
innovation that will deliver on its promise to create sustainable economic growth and benefit those groups of society
commissioning and procurement structures are suited to social innovation ventures. In addition, there is a dearth of skills across sectors
create distinct circumstances and environments for social innovation. There is therefore an urgent need for research on the relation between social innovations and economic
explore in what kinds of environments social innovations are created (or are created not What kind of environment and what kind of settings are most favorable to the emergence
of social innovations Setting out an agenda for academia There are three main challenges to researching
Activity taking place across the public, private and not-for-profit sectors involving social entrepreneurs,
arrangements, macro-level economic policy, regulatory and legal frameworks, welfare regimes and modes of production. Countries have different kinds of ways to distribute
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 or
and offer different opportunities for provision that facilitate social innovation in particular ways. Social and cultural norms will play equally
At the micro-level attitudes to social entrepreneurship and organizational cultures will shape opportunities for individuals
and organizations to develop social innovation However, individuals†financial and personal capacity, their ability to access social capital
and their willingness to take risks will influence opportunities for innovation Innovation: The European Journal of Social science Research 447
The EU is a complex socio economic space with unique regional and national cultural identities.
on market forces, economic and fiscal policy, welfare systems and regulatory frameworks might seem to fit comfortably with economic positivist models and methods which draw
all stakeholders, including the groups who are intended to benefit, to articulate expected achievements. Carol Weiss, who is associated closely with the development of the â€oetheories
value of social capital for building sustainable and resilient societies that have the capacity to act in an environment of permanent change
By encouraging engagement and participation, social innovation pushes the ball of responsibility into the field of individual citizens.
and partnership between various stakeholders (the public sector, private enterprise and the free market, civil society, the charitable sector and individual citizens) that make up the
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A Prototype Design Bih-Ru Lea Wen-Bin Yu Prashanth Kannan University of Missouri †Rolla
which knowledge is transformed into products and services which in turn fuels economic development to create wealth
online services, 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
demand factor, industrial support activities, business strategies and structures) and consequently enhances the innovation process.
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
or services from innovation could serve as an objective means to evaluate impact of innovation on economic development (Komninos, 2002
Social networks provide participants with opportunities of finding social support, establishing new social or business contacts (Hogg & Adamic, 2004), starting collaboration (O†Murchu, et al.
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.
Influential factors on the success of innovation include supply factors, demand factors, industrial support activities
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
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
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.
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
capital including financial resources, goods or services (Garton et al. 1997), and exploring and initiating knowledge
Walshok, 1999) is a place where a group of people are drawn together by an opportunity to share a sense of
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, and
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. 2000; Blanchard & Markus, 2004; Churchill, et al. 2004; Ferguson, et al. 2004; Hiltz &
the system and to provide its users with opportunities for social support, business collaboration, communication with
•Providing a framework for timely communication and distribution of experiences, contextual information and expert insight to stimulate knowledge creation
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
environments and to give the user a sense of belongingness in the community (Ferguson et al.
can form influential circles that transform innovation into a successful business plan. The survey statement entity
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.
For the prototype, administrators focus on the threads of messages (chain of related messages), as shown in Figure
complex messages for potential collaboration opportunities. For instance, a user may require 1000 sq ft. space resource and has emailed many users regarding the resource requirement, for
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.
renders service sessions (Service Session entity) for any communication that the case manager might have had with
and provides social support to improve opportunities for innovation success 15 B. R. Lea, W. B. Yu & P. Kannan 2007 Volume 16, Number 3
An important feature that must be supported by a digital city is communication and collaboration among large
) I3 recognizes the need for communication and collaboration in digital cities and provides an internal email system
interactions among users 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
digital city prototype. Personalization and intelligent interaction between digital cities and their users based on user
Business and transaction services are yet to be provided. Also as part of future enhancements, software agents can be developed
environments and gives the user a sense of belongingness in the Information City User Management
-Enhancing Community Consultation through Web Based Virtual Environments, †Association for Computing Machinery Inc.,ACM Press, 271-272
Community Participation, †Communications of the ACM, 47,2, February, 38-44 Davies, W. 2003. Digital Networks & Social networks, isociety Alex Macgillivray, New Economics Foundation
Downey, J, . & Mcguigan, J. ed)( 1999). Technocities, London: Sage Emirbayer, M, . & Goodwin, J. 1994).
â€oeopen Frameworks for Information Cities, †Communications of the ACM, 47 (2), 45-49 Garrison, C,
Computer-Mediated Communication, 3 (1), http://www. ascusc. org/jcmc/vol3/issue1/garton. html GÃ tzl,
. & Wellman, B. 1997) â€oeasynchronous Learning Networks As A Virtual Classroom, †Communications of the ACM, September, 40,9, 44-49
â€oethe Driving forces In The Virtual Society, †Communications of the ACM, December, 42,12 64-70
â€oedigital City Kyoto, †Communications of the ACM, July, 45,7, 76-81 Ishida, T. 2002b.
â€oewhat Makes A Web site Popular, †Communications of the ACM, February, 47,2, 51-55 Kollock, P. 1996.
of Management and Enterprise Development, 4 (1), 1 †17 Lea, B.,Yu, W, . & Ma, Y. 2005).
Communications of the ACM, 47 (2 february Simmie, J. 1997. â€oethe Origins and Characteristics of Innovation in Highly Innovative Areas, †Innovation
â€oemaking Information Cities Livable, †Communications of the ACM, February 47,2, 33-37 Stevens, G,
Prototype Design Bih-Ru Lea is an Assistant professor of Business Administration at the University of Missouri at
Journal of Production Research, International Journal of Production Economics, Industrial Management and Data systems, Technovation, and Journal of International Technology and
demand forecasting especially in a supply-chain environment Prashanth Kannan conducted research in the area of Social networking/Digital Cities and
He has published papers in journals such as Communications of the ACM and Human Systems Management Reproduced with permission of the copyright owner.
Internet Entrepreneurship and Economic growth
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