What is Social Innovation?

Although social innovation and entrepreneurship as a recognized discipline has been around for decades there continue to be debates about what it is and how it differs from just “entrepreneurship”. One widely cited definition describes social innovations as having at least three characteristics:

  1. Novel (not necessarily a new) solution to a social problem
  2. More effective, efficient, or sustainable (financially and perhaps environmentally) than existing solutions
  3. The value created accrues primarily to society as a whole rather than private individuals

Social entrepreneurship, then, can be thought of as the act of creating, building, and managing an organization launched as a result of a breakthrough social innovation.

Social enterprises are customarily thought of in the context of nonprofit/NGO organizations and defined as “an income-generating venture providing a nonprofit with unrestricted funds that also enhances the organization’s core mission.”  The earned income (profit but also known as “surplus”) from these ventures is used at the nonprofit’s discretion to meet the needs of constituents and lessen its reliance on traditional forms of funding.