CrESSI, Creating Economic Space for Social Innovation

CRESSI Working Papers No. 28/2016 The CRESSI project explores the economic underpinnings of social innovation with a particular focus on how policy and practice can enhance the lives of the most marginalized and disempowered citizens in society. “Creating Economic Space for Social Innovation” (CRESSI) has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no 613261.

CRESSI Policy Briefing on Deliverable 4.1 “Creating Economic Space for Social Innovation” (CRESSI) has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no 613261. CRESSI is a collaboration between eight European institutions led by the University of Oxford and will run from 2014-2018.

The basis of this chapter is a comprehensive case study on freshwater supply in European countries from the nineteenth century to the present. First, the chapter introduces the different phases of freshwater supply during that time span as well as various modes of provision (self-provision, informal provision, market provision, public provision, and professional provision). Then, the chapter turns to a change in cognitive framing, and the important achievement of framing water provision as a social challenge in the nineteenth century, as well as the role civic participation played for this. Next the analysis concentrates on the central question of provision as it is visible in the debate on market versus public provision. How can civic involvement help keep the institutionalized innovation on target so as to ensure clean and affordable water for all? The issues of knowledge, path dependency, and niche modes of provision are also discussed.

This chapter describes two empirical approaches with which social innovation and its potentially transformative role can be studied. Both are oriented towards the Extended Social Grid Model (ESGM) and strive to bring its abstract categories on the ground and facilitate empirical analyses; first an analysis of long-term comprehensive case studies; and second a mixed-method approach inspired by the capability approach for evaluating the impact of social innovations. Both approaches enter new ground in social innovation research and supply valuable insights into the nature of social innovation and how it can be examined. The historical approach reveals the complexities of social innovation trajectories; the agency oriented approach of the more quantitative study opens new paths for a measurement of social innovation impacts that can be applied in many situations.

This chapter addresses key issues that public policy seeking to support social innovation faces. Combining theoretical insights of the Extended Social Grid Model with empirical results obtained from EU policy surveys and case studies, it identifies key policy implications and recommendations. It first introduces key notions for social innovation policy, including the multifaceted landscape into which support is inserted; the necessity to recognize its political character; to what extent insights from business innovation studies can be useful; and why successful support of social innovation must imply institutional change. The chapter then outlines a series of recurrent policy dilemmas such as whether horizontal support should be preferred; the trade-off between degree and costs of marginalization that wish to be targeted; the difficulty to promote a capability to associate; and how the subsidiarity principle may clash against the need to overcome marginalizing processes.

On 25th April 2016, the Institute of Economics, CERS, Hungarian Academy of Sciences organised a practitioner seminar on social co-operatives in Hungary. Participants included leaders of social co-operatives and local governments of small villages (mayors, village notaries), researchers, as well as government officials drafting and operating policy schemes supporting social enterprises, in particular social co-operatives (from Ministry for National Economy, and OFA, Hungarian Employment Public Benefit Non-profit LLC, respectively). György Molnár introduced the seminar by talking about the overall CrESSI project and then explaining WP6 in more detail (i.e. the goals, research questions, methods, results obtained in Hungary). That was followed by an overview of measures aimed at supporting social co-operatives, planned by the NGM. These measures have been introduced since then. The main topics of the discussion were as follows: (i) new type social co-operatives; (ii) the role of social co-operatives, (iii) societal vs. business benefits, (iv) schemes aimed at supporting social cooperatives, (v) regulation, and (vi) networking.

On 27th April 2016, the Institute of Economics, CERS, Hungarian Academy of Sciences organised a policy roundtable on social co-operatives in Hungary. Participants included policy-makers, experts, researchers and a representative of the National Association of Social Cooperatives. A former MP was also present who initiated to introduce the legal form of the so-called ‘new type’ social co-peratives (currently he is leading several associations of co-operatives, but not in the field of social co-operatives.) Experts and officials from two ministries also attended the policy roundtable. György Molnár introduced the seminar by talking about the overall CrESSI project and then explaining Workpackage 6 in more detail (i.e. the goals, research questions, methods, results obtained in Hungary). The main topics of the discussion were as follows: (i) new type social co-operatives; (ii) social co-operatives (both the ‘traditional’ and ‘new type’ ones) operating in poor regions; and (iii) schemes aimed at supporting social co-operatives. The major policy tasks identified by the participants concern these issues.

This book draws upon economic and sociological theory to provide a comprehensive discussion of economic space for social innovation, addressing especially marginalized groups and the long-term projects, programmes, and policies that have emerged and evolved within and across European states. It approaches the explanatory and normative questions raised by this topic via a novel approach: the Extended Social Grid Model (ESGM). Taking inspiration from the fields of economic sociology and ethics, this model shows that social innovation processes must be structural, and require change in power relations, if marginalization is to be effectively dealt with via social innovation. Part I of the book sets out the ESGM, including an exposition on the model along with background chapters on innovation, power and marginalization, ethics and social innovation, and empirical methods. Part II explores the model with a focus on social innovation trajectories of social housing, drinking water provision , poverty alleviation, education, and food provision. It also explores the operationalization of the model with a view to agency and empowerment, as well as social innovation policy in Europe and the use of social impact bonds as a tool for financing social innovation. Part III revisits the ESGM and considers the explanatory adequacy and fruitfulness of the model for innovation research and for theorizing social innovation, addressing questions on the role and limitations of participation in social innovation for the marginalized, the role of capital for creating economic space for capabilities, and how we can approach the social impact of social innovation. This collection of essays presents a diverse range of perspectives on understanding and addressing the key issue of marginaliza-tion, and offers key recommendations for policy makers engaging with social innovation across the European Union and beyond.

Solidarity Purchasing Groups (SPGs) are emblematic of social innovation in agriculture. Scholars coined the term to refer to groups of individuals who organize themselves to collectively buy primary goods, avoiding mass retailers’ intermediation and putting in question the actual economic relations behind the system of food distribution. Their main declared aim is to foster the economic and social conditions of the producers they collaborate with. A closer look at their inner functioning, however, gives a more nuanced panorama, in which the altruistic dimensions of SPG activities do not exclude paternalistic practices. Drawing from forty interviews conducted in Italy in 2015, the chapter highlights how and to what extent their socially innovative practices have reduced the economic marginalization of producers.

La mercantilización del sector de la comida y la creciente importancia de los minoristas de masas han creado una cadena de suministro desequilibrada donde, sobre todo, los pequeños productores y los consumidores son más débiles. En contra de este escenario, en los últimos veinte años la agricultura y los mercados de proximidad se han ido situando como espacios relevantes de experimentación de prácticas sociales innovadoras con el objetivo de solucionar esta anomalía y de reequilibrar la distribución del valor en el conjunto de cadena de suministro. Las cooperativas de consumo solidario forman parte de estas experiencias innovadoras y pueden representar una de las medidas más relevantes para contrastar el poder de negociación de los minoristas de masa. No obstante, el análisis en este artículo muestra como las cooperativas de consumo solidario son innovaciones sociales que sólo consiguen parcialmente el objetivo de reducir la marginalización económica de sus proveedores al crear una cadena de suministro alternativa.

Thorough case studies clearly indicate that in many cases social innovations can only be successful when supported by various types of business innovations, be they product, process, management, organisation, business model or market innovations. Both business and social innovations have been studied for several decades by now. Yet, these two communities still seem to live in their own fiefdoms. This review is aimed at stressing the need and possibilities for more interactions and exchanges between these two ‘tribes’. As a first step, lessons from business innovation studies are highlighted below, indicating opportunities to refine the analytical tools and methods we use, and thus improve our understanding of social innovation processes. These insights – on the degree of novelty, level of change, the ‘dark side’ of innovation, policy rationales to justify interventions, and policy implications – can be useful for practitioners, social innovation scholars, policy analysts and policy-makers.

The presentation, based on a forthcoming book chapter, analyses the specific features of social innovation for marginalised people (SIM), using the example of Kiútpgram, a Hungarian social microcredit programme. It offers a review of the marginalisation of the Roma in Hungary, considering the major factors of becoming marginalised as well as the processes reproducing marginalisation, stressing the impacts of interactions between institutions, networks and cognitive frames, showing that the complex nature of the reproduction of marginalisation requires complex interventions, including empowering and capability building. The presentation highlights several policy and practical implications, including trade-offs to be considered when planning and implementing SIMs – in particular, those between exact targeting in a SIM versus building inter-community connections; the degree of assistance provided versus the short-term empowerment effect; and the degree of marginalisation of the participants versus the costs of a given SIM.

The poster presents a complex social innovation for the marginalised (SIM), namely the Kiútprogram, a social microcredit programme for the Roma in Hungary. It sheds light on the peculiarities of SIM within the wider field of social innovation and offers several theoretical and policy implications concerning SIM.

The capability approach, an influential development in ethics, provides a way for the consideration of justice and democracy at the core of social innovation. It creates space for a critical reflection on and promotion of social innovation that is social both in its ends and in its means.

Over the last twenty years, Alternative Food Networks (AFN) have become increasingly successful at reducing the length of the chain that connects food production and consumption in an attempt to counteract the impact of the contradictions of the industrial food system and its supermarket-dominated distribution. Their grassroots actions, aimed at overcoming pre-existing socioeconomic structures, are in line with social innovations, which have the objective of promoting the social participation of consumers and producers in food systems (empowerment, socio-political activism or social integration in society). In Italy, the Solidarity Purchasing Groups (SPGs), have been the subject of numerous academic studies, but the scope of these studies has, to date, been limited to the political activism of the consumer. The ability of this experience to foster the social participation of the groups' suppliers and the effects that the exchange has on the economic life of the producers have not yet been adequately studied. This article addresses this gap by investigating the extent to which SPGs can reduce the economic marginalisation of their suppliers and evaluates if the activities they promote could increase their social participation. Based on quantitative and qualitative data, this study shows that SPGs, in contrast to other AFNs, maintain a clear separation between consumers and producers and this could mitigate the positive impact of these initiatives on their suppliers. Our analysis of the suppliers shows that SPGs can act as a safety net against economic downturns and that the social participation of the producers involved is higher at the macro, meso and individual levels, compared to producers who do not cooperate with the SPGs.

The article here presented offers an analysis of Solidarity Purchasing Groups under the frame of the social innovation debate. By relying on two main axes of analysis that take into account the features of the territory in which the activities of the groups are embedded (economic vulnerability and density), it investigates how networks, institutions and cognitive frames – as theorised by Beckert (2010) – are effective in reducing the economic marginalisation of the beneficiaries of their activities, identified by small family farmers. The empirical investigation is based on 35 semi-structured interviews (completed by short organisational questionnaires) that investigate solidarity purchasing groups as organisations, focusing on their activities in favour of their suppliers. Results show that groups are rarely oriented towards local communities and their activities only rarely succeed in involving systematically their suppliers in the activities of the group.

Social innovation has increasingly been referred to as a potential driver for–transformative and disruptive -- social change because it offers the potential to provide solutions to social needs that the current institutional status quo neglects or only partially attends to. In this introduction to the special issue on social innovation and marginalisation, the editors provide an overview of the theoretical framework, with which the two phenomena can be put into connection. It introduces the Extended Social Grid Model, in which an institutionalist perspective on social forces can be combined with the capability approach that puts human agency at its core.

The Social Forces theory was proposed by Beckert (2010) to study the interconnecting dynamic interrelations between institutions, networks and cognitive frames that underlie economic phenomena. In the context of this article, this theoretical perspective was applied to study Solidarity Purchasing Groups as a social innovation and to assess their capacity to create a new process of social inclusion for their suppliers. Despite being the most relevant alternative food networks in Italy, Solidarity Purchasing groups are only partially able to fulfil the promise of social innovation (by increasing the participation of beneficiaries and challenging pre-existing socio-economic dynamics) through the establishment of an alternative supply-chain alongside the one proposed by mass retailers. The results were obtained from an empirical investigation of 35 solidarity purchasing groups (2015/2016, nationally based), under the frame of the EU-funded CRESSI project.

Economic space for social innovation is not bounded by markets. Further to the money based exchange relations in markets, there is self and informal provision based on social norms such as reciprocity, community and; public provision of entitlements and public goods organised via political processes; as well as professional provision based on expert knowledge. While these ideal-types blur in practice, they show the rich contours and collaborative pluralism of economic space in practice. Fostering fair space for social innovation requires to take all these modes and their relations into account. Social innovations as messages signal to the public where a change in mode or a reconfiguration of modes is demanded. Fairness as a matter of taking the perspective of those marginalised and least advantaged, calls for evaluative scrutiny with respect to such messages: do social innovations empower beneficiaries to become agents; and do they consider their well-being as patients?

Various economics schools define and analyse innovation in different ways. That has fundamental implications for measuring innovation. This presentation provides an overview of the major economics paradigms from the angle of innovation (that is, how innovation is understood in a given paradigm), linear and networked models of innovation, as well as the widely used indicators to measure innovation. It argues that evolutionary economics of innovation offers a more accurate, more reliable account of innovation activities than mainstream economics. The former considers all knowledge-intensive activities leading to new goods (products or services), processes, business models, as well as new organisational and managerial solutions, and thus take into account various types, forms and sources of knowledge exploited for innovation by all sorts of actors in all economic sectors. In contrast, mainstream economics mainly focuses on the so-called high-tech goods and sectors. The former, broad, approach to innovation is needed to collect data and other types of information, on which sound theories can be built. These theories, in turn, can offer a reliable and comprehensive description of innovation activities to decision-makers to underpin innovation policies and company strategies.

The presentation analyses why and how the previously unknown legal form of social co-operatives has been introduced in Hungary, characterised by wide social gaps and severe tensions, and why the history of genuine social co-operatives was cut short drastically in 2017.

The paper analyses why and how the previously unknown legal form of social co-operatives was introduced in Hungary in 2006, and why the history of genuine social co-operatives was cut short drastically in 2017.

Empirical investigation of social innovation and its effects is a much under-explored terrain. Difficulties range from the conceptual complexity of social innovation processes to empirical implementation. This study applies a conceptual framework (ESGM) that envisages multi-layered effects of social innovation on individuals and societies. It analyzes subjective, primary data to compare three different European cases, proposing an empirical strategy to capture their effects. Perceptions of participants report improvements in autonomy and that social innovations mainly produce intangible outcomes such as knowledge and personal relationships, which are unlikely to be captured in synthetic measures such as average effects or money metrics.

This paper explores the relationship between gender and social innovation to highlight the possible positive effects of women's participation in social innovation in terms of protection from economic marginalization. It focuses on Italian solidarity purchasing groups as a case of social innovation in the domain of food and agriculture. The analysis is based on logistic regression using primary data collected in 2016 for the EU funded project CrESSI. The results show that participation in social innovation does protect households from worsening economic conditions. However, it was not empirically proven that there is a significant difference between men and women in the benefit enjoyed from the participation in solidarity purchasing groups.

The rise of social innovation expresses a discontent with innovation as we know it, and its ability to deliver just and sustainable outcomes. Yet, social innovation is also notoriously vague as a concept, thereby putting into doubt whether the concept offers any real improvements or alternatives. This paper issues an invitation to think about social innovation as a collaborative concept. The conceptual framework shows collaboration, rather than contestation, to offer a space for the working together of different perspectives and actors. The collaborative concept frame welcomes and seeks to explain a diversity of uses. Singling out key features of social innovation as a collaborative concept, it seeks to contribute to an emerging practice that makes different contributions part of a progressive conversation about social innovation, the evaluative ideas associated with it and the evidence from policies and projects. Identifying transformative, taxonomical and transitional–sceptical uses of social innovation, the paper highlights the importance of analysing the evaluative aspects of the multisectoral reconfigurations associated with social innovation so as to keep track of its role for justice and sustainability.

There have been many creative responses to modern economic, political and technological developments and their (un)intended social and ecological consequences. These responses provide the soil for the type of social innovation identified in this article: citizen innovation as niche restoration. It is about civic action that creates novelty by seeking to restore the places and practices citizens already value. Drawing from an in-depth case study on decentralized water management, the concept of citizen innovation as niche restoration is explored, and its implications for political participation and sustainability discussed.

Social impact bonds are payment by results contracts that leverage private social investment to cover the up-front expenditure associated with welfare services. The introduction of private principles and actors through outcome-based commissioning has received a great deal of attention in social policy research. However, there has been much less attention given to the introduction of private capital and its relation to more established forms of quasi-marketisation. This paper examines what effect private social investment has on outcome-based commissioning and whether the alternative forms of performance measurement and management, that social impact bonds bring to bear on service operations, demonstrate the capacity to engender: innovation in service delivery; improved social outcomes; future cost savings; and additionality. This paper draws on an in-depth study of four social impact bonds in the UK context, as the welfare regime at the vanguard of this policy development. The findings suggest that the introduction of private capital in outcome-based commissioning has had a number of unique and unintended effects on service providers, operations and outcomes. The paper concludes by considering whether social impact bonds represent a risk or an opportunity for public service reform both in the UK and further afield.

The paper deals with financing social innovation today and during the Victorian age. It explores ways in which capital markets can create value beyond private profit today and how private actors did the same thing back then. The ways to do this are nowadays often subsumed under the heading of social impact investing and one of the historical paths was called five percent philanthropy. When successful, both approaches create financial as well as social, yet there are substantial differences. We look at both concepts and how they are/were practiced, practitioners’ motivations, contexts/ecosystems, driving forces, investment fields, financial performance and their impact on beneficiaries’ capabilities. We do so by applying two theoretical lenses: The extended social grid model and the multi-level perspective. We found that the Victorian approach did not target the most marginalized, and so did not enhance their capabilities significantly and therefore would not completely qualify as an early form of financing social innovation; but it did fare quite well economically. In contrast, social impact investing today has the potential to make a difference for the most marginalized, however it needs to be seen whether or not it can leave its niche status behind and gather momentum, and that in turn depends on whether practitioners succeed in finding enough economically successful investment opportunities. However, the historical case provides some evidence for the claim that in order to make a difference with severe social problems, a finance first investment approach may not be sufficient.

This article reviews various approaches to measuring business innovation with the aim of drawing lessons for measuring social innovations, and offers several methodological and policy conclusions. First, Innovation Union Scoreboard (IUS) indicators, in principle, could be useful in settings where the dominant mode of innovation is based on R&D activities. In practice, however, both R&D and non-R&D-based modes of innovation are important. IUS, therefore, only provides a partial picture. Social innovations can also rely on R&D-based technological innovations; their essence, however, tends to be organisational, managerial, and behavioural changes. The IUS indicators do not capture these types of changes. Second, an assessment of the 81 indicators used to compile the Global Innovation Index reveals that it would not be fruitful to rely on such indicators to capture social innovations. Third, given the diversity among innovation systems, a poor performance signalled by a composite indicator does not automatically identify the area(s) necessitating the most urgent policy actions; only tailored, thorough comparative analyses can do so. Finally, analysts and policy makers need to be aware of the differences between measuring (i) social innovation activities (or efforts); (ii) the framework for social innovations (prerequisites , available inputs, skills, norms, values, behavioural patterns, etc.); and (iii) the economic, societal, and environmental impacts of social innovations. Keywords: Evolutionary economics of innovation; business innovation; social innovation; measurement of innovation; composite indicators; scoreboards; league tables; unit of analysis

This presentation is based on a paper with the same title, as well as on other papers also written for the CrESSI projects. It reviews various approaches to measuring business innovation from the angle of capturing social innovations and offers several methodological and policy conclusions. First, the Innovation Union Scoreboard (IUS) indicators in principle could be useful in settings where the dominant mode of innovation is based on R&D activities. In practice, however, both R&D and non-R&D-based modes of innovation are fairly important. IUS, therefore, only provides a partial picture. Social innovations can certainly rely on R&D-based technological innovations. Their essence, however, tends to be organisational, managerial and behavioural changes. The IUS indicators do not capture these types of changes. Second, an assessment of the 81 indicators used to compile the Global Innovation Index reveals that it would neither be a fruitful effort to rely on those indicators to capture social innovations. Third, given the diversity among innovation systems, a poor performance signalled by a composite indicator does not automatically identify the area(s) necessitating the most urgent policy actions. Only tailored, thorough comparative analyses can do so. Fourth, analysts and policy-makers need to be aware of the differences between measuring (i) social innovation activities (efforts) themselves, (ii) the framework conditions (pre-requisites, available inputs, skills, norms, values, behavioural patterns, etc.) of being socially innovative, and (iii) the economic, societal or environmental impacts of social innovations. Finally, the presentation also considers the relevance of some other results of ’classical’ innovation studies for analysing social innovations, especially the importance of the unit of analysis (or subject and level of change) and degree of novelty. It offers several observations and caveats by using these notions.

This paper demonstrates that the capabilities approach offers a number of conceptual and evaluative benefits for understanding social innovation and – in particular, its capacity to tackle marginalisation. Focusing on the substantive freedoms and achieved functionings of individuals introduces a multidimensional, plural appreciation of disadvantage, but also of the strategies to overcome it. In light of this, and the institutional embeddedness of marginalisation, effective social innovation capable of tackling marginalisation depends on a) the participation of marginalized individuals in b) a process that addresses the social structuration of their disadvantage. In spite of the high-level ideals endorsed by the European Union, social innovation tends to be supported through EU policy instruments as a means towards the maintenance of prevailing institutions, networks and cognitive ends. This belies the transformative potential of social innovation emphasised in EU policy documentation and neglects the social structuration processes from which social needs and societal challenges arise. One strategy of displacing institutional dominance is to incorporate groups marginalised from multiple institutional and cognitive centres into the policy design and implementation process. This incorporates multiple value sets into the policymaking process to promote social innovation that is grounded in the doings and beings that all individuals have reason to value.

Solidarity Purchasing Groups (GAS) movement is a peculiar bottom-up social innovation that has been spreading over the past 20 years in Italy. It is composed mostly of self-organised groups of citizens who collectively buy from small organic producers in Italy. They promote several practices that sustain the alternative food networks in the country, such as: solidarity and critical consumption, organic and km-0 productions as ways to promote environment protection, respect of labour regulation and fair economic relations. Several authors have recognised their role in reducing the marginalization of small and micro farms in the country (Forno and Graziano, 2014; Grasseni, 2014). The historical foundation of GAS can be traced back to the 19th century, when mutual purchasing groups had been promoted in the experience of consumers’ cooperatives. More recently, the NoGlobal movement and the expansion of fair trade during the `90s have favoured the progressive increase of consumerism awareness among the middle classes (both in terms of purchasing power and in terms of cultural capital) that sustained the progressive growth of the GASs movement. GASs are now in a mature phase of the social innovation cycle and new more institutionalised forms (such as emporiums and formal associations) have now been established next to the original informal groups of consumers. The aim of this paper is to describe origins, features and transformations of the GASs movement in Italy. Our analysis is based on documents, materials and interviews out of WP7 qualitative phase in order to sketch a case study about Solidarity Purchasing Group. Between September 2015 and January 2016 35 interviews have been conducted with social innovators belonging to 35 GASs, distributed nation-wide. GASs have been selected randomly, stratifying the sample on the basis of a composite index aimed to capture the vulnerability of the contexts, being classified as low, medium and high vulnerable territories. The Italian team has interviewed at least ten social innovators for each type of context. In order to fully understand the life cycle of the social innovation and to trace the historical foundation of GASs movement, starting from the original experience of mutual consumer cooperatives, we have also added up 7 key-informant interviews with national and local representatives of GAS movement and with academic experts.

This paper reviews various approaches to measuring business innovation from the angle of capturing social innovations and offers several methodological and policy conclusions. First, the Innovation Union Scoreboard (IUS) indicators in principle could be useful in settings where the dominant mode of innovation is based on R&D activities. In practice, however, both R&D and non-R&D-based modes of innovation are fairly important. IUS, therefore, only provides a partial picture. Social innovations can certainly rely on R&D-based technological innovations. Their essence, however, tends to be organisational, managerial and behavioural changes. The IUS indicators do not capture these types of changes. Second, an assessment of the 81 indicators used to compile the Global Innovation Index reveals that it would neither be a fruitful effort to rely on those indicators to capture social innovations. Third, given the diversity among innovation systems, a poor performance signalled by a composite indicator does'nt automatically identify the area(s) necessitating the most urgent policy actions. Only tailored, thorough comparative analyses can do so. Fourth, analysts and policy-makers need to be aware of the differences between measuring (i) social innovation activities (efforts) themselves, (ii) the framework conditions (pre-requisites, available inputs, skills, norms, values, behavioural patterns, etc.) of being socially innovative, and (iii) the economic, societal or environmental impacts of social innovations.