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Every truth passes through three stages.
First, it is ridiculed.
Second, it is violently opposed.
Third, it is accepted as being self-evident.
—Arthur Schopenhauer



Geoff Mulgan is director of the Young Foundation based in London (U.K). He previously worked in the U.K. government as director of the Strategy Unit and head of policy in the Prime Minister's office, and before that was founder and director of the thinktank Demos. He is a visiting professor at London School of Economics, University College London and Melbourne University.

What Is Social Innovation?

Social innovation refers to innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly diffused through organizations whose primary purposes are social. Business innovation is generally motivated by profit maximization and diffused through organizations that are primarily motivated by profit maximization. There are of course very many borderline cases, for example models of distance learning that were pioneered in social organizations but then adopted by businesses, or for-profit businesses innovating new approaches to helping disabled people into work. But these definitions provide a reasonable starting point.

A good example of a socially innovative activity in this sense is the spread of cognitive behavioral therapy, proposed in the 1960s by Aaron Beck, tested empirically in the 1970s, and then spread through professional and policy networks in the subsequent decades. A good example of socially innovative new organizations is the Big Issue, which publishes Big Issue Magazine, and its international successor network of magazines sold by homeless people.

Much of what we now take for granted in social life began as radical innovation. A century ago, few believed that ordinary people could be trusted to drive cars at high speed, the idea of a national health service freely available was seen as absurdly utopian, the concept of “kindergarten” was still considered revolutionary, and only one country had given women the vote. Yet in the interim, these and many other social innovations have progressed from the margins to the mainstream.

During some periods in recent history, civil society provided most of the impetus for social innovation (see box, facing page). The great wave of industrialization and urbanization in the nineteenth century was accompanied by an extraordinary upsurge of social enterprise and innovation: mutual self-help, microcredit, building societies, cooperatives, trade unions, reading clubs, and philanthropic business leaders creating model towns and model schools. In nineteenth and early twentieth century Britain, civil society pioneered the most influential new models of childcare, housing, community development and social care. At other times governments have taken the lead in social innovation—for example, in the years after 1945 democratic governments built welfare states, schooling systems, and institutions using methods such as credit banks for farmers and networks of adult education colleges. (This was a period when many came to see civic and charitable organizations as too parochial, paternalist, and inefficient to meet social needs on any scale.)

There is every reason to believe that the pace of social innovation will, if anything, accelerate in the coming century. There is certainly more money flowing into NGOs and civil society than ever before. Economies in both developed and (to a lesser extent) developing countries are increasingly dominated by services rather than manufacturing. Over the next 20 years, the biggest growth for national economies is likely to come in health, education, whose shares of GDP are already much greater than are cars, telecommunications, or steel. These growing social sectors are all fields in which commercial, voluntary, and public organizations deliver services, in which public policy plays a key role, and in which consumers co-create value alongside producers (no teacher can force students to learn if they don’t want to). For all of these reasons, traditional business models of innovation are only of limited use—and much of the most important innovation of the next few decades is set to follow patterns of social innovation rather than innovation patterns developed in sectors such as information technology or insurance.

Thousands of recent examples of successful social innovations have moved from the margins to the mainstream. They include neighborhood nurseries and neighborhood wardens; Wikipedia and the Open University; holistic health care, and hospices; microcredit and consumer cooperatives; the fair trade movement; zero-carbon housing developments and community wind farms; restorative justice and community courts; and online self-help health groups.

Yet despite these trends, the process of social innovation remains understudied. While processes of commercial innovation have been the subject of considerable academic research, the parallel field of social innovation has received little attention and rarely goes beyond anecdotes and vague generalizations. 1 This neglect is mirrored by the lack of practical attention paid to social innovation. As compared with the funds spend on commercial and military innovation, the amount spent by governments, nongovernmental organizations, and foundations to develop innovative solutions to common needs is small. While national strategies abound to support innovation in business and technology, no comparable strategies at the national level exist to understand and support social innovation.

The Young Foundation’s precursors were among the world’s most important centers for understanding social enterprise and innovation and for doing it. Under Michael Young, widely seen from the 1960s to the 1990s as one of the world’s most effective social entrepreneurs, they helped create dozens of new institutions, including the Open University and its parallels around the world, Which?, the School for Social Entrepreneurs, and the Economic and Social Research Council. The institutions pioneered new social models such as phone-based health diagnoses, extended schooling, and patient-led health care. 2

This tradition of practical social innovation is now being energetically revived from the Young Foundation’s base in east London, where we are working with cities, governments, companies, and NGOs to accelerate their capacity to innovate and launching new organizations and models that can better meet people’s needs for care, jobs, and homes.

The combination of our institutional heritage and current activities prompted us to seek a better understanding of social innovation—and particularly innovations that take the form of replicable programs or organizations. We are particularly interested in fields where there is the greatest gap between needs and current provision, which can often be gauged by how angry or dissatisfied people are (see Box 2). As the great Victorian historian Lord Macauley wrote: “There is constant improvement precisely because there is constant discontent.”

This article provides a summary of our findings about the processes of social innovation and it outlines the frameworks we have developed for understanding how to accelerate social innovation and how to improve the chances of new ideas succeeding.