What is a Social Innovation?

The customary definition of social innovation is an innovation beneficial to society as a whole, especially to downtrodden and victimized individuals such as the poor, disabled, women, children, pets, and various ethnic and minority groups. Most citizen organizations and NGOs (Non Governmental Organizations) that do the social work of the world (over 100,000 such organizations worldwide) are "social innovators" (See for example, Hazel Henderson, "Social Innovation and Citizen Movements, FUTURES, pp. 327-388, vol. 25, #3, UK April, 1993)

Social Innovation is as Different from Commercial Innovation as Green from Red.

A social innovator attempts to create an innovation that produces "public goods" for the collective use or benefit of many people (See, for example, "Global Public Goods, Ed. Inge Kaul, Oxford University Press, 1999). In contrast, commercial innovators seek ideas for producing goods or services that customers want for use by the individual person, family, or corporation. Commercial innovations are usually based on technological innovations. New technology has been the biggest driving force for commercial innovation, but new technology has rarely been developed to drive social innovation. Three of the "Solutions (#3, #4, and #9) do require the development of new technology. In the others, technology plays little or no role. Social and commercial innovations differ in another important way. Public goods are usually paid by peoples' taxes, e.g. roads, public health facilities, etc., or donated or sponsored. The user does not pay for use. In the commercial world, the user pays.

Social Innovation must be Socially Responsible – sometimes called Doing Well by Doing Good
Addendum 6/15/06, Alan F. Kay

Metaphors, viewpoints, and hard facts that enlighten the essence of social responsibility:

1. My father in the mid-twentieth century sometimes said, "Climbing the ladder of success? Be careful not to kick anybody on the way up. You may need him on the way down."

2. Fish have no word for "water". They know no other media. Some species occasionally rise above the surface for a few seconds of air. They might wish to stay up longer and learn to fly -- and indeed might just do that over the course of millions of years. Empathizing with the fish, those of us struggling to make a better world hope that our smarter species can succeed in a few years. We may have 10 or 20 years. We don't have millions of years.

3. There are two reasons I now only invest in companies that meet first-rate clean, green, sustainable standards. First, compared to the tens of thousands of listed companies, limiting my attention to the mere few hundred that also meet high standards, greatly eases my evaluating process. Second, well, "When closely involved with clean, green companies, you'll meet a better class of people."

4. To compete with other investments Wall Street demands that the value of a company measured by revenue or profit must grow pretty close to 15% annually. Material growth cannot continue at an exponential rate forever. By the end of this century aside from at most a few astronauts surviving some months on the moon, the rest of us will have to live on finite earth pushing against the resource limits of usable air, water, topsoil, oil, and the like.

Let's take a look at how well the 15% Wall Street demands have been met over the past century. The most successful company, Exxon, in 2005, according to "Fortune" had 338 billion dollars annual sales with profits of 36 billion. Not so many years ago, as a young man I recall the very first "billion dollar" company, minuscule compared to Exxon today. For every company that achieves the 15% growth rate Wall Street loves, a hundred others fall by the wayside. In 2003, the financial industry made a whopping one third of all US profits. That's taking a lot of money out of the pockets of the vast majority of us working in non-financial companies and organizations!

Exxon is the direct descendent of Standard Oil. The story, uniquely inspiring to Wall Street, made its founder John D Rockefeller, the richest man in the world, largely based on a feature of purchase and sale agreements suggested by Standard Oil's corporate lawyer, Henry Flagler, that bought up competitors at unprecedented and not-to-be-refused prices. Standard Oil issued enough stock to maintain its percentage ownership after acquisitions. The practice then legal, soon after Rockefeller dominated the oil business, became illegal and is now known as "watering stock"!

5. Transition to a society that is now mainly competitive and slightly cooperative to one that is the other way round, something like 10% competitive and 90% cooperative. The fact is that humans enjoy cooperation, despite macro-economists incorrectly characterizing the motivation of people as dedicated to the pursuit of self-interest through competition.

6. Think of two or more heads of state (and/or their deputies) seeking agreement on working together. Or imagine two or more corporate CEOs similarly seeking such an agreement. In either case, or in a mixed case (heads of state agreeing with corporate CEOs) none of the parties agree to anything until each party is sure that it is in their own interest. This is standard practice. Anything else would be crazy, right? Well maybe not. Look at it this way.

Suppose they all went much further and only made agreements that would be beneficial to all countries -- or all companies -- or, better still, most of the people in the world. Would the world be a better place for everybody including the deal- makers? You bet it would. Imagine how you would feel if you knew that every deal-maker in the world was selflessly agreeing only to arrangements that produced a better world for all! So how do we get there from here?

It is possible to go from where we are to a better place, but it is extremely difficult to do so. Most people would say impossible.

In over twenty years of divergent efforts I and my partner, Hazel Henderson, slowly worked out some important ways to do just that. Sixteen of them are in this website (Click on "Solutions" button above). Others are at www.hazelhenderson.com.  Our activities often provided synergistic experiences: ranging from organizing civic, public service groups and start-up companies, to writing books and articles, to drafting legislation and regulations, to educating government officials, to guiding official government valuations, and to assessing technology for the Congress. With all this we have remained optimistic.