How social entrepreneurs can enhance service innovation in Europe

The SELUSI research project has been working to find out whether the special abilities of social entrepreneurs might be utilised by more traditional companies to promote their own innovation-led growth. The project suggests that the intelligence of social entrepreneurs can be leveraged to enhance innovative processes in corporate contexts outside the realm of the purely social enterprise.

In Europe’s mature economies, innovation is the grease that keeps the wheels of commerce turning. Consequently, considerable effort (and money) is being spent on finding out how best to foster innovation, particular in the services sector, since that accounts for the bulk of Europe’s private-sector economic activity. One source of innovative capital, however, appears to have been largely neglected in this quest: social entrepreneurs.

SELUSI was launched in 2008 with an awareness that it was operating in a field that was poorly understood. Even at the end of the project, the researchers acknowledged that there is no definite consensus about what the term ‘social enterprise’ really means. In order to approach their subject methodically, the SELUSI team developed a basic set of criteria for selecting enterprises to be included in the project panel sample. They focused on “ventures that are primarily in the business of creating significant social value and do so in an entrepreneurial, market-oriented way – that is, through generating own revenues to sustain themselves”.

Working in five EU Member States (Hungary, Romania, Spain, the UK and Sweden), the researchers sought out ventures that were not only regarded as having a special feel for societal trends but also practical experience of thinking up a business model. These types of ventures were considered as offering the most relevant intelligence for mainstream businesses.

Over the course of two years (between 2009 and 2011) the SELUSI team then set about collecting data on over 600 social enterprises, creating a unique data set. The researchers analysed the attributes of 500 individual social entrepreneurs, identifying what sets them apart from their non-social-enterprising peers. What they found was that social entrepreneurs appear to be much less conformist and radically more ‘universalist’ (with values transcending the self) than mainstream entrepreneurs.

With their more universalist orientation, social enterprises were found to be more sensitive - and responsive - to social market needs. Indeed, the researchers found that social ventures systematically identify and respond to such needs (e.g. environmental concerns or the specific needs of the elderly) long before the bulk of the marketplace encounters them. SELUSI suggests that in this sense social enterprises are on the cutting edge when it comes to dealing with certain needs, and that obliges them to innovate as a matter of course. In sum, these project’s findings support the hypothesis that social enterprises are indeed ‘lead users’ for social service innovation.

Aside from exploring what motivates social entrepreneurs and how they experience social service needs, SELUSI undertook two action-research experiments in which it tested ways to link the intelligence of social enterprises with the real-world innovation challenges of a mainstream business. (Figure 1):

 

Figure 1: Action research experiment model


In conjunction with the service innovation consultancy, i-propeller1, SELUSI developed an open-innovation mechanism based on ‘crowd sourcing’ (outsourcing a task to a large group of people or community). The more ambitious of the two experiments involved the mainstream company, Telenet (Belgium). The aim in this case was to explore how a large telecommunication company in Western Europe can effectively recognise opportunities for social business innovation.

Utilising crowd sourcing techniques, the experiment integrated input from 17 external social entrepreneurs. They were asked to provide ideas on how to build a ‘green’ identity for the company in order to help it sustain its competitive advantage. Crowd-sourced input was also collected for the same purpose from employees within the telecommunications company. The ideas of the two groups were meticulously documented, analysed and scored.

What the researchers found was that “relative to corporate employees, social entrepreneurs delivered more integrative ideas.” Examining the results of both action-experiments, the research team concluded that ideas crowd-sourced from social entrepreneurs do indeed differ from those that a company can access internally.

While much research remains to be done in this exciting field, SELUSI has demonstrated that social entrepreneurialism does have an innovative capacity that can be of benefit to mainstream companies. Importantly, the researchers note that social entrepreneurs are particularly strong with regard to services innovation. If that strength can be systematically leveraged – for example, through collaborative techniques such as crowd sourcing – this could have positive implications for Europe’s economic and social development.

 

1 See: http://www.i-propeller.com/Research

SELUSI – Social entrepreneurs as "lead users" for service innovation (duration: 1/6/2008 – 31/10/2011). FP7 Socio-economic Sciences and Humanities, Activity1 “Growth, employment and competitiveness in a knowledge society", Research area 1.2 “Structural changes in the European knowledge economy and society”. Collaborative project (small and medium scale focused research project).

See: http://www.selusi.eu/

Contact: Dr. Marieke Huysentruyt, M.E.Huysentruyt@lse.ac.uk