Social innovation is a very wide term that includes ideas, ways and means, strategies and even organizations that works out innovative solutions to meet the demands of the public, especially those who live at the bottom of the pyramid. It may include innovative fields in a wide variety of setups like education, healthcare, community development etc.
The micro credit scheme started by Mohammad Yunus in Bangladesh is a very good example of social innovation. Distance learning methodology similarly is a social innovation that enables people in far fetched areas to have access to quality education. The concept can still more be extended to open source techniques used in software development.
Development of the concept of Social Innovation
The idea of social innovation is not a recent one, though it may have been discussed more often recently. Benjamin Franklin, for example, made references of it in his writings as small modifications that may be brought about in the social structure to solve everyday problems.
Later on certain French workers made mention of the same in their writings. In the recent literature the term social innovation is frequently found in the writings of some management gurus like notably in those of Peter Drucker and Micheal Young. Some other noted sociologists like Karl Marx and Max Weber also worked extensively on social innovation for bringing about social change.
Of late Joseph Schumpeter incorporated it into his concept of creative destruction. He also extended his concept to defining entrepreneurship as a way of creating new product or service by combining the existing elements.
Organizations are globally being attracted to the idea of creating and marketing products and services for those at the bottom of the pyramid. As C.K Prahlad rightly notified us about the fortune at the bottom of the Pyramid, increasingly marketers are driven to the idea of tapping this potential hitherto undiscovered.
Nearly four billon people around the world make a living on about two U.S dollars a day and this is magnanimous not only in terms of a business opportunity but also in terms of a reciprocal relationship. Firms cater to the needs of these people and they in turn offer a huge profit opportunity that is dependent on the scalability of the same.
The operation may however not be as simple as it appears on paper. There are barriers not in production but in distribution because low income household markets are price sensitive and highly segmented.
Global FMCG giant P & G, for example, developed PUR (a water purification system) in partnership with US government which was meant for low income consumers. The product was meant to serve a social need which was to provide clean and hygienic water at places where the drinking water was unsafe. The product failed to serve well and after three years of launch, it was found out that the product was a failure!
It clearly appears that cost is not the only factor that acts a barrier to the success of a social innovation. There are yet other examples where out reach (ease of access), distribution channels were ignored and social innovations failed their purpose. The need is of building sustainable models that are operationally well laid out and successful in delivering the goods. Remember cost is not the only factor!
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