Social Innovation

Comparative Perspectives

Helmut Anheier, Gorgi Krlev, Georg Mildenberger

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351655347
• Edition: 1
• Topic: Business
• Subtopic: Government & Business
• Index: Business

Social Innovation: Comparative Perspectives investigates socio-economic impact. Since it is hard to establish causality and to measure social properties when investigating impact, especially at the level of society, the book narrows down impact to one priority aspect: social innovation – understood as organizations' capacity to generate novel ideas, ways and means of doing things, of addressing public and social problems of many kinds.

This volume's primary assertion is that the Third Sector, specifically through stimulating civic involvement, is best placed to produce social innovation, outperforming business firms and state agencies in this regard. By investigating actor contributions to social innovation across seven fields of activity, Social innovation: Comparative Perspectives develops our understanding of why and how the Third Sector is central to functioning, cohesive and viable societies.

This volume is based on contributions of the project "ITSSOIN – Impact of the Third Sector as Social Innovation" funded by the European Commission under the 7th framework programme. It will be of insight across disciplines, in particular to the growing social innovation community, innovation researchers more generally and to non-profit scholars. The practical relevance of the book will be of interest to European and national policy makers and practitioners across different sectors.

Part I
The Question

Who Are the Innovators and How to Find Them? (Conceptual Foundations)

1 Introduction

Social Innovation—What Is It and Who Makes It?

Gorgi Krlev, Helmut K. Anheier, and Georg Mildenberger¹

Impact of the Third Sector as Social Innovation

The third sector or non-profit sector² has increasingly gained, in recent years, policy recognition and attracted academic attention. Researchers have analysed non-profit organisations from different perspectives, usually emphasising specific roles this set of institutions is assumed to perform (Anheier, 2014). The most prominent among them are:

1. Service-providing role: In the wake of government failure, non-profit organisations are seen as complementary or substitutional elements in the public service systems. As governments with limited resources seek to serve the average voter under conditions of demand heterogeneity for public and quasi-public goods and services, non-profit organisations meet a broad range of minority preferences (Ben-Ner & van Hoomissen, 1991; Weisbrod, 1975, 1998). In response to market failures, non-profits signal trustworthiness in terms of service delivery under conditions of information asymmetries that make profiteering likely and monitoring expensive (Hansmann, 1980, 2006; Young & Steinberg, 1995).
   Comparative research has shown that tendencies towards government and market failure depend on the type of welfare regime (Esping-Andersen, 1990), the variant of capitalism involved (Amable, 2003; Hall & Soskice, 2001; Schneider & Paunescu, 2012), and correspond to different non-profit regimes (Anheier, 2014; Anheier & Salamon, 1997; Salamon & Anheier, 1992). Such patterns and tendencies also vary over time, especially in terms of state capacity in respect of an effective regulation (Anheier, 2014; Hansmann, 1996; Hertie School of Governance, 2013).
2. Advocates and value guardians: Apart from investigating the non-profit organisations’ service-providing role, research has focussed on the issue of to what extent non-profits engage in advocacy activities to protect or advance the position in society and welfare of people needing help, e.g., disabled or poor persons or members of neglected communities. Non-profit organisations are hypothesised to be an important element of social self-organisation, to ‘give voice’ to those otherwise unheard, and to support those who would otherwise find little or no attention.
   The research on the topic has explored cross-national differences as to the advocacy and the values-related role of the non-profit sector, and observed that—just as the service-providing role mentioned previously— they not only vary by the kind of welfare regime but also by the kind of democratic and administrative system and, more generally, the civic culture and civic-mindedness of local populations (see, e.g., Almond & Verba, 1963; Halman & Nevitte, 1996; Putnam, 2000; Putnam, Leonardi, & Nanetti, 1993).
   By implication, third sector service provision and advocacy are often linked in ways that go beyond combining the economic with the social, as it has traditionally been the case in social economy organisations such as cooperatives, mutual and employee-owned enterprises (Borzaga & Spear, 2004; Pestoff, 2012). By contrast, non-profits are co-producers and engage in product bundling as they combine service provision and values (Anheier, 2014; James, 1989), which are social values, of course, but frequently also religious, political or humanitarian values in a profound sense. They are “likely to seek out and include the target population for purposes of value formation, and long-term commitment and loyalty” (Anheier, 2005, p. 213). Thus, non-profits deliver services with a ‘plus’ (Salamon, Hems, & Chinnock, 2000, p. 23).

In addition to the identification of the sector’s functions it has been mapped, both conceptually and empirically: The Johns Hopkins Comparative Nonprofit Sector project (CNP) has made a seminal contribution to mapping the sector in an international perspective with a special emphasis on its scale, scope, structure and financing (Salamon & Anheier, 1999). This effort has been followed up by the United Nations’ Handbook on Non-profit Institutions in the System of National Accounts, developed by Anheier, Tice and Salamon with the UN Statistics Division, which resulted in a satellite account on non-profit organisations (SNA) that has since then been adopted by a growing number of countries.

While all these efforts have contributed to a better understanding of the sector in its economic and social foundations, a major gap remains: the sector’s impact and the longer-term outcomes achieved or involved. This book has evolved against the background of a call for proposals issued by the European Commission targeting these very results of third sector activity.

In this book, we seek to explore this issue and propose a novel way to approach the capturing of the third sector’s impact. We start with reviewing the tradition of performance measurement in relation to the third sector, specifically from an economic and management perspective. Performance in the wider sense (including, for instance, the reliability or quality of service provision) can thereby be regarded as a proxy for impact. In the more narrow sense (effectuated targeted change as well as externalities for a range of beneficiaries), it can be seen as a synonym for impact. Social impact is denoted in the standard way of the ‘logic model’ of programme evaluation (Weiss, 1998) as the change caused within a ‘social system’ (outcomes that result from outputs delivered by an intervention) minus the change that would have happened anyway (‘deadweight’) (Clark, Rosenzweig, Long, & Olsen, 2004; see also Ebrahim & Rangan, 2014 or Nicholls, 2009 for the underlying connections).

In the second step we will outline the challenges that evolve in assessment of performance. Against these methodological and conceptual challenges and despite the major advances that have been made in promoting performance measures in the third sector, we will propose another, more timely, policy relevant, and feasible way of assessing third sector impact: a focus on social innovations and the question as to how the third sector is likely to play a key role in their emergence, nurturing and spreading.

To establish this link, it will be necessary to review a variety of traditions that exist in innovation research and to posit how social innovations take a particular position therein, specifically in view of today’s societies’ challenges. Subsequently, we will establish a tight link to the third sector and provide some key rationales for its socially innovative capacity giving the project which this book is based on its name: Impact of the Third Sector as Social Innovation (ITSSOIN). While an explicit definition of social innovation will follow, we can forestall that social innovations come in different outfits and there are recent as well as historical examples of what they are. Contemporary examples range from new employment models built on a special ability image of disability, to (decentralised) renewable energy production. Historical examples comprise social housing, public fresh water supply, or mutual and co-operative movements.

In the chapters following the introduction we will systematically gauge the socially innovative capacity of the third sector by introducing a research design on social innovation that examines the actors involved from a neutral position, that is targets non-profits, public agencies and firms alike to study their relative contributions.

Performance, Impact and the Third Sector

The growing role of performance measurement and impact assessments in the third sector is linked to both, its enhanced position in taking on state-funded service provision and its critical role as an advocate for many causes. The third sector is arguably likely to be able to achieve social welfare benefit in certain areas but also less likely to be able (and sometimes willing) to demonstrate it. In a context of rapidly escalating health and social care demands alongside public expenditure restraints, performance measurement becomes ever more important. There is an extensive literature in economics concerned with valuing the quality of life, the fulfilment of needs and related matters. Economics has contributed to the theoretical and policy debate about the different alternatives for measuring social welfare and also to the discussion of strategies for enhancing social wellbeing. Economists have been providing foundations for normative theorising and developing different methodologies or approaches to meet the challenges of analysis in a complex and continuously changing environment.

To get a better understanding of welfare in the context of long-term care needs and services, Davies and Knapp (1981) pioneered a simple organising framework known as ‘The Production of Welfare Framework’ which “seeks to make explicit the interrelationships between key elements [in the system], and then exploits the parallels with, for example, parts of the economics literature to enter hypotheses, structure empirical investigations and interpret findings” (Davies & Knapp, 1994, p. 264). The framework provides a useful conceptual foundation for performance evaluation which stems from economics but is also influenced by other disciplines (Davies & Knapp, 1981; Knapp, 1984). The framework encourages various theoretical concepts, approaches, objectives and stakeholders’ goals. Its main features rely on the description of elements and relations under an economic approach; the relevance of the purposes and processes within a specific context, and finally on its explanatory and predictive capacity (Kendall & Knapp, 2000). The framework has found to be useful in helping identify relevant evaluative criteria based on economy, effectiveness, efficiency and equity.

Economy refers to cost minimisation pursued to lever action capacity in view of scarce resources. Effectiveness refers to the relationship between service provision (or prevention and other policy strategies) and enhanced final outcomes relevant to the overarching aim of increasing welfare. Because measuring the comparative effect on final outcomes is often difficult, intermediate outputs are often used which are simpler but more short-sighted. Despite being insufficient to provide an estimation of their impact on the welfare of individuals and communities, intermediate outputs may offer information about performance in the shape of rough estimation about recipient-related consequences. Efficiency, in a broad sense, refers to the combination of resource inputs and effectiveness of service provision, aiming to maximise ends from given means or to minimise the means needed to achieve given ends (Knapp, 1984, pp. 10–11). It can be improved when reducing the cost of producing a certain level of service or good, or improving the level of effectiveness given a certain cost. Equity in economic research has been used as a concept of fairness or justice, which is a subjective matter and requires value judgement. Although the terms equity and equality are often used interchangeably, they are not the same: equity is concerned with ensuring that everyone has a fair share whilst equality tries to give everyone the same share. Assessing whether an organisation, community or individual is ‘meeting needs’ in an equitable manner is to assess how far the agents are (more) capable of living a better or good life (capability approach; Sen, 1985).

This trend has been complemented by broader performance ratings and incentives relating to quality of life, wellbeing and happiness. The most prominent among them could be the increasing spread of quality-adjusted-life year (QALY) analysis, in particular in Anglo-Saxon health care contexts (going back to Fanshel & Bush, 1970; Torrance, Thomas, & Sackett, 1972; Weinstein & Stason, 1977). It combines the additional number of years granted to a person by a medical treatment with the quality of life that person will enjoy during these years. Some of the tools used to measure QALYs have been criticised for their inability to measure all aspects of life that matter to people, and for being insensitive to changes in broader wellbeing (Tsuchiya & Dolan, 2005). Partly in response to this, new measures have been developed to capture different aspects of quality of life: A happiness measure has been developed which encompasses experiences of mood and evaluations of life satisfaction and is now employed in population surveys in Europe (Dolan, 2011).

The Remaining Gaps

It is probably impossible to develop one outcome tool that is able to capture all aspects of life that matter to different people in different situations. The attractiveness of employing the small range of generic measures presented earlier is that resource allocation decisions can be made within department budgets (such as departments responsible for health and social care). In the following we outline how performance measurement is used in third sector practice and which particular challenges are caused by third sector characteristics in such kinds of measurement. This will mark the point of transition from performance measures to other ways of assessing impact, one of which—and the most effective, as ITSSOIN argues—is a focus on the third sector’s contribution to social innovation.

The Limits of Economic (E)valuation Practices

Economic evaluation is a comparative analysis of costs and outcomes associated with the goals of increasing social welfare and making best use of limited resources. Although the method could be too resource-intensive to be repeated frequently as part of regular performance management processes, economic evaluations present a theoretical foundation of performance measurement and set the context in which performance measurement takes place. The contribution of involved analysts refers to

all stages of the evaluation process including: helping to clarify objectives and convert these into outcomes that are measurable; drawing a clear distinction between processes, inputs, outputs and outcomes; encouraging a more systematic and rigorous assessment of costs and outcomes, with a particular emphasis on generating statistically valid results; highlighting the need to consider what would have happened in the absence of the intervention being evaluated; adopting a societal perspective or multiple perspectives, thus ensuring a more comprehensive assessment of a programme’s impact.

(Byfold & Sefton, 2003)

Whilst these authors refer in their report to the application of economic evaluation in social welfare—and to social care in particular—these principles apply to all sectors, including those where the third sector may play an important role.

There are different methods to value costs and outcomes depending on the nature of the research question asked. Cost-minimisation analysis is used where outcomes are certain and similar across the alternatives to be evaluated, which is rare. All other approaches to economic evaluation incorporate outcomes explicitly in the analysis, but they do it in different ways. In areas where there is an accepted generic measure that is thought to capture all relevant effects, one can employ cost-effectiveness analysis. If this measure is a preference-weighted measure of utility (such as the QALY), the evaluation is often called (in health care contexts, at least) a cost-utility analysis. Recommendations about in...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Preface
• Acknowledgements
• List of Contributors
• Chapter Summaries
• Part I The Question: Who Are the Innovators and How to Find Them? (Conceptual Foundations)
• Part II The Evidence: Social Innovation and Actor Involvement (Empirics)
• Part III Synthesis: Social Innovation Conditions