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Social innovation and smart specialisation strategies

A social innovation is a new product, process, service, organizational model or solution that provides an answer to social needs unmet by the market or the public sector. Some use a narrower definition, namely workplace innovation: the development of new labour market integration, new jobs, new forms of labour participation and human resources management.

Written by Claire Nauwelaers

Reviewed by David Walburn


The concept

Social innovation and smart specialisation

What can be expected?

How can policy spport innovation?

A quote


Experts' comments


The concept

The main difference with the usual concept of innovation is that social innovation aims at, and results in social added-value, while innovation seeks and brings economic added value.

Social innovation also differs from innovation in terms of the actors involved. Social innovation is often developed by actors from the non-profit sector or within public services. Social entrepreneurs and social enterprises, as well as non-profit organisations and community/citizen associations are key actors in the field of social innovation. And last but not least, citizens and users groups are important players both for the identification of social needs and for development and for testing of new solutions. The acceleration of social media uptake facilitates the participation of individuals and communities of interest in the development of social innovations, and explains the upsurge of this concept in recent years.

Examples of social innovations are:

  • Innovations that improve public services: the development of alternative and more ecological sourcing methods for food in hospitals; new training methods for prisoners that enhance their chances of later integration in the labour market; shift in funding methods for municipal waste (from lump sums to pay-per-kilo systems);
  • Innovations from the third sector (voluntary and community groups, social enterprises): a new touristic service that consists in city guided tours performed by homeless people; a web-based system that supports the free supply of personal services by citizens in a locality; fair trade approach developed by non-profit companies.


Social innovation and smart specialisation

The territorial dimension of social innovation (proximity to citizens) justifies its inclusion in a regional development strategy: such strategies have as their ultimate goal to increase the well-being of citizens, and this can be nurtured both by economic and social advances.

The goals of smart specialisation strategies are expressed in economic terms, namely transforming an economic fabric towards activities with higher knowledge content enhancing international competitiveness. There is room for a social dimension in such strategies. Since social innovation is a new, unexplored area, the question is open as to whether social innovation and economic innovation are complementary and should be integrated as parallel streams, or if they can be integrated and bundled into activities where the frontier between economic and social dimensions is blurred. Social enterprises, which increasingly adopt modern management practices and evolve towards self-sufficient organizations (generating their own incomes while keeping their social goal) are well placed to create this link between economic and social goals in RIS3. In addition, social enterprises create jobs, and the growth of this sector can contribute simultaneously to economic and social objectives (the social economy sector employs over 11 million people in the EU accounting for 6% of total employment).

Social innovation can be part of a smart specialisation strategy in three ways:

  1. Social benefits can be a goal assigned to the strategy, along with economic benefits: social innovation has then a role to directly contribute to the RIS3 goal;
  2. Social innovation can become one of the specialisation domains in which the region aims to excel and differentiate itself from other regions;
  3. Tools and funding mechanisms to support social innovation can be part of a RIS3 policy mix.

Integrating social innovation in a smart specialisation strategy needs to be achieved considering all six steps of the design of RIS3:

1) Analysing the innovation potential: the potential for social innovation should be assessed, based on the identification of existing practices. The size and composition of the social enterprises sector is one element of this diagnosis;

2) Setting out the RIS3 process and governance: including social innovation in a RIS3 necessitates the involvement of a new range of stakeholders from the fourth leg of the “Quadruple Helix”, namely citizens, associations, non-profit organisations and social entrepreneurs;

3) Developing a shared vision: a common definition of what social innovation actually means is an important element at this stage. The place and role of social innovation in overall regional development should be debated and become subject of consensus in the formation of a vision for the region;

4) Identifying priorities: this most difficult step of a RIS3 demands a good knowledge of the situation with respect to social innovation, which is often not available. Often social innovation efforts evolve through small-scale initiatives. When specific areas of success emerge, these should be prioritized in the strategy;

5) Defining an action plan with a coherent policy mix: actions plans may include two types of measures:1) support to experiments and 2) support to scaling-up experiments into actions with a bigger critical mass;

6) Monitoring and evaluating: this is essential in an emerging field, since many actions are likely to be of an experimental nature and will have to be revised and fine-tuned according to results obtained. Due to the lack of prior evidence on impacts of social innovation, devoting resources to monitoring efforts and outcomes, and evaluating promotion and support schemes are key elements of a RIS3 including a social innovation dimension.


What can be expected?

The outcome of social innovation can be summed up in two terms, capturing results and process: “social transformation” and “social capital”. First, the outcome of social innovation relates to the improvement in the social challenge addressed by the innovation: reducing poverty, decreasing environmental burdens, enhancing social inclusion in multicultural societies, ensuring integration of older people in society, etc. Second, since the process of social innovation involves the participation of many stakeholders and generates new interactions while empowering the actors involved, the process itself, by enhancing social capital, is also an outcome.


How can policy support social innovation?

Public authorities can support social innovation through the development, implementation and follow-up of policy instruments.

Social innovation policy instruments

The Social Innovation Factory in Flanders is a light structure funded by the regional government (€2.6m yearly), aiming at catalyzing social entrepreneurship projects. The support consists in advice to social entrepreneurs, funding for feasibility studies, executive courses for managers in the non-profit sector, support for local and regional networking around social innovation ideas, launch of prizes for social innovation projects, etc. The Innovation Agency IWT has a new dedicated funding line to fund projects selected on a competitive basis (€50M/year/project). The overall aim is to support the creation of a strong set of “social innovators”, well equipped to drive their enterprise or project to full success.

PACA-Labs is a regional programme (€1m yearly) implemented by the French region Provence-Alpes-Côte d’Azur. It aims at fostering user centered open innovation by giving regional SMEs opportunities for tests, experimentations and fields for «proof of concept» with communities of users in a local territory. Through experimental projects (€240M/year/project), better identification of needs and real life testing of new solutions are achieved, in fields as diverse as fire detection devices for fire brigades, solutions for municipal waste treatment, devices for distance monitoring for old people, etc. The programme will be extended from ICT to other fields.

Social innovation has been explicitly integrated in the regulations for the Structural Funds in 2014-2020, hence ERDF and ESF funds can be used to support social innovation initiatives or experiments in a region.

Evaluation of baseline and outcomes of social innovation

Existing regional innovation scoreboards, indexes and monitoring and evaluation systems do not incorporate a social dimension. The Basque Country has developed a “Regional Social Innovation Index” (RESINDEX). The index measures the extent of social innovation activity in the region as well as the factors that are thought to favor or hinder the development of social innovation. The indicators cover 282 regional agents and measure their innovation potential, their social orientation and how innovative they are in social oriented projects.

Incorporating social return on investment conditions in the management of publicly funded schemes or public services, like the City of Barcelona does for its home care services, is another way to measure outcomes of social innovations.


A quote

We have moved from a long period of consumer-driven innovation to an era in which innovation is likely to be most strongly driven by social issues”. - Professor Luke Georghiou, Manchester Institute of Innovation Research.



  • BEPA-Bureau of European Policy Advisers (2010), Empowering people, driving change: Social Innovation in the European Union, Report prepared for the European Commission.
  • European Commission (2012), Strengthening social innovation in Europe: Journey to effective assessment and metrics, DG Enterprise and Industry.
  • European Commission (2013a), Guide to Social Innovation, DG Regional and Urban Policy.
  • European Commission (2013b), Social innovation research in the European Union Approaches, findings and future directions: Policy review, DG Research and Innovation.
  • Innobasque (2013), RESINDEX: Regional Social Innovation Index: A regional index to measure social innovation, Zamudio, Innobasque.
  • Lundström, A and Zhou, C. (2011), Promoting innovation based on social sciences and technologies: the prospect of a social innovation park, European Journal of Social Science Research, 24:1-2, 133-149.
  • Moulaert, F., MacCallum, D., Mehmood, A. and Hamdouch, A. (eds) (2013), The International Handbook on Social Innovation: Collective Action, Social Learning and Transdisciplinary Research, Cheltenham: Edward Elgar.
  • NESTA (2008), Social Innovation: New approaches to transforming public services, NESTA Policy Brief, SI/18 - - http://www.nesta.org.uk/sites/default/files/social_innovation_policy_brief_cover.pdf.
  • OECD (2011), Fostering Innovation to address social challenges, Workshop proceedings, STI/CSTP, OECD publishing, Paris.
  • OECD (2010), Social entrepreneurship and social innovation, in OECD (2010), SMEs, Entrepreneurship and Innovation, OECD publishing, Paris.
  • OECD Innovation Policy Platform, online at : https://www.innovationpolicyplatform.org/content/social-innovation?topic-filters=12802


Mrs Claire Nauwelaers


Independent expert in Science, Technology and Innovation policy, Advisor to the OECD and the European Commission

Claire NAUWELAERS is an independent Policy Analyst and Governmental Adviser, specialised in research and innovation policy, working in an international environment. She has 30 years of experience in this field and a wide network of contacts with experts, academics and policy-makers. Until 2011 she was working on innovation as a policy analyst in the Regional Development Policy Division at OECD. Previously, she was Research Director at UNU-MERIT, the University of Maastricht and United Nations University, in charge of the research team: “Governance of Science, Technology and Innovation». She started her career as researcher within two academic teams (the Interdisciplinary Centre in Regional Development, and the Interdisciplinary Centre Law-Economics) at the University of Louvain in Belgium, where she was in charge of research projects dealing with economic development and innovation.

Her main areas of research and expertise revolve around the analysis and policy advice about the functioning of research and innovation systems, notably at the regional level. She is working on policy development, analysis and evaluation in the areas of Research, Technological Development and Innovation in response to needs from the European Commission, national and regional authorities. She is currently one of the leading experts in Europe on Smart Specialisation Strategies. She is member of Scientific Steering Committees of several Research Networks, part of policy review teams, and is regularly invited as expert in High-Level Expert groups for the European Commission or Member States. She has published numerous books and articles on policy aspects of research, technology and innovation.



Expert's comments

This is an exemplary paper. The concept is clearly explained without jargon, as is the relationship of social innovation to smart innovation. As a guide to practitioners, the paper sets out the main issues comprehensively, containing enough meat to stimulate someone with little knowledge of the subject to start thinking creatively about how to use social innovation as a tool to improve their regions.  

An important point which is perhaps not brought out sufficiently in the paper, though it is alluded to in the examples presented, is that valuable and effective programmes of social innovation may not be expensive to devise or implement. Often they consist of doing things which are already being financed, but doing them better. This makes it particularly important that prominence is given to social innovation in communication about economic development policy so that best practice is effectively disseminated.

There is a further particular value to programmes of social innovation in that they direct the attention of practitioners and policy-makers to the needs of actual people. It is all too easy for economic developers to think of the needs of regions in terms of measures to boost investment, to meet the financial needs of small businesses, to encourage clusters, to support research and technical innovation. In doing so they may overlook the immediate needs of people living in their regions, or as Ms Nauwelaers puts it, “the well-being of citizens”. Economic improvements in themselves, welcome though they are, may not immediately address important social needs which have their roots in poverty and exclusion. 

In the “what is to be expected” section of the paper, a number of important benefits from programmes of social innovation for people facing disadvantage are highlighted. “Enhancing social inclusion in multicultural societies” and “ensuring integration of older people in society” are not matters which appear frequently in papers on regional economic development policy, and yet improving the lives of citizens is surely what all economic development policy should fundamentally be about.

Improving the life chances of people in regions in economic decline may appear to have some perverse outcomes. People who become better able to participate in economic life as a result of a programme of social innovation may choose to leave their region and go elsewhere where prospects are better, and thus contribute to the very decline which regional policy is intended to arrest. However, when life gets better for anyone as result of public policy, it should always be seen as a victory.

Regions do not experience the hardship of poverty and thwarted ambition caused by declining economies. People do.


Mr David Walburn


After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.