Wikipedia defines innovation as “the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society.”

Traditionally, the critical factor of success in social innovation is the innovative capacity of institutions, individuals and societies as a whole to enable and manage innovation as a process of on-going “creative destruction” (Schumpeter) for better and quicker (development) solutions. A workshop on “Strengthening Innovation Systems in the Context of Development Cooperation” (GTZ 2009), held in Dortmund in 2009, concluded that innovation in practice can best be facilitated by strengthening

• innovative capacities of different actors (e.g. values, management capacity, etc.),
• interactions between actors (e.g. knowledge sharing, networking, innovation culture), and
• an environment that enables actors to be innovative and to keep institutional settings adaptable to new findings and solutions (based on a focus on the real impact of innovations.)

Section 1 emphasized that practical policy and decision makers face a difficult double-bind situation: on one hand they are expected to show leadership required to manage change required by the knowledge society. On the other hand, new players and their heavy use of social media enforce a new paradigm of managing these changes in many facets of modern societies. This entails three different policy approaches discussed in literature and practice.

Along this classical line of thinking innovative change is typically managed within a fixed institutional setting (within an organisation, project, etc.). The main driver is keeping control of information, content, and value added.

This “linear innovation approach”, on a political level, for instance, is reflected in the World Trade Organization’s approach to patents and intellectual property rights as a basis for private sector production and trade. This model creates a robust base for private sector innovation whereby supportive institutional and regulatory frameworks are well in place, but it also has various weaknesses, in particular when it comes to non-market based or non-profit innovation e.g. in the area of vaccination programs.

Against this regulatory and policy background, organizations adopt social media as tools of knowledge management. This line of action is well-developed both in literature and practice . As a pervasive trend, organizations worldwide transform into “learning organizations” in order to optimize utilization of knowledge as a factor of production. Collaboration and information sharing in the best case improve innovative capacity, performance of knowledge workers, quality of knowledge-based output and organizational competitiveness. These benefits, however, critically depend upon the knowledge sharing culture and trust within the organization among other management factors (see e.g. Collison/Parcell 2004, Covey 2006, North/Gueldenberg 2011).

This “innovation catalyst approach” extends the linear model to society and management of public goods. The main driver is to create an environment that enables private sector innovation. Innovation policy measures address individual, institutional and policy capacities in order to stimulate innovation for growth and development (this may also include the integration into regional innovation programmes).

Social media are implemented to provide entrepreneurs, civil society and other private sector innovators with cutting-edge innovation know-how, digital infrastructure, access to good practices and benchmarks, room for reflection, sharing insights and learning from peers, as well as tools for implementation and evaluation of innovation systems. This approach creates visible impact and is pursued by governments worldwide. Many countries, therefore, adopt “digital agendas” which aim at providing both the regulatory and policy framework for innovation rooted in the knowledge society.

There are various challenges. First, innovation is not per se positive and has only winners,  are losers and negative effects as well. Therefore, it is very important to carefully analyze the system, in which innovation shall take place. Geoff Mulgan, Chief Executive of Nesta, phrases this as “systems innovation”, which is crucial in particular to tackle greater challenges or to successfully scale innovation. The type of innovation discussed here, i.e. social innovation, is much harder to achieve compared to product innovation happening in a laboratory. It brings in interests, power players and various other dynamics.

“In more cases, we see an interaction between bottom-up changes in culture and behaviour, and the responses of governments and big businesses, with a combination of new technologies, changed market dynamics, changed policies and also changed behaviour”. (Geoff Mulgan 2013)

Second, innovation always is an intervention in an existing system. This can make the best ideas fail. The “eco-system” for innovation changes at break-neck speed, leads to technical advances and a diversity of innovations. Ideas from one place at the world are quickly heard of elsewhere, even on a different continent. But implementing the same idea in different places is incredibly difficult, because each context is different and complex. More shortcomings arise when issues address complex public goods and global challenges (e.g. climate). In many cases conflicts about intellectual property arise as control over information and patents may reduce the innovative capacity of non-patent holders.

>> Ch. 3 'The Road to Open Social Innovation'