Elements Of Social Innovation

Social innovations (SI) can be described as new solutions that can take the form of products, services, models, markets, processes etc. that satisfy a social need and lead to a more efficient use of assets and resources (Caulier-Grice et al. 2012) and creation of social outputs irrespective of economic sectors (non-profit, public, private etc.). In that sense the social innovation can be implemented as a new product, production process, technology, principle, idea, movement or any combination of them that responds to existing social demand and influences the process of social interactions. According to Caulier- Grice et al. (2012) core elements of SI relate to:

- novelty – anything which is new to field, sector, region, market, user etc.

- practically

For Pol & Ville (2009) the innovation is termed “social” since the implied new idea is expected to have the potential to improve quantitatively or qualitatively the social environment. Martinelli (2012) expresses the view that in comparison to the economic focus of Schumpeterian innovation which is directed toward gaining competitive edge and market share, peculiar feature of SI is to provide social justice or social cohesion through innovation process. Nussbaumer & Moulaert (2005) define SI as process encompassing both macro and microeconomic aspects with the clear focus on inducing entrepreneurial organizational change. Anderson et al. (2014) characterize SI as proposing new solutions to various social challenges which can appear on the global or local scale with the intent and effect (impact) good to society. This effect on society can be defined in terms of justice, equality and

Theoretical challenges in the process of defining socially innovative entrepreneurship include the following:

 aligning market dynamics with social outcomes in terms of commercial and social purposes and the process of internalization of social costs and benefits;

 analyzing the strengths and limitations of different economic strategies with respect to sustaining innovation and promoting systemic change;

 achieving competitive advantage of the social orientation and the social impact relative to potential profit seeking enterprises;

 the degree of existing market discipline to guarantee high level of performance of the socially innovative enterprises and cost effectiveness in the social value creation process;

 the degree of efficiency of the capital markets to direct capital to most optimal social and economic