A comprehensive study on the social innovations of social enterprises has been conducted for the first time in Finland, highlighting the significant potential they hold in service production and public procurement. These findings provide an important message, particularly to policymakers and decision-makers responsible for innovation policies, funding, and public procurement.
Social enterprises are already making strides in reforming and developing social and healthcare services, employment, and various other sectors to prevent marginalization. The study emphasizes the need to implement their potential in innovations aimed at ecological sustainability and the green transition.
The study puts forth three recommendations to enhance the environment for social enterprises’ social innovations:
- Consider positive societal impacts as a central indicator of successful innovation policies and as a criterion for funding. Emphasize the importance of tracking and assessing the positive societal effects of innovations more extensively than at present.
- Establish a national database that collects and showcases social innovations, replacing the current fragmented statistical approach. A centralized database would provide comprehensive insights into the landscape of social innovation in Finland.
- Recognize social enterprises as equal and reputable service providers alongside the public and private sectors and traditional organizations, particularly in public procurement processes. Ensure that social enterprises are given fair consideration and equal opportunities in these contexts.
Social enterprises’ social innovations are closely intertwined with civil society and end-users. They delve deep into the underlying causes of societal problems and offer financing mechanisms similar to those found in business-oriented service production. As a result, they present an alternative to traditional public and private sectors and organizational activities.
Implementing these recommendations requires action and collaborative efforts from the social enterprises themselves, as well as forward-thinking initiatives from public actors responsible for practical implementation and funding of innovation policies. Decision-makers and service providers in municipalities, cities, regions, and welfare areas hold a key position in driving these changes.
The recommendations stem from observations made during the study, suggesting that social enterprises do not require preferential treatment compared to other businesses. However, representatives of these enterprises explicitly express the need for greater consideration of the positive societal impacts of innovations. Additionally, assessing the societal influence of innovations should be integrated into long-term innovation policies and public service procurement.
What are social enterprises’ social innovations? Social enterprises engage in business activities with the primary goal of achieving a chosen social objective, as specified in their articles of association or statutes. They allocate the majority of their profits towards furthering this goal.
Social innovations are characterized by their ability to:
- Address societal problems more effectively than existing solutions.
- Utilize resources more efficiently than previous approaches.
- Create opportunities for new ventures and collaborations.
This comprehensive Finnish study sheds light on the current state of social enterprises’ social innovations and their significance in finding new solutions to societal challenges. The research was conducted by Demos Helsinki, Diakonia-ammattikorkeakoulu, VTT Technical Research Centre of Finland, the Rehabilitation Foundation, and Silta-Valmennusyhdistys.
The study is part of the implementation of the Finnish Government’s Research and Evaluation Plan for 2022.