For most of the last decade, a number of diverse economic prescriptions for many developing countries which recently this name lifted as “emerging nations” have been made. In this regard, it is appropriate to take stock of the 1979 Nobel lecture of the renowned economist T. W. Schultz. He said that “most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of the poor. People who are rich find it hard to understand the behavior of poor people. Economists are no exception”.
Most of those prescriptions for many emerging nations have focused predominantly on “getting prices right” by adjusting macroeconomic policy, privatizing state-owned or sponsored enterprises, or opening domestic markets to international trade in agricultural commodities and currencies. The implicit assumption is that structural adjustments will attract foreign capital through the domestic and international private sectors. More recently, evaluation of the interrelationships among macroeconomic policies, firm strategies, and societal issues, particularly the idea of social innovation has been the source of great debate.
It is obvious that the complex and multifaceted societal challenges of poverty can possibly be tackled by social innovations. The importance of innovation for development is widely recognized in both the developed and developing nations all over the world. The Second World War devastated Europe and Japan beyond limit. It was the United States’ 1947 “Marshall Plan”- 20 billion dollars in relief for war-torn Europe, which enabled Europe to stand up on its feet again within a few years. Europe’s recovery was extraordinary and defied the assumptions of many of the world renowned economists and development experts. It took less than ten years, particularly for Germany, the main culprit for the cause of the war, to rebuild itself and quickly assuming the position of one of the top five largest economies of the world.
For Japan, on the other hand, the story is quite different. Like Europe, the war totally ruined its economic infrastructure in a way, as it was not there in the first place. In addition, Japan was not a beneficiary of the United States’ “Marshall Plan”. Japan was left to fend for itself in the herculean task of the post-war rebuilding.
However, like Germany, Japan also defied every economic and development assumption and managed to rebuild its economy with a miracle like speed and magnitude. Japan’s post-war rebuilding and economic recovery was like a fairy tale. Japan not only recovered its economy, it became the second largest economy in the world, a position overtaken only last year by the current “world economic wonder Tiger” China.
The secret to Japan’s post-war economic miracle was none other than its human capital and social values. Japan’s human capital was the only economically valuable asset that was relatively unaffected by the war. It was this human capital that was highly instrumental in the process of rebuilding the country a new and repairing the ruined economy. In this huge and difficult task of rebuilding, Japan gave prior attention to the idea of social innovations. As a result, Japan employed different alternatives and techniques of social innovations, which were suitable to its policies and societal values, to tackle the severe economic woes the war caused and to stimulate the recovery.
It was not so long ago that Ethiopia was the “poster-child” of war and famine coupled with an economy in shambles in a downward spiral. The current story is starkly different. Today’s Ethiopia is almost the direct opposite of the past. Now, the country has become one of the fastest growing non-oil producing countries in the world. Ethiopia’s economic development over the past several years was so remarkable that it earned the country the nickname of the “African Tiger”. To achieve this new found status, the government emphasized social innovation. To this effect, the government selected appropriate alternatives and employed different social innovation techniques, particularly in the agriculture and social service sectors.
Maria Clara Couto Soares, an economist from the Economics Institute of the Federal University of Rio de Janeiro, Brazil, in her recent study voiced her concern that despite the visible success of social innovations as mentioned above, the benefits of innovation are not readily or equally distributed among or within countries. In fact, there has never been so much innovation with so little benefit for far-reaching social welfare. Innovation has created immense capabilities for improving living conditions, in areas such as food production and information technologies. However, these coexist with growing poverty rates, widespread hunger and poor health conditions for much of the world’s population.
One reason for this is the issue of global power relations, which influence how markets are organized and who benefits from technological progress. Innovation systems are not neutral. The effects of purely market-led science and technology efforts and associated innovations tend to aggravate existing inequalities. To enjoy the maximum benefit, this needs to be changed. The process of innovation and its place in development must be revisited and aligned with social concerns.
Continuously seeking alternatives to tackle the multi-faceted malaise of poverty through social innovationis indispensable. In the current age, financial capital and transnational corporations have an unprecedented concentration of power. With market-based philosophy dominating as the logic for social organization, technological progress tends to put pressure on natural resources and societies through a perverse combination of fast accumulation of capital, together with deepening inequalities and environmental degradation.
On the basis of solidarity, social inclusion and ecological preservation social and political movements have encouraged alternatives to this system. Social innovation is one such alternative. It is a process of societal change that not only improves living conditions, but also encourages new forms of social organization. It paves the way for the emergence of new social actors, family farmers, for example, and treats the fight against poverty and inequality not as a residual or compensatory issue, but a priority.
From this perspective, social innovation is not merely an act of making ‘appropriate’ technologies available to poor people, but a social and systemic process of developing and introducing new products, processes, technologies and organizational practices within society that are effective solutions for social change. Interventions designed as poverty solutions that lack a systemic approach and ignore participatory methodologies tend to fail to be sustainable in the medium and long term. Social innovation, on the other hand, has a clear focus on social inclusion. It is built and re-applied through processes that are proactive, collective, democratic and characterized by solidarity. And it occurs alongside a strong community awareness of how to deal with problems collectively.
Regarding this important issue, Maria Clara Couto Soares shared her native Brazil’s experience in her recent study. In Brazil, there are several examples of social innovations being successfully reapplied to enable access to water in semi-arid regions, provide food security in poor areas, and supply credit for people previously excluded.
One such project is the Brazilian Semi-Arid Articulation (ASA), a network of farmers and civil society institutions that helps democratize access to water in semi-arid regions. The project’s first social innovation was a cistern for capturing rainwater. Easy to build and at low cost, the cistern was developed using experimentation and local knowledge, and the process of technological improvement took place through dialogue with universities and civil society organizations. The mobilization of many people to discuss collectively ways of solving specific problems resulted in the strengthening of family farmers, women and local organizations, as well as their capacity to influence public policy. To date, more than 385,000 cisterns have been built with governmental support, serving almost 2 million people.
In the process of social innovation, creating the right environment is also equally indispensable. Social innovation means new products, techniques and methodologies that are re-applicable, developed in collaboration with the community, which presents effective solutions for social transformation. The idea of the re-applicability of innovations is different from the scaling up of innovation. Re-applicability implies that when a social innovation is used in a different context to where it was developed, it will necessarily be recreated and adapted for this new context, bringing new values, knowledge and meanings.
This has concrete implications. It means that expanding the reach of small-scale, grassroots innovation requires efforts to build political and institutional capacities in support of the process. It may require interaction with various public and private entities such as local authorities, universities and other organizations specializing in technical assistance and training, as well as funding institutions, nongovernmental organizations (NGOs) and private companies.
Often, policy priorities need to be reshaped and political will constructed to allow the changes necessary for re-applicability on a larger scale. This might involve dealing with potential conflicts that may emerge. For example, in the semi-arid regions of Brazil, political parties commonly use water access as a way of eliciting poor families’ political support, revealing how expanding the reach of the Brazilian Semi-Arid Articulation (ASA) social innovation sometimes interferes with local power structures.
Building institutional structures that can support the re-application of social innovations requires social actors capable of driving such initiatives and ensuring their success. As it is obvious, social innovation will not be fruitful without the employment of the right inputs. At this point, the very crucial and final question is the following: In the process of social innovation, what are the key ingredients for success? They are none other than grassroots participation, as well as strong organization, mobilization and networking.