Drivers of Social Innovation and Human-Centered Design Thinking

Social innovation creates a paradigm shift from the Jean Baptiste Say definition of entrepreneurship as follows:

1. It identifies a need for understanding the scope of social entrepreneurship and social enterprise
2. It requires an understanding of the processes within the socio-economic and environmental context of “bottom of the pyramid” market needs, and
3. It requires an actualization of the mechanisms of social innovation through endorsing and enhancing appropriate social institutions for making economic freedoms accessible to lower income communities and informal business.

Therefore, social innovations need to cultivate the conditions that are amenable to and foster the social institutions required for sustainable social innovation (Phills et al: 2008).

Taking the market based approach to poverty reduction requires “capitalist states” (Bisson et al: 2010) to create social institutions that enhance, collaborative ventures between for-profit businesses and NGO service support initiatives. More specifically, the public sector within developing countries need to create enabling legislation and regulatory policy for making informal markets more secure and stable investment alternatives for venture capitalists.

A research paper written by Gopal Joshi of ILO on “Policy and Regulatory Environment for Micro and Small Enterprises: Informality and Policy Alleviation”, studies the regulatory impediments in developing countries that make it difficult for businesses ventures in the informal market to access the mainstream economy. The importance of this paper to the subject of social innovation is that, social institutions that innovate business environments such that micro and small businesses are incentivized to participate in mainstream economies, allows the many households that are dependent on SME livelihoods to increase their welfare.

The ability of low income countries to become more independent and less reliant on donor funding to alleviate extreme hunger and poverty is of paramount importance. According to OECD projections, member states may not be able to sustain donor funding as their demographic patterns change, and their productivity is affected by aging population. Perhaps the age of mercantilism has arrived for emerging low income economies.