Globalization has shortened the
distance among cultures and sets of beliefs, enabling some values to influence
and prevail over others. A wide acceptance and application of market based
principles around the world has changed the way in which people think, turning
community values into individual beliefs. This era could be seen as a modern
Renaissance in which the individual is the central piece of the puzzle and in
which a new reality is being human-centered designed. As this individualization
phenomenon expands, the definition of “what people need” has disintegrated, in
a literal sense, into the needs of smaller units: a country, a community or
even an individual. Hence, as demand has sophisticated, innovations in every level
and dimension of supply have been exerted in order to respond to a more complex
reality.
In this
sense, new institutions have surged to norm, regulate and set a framework for
action of firms, governments and civil societies trying to supply an increasingly
complex demand. In the near future, the greatest challenge social innovation
will experience will be related to institutional change. As Samuel Huntington
says, the survival of an institution depends on its ability to adapt to a
changing reality.
Therefore,
ties among private, social and public sectors will have to strengthen to
improve and increase the information flow. If governments do not assume their
co-responsibility on social innovation and development by legislating and
creating a favorable environment for that can norm new forms of social
enterprises, there will be a bottleneck, entrepreneurs will be discouraged and
many social needs that cannot be met by the government won’t be met by other
actors either.
Also, the
survival of traditional non-profit organizations will most likely be put at
risk. As new and more institutions are created, the sources of funding will be
more limited for existing non-profits. Consequently, they will have to increase
their fundraising efforts or revaluate their business models. In addition,
innovators should focus in developing new ways for reducing transactions costs
derived between non-profits and donors, and between entrepreneurs and
investors.
Moreover,
another challenge for social innovation will occur inside the firms, which are
discovering new frontiers in the base of the pyramid. In the near future,
corporative ethics and corporative social responsibility will take a central
role and will possibly make many enterprises to question the balance between
their profit-maximization principles and their social impact concerns.
The future
is uncertain, but nature is wise. So, only the fittest will survive this major
changes driven by social innovation. Then, the question that arises is which institutions
will be the fittest to survive? Which new business models and institution will
be created? The limit is set by individual imagination.