Defining Social Innovation

Stanford GSB was the first North American business school to establish a center dedicated to engaging students in the pursuit of social and environmental change and made many contributions to the understanding of the evolving field of social innovation.

Sarah A. Soule, Neil Malhotra, Bernadette Clavier
Solving the World’s Toughest Problems
Solving the World’s Toughest Problems
Tomorrow’s social and environmental leaders develop a big-picture understanding of the systems they work within.

Recent Examples of Social Innovation

Charter Schools

Publicly funded primary or secondary schools that operate free from some of the regulations that typically apply to public schools. Administrators, teachers, and parents thus have the opportunity to develop innovative teaching

Emissions Trading

A pollution control program that uses economic incentives to reduce emissions. A cap is set on the total amount of a certain pollutant that can be emitted, and permits to pollute are issued to all participating businesses. Those with higher emissions can buy credits from businesses that have reduced their emissions. Over time, the cap is reduced.

Fair Trade

An organized movement that establishes high trade standards for coffee, chocolate, sugar, and other products. By certifying traders that pay producers a living wage and meet other social and environmental standards, the fair trade movement improves farmers’ lives and promotes environmental sustainability.

How Social Innovation Differs From Social Entrepreneurship

Although social entrepreneurship has become a popular rallying point for those trying to improve the world, social change can happen outside of them. As a matter of fact, solutions have historically come from the nonprofit, private, and government sectors.

The concept of social innovation focuses attention on the ideas and solutions that create social value—as well as the processes through which they are generated, regardless of where they are coming from.

Social Innovation Drivers

We observe how cross-sector fertilization underlies the three key mechanisms that are driving contemporary social innovation:

  • Exchange of ideas and values
  • Shifts in roles and relationships
  • Integration of private capital with public and philanthropic support

Ultimately, the most difficult and important problems cannot be understood, let alone solved, without involving the nonprofit, public, and private sectors.