Are you a social innovator, investor, intermediary, policymaker or other social innovation stakeholder? Come and join SIMPACT's final conference!

Background
The financial and economic crisis has clearly left its marks in Europe. Not at least it has exacerbated the many complex and interrelated socio-economic challenges Europe is facing. Long-term and youth unemployment, migration, ageing population, poverty, and gender inequalities to name but a few. Welfare services struggle to cope and growing segments of the population experience increasing difficulty in accessing support.

Social innovation will only realise its potential contribution to inclusive growth to the extent it can maximise its social and economic impact for society. Yet several key issues need to be addressed before SI can be fully mainstreamed into the European economic sphere and its policy environment. Gaining a better understanding of the components, objectives and principles of social innovation, as well as its underlying processes and contexts at each level of governance, lies at the core of SIMPACT.

Objective
Building on three years of research, stakeholder engagement and innovative thinking, the SIMPACT team invites you to share its insights as well as the practical tools developed for policymakers, social innovators and other stakeholders. This highly interactive event will also allow you to share your views and experiences, and to discuss future actions and recommendations for boosting the social and economic impact of social innovation.

Your SIMPACT Team

Social Innovation means different things to different people, but those who study SI, do agree that it is a multi-faceted subject that differs in many ways from more traditional technological and business innovation. Our insights on Social Innovation (SI) are mostly based on in-depth case studies, contextualised stories and personal testimonials, because a large part of the information on SI is difficult to codify in cold, objective, impersonal, out-of context, standardised categories, indicators, Euro's and «real numbers».

By resonding to social needs, social innovations generate value/benefits for society. However, the list of potential needs is long, context-dependent and subjective. In most economic theories value is merely related to units of output (or inputs) whose exchange value is expressed in prices. In SI the inputs and outputs are to a large extent intangible and difficult to express in financial terms (EURO). Think of the input of tacit knowledge and motivated volunteers, or output in terms of «reduced loneliness» or «increased self-confidence».

With social innovation the value is mostly based on (social, learning) processes that integrate a variety of resources from different actors from various sectors in society (public, private, third sector, citizens). Social innovators can therefore be considered as resource integrators that combine inputs from various stakeholders, and by addressing the needs of vulnerable groups (directly and indirectly, intentionally and unintentionally) create value for society as a whole.

Suggested Measurement Framework

For the suggested measurement framework, it is practical to depart from existing data sources concerning the possible traditional economic activity metrics such as turnover, expenditure and employment in the sectors. An important but difficult metric concerns the measurement of volunteer input in terms of manpower and time expended on volunteering. Next to these the Third Sector has another quantifiable activity, which is perhaps even more difficult, as it is made of different components and even differs per NPO: income. Income in this sector is of course quantifiable through measuring donated funds, however there are two more possible income flows; subsidies and sales which are potentially measurable.

Use Value. The use value from social innovation activities is, however, less easily measurable, at least not in the traditional way. Ethical, environmental, human rights, community and societal benefits are all less visible and measurable as they concern non-financial and non-physical resources but they are main contributors to human welfare or better said well-being.

Resources at Micro-Level. An example of a practical approach incorporating several of the requirements as laid out above, is provided by the New Economics Foundation (NEF). They present an array of indicators on micro and macro levels. At the micro-level this includes questions on capabilities of the beneficiaries, e.g. on basic work skills or «life skills». In SIMPACT's measurement framework at the micro-level of the individual social innovations, also the improvement of capabilities of the social innovators matter, e.g. asking under the heading of impact for

• an improvement of the self-confidence of the social innovator,
• increased management capabilities,
• improved network,
• increased revenues, etc.

As an indicator for economic benefits of the SI on the public sector we included a question asking to rate the reduced public budget costs.

Capitals at Macro-Level. The main indicators refer to economic and social resources or capital: Labour, Financial capital, Public Capital, Knowledge, Social Capital, and Health. Since SIMPACT does not have a thematic focus on SIs addressing health, this last module is less relevant for the SIMPACT analysis. A distinction has been made between indicators capturing SI potential (or supply) and those indicating SI needs or demand-side. In addition, it is distinguished between tangible and intangible indicators. The contribution to the potential or needs may come from either the public, private, or civic/third sector.

Application of the Framework at the Micro-Level

In order to apply the indicator framework at the level of social innovation initiatives, i.e., micro-level, a pilot survey has been constructed to capture the most relevant information of the SIMPACT case studies (N = 55). A limited number of questions have been answered by the authors of the in-depth case studies and included questions on: the type of SI, actors involved, theme addressed, type of funders, objectives, input of resources, obstacles, and impact for various kind of stakeholders, including for instance: increased income, increased capabilities, increased networks and increased self-confidence. The answers to the survey have been used to construct indicators to describe and analyse SI at the micro-level of SI initiatives.

Several types of economic impact (which also includes certain improved capabilities) from SI can be identified: economic impacts for the innovator, economic impacts for the target group, and economic impact for the government in terms of discharged public budget. With regard social innovations' impact it appears that compared to social innovations of the «Demographic» theme, social innovations addressing «Employment» are characterised by on average high economic impacts for the target group. The economic impact related to a discharge of public budgets is rated high for social innovations which have a government agency as main funder, while the impact for the social innovator is on average very low.

Results - An Example. Several types of economic impact (which also includes certain improved capabilities) from SI can be identified: economic impacts for the innovator, economic impacts for the target group, and economic impact for the government in terms of discharged public budget. With regard social innovations' impact it appears that compared to social innovations of the «Demographic» theme, social innovations addressing «Employment» are characterised by on average high economic impacts for the target group. The economic impact related to a discharge of public budgets is rated high for social innovations which have a government agency as main funder, while the impact for the social innovator is on average very low.

Moreover, a distinction between the types of social innovation matters. On average social innovations that are product/service innovations do well on the economic impacts for the innovators (they can be labelled incremental social innovators), while those that address a new target group of vulnerable, people do very well on all impact fields, except economic impacts for the innovator (see Figure 1). In order to improve their long-term perspective, policymakers should therefore invest in the business capabilities of these social innovators, and reduce the political, social and financial obstacles that these more radical social innovators often encounter.

Application of the Framework at Macro-Level

European statistics at regional level on social innovation actors and activities do not yet exist. Nevertheless, statistics relate to social innovation in a more indirect way are available and have been used to indicate the regional context for social innovation. Besides data from Eurostat on for instance «Early leavers from education and training», we have included indicators on trust and engagement from the European Social Survey. From the OECD Better Life Index we have, for instance, included several regional indicators for fields of perceived well-being.

Depicted in the figure on the right, a set of 63 indicators allowed to differentiate between four distinct types of regions or else regional social innovation ecosystems within the EU. The regional social innovation ecosystems with their distinct degrees of vulnerability, i.e., needs for social innovation and potentials explain much of the differences found between the SIMPACT case studies. For example, mainly located in the southern part of Europe, in the first cluster of regions social innovations revolve primarily around the themes of unemployment and education, while in the second cluster demographic change (e.g. addressing elderly and children in vulnerable situations) and migration prevail. It also appears that the latter regions possess high potentials as regards the engagement of volunteers.

SIMPACT Survey & Indicator Lab

Given the lack of surveys and statistics on SI, it is important to collaborate on ideas how to improve this in the future. On September 22, international experts met to participate in the SIMPACT Survey and Indicator Lab. The aim of the workshop was to exchange experiences in capturing SI in metrics in order to prepare for a future with meaningful surveys (and indicators which could be derived from the collected information) which can be used to describe, study and promote social innovation.

The experts agreed that traditional economic metrics are not fit for SI, an alternative approach to economic underpinnings is needed, and in fact an alternative economy is needed. One of the reasons for this is that the boundaries between sectors in society are blurred and that the enormous «hybrid sphere» is overlooked in our traditional concepts, studies and surveys. Methodologically, the experts opted for approaches to survey households rather than companies, as households are easy to identify and allow for capturing various forms of SI, and for capturing various roles people can play when they engage in SI. It was pointed out, though, that SI may not be captured by a single survey but by a number of complementary approaches, addressing informants in various sectors of society. In this regard the experts discussed ways and means to survey SI in various domains, such as companies, the third sector, the public sector, volunteers and (other) beneficiaries (e.g. certain groups of vulnerable people). A key result of this discussion was a demand for inventories of such actors and a broader approach to data collection that includes also social networks, social media and websites. A mixed-method approach of qualitative and quantitative research methods was recommended. With regards to the effects of SI it was pointed out that measurement of job-satisfaction or well-being are less relevant than more complex measurement of relatedness, identity and autonomy, in relation to empowering and transforming activities.

"You can see IT everywhere, but not in the statistics?, is a famous quote from the leading American economists Robert Solow. The same thing may apply to social innovation: it is very well on the rise in public thinking, but the statistics part is missing. The first question of course is which statistics? The second question is why this understanding from a National Accounts perspective should be of importance?

The NA are not more, nor less than an account of all the goods produced and the total income of a country. It shows what the state of the economic activity is. And it allows to make a cost-benefit judgement on the importance of economic activities: do the investments lead to more output? Social innovators are producers, they set-up companies or social activities to deal with all types of societal challenges. Therefore, social innovation should be a part and is a part of NA, even though NA do not completely cover social innovation.

Every policymaker wants to generate more economic growth. Here lies also one of the core questions for the SIMPACT-project: can we show that investing into social innovation is of importance for economic growth? The question is simple, the answer falls in the middle of the discussion about NA. Over the past two decades, a lot of work has been done to uncover all those factors that explain economic growth. It is clear that producing and burning a lot of additional coal could generate higher economic growth, but everyone is now well aware that the economic value this represents, should also take into account the destruction of landscape through mining of coal, the pollution of air and the mortgaging the future of our children with destruction of our living environment. This discussion about NA is known as the «Beyond GDP»-discussion. Social innovation may be somewhat difficult to uncover in NA, but how does it fit in the Beyond GDP-discussion. Both tasks where central in the work package of SIMPACT on «social innovation and national accounts». We have explored the possibilities for integrating the economics of social innovation into NA and discussed pros and cons of requirements to do so.

Measuring the full impact of social innovation require us to refer to wider non-financial impacts, including the well-being of individuals and communities, social capital and the environment. We therefore emphasised the (macro-)economic dimensions of Social Innovation both in a NA and a «beyond GDP» perspective. Our investigation showed that if one wants to set-up a measuring framework to fully address the economic relevance of Social Innovation at the national level, this could be done in a Satellite Account to the NA ? building on the approach and thematic indicators as recommended by the Conference of European Statisticians (CES) to measuring Sustainable Development. However, this would first require a clear and standardized operationalisation of Social Innovation activities, inputs, outputs and impacts. The micro-level at which transactions take place make it difficult to identify social innovation as a separate phenomenon in the NA. Therefore, it remains quasi unidentifiable in regular NA transactions.

We conclude that given these limits, one should not try to fully integrate social innovation in the NA. Our recommendation is to combine the best of all statistical worlds, by using the relevant elements from the NA, various satellites to the NAs, as well as statistics in non-economic domains. These statistics should furthermore be analysed in a framework that allows to incorporate quality of life and human well-being in order to fully assess all aspects of social innovation and its outcomes and impacts, including those in the «beyond GDP» realm. We consider the analytical and conceptual framework as adopted by the Conference of European Statisticians to Measuring Sustainable Development relevant and useful to structure causal linkages of all aspects (i.e. the full cause and effect chain) of social innovation.

Good insight in these causal relations is needed to determine what type of information (auxiliary to information from National Accounts) should be combined to arrive at a statistical product, that addresses the economic dimensions of social innovation as well as the broader societal benefits, and can function as relevant knowledge base for policy development and decision making.

The CES-framework takes human well-being as central notion, and acknowledges that the fulfilment of wants and satisfaction of human needs, directly or indirectly relies on the use of resources, i.e. flows and stocks of economic-, natural-, human- and social-capital. The latter are the four types of capital that are central in the CES-framework. We assessed that, in addition to the standard economic flows that address relevant aspects of social innovation, in this context [of Social Innovation], human capital and social capital have more relevance than natural capital.The next step towards measuring Social Innovation in a Satellite Account to the NA would be to develop a corresponding measuring framework with subsequent indicators. The CES-measuring framework with corresponding (ideal) thematic indicators could be used as a basis for capturing social innovation. This requires more work in order to select appropriate indicators to measure social innovation activities and its outcomes and impact.

But all of this is just a start for getting more understanding of the importance of social innovation. Really getting social innovation into an accounting framework, requires a lot of work from the social innovation scholars. One task is to start with a clear and exclusive description of subsequent concepts, actors, etc. of social innovation. Currently, social innovation is still too vagely defined from a NA's perspective. Our work has only shown where the work needs to start.

Defining social innovation indicators to measure clear social and economic impact has been a challenging task. Mixed method approaches and perspectives to achieve this goal and determine a causal relationship between the different levels of SI (micro-meso-macro), clear inputs and outcomes, the role of stakeholders and networks, as well as an integrated framework that takes account of its products, processes and possible scalability, has been one of the major aims of the SIMPACT project. Our contribution to this hunt has materialised in the concept of Social Innovation Regime

The importance of context is key to social innovation. Context not only defines the purpose behind a social innovation but also helps us understand the social challenge it is trying to address, and the conditions of the vulnerable target population it is looking to help. Especially in their first developing stages, social innovations are usually circumscribed to a certain region or locality which can discover the weaknesses and inabilities of the welfare regime or the social policies that result from this context. These weaknesses often reveal different policy failures, which social innovators, social entrepreneurs, non-profits, and other social organisations are looking to tackle. In this sense, we can say that vulnerability is not only the result of personal flaws, but also the result of institutional barriers that have difficulties to address certain social problems, increasing the degree of national, regional or local vulnerability. Hence a strong welfare regime with strong public policies would have lower levels of social exclusion and vulnerability in their population.

The concept of Social Innovation Regime defines the different modes/paths used in specific regional contexts to develop social innovations capable of answering to regional social vulnerabilities inside certain environments. Through the concept of SI Regime, we propose a framework for the development of indicators aimed at mapping social innovation contexts (meso-regional level) and social innovation dynamics (micro level), through an integrated model whose guiding element are the different forms of vulnerability present in different welfare contexts. The dynamics of social innovation refer to the patterns and processes of social innovation development followed inside organizations.

Therefore, the model of Social Innovation Regime helps us build a framework to guide the development indicators to measure SI in three different ways as follows.

• The first one refers to the understanding and measurement of the conditions of the institutional context according to their regional vulnerability rate. The regional vulnerability is made up of four kinds of vulnerabilities (social, economic, institutional and environmental) that provide a clear view of the inabilities of an institutional context to resolve social problems according to a welfare standard. This path allows for the comparison of different regions (contexts) according to their degree of vulnerability, which is the proper ground for the emergence of specific social problems and challenges.
• The second one refers to the measurement of social innovation dynamics at an organisational level to understand the different modes and cycles (patterns) of SI in a diversity of agents (social innovators, social entrepreneurs, social organizations, non-profits, etc.).
• Finally, the third way is about understanding the global picture of the Social Innovation Regime by linking regional vulnerability with social innovation dynamics inside organisations. This would allow detecting and comparing different policy failures inside different regional contexts and also relating these failures to the organisational capacities of different agents to solve them. This method would certainly guide policymakers inside different contexts to improve public policies through social innovation by learning about new or undetected social problems and challenges, and relying on other agents to improve policy conditions or support the development of social innovations.

Whilst, we acknowledge we have not found the goose of the golden eggs to measure social innovation, this framework could certainly help the guidance of future perspectives to support and measure the impact and outcomes of social innovation, the role of stakeholders in the development of social innovation, and the different contextual factors involved in the design and successful response of social innovation to innovative social problem solving.