Opinion
10.09.19

Scaling innovative ideas creates inclusive labour markets

Johanna Mair speaks to the Erste Foundation about the relevance of social innovation for the labour market.

Scaling innovative ideas creates inclusive labour markets, says Johanna Mair who has been studying the effectiveness of social innovation for many years. Maribel Königer from the Erste Foundation asked Mair why she thinks scaling is an integral part of the innovation process.

What exactly do you mean by social innovation?

Social innovation is a process initiated to tackle social problems and societal challenges by developing new ideas and novel approaches. This involves combining and recombining different methods, resources and practices. Many of these approaches and models are developed outside the private or public sector and substantially determine the rules of the game.

Everyone is talking about technical innovation, while social innovation seems to receive less public attention. Why do you think it’s still important?

It is precisely because of these technical changes that we need social innovation. For instance, we still don’t have adequate tools to deal with the consequences of the digital revolution. In the economic realm we will be dealing with new organisational structures that will change the relationship between supply and demand. The labour market – meaning how work is accessed and distributed – is organised by a complex set of constantly changing regulatory and voluntary provisions. As a result, once-effective tools and regulations have become obsolete and need to be updated.

Do you mean that without technological progress there is no reason for social innovation?

Certainly not; those are just the latest challenges. There are still plenty of persistent issues, like the large number of women and marginalised people who are still denied equal access to and fair treatment in the labour market.

Could you explain how social innovation works in the labour market?

One example is impact sourcing. Technological progress increases demand for digital solutions and provides career opportunities for workers with digital skills all over the globe, including in poor and rural communities. Impact sourcing combines this high-demand digital labour market with a novel approach to combating poverty at the local level. Organisations such as Samasource offer affordable business process outsourcing solutions to their customers worldwide by training local staff in underserved communities to meet global demand in the digital labour market.

Isn’t that another way of moving labour to low-wage countries?

Not at all. While initially aimed at rural and poor regions in India and Africa, this innovative solution is now increasingly geared towards population groups at risk of poverty in the United States, such as the spouses of military personnel and veterans. In Europe, organisations such as ReDI School provide coding training to asylum seekers in Germany and connect them to the local start-up scene and digital industry.

Does that mean social innovation models increase diversity in the labour market?

Yes. For example, they make labour markets more permeable to those who are excluded from those markets due to physical or mental disabilities. Organisations such as Specialisterne highlight the special and unique capabilities of people with autism and build a range of business models on those skills, including IT consulting. Another organisation, Discovering Hands, has developed an innovative model that makes use of the unique sense of touch that blind and severely visually impaired people have in order to help with early detection of breast cancer.

But aren’t those genuine niche talents?

That’s not the point. It’s rather the question of whom we consider to be part of the formal labour market. In India, for instance, organisations such as Nidan have turned the labour market completely upside down. They have built infrastructures and platforms for informal workers and street vendors and are addressing their needs, including at the political level. For instance, Nidan has equipped more than 700,000 workers and their families from nine states in India for the labour market.

So these initiatives extend far beyond labour market policies?

You could say that, yes. Their success has led governments and policymakers to increasingly consider social innovation a cost-effective universal remedy: It creates jobs, stimulates employment and produces inclusive societies at the same time.

Do you agree with them that social innovation is a universal remedy?

Social innovation definitely has the potential to have a long-term impact on problems. For it to succeed, however, it needs to be combined with an effective scaling strategy. Implementing and disseminating new ideas in line with existing organisational strengths is less sexy than innovation as the former mainly involves boring, cumbersome routine work. Yet scaling is crucial for effective social innovation. Because effectiveness is less about finding the “right” solution and more about changing prevailing attitudes and conceptions in society.

What role do organisations play here?

This aspect is particularly challenging for them, because it means they have to give up direct control over the scaling process. For scaling strategies to be effective, you have to create a movement, influence policies and change deeply rooted patterns of behaviour and thinking. This is largely irrelevant to organisational control. Effective scaling requires organisations to look beyond what they can achieve alone. They need to figure out how they can cooperate with other sectors. The examples I have mentioned show that effective social innovation involves partners. It requires mobilisation and advocacy work. Specialisterne teamed up with one of the world’s largest IT companies from the very beginning. Nidan exerted influence on policy because a central pillar of their work has always been to build relationships with policymakers.

In other words, ideally, social innovation will not only lead to an inclusive outcome but will be inclusive throughout the process?

Precisely! It’s not enough to just build an organisation’s capacity to scale. Social innovation also needs to be taken up by the private sector and/or endorsed by the public sector. It is enormously helpful to incorporate this type of collaboration in the innovation process early on. Labour markets are about the human capital of a society. They are about people.

Originally published on erstestiftung.org in German. Translated into English by Barbara Maya.

More about Johanna Mair

  • Johanna Mair , Professor for Organization, Strategy and Leadership