Social Innovation and Social Enterprise: Evidence from Australia

1. Social Innovation and Social Enterprise: Evidence from Australia Associate Professor Jo Barraket and Craig Furneaux Australian Centre for Philanthropy and Nonprofit Studies

2. Acknowledgements • More than 570 participants in the Finding Australia’s Social Enterprise Sector project • Social Traders (research partner) and Westpac Foundation • ACPNS colleagues: Dr Nick Collyer, Matt O’Connor, Dr Heather Anderson

3. Background and Context • There is a growing interest in social innovation, both in Australia and internationally • Movement both includes and contests social economy organisations • Despite growing interest ,there is little known about the nature of social innovation within the social economy • This paper reports on a research project undertaken to identify the population and practices of social enterprises in Australia.

4. Definition of social enterprise • There are competing definitions of social enterprise. • Based on key informant discussions, the following definition was applied. Social enterprises: • Are led by an economic, social, cultural, or environmental mission consistent with a public benefit; • Trade to fulfil their mission; • Derive a substantial portion of their income from trade; and • Reinvest the majority of their profit/surplus in the fulfilment of their mission.

5. Defining social innovation: • Minimal conceptual development and operational application to date a “novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions, and for which the value created accrues primarily to society as a whole rather than private individuals” (Phills et al. 2008: 34)

6. Theoretical framework • Mulgan et al.’s (2007: 5) three dimensions of social innovation are used to explore social innovation in Australia: • new combinations or hybrids of existing elements; • cutting across organisational, sectoral and disciplinary boundaries; • and leaving behind compelling new relationships.

7. Methodology

8. Size of responding organisations

9. Age of responding organisations

10. Primary Mission

11. Organisational Structure

12. Geographic Reach

13. Main Beneficiaries

14. Industries in which the social enterprise operates

15. Finding 1 • As predicted by Mulgan et al. • Social enterprises in Australia operate across geographical boundaries, areas of operation and main beneficiaries

16. Ownership structure

17. Sources of Income (as a percentage)

18. Type of Innovation

19. Principal Component Analysis of Innovation Two clear components were found in the data. This was split across type of innovation, with a number of nonprofit organisations not engaging in goods innovation

20. Relationship between innovation type and profit/loss Goods and service innovators had a higher profit overall compared to process, services and organisational innovators [F(1,107)=5.099,p<.026]

21. Finding 2 • As predicted by Mulgan et al. • There is evidence that the social innovation is associated with new combinations of structure and organisational form • There is also innovation in routines, and as the principal component analysis indicated, there is also two distinct combinations of innovation type

22. Source of Information Used by Social Enterprises

23. Finding 3 • As predicted by Mulgan et al. There have been new relationships established in the process of creating social innovations. • Many of the organisations referred to by social enterprises simply do not fit within the ambit of a traditional nonprofit organisation (e.g. Trade associations)

24. Summary of findings • There is incredible diversity in social enterprises and the innovations which they undertake • Following the framework advanced by Mulgan et al., we have found evidence that social innovation amongst our participating social enterprises: • Involves new combinations or hybrids of organisational structure, form and operations • Cuts across boundaries – in terms of geography, intended beneficiaries, and operations • Stimulates new relationships to facilitate outcomes

25. Next steps • Beyond ‘what’ to ‘how?’ and ‘to what end?’. • Regional development and social enterprise • Social enterprise and strategic entrepreneurship • Beyond social enterprise to other sites of social innovation