Social innovation is a subtype of innovation that leads to outcomes that can be measured in terms of improvement of earlier practices. It is not specific to any sector of the economy, but can be specific to a context. Social innovation enhances social relationships with a focus on governance, alters social resilience, and raises the capacity and accessibility of the beneficiary to resources. Young Foundation, and the Danish Technology Institute, among other TEPSIE partners, view social innovation as a new solution in the form of products, services, processes, models, and markets that meet social needs. The need is met more efficiently than when applying the existing solutions. This leads to improved capabilities so that resources and assets are used better.


It has been realized worldwide that old ways have become ineffective. The new solution has features that enable the following:

  • fair trade, 
  • mobile money transfer, 
  • zero-carbon housing, and
  • distance learning, which have helped solve the world’s most disturbing challenges

Social innovation has widened thoughts about enterprise and business engagements, encouraging the interconnection of various factors and stakeholders. In continents like Africa, social and economic growth has occurred consecutively for more than ten years. From 2005 to 2008, Africa’s GDP was observed to rise at an annual rate of 5.5%. Africa is now second after Asia in terms of fast growth, and such acceleration is attributed to crucial improvements in macroeconomic policies, advancing business contexts, and growth in political policy. 

While reporting for the OECD, Geromettaet al. state three essential benefits of social innovation:

  • First, it focuses on the satisfaction of human wants that existing solutions need to include
  • Secondly, it brings beneficial societal changes that target governance to satisfy the ignored human wants to raise participation levels, especially for the deprived social groups
  • Thirdly, it expands sociopolitical strength and access to resources required to sustain human wants and participation. Social innovation is the production of new ideas and structures that brings contingent construction changes within the society, providing importance to knowledge and cultural factors. It results in the public good, justice, and equity.

Social Innovation in the Service Economy

The industrial policies of the 1950s in the manufacturing sector have been improved by the changes that followed in the 1960s and beyond. The Neo-industrial theory of Galbraith, for example, is from the 1960s. Galbraith emphasized restructuring the industrial structure, followed by changes in the relationship between the industrial sector and public impacts.

Later, Bell adopted the post-industrial approach that stressed the role of knowledge in determining new social relations in production. Galbraith’s and Bell’s theories both originated in the US. Galbraith was more concerned with industrial economics, while Bell emphasized sociology. Today, Bell’s concepts are observed in the industrial expansion of knowledge or information societies. These theories share the idea of transitioning from industrialized countries to complex service-based and expanding knowledge-based economies. 

Hauknes explains that economic development observed in the past decades has been influenced by advancement in service sectors that resulted in a “service society” called an information society. However, the activities included in the service form are not immediate, and service sectors still lack visible characteristics that are coherent with the concept of industrialization.

The information or knowledge societies are also unclear as their content is not yet revealed except for the expression of simple surface traits (Hauknes, 1998). Therefore, the question is whether the present structural changes in the manufacturing industry should be considered a service society. Porter’s diamond and PESTLE models will be applied to present an in-depth analysis of the management issues, considerations, and opportunities surrounding social innovation.

Social Innovation: A strategic issue in the manufacturing industry

The commonwealth recognizes that “manufacturing controls technology, production, and innovation” across all sectors. The manufacturing sector has underperformed due to several challenges, the greatest being the inability to find workers trained in trade skills. In America, for example, The National Association of Manufacturers (NAM) Manufacturing Institute 2011 reported that 82% of manufacturing companies suffer from a severe shortage of skilled workers.

This shortage stems from the fact that “America does not emphasize the study of subjects like math, physics, engineering and technical knowledge,” which has brought economic development in countries like India and China that focus on them.  The Program for International Student Assessment 2009 reported that America was ranked average in reading and sciences, but was below average in math. The shortage of skilled workers for the American manufacturing industry, therefore, results from the nature of the education curriculum.

To correct this situation, NAM proposes A Manufacturing Renaissance with Four Goals for Economic Growth. The strategy aims at uniting “people, schools, businesses, and government” to ensure the production of skilled graduates. It states that manufacturers will only emerge as the top in designing, building, and exporting high-quality commodities that will encourage economic growth.

The National Council for Advanced Manufacturing proposes three steps in reviving the American Manufacturing sector. These include the “establishment of better education and trained workers, promotion of products/processes and development, and improvement of global competition.” The Association for Manufacturing Excellence (AME) suggests that the manufacturing sector and policymakers should focus on local and state job creation. Relevant teaching styles and curricula should be adopted in schools. Schools also need to provide vocational programs through connections between trade schools and manufacturers. 






Teaching tools/approaches

Key Concepts

Key Theorists

Business and organisational strategy

Analysis of strategy


Stakeholder management


Nichols & Murdock

Business Ethics and sustainability

Ethics relates to managerial and organizational behaviour while focus remains on sustainability

Case studies of businesses within the society

Ethics in business and sustainability



Understanding organisational or theory and practice

Cultural application from theory to practice

Case studies or debates

Organizational power, comparative approaches

Heiskala & Hamalainen

Global operations and supply chain


Problem-based procedures to organizational resources in supply chains and value flow

Analytical methods and tools

Neo-industrial theory.

Post-industrial theory




the Self at Work

Proficiency in the workplace through learning, self-growth, and development

Self-assessment in a reflective way, critical review, and case study

Positive mindset and organizational


Nicholls & Murdock


People and


Application of organizational theory and practice for managing people

Applying critical thinking skills to management theory and practice

Power, culture, ethics, and social accountability

Heiskala & Hamalainen






Foundational and functional concepts that relate to employee management in an extensive organizational environment

Theoretical concepts; evidence-based decision making

Critical comparison of traditional HRM and organization theory




Problem-solving for a consumer or project management

Simulating consulting projects, or real customer consulting projects

Data analysis, problem-solving, project management,


Theories addressing professional service firms

Innovation &


Application of

concepts and theories of innovation and entrepreneurship for the development, organization, and management of new ventures

Case studies; Reflective learning and collaborative teamwork

Types of innovation and

entrepreneurship: User and Open

innovations and

crowdsourcing; Social



Nicholls & Murdock


Management Field


Experiencing management and organizational practices in a global setting


field study and critical reflection on experiences

Globalization, economic development phases; cultural dimensions and biases; analysis of the business context



Theory and


Critical analysis

Strategy theory

Foundations and practice

Discussion of ideas and practical application of strategy theory through examples and case studies

Strategic decision-making; competitive forces and positioning; resources and capabilities; strategy processes and practice




Analysis of the challenges associated with the management of organizations operating across national borders

discussion of ideas and practical application of management

Development of transnational strategies and establishing a transnational organization, fostering innovation and learning, implementing a strategy