On the Economics of Social Innovation – A Conceptual Framework and its Policy Implications

Year: 2020
Published in: Innovation
Cited as: Cuntz, Alexander, Dominique Foray, and Elena Mostovova. “On the economics of social innovation–a conceptual framework and its policy implications.” Innovation 22, no. 4 (2020): 469-487.

Social Innovation, Welfare Economics, Market Failure, Social Innovation Policy

Social innovations addressing social, economic and environmental challenges are increasingly recognized as crucial drivers of social changes and today represent an important target for innovation and related policies on national and international levels, including the United Nations’ Sustainable Development Goals (SDG). However, the concept of social innovation remains vague. This paper builds a conceptual framework from an economic perspective: The main criterion for identifying a social innovation concerns the way the benefits generated by an innovation are distributed between the (private or public) innovator and society. We close the paper by an extensive discussion of the conceptual boundaries, the research agenda and the policy implications we can derive based on the framework.