Theorising the Economics of SI


Social innovation comes into live in specific social, cultural, economic and territorial contexts. It is often driven both by altruism and by the localism of the social innovators. On the one hand a social innovation may remain embedded in its particular setting. On the other, it may spread to different contexts and may have the potential to initiate institutional or systemic social change across geographical cultural and sectoral boundaries. An evolutionary approach is best placed to help us understand the growth and distribution of social innovations, recognising that evolutionary change often occurs in ways that are unplanned and unintentional. However, it is recognised that ad hoc evolution is insufficient to generate the smart and inclusive growth required by Europe 2020.

In addition, the development of a robust and relevant theory necessitates to combine evolutionary thinking with an understanding of the competing paradigms and forces which shape public policy making at strategic level. The challenge for strategic policy in Europe is to establish means of identifying promising initiatives within their specific contexts and to extract the lessons, practices and generators that can stimulate comparable innovations on a large scale across diverse settings. This has two dimensions: Firstly, it requires understanding of the windows of opportunity and related political streams that are needed to initiate and implement political action to support social innovation. The focus here is on the mutually reinforcing and cumulative effect of multiple policy streams. Secondly, evidence-based policy requires a clear understanding of the ways in which markets, the public sector and institutions function (or not) in addressing the needs of marginalized and vulnerable groups in society and managing the co-evolution social innovation and technology-based growth.


Applying Go to Middle-range Theorymiddle-range theorising, a comprehensive architecture for understanding the economic dimensions of social innovation shall be provided.


SIMPACT's core aspect of theoretical foundation is based on critical reflections on the economic factors of how markets, public sector and institutions function (or not) for marginalised and vulnerable groups in society and how social innovations co-evolve with technology-based growth, underpinned by the diffusion of technologies. Understanding social innovation as an outcome and a process further core elements considered are differences and similarities of technological and social innovations, economic principles, objectives and components as well as drivers and barriers of social innovation.

Based on Go to Literature Reviewliterature review in combination with the input from the contextualisation of Go to Interplay of SI and TItechnologically-bounded social innovation plus the identified of specifics in the Go to SI in NMSNew Member States (NMS) an interdisciplinary discourse in form of laboratories of consortium partners representing the relevant disciplines will be undertaken. Following the idea of theoretical co-conception the laboratories will be enriched by external scientific experts' contributions collected via related LinkedIn groups and from scientific Go to MACMAC members.

For cross-verification of the theorising process, methodological triangulation will be applied by feeding the results of the desk research into the simulation model (WP2) and the participatory action research, i.e., the experimental stakeholder games Go to SI Behaviour Scenarios(WP2), policy action learning Go to Policy Instruments(WP6) and indicator laboratories Go to Indicator Sets(WP5). To collect feedback from the scientific community on the methodology of middle-range theorising in the field of social innovation, a discussion paper will be prepared and circulated.

Basic Information

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    Judith TERSTRIEP
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  • 1

    Middle-range Theory (MRT)

    MRT was developed in sociology by Robert K. Merton in the late 1940s as a way of connecting high-level social theory with empirically observable patterns. As such it stands between high-level social theory (e.g. hermeneutics) and low-level general laws or principles.

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    Principles comprise modes of efficiency and governance. The former refers to resource allocation as subject to the set objectives. In contrast, (new) modes of governance are likewise related to policy-making and self-regulation of private actors, the co-regulation of private and public actors or the delegation of tasks to regulatory agencies.

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    SI actors' primary strategic objective is to generate either solely social impact or social and economic impact, while a trade-off between social and economic objectives may exist. Furthermore, it is to be expected that SI actors' objectives vary depending on the type of organisation. Accounting for the dynamics of SI, it is furthermore assumed that objectives may change during the innovation process.

  • 5


    Components comprise actors, resource allocation and institutions. SIs are developed and implemented by (collective) actors, herein referred to as «organisations». These are embedded in an institutional setting that defines the game of the rule (resources, modes of interaction, access etc.).