Social innovation has been developed through a 'bottom-up process" with little conceptualisation of theories of social innovation, its value, and its definitions. In this respect, methodological developments are necessary for a better measurement of cost and benefit analysis from economic, social, environmental, cultural and policy points of views, including the social return on investment. There is also an insufficient culture and practice of ex-post and ex-ante evaluation of social innovation initiatives in Europe based on similar definitions and approaches. National, regional and local public authorities as well as social economy, non-profit sector and private companies should be guided by common principles in this respect in order to be able to compare, validate, scale-up and monitor such initiatives or to transfer more easily good practices. The promotion of effective instruments (economic and financial) also needs a better knowledge about legislation, barriers and public procurement linked to social innovation. The role of social entrepreneurship and networks of practitioners also have to be better understood to be promoted.
Although the public sector needs to innovate to meet the increasing demand of citizens, innovation in public sector is more difficult to define and identify. Efforts to better understand and to promote public sector innovation are greatly hindered by a lack of quantitative evidence. Therefore, we strongly need a measurement framework, which could provide internationally comparable indicators, and which would give information on the characteristics of public sector innovation, particularly on its drivers and barriers, providing thus scientific evidence for effective policy making and benchmarking. Apart from some national and regional pilot initiatives, there is no such a conceptual framework at EU level, which could provide comparable information on how the public sectors of Member States innovate, and also on the policy responses needed to enhance innovation in the public sector.
Public services are among the most knowledge-intensive and value added of all sectors. Therefore, the public sector has a huge potential for innovation, and public sector innovation is now perceived as a fundamental factor in addressing globalization and grand societal challenges and also as a stimulus for business innovation. Public sector represents about 45% of the EU’s GDP, 15% of the total employment in the EU and, as regards public procurement, 17% of GDP. There is a strong need for efficiency gains, better governance, more user involvement, as budgetary and human resources pressures are imminent.
A common conceptual framework of public sector innovation, which could provide internationally comparable indicators. These would give information on the characteristics of public sector innovation, particularly on its drivers and barriers, providing thus scientific evidence for effective policy making and benchmarking.
The public sector has an interest in promoting and facilitating social innovation, to answer unmet social needs or address societal challenges, both through its own provision of services to address these needs/challenges and supporting and working with other societal actors to do so. In this context, important questions to consider is to what extent social innovations can improve and complement existing public services, and what kind of partnerships can be established.
Social innovation offers a way forward to tackle societal challenges when the market and public sector do not respond to the social needs. It is about developing new forms of organization and interactions to respond to social issues. Social innovation can address a social demand or need (e.g. elder care), contribute to addressing a societal challenge (e.g. ageing society) and, through its process dimension (e.g. the active engagement of the elder, new services) it contributes to reshaping society in the direction of participation, empowerment and learning. Social innovation can be defined as a new idea (product, service and model) that simultaneously meets social needs (more effectively than alternatives) and creates new social relationships or collaborations.