Building Capabilities through Social Innovation: Implications for the Economy and Society

Abstract Purpose This chapter emphasizes the importance of potential and realized capabilities in building and sustaining social innovations. We present an assessment of the drivers and barriers to the development of social innovation ecosystems through the use of internal (absorptive capacities) and external organizational capabilities (open social innovation). A particular emphasis is placed on social innovation outcomes and impacts. The capability approach is particularly useful for measuring social innovation impacts and investigating the “micro-meso-macro” of linkages that underlie the process of social innovation. Methodology/approach Our methodological approach measures social innovations’ outcomes and impact through an aggregative model, which takes into consideration different forms of capabilities that are engendered in the process of or as a result of social innovation. This methodology highlights the importance of social innovation drivers and contexts in which knowledge exploration and exploitation lead to the creation of capabilities that help social innovators to respond to unfulfilled social needs. Findings The research presented in this chapter provides a new perspective on how the capability approach can be used to assess and measure individual and collective actions when facing social challenges. Research implications Our research supports and complements the findings of the EU project SIMPACT an acronym for “Boosting the Impact of SI in Europe through Economic Underpinnings,” by highlighting the processes and outcomes and SI impact measurement. Social The measurement of social innovation outcomes and impact has gained importance for policy makers and constitutes a strategic tool for designing policies in support of social entrepreneurs, social investors, and private and public organizations which participate in cocreating and implementing innovative projects. Originality/value The research presented in this chapter sheds light on the “micro-meso-macro” linkages that foster social innovation ecosystems, and offer valuable tools and guidelines to researchers, practitioners, and policymaker in the field of innovation in general and social innovation in particular.