Social Innovation for Sustainability and Social Inclusion

Companies are realising now that business is not only about selling products to rich consumers but also to serve the underserved bottom-of-the-pyramid (BOP) markets. Serving these customers calls for innovative methods. This had led to reinventing business models to expand the nature of their businesses from mere commercial motives to social ones as well; the understanding that businesses succeed if they go beyond their mandate of making profits. The future rests on three paradigm shifts taking place in BOP approaches: innovation, transformation of companies into social enterprises and technological advancements that bring products closer to BOP consumers. That is to say, companies today re-invent their business models and their very approach of doing business. Such companies stand a greater chance of success and long-term survival. This article describes the concepts of social business, social entrepreneurship and social innovation. We illustrate the concepts with mini case studies or examples of several companies that have achieved innovation in products, business models or processes to serve BOP markets. We describe efforts that solve problems of consumers who are disadvantaged because of distance, education or purchasing power. If this ‘social innovation’ betters the life of consumers, it could result in sustainability and inclusive development. The world is slowly realising that the existing business models that place importance on relentless pursuit of profits are causing immense damage to our society and environment. The objectives of business must change. Milton Friedman’s famous saying, ‘the sole purpose of a business is to generate profits for its shareholders’ is no longer accepted today as businesses find that they must cater to social objectives as well. This article describes that this can well be achieved, as illustrated by several companies who achieve both—financial profits and social good. Drawing from examples of successful initiatives, new business models are being created that provide affordable products and services for disadvantaged consumers. We have taken elements from the business models of these companies to figure out what the future looks like. These companies, we find, found solutions through an action-oriented mindset to solve long-standing problems. Firms that embrace experimentation and rapid prototyping stand to win huge new markets and profits. They invest in distribution and training of local resources, develop innovative products and processes, involve stakeholders and above all, build a social purpose in their objectives. Social innovation and social entrepreneurship shift the focus of governments and companies towards neglected or BOP consumers who are otherwise unapproachable. Examples of social innovation show that it touches the lives of millions of people, empowers them and leads to sustainability. Investments in social innovation that are both sustainable and socially inclusive are the need of the hour.