Dec 29, 20213 min read

Innovation + Social Impact = Social Innovation: The Prahalad Awards approach

Not all innovations are created equal.

Most frequently, innovation is associated with technology in new, profitable, and even revolutionary products or services.

Some innovations can be radical and disruptive, like the Internet, personal computers, smartphones, or social networks.

Others might involve minor improvements, tinkering, and tweaking some elements of existing formulas, such as components, applications, business models, that facilitate mass adoption.

Some innovations are inventions, like the wheel. Others are discoveries like producing and controlling fire[1]. Whether inventions or discoveries, innovations can have enormous, unforeseen social impacts.

Innovations are about the “how” and the “know-how” required for significant change.

Not all innovation has a significant social impact. Not all social impact comes from innovation

Innovation can be passing and transitory (think of audio cassettes or handy cams), have a little social impact (like most of Tesla and Edison patents). Furthermore, some innovations can have negative, even devastating social impacts. Just consider the case of the 2o08 global meltdown created by credit derivatives[2] that Warren Buffett called “financial weapons of mass destruction.

Innovations, like any technology, are means to different ends and social consequences, many of them unintended or unexpected “black swans.” Think of the social pushback against Uber or Airbnb in cities around the world.

Innovation is about “how” to produce change. Social Impact is about “what” to change and “why.”

Social impact is about the results of change, measured at three levels: benefits to end users delivered by products and services (Micro level); benefits to shareholders delivered to organizations in terms of ROI, ROE, stock valuation, brand recognition, employee retention, talent recruitment (Macro level), and benefits for all other stakeholders -clients’, clients’ clients, value chains, communities, society at large- and our shared environment (Mega level).

Social innovation is innovation with net positive social impact

Social innovation can be defined thus as innovation with net positive social impact. In many cases, technological innovation can have an unintended positive social impact -such as the adoption of cell phones and WhatsApp by small, BOP, and informal “stealth” economies of poor and low-income end users-. However, social innovation reaches its full potential only when it finds a deliberate formula to create a virtuous circle of reinforcing social impact on a larger scale and scope.

Tyson’s ball barrel, Apple’s iPhone, Google’s Internet balloons, WhatsApp or Facebook are examples of technological breakthrough innovations. Kaufman Awards on Social Impact winners such as World Central Kitchen, Mo Ibrahim Foundation, TOMS, Barcelona Activa are examples of significant social impact achieved without major technological innovation.

Social innovation often involves a social application of technology. That is the case of India’s Phone ladies, African farmers using smartphones to negotiate better prices for their crops, Airbnb and Uber sharing economy model for rides and hospitality, or APOPO’s use of animal behavior technology in rats to detect land mines, reduce mortality and help recover land to produce food and jobs.

Not all social innovations are created equal.

Many must learn to use their social impact power for good and avoid unintended consequences. Facebook struggles to control the viral dissemination of anti-vaccine conspiracy theories of fake news to prevent a growing pandemic of the unvaccinated. Uber faces strong backlashes from underpaid drivers and unsafe riders. Airbnb has provoked housing crises in Barcelona by involuntarily rising rents and making housing less affordable.

In 2021, the Kaufman Center at the Performance Improvement Institute and the Performance Improvement Global Network launched the C.K. Prahalad Awards to identify and recognize Outstanding Social Innovation in different categories -products and services, Social Networks and Bottom of Pyramid (BOP) and Inclusion-. The 2021 Awardees are