New thinking is needed to meet the growing challenges that people and society face.
Businesses need to respond and adapt to the demands of a changing world in such a way that they can benefit society as a whole. To do this they need to embrace Social Innovation.
Hitachi has defined Social Innovation as “innovation to deliver life-changing outcomes for society and individuals”. Such a mission clearly isn’t easy. There is a need to build stronger bridges with governments, communities, charities and other organisations. Businesses need to undertake internal transformations including how they develop products and how they reward employees.
Collaboration – or what Hitachi calles ‘Co-Creation’ – lies at the heart of this, whether it be between local entities or across international supply chains and borders. Collaborating widely, businesses must ensure that the products and services they develop are both profitable and also work for the good of all.
Becoming Social Innovators
Companies wanting to lead the Social Innovation movement need first to understand what successful Social Innovation is. They must also learn how they can begin the transformation needed to move ahead.
Successful social innovators must be:
- Multi-functional and multi-disciplinary: Rather than dealing separately with the many stakeholders, departments and local subsidiaries that a company oversees, problem-solving processes should embrace all of these. For example, smart city projects can bring together IT integration, HR, operations and change management across different city departments. Together these can then tackle functions as diverse as energy, water, mobility, education, healthcare and buildings.
- Demand driven: Supply should not dictate strategy. Instead, solutions and services must be developed from the point of view of the customer. This will ensure that, for example, efforts to improve transportation do not focus solely on profit. Rather they should seek to achieve appropriate profit levels whilst delivering on a customer’s need to feel comfortable and secure.
- Committed to tailored solutions: Global healthcare is a prime example of a sector where a one-size-fits-all response does not work across distinct contexts. Innovative solutions should be tailored to particular local circumstances.
- Innovative and original: Novel thinking leads to a high degree of learning and iteration. This results in circular value chains that lend themselves to continuous improvement.
The final link in the chain—customer and stakeholder feedback—is an invaluable part of Social Innovation. It should be integrated fully into a company’s strategic development plan.
The need for businesses to be as collaborative as possible going forward cannot be overstated. Innovation processes should be developed, delivered and managed across value chains. This can be achieved through partnerships with various private sector players or public-private partnerships.
Collaboration across business areas, such as IT and infrastructure, is also needed. Suppliers throughout the value chain should be brought into the innovation process. And so should the inventiveness of local communities and partner companies.
All this points in the direction of a final, vital goal for businesses: to bring the end-users directly into the design and delivery process. This will be aided by the encouragement of that key element of Social Innovation: co-production and co-creation, where the desires of customers serve as a guiding light.
Where to innovate?
Particular sectors have a stronger need for Social Innovation than others. They will provide opportunities for companies to engage in problem-solving in areas where it is most in demand.
How do we determine which these sectors are?
The answer is simple. Those sectors that serve societies where converging technologies, business models and financing solutions can be deployed will reap the most from Social Innovation.
Sectors, where there are many opportunities for business to innovate in a socially responsible way, include:
- Energy: The growing demand for energy comes as the need to reduce carbon emissions becomes more pressing. Developing alternative sources is now vital.
- Water: Clean water is a finite resource in many parts of the world. This is prompting innovation in desalination, wastewater recycling and smart water networks.
- Natural resources: Pressure on the sustainability of supply chains is being compounded by growing demand for food and energy. This therefore provides an opportunity for innovation in resource efficiency and waste recovery.
- Transport and logistics: The need for technological advances in mobility will become more pressing as with rapidly expanding urban populations. New high speed rail networks, car sharing initiatives and better management of vehicle parking space are vital.
- Healthcare: The shift from treatment to early diagnosis and prevention, and the need for advancements in those areas, is evident in the figures. Spending on prevention, diagnosis and monitoring is set to increase from 30% of total spending in 2014 to almost 45% by 2020.
- Manufacturing and construction: Smarter manufacturing is being enabled by data analytics, cloud computing and the Internet of Things. In the meantime automation and data exchange—key components of Industry 4.0—are driving resource efficiency and sustainability.
- Urban development: This is where integration will be vital—the bringing together of technology and infrastructure that serves the needs of numerous sectors including healthcare, energy and transportation.
A better world
A more integrated world in which businesses work in concert with governments and local communities: this is the goal towards which companies wishing to contribute to progressive change should all work.
But while it’s an outward-looking vision, the first change must happen within. Those who know the key ingredients of Social Innovation—convergence, collaboration and co-creation—will become better companies themselves: better able to maximise profit, and better able to make a positive contribution to this changing world.
The ideas in this article are taken from Hitachi’s whitepaper on Social Innovation.
 Hitachi / Frost & Sullivan (2014) – http://www.hitachi.eu/sites/default/files/fields/document/sib/whitepapers/social_innovation_in_action_whitepaper1.pdf p8.
Our world faces a number of challenges, from climate change and pollution to population growth and urbanisation. Hitachi believes that it must help to find innovative and commercially viable solutions for these challenges.
Visit Social-Innovation.Hitachi to learn how Social Innovation is helping Hitachi improve lives across the world.
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