Social Innovations, Institutional Change and Economic Performance

Social Innovations, Institutional Change and Economic Performance

Making Sense of Structural Adjustment Processes in Industrial Sectors, Regions and Societies

Edited by Timo J. Hämäläinen and Risto Heiskala

This book examines the nature of social innovation processes which determine the economic and social performance of nations, regions, industrial sectors and organizations.

Chapter 3: Social Innovations: Structural and Power Perspectives

Risto Heiskala

Subjects: business and management, organisational innovation, economics and finance, economics of innovation, institutional economics, innovation and technology, economics of innovation, organisational innovation


Risto Heiskala INTRODUCTION The world economy is currently going through a third industrial revolution characterized by rapid development and diffusion of ICT; globalization of economic activities through foreign direct investments, international trade and cross-border alliances; increasing specialization, complexity and knowledge-intensity of production processes; growing differentiation of demand patterns in consumer and producer markets; and the spread of cooperative network organizations (Hämäläinen, 2003; Hämäläinen and Heiskala, 2004). This transformation increases the importance of innovations as the key determinant of economic competitiveness and growth. So far academic research and public discourse on innovations have focused mainly on technological innovations. We argue that, in addition to the challenge of techno-economic adjustment, the third industrial revolution calls for social innovations that would transform the regulative, normative and cultural aspects of social systems, and their interplay with each other and the techno-economic structure. This chapter contributes to the study of social innovations and collective learning processes by developing the concept of social innovation and some related concepts such as social structure, institution and social change. The aim of our conceptual analysis is to provide tools for empirical research and thus support the development of policies that facilitate the creation of reflexive social organization with the capacity of constant collective learning and adjustment. Theoretically we begin with the assumption that societies can be understood as structured totalities of action. This means that societies would not exist without the activities of various actors and even the activities of...

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