How We Create the Wealth of Nations
Chapter 18: Socio-Economic Environment
Following the framework used in Part I (Chapter 6), this chapter concerns common innovation and the socio-economic environment. Some of the ideas to be discussed here are better known as social innovation,1 and this will be familiar ground to many readers. But the scope of this chapter is wider than the conventional interpretation of social innovation. Social innovation is by no means a new idea. We can find important social innovations and innovators from the dawn of the industrial revolution (Mulgan, 2007). One of the earliest and most important innovators was Robert Owen, the enlightened owner of textile mills in New Lanark, Scotland. Owen acquired these mills at the end of the 18th Century, and transformed them from a very harsh working environment into a model community, with facilities, medical care and comprehensive education. His example inspired many other social innovators. Mulgan (2007, p. 8) offers this definition of social innovation: ‘innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly developed and diffused through organisations whose primary purposes are social.’ This puts the emphasis on innovations with a social purpose. In this chapter, I shall cast the net even wider – in line with the format of all the chapters in Part III. We shall consider all three of the following: _ innovation that directly enhances the socio-economic environment _ innovation that exploits other categories (e.g. science) to enhance the socio-economic environment _ innovation that exploits the socio-economic environment to enhance other categories (e.g. consumption in the home)
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