*This thesis was presented for the Erasmus Mundus - Joint European Master in Comparative Local Development of the University of Regensburg (Germany), University of Trento (Italy) and Corvinus University of Budapest (Hungary).

“Idea Development towards Social Innovation through Digital Platform"*

Yovita Herma Santosa

Oliver Silveti Sánchez García

This Master thesis is copyright but the text may be used free of charge for the purposes of

advocacy, education and research, provided that the source is acknowledged in full and the

authors informed to the e-mail oliverssanchez@gmail.com / yovita_herma@hotmail.com

i

Author’s CV

Oliver Silveti Sanchez Garcia is from Mexico City. He holds a B.A. from National

Polytechnic Institute (Mexico) with a major in International Business. He has international

experience in both private and development sector, running market analysis and implementing

commercial strategies. He recently collaborated at Inter-American Development Bank (DC, USA),

forecasting resources demand and at European Union – Latin America and Caribbean Foundation

(Hamburg, Germany), analyzing commercial strategies for fostering Small and Medium

Enterprises’ participation within the Latin America region. His work and research interests include

Competitiveness of Small and Medium Enterprises and how youth social participation can

positively impact on economy and society.

Yovita Herma Santosa is an Indonesian born in Jakarta on December 31st, 1992. She

graduated with a Bachelor degree in Business Administration from University of Southern

Queensland. She is currently enrolled in the Joint European Master in Comparative Local

Development from the cooperation between Corvinus University of Budapest, Regensburg

University, University of Trento and University of Ljubljana. She has a few years of working

experience particularly in financial and banking sector as a Corporate Analyst. Moreover, she had

actively participated in the student organisation and various projects on marketing researches to

make the most of her academic experience. Her last project was to provide an elaborate marketing

research for a multinational company in Europe on both Italian and Spanish markets.

ii

Abstract

Social innovation has been incorporated with the latest developments and trends both at

the policy and grassroot level. Social innovation is characterized by a wide range of definitions

and understandings, although the main idea is the creation of new solutions in tackling social

issues. Accordingly, the purpose of this thesis is to examine how the implementation of social

innovation is currently boosted by the Information and Communication Technology (ICT) to

address some of the principal challenges at the local development. Internet, social media and

modern technologies such as mobile phones have currently contributed to quick changes on

people’s communication and interaction. This thesis will discuss the principal theories related to

social innovation and steps on implementing this concept. This discussion will be developed

drawing upon the case-study of the Mexican’s social participation rate to explore how the

implementation of a digital platform can contribute to increase the degree of social participation

of all stakeholders to address some of the key socio-economic challenges at the local level. The

thesis will explain how the development of a digital platform can help to encourage collaborative

action from the local citizens, businesses actors (especially Small-Medium Enterprises (SMEs)),

Non-Governmental Organisations (NGOs) and the local government/ institutions, to alleviate the

social challenges. This thesis proposes SOCAnet, an online platform to encourage – in particular

way - millennials’ social participation, to undertake charities and volunteering activities. This

thesis argues how the development of SOCAnet platform can become not only an economic and

social opportunity for potential investors and stakeholders, but also offers the chance for

promoting a sustainable project with socio-innovative impact.

iii

Executive Summary

The purpose of this thesis is to examine the role of social innovation in tackling socio-

economic challenges thanks to the development of a digital platform which supports social

innovation. The thesis will draw upon the literature to provide an encompassing definition of social

innovation and how it has evolved overtime. Social innovation has been initially regarded as an

argumentative solution towards achieving sustainable development. The concept of social

innovation denotes the outcome of the evolution of the social change dynamics. The topic grasps

various themes such as health, cities, immigration, politics, employment, etc. and is approached

from multi-disciplinary perspectives developing from knowledge creation to ethical consideration

and to social capital perspective. In this framework of social innovation, the thesis will discuss on

how strategic collaboration can create societal value and how the concept of social

entrepreneurship has been considered to foster social innovation.

The thesis then provides an analytical model of social and economic ecosystem to examine

how social enterprises have been increasingly playing an important role in the society, facing the

challenge of promoting social change and involving stakeholders by being financially sustainable

and even profitable. Social entrepreneurs achieve this by promoting a change in the people’s

mindset reflected especially in the way people should consume. A good example is on how

“Sharing Economy” has brought changes to the consumption behavior of many people. The

analytical model will then be employed to explain how Digital Ecosystem (DE) creates additional

value from business, technological and social perspectives.

The thesis will then discuss about the implementation of social innovation drawing upon

the millennials’ perspective on getting involved in socially responsible enterprises as a way they

can feel to contribute to the society. A particular attention will be reserved to understand how

digital technology has helped in fostering social innovation thanks particularly to the progress

made in Information and Communication Technology (ICT). Naturally the thesis will advance

various considerations and concerns regarding social innovation’s implementation and its

limitations.

The case-study of the Mexican social participation and particularly of the millennials will

be then examined in the thesis. It will explore how the current situation may become an opportunity

iv

to encourage participation - on both volunteering and donation activities - in Mexico through social

innovation. According to the Organisation for Economic Co-operation and Development (OECD),

there is a preference for Mexicans to volunteer mainly in four principal sectors: social and health

services, followed by education and culture. Mexican students are much more likely to engage in

organisation-based volunteering than the average of students in other OECD countries; a survey

conducted by us (SOCAnet) also expressed a similar trend on volunteering. The analysis continues

by exploring the reasons of such performance and provides some hints on how to engage

millennials in social participation.

The thesis will propose a project-idea (SOCAnet) aiming at creating an online digital

platform to promote social participation (donation and volunteering) especially to millennials.

Considering crowd-funding as an approach predominantly employed to collect online financial

support for social projects, the thesis will briefly discuss the current situation of crowdfunding

sector globally along with the respective shares of non-profits and charities. The project –

SOCAnet will be explained in terms of its purposes, aims, and detailed business model for its

implementation in the Mexican reality. The thesis will be concluded by providing an analysis on

how SOCAnet creates additional value in comparison to other models, along with specific

recommendation for promoting social innovation.

v

Table of Contents

Author’s CV ......................................................................................................................................i

Abstract ............................................................................................................................................ ii

Executive Summary ........................................................................................................................ iii

List of Figures ................................................................................................................................. vi

List of Tables ................................................................................................................................. vii

Abbreviations ................................................................................................................................ viii

1. Preface....................................................................................................................................... 1

1.1. Thesis Structure ................................................................................................................ 1

1.2. Methodology and Its Limitations ..................................................................................... 3

2. Introduction to Social Innovation ............................................................................................. 4

2.1. Embracing Strategic Collaboration to Create Societal Value .......................................... 6

2.2. Understanding Social Innovation & Social Entrepreneurship ......................................... 8

3. The Analytical Model of Social and Economic Ecosystems .................................................. 10

3.1. Digital Socio-economic System ..................................................................................... 11

3.2. Various Approaches on Digital Ecosystems (DE) ......................................................... 13

4. How Social Innovation can be Implemented .......................................................................... 19

4.1. Various Concerns Associated with Social Innovation ................................................... 24

4.2. Limitations on The Implementation of Social Innovation ............................................. 26

5. An Analysis of the Mexican Social Participation: An Opportunity to Encourage Volunteering

and Donation in Mexico through Social Innovation ............................................................... 30

5.1. Social Action in Mexico and other countries ................................................................. 30

5.2 Remarks on Social Participation in Mexican context and at International Level .......... 35

6. Idea Development towards Social Innovation through a Digital Platform ............................. 38

6.1. The Development of Crowdfunding Platform ............................................................... 38

6.1.1. Crowdfunding Engagement: Non-profits & Charities ............................................ 40

6.1.2. Rewarding System .................................................................................................. 42

6.2. Idea Development - SOCAnet........................................................................................ 43

6.2.1. SOCAnet’s Flowchart ............................................................................................. 46

6.2.2. Business Model............................................................................................................ 50

7. Recommendations and Conclusion ......................................................................................... 63

List of References ......................................................................................................................... 66

vi

List of Figures

Fig. 1 - Perspectives and consideration in social innovation (Osburg & Schmidpeter 2013) ........ 5

Fig. 2 - Related business concept (Osburg & Schmidpeter 2013) .................................................. 6

Fig. 3 - Simplified "historical" map of the main economic fields relevant to DEs (Lorena Rivera

León 2014) .................................................................................................................................... 13

Fig. 4 - Exploring the implications of the DE backbone with a logical-semantic process model

(Lorena Rivera León 2014)........................................................................................................... 18

Fig. 5 - On "big issues”, millennials feel more accountable than influential (Deloitte 2017) ...... 20

Fig. 6 - Steps on the implementation of social innovation (European Commission 2013) .......... 21

Fig. 7 - Generalized social innovation and the value of technology (TEPSIE 2014) ................... 22

Fig. 8 - Network and social innovation scaling cycle (TEPSIE 2014) ......................................... 23

Fig. 9 - Volunteering in Mexico and OECD Countries (OECD 2016)......................................... 31

Fig. 10 - Millennials Social Participation (SOCAnet Survey 2016)............................................. 31

Fig. 11 - Social Participation – Mexico and Other Nationalities (SOCAnet Survey 2016) ......... 32

Fig. 12 - Percentage Volunteers in Non-Profit Organisations - Mexico (Instituto Nacional de

Estadística y Geografía 2015) ....................................................................................................... 33

Fig. 13 - Types of Staffs in Non-Profit Organisations (Instituto Nacional de Estadística y

Geografía 2015) ............................................................................................................................ 34

Fig. 14 - Contribution of Non-profits and Charitable in Crowdfunding Platform (Hivewire Inc.

2015) ............................................................................................................................................. 41

Fig. 15 - Growth of Non-profits and Charities 2009-2014 (Indiegogo Campaigns 2008 - 2015) 41

Fig. 16 - Non-profit/ Charity Campaigns: Category Breakdown (Hivewire Inc. 2015) ............... 41

Fig. 17 - Success Rate of Non-profit and Charities Campaign (Hivewire Inc. 2015) .................. 42

Fig. 18 - SOCAnet Scheme........................................................................................................... 44

Fig. 19 - Work flow of NGO ........................................................................................................ 47

Fig. 20 - Work flow of Private Sector........................................................................................... 48

Fig. 21 - Work flow of Users ........................................................................................................ 49

Fig. 22 - Business Modelling Tool (Filippas 2016) ...................................................................... 51

Fig. 23 - Competitors Matrix (SOCAnet 2016) ............................................................................ 54

Fig. 24 - Social Action Sector (SOCAnet 2016)........................................................................... 55

Fig. 25 - SOCAnet's Potential Sources of Funding....................................................................... 58

Fig. 26 - Projected Partners and Alliances .................................................................................... 59

Fig. 27 - SOCAnet Partnership by areas 2016 .............................................................................. 59

Fig. 28 - SOCAnet Prototype 1, 2017 ........................................................................................... 61

Fig. 29 - SOCAnet Prototype 2, 2017 ........................................................................................... 61

Fig. 30 - SOCAnet Prototype 3, 2017 ........................................................................................... 62

Fig. 31 - SOCAnet Prototype 4, 2017 ........................................................................................... 62

vii

List of Tables

Table 1 – SOCAnet’s Activities ................................................................................................... 56

Table 2 – SOCAnet’s Impact Evaluation...................................................................................... 57

Table 3 – SOCAnet’s Budget ....................................................................................................... 58

viii

Abbreviations

CSR Corporate Social Responsibility

DE Digital Ecosystem

ICT Information and Communications Technology

INEGI Mexican National Institution for Statistics and Geography

NGO Non-Governmental Organisation

OECD Organisation for Economic Co-operation and Development

SME Small-Medium Enterprise

SSR Sharing Social Responsibility

UN United Nations

1

1. Preface

Social innovation has been incorporated with the latest developments and trends both at

the policy and grassroot level. Social innovation is characterized by a wide range of definitions

and understandings, although the main idea of social innovation is the creation of new solutions in

tackling social issues. Accordingly, the purpose of this thesis is to examine how the

implementation of social innovation is currently boosted by the ICT tools to address some of the

principal challenges at the local development. Internet, social media and modern technologies such

as mobile phones have currently contributed to quick changes on people’s communication and

interaction. This thesis will discuss the principal theories related to social innovation, steps on

implementing social innovation, drawing upon the case-study of the Mexican’s social participation

rate to explore how the implementation of a digital platform may contribute to increase the degree

of social innovation. Thanks to this, the thesis will propose the development of a digital platform

to encourage collaborative action from the local citizens, businesses actors (especially SMEs),

NGOs and the local government/ institutions, to alleviate the social challenges together. This thesis

proposes SOCAnet, an online platform to encourage millennials’ social participation, to undertake

charities and volunteering activities. We further argue how the development of the SOCAnet

platform may become not only an economic opportunity for potential investors, but also offers the

chance for promoting a sustainable project with socio-innovative impact.

1.1. Thesis Structure

The structure of the thesis will follow the given outline: literature review – understanding

social innovation and its related theories; the impact of social innovation towards economic and

social development and through the support of ICT sector; followed by case study and a concrete

project idea to promote social innovation via the creation of a digital platform. Meanwhile, the

methodology and limitation of conducting the study will be discussed in advance in this chapter.

In the second chapter, the thesis undertakes a thorough review of various literatures on social

innovation. The thesis draws upon various scholars such as Schumpeter (1950), Zahara and Covin

(1994), Michellini 2012, Vinals and Rodrigues (2013), Chambon (1982), Harrison (2012), Osburg

and Schmidpeter (2013), Jenkins (2010), Durkin and Gunn (2017) as well as Howaldt (2012) to

2

provide a full understanding on how social innovation works, along with various theoretical

approaches related to this concept.

The third chapter will provide an understanding about the analytical model of social and

economic ecosystems, offering further explanation on how social enterprises have been playing an

important role in the society. The chapter will further explain the framework of the socio-economic

ecosystem and how it works along with the development of ICT or digital technology referred

from the work of Lorena Rivera León (2014). It will explain how DE creates an additional value

from business, technological and social perspectives.

The fourth chapter will then discuss the implementation of social innovation. It will

initially explain the perspective of millennials perspective on socially responsible enterprise and

how they feel they can make a contribution to society. It will continue explaining how digital

technology has helped in fostering and implementing social innovation strategies. This chapter

will elaborate various considerations and concerns related to the process of implementing social

innovation and its limitations.

The fifth chapter will focus on the analysis of Mexican’s social participation, particularly

millennials. It will deliberate on how the current situation may become an opportunity to encourage

volunteering and donation contribution in Mexico through social innovation. The data is partially

collected from secondary sources, while the rest is gathered from a survey that has been conducted

on behalf of SOCAnet regarding millennials social participation in Mexico, including their interest

towards contributing to the society in the form of donation or volunteering. The chapter will

explain the reasons behind these numbers and how to engage millennials in social participation.

The last chapter will discuss about the development of a project that will contribute in

social innovation. This project is based on the idea proposed (SOCAnet) on creating an online

digital platform to promote social participation (donation and volunteering) particularly to

millennials. The chapter will first explain the current crowdfunding market in a global scale

particularly for the non-profits and charities sector. Then, it will come to the idea projection –

SOCAnet, explaining about its purposes, aims, the detailed business model, how it should be

applied in the Mexican market as well as competitors’ analysis on how SOCAnet creates aditional

value in comparison to others. The thesis will be concluded with an analysis on how SOCAnet

3

creates additional value in comparison to other social innovative models, along with specific

recommendation for promoting social innovation.

1.2. Methodology and Its Limitations

The study is based on our exploration in developing an online platform – SOCAnet, that is

projected to create a collaborative synergy between several actors in the locality, including citizens,

commercial businesses and NGOs to help tackling the local’s issues and fostering sustainable

development. During the given period, a combined methodological approach drawing upon

qualitative and quantitative methods of research is employed, such as:

Unstructured qualitative interviews – various opportunities have been given to pitch this

project to several scholars and NGOs to gather feedback on the project as well as to further

investigate all possible scenarios given the situation of one locality and how to approach the given

project to be implemented in the targeted market.

Informal conversation with members from various NGOs and local citizens that have been

actively participating on social activities (charities and volunteering).

Quantitative research focusing on the attitude surveys on how millennials act upon social

participation and how they see the importance of contributing to the society through social

participation.

Secondary sources were also explored to gather both qualitative and quantitative data from

books, surveys and studies so to attain a broad understanding on the subject of study.

Considering the previously mentioned methodologies employed, there are various

limitations faced while conducting the study. Firstly, the limitation related to the process of

gathering information and data about the specific volunteering and donation market in Mexico.

Due to the limited resources and accessibility of the data, it limited our market-research in detail.

Secondly, as it has been previously mentioned, the project is still in progress where in this case, a

thorough evaluation on its impact is provided at a limited degree. However, a comparative study

has been implemented to assess the success of similar projects overall. Lastly, tacit knowledge

might have influenced to some extent the findings, while recommendations are drawn based on

our experience and SOCAnet results, which may fully apply in a specific framework.

4

2. Introduction to Social Innovation

Despite the multifaceted challenges, various organisations and private bodies collaborate

synchronically on their path to a sustainable future. Poverty, illiteracy, transmitted diseases and

climate change are a few sustainability challenges facing the world today. According to the World

Bank Report, the global poverty rate in 2015 had substantially declined to a single digit (9.6%),

yet, the figure is still relatively high. Therewith, corruption and poor institutional capacity have

worsened public’s conditions with limited access to health center, education as well as water and

descent sanitary system. In order to address these developmental problems, ergo, NGOs, social

entrepreneurs and businesses joined their hands in order to create a better society through social

innovation.

Social innovation has been an argumentative solution towards achieving sustainable

development. Innovation is highly regarded as a way to create value and sustaining a competitive

advantage which is highly related to corporate’s survival and growth (Zahara & Covin 1994),

Schumpeter (1950) complemented that organisations should innovate to recommence the value of

their assets aptitude. By bringing innovation in philanthropic viewpoint, social innovation can be

considered as a vehicle that drives social change which is linked to a set of solutions and

approaches to various problems, thus leading to a better quality of life (Michellini 2012). It is

regarded as the generation and implementation of new ideas or inventions where it addresses

problems related to current social issues.

The concept of social innovation denotes the outcome of the evolution of the dynamic of

social change. The topic grasps various concerns regarding health, cities, immigration, politics,

employment, etc. and is approached from multi-disciplinary perspectives (Vinals & Rodrigues

2013). According to Chambon et al (1982), social innovation was linked to the creation of new

social structures, new relationships and new ways of making decision; although innovation is not

necessarily a synonym of new, but rather putting forward alternatives to the existing concept.

Harrison (2012) added that social innovation was developed on the basis of moral and idealistic

motivations with fellow human beings searching for harmony and freedom. Social innovation can

be defined drawing upon three concepts: common public interest, a new approach to the concept

of service and strengthening the bonds of trust between citizens (Harrison 2012, Osburg and

Schmidpeter 2013).

5

Social innovation encompasses social transformation, about meeting the unmet social

needs and social outcomes, which is based on its roles, relations, norms and values (Franz,

Hochgerner & Howaldt 2012). It is about tapping the creativity of the social organisations as well

as social entrepreneurs to find a new way in fulfilling social demands, which are not adequately

fulfilled by the market or the public sectors and are directed towards the vulnerable groups of

society. It is, indeed, an opportunity not to be missed to generate new solutions, creating bonds

among the citizens while promoting a better quality of life which leads to sustainable development

(Vinals & Rodrigues 2013).

Why is social innovation becoming a trend right now? According to Howaldt and Kopp

(2012), “the transition from an industrial to a knowledge-based and service-based society

corresponds with a paradigm shift of the innovation system.” The link between the advancement

of technology, accessibility of knowledge and information, use of telecommunication and the

higher awareness of societal problems in this knowledge-based society along with societies’

involvement to address social problems might explain why social innovation is progressing so

much in the 21st century, encompassing different areas of the society. This paradigm reposition

implies an increasing significance of social innovation, as compared to mere technological

innovation (Howaldt 2012).

Fig. 1 - Perspectives and consideration in social innovation (Osburg & Schmidpeter 2013)

In a knowledge-based society, social innovation has been importantly considered as a way

towards sustainability. Ethics, know-how creation as well as humanitarian and social capital

perspectives have become paramount considerations that surrounded social innovation and

sustainability (see Fig.1). Social innovation is becoming crucial for organisations given that it

determines how to transfer knowledge and improve organisational performance. Social capital is

Social Innovation

& Sustainability

Ethical

Consideration

Humanitarian

Perspective

Knowledge

Creation

Social Capital

Perspective

6

needed to understand the innovative thinking behind social innovation, which involves the three

levels of social capital – individual level, organisational level and institutional drivers of

innovation. While ethical perspective is applied to a way of thinking about doing a business from

humanitarian perspectives, which regards inclusive business model, social entrepreneurship or

CSR as a systemic concept in fulfilling corporations’ wider role in the society (see Fig.2).

Fig. 2 - Related business concept (Osburg & Schmidpeter 2013)

Humanitarian ethical consideration has been highly regarded in current business

development. The concepts of inclusive business model, social entrepreneurship and CSR, have

been developed over the past decades, and shows how companies nowadays initiating shared value

– for society and business – by addressing social issues while doing business at the same time.

They can no longer be a peripheral activity but pivotal component towards sustainable

competitiveness and growth, which is why many companies today started to see the opportunity

by remodeling their business plan and focusing on creating shared value (Osburg & Schmidpeter

2013).

2.1. Embracing Strategic Collaboration to Create Societal Value

With the emerging sustainability challenges facing society, it is becoming gradually

recognized that “companies will need to seek avenues for collective action with NGOs and other

business counterparts as well as channels for policy dialogue with government and other key

stakeholders” (Osburg & Schmidpeter 2013). This collaboration will enhance the effectiveness in

addressing local issues as it allows the companies to deliver their value to the communities with

Social Innovation

Corporate Social Responsibility

Inclusive Business Model

Bottom of The Pyramid

Social Entrepreneurship

Corporate Social Innovation

7

the help from the NGO’s expertise. Furthermore, the collaboration may also improve the efficiency

as well as minimizing the risk and cost while delivering their value, which in turn can create a

long-term economic value. One successful case of strategic collaboration is Shakti Project – a

project ran by Unilever through its cooperation with NGOs to create a rural network employing

31,000 women, helping them to improve their entrepreneurial skills and mindset, adapted to

customers in more than 100,000 rural villages. This example “extend the notion to argue that

business models can be viewed as generators of social value, and that economic and social value

creation can be mutually reinforcing” (Dahan et al. 2010, Osburg and Schmidpeter 2013).

Generating social and economic value, even at the local level, is a complex goal which one

company alone will not be able to achieve, considering the substantial initial investment and local

knowledge. Even though companies are willing to collaborate with NGOs, collective action

between companies also needs to take place. Thus, companies will be able to attain the real impact

and to achieve the long-term goal of sustainable competitiveness. Nevertheless, the

implementation of collective action between firms, NGOs and other stakeholders has become the

greatest barrier to address sustainable issues effectively (Osburg & Schmidpeter 2013).

The action to create value may be encouraged by building on multi-sector, multi-player

and pluralist approaches to find common concerns and to define a practice which addresses them.

This practice might align multiple actors, with different value orientations and understandings,

who share a communal problem. This issue becomes the trigger to create a discourse that may be

transformed into a collective action.

When it comes to the involvement of the private sector into social matters, it is found that

business-driven networks for sustainability have a great potential to drive collective action and

policy dialogue (Simeonov et al. 2012). Such is the case of CSR Europe (the European business

networks for corporate social responsibility) which highlights the significance of intermediaries

that provide a platform to eradicate corporate barriers and build an environment to encourage

collective approaches for tackling emerging issues and entering the formerly untapped markets.

Thus, companies will be more inclined to pool resources and invest in common goods together,

which is the way to an efficient local cluster development and to increase the potential of

products’/services’ innovation. (Osburg & Schmidpeter 2013).

8

2.2. Understanding Social Innovation & Social Entrepreneurship

One of the distinctive features in capitalist economies is the emphasis on ‘entrepreneurship’,

the capability to recognize opportunity and innovate in products/services creation for the sake of

monetary profitability. In the 20th century, Schumpeter developed the concept ‘social enterprise’

to focus on how entrepreneurs innovate and stimulate change in the economy by serving new

market or creating new ways to do so. Social enterprise is highly linked to social innovation where

the goal is to develop innovative solution to alleviate poverty and social exclusion (Durkin & Gunn

2017).

Durkin and Gunn (2017) have identified the following characteristics of social enterprises:

1. Social enterprises nurture multiple stakeholders, including whole communities. The

contribution of innovative propositions from social enterprises may encourage the

participation of other stakeholders as well as spilling ideas over the community.

2. Social enterprises build activities on relationship-based networks – social capital and

mutualities. As social enterprises´ activities provide positive impact on others’ lives,

the involvement of stakeholders and the beneficiaries themselves might be an organic

consequence. Once a common problem has been identified, the social enterprise

dedicates efforts to innovative ways to tackle the issue by leveraging the

interrelationship with all actors.

3. Social enterprises take care of the developmental aspects of various stakeholders.

Process becomes more important than product. Towards fulfilling social needs, social

enterprises will face obstacles which may not be solved unless they occupy their social

capital in order to have a wider resolution perspective. To do so, social enterprises

might utilize a tit for tat approach with stakeholders, in this way, a stronger

commitment of actors may be encountered and as consequence social issues may be

tackled.

4. Social enterprises ‘keep it all in the family’, through the mechanism of asset lock or

no-profit distribution. By limiting the mechanisms of making profit or simply utilizing

a no-profit approach, social enterprises may aim exclusively at strengthening

relationships among actors in order to solve social issues.

9

Generally, social entrepreneurship is focused on creating socially innovative products.

Such products will not be delivered unless a partnership with stakeholders is formed probably

producing complex networks where a reciprocity system is sought. Once a network is built and a

common ground is established, social enterprises and stakeholders may work on solving any social

common problem that may be hindering the development of a community.

Furthermore, while delivering the social innovative products, social enterprises should

implement the inclusive business model which promotes the participation of all stakeholders and

focus on alleviating social problems while not losing the intention of generating profit.

With around four billion people living under the bottom of the pyramid, it might need a

quantum leap from commercially viable inclusive business model (Jenkins, et al. 2010).

An inclusive business model is referred to one business that seeks to contribute towards

poverty alleviation by including lower-income communities within its value chain without losing

sight of the ultimate goal of business, which is to generate profits (SNV & WBCSD 2008;

European Commission 2013). For the past decades, interest and activity have emerged around the

concept of inclusive business model; this concept is fascinating for many businesses as it can

provide new opportunities for innovation, growth and competitiveness. It may create a positive

social and development impact, as well as helping the donors, foundation, governments and civil

society organisations for driving sustainable development towards a self-generating system of

funding -a clear win-win conception- (Jenkins, et al. 2010). The implementation of development

instruments and mechanisms for tackling social issues is not an easy task, therefore, social

enterprises will play a key role by encouraging stakeholders to get involved in social matters in

addition to proposing innovative conducts to provide social and economic value. In this way, social

needs will be met and development will be reflected as assets within the community.

10

3. The Analytical Model of Social and Economic Ecosystems

As we have seen up to now, social enterprises can play an important role in societies. From

the business perspective, an aspect worth acknowledging is the tough duty to promote social

change and involve stakeholders while pursuing financial self-sufficiency and, in some cases, even

being profitable. To this end, innovation in the form of ideas, processes, mechanisms, will be a

key factor to accomplish development.

To reach a level of innovation clarity, it is first required for social entrepreneurs to have a

range of skills: the ability to identify problems, an entrepreneurial spirit, leadership and

teambuilding (Mark Anderson 2014). Along with a very strong knowledge of the so-called socio-

economic ecosystem; its actors’ needs, preferences, and ways of interaction. With this knowledge,

a social entrepreneur might be able to come up with innovative strategies and communicate

assertively with stakeholders within this ecosystem. Ultimately to promote interaction towards

creating a social value.

In development field, social entrepreneurs promote broadly a change in the mindset of

individuals reflected in the way people should consume. A good example of this is the case of the

“Sharing Economy” business model in which consumers have the chance to have access to

products and services with a lower cost by sharing the goods with others. However, before

entrepreneurs take the leadership and propose innovative ideas, it is important for them to bear in

mind that there exists environmental characteristics that govern the system’s dynamics that

ultimately affect the way innovation can be proposed.

Therefore, it is relevant to point out the ways innovation arises in normal ecosystems. Two

types of endogenous innovation have been seen; bottom-up, given when peels, at the same level,

get organized and proposed innovative ideas to solve a communal issue; top-down, in which

governments or popular leaders or big mouths propose innovation. Innovation itself has to be

flexible and inclusive so different actors can take part in innovative process and may subsequently

lower the risk of facing discrepancies.

Prior to innovate, entrepreneurs should analyze as thoroughly as possible the patterns of

interaction in socio-economic systems. In this way, they will identify the main patterns that control

the system’s dynamics which would determine the success or failure of their social and business

11

ideas. Once these patterns have been adequately analyzed, entrepreneurs will be able to frame

opportunities from a more tangible perspective as well as identifying more easily potential partners

that can also contribute to their innovative ideas.

Even though there is a lack of research information on how to foster effectiveness in socio-

economic systems, there exists a recent publication on the topic, “The socioeconomics of DE

Research: Policy Analysis and Methodological Tools from Argentina Case Study” presented in the

book “Innovation Support in Latin America and Europe” in 2014. It provides a wide picture of the

evolution of business as well as social patterns found in more modern ecosystems. Also, it sees

technology as an asset that is currently embedded to the current dynamics’ generation, and

innovation as the trigger actor, which will determine the sustainability of social and economic

systems.

This publication proposes a concept called Digital Socio-Economic Systems which has an

interdisciplinary’ point of view on business and societal dynamics within systems. This concept

intends to become an instrument that might enhance the decision-making of policy makers but

mainly equip entrepreneurs with valuable knowledge on the market.

3.1. Digital Socio-economic System

In complex socio-economic systems, economic entities strongly promote the reduction of

trade barriers in order to create a more prosperous environment for the domestic enterprises.

Whereas NGOs tend to call for support from stakeholders as well as promoting involvement of the

ground level as to solve social problems. In both extreme scenarios, innovation will play an

important role, first, to give visibility to the group´s challenges, second, connect stakeholders, third,

promote the development of ideas and ultimately call for a communal action.

A research of this nature has begun in the late years which this paper will dig into it later

on, the involvement of the new generations became more complex. As their needs, channels to

communicate and trends of consumptions have evolved. Having said this, technology and online

models represent a bridge for development opportunities that might foster better dynamics.

The current research tool proposed on the work “The Socioeconomics of Digital

Ecosystems Research: Policy Analysis and Methodological Tools from an Argentinian Case Study”

12

is the DE. The concept of DE arises from the hypothesis that ICT can contribute to catalyze

development through innovative tools and processes of innovation. It is important to highlight that

this tool has two assumptions: the software should be an open source and the architecture should

be distributed among the stakeholders. In between these two poles, DE should be allocated.

DE concept addresses different disciplines; economic, technological and sociological, in

order to have a more integral action into the development arena. The core idea of DE as an

innovative tool is not only to introduce creative processes and interactions but also seeks to couple

that with actual participation from stakeholders. Towards creating value, DE tool seeks to be tested

in the field thus innovation may take place and also could be measured by real indicators.

Additionally, to understand why DE has gained importance in the development field, it is

of concern to take a look into the evolution of the economic markets and social aspects. How they

have evolved over the decades and the current presence of interdependence to each other due to

the new social and business needs and modern dynamics.

Fig.3 indicates how the concept of economic development has been evolving over the

decades. A shift from an only-goods production towards considering more social aspects into

business models is appreciated. At the same time, the utilization of ICT as promotion and

communication channel is currently present. In this developmental path of the concept, actions

from the civil society are even considered as potential business ideas. It is true that social actions,

such as voluntary work and donation, are not completely combined with business but they

represent the “value creation” that nowadays consumers look for.

13

Fig. 3 - Simplified "historical" map of the main economic fields relevant to DEs

(Lorena Rivera León 2014)

According to Fig.3, to provide “value creation” to society a combination of business and

technological tools should be coupled with a social perspective. The expected outcome from value

creation is to build a win-win situation between enterprises and society, on one hand providing a

“public good” for society, on the other hand, an economic returning for enterprises. For that,

business models will trigger the value creation and feasibility of income return.

In DE, to define the appropriate business model can be a very complex task. Particularly

when it comes to combining social and business ideas. There exists an urge for consumers,

stakeholders and other actors to interact more efficiently. This urgency characterizes this current

young generation (millennial). Millennials will be analyzed deeply later on- have found in

technology the principal way of interaction. Therefore, DE concept has gained more relevance to

be studied and applied.

The following hypothesis of DE pretend to enhance the analytical process for

understanding DE but ultimately seeks to support entrepreneurs when developing business models.

3.2. Various Approaches on Digital Ecosystems (DE)

Now that we have taken a glance at the evolution of economic development, it is of

importance to proceed to state the environmental patterns that in due course will let us to

understand and frame the construction of a proper business model within a digital ecosystem. For

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this, the scholars of DE approach propose and claim that since this is an experimental concept,

these environmental patterns should be treated as a hypothesis and should be confirmed while

running projects in such digital ecosystem, as they may vary from environment to environment.

The importance and rationalization of these hypotheses is that they can lead further

entrepreneurs to consider them as a guideline to come up with innovative ideas that eventually

evolve during the implementation stage. While seeking to make their projects sustainable and even

be profitable.

The approaches of DE are stated as following (Lorena Rivera León 2014)

ICT guide to Improvements

In the business field, ICT tends to be related to an improvement of efficiency in

administration and business dynamics that it is ultimately expected to increase

profitability. Whereas in social dynamics, ICT fosters communication, promotes

visibility of social issues and calls for action among stakeholders. At the same time,

DE users and actors expect an automated communication among them.

For economic and social development, communication and accessibility to

information is vital and should be automated based on “the OPAAL project, the

European Network of Excellence developing a theoretical framework of Digital

Ecosystems” (Dini P. 2008). To do so, social aspects should be considered; ranging

from the way a particular society interacts to the most important issues they consider

as threats.

Social Dimension

The consideration of a social dimension into economic processes will clearly

provide a more complete impact on development. Social aspects are themselves an

appropriate indicator to confirm that development is actually seen in the process. DE

research seeks to improve and support the creation of new inclusive models that can

sustain socio-economic processes within society. For this, inclusive business models

will seek to tackle social issues but also to promote collaboration among stakeholders.

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Collaboration for Greater Competitiveness

It is usually observed that social interaction is constrained by the number of

actors involved and the proximity among them. Therefore, ICT will enhance the

process of amplifying the participation of stakeholders as well as proposing a decrease

in transaction cost, meaning lower costs in connectivity, communication and higher

interaction between them. To put in another way, social interaction should be

supported by ICT platforms which will leverage and support the interaction process

among the actors. This can represent a potential asset that might contribute to economic

and social sustainability, as it is a self-reinforcing of improvement dynamics.

Within a digital ecosystem, fostering collaboration might represent a

transaction cost. It is true that these transaction costs might be low, however, when it

comes to the sustainability of projects it requires either an investment of monetary

resources or to be self-sufficient. This has opened a debate whether collaboration

should be open or charged with a monetary contribution.

Open Source

This hypothesis explores the dilemma of whether or not a software / online

platform that enhances efficiency for both business and social participation should be

open and /or costless. To reach a conclusion, it has to be taken into consideration that

economic and social knowledge creation implies itself an investment. On the one hand

to run a project represents a cost and it would be expected to have a return in certain

period, while on the other hand the technological tool is expected to be freely reached

by any stakeholder.

Therefore, for the sake of social and economic impact and the sustainability of

the technological tool both approaches should be considered. In this way, a profit

opportunity should be met while providing full accessibility to any kind of stakeholder

so that neither social development nor business opportunities should be hindered.

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Distributed Architecture

To ensure social and economic development, it is proposed to make the

architecture of the tool an “open source”, so to facilitate the process of adapting and

distributing according to a specific culture and country. In this way, the tool would be

ruled by the cultural, economic and social values of the respective context. The

assumption of this distributive approach is to make the tool adaptable for every context

so that a better development impact can be met accordingly.

The flexibility of the architecture might have to allow users also to express their

opinions on the dynamic, so that the architecture can be adapted according to the users´

needs. This would contribute to the self-adjustment of the ecosystem and could develop

a concrete model in accordance with the requirements of the economic and social needs.

Ecosystem as a Model

Towards efficiency in socio-economic systems, DE concept not only proposes

the combination of different fields –as in inclusive business is reflected- but also the

monitoring of the user´s needs, would be of the same importance. “DE is also about

making the software better able to track user needs, autonomously….it should be

possible to transform the self-organizing and evolutionary properties of biological into

the architecture and algorithms of Digital Ecosystems.” (Lorena Rivera León 2014)

To summarize, so far, the evolution of the economic framework of business and

social dynamics have been analyzed, in which it is understood that social activities are

not directly related to businesses. Nevertheless, the combination of both can contribute

to the creation of socio-business assets. These kinds of assets are usually found in those

enterprises that take a social approach while doing business.

Additionally, the hypothesis that may be encountered in a Digital Ecosystem

has been stated. With this analytical model, it is intended to provide an overall picture

of the possible challenges and opportunities entrepreneurs may meet when looking for

and implementing innovative ideas in their communities –either on business or social

matters. Not to mention that the involvement of technology, as a catalytic tool, is simply

inherent in modern times.

17

Having said that, it is believed that the following Fig.4 expressed the previously

mentioned hypothesis, dynamics of social and economic activities and even proposes paths

for innovation. Of course, it might vary from scenario to scenario, however it overall

presents a wide picture of the backbone of a digital ecosystem.

An important point to highlight from Fig.4 is that it shows the potential implications

entrepreneurs might face when trying to define a path to implement their projects. It is true that

some implications may lay on the public policies arena, however, knowing where those are

allocated might enhance decision-making of entrepreneurs so that they can chose for another route

in order to find success and sustainability in their ideas.

Towards a successful implementation of socio-economic projects, it is very relevant to

know what tools are available in our environment and their employment by the community

members, such is the case of ICT assets. As important as that is to have a deep knowledge on the

environment, including the profile of the community members as well as their motivations which

will be key to define the success of the implementation of a social innovation project.

Taking into consideration of these implications, it is important to explain how a social

innovation strategy should be implemented in a DE.

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Fig. 4 - Exploring the implications of the DE backbone with a logical-semantic process model (Lorena Rivera León 2014)

19

4. How Social Innovation can be implemented

The improvement of technology has cut a significant distance in terms of connecting

people with the outside world. Supplementary advancement has been added little by little to

devices and applications that without realization, has made society become so dependent on it.

The societal evolution has also changed the behavior on how one approaches technological

transformation. Millennials, reasonably, have been classified as the most sensitive generation

towards technology. They are at the heart of the digital age where they can think with and

through new technologies, bringing changes to the society (Murphy 2017).

Millennials have not an explicit definition, since various definitions include those

people who were born between 1979 and 2001, 1980 and 2000 or from 1982 to 2002 and so

on. A particular study on millennials carried out by Cone in May 2006 involved a probability

sample of 1,800 millennials born between 1979 and 2001. The study indicates that 61% of

millennials feel personally responsible for creating a difference in the world. Individuals from

this tech-savvy generation not only believe that it is their responsibility to transform the world,

but a majority of them deem that companies have similar duty to join them in making a better

world. More than 75% of millennials prefer to work for a company that cares about how it

impacts society and more than 65% would reprobate to work for a company that is not socially

responsible (Mc Glone, et al. 2011).

Involvement of good causes in business has rather created intangible impact or certain

reputational benefit to the companies by involving millennials in such initiatives, boosting their

sense of encouragement and accountability. The latest survey done by Deloitte (2017) on

millennials concluded that millennials have greater sense of responsibility towards addressing

issues around the globe. Referring to Fig.5, millennials contemplate themselves to have a fair

degree of accountability for many of the world’s largest problems, nevertheless their limited

contribution. While six out of 10 people believe that they have a greater contribution to help

protecting the environment, four out of 10 people believe they can exert a significant level of

influence.

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Fig. 5 - On "big issues”, millennials feel more accountable than influential (Deloitte 2017)

Involvement with good causes activities and not-for-profit organisations—whether

directly or indirectly - helps millennials feel empowered and able to contribute on changes to

the world around them. Furthermore, Deloitte’s survey on millennials has reckoned that a total

of 77% have involved themselves in a charity or other activities for a good cause. A

considerable proportion out of this number have shown that millennials taking an active interest

through social media, being an active volunteer, becoming a regular donator and even raising

money by sponsorship, organizing an event or by other means (Deloitte 2017).

Likewise, millennials presently have more opportunities to be socially active in helping

and dwindling current issues that are facing the world today. The extensive growth of

inexpensive, ubiquitous and prevailing tools like the internet, the world-wide-web, social

media and smart phone apps make everything accessible in just a click away. This also means

the new ways of carrying social innovation have been made possible while the current existing

models are being strengthened. Barriers of social innovation in terms of communication,

outreach and scaling have been diminished and threshold lowered.

In this respect, digital technology can be transformational and opening new

perspectives on social innovation, taking an example of the blossoming ‘sharing economy’ in

this modern society. In ‘shared economy’, everything is made accessible; people can share cars,

accommodation and even their time and skills. This is made even more possible with the

support of internet and mobile apps to link people with a social need instantly and regardless

the distance. Moreover, with the utilization of digital technologies, it can also open new

outlooks for locally manufactured and very cheap products for people who otherwise have no

chance of being helped.

There are 10 practical steps to implement social innovation (European Commission

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2013). Fig.6 shows a summary on how social innovators can choose to promote social

innovation. The steps are depicted in an increasing order of their involvement in social

innovation, however, the order is not unalterable, depending on the local level of knowledge

and development. Some might start from Step 4, while the others might need to start from Step

1; other might want to implement Step 6, while some might not be interested on it. These steps

are crucial to help one locality in tackling their existing social problems, for instance,

integrating ICT in medical sector to provide solutions in tackling health problems for all

population.

Fig. 6 - Steps on the implementation of social innovation (European Commission 2013)

Likewise, with the advancement of technology, “one approach to examining the role of

digital technology in social innovation is to examine the value chain of online (digital) tools

and platforms. This ranges from tools which focus on creating content and identifying unmet

social needs at one end, through matching assets to needs, to those which focus on identifying

solutions and taking action to meet those needs, at the other end” (TEPSIE 2014).

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Fig. 7 - Generalized social innovation and the value of technology (TEPSIE 2014)

Fig.7 shows the value chain where technology plays a major support in certain phases,

while human support is needed on the other edge of the chain. Online/Offline digital tools and

platforms are predominantly used in the early phase of the chain and this is especially applied

in the ‘sharing economy’ cases where the remaining activities are implemented using

traditional and physical activities. In some cases, like in education and health sector, digital

technology is more likely to be used end-to-end along the whole value chain with less

involvement of physical and traditional method, enabling new types of social innovation.

Further analysis along the value chain indicates that in many cases digital technology

and people seem to focus on tasks which are best suited for them to perform in complementary

symbiosis. For instance, digital technology is highly depended on its data and analytics heavy

tasks, providing access in high speed, reducing transaction and improving process efficiency.

While on the other side, people are good in social interaction, dealing with decision and policy

making tasks, delegating management tasks and undertaking ‘un-codifiable’ tasks (TEPSIE

2014).

With the implementation of digital technology in various kind of roles, networks

indicate how the effect plays out in regards of social innovation. A highly typical scenario of

networking in social innovation scaling is as follows (see Fig.8):

1. Early phase – Small world network

In this phase, the initiation of social innovations mostly starts through the

efforts of a small group of people or an endearing project that has been executed

after various trial and error, conducted within a limited range of proximity played

by limited number of actors and beneficiaries. Nearly all the people involved have

moderately trivial numbers of links to other people in the group, but almost all of

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whom are interrelated to each other via one or more links as part of an inward-

looking network with only few external links.

Digital technology is typically used in this phase to hasten the copying of

innovation and to spread cognizance within the network, usually alongside

traditional and physical activities. The policy and scaling implications of this type

of inward-looking network are to pinpoint and aim to augment in-group

communication and transform internal group conduct on the group scale.

2. Main Phase – Scale free network

Most social innovations start to get noticed by the other parties as soon as

they are inaugurated and attaining success and realizing the impact to the target

groups. This might be a deliberate and conscious endeavour to propagate and scale

up the project. Social innovation ‘hubs’ along with influencers and sectoral

expertise are the key actors to disseminate the innovation to a higher scale.

Digital technology is typically used in this phase to accelerate copying of

the innovation and to spread awareness, with hub-to-hub collaboration as the main

mechanism, assuming that finding hubs and meshing with hubs turn out to be easier

and faster than trying to grasp the whole potential population. The policy and

scaling implications of this type of expanding network are mostly focusing on the

hubs, to convince and change their conduct, as well as to develop their influence on

their followers so as to maximize scale and impact.

Fig. 8 - Network and social innovation scaling cycle (TEPSIE 2014)

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3. Late Phase

The late phase has a tendency to open up a number of different possible

trajectories once the innovation has been disseminated;

● First, this dissemination continues till it runs its course, or the innovation becomes

mainstream or obsolete.

● Second, the original innovation procreates one or more new small spin-off groups

or initiatives as small-world networks, perchance as a completely new innovation.

● Third, more random and contamination spreading may emerge in the so-called

random networks, which tend to be unstructured and amorphous and highly exposed

to chance events. In such networks, there are no or very few ‘hubs’ or ‘gatekeepers’

to cascade through, but once a likely innovation is acknowledged and appears

applicable and striking, it can spread extensively and in a fast pace as it develops

into more and more ‘fashionable’, normally because it is already well-accepted in

the first place.

Digital technology is typically the primary driver of random networks to

intensely speed up copying and to increase awareness. The policy implications of

scaling through random networks are aimed on large scale digitally viral and other

mass-media campaigns. Nevertheless, considering the randomness, unstructured and

free form network, the incidence of unsuccessful implementation, and so of wasted

capitals, is probably to be relatively high in comparison with the other network models.

4.1. Various Concerns Associated with Social Innovation

After all, like every new attractive concept, social innovation holds some risks on how

it is regarded. Based on the report written by Agnes Hubert (2010) from the Bureau of European

Policy Advisers (BEPA), there are four main types of risks that need to be assessed. Firstly,

the concept of social innovation is viewed as a renamed or re-labelled of all those initiatives

and approaches that bolster social dimension. Such issue was echoed during the BEPA social

innovation workshop where it has been accentuated that the concept of social innovation cannot

be seen merely as a rebranding of the other existing initiatives or approaches. As social

innovation has been underlined here, the social fallout is incumbent, but not sufficient

component. The progress that leads to the result should also subsume elements of novelty in

25

reshaping social interaction. For instance, the involvement of new actors and other stakeholders

in the development of new initiatives can be regarded as social innovation.

Secondly, the concern regarding the respective roles of the private, public and third

sector. Undoubtedly, the private sector has an imperative role to act on, not merely on financial

aspect, but also for interjecting the creativity, flexibility and innovativeness that characterize

the business world. Despite its support, such involvement also raises issues of ethics,

responsibility, quality of services and access. In this matter, social innovation shall not be seen

as lightly as a method of privatizing social services. Social innovation shall be intended to

empower changes on the existing approaches in regards of the responsibility on finding the

most pertinent solutions to address the unmet social demands. The objective in this matter is to

create a flexible borderline in differentiating business innovation with social innovation that

utilize the complementarities.

For example, the involvement of the private sector in the provision of social services,

can be viewed as a strategic planning in providing the appropriate solutions through social

innovations and then disseminating them through businesses and markets. In this case, it

requires a channel for experimentation and diffusion, where it might involve cooperation

between stakeholders from both the private and public sectors. On top of it, the point that needs

to be accentuated is that the core of social innovation shall be oriented towards addressing

social needs and the public sector plays a critical role in this. Moreover, the involvement of the

private sector in catering social services should not be pursued to the disadvantage of some

fundamental values that work as the basis of European Social Model; a common vision of the

European states in achieving a balanced social condition along with a decent economic

performance. This model ordinarily includes various commitment such as social protection,

social inclusion, employment opportunity and democracy. However, some studies indicate an

abusive situation where simply, the weakest group according to the ‘market logic’ has limited

access on getting the advantage or benefits from the social practice.

In fact, public shall be given more access to assess and monitor that proper quality and

access is assured, whoever the actor that undertake it in order to provide an appropriate

evaluation and impact assessment. Such involvement should go accordingly with increased

measures from the public sector in creating rules to make sure the public is respected. This

measure can be varied from regulation to certification, from monitoring to evaluation. In this

case, social innovation must be used to strengthen the European social model, instead of

replacing it.

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Thirdly is the risk of social innovation in confining bottom-up or grassroots initiatives.

Social innovation is not particularly about the bottom-up approach that stems at the micro niche

level of certain individuals or groups. Generally, social innovation arises from various actors

in a locality that share similar social problems or it can also emerge from the market initiative

with a social concern. Nonetheless, taking example from the European experience over

frequent experimentations, social innovation can also emerge from the macro level, when

policy maker, public administrators, business and opinion leaders or academicians recognize,

propose and materialize new ways to address social issues. For instance, innovative pension

schemes or unemployment policies might be appropriately conceived as part of social

innovation taking into account that they are able to deliver more in the context of the constraints

and challenges ahead. Undeniably, social innovation has encouraged a participatory process,

placing an increased role on citizens’ participation in the design and implementation of

solutions to social needs, providing an access to learning between all the stakeholders.

Lastly, similar to any new concept, one should avert viewing social innovation as a

panacea for solving all social challenges and problems. Each innovation has to be monitored

and evaluated for evidence of its positive and negative aspects, its benefits and limitations. Too

frequent, the advantages of social innovation were corroborated based on mere anecdotal

evidence instead on scientifically proven fact, while minimizing or even ignoring its limitation,

thence deviating the substantial outcome of the implemented approach.

4.2. Limitations on The Implementation of Social Innovation

The implementation of social innovation is frequently hampered by insufficient

knowledge of the sector, limited support of grassroots and social entrepreneurship activities,

which destitute diffusion and little scale-up of good practices along with deficient impact

evaluation methods. It also needs to be noted that different locality has different context on

social innovation development and there are several aspects that might hinder the growth and

development of social innovation across localities. Various factors that limit the

implementation of social innovation include:

1. Financing and scaling up

This relates to access for financing, capital risk and scaling up, especially

for social enterprises (private sector). This problem is exceptionally important to

social innovation, mainly due to its particular nature, which has been indeed

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affecting social innovation at various levels, from individual to organisational

initiatives, within different stages in the innovation cycle, from startup to growth.

Usually social innovation venture starts from a non-traditional business sector and

in a limited size, which might not be seen as self-sustainable or replicable sector in

the industry thus do not captivate necessary interest. Consequently, there is limited

funding available for social entrepreneurs and a fragile market in valuing social

innovation. Where in this case, special initiative on funding social entrepreneurs or

social innovators need to be promoted accordingly.

Various initiatives have been implemented to promote social

entrepreneurship these days. This means there has been an outgrowing number of

firms and organisations that support social entrepreneurships. Business angels,

private investors, grants and charities have created more access to start and even

develop initiatives. However, a common issue faced by the social economy firms,

is not only coming from raising the necessary initial capital, but also the capability

in securing the growth of the capital in the long-run; which is essential to move

them from startup to the next level of company development. Yet, an issue of

dependency on accessible free funding is commonly found in various organisations

and social enterprises, which impede the sustainability as well as the growth of the

sector in the long run.

2. Governance and coordination

Lack of coordination between various actors engaged in social innovation is

another barrier in its implementation. The needs of efficient coordination and

cooperation between all the players, from policy makers, social innovators to

financial institutions and incubators, etc., are significant in the long-term

development of the initiative and has become a pivotal factor in the development of

social innovation. Each player has specific role and responsibility according to the

respective competence and expertise. For instance, policy makers engaged in social

innovation help to improve the approach at the institutional level, spread and

scattered among numerous institutional actors from diverse fields concerned (e.g.

social, environmental and innovation policies). Lack in coordination might lead to

trivial intervention, policy inconsistency or out-of-sync with each other.

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3. Legal and cultural recognition

Additional barriers to social innovation are due to the weak recognition of social

entrepreneurs and enterprises and their substantial contribution in creating

innovations to address social demands. This lack of recognition is generally rooted

in both legal (the status of social entrepreneurs) and cultural perspectives (the idea

that innovation is narrowed to commercial businesses) (Hubert 2010). A lack in

common framework on defining social entrepreneurs with non-profit and other

business sectors have created limitations on assessing the size and impact of the

social innovation sector. Consequently, it results in the lack of recognition of the

social innovation sector in comparison with another well-defined sector.

Eventually, this impacts social innovation at various levels, from access to finance

to education.

4. Education, skills and training

Related to recognition, the issue of education and skills need to be taken into

account. A low education background along with a lack of skills and training will

definitely lead to human resource issues and professionalism. Furthermore, it will

lead to a weak recognition of social innovators as a recognized ‘profession’. Due to

the transverse nature in the social innovation sector, training and skills development

are required to connect across various sectors, policy domains and interests at stake.

In recent innovation development, such cross-discipline skill has been sought and

needed, indeed, it has now become more crucial as social innovation widens and

expands the heterogeneity of the actors at stake.

5. Lack of data and evaluation

Due to the ambiguous definition of social innovation, lack of data may be

caused by the difficulty in defining the concept due to its broad or wide category it

belongs to. Entities falling into this sector, including non-profits and businesses, are

often small but at the same time highly diffused in the territory. These

characteristics, together with the absence of a coherent legislative framework on the

definition and modus operandi of non-profit entities, make policy design,

implementation and data collection for ex-post evaluation, a serious challenge

(Hubert 2010).

In regards of measurement, the array and diversity of actions and projects which

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is associated to social innovation have given a somewhat dispersed knowledge

regarding policies and practices that work. Furthermore, the impact of social

innovation is difficult to be measured in quantitative terms. This is often occurring

due to the nature of innovation itself in the society, where the effectiveness of

various social programs cannot be evaluated in terms of numbers. For instance, in

education sector, the increasing number of recipients or capital invested does not

necessarily mean that there is an improvement in the quality provided. On the other

hand, the lack of professional evaluators may also hinder the quality of impact

assessment on social innovation.

Social innovation can be considered as a fresh concept that is still in the process of

being fully accepted by the wider population. The implementation of social innovation itself

should circumspect every possible scenario and be carefully examined in a well-planned

strategy, thus implementation might increase effectiveness and efficiency. A well-executed

initiative will help building capacity for social innovation by encouraging new organisations

and adapting existing organisations. It might also help in strengthening the social innovation

sector and embolden cross sectoral collaborations by using the help of public procurement to

encourage innovative and cross sectoral approaches. Thus, it may improve the market value of

social innovation and also its recognition in the eye of the public to be a highly considerable

sector in the market.

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5. An Analysis of the Mexican Social Participation: An Opportunity

to Encourage Volunteering and Donation in Mexico through Social

Innovation

Social Participation makes an important “hidden contribution” to society and its

members themselves, producing goods and services that are not captured by conventional

economic statistics. According to the Organisation for Economic Cooperation and

Development (OECD), volunteering amounts roughly 2% of GDP of its members, when adding

up the time people spend on voluntary work. (Organisation for Economic Cooperation and

Development 2016)

In the following paragraphs a comparison is presented between Mexico and the

international environment on social participation as well as specific patterns of the Mexican

context are presented. It is intended to highlight the indicators’ outcomes that confirm the

urgency to propose innovative ideas towards encouraging social participation. Also, to identify

the patterns of the volunteers’ profile such as preferences on volunteering sectors, average of

time spent and age. Thus, more accurate and appropriate strategies can be implemented.

Using data from the OECD, The Mexican Institution of Statistics and Geography

(INEGI) and Social Action Network (SOCAnet) survey, it will be presented a comparative

study between the international and the Mexican voluntary sector. With the assumption that

there is an opportunity for Mexico to foster social participation. Finally, a social innovation

strategy will be proposed, which is believed can potentially improve social participation

dynamics and encourage the youth generation into volunteering and donation.

5.1. Social Action in Mexico and other countries

According to the OECD, there is a preference for Mexicans to volunteer mainly in two

sectors which are social and health services, followed by education and culture (see Fig.9). An

indicator that stands out, compared to other OECD countries, the Mexican working-age

population spends relatively little time on volunteering through an organisation (termed

“formal volunteering”).

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Fig. 9 - Volunteering in Mexico and OECD Countries (OECD 2016)

Mexican students are much more likely to engage in organisation-based volunteering

than the average student in the OECD: 40.4% of Mexican students aged around 14 volunteered

at least once in the 12 preceding months compared to the OECD average of 29.7%. Who

volunteers? Across the OECD area, people with a university degree are more likely to volunteer

formally than those with lower levels of education. Similarly, people who are in employment

are more likely to volunteer than those who are unemployed. Participation in formal

volunteering also increases with people’s level of household income. (Organisation for

Economic Cooperation and Development 2016)

SOCANet survey expresses a similar trend as the above mentioned. Fig.10 shows the

preferences by volunteers’ segments. Both students and employees see donation and

volunteering as potential instruments to promote change in society. While donation is

considered important by an average of 60% of the participants, 95% think volunteering is more

relevant over the other categories.

Fig. 10 - Millennials Social Participation (SOCAnet Survey 2016)

32

The average Mexican aged 15-64 spends only 1 minute per day on formal volunteering

which is less than the OECD average of 5 minutes per day, although differences in how data

are collected across countries make international comparisons difficult in this area.

In contrast, on the SOCAnet survey 64.2% of Mexicans (see Fig.11), between the age

of 18 and 40, claim they consider social participation very important and would be willing to

participate in any. This percentage is above 58.5% of average from other participants of 36

different nationalities. In regards of active participation, Mexicans and the other nationalities

show a similar average of 25%. The obstacles that they think hinder them to be socially

participative are lack of time and knowledge on social projects. (Social Action Network 2016)

Fig. 11 - Social Participation – Mexico and Other Nationalities (SOCAnet Survey 2016)

Why is there a discrepancy between the willingness to participate rate and the actual

participation from Mexicans? The reason of such discrepancy of involvement may lie on the

culture itself and the systematic organisation of actors who promote social participation. On

the cultural aspects, volunteering has been mostly associated with religious beliefs to help other

individuals, at the same time it is characterized to have a female face as the main promoters of

such activities are women. Historically, most of the charity activities have been carried out

mainly by religious organisations. Additionally, the involvement of women in this sector comes

from the social association that volunteering belongs to a female responsibility such as taking

care of orphans and patients. (Serna 2010)

This has labeled a connotation on volunteering within the Mexican society, as in other

Latin American societies, so volunteering is seen with a proximity to religion and often as an

exclusive religious activity. It is true religious groups have successfully encouraged social

33

participation among their members (see Fig.12), nevertheless they often focus on specific

topics such as health and social charity and the social involvement remains constrained among

their members.

These social participation patterns in the Mexican society have left out other relevant

social issues that are not within the action ratio of religious groups. In addition, the lower

voluntary participation rate in non-religious organisations may be explained by the lack of

belonging for volunteers to participate in them –unlike what is seen in religious groups- but

also the assumption that they have a weak infrastructure and limited “know-how” to attract

volunteers for taking part in the activities they promote (Serna 2010).

Fig. 12 - Percentage Volunteers in Non-Profit Organisations - Mexico (Instituto Nacional de

Estadística y Geografía 2015)

In a more specific perspective, Fig.13 shows the average that volunteers represent as

labor in each social sector. As mentioned above, religious organisations are where most of the

social participation occurs and in which 85% of the personnel consists of volunteers. Whereas,

other sectors such as Development and Housing as well as Teaching and Research have a

limited participation with 31% and 9.2% respectively. This statistic represents a challenge for

the Mexican development agenda since mainly Housing and Teaching are marked as priorities,

and the fact that there is a lack of social involvement may mean to not reach the objectives.

(Organisation for Economic Cooperation and Development 2016). Moreover, in Mexico about

14% of financial contributions to Non-profits are given by volunteers, which also represents

another way of financial sustainability (Instituto Nacional de Estadística y Geografía 2015)

34

Fig. 13 - Types of Staffs in Non-Profit Organisations (Instituto Nacional de Estadística y Geografía

2015)

Likewise, in Mexico there has existed a systematic and organizational issue on the

actors who promote social participation. Historically, organisations have themselves

encouraged volunteering as there was a limited interest from the public sector, mainly because

there was a poor research on the topic to punctually prove that certain economic and societal

issues can be tackled through this instrument. However, in recent years both International

Organisations and local governments have put efforts to promote this instrument among their

communities as it has been demonstrated that volunteering can foster social and economic

development (OECD 2016).

Recently, the Mexican National Institution for Statistics and Geography (INEGI)

recognized the important role of volunteers. Who, through their efforts and participation,

become catalysts for achieving development goals such as eradicating poverty; ending hunger,

achieving food security and better nutrition; ensuring inclusive and equitable education;

achieving gender equality and empowering all women and girls; ensure the availability and

sustainable management of water; to ensure consumption patterns and sustainable production;

taking measures to combat climate change effects; facilitating access to justice for all and to

create effective institutions; in overall promoting well-being.

Considering the importance of voluntary work, INEGI presented information on the

economic impact that volunteering represents for the Mexican economy. In 2013, voluntary

activities are equivalent to 1.4% of the total value of the labor market. The economic value of

volunteerism amounts approximately to 4.7 billion US dollars (61.57 billion Mexican pesos)

35

and if volunteers received any kind of remuneration for their performance, the contribution for

each one would be 3.4 thousand US dollars (44.66 thousand Mexican pesos) yearly. It

represents the 0.4% of the Mexican GDP which is way smaller when comparing it to the OECD

media of 2 %. Highlighting an opportunity for Mexico to catch up with leading countries.

(Instituto Nacional de Estadística y Geografía 2015)

5.2 Remarks on Social Participation in Mexican context and at International Level

To summarize, in a both international and Mexican level there still exists an urge of

encouraging social action. However, in the Mexican context, as in other developing countries,

a more complex scenario is found and more innovative and drastic strategies should be taken

in order to meet social and economic development goals. Therefore, the analysis on this context

can contribute to deliver recommendations, lessons learnt, and propositions of innovative

strategies and eventually call for action. The untapped opportunities in volunteering, a lack of

know-how on how to encourage social participation as well as a weak innovation result in a

significant social and economic cost for Mexico and other developing countries. Change is

needed!

What should be done to increase youth social participation? Firstly, create a proper

environment in which assertive communication can be held with this young generation. In other

words, to communicate with them through their main communication channels –social media

and online platforms. In contrast with other generations, 85% of millennials use technology to

keep up with the topics they consider at least somewhat important (Fromm, New Study Finds

Social Media Shapes Millennial Political Involvement And Engagement 2016), and 73% tend

to explore further when clicking on “learn more” (Rohamptom 2016). A good example comes

from the private sector, which has found a potential way to communicate with millennials: so

far companies have achieved a millennials’ engagement of 53% through digital platforms

(Friedmann 2017). Technology equals convenience to millennials, therefore social sector

should exploit more intensively digital communication which recently is social engagement.

This young generation is 2.5 times more likely to use technology than other generations

(Fromm, New Study Finds Social Media Shapes Millennial Political Involvement And

Engagement 2016), as they are at the heart of digital age where they can think with and through

new technologies even bringing changes to society (Murphy 2017). Therefore, the utilization

of social media and on-line platforms is nowadays millennials’ “modus vivendi”.

36

When it comes to social participation, 40% of millennials tend to take an active interest

on societal issues through on-line platforms (Deloitte 2017). It can be appreciated in the

ongoing increase of the fundraising on-line sector, for instance, which shows a growth rate of

85% yearly in the North American region. (Crowfunding Industry Statistics 2015-2016 2016).

Another case is the on-line volunteering platform promoted by United Nations, which in

average successfully engaged 12,000 volunteers per year. When looking at the patterns that

have made both cases successful, the following is found:

First, technology makes it easier to spread information on social and economic

projects. This approach makes it even more convenient for millennials to get to

know such projects and eventually get involved. Since this generation seeks to have

quick and easy access to any kind of information, they prefer to use automatized

mechanisms;

Second, the virtual interaction is intrinsic to this generation. Through digital

ecosystems, this generation has encountered more efficient ways to interact. They

have learnt they can participate in any kind of social topic within any on-line

community. They have encountered a sense of belonging when contributing to a

specific cause. The fact that they can follow up their impact thanks to digital means

makes this a kind of “virtual reality” experience and their participation exciting.

Lastly, they need to experience a meaningful memory. Once millennials have been

approached on Digital Ecosystems, it has been identified that youngsters will tend

to participate not only because they have a particular interest for a cause but also to

live a meaningful experience, a memory they can share with their close circle.

Therefore, social recognition and other incentives will be key triggers for engaging

millennials. Such is the case of UN on-line volunteering programs in which the UN

issues volunteering certificates to volunteers, so that they feel recognition by an

international entity. Also, the employment of rewards in some philanthropic

organisations reinforces social participants to keep participants active.

Having mentioned this, the key for non-profits and governments to encourage youth

generation is to bear in mind that they will not just participate because they believe in the cause,

(even though they do), but that they are participating because they seek to make a memory out

of their social participation. To do so, a proper environment for them should be built. On the

technical aspects, online platforms can succeed by approaching youngsters on the digital

37

environment, as it is expected they would look for the necessary information to reinforce the

desire to participate, thus, online platforms can provide them with the necessary information.

Furthermore, the employment of material and emotional incentives as well as social recognition

within this digital environment constitute some triggering factors to attract younger generations

by creating a meaningful experience for them. (Fromm, The Key To Getting Millennials To

Donate: Create Something They Can Experience 2015)

To summarize, in Mexico and other developing countries, there is an urge to promote

voluntarism not only for the economic benefits it could bring to society - as we have seen it

directly impacts on the Gross Domestic Product of nations - but also all the societal issues this

instrument could tackle. In the Mexican context, it is very contrasting that the two most

important social topics are education and health (OECD 2016) while they take fifth and second

place of priority within the voluntary sector (Instituto Nacional de Estadística y Geografía

2015). Needless to mention that the willingness millennials have shown to take part in social

activities has not been fulfilled. Why? It can be assumed that there has been a lack of social

innovative strategies by stakeholders. Therefore, one way to address this challenge might be to

enhance youth participation by building assertive communication and encouraging social

action through meaningful incentives for youngsters.

To increase social participation in Mexico, one social innovation approach can be taken:

the increasing role of digital technology. This approach examines the value chain of online

(digital) tools and platforms. This ranges from tools which focus on creating content and

identifying unmet social needs at one end, through matching assets to needs, to those which

focus on identifying solutions and taking action to meet those needs, at the other end” (TEPSIE,

2014). On the volunteerism context, an online platform should be proposed to enhance social

participation, starting with the creation of content on social projects, followed by identifying

social needs that millennials consider important and interesting. By creating this match-making

virtual space, volunteers and NGOs priorities can be matched, proposing solutions for societal

issues and finally youth participation could be reinforced by creating a meaningful experience

while they volunteer.

38

6. Idea Development towards Social Innovation through a Digital

Platform

6.1. The Development of Crowdfunding Platform

In the digital technology era, interaction and connectivity are made more efficient and

accessible to the public. This does not exclude donating activities which have been part of

people’s humanitarian nature to help others in need by sharing with them some of their money

or goods. The online access and improvement of technology have made possible the creation

of crowdfunding. Crowdfunding is an arising term for an online platform where users can

donate and contribute themselves to the society within a short period of time and without losing

their intrinsic value. Crowdfunding is basically about creating and sharing value, building

opportunities for the crowd to participate in a project. At its most basic level, crowdfunding is

the aggregation of small sums of money from a large group of people scattered in different

locations connected via internet through this platform to financially support an idea or project,

etc. (Hivewire Inc. 2015)

There are at least three players involved in crowdfunding, the campaigner/fundraiser,

who seeks funding for their project; the crowd of people who support the work of the

campaigner’s project and a platform that intermediate the campaigner with the crowd. The

increasing use of social media sites such as Facebook and Twitter has made it a lot easier for

fundraisers to expose their campaign to people who are willing to contribute. The heavy

attribution of social media and other social networks is highly associated with the growth of

crowdfunding and its breakthrough success in digital world. There are various types of

crowdfunding along with their characteristics:

1. Donation

This type of crowdfunding is often motivated by personal aspirations or

moral obligations and most likely used for philanthropic or sponsorship intents.

This approach lets the crowd support a specific cause or effort without expectation

of financial return. This is currently the most common type of crowdfunding.

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2. Peer-to-Peer Fundraising

This type of crowdfunding allows supporters to raise funds for one’s

campaign by publicly promoting and sharing on their behalf. This method can be

an excellent tool to leverage the network of their most zealous supporters.

3. Social Fundraising

The creation of independent crowdfunding campaigns by supporters which

directly benefit charities and non-profits.

4. Rewards

The rewards model integrates non-financial rewards to further incentivize

supporters to donate. The rewards may differ according to the amount donated, and

are mostly suited to creative projects (e.g. film production or album recording).

5. Debt / Lending and Equity Crowdfunding

This form of crowdfunding often depends on securities standards, and

entails the purchasing of ownership or the placing of debt.

Crowdfunding and traditional fundraising may share many similar traits, but there are

several distinctive differences to be noted. Most of these differences bring added value, yet

some may create additional challenges. Some of the significant distinctions that crowdfunding

takes are as below:

1. Value exchange

Crowdfunding can encourage organisations to escalate the amount of value

that they are creating for their donors. “When there is more value created, either by

delighting, entertaining, or offering goods and services, donors will often contribute

additional funds.” (Hivewire Inc. 2015) The self-gratification that one experienced

has overcome the materialistic value given or other extrinsic benefit.

2. Specific

Crowdfunding can entail a more specific question for a specific project,

which gives the project a more assessable outcome. Thence, someone can instantly

relate to as having supported and increased the ‘touchpoints’ of the campaign. “The

‘touchpoints’ are those characteristics that increase the spectrum of participation by

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allowing the campaign to resonate with people in different ways” (Hivewire Inc.

2015).

3. Time-bound

Crowdfunding campaigns are of an explicit, definite time-length that allows

marketing, buzz, and momentum to feed onto itself and peak appropriately. An end

date encourages the participation of the crowd as well as pushing the efforts of the

campaigner.

4. It’s a sprint

Crowdfunding is an intense effort that needs all hands-on deck for a specific

period of time.

5. Transparency

Crowdfunding is openly accessible to public and transparent which should

be seen more as a benefit than a hindrance as the public salutes this kind of

transparency.

Crowdfunding has increasingly offered more benefits that one might expect. NGOs and

other non-profit bodies gained more access to funding through crowdfunding platform. In this

way, crowdfunding has become an integral component of social innovation, which might as

well provide an access to a better social welfare and also towards achieving a sustainable

development.

6.1.1. Crowdfunding Engagement: Non-profits & Charities

Crowdfunding is a worldwide phenomenon with exponential growth alongside the

participation of various sectors. Through the study conducted by Hivewire & Centre of Social

Innovation in 2015 regarding the engagement of non-profits & charities in crowdfunding,

around 26 thousand non-profits and charities from around the globe promoted their campaigns

through crowdfunding. Referring to Fig.14, the non-profit and charitable crowdfunding

campaigns made up 8.1% of the total number of crowdfunding campaigns and comprised

nearly 17% of the total money raised which is equivalent to $91 million. Moreover, the use of

crowdfunding by non-profits and charities has increased significantly over the last 6 years (see

Fig.15).

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Fig. 14 - Contribution of Non-profits and Charitable in Crowdfunding Platform (Hivewire Inc. 2015)

Fig. 15 - Growth of Non-profits and Charities 2009-2014 (Indiegogo Campaigns 2008 - 2015)

Fig. 16 - Non-profit/ Charity Campaigns: Category Breakdown (Hivewire Inc. 2015)

42

Fig. 17 - Success Rate of Non-profit and Charities Campaign (Hivewire Inc. 2015)

Considering the wide array of non-profits and charities engaging in the crowdfunding

platform, there are two dominant categories that lead the other sectors, namely education and

community. Referring to Fig.16, both of these categories comprised around 45% compared to

the other categories engaged in non-profit and charities crowdfunding. This shows a

considerable rate of engagement for non-profits and charities on improving the society through

the development of education and the community itself. Community may further be broken

down into several categories such as building houses for victims of natural disasters, improving

water access or refining the infrastructures of one locality. With the increasing engagement of

non-profit or charities in crowdfunding platforms, the successful rate of each campaign has

been impacted. The increasing number of project participants have marked up the total amount

of funding target, which has resulted in the lower success rate among these fundraisers. Fig.17

explained how projects that targeted higher funding faced lower a chance to succeed. This

happened considering the wide varieties of projects that donors could choose and how they can

donate to several projects instead of one. Therefore, a well-planned execution of the campaign

needs to be done as raising money has become increasingly challenging.

6.1.2. Rewarding System

One key factor of success in most crowdfunding campaigns is the implementation of a

reward system for the financial donors. Crowdfunding can be seen as a platform to exchange

value between the fundraisers and donors. The value received by donors may not only be

intangible but also tangible in the form of goods. The implementation of a reward system might

increase the value of recognition of the good deeds of the donors and it boosts the donor's’ self-

gratification and also self-acknowledgment. Rewards may not be in the form of expensive gifts;

however, it can be presented as a form of symbol of their participation on the campaign and

show the campaigners’ gratitude of their contribution.

43

From the previously mentioned research on the participation of 26 thousand non-profits

and charities on crowdfunding, more than 80% of them prefer to offer some rewards.

Campaigns that include rewards had a 22% increase in success rate compared to campaigns

that did not offer rewards; where success is defined as reaching their target funding. They also

had 3.3 times increase in the average amount raised and 2.8 times increase in the average

number of donors. Including rewards may increase the scope of reasons why people would like

to donate and contribute in the campaign. In this matter, there are various types of rewards in

both tangible and intangible forms that can be delivered to donors, for instance:

1. Goods - Object that donor receives or can choose, an item that increase the awareness

of the campaign as well as the campaigner.

2. Experiences - Something unique that someone normally would not experience.

3. Access - Give access to allow the donor to participate in the journey.

4. Recognition - A way of recognition in the form of cards or via email, or social media

shout out.

5. Services - Offer service to leverage one’s expertise, e.g. workshops, training, etc.

6. Ways to increase value - custom, exclusive, personalized gifts.

Anyhow, the success rate of one’s campaign is not solely determined by the

implementation of reward system. It is a combination of marketing effort, networking as well

as the delivery of value on how the campaign can create an essence in donors’ eyes.

6.2. Idea Development - SOCAnet

Civic participation is a fundamental right. It has been one of the guiding principles in

the Universal Declaration of Human Rights that has been restated in many other Conventions

and Declarations. Young people are encouraged to play an imperative role in their own

development as well as in that of their local communities, helping them to learn essential life-

skills, develop knowledge on citizenship and in promoting positive civic actions. To participate

effectively, these youths must be given the proper tools, such as information, education about

and access to contribute in the local community (United Nations Youth n.d.).

According to the UN, youth or highly known as millennials have become a major

human resource for development and key agents for social change, economic growth and

44

technological innovation. They are gradually acting as the agent of transformation in the

society, demanding from institutions to be more receptive, not only to their needs, but also to

national or even global concerns; delivering the energy, creative ideas and determination to

work towards reformation. Irrespective of the capacity and willingness of millennials to

volunteer, many barriers to youth volunteering exist. These include restrictions on freedom of

movement and security, economic barriers and challenges related to social exclusion and lack

of access to information about volunteering and volunteering opportunities (United Nation

Volunteers (UNV) 2016). Consequently, the lack of the number of volunteers ready to

participate in social projects may result in the unsustainability on NGOs operation, with clear

negative consequences in improving the quality of life for marginalized local communities.

With these challenges faced by millennials, there is a need of an innovative platform

that can bridge these creative minds to help improving the society. In addition, with the use of

modern technology and internet, connectivity is made easier; current events can be accessed

just by a second. With millennials engagement towards technology, internet and social media,

we tried to develop an online platform that can be accessed with ease by millennials – SOCAnet.

SOCAnet is envisioned to fulfil the needs of this fast and dynamic generation to involve in

philanthropic activities, providing the online platform to allow them to participate in helping

marginalized groups or people in need as well as supporting the NGOs operational

sustainability at the local level.

Fig. 18 - SOCAnet Scheme

Citizen

NGO SME & Corporation

①

② ③

④

45

The development of an online crowdfunding platform has been the basic motive

towards the initiation of this project. SOCAnet is expected to accentuate the idea of Sharing

Social Responsibility (SSR) and strategic collaboration which promotes social action and

reciprocity among three main players: citizens, NGOs and private sectors (see Fig.18). This

platform links the three actors, aimed to encourage them in philanthropic involvement through

funding or volunteering activities, mostly in typical social challenges such as poverty,

education and environmental protection. The competitive edge of this project lies in the

involvement of a reward system for donors through the sponsorship from private sectors (local

SMEs and enterprises) as well as the local municipality, encouraging a shared responsibility

between the main actors at the local level to address principal challenges. The practice of

reward system is also intended to improve the local business climate which eventually

contributes towards creating a sustainable development within localities in terms of social,

economic and environmental aspects.

Primarily, SOCAnet interconnects the major players via an online platform that can be

accessed via mobile devices or computers. NGOs can participate in the platform by registering

their organisation and their projects through the platform, explaining about the project

including the targeted funding sought and/or number of volunteers needed within a definite

period or indefinitely through open donation feature.

Meanwhile, the private sector – local companies can participate in the platform in three

different ways: as a donor for the project, as a sponsor by engaging their employees to

participate in volunteering activities or as a benefactor on giving rewards to users in the form

of discounts, offers, promotions, etc.; mainly addressed to the online donors. Following the

discussion on the previous sub-chapter, the implementation of a reward system might increase

the value of recognition of the good deeds of the donors and boosts the donor's’ self-

gratification and also self-acknowledgment. In this case, the private sector acts on behalf of the

NGOs in giving rewards to donors. The primary aim of their participation is to promote local

economic development. With the increasing awareness of CSR and sustainable development,

these companies, especially SME´s, will be branded as socially committed businesses. This

strategy will be used to retain social participation of SOCAnet users as well as improving the

local business conditions.

As previously explained in the theoretical chapter, one way to foster social innovation

in order to tackle challenges ensure sustainability and create societal value is to implement a

strategic collaboration between local actors. It is increasingly accepted that “companies will

46

need to seek avenues for collective action with NGOs and other business counterparts as well

as channels for policy dialogue with government and other key stakeholders” (Osburg &

Schmidpeter 2013). This collaboration will enhance the effectiveness in addressing local issues

as it allows the companies to deliver their value to the communities along with the help from

the NGO’s expertise. Furthermore, the collaboration may also improve the efficiency in value

delivery, which in turn can create a long-term economic value. This is the main value that

SOCAnet holds for its implementation and ultimate vision of the project.

Subsequently, users (citizens) will have access to the current social projects carried out

by NGOs at the local or national level. Users can choose a topic of their interest and participate

in the fundraising program. As an act of appreciation, SOCAnet provides rewards to be selected

by them, thanks to the support of sponsors and benefactors. Besides donations, users are also

allowed to contribute on the listed projects by joining the volunteering activities. Certificates

will be given to participants by the end of the volunteering period as an award of appreciation

considering that volunteers are basically unpaid. However, in some cases, sponsors are

welcome to participate in providing basic necessities for volunteers.

Ultimately, NGOs will get the support they need to accomplish their goals so they can

focus their efforts on project establishment rather than concentrating merely on fundraising.

Private sectors will also get the benefit by becoming well-known for their socially responsible

approach, while indirectly marketing the proper products through the rewards distributed via

the platform to engage more customers. Users also gained personal gratification on contributing

something to the society. In this way, SOCAnet is working towards creating a synergy and

positive symbiosis between all the players involved in this scheme, which will help the local

community to progress towards a sustainable local development.

6.2.1. SOCAnet’s Flowchart

Fig.19 – 21 shows the work flow of each player in the platform. The work flows

demonstrate the process that each player has to follow in order to participate in the platform.

This whole process is intended to create a clear data management and providing all parties with

a transparent flow of money to mitigate any risks that might occur during the process.

Fig.19 depicts the process of NGO to participate in the platform. Any NGO needs to

initially register to validate its activity. Documents such as proof of legal entity and proof of

owner’s identity are required to validate their existence and to mitigate any fraudulent act from

47

happening. Once registration has been concluded, the NGO can create a fundraising campaign,

open donation or volunteer opportunities. In terms of charities and fundraising, once money

has been transferred via SOCAnet platform, money will be transferred to the organisations

once they issued the donation receipt to the donors. This is an important process to show that

money flows in transparently. Thereafter, the NGO shall provide regular updates regarding

their project implementation to the users and SOCAnet. This is done in order to verify that

money is used for the project accordingly, and as a tool of transparency to make sure that the

organisation is actively participating on improving the locality thus they can continue to open

further campaigns in the future.

Fig. 19 - Work flow of NGO

ApplicationAccepted?

Complete Profile/ Submit Data

Register

Create

Campaign/ Fundraising

Open Donation

VolunteerVacancy

Check Amount

Issue Donation Receipt

Sign in

No[Incomplete Document]

Yes[Continue]

ApplicationReview

Confirmation

48

Fig. 20 - Work flow of Private Sector

The work flow of private sector can be seen in Fig. 20. After the registration process,

the company can decide which role they want to be in, whether as a donor or as a sponsor. In

case of donation, the company will be regarded as a regular user where they will get a donation

receipt once the donation is done. In case they want to cooperate, they can choose whether they

want to cooperate as a sponsor to provide rewards for users/donors or in volunteering activities

by providing volunteers (e.g. employees) while implementing their CSR program. Each

contributing company is given the decision to choose which NGO they want to cooperate with

or what kind of projects they want to participate in. In this matter, SOCAnet acts as an

intermediary for both parties and to validate their accountability and hence everything goes as

planned. In both scenarios, the company will have the opportunity to be acknowledged as

SOCAnet’s main sponsors to boost their social marketing effort. SOCAnet will also provide

certifications and simple rewards to these companies as an act of appreciation on their social

participation.

Donate

Choose Topic of Interest

Register / Sign in

Cooperate

Choose Amount

Payment Method

Paypal/ CCBank

TransferIntermediary

Input Transfer Information

Donation Receipt

Apply for Reward Sponsorship

Choose Method

Confirmation Receipt (Sponsor)

Confirmation Process

Point : Prize Coupons

Voluntary Activity

Apply - Input Data

Confirmation Process

Confirmation Receipt(Sponsor)

Choose Topic of Interest

49

Fig. 21 - Work flow of Users

Lastly, the work flow of the users is depicted on Fig. 21. In order to engage more users,

the process is made as simple as possible without neglecting their personal security and

transparency system. After registration, users can choose their topic of interest and whether to

participate in by offering a donation or as a volunteer. In case of donation, users can choose

the payment method they desire, while an additional step of validating the transfer is needed

for bank transfer and intermediary (e.g. supermarket) methods. Furthermore, as previously

mentioned, users will get a donation receipt from the NGO to verify that the money has been

transferred successfully. While in case of volunteering, they can submit their application via

online platform and the NGO will reply within few days regarding the vacancy. As an act of

recognition, certifications will be given by SOCAnet and the participating NGO to the

participants. Subsequently, users will also get further updates regarding the project

implementation and its evaluation. This is done to increase the engagement rate of the users as

well as creating additional value on their personal satisfaction by contributing in the project

and how they have helped the community.

Donate

Choose Topic of Interest

Register / Sign in

Volunteer

Choose Amount

Payment Method

Paypal/ CCBank

TransferIntermediary

Input Transfer Information

Donation Receipt

Apply - Input Data

Confirmation Process

Confirmation Receipt

Contact NGO

50

6.2.2. Business Model

To provide a better explanation on how the business idea will be implemented, it has

been utilized “The 6 Ingredients Business Model” (Filippas 2016). Such tool describes the

rationale of how the Concept Social Action Network (SOCAnet) will create, deliver and

capture value among millennials. Additionally, by utilizing this instrument is expected to not

only encourage social participation but also to be able to measure the impact on the youth

participation as well as social and economic sector. It is important to highlight that SOCAnet

will take a profit oriented approach in the business model as it will seek to be economically

self-sufficient in the long run.

The Business Modelling tool is segmented in three sections, Value Proposition,

Internal and external perspectives, which consist of the identification of the so called “6

business ingredients” described as follows (Filippas 2016):

1. Visualization. Defines the customers’ problems and proposes a business solution.

This business ingredient also considers market size and trends in order to entail

proper solutions for customers’ needs.

2. Road Map. Through market intelligence instruments, it enhances the

identification of current players in the market as well as placing potential

opportunities according to timing and customers’ demands.

3. Financials. It recognizes all the financial opportunities and estimates the

investments and needed profit for the sustainability of the project.

4. Competence needed. It proposes the development of a “SWOT” analysis on the

intellectual and material sources in order to point out what project pitfalls to meet

its goals. In this way, potential partnerships and suppliers can be identified.

5. Communication Channels. It identifies the main channels that should be used to

approach customers. Through them, a more direct and assertive communication

is expected.

6. Produce, distribute and sell. It covers all the logistic and production aspects as

well as the method by which the final product will be delivered to ultimately

tackle the customers’ issue.

51

Fig. 22 - Business Modelling Tool (Filippas 2016)

Fig.22 presents a macro perspective of these 6 business ingredients. This business

modelling tool starts with defying the Customer as the focal point of the instrument. It will

let the business resources focus on identifying and tackling customer’s issue. Then it follows

by the analysis of the 6 business ingredients; while the inner circle considers internal factors,

the outside circle takes into consideration external factors that impact on the business

execution. The instrument’s application (see Fig.22 – clockwise manner) starts with the

visualization idea in which external market factors are considered to shape the business idea;

then, a Master plan can take place, this considers the time constraints, the actors who take

responsibility in the project as well as other environmental factors; it is followed by the

Financial ingredient, in which the cost of running the idea is expressed as well as potential

investors are identified; the Competences Needed ingredient proposes to analyze the internal

resources in order to identify what external resources might be needed. In the Communication

Channel ingredient, it identifies the channels through which the customer will be reached to

52

ensure an effective communication and finally, the last ingredient will consider the supply

chain as a whole, ranging from production, distribution and delivery of the idea, this

ingredient deals with delivering a solution to customers together with its added value (e.g.

extra service).

6.2.2.1. Visualization

In the light of SOCAnet project, many actors have been taken into consideration to

provide a more systemic business solution. For a better explanation and visualization of

whom this business project will focus on Customer-Problem-Solution (CPS) approach

(Filippas 2016) as below:

Customer

Mexican society is suffering a low participation rate in the charities and voluntary

sector that, among others, it negatively impacts on its economy and leaves societal issues

unsolved. On tackling social issues, NGOs are often reflected as the foundations, which seek

to alleviate such problems. However, it is frequently seen that NGOs fail in their mission due

to poor engagement with the society combined with limited financial resources. Therefore,

SOCAnet will focus on those actors –millennials and companies- that are ready to take part

in social activities. SOCANet will see them as its main customers and will intend to alleviate

their main social concerns by encouraging volunteering and financial contributions towards

NGOs.

Problem

In Mexico, youth have shown a strong willingness to take part in social activities,

nevertheless, when looking at the numbers in the voluntary sector there still exists a very

low rate of participation (ratio of 8:3 - SOCAnet Survey 2016) between those who would

like to participate and those who are actually participating The untapped opportunities in

volunteering sector, lack of know-how in encouraging social participation as well as a weak

innovation has resulted in a significant social and economic lost for Mexico. Change is

needed!

53

Various factors, which have been hindering youth social participation are: lack of

assertive communication from the social sector to millennials in combination with weak

engagement strategies which lack of emotional and material incentives and the social

recognition youth look for. These factors have eventually limited NGOs’ resources causing

various obstacles to fully implement their projects in an effective manner.

Solution

SOCAnet is envisioned to fulfil the needs of the Mexican society. SOCAnet will

connect the youth’s willingness to participate in social activities according to NGOs’

necessities by providing an online platform to allow companies and millennials to get to

know social projects and engaging them through the creation of meaningful experiences by

donating or volunteering. Additionally, private sector will be involved in order to provide

incentives to volunteers reinforcing volunteerism among youth.

6.2.2.2. Road Map on The Implementation of SOCAnet

To understand how the social action in online sector works, it is relevant to take a

look at the existing online platforms. It is important to highlight that this market is split into

two segments: crowdfunding and volunteering. As mentioned above, SOCAnet seeks to be

part of both segments, to put it in other words, to be a pioneer that can put both social

activities on only one platform. Opening opportunities for non-profits to wider their potential

as well as involving the private sector in an activity they have not fully exploited and most

importantly to open a range of opportunities for the youth in the social sector.

Through crowdfunding platforms, NGOs and other non-profits organisations have

found another way of reaching financial sustainability, making it a valuable resource for the

social sector but it will also lead millennials and other generations to have access to be

socially participative. In such platforms, two main factors are considered by customers:

attractiveness of the platform (user-friendly) and the percentage of fee charged when

donating.

54

Fig.23 shows the position crowdfunding online platforms have according to these two

variables, accessible cost and user-friendly approach. SOCAnet is also placed in this figure

as it is expected to have a bigger competitive advantage over the other competitors.

Fig. 23 - Competitors Matrix (SOCAnet 2016)

The range of fees charged by the analyzed platforms varies from 5% up to 15%. The

specific case of Kiva, is that it has been well branded among the activists as it provides an

easy surfing experience for users in combination with very attractive information on the

promoted projects. However, its fee goes up to 15% on the total donation, making this

platform the most expensive in the market. On Gofundme case, it is seen that it has had a

very good acceptance by customers as it provides a rich variety of information on social

projects but also offers one of the lowest fee rates in the market, approximately 5%. It is

important to highlight that some of these platforms offer rewards nevertheless, these

incentives are limited only to promotional material that in the long run do not provide an

added value for customers.

On the voluntary market, it has been found that promotion is carried out in most cases

by the NGOs themselves, making it difficult for potential volunteers since only scattered

information on social projects is encountered. Additionally, some governmental platforms

55

that encourage youth participation, such as INJUVE in Mexico and “Online Volunteering”

by UN. However, the first one focuses only on promoting volunteering within government

entities, discarding opportunities for NGOs to have presence on official websites. While

Online Volunteering UN is limited only to online volunteering activities plus there also exists

a language barrier for both NGOs and volunteers as the platform is only available in English.

Fig. 24 - Social Action Sector (SOCAnet 2016)

Having mentioned this, SOCAnet seeks to be branded as a dynamic online platform

which can provide a wide range of social activities by merging two segments on one online

platform (see Fig.24). For potential volunteers, online-volunteering, volunteering and

donation activities; for NGOs and non-profits to expand their potential in a new market that

has not been completely exploited; and for enterprises the opportunity to experience the so

called “social marketing” in order to expand and reinforce the consumption from millennials

as their audience.

56

6.2.2.3. Implementation

Table 1 – SOCAnet’s Activities

To implement SOCAnet, three phases have been defined for the first 6 months;

Visibility, Connectivity and Interaction (see Table 1). In the Visibility phase, the focal

societal topics will be proposed, in this way, a first data base of NGOs and non-profits will

be built while working on the IT components for the online platform. During the Connectivity

phase, it is planned to approach potential volunteers through two main channels, social media

and face-to-face events, while simultaneously starting negotiations with governmental and

private entities to build a reward system. The reward system consists of incentives such as

providing tickets to attend exhibitions, discounts in libraries, cinemas and social events as

well as social recognitions incentives such as recognition on social media and within the

community. While in the Interaction phase, a monitoring instrument should be implemented

so concrete indicators and data on the project impact can be publicized.

Definition of Pilot (First topics)Mexian context

NGOs Data Base

Online Platform DevelopmentDevelopment Evaluation

Testing

Monitoring /Maintainance

Promotion Social Media

Promotion with Potential VolunteersEvluation of Percentage ofvolunteers engaged in

Social activities

Promotion with NGOsEvaluation of perception of Added Value of NGOs

Promotion with SMEsEvaluation of perception of Added Value of SMEs

Monitoring Dynamic

# Volunteers / Enterprises

Sustainability of the Dynamic

Month 5 Month 6

Visibility

Connectivi

ty

Interaction

Activities 1 Month Month 2 Month 3 Month 4

57

The impact evaluation will be carried out as follows:

Table 2 – SOCAnet’s Impact Evaluation

Activity Indicator Definition Baseline Target Data Source Frequentcy Responsible Reporting

6 monthsHow is it Calculated? What is the current Value? What is the target value? How will it be measured? How often will it be measured? Who will be measured it? Where will it be reported?

GoalDevelop a online

platform.

The completion of

the entire IT product.0% 100%

Percentage of progress by

20 % every week.weekly SOCANet Weekly report

Outcome

Be a platform that is

differentiated from others

and utilized by youth

Positive perception

of the online

platform by youth in

comparison to others

No SiDoes it provide an added

value?Every trimester SOCANet Weekly report

Output

Develop a platform which

promotes a reciprocity

system among NGOs,

youth generation and

SMEs. The devlivery of the

IT product withint 5 weeks

Posive perception of

the online platform

by all actors (NGOs,

youth and SMEs)|in

comparison to others

yes noDoes it provide an added

value?Every trimester SOCANet Weekly report

Goal

Percentage of students of

a University involved in

voluntary work

Number of students

involved in a

voluntary work,

divided by the total

of students of the

sample, multiplied

by 100

10% 20%

Percentage of students

that got involved after

promoting SOCAnet.

Second sample/third

Sample

Every trimester SOCANet Report (every trimester)

Outcome

Increase of involvement

of students into social

projects

Number of students

involved in a

voluntary work,

minus the number of

students already

involved before th

exercise

0 60

Number of students that

got involved after

promoting SOCAnet.

Second sample/third

Sample

Every trimester SOCANet Report (every trimester)

Output

Number of students that

are conciously aware of

social matters and are

eager to be socially

participative

Number of students

that got involved

after promoting

SOCAnet.

0 60

Number of students that

got involved after

promoting SOCAnet.

Second sample/third

Sample

Every trimester SOCANet Report (every trimester)

Promotion of

the Platform

Online

Platform

Development

58

6.2.2.4. Financial

For kick-starting SOCAnet platform, it has been considered an approximate amount of

27,500 euros for the project to be sustainable over the first 6 months. The following table details

concepts on which a budget should be assigned:

Table 3 – SOCAnet’s Budget

Due to the nature of SOCAnet platform, SOCAnet is intended to be constituted as a

social enterprise which would let the project access to financial instruments such as grants,

credits or private investment through financial entities. Fig.25 shows how SOCAnet will

approach potential financial partners.

Fig. 25 - SOCAnet's Potential Sources of Funding

6 months

Concept Needed Amount

IT

Platform development 8,000

Maintenance 1,500

Public Relations

NGOS 1,000

Enterprises 1,000

Universities 1,000

Promotion

Social Media 1,000

Universities 1,000

Enterprises 1,000

NGOs

Personnel

IT Leader 4,000

Admnistrative Leader 4,000

Marketing / Communication

Leader 4,000

Total 27,500

59

6.2.2.5. Competences Needed

Towards making SOCAnet successful, it will be required to build partnerships with other

stakeholders such as NGOs, enterprises and municipalities (see Fig.26). They represent the

needed inputs to create a proper scenario for developing a reciprocity system. Thusly,

millennials participation can be ensured by adding value to their experience through rewards

and social recognition partners will provide to this project.

Fig. 26 - Projected Partners and Alliances

Fig. 27 - SOCAnet Partnership by areas 2016

To have a better view in which areas potential partners would contribute to this project,

Fig.27 shows where the partnership would lie according to the inputs partners would bring to

SOCAnet project. In the Source area, as financial actors might provide SOCAnet with the

needed resources while companies and non-profits can provide the needed inputs to generate

attractive data on social projects and rewards.

60

On the marketing strategy, various actors can take part in the communication strategy,

however, two channels might trigger the participation from youngsters, which are universities

and social media. These two channels will act as the ultimate key to reach the audience

considering it is where the youth concentrates and interacts. While regarding Operations,

combining efforts with the municipalities may potentially foster social participation as it can,

through social projects, provide promotion on SOCAnet online platform.

6.2.2.6. Communication Channel

Nowadays social media represents by far the main communication channel of the

millennial generation. According to statistics, the employment of social media platforms is

embedded to this young generation since approximately 69% of them use social media just to

keep up with the topics they care about (Fromm 2016). Therefore, the promotion of this project

on social media such as Facebook, Twitter, Linkedin among others, will be key to spread

information about SOCAnet.

Additionally, the communication strategy will also focus on face-to-face events which

are planned to be run in places where millennials tend to get together and that represent a

relative easy access to approach them, such as universities and other promotional events.

Therefore, to build partnerships represents a focal point for this project, since the success of

partnerships will be also reflected on the communication strategy.

6.2.2.7. Produce, Sell and Deliver.

On SOCAnet platform, youth will be able to get to know projects on the topics of their

concern. Moreover, thanks to SOCAnet, they will experience the social recognition from NGOs

and private through a reward system.

The following figures provide an overall view of users’ perspective, presenting the way of

interaction proposed by SOCAnet:

a. Fig.28 shows the first screens which will approach youth by showing relevant societal

problems they will potentially be interested in. Such problems should be adapted to the

context millennials experience regionally and temporally.

61

Fig. 28 - SOCAnet Prototype 1, 2017

Fig. 29 - SOCAnet Prototype 2, 2017

b. Fig.29 presents the two main social activities –donation and voluntary work- youth can

get involved into. In this way, millennials experience the possibility to either contribute

with volunteering time or with a financial contribution to social sector.

Once youth decides to take part in social activities, both private and governmental

sector should contribute to encourage millennials to participate. Through a system of incentives,

millennials could be provided with an extra motivation to participate in social matters. It is

important to highlight that the private sector can be benefited by being involved in projects of

this nature. For instance, they can amplify their potential within the youth market by utilizing

this project as a CSR marketing strategy. In this way, they can be branded as committed social

enterprises, while attracting or reinforcing the largest generation as their customers, millennials.

62

Fig. 30 - SOCAnet Prototype 3, 2017

c. Fig.30 expresses the importance of rewards. As they can potentially create a unique

experience or provide youngsters with something they find valuable. For example: free

tickets to attend an exhibition; discounts on school books; a free drink at their favorite

café.

These rewards in combination with social recognition - on social media - will be the

trigger for millennials to take part in social activities.

Fig. 31 - SOCAnet Prototype 4, 2017

Another point to highlight is that SOCAnet will let youth to provide comments on

their experiences they had while doing volunteering, experiencing the reward and so on (see

Fig.31). In this way, SOCAnet intends to build trust among non-profits, private sector and

participants.

63

7. Recommendations and Conclusion

The objective of this thesis work is to characterize social innovation perspectives by

focusing on how to increase youth social participation within the Mexican context – with some

generalizations useful in the international context as well –and considering the participation of

millennials in volunteerism and donation activities thanks to digital tools and the impact these

activities may have on addressing social challenges. It can be concluded that youth social

participation has not reached its potential and only by employing innovative strategies social

action can be increased. Findings point out that volunteering and donation activities have

become of interest to millennials. Also, millennials have been extremely adept at technology

and digitalization processes, not only being keen for technology but already making it part of

their “modus vivendi”. Thus, it is evident that social participation should be promoted on digital

ecosystems, although this is a step still to be completed. The principal causes of such delay

have to be identified in the lack of “know-how”, resources and innovative strategies from the

social actors especially towards millennials.

Therefore, this thesis puts an emphasis on social innovation mainly because it has been

identified as a potential strategy to be adopted for replacing traditional actions, which have not

completely met social goals. This work aimed at building an outline for identifying current key

patterns of social dynamics and for building an adequate social innovative instrument that can

gather efforts and catalyze social and economic development, SOCAnet.

SOCAnet is proposed as the online platform which will interconnect, via mobile

devices and computers with the principal stakeholders. NGOs can participate in the platform

by registering their organisation and their projects through the platform, explaining about the

project including the targeted funding sought and/or number of volunteers needed within a

definite period or indefinitely through the open donation feature. Meanwhile, the private sector

– local companies can participate in the platform in three different ways: as a donor for the

project, as a sponsor by engaging their employees to participate in volunteering activities or as

a benefactor on giving rewards to users in the form of discounts, offers, promotions, etc; mainly

addressed to the online participants, millennials. Additionally, the implementation of a reward

system might increase the value of recognition of the good deeds of millennials and it boosts

their self-gratification and also self-acknowledgment. In this case, the private sector acts on

behalf of the NGOs in giving rewards to youngsters. The primary aim of their participation is

to promote local economic development. With the increasing awareness of CSR and

64

sustainable development, these companies, especially SME´s, will be branded as socially

committed businesses. This strategy will be used to retain social participation of SOCAnet

users as well as improving the local business conditions.

It is important to add to the equation described above that the connection between

stakeholders and potential participants will allow SOCAnet to implement a sustainable

business model for its operations. Stakeholders will be invited to provide financial

contributions to SOCAnet. It is expected that enterprises in particular will contribute as they

see in this online platform a potential opportunity to expand their market among the millennial

generation. While participants, mainly when donating through the platform, will allocate a

proportional share of the donation value to SOCAnet’s sustainability.

To conclude, social participation has to be seen as the social instrument that can

contribute on alleviating social issues and fostering economies. Especially for Mexico and

other developing countries, increasing social participation has to be considered as a must, given

the positive correlation between social participation and the rate of alleviating social issues.

Therefore, this thesis delivers recommendations on the following aspects: Digitalization of

social activities; increasing efforts and resource allocation on digital tools; and the

implementation / replication of SOCAnet as a digital tool that can bring additional value for

society and millennials’ generation.

Digitalization of the social sector is an innovative approach on how volunteerism and

donation activities can be strengthened and increased. This should be seen as a precondition

for being more successful in addressing the numerous social challenges people face daily in

developing countries. First of all, ICT training programs have to be offered by governments or

other stakeholders. Thus, NGOs and non-profits will be able to understand the importance of

digital channels among potential donors and volunteers and even being capable to run

engagement strategies on these digital ecosystems. Moreover, there exists a lack of literature

on the impact of ICT systems in social and economic development. This thesis encourages

scholars, researchers and other actors to put more efforts in delivering literature to reinforce

the strategy of the digitalization of social activities.

This also maintains that the development of an online platform as a digital instrument,

which will potentially contribute to enhance the participation of various stakeholders –

especially millennials - in addressing social challenges. The popularization of crowdfunding

online platforms reinforces this approach and makes more evident that activists’ preferences

65

lean on digital ecosystems. However, these instruments have not been fully utilized in other

segments such as in the voluntary sector. Therefore, stakeholders should punctually allocate

financial resources on building digital tools in order to pull more human resources and financial

contributions for NGOs and non-profits sustainability.

In regards of the implementation of a digital tool, considering that social dynamics may

vary from a digital ecosystem to another. This work recommends the employment of the digital

approach by implementing -and then replicating- a prototype of the SOCAnet platform. In this

way, SOCAnet can be fine-tuned accordingly to what each environment requires for achieving

social engagement. It is important to highlight that SOCAnet would be the first in its kind, as

it gathers the two main pillars of social activities, donation and volunteerism and will combine

them with a reward system of emotional incentives. Meaning a wider portfolio of social

activities and a more appealing model in comparison to others (UN-Online Volunteering,

Kickstarter, KIVA, etc).

Potential investors and stakeholders should pay particular attention in the value

SOCAnet will deliver to NGOs, private sector (mainly SMEs) and users (mainly millennials).

For NGOs, by giving them visibility on digital ecosystems and attracting youngsters to social

activities, their sustainability will be ensured. For enterprises, by providing rewards on behalf

of NGOs, they will be branded as social committed enterprises and will expand their potential

among youngsters. Millennials will fulfill their intention of being social active and will have

the opportunity to create meaningful experiences.

In the case of millennials, as they will represent the human resource for social activities.

Stakeholders have to bear in mind, that the key concept is that millennials are not just getting

involved because they believe in the cause (even though they do). They are participating

because they found interesting information on-line on social projects and were attracted by the

meaningful memories they can experience. Doing good has become a social activity, combined

with social recognition and delivered by high-tech and high-touch means. It needs to be more

than just the act of participating. Millennials are more concerned about experiences, which is

an opportunity social sector should properly explore by employing SOCAnet.

66

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