Social innovation in the strong Danish welfare state

Artiklen er skrevet af Andreas Hjorth Frederiksen og udgivet i Observatory for Sociopolitical Developments in Europe 1/2013.

The Danish and the other Nordic welfare systems can be viewed as huge complexes of social innovations. These systems are on one hand claimed to be so universalistic, strong, powerful and thought through that they keep the people happy, safe, healthy and educated and to a large extend create equality  – at least in an economic sense. On the other hand one could claim that these massive welfare systems impede the drive for further social change and new innovations. Thus, the societal benefit of social innovation is deemed worthy of further discussion: is social innovation supplementing or competing with the welfare state?

There is a lot of talk about social innovation in Denmark. But let us be honest: most of us do not even know what social innovation means and think of it as a buzzword with the same meaning as social development. In order to change this reality, Denmark has in the last five years seen the emergence of new actors promoting and supporting social innovation.

Efforts for promoting social innovation
Some of this actors are initiated and supported by official policy-makers while others are private initiatives. We have a Centre for Social Entrepreneurship at the University of Roskilde and an independent Centre for Social Economy. Both of them have been strongly supported by the government. An alternative educational structure for social and cultural entrepreneurs called the “Chaos Pilots” was founded in the 1980s; it now more than ever focuses on social innovation. We have seen the establishment of the privately funded Social Capital Fund to support scaling and of the also privately funded Social+ (which the author represents), which offers social inventors the support they need to get from idea to social innovation. Lastly we have seen DANSIC – a student driven organisation – promoting social innovation to students of all backgrounds.

These infrastructural actors know that a lot is going on at EU level in regards to promoting social innovation. But European efforts are not well known in the general public. The Social Innovation Europe initiative stands rather strong but most inspiration for social innovation in Denmark comes from the Uk, the US, Australia and Canada rather than from France, Holland, Belgium, Austria or from our neighbours in Germany, Norway and Sweden.

Controversial discussion about the actual benefit
The main discussion is about value (in both meanings) between a group that is critical of capital and a more conformist group. The first would argue that the focus of social innovation should be on social rather than on economic value and see the danger of a simple privatisation of the welfare system. The latter would argue that a more sustainable welfare system also needs the involvement of the (traditional) enterprises engaged in the delivery of social services.  Middle-of-the-road pragmatists (which is where the author stands) would argue that social innovation is the development of social services, methods and products in economically sustainable models – irrespective of their organisational system: non-profit, private, public, business, voluntary or other.

Social innovation within a strong welfare state
The Danish welfare system is constantly evolving and targeting new social challenges. But this evolution happens in small, slow steps. The reasons for this are, above all, the following:

  • The size of the welfare state and of public organisations creates inertia, holding them back in, for instance, the field of knowledge sharing
  • The public sector’s tasks are highly complex – with many professionals and stakeholders involved in developing new initiatives
  • The fear of making mistakes minimises risk-taking – but risktaking is an essential part of any innovation process

As long as the welfare state holds the main responsibility for solving social problems in Denmark, social innovation will be challenged by the conditions in this strong public sector.

Most social innovation initiatives are strongly connected to the public sector – and either initiated or funded by this sector.  Nevertheless, a traditionally strong NGO-sector is also a major social innovation player, although its key funding is not private but public. Many non-public social innovations are also financially supported by private philanthropic foundations that are much more willing to take innovation risks.

Traditionally, social development work has been based on relative short-term funding in development projects. A lot of valuable social methods and results have not succeeded in the long term because no complementary sustainable business models were implemented.

When discussing social innovation in Denmark, we see clearly that there is a strong focus on economic and organizational sustainability.

From supplement to competition
Social innovators in Denmark have traditionally been non-profit entrepreneurs supplementing the welfare state. With rising awareness and interest in social innovation, a number of different sectors and actors are getting increasingly involved. For example, the private sector and the business sector are becoming involved in developing a social economy and small social businesses within that economy. These actors do not necessarily see themselves as supplementing the welfare state – but rather as competing with traditional services within the welfare system.

The great (almost complete) majority of social, health and education services are publicly funded through taxes. For most Danes, this means that we do not want to pay for any of these services as we have already paid for them on our tax bill.  So although the end users of social innovations in Denmark might often be the citizens (marginalized or not) the customer is almost always the welfare state. This is a challenge for social innovation in Denmark.

And yet there is a growing interest in understanding how to increase the role of civil society in solving social problems and making social innovation. Denmark has always had a strong volunteer sector supplementing the public sector’s work for socially marginalised groups. But with the future challenges faced by the welfare state, there is strong interest in finding new ways to activate civil society. The answer could very well be social innovation.