Impact Innovation
Social Innovation refers to the creation of social value through innovative strategies and can occur within MSMEs or across the sector in the relationship between MSMEs with other actors.
In Peru and globally, society is facing complex social problems such as poverty, income inequality, climate change, violent conflict and low access to basic services.
Those problems can be opportunities to MSMEs to create innovative business models with two different approaches:
Regardless of the type of business model that you choose for your company it is important to define and measure the kind of social and/or environmental impact that the company pursues. The key questions to respond are:
- What impact your company plans to achieve?
- What is the mechanism by which your company will achieve that impact?
- How will you know when you’ve achieved it?
In that sense, it is recommended that MSME develop a theory of change that explain how the company is going to deliver a specific change. Theory of change is a framework which articulates the problem causes, the strategies needed to generate solutions to those problems and the activities that should be delivered according to those strategies.
To monitor and measure the advances in the meeting of results planned in the short, medium and long term, it is needed to design qualitative and quantitative indicators.
How you can start to develop a theory of change?
MSMEs can use the method of theory of change as a part of their planning process before to launch the company or even to re-visit the business model once the company is running.
To create a theory of change it is useful that MSMEs review the 2030 Agenda for Sustainable Development adopted by all United Nations Member States in 2015 which includes the 17 sustainable development goals (SGD). The goals a global reference aimed to end poverty, improve health and education, reduce inequality, promote economic growth, tackling climate change and preserving oceans and forests. For more information see United Nations-Sustainable Development Goals.
Available Resources
- Kunan is the platform that promotes the Social Enterprise Ecosystem in Peru. It has a network of Social Enterprises called “Red Kunan” and different tools and opportunities to help them grow.
- NESsT provides support to entrepreneurs to develop appropriate metric systems as a part of the technical support to their investees.
- Protagonistas del Cambio a social responsibility program of the UPC that recognize and strengthen the innovative spirit of young social entrepreneurs in Peru.
- Economía Verde is a directory of sustainable MSMEs.
- The Global Reporting Initiative has a program for sustainable MSMEs.
- Stanford Social Innovation Review (SSIR)