What is Business Innovation?
Innovation is when an organisation introduces new processes, services, or products to affect positive change in their business. This can include conceptualizing brand new products, processes and ideas. It also includes coming up with new ways to improve products, processes and ideas.
Innovation improves a business’s productivity and efficiency, ensuring a business can grow. The ability to innovate will also ensure a business stands out from the competition. In business speak, innovation is critical to its growth and the value it will bring to its customers, shareholders and supply chain.
In the world of business, there are many different types of innovation a company can pursue. Often, it is tied directly to:
- Developing a new product that meet a pressing social need
Some businesses even embrace all three to boost growth while adapting to changes in the market. Innovation is hence critical to the value it creates. However, not all innovations help society directly. Some innovation might come at the price of unintended consequences.
Take social media for example. At the beginning of the century, Facebook was hailed as a tremendously powerful platform that encourages communication and socialisation online. With the power of the internet, social media was seen as an innovative solution that we still use today to communicate and showcase our best selves online.
However, these innovations also cause some unintended consequences such as the spreading of fake news and misinformation. Innovation itself is hence not sufficient to promote social good without the organisation adopting a social conscience.
Why is Business Innovation important?
You might have heard of the phrase “adapt or die”. That seems to be the case when businesses are striving for success in today’s modern world. Businesses have been forced to adapt, to remain relevant and profitable.
Innovation is also about doing things differently from your competitors in your industry. Some businesses aim to develop and update products until there is nothing like it in the market. Some want to optimize their processes because it will save the business time, money and resources, giving it a competitive advantage over other competitors that are still stuck in their respective systems. In both cases, your business is taking some time to explore new ways, because complying to the status quo would place the business’s survival at risk.
What is Social Impact?
When you google the phrase Social Impact, you get a ton of results on Google. There really isn’t a fixed definition. You’re probably also heard a business state that “we’re making a social impact”, or hear the people around you say “I support businesses who make a difference”…what do they actually mean? How would a business create social impact?
Generally, a social impact business is one that prioritizes doing work that consciously, systemically and sustainably serves to attempt to address a problem faced by a local or global community.
Today we see an increasing trend in companies embracing “social impact” as a core value. You might have heard of Corporate Social Responsibility (CSR), which is a standard metric for companies and for-profit organizations to be socially accountable. However, the goal of social impact companies differs from the typical CSR approach. Bringing social positive social change is prioritized in all of a social impact company’s work, rather than just a secondary organizational value. Social impact businesses carefully select clients, partners and projects based on their impact on the world, versus mobilizing employees every once in a while to volunteer for a local nonprofit. The latter is a decisive action, rather than a sustained, systemic change.
Why do we need social impact business?
Who could possibly say no to increasing a company’s appeal to consumers and job seekers, when it is demonstrating positive social impact? People now have a choice to work for a business that commits its time, skills, and even small portions of its profits to bring a positive social change.
No doubt that social impact businesses are important, since they take a profit driven business model, which has been historically unsustainable, and make it sustainable. This shift creates a snowball of actions that lead to impactful social change. If we want a better world for us and our future generations to live in, we need to encourage a new age of businesses with a social conscience.
What does Innopact mean?
Innopact combines the definition of business innovation and social impact in businesses. Why the need for a word? The social impact from a business can be greatly expounded with the help of innovation. Similarly, innovation can help to create new solutions for social changes.
Now, we don’t just need social impact businesses. We need Innopact businesses! With innovation, the snowball of actions will only get bigger and bigger, maximising the positive change we bring to the world.
With new realities emerging, challenges that were once local are being tackled on national and global levels. Issues like access to clean water, education for all, and environmental conservation are just some issues that social impact businesses are attempting to tackle.
The best way to understand what a inno-pact business is to look at the examples around us.
TOMS Shoes is an example of a company making a commitment to maximize its social impact using innovation. When founded, it had a singular mission of improving the lives of children by providing shoes to those in need. Shoes are produced in Argentina and China following fair labour practices while creating minimal environmental impact.
During the manufacturing process, factories are monitored by TOMS and third-party independent auditors. With the help of ecommerce, TOMS shoes are sold online and in retail locations around the world. It comes with a promise that for each pair purchase, TOMS will donate a second pair to a child in need in Argentina, South Africa, and other locations around the world. TOMS invited the public to participate in “shoe drops” around the world and to experience the firsthand change TOMS shoes would bring.
The construction company in Sweden spearheaded a project to build a road that charges electric cars while they drive. The roads have an electrical rail embedded, and electric vehicles would lower a movable arm attached to the bottom of the car to charge the batteries. The roads are also safe for walking, as the electricity is designed to be below the surface. Using such an innovative energy transfer system, Sweden can ensure a safe and clean environment and responsible consumption of natural resources through the use of clear energy. This route would run between Stockholm Arlanda airport and a logistics site, and there are still plans in place to expand the project throughout other parts of Sweden and even the world.
New Story is a nonprofit organization that helps families in need of shelter, and has built more than 2700 homes in South America and Mexico since its founding in 2014. In 2019, it partnered with ICON, a construction technology company, to start its first homebuilding project that leverages 3D printing technology. These houses would replace the structures that the residents in the area built, which was mainly out of wood, metal and whatever little materials they could afford. These families also reside in a seismic zone, prone to flooding in the state of Tabasco, Mexico. This community is very vulnerable, and they’re living on about an average of $3 a day. These homes are sturdy and safe from the natural disasters in the area. While there is no fixed cost on the homes yet, New Story aims to get the families to pay 20 to 30% of their income. The technology holds promise for affordable and safe housing for the community.
Teacherly is a knowledge sharing platform to improve teaching skills. It aims to help teachers in the whole world to improve their teaching skills and share knowledge. It allows teachers to prepare lessons with interactive tools, collaborate with other teachers on lessons, and track single student progress through analytical tools. Through innovation, Teacherly facilitates the sharing of best practices, learning outcomes, and professional development materials in teaching. It promotes access to basic education and helps to improve the overall education.
Microinsurance in Rwanda
In some of the poorest nations in the world, many people cannot afford traditional insurance premiums. As a result, they are left without a safety net when they want to pursue their careers. One solution is microinsurance – smaller premiums tailored to the unique needs of people living in poverty. Microinsurance Master and Access to Finance, a non-profit organization, partnered up with Board of Innovation, to facilitate and fund insurance companies to create their first microinsurance products for this group of people. Doing so helps promote equality across ethnicity, religion, gender, sexual orientation, and disability. It also promotes equal job opportunities, a fair reward system, and healthy work ethics for all.