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European Center for Social Finance

On the nature of social business model innovation

On the nature of social business model innovation

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Business model innovation is a widely discussed research topic which spans all sector boundaries. There is a growing body of literature in the for-profit sector which covers business model innovation. This study analyses what constitutes business model innovation for social enterprises and identifies different types and explains their rationales. The various components which make up a social business model will also be discussed.


The study is based on a dataset of awards for social innovations in the years 2011 and 2012. In total, 28 competitions, 30 funding institutions, 11 academic institutions and 3 governmental organisations were identified, and between them they awarded 1020 social organisations. 204 of these social organisations had an innovation based on a business model innovation.


Six types of social business model innovation could be identified, which were opportunity creation, smart distribution, ecosystem engineering, cheap sourcing, smart pricing and inclusive production.


This study's main contribution to the body of literature is the identification of different types of social business model innovations and the empirical review of these patterns on a global basis.

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