Open Innovation for Sustainability in the Social Enterprises: An Empirical Evidence

Abstract

Social enterprises are currently receiving significant attention from academics and practitioners because of their hybrid nature to achieve profit while achieving the planned social mission. To achieve their social mission as well as financial sustainability, social enterprises need to have the ability to carry out innovation for sustainability which helps them balance these two goals. In hybrid organizations, such as social enterprises, priorities in financial and social missions may conflict, resulting in managerial tensions and stakeholder pressure, making open innovation (OI) by involving external parties essential. This paper aims to explore OI for sustainability in social enterprises. The research question posed is: what innovation for sustainability practices do social enterprises implement and, how does the mechanism of OI for sustainability work in social enterprises? A multiple case study approach is used by taking four leading social enterprises in the education sector located in West Java, Indonesia. Our findings indicate that sustainability innovation is practiced by social enterprises in the form of providing social benefits such as paying for the education costs of their students and providing social services for the surrounding community. Beyond that, ecological benefits are provided in the form of reducing waste and using unproductive land in a productive manner. Innovation is performed with a different approach from one case to another. All cases studied collaborate with parties external to the organization to be able to implement sustainability innovation. This study contributes to the literature by providing empirical research on sustainability innovation in the context of social enterprises, which is still rarely found in the literature.

Sustainable Education and Open Innovation for Small Industry Sustainability Post COVID-19 Pandemic in Indonesia

“…It is important to note that innovation in the food industry, such as in tofu, crackers, and dodol, is likely to increasingly rely upon the decisions and activities of other entities in the innovation system [ 60 ]. This study is in line with the proposition conveyed by Harsanto that companies need to involve external parties in building open innovation [ 21 ].…”

“…Formally, innovation for sustainability was defined as the commercial introduction of a new product or service, product service system, or pure service leading to environmental, social—or both—benefits during the previous life cycle [ 38 ]. The concept of innovation for sustainability consists of three important components: the level of integration in its implementation (a standing-alone innovation or integrated with others), the renewal in innovation (whether it affects technical updates or, more strategically, the socio-technological component), the impact scope of innovation on consumer behavior and society (how far the innovation will be able to go to solve the problem of sustainability) [ 21 ]. Innovation for sustainability in small industries is challenging due to many limitations, including finance, labor, infrastructure, networks, and access [ 9 , 10 , 11 , 12 ].…”

“…OI combines ideas and contributions from internal and external sources to achieve successful innovation. OI is currently one of the most popular innovation streams [ 21 ], along with the increasing complexity of business and the development of communication and information technology that allows a smoother flow of knowledge inside and outside the company [ 22 ]. Therefore, the uniqueness and the novelty of this research is that the OI design is carried out in a participatory manner by involving academics, government, and the community, resulting in a more targeted OI.…”

Assessing the interplay between Open Innovation and Sustainability‐Oriented Innovation: A systematic literature review and a research agenda

“…Although Open Innovation has been mainly driven by business objectives, societal challenges have more recently turned the attention to a wider range of objectives to which Open Innovation is relevant (McGahan et al, 2021). In this regard, the adoption of openness to tackle societal challenges has brought a promising avenue for research, as well as in practice (Chalmers, 2013; Harsanto et al, 2022). Mirvis et al (2016), in a study on corporate social innovation, show that a huge part of the exchanged knowledge in corporate social innovation is a tacit one, which firms develop from shared experiences and interactions.…”

Impact of human resource management on improving the innovation potential of an enterprise to achieve the principles of sustainable development

“…The object of this mechanism is promising areas of innovative development of the organization, and the subject is a company's management, which performs managerial actions in accordance with their functions (Shikverdiev et al, 2023). In this, we should emphasize the mutual connection and conditionality of the components of improving innovation potential: "innovationthe source of competitive advantage", "knowledgethe source of innovation", and "innovation competence of the enterprisethe quality of HR" (Harsanto et al, 2022).…”