Social Innovation in Kosovo:
A contribution to the civil society
Dillon Berjani
11373202
Program: MSc Entrepreneurship (Joint degree)
Institution: University of Amsterdam & VU Amsterdam
Supervisor: Prof. Tsvi Vinig (UvA)
Second reader: Dr.Joeri Sol (UvA)
Date of submission: 20/06/2017
Acknowledgment
This research was supported by Professor Tsvi Vinig from the University of Amsterdam. I thank my interview participants from the Unicef Innovation Lab in Kosovo, the USAID Empower Project in Kosovo, the Ministry of Environment and Spatial Planning, the Ministry of Economic Development and the Innovation Center Kosovo who provided insights and expertise that greatly assisted the research, although they may not agree with all of the interpretations/conclusions of this paper. I thank Professor Tsvi Vinig for assistance and supervision of the entire research. I would also like to show our gratitude to the professors at the University of Amsterdam for sharing their pearls of wisdom with us during the course of this research, and we thank 3 “anonymous” reviewers for their so-called insights.
Preface:
The copyright rests with the author. The author is solely responsible for the content of the thesis, including mistakes. The university cannot be held liable for the content of the author’s thesis.
Statement of Originality:
This document is written by student Dillon Berjani who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the content
Table of Contents
1.0 Introduction………...7
1.1 Social Entrepreneurship………..7
1.2 Social Innovation………....8
1.3 Social Challenges in Kosovo………..8
1.4 Thesis Outline………11
1.5 Practical Relevance………11
2.0 Theoretical background………...12
2.1 SI origin and definition………. 12
2.2 How SI can foster life quality in developing countries………..13
2.3 How new ventures learn to innovate for the greater good……….14
3.0 Methodology……….15
3.1 Research design……….15
3.2 Data collection………...16
3.3 Data analysis………..17
4.0 Results………...17
4.1 Why Social Innovation………..19
4.2 Social Innovation approaches and implementation………...20
4.3 The scope of social innovation………..22
4.4 How can policy makers foster social innovation in Kosovo……….24
4.41 Political level……….. 25
4.42 The education system in Kosovo ………....26
4.43 Supporting local entrepreneurs………... 26
4.51 Environmental Potentialities………..28
4.52 Economic Potentialities………..29
4.53 Ethical Potentialities………...31
4.54 Health & Education Potentialities………..32
5.0 Discussion………...33 5.1 Theoretical contribution………34 5.2 Practical Contribution………...34 5.3 Limitations………35 6.0 Conclusion………...35 References……….38
Abstract: The term ‘‘social entrepreneurship’’ has been on an increasing trend in the recent
years. Studies about entrepreneurship shifted their attention more and more to entrepreneurship as a social activity rather than just providing economic benefits. It is seen as an activity that could benefit the society as a whole. Schumpeter defined entrepreneurs as value adding individuals who combine existing elements with new orders to create value. He saw an
entrepreneur as a change in a larger economy. However, this change is not necessarily limited to economic changes only. Acquiring an economic profit, being the main incentive for
entrepreneurs to start a business, nowadays many entrepreneurs aim to create value by
addressing social problems such as environmental pollution, unemployment, gender inequality or child-labor. They use social innovations as a main tool for such purposes. Although it is
beneficial, many countries that are still in the process of establishing a stable state, run behind on technological and educational advancement, which leads to social innovation. Therefore, this paper will focus on how social innovation could be an efficient tool to tackle social problems in Kosovo through innovative social enterprises with the support of policies or programs designed for them.
1.0 Introduction
The concept of social entrepreneurship or social enterprise may have entered the discourse of entrepreneurship recently, however, new ventures have tried to press social needs even before. Companies nowadays aim to address social issues to contribute to the well-being of the environment or the society. Rather than creating value to private individuals, the value created by social innovations is primarily for the society. Social innovations are considered as more effective and sustainable solutions to a social problem. There is a number of factors that may have fostered its development in the recent years (European Commision, 2013). Current social challenges and crisis such as the aging of the European population or climate changes strengthened the need for social activities by companies. Additionally, social media also
impacted the development of such a term. People can communicate quicker and more efficiently now, be that financial or time-wise. They can react quicker more directly in a participative way. These factors played a crucial role in speeding up the development of social innovation around the globe.
1.1 Social Entrepreneurship
Bornstein and Davis define social entrepreneurship as the process by which citizens build or transform institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses and corruption, in order to make life better for many (Bornstein & Davis, 2010). Social entrepreneurship has the power to change the world. With a creative class, consisting of professors, architects, engineers, doctors, or creative and good willing students, it is always possible to make certain things easier, faster and cheaper, by not reducing the quality of the product or service. Some ideas will provide benefits to the entrepreneurs or their business, while others have the capability of effecting a wider range of individuals. Tesla is an up-to-date example of a venture that combines an existing element with a new one. Designing a car run entirely by electricity, they introduced a product with economic and social value that eliminates fuel driven vehicles that damage the environment, which directly impacts the health of the society. It mass produces its vehicles to reach profit, but benefit the society simultaneously
1.2 Social Innovation
Social Innovations are considered as innovations adopted by social enterprises aiming to meet a social need in their community (Murray et al, 2010). Social innovation is considered an effective tool of realising development and growth by building on entreprises as self-reliant development actors and replace government involvement (Neumeier, 2016). Different as usual innovation, social innovation include one additional feature, which is the social mission (European Commision, 2013). Tesla’s case shows that social entrepreneurs can provide new approaches through social innovations that could tackle major problems within a country. A growing population over the last decades produced additional needs of the society. Most challenges that governments face today are at social dimensions (Baturina & Bezovan, 2015). The term of social innovation is attracting a growing amount of attention and has entered the discourse of entrepreneurship in recent studies. Social innovations being a crucial tool of social entrepreneurship are considered as opportunities pursued by entrepreneurs that hasten major social issues. With an advancing technology, the effect of many of technical challenges of social innovations have been minimized. However, a stagnation of technological and educational advancement in developing countries have led to a situation where these challenges expanded even further, producing hazardous outcomes. Social innovations implemented by entrepreneurs have the power to change societies. Schumpeter pointed out that the value of social innovations is in the promotion of social change in a society (Baker & Meehmood, 2015). Innumerable cases of the use of social innovations in developing countries have shown that it is an efficient tool to address social problems. For example, a simple social innovation that enabled poor rural women in Bangladesh to acquire small loans through microfinance proved to be practical poverty reduction strategy (Babu & Pinstrup-Andersen-2007).
1.3 Social Challenges in Kosovo
While the EU strongly encourages social entrepreneurs to develop their innovations further for the benefit of the society, in a post-war country such as Kosovo the term social innovation is relatively new. Kosovo is facing serious challenges including air pollution caused by exhausted means of energy production, a 33% unemployment rate (UNDP) and a market
where only 10% of businesses are owned by women, from which only 3% had access to bank loans (USAID Kosovo). Based on measurements undertaken by the Kosovo US Consulate, the air quality in the capital city of Pristina is at a level that poses a general threat to the health of the society. UNDP and USAID Kosovo also explained that a poverty rate of 30% and a general unemployment of 33% in 2017, needed immediate responses from policy makers. For many years, UNICEF is organizing the social innovation camp, where young and enthusiastic entrepreneurs pitch business ideas that aim the improvement of a social issue. Startups such as ‘‘Alfa ’’or ‘‘Zgjate doren’’ were few examples that demonstrated the potential of social
entrepreneurs in developing countries. One of the ‘‘hottest’’ startups in Kosovo, Shnet, provides sexual education awareness to young teenagers and tries to provide support for various topics regarding that field. Its social incentive provided it with attention from the startup scene in Kosovo. Another point of interest in regards to social welfare is gender inequality. Although it is often stated in a company’s or organization's policies be those from the private or public sector or the political scene that such thing is not tolerated, the following chart does not support such claim:
Figure 1 Figure 1: Country Gender Profile 2014
In this graph, highlighted by the Country Gender Profile, we see that there is an unequal distribution between women and men regarding political positions and domestic violence. Men were in charge of 202 top political positions compared to only 52 positions held by womenin the
post war period after 1999. In addition, in 2013, 869 cases of domestic violence were reported against men, compared to 220 against women.
The term social innovation is not limited to technological advancement. An entrepreneur does not necessarily need to invent a new technological tool to improve the wellbeing of the civil society. Social Innovation covers a larger scope. He or she can do so by simply tackling a social issue in their community by offering a service that tackles any social challenge by spreading awareness about a social needs or by including discriminated groups in their startup. Another interesting example of a social dilemma is the business’s ownership distribution. The following pie chart represents women as total outliers in the entrepreneurial world:
Figure 2: Country Gender Profile 2014
By addressing these major issues in Kosovo including poverty, gender inequality, low unemployment or air pollution, this paper will answer the question of how social innovation could be an efficient tool to tackle problems in Kosovo through innovative social enterprises with the support of policies or programs designed for them.
Given the current status of Kosovo, being a post-war country, social innovation could provide a boost to the well being of its citizens and the local economic growth. Local
potentialities such as tourism and agriculture still face challenges and cannot entirely support a growing country. Furthermore, although the government focuses on the development of tourism
and agriculture, this will tackle social issues only indirectly. Additionally, political gaps make it problematic to realize innovation within the country. One popular example is the energy sector. Kosovo is still dependent on fuel for its energy generation. It is harmful to the environment and provides an unstable supply of energy. The main target until 2020 is the 20,20,20 target, which consists of 20% of the energy generated by renewable resources, 20% efficiency and 20% reduction of environmental pollution (Malushaj, 2014). However, although Kosovo consists of the necessary resources to realize such a target, it faces inner obstacles that make the
implementation of it difficult. Low educational qualifications also represent a social drawback. According to the PISA test in 2016, the educational system in Kosovo was ranked among the last participants. Furthermore, children should build up that mindset of being able to do something for the greater good from their early days. Schools provide insufficient courses that deal with social issues. A growing population will demand a properly functioning education. This research will depict the major social drawbacks and try to provide a solution on how they can be tackled by using social innovation.
1.4 Thesis outline
The first part of the research will include a theoretical review where all the present literature is presented. This will help understand the content better. The next part will cover the methodology that is used for the collection of data. It will explain the nature of the study and the tools used to collect the information needed to answer the research question. This will also cover the research design and the data analysis method. The third part included the outcomes of the research, which is followed by an analysis, discussion and the conclusion.
1.5 Practical relevance
The aim of this research is to show the benefits of considering investments on social innovation. The research will show that social enterprises can tackle certain social issues in their communities through social innovation. It will explain which social issues can be challenged and what they should do to engage in such a process. The results of this research can be adopted by new ventures that could be inspired to view entrepreneurship as a social activity rather than
economic one. Additionally, the results can be used to inspire policy makers to foster the development of social enterprises that make use of social innovation. With a more intense support from policy makers, social innovation can get a boost that would facilitate its implementation in Kosovo.
2.0 Theoretical background
This section aims to cover past theory that deals with social innovation. It will help us understand the key concepts and finding in this field. In past studies, little attention was paid to the effect of social innovation in unstable countries that are in the process of development. Entrepreneurship was recorded more as an economic activity and less as a social one. Especially in Kosovo, entrepreneurs have just recently discovered the social aspect of entrepreneurship. Kosovo is a pioneer in the term of social innovation. The population of Kosovo, being among the youngest in Europe, has the potential to change that.
2.1 Social Innovation origin and definition
Social innovation (SI) is an outstanding paradigm that is attracting the interest of researchers, practitioners, and policymakers around the world (Andrew & Klein, 2010). In the recent years, social innovation had a boost and attracted more scholars and entrepreneurs. One reason for that is the proactive approach and newness of solutions for firms, compared to a responsible behavior and partially reactive approach of similar concepts (Osburg & Schmidpeter, 2013). A crucial part of social innovation is the empowerment of citizens and the participative process, involving collaborative activities between private, public sectors and third sectors (Edwards-Schachter, 2012). In Kosovo, the term social innovation represent a new concept that policymakers and young entrepreneurs have not dealt with intensively. Processes of change, especially if it involves introducing a new concept to a community, should be seen as heroic acts by young entrepreneurs. Certain entrepreneurs change the way things are done in an industry, adding value to an existing product or creating a new solution. Many companies or entrepreneurs recognized that by pursuing social innovations, they can gain a comparative advantage and enhance their reputation while doing something beneficial for the society (Nelson & Jenkins,
2006). Furthermore, Nelson and Jenkins argue that innovation is the lifeblood of corporate competitiveness, value creation and sustainable growth (2006). Social innovation poses some distinctive challenges compared to commercial innovation, particularly with its incentives to invest in it and assessment of performance (Nicholls & Dees, 2012). Although researchers began studying social innovation in the late twentieth century, the theory possesses gaps. Some argue that it emerged in the 1970’s while others say it dates back from the time of Max Weber and Schumpeter (Edwards-Schachter, 2012). Godin even argued that social innovation dated back from the French revolution where it represent a crucial contribution for the development of innovation (2012).
2.2 How SI can foster life quality in developing countries
Many authors have a mutual conclusion about the effect of social innovations in
developing countries. Babu and Pinstrup-Andersen explained that for a country to shift to social innovations, it does not necessarily need to eliminate current policies (2007). Social goals such as the reduction of poverty demand new approaches that could be developed by social
entrepreneurs. They explained that social innovations could be efficient for micro, meso and macro-level problems of a country. Social entrepreneurs combine individual ideas with public financing to face social challenges. Social entrepreneurs, rather than replacing public sector policies tackling social issues, should combine their innovations with policies that already address these problems to make them more efficient. Social innovations have to produce
improvement in terms of outcomes, including quality, reduction of costs and the improvement of wellbeing (Baturina & Bezovan, 2015). Lubelcova noted that social innovations should bring permanent social changes to improve the living conditions and bring new solutions to the demand of individuals (2012). Lubelcova also concluded that social innovations, besides impacting the well-being of society, also have an impact on the national economy as its sources come from citizens living in that region. In a report they published, the World Bank introduced to us a direct relationship between innovation and population growth and life expectancy in a report published by the World Bank (2010). They argued that by engaging in social
the years, increasing the size of entire populations. Social innovation are applicable in various areas. The case of Coelho Junior et al illustrates how through social innovations, an
undereducated region of Brazil, called the Itajuba region, was provided with a knowledge generating centre (2011). With multiple new courses being offered, an easier access to an education in Itajuba was guaranteed. This is an additional case that shows how the social sector has emerged as a new field for entreprises.
2.3 How new ventures learn to innovate for the greater good
The new paradigm for innovation results in a partnership between private enterprises and public interest that produce profitable and sustainable change for both sides (Kanter, 1999). Kanter argues that companies view community needs as an opportunity to develop their products further and solve long-term business problems, simultaneously benefiting the community (1999). Neumeier even explains how social innovations can be a solution to fill gaps caused by austerity politics, or as a mean to meet the grand challenges of this era (2016). They are innovative with regard to the user, meet needs more efficiently than previous alternatives, provide long term solutions and can be adopted beyond the initial group that developed it.
Mirvis et al conducted a research about how companies are learning to innovate for the greater good (2016). They explain that firms learn to engage in successful social innovation by acquiring knowledge from external parties. In addition to innovating for new solutions that meet social needs, companies also engage in social innovation to grow and to meet the needs of their stakeholders. To enhance their supply chains, reach socially-conscious and green consumers and tap the base of the pyramid, companies aim to foster social innovation tools (Mirvis et al, 2016). The authors emphasize the role of networks and R&D in the process of acquiring knowledge to engage in social innovation. The nature of this networks is mostly business to business, although social innovation usually involve business to non-business partnerships to involve the
community in the co-creation of a solution. The inclusion of communities in the development of social solutions is crucial. They represent a part of that external knowledge needed to design a product or service for a specific social need. With this continuous feedback, either from
communities or networks, companies will engage more intensively in social entrepreneurship, which will foster the development of social innovations.
3.0 Methodology
3.1 Research Design
Considering the nature of this area of study, the research methodology that fits this case best should be approached. Since Kosovo is not a country in which social innovation is a highly considered as part of the discourse of entrepreneurship, it will be difficult to have access to numbers that could give us a clear picture on how social innovations impacted the
unemployment rate or the quality of air for example. The effect of social innovation was not the focus of past studies. This research could serve as a foundation for future studies that analyze social innovation in Kosovo further. Therefore, this paper will be more explorative in regards to social innovation in Kosovo, rather than descriptive, given that there are no previous studies about Kosovo to refer to. It aims to come up with its own results gathered from interviews and previous studies about social innovation in general, suggesting multiple applications of social innovation, rather than conducting a literature review, which would be more quantitative. This is the reason why the paper will follow the characteristics of the grounded theory. Theories will be based on data collected. These theories will help to explain the the main concerns of the
population and provide an answer on how these concerns could be resolved through social innovation. The grounded theory approach will be based on Gioia’s approach. (Gioia, 2013). Its main purpose is to capture and model informant meaning in a single case that is chosen based on the richness of information it provides. The interviews chosen for this research will provide enough material to build up our theory in a single case study that could serve as a foundation for future studies. Similar to Gioia, this study will show how a gap is filled. In this case, the lack of knowledge or awareness about social innovation in Kosovo. Given that we are aiming to
measure the scope of social innovation in Kosovo and the effect it has on the well-being of the society, we will focus mostly on qualitative methods of data collection. Additionally, a reason to go with a qualitative research design would be to get first-hand information from those that are directly involved in this field. This would mostly include interviews. Interviews aim to record the
information behind a participant's experience. The interviews conducted will address the research question by gathering information from experts of this particular field. They will help understand the importance of social innovation in Kosovo.
3.2 Data Collection
Fitting to the research design, the interviews are conducted with relevant participants. For this paper, we will choose an open-ended type of interview. Every interviewee will receive different questions based on their field of expertise and will not be limited to a set of answers. The interviews will be semi-structured. The reason for this is that the participants will be able to express their point of view and have the opportunity to add any additional information that they might think could be crucial for the research (Saunders et al, 2009). This will facilitate the entire process and will make it easier to analyze the interviews. Moreover, the interviewees will be able to share their entire experience about the topic. Interviews will be conducted face to face to lower the risk of bias answers. In total I will conduct 5 interviews. They will aim to gather information about the participants opinion, values, feeling and background knowledge. If granted permission, the interview will be recorded and will be available on replay to limit the probability of leaving out crucial information. As a tool of data analysis, coding represent an efficient method. This will divide the interview into various topics and will allow a clearer and easier understanding of the material. The lack of recorded statistics makes it problematic to pursue quantitative methods. However, to have a better idea about what the society thinks represent the most crucial social problems, through the usage of surveys, we will have some numbers
available, that represent a quantitative approach as well. Given that the focus of the research lies on the civil society, the survey aims to gather information about what citizens of Kosovo believe are the most harmful social issues and how we could improve them. This will help us to direct our focus to the important issues during the interviews. The questions and topics of the
interviews will be based on the answers we get from the survey. This way we will make sure that we are addressing the important issues during the interviews. To eliminate convenient sampling, which would result in bias answer, the survey will pay attention to demographics. The sample will include participants from different ages, different cities, without discriminating based on
gender, ethnicity or race. This will provide us with equally distributed results in all demographic areas directly from the civil society. The survey aims to collect at least 500 responds to minimize potential errors. The mixed-method approach could be beneficial in multiple ways in this case. First, a mixed-method offsets any weakness of either the qualitative or quantitative approach. Second, through the mixed-method, the research gains more depth and filters out more information that could be crucial to the outcome of the research. By approaching both
quantitative and qualitative research methods, the paper aims to acquire deep insights about the core needs of the society in Kosovo and how these needs can be treated using social innovations.
3.3 Data Analysis
The majority of theory will be generated from the interviews conducted. Given that, we will need a well designed approach to analyze the data from the interviews. Since we base our research on Gioia’s approach, we will also use Gioia’s methodology to code the recorded interviews (Gioia, Corley & Hamilton, 2013). Coding will allow us to organize a huge amount of data generated from the interviews into smaller categories that will enable an easier finding of particular information. This will bring the information into a hierarchical structure towards the creation of new concepts and grounded theory articulation. First, we will collect all recorded interviews and write a script that includes all the information retrieved from the interviews. In this form, it is difficult to filter out any particular information that we need. We will divide the data based on Gioia’s methodology that includes first order concepts, second order concepts and aggregate dimensions. The first order concepts represent a broader range of terms that have similarities. The second order concepts and aggregate dimensions will narrow their meaning down to a single concept that represents the similarity of the first order concepts. This will help us to narrow down information into various categories that will help us create our theory.
4.0 Results
The results section will start with the analysis of the survey conducted with the civil society. The main purposes of the survey was to filter out the main concern of the people living in Kosovo. The survey was conducted online so that it could reach more participants. The survey was
distributed through the social media channels Facebook and LinkedIn and was individually sent to another 100 individuals. The survey reached a participants list of 503 people from different cities in Kosovo. Participants were asked about their knowledge about social innovation, what they believe could be tackled through it and how (See question in the appendix). This survey was conducted before the interviews. From the survey we concluded that the following represent the major concerns for the civil society:
Figure 3: List of social challenges according to the civil society (in percentage)
From the results of the survey we see that health and access to health (17.9 %), a low educational system (19.4) and unemployment (17.6%) rank among the most harmful social challenges in Kosovo. Additionally, a low economic development, gender inequality, and poverty are also considered as major social drawbacks. The following chart will represent potential solutions to these problems:
Figure 4: Potential solutions for social challenges (in percentage)
As seen in the figure 2, social challenges listed in figure 1 could be resolved fostering economic development through innovative solutions, enabling proper access to health and education and reducing environmental pollution. All this is retrieved from the survey. Additionally, child protection and development, promoting gender equality and attracting the youth to rural areas are also listed as potential outcomes of engaging in social innovation. Unsurprisingly, a low
economic development, a low educational system and access to health were listed among the crucial social challenges that need to be tackled. These results will help the grouping of social challenges later in the results section.
4.1 Why Social Innovation ?
The European Union set its target to tackle certain social challenges until 2020. Among the list of social challenges are employment issues, environmental issues, education and poverty. The designed process created by the European Union could be an efficient template for policy makers in Kosovo. Policy makers in Kosovo have not prepared such a list that directly aims to tackle social issues in Kosovo. Today, it is not even possible to register your business as a social enterprise. Although it represents an effective tool to press social needs, mostly foreign
organizations such as USAID, GIZ or UNICEF aim to address these issues in Kosovo. Given its benefits, it is rather surprising that it receives little attention. The following list includes the benefits that could be gained from social innovation:
● It provides a totally new approach on addressing social needs ● Provides need opportunities for new ventures
● It can mobilize the government, companies, stakeholders and users to work together on a social challenge
● It provides answers to various challenges within the community and beyond
Social enterprises are highly dependent on support. Be that in the form of supervision, mentoring or finance. One of the most supportive organizations in Kosovo is the Unicef Innovation Lab. It provides assistance throughout the process of creating a new business. The lab lays its attention on startups that aim to address a social need in Kosovo. Once a business idea is accepted, it provides working space, supervision, advice and finance. Support like this is crucial especially in a country where policy makers seem to not fully understand the potential of social innovation. According to the European Commision, in the past, social challenges were mostly perceived as problems constrained by behaviour of economic actors (2013). Individuals who aimed to tackle these problems usually chose the traditional non-profit models as a vehicle to address that particular social need. However, that is highly dependent on external funding and mentorship such as funding from the government or supervision by experts of that field. The advantage of a social enterprise is that it can gain a ‘‘self-sustaining ’’ status since it produces a certain revenue stream. Simultaneously, it does something in favor of the community too. Given this potential, social enterprises should get support to initiate their development.
4.2 Social Innovation Approaches and implementation
There are different forms of addressing challenges in Kosovo. Policy makers mostly focus on creating new jobs to reduce unemployment and poverty. This can be realized by foreign direct investments, direct domestic investments on fields such as tourism or agriculture or through
subsidizing high-growth companies that create new jobs. However, these attempts do not directly focus on social challenges. Social Innovation has a different approach. The term Social design is a concept used to describe the approaches to social innovation. It emphasized the importance of people working together towards a social need. These co-productions or co-creation are effective ways to implement social innovation (European Commision, 2013). According to the European Commision, the approaches of social innovation include the following (2013):
● When it comes to knowledge sharing, social innovation are rather open than closed. This can inspire others that lack certain knowledge to target social needs as well.
● More integrated to problem solving
● No ‘‘top down ’’ system. Citizens are empowered and participate in the process ● Focus on demand rather than supply
● Given that solutions have to adapted to local circumstances, social innovation tends to be more tailored than mass-produced
Social enterprises that make use of social innovation see others as potential partners to work together on a issue rather than as a competitor. Their knowledge sharing nature might inspire others to work on social needs too or join the team. Social Innovation focuses on solving a problem rather than making profit. Users are more participative and help design the project. Peverelli and Verduijn introduced to us the term of social inclusions (2010). They represent a group that includes members of a community that work together on a issue. Social Innovation encourages ventures to create social inclusions that make users active members of that inclusion. This inclusion helps to design ventures idea better through active feedback from the community. This makes it possible for ventures to focus on social demand innovation, which represent innovation on issues that are mostly demanded by the society and that are currently not being addressed by the institutions or the market. These communities differ from each other. Some social issues are shared with other communities, but some are exclusively part of a particular inclusion. This is why social innovation focuses on adapting to local circumstances or are
they differ to other alternatives. The following model represents the process through which social innovations have to pass to guarantee a successful implementation:
Figure 5: Social Innovation implementation process
Social Innovation starts with the idea. Looking for a unmet or poorly met social need should be the initial step. The best way to explore what exactly is needed in a community is involving them in this process as mentioned. Together, ventures can design the business model. A prototype of the product or service is created and tested. Any potential weaknesses are found and eliminated so that the product is ready for launch. After the implementation of the product, the scaling process follows in which the success of the product is tested. If the product did not have any solid impact on the target, the venture can gather with the community for further improvement of the product.
4.3 The scope of Social Innovation
To better understand the scope of social innovation, I conducted a survey among the civil society to get rich information directly from the group that is being affected by social challenges. The survey showed that the top three needs of the civil society remain low employment, the education system and access to proper health. For public authorities or ventures that want to pursue social innovation, it is crucial to divide these social needs into categories to have a clear view on social challenges. Based on the survey, the following list includes the social needs that need to be addressed:
Societal trend Example Description Demography ● Migration ● Rural areas ● Only in 2014, around 100.000 people left Kosovo (Ministry of internal affairs, 2015) ● Low employment opportunities in rural areas
Environmental ● Energy production
● Unstable energy supply ● 97% of the energy is produced by fuel ● Unstable energy production leads to constant interruptions in energy supply ● Renewable energy, an unused energy production tool
Health & Education ● Access to health
● Low educational qualifications ● Weak educational system ● School absenteeism ● Health problems caused by air pollution and trash ● Kosovo ranked on the
bottom of the PISA test (PISA, 2016) ● Children in rural areas
unable to attend school
Ethical issues ● Gender inequality
● Women business owners ● Minority discrimination ● Domestic violence ● Majority of major political positions held by men
● Only 8 % of business owners are women (Färnsveden et al, 2014)
● Higher number of violence against women reported
Economical ● High unemployment
● Youth unemployment
● 40% of women unemployed in 2014
● Low economic development ● Poverty ● 60% of youth unemployed (Färnsveden et al ,2014)
● High import to export ratio
Figure 6: Social challenges in Kosovo divided into 5 categories
Figure 6 represents the most concerning social issues categorized into 5 divisions. Based on the survey conducted, the civil society considers demographic, environmental, health and education, ethical and economic issues as the most harmful. Although these social trends represent huge challenges for Kosovo, they might also inspire young entrepreneurs to work on a solution. A young generation as the Kosovar population should know that they are the one responsible for solving complex social issues. They are the one who will live under their consequences. In past years, a mindset including mostly financial incentives was created among the young generations. The civil society needs a shift in their mind-set. People need to know that they are able to work together on solutions not only because they can benefit financially from it. If getting rich represent the main incentive to start your business, I believe that you are more likely to fail. Entrepreneurship needs to be considered as a social activity more than an economic one. This idea needs to be taught in early ages so that young generations can pass it over and over. This mindset shift is crucial for the development of social innovation in Kosovo. Given the young generation and the energy and motivation that comes with it, social innovation represent a huge potentiality in the future of Kosovo. Many issues represented by the social trends mentioned above can turn into huge opportunities for new ventures in the future.
4.4 How can Policy makers foster social innovation in Kosovo
Little attention was given to social innovation by policy makers in the last years. Usually, social enterprises were initiatives by individuals that came up with an idea on how to change something in their community. Such a case is not always possible. Social enterprises often work with low revenues and need constant support to not fail. Additionally, there is no present law about social enterprises. As a young entrepreneur, this means that you cannot register your business as a
social enterprise. This legislative gap is essential since a law about social enterprises would grant certain rights for new ventures engaging in social activities. A boost from policymakers either by subsidies or rent allowances for social enterprises could also facilitate their process. However, the political gap does not represent the only obstacle towards achieving a stable chain of social enterprises. As mentioned before, the educational system also includes gaps itself. In 2016, PISA conducted a research among educational systems worldwide. Kosovo was ranked in the bottom three, At Unicef, where I conducted an interview about social innovation, I was informed that the educational system is one of the major issues why this social aspect of entrepreneurship is not being considered. The list of subjects provided in elementary and middle school does only pay little attention to educational subjects and includes more specific subjects. School are not prepared to teach their children the recent social trends. Children need to build up a certain mindset from early ages so that when they grow they will have that social consideration.
4.41 Political level
Christian Bason, the director of Mindlab, which is a Danish agency for social innovation, came up with a list on how policymakers can develop towards becoming an enable of social innovation (European Commision, 2013). The list includes the following steps:
● Shifting from random innovation to a systematic approach and an update of the public sector
● Building innovation capacity at all levels of government
● Engage in co-creation; creating new solutions with people and not just for them ● Shifting from administrating public organisations to courageously leading innovation
across and beyond the public sector.
Although the majority of social enterprises were the result of young entrepreneurs that worked independently without the interference of policy makers, this process can also shift to systematic process that is planned out by policy makers. Policy makers should shift innovation towards a systematic approach including all levels of government in the creation of innovation.
Including the community in the process is crucial since it provides feedback. The social inclusion created by entrepreneurs , communities and policy makers will result in a more effective
co-creation of new ventures. New solutions should be made together with the people and not for them. A first step would be the creation of a law that provides social enterprises with exclusive rights that could provide them with an advantage. This would push young entrepreneurs forward and facilitate their path to the final product.
4.42 The education system in Kosovo
Education and new policies are the key to the development of social innovation in
Kosovo. As mentioned, the educational system and the political gap are the main reasons for this underdevelopment of social innovation in Kosovo. Creating that social mindset should be a priority for policy makers. Changes in school programs would help children create that
awareness towards social challenges which would be passed over to other generations and future policy makers. Young generations need to understand that we are responsible for these changes and that we are the generation that will live under the consequences of social instabilities. Awareness campaign should also target young generation to foster that mind shift that is crucial for social development. An effective idea that was discussed during the process of my data collection was the idea of including more educational courses throughout the school years. Examples of these course could be Corporate Social Responsibility or Social Responsibilities Awareness. Children should be aware of social responsibility before they face multidisciplinary courses.
4.43 Supporting local entrepreneurs
As a result of the political tensions in the post-war period, many international organizations settled in Kosovo aiming to give a hand to the government to build a stable country. The UNICEF Innovation Lab is an incubator that aims to help new ventures that focus on social issues. Organizations like this are an efficient way to overcome political gaps. The idea of the project is to provide a bridge for entrepreneurs that have an idea, but not the funding to
from Kosovo. They even encourage minorities to apply with their ideas. The lab picks up 10 startups, who can work under the supervision of local experts and provides funding for the development of the product. A domestically created incubator financed by the government could be an alternative to that. Often entrepreneurs give up on ideas lacking the financial means to realize them. They need an ‘‘Injection’’ to initiate their planning process, A success story from the Unicef Innovation Lab is the mobile application called ‘‘Shnet’’. Although it was seem a little controversial by some critics given that it covers a total taboo in Kosovo, its aim is crucial to the development of the youth. Shnet is the first app that provides its services about sexual education in Kosovo. It is arguable whether an application like Shnet would have reached this high without the support it got. It is an adequate example of why young entrepreneurs need support especially if they want to tackle social needs. Another example of incubators that are currently doing great work are the Innovation Center in Kosovo (ICK) and GjirafaLab, the second being a new venture launched with the help of ICK. These two organizations have noticed the potential of the youth in Kosovo and aim to assist entrepreneurs in the development of internet economy in Kosovo. They see the internet as an efficient tool to tackle certain problems in Kosovo and make the lives of people easier.
4.5 Local social innovation potentialities
Based on the research conducted, 4 major potentialities are considered as opportunities where social innovation could improve the living standard of the Kosovar population significantly and permanently. The results presented in this section are retrieved from a series of interviews. I used the Gioia method of coding interviews in order to categorize the interviews which would make it easier for me to to build up my theory about social innovation in Kosovo (see example in the appendix) The demographic dimension that is included in figure 6 is not included in this list since issues such as the migration can be improved by any of the potentialities listed below:
● Environmental potentialities ● Economic potentialities ● Ethical potentialities
● Health and Education potentialities
4.51 Environmental potentialites
Given that 97% of the energy in Kosovo is generated by coal, the need for trending methods of energy production is high. The dependency on coal is damaging for the environment, which directly has an effect on the well-being of the civil society. Since policy makers have done little regarding this topic, it is crucial for new ventures to actively engage in preserving the well-being of the environment. Challenges like this always create the opportunity for new solutions. It is an requirement from the EU that a certain amount of the energy to be produced from renewable energy. To meet this criterion and be a potential candidate to enter the EU, Kosovo would need to shift most of its production of energy. It is a relatively new concept on which only few studies has been made so far regarding Kosovo. Few wind turbines positioned at the Goleshi Hill, only serve as a test as part of a research on local potentialities regarding wind energy in Kosovo. Given the high potential and the adequate position of Kosovo in the center of the Balkan states, the lack of interest by policy makers to foster the development of renewable energy sources is mysterious considering the ongoing trend of renewable sources as seen in figure 7. Especially wind and solar energy represent opportunities to eliminate the dependency on harming means of energy consumption. The reasons for this underdevelopment of this sector are arguable. Political struggle and the lack of appropriate research led to a situation in which the benefits of renewable energy are taken for granted. A series of mountains, constant supply of sunshine and hydropower potentialities in the Dukagjini area represent opportunities for setting renewable energy as a source to produce energy. Not only is this required by the EU and the Regional committee of energy, who demand that by 2020, the 20,20,20 condition (20 % efficiency, 20% of the energy produced by RES and 20% reduction of pollution) will apply in Kosovo, it is also an opportunity to tackle other social issues such as the unemployment rate and the general well-being of the population. Many social needs can be seen as a chain that correlate with each other. Fostering the development of renewable energy could create new jobs, which in the long run could affect the economic development of Kosovo and so on. Although it represent a hurdle at first, given the high investments, it is an investment with a guaranteed return. Policy makers could boost new
ventures by tax allowances, subsidies or a ‘‘One stop shop ’’ that would regulate all legislative issues in one place. Renewable energy sources are a recent trend in Kosovo. This makes it riskier for new ventures to invest in such a trend. The support from policy makers is crucial. A young generation of entrepreneurs that are aware of the positive effects of renewable energy will need constant support be that financially or in other forms.
Figure 7: Most trending energy production sources in Europe (Eurostat)
4.52 Economic potentialities
As mentioned above, some dimensions or social trends are correlated with each other. As economic issues, unemployment and poverty represent major social challenges where many opportunities lie for social entrepreneurs. According to the World Bank, 30% of the population lived in poverty in Kosovo by 2011. Compared to 2014, the GDP dropped from 7.3 billion to 6.4 billion in 2015 (World Bank). These statistics may explain the migration period in 2014 reported by the Ministry of Internal Affairs previously. There is a 7 to 1 ratio between imports and exports which represent a high deficit that is harmful for the economy of Kosovo. These numbers do not promise an attractive future, especially for the younger generations.
New ventures prefer to start trading with domestic partners. However, in a small country, there is a small market. During this trading activity, domestic businesses seek for financial stability and establishing their brand in the market. Nevertheless, trading partners beyond the
borders are crucial towards achieving an economic growth since the demand in Kosovo is not high enough. Revenues generated from such an activity could be used for further development. New clients would mean new jobs and would foster the company’s ability to innovate. With a small market, where the demand is insufficient to achieve high economic growth, it is a hurdle for Kosovar companies to create a comparative advantage towards foreign competitors. This however is crucial since it would improve once reputation abroad which would facilitate consumer attraction. First, it is important to educate young entrepreneurs on the importance of international trade. Once they are aware that the local market is not sufficient, further steps need to be taken. The government plays an influential role. Unifying import and export regulations would facilitate the process by which companies would market products in foreign markets. Mistrust is a huge problem for Kosovar companies. The reputation of Kosovo has not been improved much since the declaration of independence in 2008. Foreign markets often don't trust companies that are created in an unstable market. Exposing domestic companies to foreign markets is crucial. Policy makers can do so by financing all kind of fairs abroad, where domestic producers could advertise their products or services. The low labor costs represent a high
advantage against foreign companies in developed countries, which should also be used as an advantage to foster business development. This would shrink the export to import deficit, create new jobs, which would yield a higher GDP and more money to invest on the well-being of citizens.
It is an increasing trend in many countries that people move towards urbanized areas hoping for a better connection to the labor market. Unfortunately, the majority of population that live in poverty come from rural areas, which do not provide enough potentialities. Urbanized areas simply promise a higher standard of living. Communication and interaction with urbanized areas provides an additional disadvantage for rural areas. However, to tackle poverty and
unemployment it is crucial to stop this trend. Given that the majority of unemployed people come from villages or small cities that are further away from major cities, it is important to tackle these social issues in their roots. To foster economic development in rural areas, policy makers need to encourage rural entrepreneurs to shift their activity to rural areas instead of migrating to urbanized areas. A constant supply of energy, which is not necessarily constantly
available, is a necessity. Proper communication and interactions with authorities and institutions should be guaranteed. If policy makers would convince rural entrepreneurs or even entrepreneurs to invest in rural areas because of more affordable tax rates or land rent, this would boost up the economy in rural areas by creating new job opportunities and tackling two major social issues, unemployment and poverty.
4.53 Ethical potentialities
When we talk about ethical issues, we have to mention the mindset of the population as the major cause of social challenges such as gender inequality, minority isolation, sexual education or domestic violence. Ethical issues are more a problem of mentality rather than a legislative issues. According to the law, everyone should be treated equally. However, cultural issues have created that mindset that does not necessarily adapt to the law. Children grow up in a society where women have difficulties entering the labor market or starting their own business. To change this, people need that mindset shift and be aware that through gender equality or the inclusion of minorities in their society, they entire country will benefit, including the civil society. In a young population, where technology is an increasing trend, social needs can efficiently be tackled by using technical tools to spread awareness towards ethical issues. With the use of the internet, new ventures can spread their applications easier, more efficiently and reach a higher number of people as ever before. As mentioned before, the Unicef Innovation lab is doing an outstanding job to build that bridge for young entrepreneurs that have the ideas, but do not have the means to realize them. Social enterprises aim to address areas such as sexual education or minority inclusion by providing services that spread awareness. A success story from Kosovo is the new venture called ‘‘Dekorime nga dora ime’’, which translated to english would mean ‘‘decorations from my own hand’’. The message that this startup tries to convey is that every citizen needs to be treated equally and be included in activities regardless their background. This venture educates orphans on how to build decorations from things that we do not necessarily use. They give orphans an opportunity to do something productive, engage in teamwork, and maybe earn a little profit at the end of the day. Decorations are not the crucial thing about this. The message that this startups is trying to transmit to the rest is.
The patriarchal system in Kosovo has fostered the creation of space for sexism in family and decision-making processes, where women are often considered as objects with no real power. A movement called ‘‘youth for equality’’ aims to organize trainings across Kosovo that include various activities in the hope to spread awareness for gender equality in Kosovo. The goal is to eliminate that thought that women should only be considered as secondary actors in our society. Another example worth mentioning is ‘‘Bonevet’’, meaning ‘‘do it yourself’’. It is the first Makerspace in the Balkans, a place where people gather to learn, create, bring their ideas to life, share resources and knowledge, work on projects, network and build. Each one of these activities involves 50% girls and 50% boys. This project tries to establish the awareness of ethical issues in the mind of young children. They involve children from any ethnicity, race or religion and promote a fair distribution between boys and girls. Initiatives like Bonevet and Dekorime nga dora ime are the most efficient tool to gradually reach that mindshift and spread awareness for social needs. It is important to push future entrepreneurs to follow a similar path. With the use of the internet, it has become even easier to reach a certain audience and with a little help by policy makers or incubators like Unicef, it has become even easier to establish a social enterprise.
4.54 Health & Education
Health and education have been controversial topics in the recent years. Health as a significant part of the well-being of the civil society is suffering from factors such as
environmental pollution coming from the energy production and the dumping of trash. I have talked about health being affected by primitive means of energy production. Another factor affecting health seriously is a poor waste management system in Kosovo. Dumping waste in inappropriate areas caused air and environment pollution that directly affects health. Given that people will constantly produce waste, Kosovo needs a systematic approach on waste
management. This allows new ventures to create new solutions that could improve the
management of waste in Kosovo. The problem with waste is also more a problem of the mindset of citizens. Although there are companies contracted by the municipalities that are capable of cleaning areas within their cities, people still produce waste by not eliminating it properly and
creating more pollution in their neighborhoods. New ventures could implement a new recycling system that would be easy to follow by ordinary people. Dividing trash cans into different colours would divide waste in a form that makes it easier to recycle. This would make it easier for recycling firms that receive only their type of trash. Making it easier for people to recycle will make them follow this division of waste. This would create clean neighborhoods by
eliminating gatherings of trash that transmit all kind of diseases. ‘‘Meso dhe reciklo’’, meaning learn & recycle, is a new venture that aims to address this topic. It spreads awareness for a proper waste management and pushes people to eliminate their trash in a proper way. They try to
implement the division of cans starting from public schools and further. This would teach young students the importance of proper waste management and its effect on preserving a clean and healthy environment.
I will not spend too much time on the effect of social innovation on education. I have mentioned the problem of the education system in Kosovo and potential ideas to improve it. I have mentioned that civil society needs a mindset that recognizes the importance of tackling social needs within their community. This could be achieved starting from early age education in school or through new ventures such as Shnet that provides young men and women with
important information regarding sexual education. I believe that education is one of the most important areas that need to be tackled since it creates that mindset that will follow young entrepreneurs throughout their entrepreneurial career. This mindset will potentially tackle all kind of social needs be that economic, environmental or ethical needs.
5.0 Discussion
This research provides practical and theoretical insights on how social innovation could be used as an effective tool to tackle social needs within a community and beyond. Most of the theory was built from a single case that included interviews with experts on the field of social entrepreneurship. Given the explorative nature of the study, only little was based on existing theory. I have discussed the reasons for the underdevelopment of social innovation in Kosovo, their benefits and the steps policy makers or new ventures need to take to implement them.
5.1 Theoretical Contribution
This research agrees to previous studies from Social innovation can tackle social needs like gender inequality or minority discrimination. It needs to produce a permanent social change and need an act of heroic entrepreneurs that approach those needs in a country where the social aspect of entrepreneurship only receives little attention. This research will enrich the theory on social innovation in developing country and can be used as a template for further in depth studies about them. This research provides more insights on the potential of social innovation in
developing countries and ways on how policy makers and new ventures could foster its development.
The main theoretical contribution are the findings that social innovation could especially target gender inequality, minority inclusion, the inclusion of orphans in the society and have positive effects on the societies health by reducing the environmental pollution. It is also an effective means to reduce unemployment and poverty, which would boost up the economic growth. These research will help future researchers build their theory on more detailed case studies that could transform this theory into accurate numbers, which would allow us to have a more accurate view on the benefits of social innovation in Kosovo.
5.2 Practical contribution
Besides its theoretical relevance, this study may find its application practically as well. Political gaps and an improper educational system were mentioned as the main reasons for the weak recognition of social innovation in Kosovo. This research aims to spread awareness towards the benefits of social innovation in a socially and economically unstable country. The main practical contribution is that this research could serve as a basement for policy makers to shift their attention to social needs. This could contribute to changes in the educational system, which should aim to address social needs as early as possible. It could initiate a more supportive approach by the government that would assists young entrepreneurs in the creation of their ventures either financially or by other means as tax allowances, supervision or promotion. Additionally, this research could also motivate other young entrepreneurs to engage in social
entrepreneurship and do something for the greater good. It could help entrepreneurs define a certain social need in their community and inspire them to approach a social oriented path.
5.3 Limitations and potentialities for further studies
Although this research came out with enriching information that include both theoretical and practical contributions, it encountered limitations and implications. I believe that the main drawback of this research is that it only provides theoretical suggestions about certain social issues. However, this was expected given the lack of previous data about social innovation in Kosovo. The presence of numerical data would have contributed to a more in-depth study of the impact of social innovation in Kosovo. It would have provided us with proof of the benefits of social innovation for the civil society. Since the research was explorative, following a qualitative approach, it was not possible to gather numerical data, simply because social innovation is a recent topic in the discourse of entrepreneurship in Kosovo.
However, every implication provides us with an opportunity for the future. For future researchers, I would suggest following a study that would follow a quantitative approach. Once these new ventures get rolling, the will produce a certain results, which could be either measured by the number of employed people, employed women or minority or the number of women business owners. A study that would provide us with numerical proof, would provide more evidence on the impact of social innovation in Kosovo. This could additionally inspire policy makers further, which could shift even more attention to the development of social enterprises in Kosovo.
6.0 Conclusion
The aim of this qualitative study was to explain the potentialities of social innovation in a developing country such as Kosovo. The reason for following a qualitative approach was the explorative nature of the research, which aimed to collect first hand data from interview
participants that are being actively involved in the field of social entrepreneurship in Kosovo. In a Post-war country such as Kosovo, entrepreneurship was often seen as a catalysator to
little attention was paid to its potential to tackle social needs by young entrepreneurs that engage in creating social enterprises. The purpose of this study is to spread awareness on the effect of social innovation on social challenges harmful for the civil society. Given that the research focuses on the well-being of the civil society, the research included a survey so that I could gather information directly from the targeted group. Using this data, I directed the focus in the interviews on the major social needs of the society. I used Gioia’s methodology for the
construction of the research and for the structure of the interviews. Given the richness of the interview participants, I decided to use a single case that included 5 interviews. To make it easier to retrieve the information of them, I coded the material based on Gioia’s coding structure.
The research grouped 5 social trends among the most controversial challenges in Kosovo. This list include environmental, economic, ethical, demographic and health & education issues. Social innovations should be ethical, creative and create a permanent change in the community. The community should be included in the social inclusion of social enterprises to guarantee crucial feedback helpful for the development of the product or service. New solutions should be developed with people and not for them. Two factors that contributed to the underdevelopment of social innovation were the educational system that not always aims to address social needs and the neglecting policies by the government. Given the political instabilities that also lead to a weak educational system, new ventures could avoid challenges with the help of incubators that build a bridge for young entrepreneurs with new solutions for social issues.
The research suggests that through social innovation, major social needs can be tackled. New ventures can either directly improve a social challenge in Kosovo or could spread enough attention to initiate a shift in the mindset of the community towards more socially-oriented activities. The results show that issues such as gender inequality, environmental pollution, education, poverty, unemployment, minority discrimination and domestic violence are in the scope of social enterprises in Kosovo. Different from other local potentialities such as tourism or agriculture, social innovation directly tackles social issues. Many success stories have shown that through the development of social media and the internet, it has become easier to spread certain messages and target the right group of people. With a young population, many creative and
talented young entrepreneurs that are supported by policy makers and different incubator programs, social needs could be tackled effectively and be eliminated from the communities.
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