As welfare states in Europe today are not only challenged by the need to restructure social costs, but also by the growing needs that are not adequately addressed by current social programmes, social innovation has become an important concept in research and policy making alike. It is linked to discussions of the transition from social welfare towards the “enabling state”, to citizen activation and participation or concepts of a “social investment state”. Civil society, third sector organizations, mutuals, cooperatives, and social enterprises are moving into focus as important sources of innovation to further labour market integration, to combat social exclusion and poverty, to create social capital, and develope new services and ways to address unmet social needs.
This paper, prepared by the TSI research team from the Institute of Social Policy at the University of Zagreb in Croatia, examines the status of social innovation research, the notion and scope of impact produced by innovation, as well as the limitations of impact measurement. The first part examines the concept of social innovation, its meaning and characteristics. The second part reviews the status of knowledge and previous research about third sector impact at micro (impact on citizens and users), meso (impact on community and organizations) and the macro levels (impact on society at large). Finally, the paper discusses methodological challenges in impact measurement and the way forward in developing and measuring social innovations for a potential positive impact on the socio-economic development of Europe.