Social Innovation in Germany

Many people have heard about the German social and financial system and, perhaps, have heard that it is a “social market economy”. The German welfare state is predominantly built on social insurance systems. Broadly, Germans see their economy as a social market economy—that is, one that combines a capitalist mode of production with the belief that society should protect all of its members from economic and social need.

While this is interesting in itself, this structure and general outlook also has an influence on the environment for social innovation.

What is social innovation?

The definition of social innovation continues to evolve in Germany. Here is one definition:

Social innovation is a systematic solution to a social problem wherein the success factor is the social change—financial sustainability is desired, profit however is not the main aim.

–Norbert Kunz, a German social entrepreneur.

Clearly, social innovation can mean different things to different people, as well as in different contexts. As such, social innovation may mean something very different in Germany compared with Australia.

To provide some context of the German experience, here is a summary of comments made by two social entrepreneurs from Germany in 2011:

“Historically, German innovation has been attached to Germany’s system of industrial relationships. If this social partnership stood as a specific strength for Germany into the 1990s, it stands today as a central problem for its lack of flexibility. Policy makers have consistently looked at social change in connection with technological innovation and technological research through the paradigm of a social-technical system, not from the perspective of an independent type of innovation”

— Tuyet Ngo (Young Foundation) and Norbert Kunz (Social Impact).

However, as already mentioned, the field is constantly evolving and in 2016 Ngo and Kunz updated the profile on social innovation in Germany (noting certain advancements):

“A first success on the political level was the incorporation of the importance of social innovation in the most recent coalition agreement between the two governing parties in 2013. In 2015, the Federal Ministry for Economic Affairs and Energy recognized the needs for special support and frameworks for social innovation; and published a study on the challenges of founding and scaling social enterprises.”

The funding of social innovation is an issue that depends on the stage of development of a given project. There are many new organisations that fund ideas and projects in social innovation, including BonVenture, Ananda and FASE.

Funded projects include those providing solutions to challenges created by demographic change and the integration of migrants, as well as those which explore the opportunities created by intercultural dialogue, future civil society and environmental protection.

Nonetheless, Germany like many other societies faces a financing gap with many social innovations.

For more information on this developing, dynamic and important subject, read the full country profile (note, this is a PDF link).

Photo credit: “”. Material used in the preparation of this article has been drawn from European Commission – Social Innovation Europe.

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