Social innovation: can it be a strategy for influencing GCC public welfare?

Author:Alsudairi, Mohammed A.T.
Position::Gulf Cooperation Council
 
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The current period constitutes a critical juncture for the joint action initiated by the GCC States, because the current period is characterized by challenges and new developments, which have to be addressed based on a vision and thought different from those prevailing at the beginning of the second half of the 20th century. Therefore, there is an urgent pressing need for the GCC States to reconsider all available opportunities and restraints imposed upon them, as well as the challenges facing them building order, to be able to draw up new trends toward the future that cope with the hopes and aspirations of their people looking forward to a better tomorrow for their generations. It is required to be done in order to develop better development plans so as to facilitate the movement toward the goals and objectives laid down for the early decades of the 21st century (EACID, 2011).

Some of the objectives of GCC are:

* achieving economic and social development

* value based capacity building Share in cultural heritage, resources and environment

* healthy competition and integration

* sustainable development, ensuring adequate water resources

* integrated economic partnership and enhancing and reinforcing intra-GCC trade.

AIM OF THIS RESEARCH

The aim of this research is to discuss the innovation perspective and its significance toward building business models as well as bringing the social innovation concept awareness, in order to address (if not all) most of the GCC objectives listed above toward focusing on public welfare.

INNOVATION AND NEED OF NEW BUSINESS MODELS

The decision on infrastructure investment in a certain regions is a complex task especially when the public financial resources are scarce. It is often necessary to determine whether a project or a public scheme can create enough revenue to pay off loans or is able to produce financial benefits to attract private investors. Moreover, economic growth is dependent on strategic market location, local economies and political and regulatory environment. Territorial Engineering is an innovative concept especially in countries like Canada, Europe etc. where the role of Territorial Engineering does not only define the rules and techniques for developing territorial programs but also involves analyzing and designing the procedures for program and project management, financial engineering management, legal management, consensus building and knowledge management (Guilherme de Aragao, Nascimento and Chaim, 2010). The Territorial Engineering operation is based on public private partnership principles and with the motivation of innovation.

Hybridity (such as public and private partnership) is their essential characteristic, and it fulfills an indispensable role. An approach is developed that does not rest on classification of distinctions by sectors or profit orientation. A generic structure of social entrepreneurship can be proposed which in turn is founded upon enterprise ontology (AlSudairi & Vasista, 2012a). Through various combinations between the components (among which are mission such as value creation and addition, target population such as people of the nation, and knowledge on markets), various types of business models can be distinguished. At an emergent functional level, these design configurations allow for a typological (taxonomy based) distinction between various types of strategy (Grassl, 2012).

The capacity of a firm (or nation) to capture value will be deeply compromised unless the capacity exists to create new business models (Teece, 2010). Because companies commercialize new ideas and technologies through their business model. The widespread commercialization or 'marketization' can become a dominant force in shaping the both social and economic life through business and non-profit sectors (Young & Salamon, 2002). Social enterprises with technological innovation often needs to be matched with business model innovation if the innovator is to capture socio economic value. Sometimes the creation of new business models leads to the creation of new industries. Companies should be seeking and considering improvements to business models, particularly difficult to imitate improvements that add value for customers, at all times. Changing the firm's business model literally involves changing the paradigm by which it goes to market, and inertia is likely to be considerable (Teece, 2010).

How to capture value from innovation and generate corresponding activities simultaneously is a key element of business model design (AlSudairi & Vasista, 2012a). Designing a new business model requires creativity, insight, and a good deal of customer, competitor and supplier information and intelligence (AlSudairi & Vasista, 2012b; Teece, 2010).

Technological change often provides the impetus for new and better ways to satisfy customer needs. The invention of new business models can originate from many potential sources. What business models pioneers often possess or develop, is an understanding of some 'deep truth about the fundamental needs of consumers and how competitors are or are not satisfying those needs. Though technological innovation by itself does not automatically guarantee business or economic success, it is possible profiting from innovation by combining commercialization strategy. Good business model design and implementation, coupled with careful strategic analysis, are necessary for technological innovation and to succeed commercially (Teece, 2010).

Investment in scientific research is an example of what economists call 'public goods'; a circumstance in which the economic activity in question generates positive externalities or 'spill-overs.' As there is no good (private) business model that can support value capture, government funding and/or philanthropy is required and provided (Teece, 2010). The Energy Innovation Case Study by OECD done in Italy (Tampone, n.d.) highlighted the importance of Innovation where it is mentioned that innovation can be fostered by research activities, consortia, joint ventures, Joint participation in governmental, national, regional, local and Territorial Public Programs and agreements on specific aspects of the technology where government funds and public and/or private research organizations carry out the activities. Usually activities are balanced and each partner bears its own costs. Results are shared according to the percentage of activity of each partner in the total program. The contribution toward working on determining economic and environmental factors, influencing the national goal of public welfare in terms of government policies and environment protection, is done through knowledge management activities by such research and development organizations (Tampone, n.d.).

Viewed in this way, the concept of the 'business model' can be integrated into almost a century of economic thought about the design of institutions and the role of enterprise and government in civil society. For example technology innovation can better facilitate the proper 'marketing' of new technology by bundled provision of complementary products and services is often necessary, not just to help capture value, but to help create it in the first place (Teece, 2010).

Looking to the future, it looks like individual buyer-seller relationships (Wilson, 1995) are becoming part of new business model in order to better address the competitive advantage challenges for which what we call 'design innovation' needs to be initiated. Although the modern theory of innovation in economics has begun to refer to the practical relationship between design and innovation, the role of design in innovation process is required to be emphasized (Mutlu & Er, 2003). It is believed that this kind of design innovation will have the capability to provide the basic tools to achieve insight on general equilibrium strategy through balancing the operational and transactional analysis and optimization but more as a result of social interactions happening through digital means during 21st century...

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