Creating an enabling institutional environment for social innovation via public policy tools: An explorative study in Hong Kong

Abstract

There is increasing recognition across the globe for the need of innovative ideas in creating social, economic, and environmental values to resolve complex societal problems. Creating an enabling environment via various strategies has thus become a public policy imperative for many governments. To date, a common public policy tool aimed to facilitate social innovation is the establishment of public funds. Public funds are typically used as policy instruments to incentivize prospective innovators to develop socially innovative ideas and to provide vital resources for them to kick-start and scale their work. While emergent research has found that public funds can considerably facilitate the creation of socially innovative projects, these studies are typically conducted in the West, where institutional environments differ remarkably from that of East Asian societies. Given that all socially innovative projects are embedded in specific contexts, there is surprisingly few studies that examine how the value creation process may be affected by both formal regulations and informal norms within their institutional environment, and by extension, how such environment may influence the effectiveness of policies that aim to facilitate the social innovation process. The present study addresses these research gaps by drawing from the perspectives of social innovators in Hong Kong. We conducted in-depth interviews with 18 social innovators who were recipients of the Social Innovation and Entrepreneurship Development Fund, an unprecedentedly large-scale public fund that aimed to catalyze social innovation via business solutions. We elicited participants’ views on the challenges encountered during their value creation process from an institutional perspective. Data was analyzed by thematic analysis Our findings identified several formal and informal institutional aspects that have adversely affected the value creation process. This study contributes to international literature on how public policy can create a more facilitate environment to drive social innovation, and at the same time, illustrate how despite good policy intentions, informal norms and regulations may erode the effectiveness of such policies.