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LUISS Guido Carli

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The role of large companies in social innovation

Professor Caroli comments on the latest LUISS CERIIS report

The LUISS International Center for Research on Social Innovation has published the Third CERIIS Report, this year dedicated to innovation of leading companies to create social innovation
With support from Italia Camp Foundation and directed by Professor Matteo Caroli, instructor in Economics and Business Management, CERIIS has dedicated the report to large companies’ commitment to innovation, sustainability and the creation of a system for social companies.

Matteo Caroli LUISS CERIIS

“Large companies are more committed than ever to sustainability and the social impact of their work,” explains Professor Caroli. “Through an empirical study of thirteen Italian cases on different sectors, the report explores the way that innovation in sustainability policy pushes large companies into the spotlight of social innovation. Innovation in sustainability also regards interaction with stakeholders: our study proves that stakeholder engagement, involving all actors in a company’s decision-making process, helps to resolve and improve social and environmental issues while still respecting business objectives. Our research tells us that there have been good experiences and that there is currently a positive trend.”

The goal of the research is not only to monitor activities of large companies but to stimulate their potential. “Even small companies may be equally innovative, but the most important technological revolutions occur in companies where large dimensions require strict technological standards. Social innovation caused by large companies are more able to determine positive structural changes in both sustainable technologies and the relationship with other actors within the community. Contributions to the report from entrepreneurs provide different models, but with a clear, shared awareness that social innovation now counts just as much as technological innovation. This idea widens the spectrum of innovation: from technological innovation to business model innovation, today the concept completely embraces social innovation.”

Rapporto LUISS CERIIS

The research confirms that the practices are highly characterized by the type of business, the production process and the market environment in which a company operates. "Businesses using circular economy principles are increasingly common, maximizing the use of materials through reuse and recycling. Innovation of this type aims not only to improve the perceived quality of product and business but also to improved social behavior and the creation of very large contexts that can generate large-scale economies. The push that comes from international ethical investors is getting stronger and this, in addition to a new way of conceiving stakeholder engagement, involves innovation in the composition of governance, directly influencing top management."

Each year, the CERIIS report monitors the level of social innovation in businesses using a case database of companies that propose models or activities of an ethical and sustainable nature. "This year’s report monitors 578 cases. An interesting fact is that a very large majority of the case cases exploit different approaches to the sharing economy, and we have identified three levels: nonprofit initiatives aimed at creating economic value with positive externalities (such as car sharing) and a mix of nonprofit and business. The latter category is the most widespread (67%) and brings together innovative initiatives with crowdfunding and microcredit, smart working and co-working.”

The research center will continue its monitoring work and is already working on the focus of the next edition of the report. "The contribution of LUISS CERIIS is among the most important in the debate on sustainability and social innovation", concludes Professor Caroli. “It is part of a broader strategy shared by the university. The next report will continue discussing the role of large companies and will launch research on the impact of stakeholder engagement and the factors that determine the strength of the impact."