As a result of both the financial crisis and a change in demographics, there is an increased pressure
on public spending in the public sector in Denmark. It is facing a series of issues on how to meet the
consistent, and in many cases, growing expectations for welfare services with fewer financial
resources.
Innovation in the public sector and the potential for delivering more welfare for less money through
this has caught the eye of the Danish government. In Globaliseringsreformen (regeringen; 2006), it
was stated that ‘the public sector should aim at being amongst the most innovative in the world’.
A number of international researchers and innovation funds have taken the notion of an innovative
public sector beyond the traditional borders of the public sector, and have highlighted how there is
innovation potential for the public sector in building new partnerships with individual and
organized users. The reason for this is the unique insight these users have into the social economy,
in particular unmet social needs in society, combined with a flexibility to innovate around these.
This type of innovation is labelled social innovation. Initial research for this masters thesis showed
that very little has been written on the term social innovation, which has laid the foundation for the
first and main part of the thesis: to understand and define social innovation in a Danish context.
The thesis has sought to do this by drawing on existing, and primarily international research, to
define what social innovation is, and by developing a set of principles for what good social
innovation is, how it can be understood. To understand what social innovation means in practice,
the thesis’ second part takes a step down the abstraction ladder and seeks to understand social
innovation in a public sector context. This is done through interviews with four chief executives of
local authorities in the northern region of Denmark.
The main findings in the theoretical work are that the primary resources for social innovation are
the social innovator’s insight into resources in the social economy. They harvest these resources by
constantly expanding their networks in the social economy, and by putting a focus on social value
rather than profit. For the public sector a systematic approach to this means opening up public
organizations so that users can modify and adapt public services based on their specific social
needs, as well as public procurement processes that include social entrepreneurs and the services
and social values they can create.
Research into local authorities showed that none of them work systematically with social
innovation. This was due to a lack of willingness to take risks, insufficient cross-sectoral
cooperation, and a perception amongst the chief execs that a culture where stakeholders interact
with public services and seek to co-design these does not exist at present in Denmark.