An emerging product innovation paradigm in innovative social enterprises

Abstract

Technology-based social enterprises provide products or services developed with technology resources to the people under poverty line, creating both economic profits and social benefits. Since the enterprises have relatively small technology resources and eco-nomic funding compared to for-profit companies, they must secure innovative competences that allow them to remain sustainable in the market. Also these enterprises have distinct characteristics of product innovation due to targeting absolutely poverty stratum as custom-ers who have been ignored by existing companies until now. Therefore the purpose of this research paper is to define a new paradigm of product innovation in technology-based social enterprises and draw strategic propositions for product innovation including successful product development. To achieve these goals, we conduct a multi-case study through sec-ondary sources and interviews with CEOs from technology-based social enterprise. Then, we verify effectiveness of the derived propositions on innovation performance and firm per-formance by using survey data and structural equation modeling. According to the results, the propositions for product development have positive relationship with innovation per-formance and the innovation performance has also positive relationship with firm perfor-mance. This research will contribute towards future empirical studies on success factors of social enterprises and the derived propositions will help to guideline social entrepreneurs in planning their innovation strategy and developing their products or services.