Developing New Ventures and Markets for Social Innovations

Abstract

“Doing good while doing well” has gained significant attention among management and strategy scholars. However, social ventures and markets that provide social innovations in developing countries face challenges in achieving widespread adoption and sustained growth. This dissertation asks three research questions: Why do social ventures and markets for social innovations frequently struggle or experience slow growth? What strategies can be implemented to overcome barriers and foster sustained growth for these ventures and markets? What are the characteristics of sustained growth concerning the actors involved, the promoted social innovations, and the on-ground impact?

To answer these questions, I conducted three studies that focus on the relationships between social ventures and key resource providers. The first study explores the role of social impact framing in persuading potential partners, such as retailers, to collaborate in providing social innovations. Findings from an online experiment and a lab-in-the-field experiment with an India-based social venture, along with surveys and interviews, reveal that the effectiveness of social framing depends on the stakeholders' expertise and the presentation of conflicting information that challenges their mental models. A framework called "expertise-based skepticism" is proposed to explain the conditions under which social impact framing can be persuasive to stakeholders.

The second study examines the relationship between social ventures and potential funders, particularly the discrepancy in early-stage funding received by expatriate social entrepreneurs compared to local entrepreneurs. Focusing on the emerging clean cooking industry in East Africa, where social innovations like smoke-reducing cookstoves and fuels address health, environmental, and gender equality issues, the study reveals that local entrepreneurs are strongly influenced by the clean cooking development sector, which affects their technological choices, business models, and support received. Consequently, they may appear less attractive to market-building actors and funders. However, I argue that these perceived development-related liabilities can be leveraged into strategies of persistence for local entrepreneurs, highlighting the need to explore alternative forms of scaling social innovations.

The third study examines the impact of knowledge intermediaries on entrepreneurial entry into nascent industries across multiple countries. I analyze 113 country-level industries in the clean cookstoves sector from 2013 to 2019. The findings reveal a positive association between entrepreneurial entry and the presence of organizations operating in countries where knowledge intermediaries are active. I propose a two-stage model of knowledge development and transfer. First, a first-order knowledge intermediary develops industry knowledge by engaging with industry actors, who acquire knowledge and know-how. Second, these industry actors transfer their expertise to countries lacking first-order intermediaries, becoming second-order knowledge intermediaries and expanding the industry knowledge base in those countries. The study further highlights that the effectiveness of second-order knowledge intermediaries depends on the number of countries they operate in, their industry role, the presence of local actors with relevant knowledge, and the culture of the recipient countries.

Through this dissertation, I recognize the potential for social ventures and markets offering social innovations to generate positive health, environmental, and social impacts. Meanwhile, I also recognize the challenges faced by social ventures and markets, and I provide strategies for addressing them. Finally, through this dissertation, I call upon scholars, practitioners, social entrepreneurs, and supporting organizations to continue exploring innovative approaches that acknowledge and manage the inherent tensions between sustainable development and business, thereby driving genuine and sustained positive change.