Over the past few years, there has been a growing interest on the part of the scientific community (and, more recently, of policy makers) in the concept of social innovation. The notion of social innovation is particularly appealing in light of the difficulties facing traditional welfare systems and, more broadly, a development model essentially based on only two actors (the market and the state) that is finding it increasingly difficult to meet the growing and diversified needs of society. However, the uses and definitions of the concept are so disparate that it is becoming increasingly difficult to assess whether social innovation is in fact a helpful construct or just another fad that will soon be forgotten. This paper focuses in particular on the usefulness of the concept of social innovation for the purposes of policy development. Therefore, the goal is not to find the “true” definition of social innovation. Rather, it is to search for a useful framework on which to build sound policies that could tackle the complex social issues that have caused scholars and practitioners to pay attention to social innovation in the first place. Building on a review of the literature, and in particular on a paper by Eduardo Pol and Simon Ville, we propose an approach that recognizes a degree of overlap between social innovation and business innovation, and argue that social innovation policy should focus on the subset of social innovation that does not overlap with business innovation. This is due to the fact that social innovations that overlap with business innovations tend to be profitable, and as such the market is amply equipped to supply them, perhaps with the support of existing business innovation policies. “Pure” social innovations, on the other hand, are not driven by a profit motive, and thus need either to be subsidized or to be developed by enterprise types that are not motivated by profit maximization. Indeed, by focusing on the characteristics of different enterprise types we find that not-for-profit enterprises with an explicit social mission are ideally suited to develop pure social innovation, even in the absence of public sector intervention. The paper then concludes that targeted policies should be more mindful of the role of different types of enterprise in generating social innovation, and, more broadly, that the debate on social innovation should be more closely aligned with the debate on the pluralism of enterprise forms
