The relationship between productivity and social innovation means we can build a better future together, without the need to compromise the increase in living standards that comes from economic growth.
Productivity has long been viewed as the holy grail of economic growth. From the Industrial Revolution to the digital age, countries and companies have strived to produce more with fewer resources, boosting wealth and living standards in the process.
Yet, in recent years, a growing number of researchers, policymakers, and entrepreneurs have started to question the narrow focus and global obsession with economic growth.
They argue that while traditional productivity is important, it does not capture the full spectrum of value that modern societies need.
So the focus is shifting towards social innovation—a powerful new approach that seeks to address complex societal challenges in inclusive, and sustainable ways.
By redefining what we produce and how we produce it, social innovation can enhance productivity in ways that are both economically and socially meaningful. What are often seen as competing priorities can be redefined as a reciprocal relationship that holds the potential to transform communities and reshape economies for the better.
Higher productivity can release the resources and make new capabilities available to support bold social initiatives.
So let’s look at redefining productivity from a Social Innovation Perspective
Traditionally, productivity is measured as output per unit of input—such as the amount of goods produced per hour of labour.
This metric works well in processing goods, manufacturing and agriculture since outputs are tangible and easily quantified.
However, in an increasingly knowledge-based and service-oriented economy, focusing purely on quantitative productivity measures will miss critical aspects of value creation.
For example, a healthcare worker spending extra time with a patient might seem "less productive" by traditional measures – such as hours per consultation - yet the different interaction created from a longer appointment could lead to better health outcomes and lower costs in the long run.
Similarly, teachers who spend more time investing in building strong relationships with students – not just a taught curriculum based on lesson hours - may see those students achieve greater educational success. This may not mean more hours in the teaching environment – it may mean creating a trade-off between different types of study that leads to better outcomes for students and society.
Looking at social innovation challenges us to broaden our understanding of productivity. It emphasises outcomes like social well-being, environmental sustainability, and community cohesion as equally important indicators of a productive society.
These may be hard to quantify in a business case – not everything has a financial value – they must be considered in some way.
So let’s look at social innovation as a Catalyst for Change
Social innovation refers to new strategies, concepts, and the implementation of ideas that create value by meeting social needs or forming new social relationships or collaborations.
These may be local initiatives—such as community-owned renewable energy projects—to large-scale interventions like digital health platforms connecting underserved populations to medical care.
A classic example of social innovation is microfinance where small loans are provided to people - typically in low-income or marginalised populations - to help them become self-sufficient or set up a business.
Pioneered by Muhammad Yunus - who founded the Grameen Bank of Bangladesh in 1976 - microfinance has provided small loans to entrepreneurs who had no access to traditional banking in developing countries. By empowering marginalized communities, this financing innovation not only improved local productivity through small investments, but the outcomes also lifted millions out of poverty.
Social innovation has also been central to the rise of the circular economy, where waste is minimized and resources are preserved in a closed loop through reuse, repair, refurbishment, or recycling.
Rather than make-buy-dispose, the circular economy means waste and pollution are minimised, products and materials retain their value, and there is a shift from extracting nature’s declining capital to regeneration through reuse of what has already been taken from nature’s reserves.
Businesses adopting circular models often see increased productivity compared to new manufacture through reduced production costs. Labour and materials input costs are lowered to deliver the same outputs - and purpose-based customer loyalty can lead to growth by displacing more resource-consuming products.
The Symbiotic Relationship
The relationship between productivity and social innovation is symbiotic.
On one hand, social innovations can directly improve productivity by unlocking untapped and underutilised potential in communities. For instance, initiatives that promote mental health in the workplace reduce absenteeism and increase employee engagement, leading to improvements in organizational performance.
On the other hand, increases in productivity can create the economic surplus needed to invest in social innovations. In countries where productivity growth has fuelled prosperity. Governments are more able to fund education, public health, and environmental programs, and circular economy models can attract private investment.
Most importantly, social innovation encourages organizations to think holistically about productivity—not just in financial terms, but in terms of human and environmental impact.
Technology as an Enabler
Technology plays a crucial role in bridging productivity and social innovation. Digital platforms, artificial intelligence, and data analytics enable organizations to deliver social services more effectively and at scale.
For example, telemedicine platforms have improved productivity in healthcare by allowing doctors to treat more patients – which has been an important feature in increasing access to health advice and treatments for people in rural or underserved areas. Telemedicine can deliver better outcomes for lower input costs.
Similarly, online learning tools can extend educational opportunities to millions by overcoming geographical isolation, marginalisation, and lack of information. The reuse of educational collateral – tutorials, videos, reading material – can easily be scaled up at little cost, delivering an unquantifiable benefit from helping people to improve their skills and economic prospects from better education.
Barriers and Challenges
Despite its promise, the link between productivity and social innovation is not universally accepted. There are significant challenges to overcome.
First, measuring the true impact of social innovation on productivity is difficult. Traditional metrics often fail to capture long-term or indirect social value so investments that would deliver benefits to society fail to secure backing at the business case stage. Rather than focus on economic measures or poor proxies for economic benefits, policymakers and business leaders need new frameworks that better account for social and environmental value.
And once delivered, the social value needs to be audited. A compelling narrative in a business case is different to the realisation of benefits from delivering the promised outputs for a set of given inputs.
The link between productivity and social innovation there is a need to develop new measures of productivity that include social and environmental outcomes, which can be used to track true progress over time.
Were productivity targets met? And where promised outputs delivered? - are valid questions.
A Path Forward
The future of productivity lies not in simply doing more for less in terms of inputs and outputs - but in doing better for all.
Social innovation offers a pathway to reimagine productivity as a force for inclusive and sustainable growth.
Increasing productivity – taken in its widest sense - can unlock new forms of value, empower communities, and create resilient economies that work for people and the planet.
As we navigate global challenges—climate change, inequality, public health crises—the intersection of productivity and social innovation will become increasingly vital.
It is not just a matter of economic survival but of building societies that are truly prosperous in every sense of the word.
