A Systematic Review on Sustainability-Oriented Innovation in the Social Enterprises

Abstract

Sustainability-oriented innovation (SOI) is a subset of innovation that focuses on not just maximizing profits but also on minimizing negative consequences for the environment and society. Despite the fact that the study of SOI has grown rapidly in recent years, little is known about how SOI takes place in social enterprises (SEs). The aim of this study is to understand SOI in SEs with two research questions focusing on the current state of the research and the identification of emergent themes and subthemes regarding SOI practices in SEs. The method used was a systematic review of the scholarly literature guided by the PRISMA protocol. The systematic search and filtering process resulted in 27 studies, which were filtered out of a total of 100 studies. The study’s findings show that process/organizational innovation, such as business model transformation and stakeholder management to increase SEs’ societal impact, is widely practiced in SEs. Unlike SOI in commercial organizations, which is dominant in the subcategory of SOI of environmental innovation, SOI in SEs is more prevalent in social innovation. Several challenges faced by SEs in developing SOIs were also revealed, including a lack of long-term funding, low entry barriers for potential competitors, and inefficiencies. A number of potential future directions were also discussed.

1. Introduction

Global issues, such as environmental degradation, economic disparities, and the recent COVID-19 pandemic, have prompted business actors to reconsider how they should operate and innovate [1,2]. Recognized as the primary driver of economic growth, corporate innovation that does not take into account environmental factors is thought to be financially beneficial but harmful and detrimental to the environment and society [3]. From there, the concept of sustainability-oriented innovation (SOI) or sustainability innovation (SI) emerged as the most appropriate driver of corporate innovation in the twenty-first century [4,5,6]. Although SOI research has grown significantly in the past decade, little is known about SOI in relation to social enterprises (SEs) [7]. SOI research has expanded rapidly in the last decade, but little is known about SOI in the context of social enterprises (SEs).

Understanding SOI in SEs is crucial since SEs have unique characteristics that distinguish them from other types of enterprises. The distinction is that while SEs are often profit-seeking enterprises, their profits are utilized to fund previously planned socially planned programs. SEs are a phenomenon that has piqued the interest of various policymakers, practitioners, and academics around the world due to their hybrid nature, namely achieving profit and financial sustainability while also achieving social goals [8]. As a result, SEs differ from commercial enterprises, whether private or public, that are entirely profit driven, or non-profit organizations that are entirely non-profit driven.

SEs need to be innovative in order to fulfill their societal mission, which necessitates the ability to survive and develop in the face of internal and external reconstraints. Additionally, innovativeness is emphasized as a critical component of SEs’ ability to utilize limited resources and manage demands from diverse stakeholders [9,10,11,12]. SEs’ potential to innovate is dynamic and subject to change over time. Due to the unique character of SEs, their capacity for innovation is distinct from that of commercial firms. While commercial enterprises typically concentrate on producing unique products or services, SEs typically concentrate on changing or reconfiguring current products and services [9].

For SEs, the desire for innovation, as well as the need to strike a balance between financial and social goals, represents a significant challenge that is not easily met. Disputes and managerial tensions can occur in SEs when an organization’s priorities move from a social mission to a financial mission [10]. It is possible that this shift in priority is due to different institutional demands from the stakeholders in the areas where SEs operate [13]. Because of this, even though they are known as SEs, there is no assurance that their innovations are sustainable. As a result, it is worthwhile to gain a better understanding of SOI in SEs by going in-depth into the relevant literature. A better understanding of SOI will certainly have a good effect on enterprises because the company can carry out its social activities better [14]. Thus, the social environment that surrounds the company will continue to support its sustainability. To understand this, the researchers conducted this study.

Thus, the purpose of this study was to understand SOI in SEs. A systematic review was utilized to accomplish this purpose. A systematic review involves a detailed and comprehensive search plan and strategy with the aim of reducing bias by identifying, assessing, and synthesizing all relevant studies on a given topic [10]. A systematic review is different from a meta-analysis. The goal of a systematic review is to review the literature as structured, clear, and comprehensively as possible in order to answer research questions without restricting it to statistical data [15]. Structured and transparent searches are also performed in a meta-analysis, but they concentrate on quantitative investigations and incorporate numerous statistical data points to be quantified and synthesized [16]. This study has a connection with the reviews by de Souza et al. [17] and Philips et al. [18] in terms of addressing the context of social enterprises. However, there is a difference with the two previous reviews because in both reviews, the focus given is on the social aspect of innovation, while this review provides a more holistic view by looking at both the social and environmental aspects of innovation, which are included in sustainability-oriented innovation (SOI) [6,17,18].

CIMO logic from Denyer and Tranfield [19], which consists of context, interventions, mechanisms, and outcomes, guides the research question formulation. The context of this research is social enterprises, with the intervention of interest being sustainability-oriented innovation. Mechanisms of interest are emergent themes and subthemes, while outcomes are SOI practices in social enterprises. In this systematic review, the systematic review methodology is at the core of the meta-analysis [13]. Systematic reviews often include a meta-analysis component that involves the use of statistical techniques to synthesize data from multiple studies into a single quantitative estimate or summary effect size [10]. More precisely, the key questions being attempted to be answered through this systematic review are: (1) What is the current state of research on SOI in SEs? and (2) What are the emergent themes and subthemes of SOI practices in SEs?

This paper is structured into five sections. The first section provides a background to the study and a general overview of the paper. The second section deals with the methodology of the study. The third section presents the results of the study, focusing on the two research questions outlined in the introduction. The fourth section is the discussion section. Finally, the fifth section provides conclusions and suggestions for further research.

2. Methods

This study employed a systematic review that followed the systematic processes of earlier authors in management studies, such as Tranfield et al. [20] or Denyer and Tranfield [19]. Systematic reviews use explicit steps, as opposed to heuristics, to conduct a search and critical assessment of the literature [21]. Systematic reviews improve the quality of the review process and results by using transparent and reproducible procedures [20,22]. The steps taken were as follows: establishment of search syntax and inclusion criteria, study selection, and analysis and synthesis.

2.1. Search Syntax and Database Selecton

The search syntax is constructed in a straightforward manner, with keywords accompanied by SOI and SE elements. More specifically, the search phrases used were “sustain* innovat* AND social enterprise” in the title, abstract, and keywords, with “sustain* in-novat* AND social enterprise” in the body of the text. With this keyword, two main elements of interest, namely social enterprises and sustainability-oriented innovation, have been represented. The search was conducted on two well-known databases, Scopus and Web of Science, several times from 2021–2022. Scopus and Web of Science are two mainstream academic databases with wide coverage and quality assessments for scholarly publication outlets indexed in them. Quality appraisal was carried out through the selection of the two academic databases. Both are the largest and most curated databases, with strict quality control mechanisms for selecting journals to be indexed in both [23,24].

2.2. Study Selection

The PRISMA flow diagram was used to guide the study selection process (Figure 1). The Scopus database yielded a net result of 71 articles, while Web of Science yielded 50 articles. These results were filtered from a rough search that returned hundreds of articles after applying keywords and all inclusion and exclusion criteria. The document categories that were considered for inclusion were limited to peer-reviewed journal papers written in English. Specifically, peer-reviewed journal articles are targeted for inclusion in the search since this form of document represents the greatest degree of scientific documentation because it typically contains high levels of innovative knowledge that have been examined by experts in the field. The search process eliminated documents other than peer-reviewed article journals, such as conference proceedings and books. The unit of analysis is also restricted to the enterprise or organizational level, excluding other units of analysis, such as individuals or countries. This is done to ensure focused results at the organizational level. English is utilized since it is the primary language used in scientific communication, and hence it is the most natural choice. Documents in languages other than English were excluded from the search. Twenty-one articles were removed due to duplication after the results from the two databases were combined; totaling initially resulted in a total of 100. As a result of this filtering, 92 articles were retained. Following that, all articles were chosen based on their title, which resulted in the exclusion of 8 articles because they did not meet the predetermined criteria. The abstract/full text of all articles was then read, and 49 articles were excluded because they did not meet the criteria, particularly in terms of the unit of analysis that was not at the organizational level. As a result, 27 articles were chosen as the final list for analysis.

2.3. Analysis and Synthesis

The analysis was carried out using thematic analysis by carefully reading all the articles included in the review and then breaking down the content into certain components or themes to facilitate the synthesis [20,25]. Thematic analysis is a method used to systematically identify, organize, and offer insight into a pattern of meaning (theme) across datasets so that researchers can understand collective meanings and experiences [19]. Thematic analysis provides an accessible and systematic procedure for generating codes and themes from qualitative data. The purpose of thematic analysis is not only to summarize the content of the data but also to identify and interpret the key, but not necessarily all, features of the data guided by the research question (but note that in thematic analysis, the research question is not fixed and can evolve throughout coding and theme development). The emphasis is on producing rigorous and high-quality analyses. The hallmark of this form of thematic analysis is its flexibility, which can be used in a critical framework [26]. Vaismoradi et al. [27] revealed that thematic and content analysis were used interchangeably in qualitative research because they share many similarities, with the particularity that thematic analysis emphasizes identifying emerging themes, while content analysis emphasizes frequency and discourses. The components used in this research are primarily the classification of SOI into the two types of innovation commonly used in innovation studies, namely product innovation and process/organizational innovation. Following that, an analysis was performed to identify subthemes in the form of the SOI practices discussed in each publication in order to comprehend important patterns that were unique to SEs. This procedure was aided by the use of an MS Excel spreadsheet and the qualitative software NVivo.

3. Results

This section is organized into two subsections to address specific questions raised in the introduction section: the current state of the research on SOI in SEs, and emergent themes and subthemes on SOI practices by SEs.

Table 1. Included literature for the systematic review.

Authors and Year	Journal	Scopus Quartile	Context	Key Findings
Sanzo-Pérez and Álvarez-González (2022) [28]	Technovation	Q1	Spanish	Social innovations in social enterprises is enhanced when there are also close partnerships embedded within the core goals and activities of the social enterprise. Moreover, insights point to the relevance of these partnerships in fostering the long-term sustainability and transformational impact of innovation.	Strengths: This research contributes to the ‘innovation ecosystem’ literature by showing that strategic partnerships between SEs and NPOs enhance SI in SEs. Weaknesses: First, the use of a survey makes the data gathered refer to a particular moment of time, but SI involves a long-term process, and the current approach should be complemented with panel data (if possible) and/or a qualitative approach. Second, it refers to the fact that the research has focused on only one of the viewpoints involved in the social enterprise-nonprofit partnership, i.e., the social enterprise.
Tuckerman et al. (2022) [29]	International Journal of Voluntary and Nonprofit Organizations	NA	UK and Scotland	Each approach has ramifications for how SEs achieve social change: either through exploitation of intellectual property as a means of income generation or freely revealing to accelerate social impact.	Strengths: We have proposed a spectrum of OSI in this paper which has implications for organizations involved in social change. Organizations could follow a commercial path of codifying knowledge and utilizing a ‘controlled’ approach to OSI, using IPR to gain new income streams. Weaknesses: We acknowledge that our findings are based on two case studies.
Chan et al. (2021) [30]	City, Culture and Society	Q1	Malaysia	An innovative approach to develop arts hub to face various challenges both internally and externally.	Strengths: This study provides an understanding of the potential roles and challenges faced by innovative social enterprises in the cultural and creative sectors. Weaknesses: This study is limited to the creative and cultural industries at the World Heritage Site, Georgetown, Malaysia, reflecting a situation where it was researched. A longitudinal study would be valuable.
Reficco (2021) [26]	Journal of Business Research	Q1	Mexico	The study tracked an organization’s business model as it evolved from a traditional non-profit to a dynamic sales-driven social enterprise (SE).	Strengths: This study helps to identify BMI change drivers and outcomes. This study suggests that a platform-inspired business model can enhance value creation and value capture in a social enterprise. Weaknesses: Purposeful sampling limits may lead to limitations in the generalizability of its findings. However, the researchers also admit that future research may put exploratory propositions to the test with other methodological approaches to validate, extend, or challenge their findings.
Mooijman et al. (2021) [31]	Environmental Science and Policy	Q1	Mozambique	Black Soldier Fly larvae were used in environmentally friendly pit emptying in the Biological Urban Sanitation Project (2016–2019), where the Pia Fantastica was developed.	Strengths: This sociological approach study shows how social innovation in the Pia Fantastica may benefit society in general. Innovation in a particular toilet delivers satisfaction as well as its environmental and economic benefits. Weaknesses: The study only focuses on a particular peripheral area, which may lead to a generalization about the context.
Steiner et al. (2021) [32]	Journal of Rural Studies	Q1	Scotland	Rural areas’ unique characteristics can serve as catalysts for social innovation. Rural factors influence rural social innovation contexts and mechanisms in ways that aren’t universal across the country.	Strengths: This study shows that a social innovation can potentially be rooted in rural peculiarity and its problematic context. However, the paper shows that the outcomes of the social innovation process might not be specific to rural areas. Weaknesses: This study may be current in one social innovation initiative and one rural location. However, it should be verified, or challenged, in future rural studies. In addition, exploring a similar initiative in an urban area could build an understanding of what would happen to social innovation without rural contextual characteristics. An urban–rural comparative study would also help to understand which of the two contexts provides more fertile ground for successful social innovation processes.
Lawrence et al. (2020) [33]	Forest Policy and Economics	Q1	German and UK	A peer-to-peer support network is more difficult to develop with top-down interventions than with bottom-up ones. WSE (Woodland Social Enterprise) have a wide range of income sources.	Strengths: This study shows that policy-based intervention can help WSEs to develop and function, but not in this case to achieve real social innovation, i.e., radical rearrangement of power. Weaknesses: This study is specific to Woodland social enterprises, which may have different characteristics from other social initiatives.
Javed et al. (2020) [34]	World Journal of Entrepreneurship, Management and Sustainable Development	Q2	Pakistan	Four main themes were found in the study analysis. These included ICT, ICT–based innovation, environmental complexity, and social value creation.	Strengths: This study proposes a unique model of electronic social entrepreneurship based on interviews and literature reviews. Weaknesses: This study is based on the perceptions of social entrepreneurs from Pakistan only. Those social entrepreneurs may have limited international exposure, and hence, they could have missed any variable(s) important in the perspectives of the international scenario. Therefore, cross-cultural studies can be conducted to identify all of the variables essential for E-SE. In addition, the model developed in this study was not empirically tested. Furthermore, the limitations of respondents may lead to limited understanding since the proposed model is based on data gathered from social entrepreneurs only. Interviewing other stakeholders such as customers, competitors, law-enforcing agencies, and government can make this model more comprehensive and authentic.
Vázquez-Maguire (2020) [35]	Sustainability	Q1	Mexico, Peru, and Guatemala	Four indigenous social enterprises in Latin America have emerged as a result of a major crisis that threatens the dignity of individuals and the socio-economic dynamics of communities.	Strengths: This study utilizes the lens of a humanistic management approach in the understanding of the dynamics of social enterprises, as these humanistic principles and practices seem to be naturally promoted by social entrepreneurs. Weaknesses: This study has limitations that suggest a cautious interpretation of the results. The enterprises are designed to achieve their goals and engage with the community. Furthermore, critical perspectives on indigenous research suggest that indigenous communities participate in study designs and interpretations. However, this work’s study design was mostly based on traditional strategies (case study) and instruments of data gathering and data analysis and ignored indigenous communities that did not participate.
Ranabahu (2020) [36]	Journal of Management & Organization	Q2	New Zealand	Initially, social enterprises focus on a few SDGs. When creating social enterprise innovations, however, the focus of the SDGs is widened as a result of product and service diversification, as well as geographic expansion.	Strengths: This study proposes a process model combining SDG literature with responsible innovation. Weaknesses: This study primarily utilized secondary rather than primary data to construct cases. These cases are ongoing projects. Therefore, comparable information is not available across all dimensions. In addition, this study has only three case studies. Future studies could apply this framework to multiple cases.
Ambati (2019) [37]	International Journal of Scientific and Technology Research	NA	Ahmedabad, Gujarat	Level of social innovations adopted while designing, developing and using services/products for target groups. Protecting the environment is paramount for the survival of mankind, and therefore, only when the environment is looked after can mankind survive.	Strengths: This research contribute to sustainability, especially create value from the waste, maximize benefits from waste material and energy efficiency, to adopt business strategies to society and environment and to develop a scale of solutions for waste management. Weaknesses: In this context, it was recognized that entrepreneurs who are working as non-profit organizations are more focused on the environment because of growing competition for donors and grants.
Henderson et al. (2019) [38]	Social Enterprise Journal	Q2	Scotland	Local governments and social enterprises working together create social innovation. However, local governments resist change.	Strengths: This paper contributes to the currently limited academic understanding of the contribution of social enterprise to emerging social care markets arising from the international policy shifts. This study offers new insights into interactions between public institutions and social enterprise care providers. Weaknesses: This study involved a small, purposively sampled group of stakeholders specifically interested in social enterprise; hence, the findings are suggestive rather than conclusive.
Zainol et al. (2019) [39]	Management Science Letters	NA	Malaysia	Social enterprise capabilities for earning generation, replicating, and stimulating had a positive relationship with scaling social innovation when the level of significance was 0.05.	Strengths: The findings of this survey will help to address the problem in innovation way and help social entrepreneurs understand the determinants of scaling social impact towards organizations growth (strengths and weaknesses). Weaknesses: First, the data collection was limited to only selected social entrepreneurs. Second, factors such as time and resource constraints caused the small sample size of the study. Finally, there is a need for further research comparing these findings with other states or countries, such as cross-cultural research, to get a more robust result.
Hillman et al. (2018) [40]	Energy Policy	Q1	UK	A socio-technical transitions conceptual framework is used to analyze these social enterprise operations as a form of social innovation.	Strengths: This study has clear and substantial implications for policy and practice. There is a need to protect the incubation space for social enterprises to support their development as they begin to maximize their potential before breaking through to the regime level. Weaknesses: This study has only a limited case. Future studies could apply this framework to multiple cases.
Olofsson et al. (2018) [41]	Journal of Cleaner Production	Q1	Sweden	The focus of business model innovation at social enterprises has shifted from novelty to efficiency in internal management routines. SEs with innovative business models driven by sustainability issues can introduce novel practices that lead to changes in their industry’s dominant business model.	Strengths: This study shows that business model innovation over time at social enterprises reflects a shift in focus from novelty, via lock-in of customers, to efficiency in internal management routines. This suggests that social enterprises with innovative business models driven by sustainability issues can introduce novel practices that lead to changes in the dominant business model of their industry. The study also suggests how social entrepreneurs might innovate their business models as they focus on environmental and social sustainability. Weaknesses: This study was conducted in a developed country with a specific character of SE and involved a small purposively sampled group of SEs; hence, the findings may not be generalized to a broader context of SE.
Vézina et al. (2018) [42]	Management Decision	Q1	Canada	Dynamic capabilities are stages in the social innovation process. At each stage, path dependency and path-building micro-processes are active.	Strengths: This study contributes to the operationalization of Teece’s dynamic capabilities model. In mobilizing a framework in the field of management of innovation, contributes to the understanding of the process of social innovation and develops the organizational mechanism for social innovation as a condition for social transformation. Weaknesses: Some limitations of this study should be noted. First, the research design led to a sample involving only one case. As with any qualitative research, this sample cannot ensure the complete transferability of the findings. In addition, the cases may have idiosyncratic characteristics, and future research could use a comparative setting to increase the generalisability of the results. Based on more comprehensive qualitative data, future researchers may develop further hypotheses on the relationships between dynamic capabilities and social innovation and test them empirically.
de Souza Lessa et al. (2017) [43]	Revista Gestão e Desenvolvimento	Q4	Brazil	Innovation arises from the need to respond to pressures coming from the environment and external stakeholders as well as the need to react to the internal demands of the organization. Rising challenges are framed as opportunities and innovative practices, services, and products created to overcome financial and human resource constraints.	Strengths: This study contributes with the academia as it confirms the relevance of innovation for social enterprises in a scenario of extreme weather conditions and historical poverty as well as social inequalities such as the state of Ceará. Weaknesses: Increased sample size, allowing the addition of a larger quantity of enterprises in the scope for analysis, other theoretical paradigms could also be used, granting a feminist or critical realistic approach, and considerations on gender and race would enable a different view about SEship.
Vickers et al. (2017) [44]	Research Policy	Q1	UK	Specific strategies and practices, such as empowering staff to be creative, managing finances, and sharing knowledge and protection, show a more fluid and creative interaction of the logic.	Strengths: The study shows how a more fluid and creative interplay of logic can be observed in relation to specific strategies and practices. Within organizations, these strategies relate, for example, to the empowerment of staff to be creative Weaknesses: A comparative study of public, private, and/or SE sector organizations would be a valuable addition to this line of research. It is also possible that the particular political and environmental context of English public policy has been instrumental in shaping the specific interplay of logic identified. There is a need for further investigation through international comparative research.
Picciotti (2017) [45]	Annals of Public and Cooperative Economics	Q1	Italy	SE’s ability to establish multiple coordination mechanisms. It establishes new businesses with public, private, and non-profit partners to achieve a stated goal or contracts with them to establish business partnerships and build local manufacturing supply chains.	Strengths: This study suggests that social enterprise promotes interaction between resources of a public, market, and community nature. This finding may be useful in understanding the coordination mechanism. Weaknesses: The respondents were limited to local manufacturing supply chains that may have differences in opinions with general SEs.
Alegre and Berbegal-Mirabent (2016) [46]	International Journal of Contemporary Hospitality Management	Q1	Barcelona (Spain)	Results indicate that three factors, namely, value proposition, appropriate market research and stakeholder involvement, heavily contributed to firm’s success, corroborating previous studies.	Strengths: This paper can contribute to enlarge the current state of the art on both social business and business model literature and have some relevant managerial implications. Weaknesses: The selection of a case-based approach allows for an in-depth knowledge of the companies studied, but it also entails some limitations, so further research on the factors that help explain business model innovation in social enterprises is needed.
Newth (2016) [47]	Entrepreneurship Research Journal	Q2	New Zealand	The development of nascent social enterprise in New Zealand shaped its innovative business model.	Strengths: This study shows how the effects of its context ultimately shaped its innovative business model. Using an ethnographic methodology, the development of the business model and the partnership through which it formed were examined by the author as a central actor as it unfolded. Weaknesses: This study utilized ethnographic methodology. It needs a more nuanced understanding of a different context.
Barrientos and Reilly (2016) [48]	Journal of Technology Management and Innovation	Q3	Colombia	The case studies in this article detail the start-up, mission, and business plans, as well as the company’s accomplishments thus so far and recommendations for other SE start-ups.	Strengths: This case study describes the start-up’s inception, its mission and business plan, and its achievements to date, together with recommendations for other SE start-ups. Weaknesses: This is such a simple concept that the author believes it can make a sustainable social and environmental difference. Hence, it needs more elaboration on different social contexts to make the model more valid.
Gupta et al. (2015) [49]	Social Enterprise Journal	Q1	Africa	This paper proposes a model that highlights five key capabilities social enterprises need to tackle complex societal challenges while overcoming resource constraints and institutional voids.	Strengths: This paper enhances our understanding of innovation to tackle complex social challenges by studying two successful social enterprises operating in Africa. Our model proposes five key capabilities that are required for social enterprises to succeed: comprehension, creation, connection, capacity building, and education and trust. Weaknesses: This research is limited to two case studies from two different industries in Africa.
Urban (2015) [50]	Journal of Enterprising Culture	NA	South Africa	In order to replicate interventions, build partnerships, and remain sustainable, social enterprises must show a clear impact and reach of their results. They must also meet the needs of groups that were ended in failure by previous government efforts at social redress.	Strengths: The study provides a need for the evaluation of social enterprise outcomes in an emerging market context. Few studies focus on social entrepreneurs that incorporate an impact assessment of their social enterprises. Weaknesses: The study has the potential to develop measurement methods for the performance of SEs. However, it needs more elaboration and validity from the different social contexts of other SEs.
Yuen (2011) [51]	China Journal of Social Work	Q2	Hong Kong	The dual meanings of social innovation as new service governance models and key components in social entrepreneurship practice have been identified and found to be applicable to Hong Kong’s policy discourse.	Strengths: The study promotes the idea of social innovation that would likely play an important role in building and sustaining the growth of the social economy. Weaknesses: The limited scope of the review of the operations of the selected case studies raises more questions than provide clear-cut solutions for advancing the social economy in Hong Kong.
Goldstein et al. (2010) [52]	Journal of Social Entrepreneurship	Q1	Indonesia and UK	The new attractor, SEs, is shown to replace an original attractor representing inadequate ‘business as usual’ practices and social networks that have not been able to resolve the social problem or take advantage of the opportunity.	Strengths: this study is one of the few studies that use a complex science-based model for social innovation in social enterprises. Weaknesses: This model needs validation from different cases.
Popielarski and Cotugna (2010) [53]	Journal of Hunger and Environmental Nutrition	Q2	United States	The Market began as a test store, with a pilot study identifying the store’s strengths and weaknesses. Among social business models in the nutrition and food security field, The Market is one to consider.	Strengths: This study is a well-written story of a social enterprise venture in the form of an agency-run grocery store called “The Market,” developed by the Food Bank of Delaware (FBD), with the goal of bringing food to the citizens of an inner-city neighborhood. Weaknesses: The study focuses only on a particular case, so the generalization is limited.

summarizes the articles included in this review.

3.1. Current State of the Research

3.1.1. Publication Year

The literature used in this systematic review uses articles from the last ten years. Figure 2 shows that the publication trend continues to rise from year to year. Before 2016, there were about 1–2 articles per year on average. By 2020, that number had more than doubled to four articles per year. The majority of the articles examined were from the years 2021 and 2020. This demonstrates the significance of SOI in SEs and has stimulated the interest of researchers in investigating it in depth.

3.1.2. Journal

The journals in which the articles in the review are published are extremely varied. It is very interesting because the 20 articles selected for the review come from 20 different journals, so they are all very different. This exemplifies the diverse interests of various related fields, as well as the highly interdisciplinary nature of the subject matter. This demonstrates the diverse interests of various related fields, as well as their highly interdisciplinary nature. The Social Enterprise Journal and the Journal of Social Entrepreneurship are among the journals that specialize in social enterprise. Other journals in the field of business economics include the Journal of Business Research, the Journal of Management and Organization, the Journal of Management Decision, the Journal of Research Policy, and the Journal of Technology Management and Innovation. Outside of the field of business economics, such as environmental sciences, the journal includes Environmental Science and Policy, Forest Policy and Economics, Sustainability, or the Journal of Cleaner Production; or the urban sciences area, such as City, Culture, and Society and the Journal of Rural Studies.

3.1.3. Context of the Study

The journals used have various contexts. It originates on all five continents (see Table 1). From Asia, the countries included Malaysia, Pakistan, Hong Kong, and Indonesia. Germany, the United Kingdom (England and Scotland), Sweden, and Italy are among the European countries represented. Mozambique and South Africa are African countries. America is represented by the United States, Canada, Colombia, Mexico, and Peru. New Zealand is the context studied in Oceania. What is interesting about these findings is that, while the context of developed economies remains dominant, the differences are not as pronounced as SOI in commercial organizations.

3.1.4. Tree Map of Abstract

Figure 3 shows the results of the analysis of the abstracts from the publications included in the review. The three most common words were ‘social’, ‘innovative’, and ‘enterprise’, which were counted 259, 112, and 110 times, or 6.62 percent, 2.86 percent, and 2.81 percent, respectively. This result is not surprising, given that the study’s focus is SOI, which includes social innovation, as well as the type of organization in question—social enterprise. However, there is another insight that can be drawn, namely the dominance of the discussion on social innovation for SOI in SEs, whereas environmental innovation is usually more dominant for SOI in commercial organizations. Following that, key words that stand out include ‘model’, ‘businesses’, ‘development’, and ‘sustainable’.

3.2. Emergent Themes and Subthemes of SOI Practices in SEs

Based on the collected papers, themes, and subthemes of SOI practices in social enterprises have been identified (

Table 2. Themes and subthemes of SOI practices in SEs.

Themes and Subthemes	Detail SOI Practices	References
Product innovation
Low or flexible pricing	Price is adjusted according to the economic capacity of the clients	[26]
	Price reduction for environmental protection	[31]
	Toilet priced only USD 6.5	[32]
Design for the sustainability	Low flush toilets developments from idea to commercialization	[32]
	Advisory support for forestry	[33]
	Support for people with and without disability	[34]
	Environmentally friendly waste management	[37]
Process and organizational innovation
Stakeholder management	Fostered links between cultural communities and local communities	[35]
	Engage with local communities to understand needs and identify solutions	[36]
	Flexible and client-lead approach	[33]
	Informal communications and dialogue	[38]
	Relationships with funders, users, and delivery organizations	[42]
	Creation of networks from different expertise and competencies	[31]
	Managing stakeholder expectations	[40]
	Recombining social networks	[41]
	Humanistic management by engaging with community to increase the impact	[44]
	Empowering indigenous or local community	[44,49]
Partnership with public sector	Revenue generating through partnership with public sector	[35]
	Partnerships with local authority	[43,45]
	Improve community health service	[44]
	Partnering with nonprofit	[28]
Business model transformation	Old business model (1987 to 2003) to the new one (2015 to 2019)	[34]
	Subsidy-based models to financially independent and sustainable	[47]
	Shift focus from novelty to efficiency in internal management	[48]
	Simple innovative business model to reduce environmental impact	[31]
	Bottom-up governance structure to help SEs more sensitively capture social opportunities	[38]
	Organizational structure for multiscalarity of sustainability innovation	[39,42]
ICT-based innovation	The use of ICT to improve internal and external networking	[50]
	Developing ICT capability to better serving unmet needs	[51]
	Using cutting-edge technology to deliver value to the market	[52]
Employee well-being and development	Employee well-being friendly, such as flexible work hours, medical insurance, emergency loans	[44]
	Leadership, empowerment, and team building to promote social innovation	[42]
	Knowledge sharing and protection to maximize social impact	[42]
Marketing for SOI	Building positive brand image resulting strong media recognition (Forbes, NBC, etc.)	[31]
R&D and learning	Project pilot before the innovation is launched to the wider market	[53]
	Combination of capabilities and technology to provide greater impact	[30]
	Implementation of principle of responsible innovation	[52]
	Open social innovation	[29]
	Appropriate market research	[46]
Entrepreneurial vision	Addressing social problem innovatively	[40]

). This paper classified the themes into two aspects: (1) product innovation and (2) process and organizational innovation. The former focuses on the products developed by social enterprises. For instance, how to create a product with low and flexible pricing affordable for society [9,10,35]. This has been in line with the purpose of social enterprises that focus not only on commercial but also on social objectives. Hence, this concern has been extended to sustainable design for social and environmental life [9,10,54]. The latter is classified into several issues, including stakeholder management, partnership with public sectors, business model transformation, entrepreneurial vision, ICT-based innovation, employee well-being and development, marketing for SOI, and R&D and learning. The themes reflect the complexity of social enterprises’ activities for academic concerns.

4. Discussion

According to the findings of the current state of research, the publication trend continues to rise from year to year. This demonstrates the importance of SOI in SEs and has attracted the greater interest of researchers in investigating it further. Most of the journal articles reviewed (12 out of 20) are in the top quartile of Scopus, indicating that they have a high level of scientific rigor and the potential to have a significant impact on the future of SOI research in SEs. Contextually, the comparison between advanced and emerging economies’ context of SOI in SEs is only slightly different. These findings are different from the SOI in general in commercial enterprises, which were dominated by advanced economies, accounting for approximately 90% of SOI studies [2].

The word frequency analysis of the abstracts was consistent with the findings of the study. The most frequently used words were mostly aligned with the themes and subthemes that emerged from the content of the article. The business model, engagement with the local community, and the challenges that SEs face in developing SOI are just a few examples. The themes are divided into two broad categories: product innovation and process and organizational innovation. An example of product innovation developed by social enterprises is how to create a product with low and flexible pricing that is affordable for society [9,10,35]. This has been in line with the purpose of social enterprises, which focus not only on commercial but also on social objectives. Hence, this concern has been extended to sustainable design for social and environmental life [9,10,54].

Process innovation is related to how existing products or services are produced [48]. Process innovation shows the process of renewal in the organization. This form of innovation has also been found to be an important driver of firm performance and a strategic means of enhancing a firm’s competitive position [50,51]. Meanwhile, organizational innovation is defined as openness to new ideas as an aspect of organizational culture [52]. Organizational innovation is also conceptualized from two perspectives, namely as a behavioral variable and as a driver of organizational desire to change [53]. These innovations are classified into several issues, including stakeholder management, partnership with public sectors, business model transformation, entrepreneurial vision, ICT-based innovation, employee well-being and development, marketing for SOI, and R&D and learning. The themes reflect the complexity of social enterprises’ activities for academic concerns.

Stakeholder management was very dominant in our collected papers (Table 1). Stakeholder management functions to ensure that the organization recognizes, analyzes, and examines the characteristics of individuals and groups that influence or are affected by organizational behavior and actions [30,55,56,57,58]. On this subtheme of this topic, the focus of the discussion is on how social enterprises engage in social ecosystems in implementing their various programs for social improvement [13,45,54]. This engagement is one of the challenging tasks, particularly regarding how social enterprises identify various social needs as a recipe for their proposed solutions [20]. In most cases, the community does not easily accept outsiders as being their community parts. The feeling of alienation from the community may be a barrier for social enterprises in identifying the “real” needs of the community. Conversely, if the community accepts social enterprises as part of their community, this will be a good entry point to engage with them and find out their real problems [40]. As a result, social enterprises utilize various tools, ranging from emphatic communication and dialogue to creating trust among community members [31].

Another attractive subtheme is the business model transformation of social enterprises. In simple words, a business model is a whole process in a business to create and deliver value to society. Social enterprises are concerned with products and services that have value in impacting the profitability of the business, as well as society. One of the interesting findings concerns the shift and transformation from subsidy-based models to financially independent and sustainable enterprises [9,32]. Another paper also focused on the efficiency of internal management in social enterprises [33]. These two subthemes are connected to each other, considering that, to sustain without government or private subsidies, SEs need to maintain an efficient business process. In addition, there is also a paper concerned with bottom-up governance structure, particularly on how SEs could easily capture social opportunities and issues [31]. Unlike the top-down approach, whereby an implemented program hardly impacted and fixed social issues because of the feeling of alienation from the program contents, the bottom-up approach would ensure that these issues would not come out due to a detailed identification of the social problems from the society itself, a society-based program not a company-based program.

Another subtheme is about the partnership with public sectors. Partnerships between social enterprises and other enterprises can be beneficial for both parties. First, partnerships with large enterprises can be an attractive option for resource mobilization [59]. The second is that large enterprises also recognize that partnerships can be an important activity for corporate social responsibility (CSR) [60,61]. With pressure from stakeholders on social and environmental issues, these companies are required to increase their efforts to help the community. In addition to large enterprises, partnerships can also be made with small businesses. Small businesses are known for their creativity in innovating [62].

The public sector has been the primary partner of SEs for years. Partnerships with this sector might guarantee their revenues as well as participation in various public programs that might be in line with the SEs program [26,45]. Local authorities, in addition to private and national authorities, might be good partners for SEs in implementing their programs [20].

In addition, another next topic is the human resource management of SEs and their well-being [20,34]. This has also been a pivotal aspect of SEs, considering that employees of SEs need to be maintained to produce leadership, empowerment, and team building to promote social innovation. In this context, transformational leadership is critical [63]. However, there is still a lack of papers (at least the collected ones) that focus on how SEs maintain and develop their employees in terms of remuneration and welfare. This might be a future agenda, considering that in every good social agenda, there should be a man behind the scenes that created it.

In delivering value, SEs employ research and development (R&D) and learning processes to deliver innovative programs. In particular, they implemented a pilot project before launching their programs in the wider market [44]. They also utilized technology and their unique capabilities to deliver a greater impact on their programs in society [42]. Considering that SEs are a social-based business with commercial nuances, the program implementation was developed with responsible innovation [19]. In addition, ICT-based innovation has been embedded to support the SE program. SEs often use ICT to better serve unmet needs [40]. This technology helped them deliver value to the market [19]. Another important theme discussed was related to open innovation in SEs [7,35].

Similar to business entities, SEs also employ marketing strategies to boost their programs in the market. Social enterprises need a marketing strategy to run their business effectively so that they can be financially independent to achieve their social goals and sustain themselves [64]. They often build a positive brand image through various channels, including local, national, and international media [35]. This has also been pivotal considering that, having a good social program, SEs are not automatically recognized by the market; hence, they need public relations or modern marketing management to communicate their program and put a good positioning in the eyes of their customers. Marketing is also important for delivering the impact of their programs in the eyes of the greater community, so this community may adopt, duplicate, and implement the same program. Lastly, the collected articles also talked about the entrepreneurial vision of SEs. This vision is important for addressing social problems innovatively [25]. Entrepreneurial vision is like an engine that organizes and coordinates all aspects of SEs to achieve their objectives and have a greater impact on society.

The identification of these themes and subthemes reveals similarities and differences between SOI in SEs and commercial organizations. The similarity found is that SOI in SEs is mostly practiced in the form of process and organizational innovation rather than product innovation. This is similar to previous research findings that SOI in commercial organizations is more prevalent in the form of process and organizational innovation [55,65]. This result is also explained by the findings from previous authors that SEs are more likely to reconfigure or modify existing products and services than to create unique new products, as is common in commercial organizations [12]. Based on this, the first proposition is postulated:

Proposition 1.

In social enterprises, SOI in the form of process and organizational innovation is more widely practiced than product innovation.

Furthermore, the difference found from the findings is that, in contrast to SOI in commercial organizations, which is more dominantly implemented in the form of environmental innovation [66], SOI in SEs is more dominantly practiced in the form of social innovation. Most of the reviewed publications, around 80%, focused on social innovation as the type of innovation that is the focus of realization. This could be because social enterprises were indeed established, although for the purpose of making a profit, the profits were used for social purposes. Thus, from the beginning, the social mission was prominent. This causes social innovation to be closer to social enterprises than environmental innovation. Based on this, the second proposition is postulated:

Proposition 2.

In social enterprises, SOI in the form of social innovation is more dominantly implemented than environmental innovation.

5. Conclusions and Future Directions

The purpose of the current study is to gain a better understanding of SOI in SEs. The answers to the two research questions have been provided. According to the current state of research for the first research question, the field is receiving increasing attention from researchers. It is well known that, in contrast to SOI studies in commercial organizations, which are extremely prevalent in research conducted in the context of advanced economies, SOI studies on SEs have proportions that are relatively balanced between emerging and advanced economies. Moreover, it is known that the majority of studies have been published in very high-percentile journals, indicating the potential for the future impact and development of SOI studies on SEs.

This study also revealed that a number of themes and subthemes emerged from the articles reviewed, which can be classified into two major groups: product innovation and process and organizational innovation. The practice found in product innovation is associated with low prices for the bottom of the pyramid or products designed to serve the social mission of SEs. There are many innovations found in the innovation process, ranging from stakeholder management and business model transformation, which are two of the most prominent things found in our collected papers, innovations in business functions such as marketing, to the entrepreneurial vision factor of the owner or manager of SEs.

Social innovation, rather than environmental innovation, is the most common form of SOI in SEs. This implies that SEs still have a lot of room to innovate beyond social aspects by incorporating environmental factors [67]. Future research could expand on the extent to which SEs can develop environmental innovation that is not limited to social innovation. The study’s findings also show that SOI is mostly practiced in the form of process and organizational innovation. This implies that implementing product innovation may be more difficult. Future research could look into ways to develop capabilities that allow SEs to carry out SOI in the form of product innovation.

This study has several limitations. Given that the utilized databases are limited to two academic databases, Web of Science and Scopus, there remains a possibility that scholarly documents published in other databases may not be included. Although the two databases used in this study are among the most frequently used in systematic reviews, further studies can also use academic databases or other search engines, such as Google Scholar, with the consequence that it is necessary to conduct additional quality assessments to ensure the articles reviewed are of high quality. In addition, the approach in this review is qualitative, whose degree of subjectivity cannot be eliminated, which, although various undertakings of efforts have been made to minimize bias, cannot be eliminated considering the nature of qualitative research, which involves some degree of subjectivity. A future review can be implemented with a quantitative approach, such as meta-analysis.

The authors of the articles reviewed in this study also raised a number of issues. The challenges put forward for SEs, for example, are financially unsustainable due to inconsistent or decreasing funding from funders, low entry barriers, inefficiencies, and ineffectiveness. Because of inconsistent or diminishing funding from funders, low entry barriers, inefficiencies, and ineffectiveness, the challenges put forward, for example, regarding SEs, are financially unsustainable. This has implications for the need for specific studies that can aid in the resolution of these issues. Future research could, for example, look at how financial strategies can help financial SEs stay afloat by ensuring that their operations are effective and efficient. Additionally, how implementing the unique SEs, which have distinct competencies that will not make it too easy, will raise barriers for potential competitors to enter the market.