Raiffeisen As Social Innovator

In recent years the term social innovation has become widely used by policy makers, yet important ambiguities remain. One of these concerns what has been called the paradox of embedded agency – how social innovators conceive of something new when working with existing social institutions. So far few writers have considered whether historical examples can, with benefit of hindsight, shed light on the relationships between social innovators and social institutions. This paper considers the example of Friedrich Wilhelm Raiffeisen, creator of rural credit unions and agricultural co-operatives in 19th-century Germany. Raiffeisen was a social conservative who worked in many ways within existing social institutions. At the same time, his desire to meet social needs drove him to create new forms of action and organization that resulted in social innovation. Raiffeisen’s process of invention shows that social innovation, particularly in transitional eras like his, need not be a matter of using logical-deductive processes to address a social need, but may depend critically on values, will, a readiness to experiment, and an ability to find allies. These qualities enabled Raiffeisen to break through existing institutions to do something fundamentally new, and they may be qualities that provide new focus for social-innovation research and policy.