The Impact Of Social Innovation On Local Economic Development: Evidence From The South-West Oltenia Region Of Romania

This paper explores the role of social innovation as a catalyst for local economic development, with a particular focus on the South-West Oltenia region of Romania. Faced with structural economic challenges such as depopulation, low employment rates, and underutilized human capital, the region presents both urgent needs and untapped potential for bottom-up, socially driven solutions. Social innovation – defined as the development and implementation of new ideas to meet social needs and create new social relationships or collaborations – is increasingly recognized as a strategic tool for inclusive and sustainable economic growth. Through a review of relevant literature and a case-based analysis of community-led initiatives and social enterprises in the region, this study highlights the concrete ways in which social innovation contributes to local resilience: by fostering employment among vulnerable groups, revitalizing local services, and promoting civic engagement. Examples from Dolj and Gorj counties demonstrate how grassroots initiatives, often supported by EU funding or local partnerships, can generate both social value and economic returns. The findings suggest that social innovation is not only a tool for mitigating socio-economic disparities but also a driver for long-term regional competitiveness. The paper concludes with policy recommendations aimed at strengthening the ecosystem for social innovation in South-West Oltenia and emphasizes the need for coordinated action among public authorities, civil society, and the private sector.