Social innovation and Austrian economics: Exploring the gains from intellectual trade

The Austrian school of economics has played a key contribution toward an improved understanding of the characteristics of economic innovation. Over recent decades the language and concepts of innovation theory has broadened to non-market settings, among other things giving rise to a voluminous literature on “social innovation.” During the same period of time, scholars have increasingly utilised Austrian economic insights to explore the nature of social interaction and the dynamics of social change, delving into matters such as social entrepreneurship, non-price coordination, and social learning. Both social innovation and non-economic Austrian scholarship have largely been conducted independently of each other. The central claim of this paper is that scope exists for meaningful intellectual exchanges between these two sub-branches of social scientific endeavour. An Austrian perspective on social innovation centres upon entrepreneurs using their unique knowledge to create and change social norms and practices, providing micro-level foundations for broader scale social innovations of cultural and institutional character. Social innovation theory assails the limitations of market-state duality by stressing the involvement of non-market, non-state social actors in promulgating social novelties. Austrian perspectives on social theory may also gain from the social-innovation emphasis upon enhancing broad aspects of human well-being.