Economics of Social Innovation and Policy
The Organization for Economic Co-operation and Development (OECD) is an international organization whose purpose is to stimulate world trade and economic progress. OECD defines terms such as social innovation and welfare economics and provides socially innovative programs and initiatives (Morgan & Volante, 2016). It also builds policies that enhance support income distribution, environment, education, equality, and access to the job market among its member countries.
Given the focus on new alternatives that already exist, phenomena like social innovation and welfare economics are, by nature, difficult to define. Therefore, it is critical to follow the OECD’s definitions as they more substantive and precise meaning. According to the Local Economic and Employment Development Committee (LEED) of the OECD, social innovation refers to a conceptual process in which organizational change and alterations in financing can engage in relationships with new territories and new stakeholders. The definition links social innovation to local development by presenting social innovation as the means to improve the welfare of people and the community, as well as the path, makes to the relationships with new territories. As per the OECD, welfare economics can be defined as a tool that seeks to formulate propositions of economic policies in different situations of a financial system to determine if social welfare in one financial situation is lower or higher than the other. The definition relates to the study of economic efficiency in income distribution and how it affects the people and communities in the economy
The nature of support programs and initiatives for welfare in the selected European countries is exceptionally socially innovative. The programs and initiatives develop new ideas that simultaneously solve social problems and develop new social collaborations. They form fresh concepts through three approaches. First is by responding to the pressing social demands that are directed towards the vulnerable people in the community. For example, the Silai for skills in England helps women to develop skills that they can use to start a business. Second, the programs and initiatives address the economic and social challenges affecting the as a whole. In the U.S, the White House Office of socials innovation and Civic Participation lists all Americans as partners in solving problems in society. Third, they create fundamental changes in the strategies, attitudes, and values, policies, delivery systems and services, and organizational structures and processes for development. For instance, this systematic change makes people from the selected nations to become more aware of climate change and recycling, thus promoting a shift in behavior towards having more responsible members of society.
The US, France, Germany, and Sweden have policies in support of income distribution, environment, education, equality, and access to the job market. These policies exhibit some characteristic similarities because they are within the OECD’s requirements. In ensuring economic equality, the countries have a system that increases the minimum wage to keep people out of poverty and add to the nations’ income (Lapatinas, Kyriakou & Garas, 2019). In the U.S, the policy has saved 5 million people out of poverty. Concerning the environment, the countries have created government agencies to handle pollution issues. An example of such is the Swedish Agency for Marine and Water Management. As part of the new OECD education policy, the countries ensure quality education to children with disadvantaged and migrant backgrounds. The countries’ equality policies combat inequalities of opportunities in education, entrepreneurship, employment, and public life. In France, there is legislation in favor of gender equality, both professional growth and politics. Countries in the OECD have policies that increase peoples’ access to jobs by enhancing incentives to seek employment, enhancing job readiness, and expanding employment opportunities. In this respect, Germany’s labor policy maintains an industrial base with well-paying jobs. Thus, it has the lowest unemployment rate in the world.