Photo: Ethan Hu

Impact start-up determinants and enablers

This section focuses on key enablers that support impact start-ups in targeting social needs. It also explores how the innovation processes can be fruitful for the people engaged by transforming relationships and providing access to resources and power. Several successful impact start-ups are triggered by a personal indignation concerning existing practices and structures. However, impact start-ups are not only focusing on solving a challenge at a subjective level; they also seek to change the system itself. In this manner, impact start-ups are based on ideas of the dynamics of change: if you can make a change at an individual level, you also establish the groundwork for making a cultural change, which can lead to societal or institutional changes at a collective level. 

Finland

In Finland, the main enablers for social impact start-ups are related to individual agency, timing, and the positive perception of the contribution to society. 
Due to the high level of overall trust in Finnish society, people generally view organisations responsible for social impact projects (such as Sitra) and their work positively (Moriggi 2020; Hughes 2019). The high level of digitalisation also plays an important role. Despite some current problems with data collection, there is usually some data available in an accessible format, and the data systems work (Hughes 2019). Relations to public institutions, personal contacts, and interests of private entrepreneurs are also important enabling factors. Often, social impact projects gain momentum because they are able to respond to societal needs at just the right time. For example, Koto-SIB began its work of preparing immigrants for the Finnish labour market in 2017 following the peak of the refugee crisis. The programme progressed quickly because institutional barriers were lifted (Pennanen 2020). This example illustrates how timing is a more subconscious yet essential factor that enables the success of social impact start-ups. 
Interest in social impact start-ups is on the rise in Finland. According to a survey from 2021,  67% of municipalities are discussing the importance of social impact start-ups, often in connection to the discussion about social impact bonds (Kyösti and Airaksinen 2021). Local city governments have the interest and capacity to work as innovators alongside private companies, especially when granted sufficient resources and incentives. In fact, some of their innovative activities may remain unknown as they do not materialise as technological patents or similar tangible results. This is because many local city governments have not considered IPR (intellectual property rights) implications nor their possible benefits. 
Another enabling factor is local city government activities in projects related to service design and lean service processes and participating in national innovation programmes (Makkonen et al. 2018). In one study, social entrepreneurs reported that their funding sources consist mainly of government grants (from sources like the Ministry of Foreign Affairs, the Ministry of Culture and Education, or the Funding Centre for Social Welfare and Health Organisations under the Ministry of Social Affairs and Health) or of fees from their products and services  (Ashoka and Sitra 2021).
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