The determinants of social innovation in European Union countries

In contemporary times, addressing social issues such as climate change, environmental problems, inequalities, and pandemics is becoming increasingly challenging. These issues have significant impacts not only at the national level but also on an international scale. In finding effective solutions to these social problems, the concept of social innovation, which has gained prominence in recent years, offers both creative and effective methods. Social innovation, defined as new products, services, processes, or business models developed to provide innovative solutions to social problems, plays a critical role in enhancing societal welfare and strengthening the ability to cope with global crises. This study analyzes the determinants of social innovation using annual data from 27 European Union (EU) countries for the period 2000-2021, employing panel data methods. In this analysis, social protection expenditures and social contributions are considered as indicators of social innovation, and both macroeconomic and institutional level determinants of social innovation are examined. According to the findings, in EU countries, public final consumption expenditures, higher education enrollment rates, total population, labor force participation rate, public education expenditures, gross domestic product, gross fixed capital formation, the employment-to-population ratio, advanced educated workforce, rule of law, regulatory quality, and control of corruption have been identified as significant determinants of social innovation. The findings are expected to provide guidance for social innovation policies that can be applied to ensure sustainable economic growth and societal welfare in EU countries.