Case Analysis: Disruptive Innovation for Social Change

I. Statement of the Problem

A. Main Problem
Aggressive spending and disappointing returns in the social sector.
​Affluent nations, institution and individuals generously fund social services that
fail to fully deliver on their promise. This problem is not because of lack of solution but
rather misdirected investment.

B. Sub-Problems
Organizations usually choose sustaining innovation over disruptive innovation.
Most innovators are into sustaining products and services that provides better
quality or additional functionality to the most demanding customers of an organization
leaving the undeserved and incapable people behind.

II. Objectives
1. To distinguish the proper allocation of investments that will lead to a sustainable
social impact.
2. To identify catalytic innovations that will guide nations, institutions and individuals
of a social sector in providing enough social services.

III. Alternative Courses of Action

1. Investments in catalytic innovations for health care yields simpler products and
services that are affordable to a broader population.
2. Investments in catalytic innovations for education especially in secondary
schools can make a broader range of good, affordable courses available to
people who otherwise would have limited or no access to certain types of course
content or degree opportunities.
3. Investments in catalytic innovations for the economic development helps those
that are incapable and unprivileged through offering low cost resources.

IV. Analysis of Information

Organizations, especially those that are in developed countries, are known to
invest in a more advanced and high-priced technology. These investments may lead to
economic advancement, however, this is limited and problematic since its resources
applies at a scale and scope unmatchable to developing countries. Technology is meant
to benefit every individual not only the privileged and substantial ones and to cover a
broader population, organizations should engage and invest more into catalytic
innovations and encourage other social entrepreneurs to consequently generate greater
and sustainable social impact. To further analyze the importance of catalytic innovation,
PEST(Political, Economic, Social, Technological) Analysis is used.

POLITICAL ● Organizations can create catalytic innovations regardless

of their ownership structure not on its tax status.
● Tax classification for profit versus nonprofit is not a useful
criterion for identifying catalytic innovators.

ECONOMIC ● Catalytic Innovations can lead to international economic

growth since it is transferable from one location to another
producing the same results.
● Combined microlenders as part of a catalytic innovation
have a far greater impact in raising significant segments of
the population from poverty with its low interest rates and
little or no collateral requirements.

SOCIAL ● The comparatively new entrant is providing a lower cost,

less-function alternative to a customer segment that is
overserved or not served at all by dominant provider.
● The new entrant is pursuing to advance its offering and
expanding its market reach.

TECHNOLOGICAL ● Catalytic innovations are low cost capital equipments

intended for those who can’t afford to purchase the
expensive ones.
● Mostly, it is labor-intensive and low capacity however it is
more affordable than motorized equipments.

Some organizations are already investing and engaging into catalytic innovations
pronouncedly stating its benefits towards the underserved and unprivileged citizens,
however, it is verifiable that in every action comes advantages and disadvantages.
1. Investing in Health Care provides those who are not able to afford insurance a
low cost health insurance and other services. An example of such is a walk in
clinic that provides fast, affordable walk in diagnosis and treatment for common
health problems, as well as vaccinations. These investments are clearly a big
help for the underprivileged society, however, these innovations have low level of
performance which makes it limited and insufficient in some cases. These could
also sabotage the current offerings of the dominant providers of the health sector
 because of its implementation of simpler, less expensive, more accessible
products and services.
2. Investing in Education can make a broader range of good, affordable courses
available to people who otherwise would have limited or no access to certain
types of course content or degree opportunities. Online class is a catalytic
innovation model that allows school systems to offer good-enough advanced
placement course and other courses that is more affordable than a live course
would cost. The community college model, on the other hand, is a catalytic
innovation, that offers a lower-cost alternative to four-year universities and
measure quality not by the selectiveness of admissions or the earning power of
graduates but rather by factors such as job placement rates and the convenience
of access to classes. These investments are significant in helping the education
sector, however, imperfections are present since innovations such as online
class may be accessible and low cost, but, there are instances that only a live
course can offer. Clearly, these innovations have their limitations and
insufficiency, as well.
3. Disruptive innovation in economic development helps generate resources, such
as donations, grants, volunteer manpower, or intellectual capital, in ways that are
initially unattractive to incumbent competitors but is useful to the broader social
sectors. Catalytic innovation is a subset of disruptive innovation with its primary
objective as social change and it has significantly helped raise segments of the
population from poverty in a form of a Microlending model. These investments
are evidently part of the economic development of a country making its
underserved society significant, however, these could also sabotage the current
offerings of the existing players of some sectors in the market since it provides
low cost and more accessible products and services that many established
organizations trouble competing to.

In addition, the behavioral theory of social entrepreneurship helps the disruptive

innovation as it contextualize the factors that lead to social venture creation, the
underlying organization dynamics and structures, and how these typologies measure
social impact, mobilize resources, and bring about sustainable social change.
V. Conclusions and Recommendations
Innovation is one of the keys to the economic development of a country and it
shall not be made only for those who are capable and rich but it should help develop
and give opportunities to the underprivileged and incapable ones. There are many
factors and measures in achieving or reaching sustainable social impact and investing
on catalytic innovations especially on the basic needs of the society such as health and
education is highly recommended. Catalytic innovations’ primary objective is about
social change such as low cost and accessible resources and facilities for the unserved
society. Thus, the establishing organizations and businesses should consider the social
impact it could offer to broader population because economic development would be
sustainable and achieved when both the upper class and the lower class are being
affected. In this regard, social entrepreneurs and rising entrepreneurs should give
importance to the social change its business could impart not just solely its business’
profit.
 Case Analysis:
Disruptive Innovation for Social Change

ENT 106
BS ENTREPREEURSHIP

Nicel Mae Orbe

Elaisa Novino
Mechelle Melaine Kilat
Trisha Camille Jacomille
Eden Mae Ortiz