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Blockchain as Social Innovation

How the technology behind cryptocurrencies could support Transformation to Sustainability

Written by D. Kaliff

Paper category

Master Thesis


Business Administration>General




Master Thesis: Transformational social innovation Since people can play an active role in creating a more sustainable future (Walker et al., 2004), social innovation can provide an important tool to achieve transformation (Olsson et al., 2017), and it is already in many ways. This has been proved in social practice. , Historical example (Westley et al. 2017). Social innovation is defined as "a new plan, policy, procedure, product, process, and/or design that aims to solve social problems and ultimately change the flow of resources and power, social conventions, and cultural values ​​of the social system that caused the problem." (Westley et al. 2017: 4). This definition lacks the key ecological aspects of the SES perspective. This missing link is one of the criticisms of the application of social innovation to sustainability issues, and these innovations “usually have nothing to do with any ecological environment at all” (for example, Olsson et al., 2017) further strengthen this link. This research solves this problem by focusing on blockchain cases with ecological connections. Westley et al. (2017) Developed a transformational social innovation framework by studying eight different historical transitions supported by social innovation. Seven patterns have been identified from these historical transitions. The first has to do with the importance of meaning and how these new beliefs will affect behavior in the coming centuries, and "in most cases, breakthrough social philosophy is the origin of the innovation cascade" (Westley et al., 2017: 240). The second is the time of social innovation transformation, from 50 years (Internet) to 300 years (legalization of birth control), which means that no individual is responsible for social transformation (Westley et al. 2013). The third model is; even though the trajectories of innovation are very different, the original idea can be determined even after the innovation is combined with other innovations, which shows that the importance of the beginning will affect the future of innovation in the long-term. The fourth is the importance of combining innovation with “ideas, resources, and practices/technologies that may be borrowed from neighbors” (Westley et al., 2017: 243). The fifth is about how paradoxes and tensions drive innovation forward. The sixth mode is related to identifying conflicts and pushing back the patchwork that drives innovation. "The ability of society to innovate and change is not about the absence of conflict: it is about how to manage conflict." Methods can include; "Alliance with the right supporters, managing the opposition and even incorporating the opposition by changing strategies and establishing new partnerships." (Westley et al., 2017) In the early stages of innovation, there may be a lack of counterattacks or conflicts, but it may also appear as innovation develops (Westley et al., 2017). The seventh and final model sees policy changes as "important in preventing opportunities (strengthening shadow networks and activities)." 2.4 Blockchain as a transformative social innovation Blockchain is a decentralized database technology with potential sustainable applications. This research solves the deficiencies of SES research by studying blockchain to explain the role of technology in transformation (Olsson et al., 2017). As far as the author knows, this is the first time that blockchain has been studied as a social innovation. There are studies that use other applications on the Internet as social innovations (Kaletka and Pelka 2011, Franqueira and Gomes 2017). This research differs from earlier research on blockchain as radical innovation (Beck and Müller-Bloch 2017) and disruptive innovation (Zamani and Giaglis 2017, Gomber et al. 2018) because it adds an interconnected SES perspective. It is closer to the socio-technical views of Paziatis et al. on blockchain. (2017) but added important ecological links (Folke 2002, Olsson and Galaz 2012, Olsson et al., 2014). Because of the blockchain's commitment to sustainability and transformation (Forbes 2015, Ahmed and Broek 2017, Chaprin 2017, Kuznetsov 2017, Paziatis et al. 2017), it is regarded as a social innovation in this research. It is said that blockchain enables “participatory governance models that may support shared and public-oriented community scale and sustainable development” (Paziatis et al., 2017), leading to “the (r) evolution of institutions, organizations, and governance "(Davidson et al. 2016). This illustrates the use of innovation as a common method to solve the emerging sustainability crisis, but Olsson et al. (2017) reminds us that if the current feedback has not changed, "their impact may be negative and positive." The blockchain is connected to the ecosystem through, for example. Its potential to transform global supply chains (Kim and Laskowski, 2018), support the transition to renewable energy (Andoni et al., 2017) and improve capital efficiency (UNEP, 2016). If these measures only support the “growth of more producers and consumers” and “ignore the need to support the transformation of production and consumption patterns to consider ecological feedback”, then these solutions are unlikely to change the unsustainable trajectory (Olsson et al. People). 2017). Technology sits on the Internet (Tapscott and Tapscott 2016), which is regarded as “the major social innovation of the past 20 years”. This illustrates that technology is a tool used by many social innovations, but it is not a solution in itself. (Franz et al. 2012) It is important to study the blockchain as a transformative social innovation, because it is not an application field innovation, but is proposed to achieve systemic change (Davidson et al. 2016), not for example Renewable energy that solves a single problem but does not change the surrounding "social-technical systems, such as energy infrastructure". The decentralized energy market enabled by blockchain can be an example of this potential infrastructure change (Mengelkamp et al., 2018). Read Less