What are the major challenges to innovation?

by | Oct 7, 2022 | Blog

Social entrepreneurs are responsible for some of the most transformative social change that our world desperately needs. At the heart of inspiring these success stories, lies innovation. Making a difference in society requires new ways of thinking to break past previous barriers and push into a future that genuinely radiates change. Innovation in this context, however, comes with a few challenges, both internal and external to a social impact venture.

Finding funding

Social enterprises require funding to get started. The due diligence involved in many application processes, however, is in most cases more suited to large corporations. In South Africa, social enterprise start-ups may not have bank accounts or long-standing financial records to show funders, immediately excluding them from applying. 

Little room for experimentation 

Trial and error is part of any business building itself up in its early phases. For social impact businesses, errors are something investors are far more afraid of due to the perceived additional risk and concessionary returns in organisations not solely focused on generating profits (even though analyses of the market have proven otherwise). This leaves little room for experimentation, which is vital when considering the human factor.  Social entrepreneurs need more opportunities to collaborate with investors who accept the risk experimentation carries because they understand the value of it.

Serving two target markets 

The success of social enterprises relies on both funding and beneficiaries. This means that the product or service needs to serve those the project is intended for, while simultaneously appealing to investors. Satisfying two customers can hamper innovation, especially when funders don’t understand the need for a specific course of action or the intended beneficiaries do not respond to the project as expected. The pressure entrepreneurs may feel from accommodating the requests of multiple funders can ultimately lead to mission drift and burnout. 

 their backers can also serve as a distraction from the original goal. 

Conservative thinking 

With funding being a leading challenge to social ventures getting a start, many entrepreneurs may be conservative in their thinking and planning, erring on the side of caution to avoid failing on delivery. Ventures that carry lower risk are favoured, which may undermine the potential an idea has to make real waves. 

Not enough support for boundary-crossing solutions 

Innovation often calls for stepping outside of the lines. Doing this requires adequate support, both financially and mentally. Not only might entrepreneurs find it difficult to identify investors who offer backing that speaks to boundary-breaking solutions, but it can also be a challenge to connect with like-minded individuals and groups who understand the core vision.

Prioritising low overhead costs 

Low overhead costs are often associated with a more streamlined process, due to less waste. While this may be true in some cases, in others, what it may actually signify is a lack of focus on valuable investments like training, research and development, and specialised tools that will improve the effectiveness of the operation in the future. With a short-term perspective of keeping overheads down, social entrepreneurs may miss opportunities to better their running and expand their reach.

No sure means of measuring impact

Impact is difficult to quantify. Sometimes, the true fruit of a project is only visible years after its seeds were sown. This poses a challenge to both social entrepreneurs, who wish to have their proof of concept or MVP  validated, and donors, who want to see whether their investments will produce any returns (be these financial, social, or environmental). Innovation suffers when ideas are constantly under the scrutiny of mismatched indicators and often leads to the conservative thinking we have already touched on. 

Assuming the need 

Innovation happens when creative thinking is applied to a real and a perceived problem. Disadvantaged populations whom social entrepreneurs wish to serve, may have different cultures and backgrounds to their own. And so, while many social entrepreneurs are passionate about addressing the gaps in society that perpetuate unequal systems and practices, this difference lends itself to the danger of assuming the best solution to a problem based on personal experience. Active and consistent engagement with focus communities is crucial to ensure that their voices are heard and prioritised in the project design to ensure the best chance of a flourishing and productive initiative. 

Finding a balance 

Situated in the overlap between business and philanthropy, social enterprises are in constant tension of having to strike a healthy balance. In many ways, this is a boat that is difficult not to tip. Some owners, who started their businesses with a heart for a cause, battle to adapt to the harsh realities of the market, ultimately jeopardising the ability to stay afloat in a competitive field. Others can become influenced by the pressure to perform to a point where their vision is compromised and their focus blurred. Coming up with a clear mission statement in the early stages of design plays a massive part in securing an anchor to return to when things above water are shaken and is crucial in promoting innovative thinking that has a chance. 


For innovation to grow beyond a seed, it requires the right amount of light, nutrients, water, and room. Literally speaking, this means guidance, support, mission-aligned funding, and the freedom to trial ideas. At Innovation Edge, we offer each of these vital ingredients to help social entrepreneurs move past the conceptual phase of their vision and create something that is real and impactful. We believe that fostering opportunities to test unproven ideas is the catalyst for innovation. 

Our focus lies specifically in addressing the gaps in early childhood development in South Africa. Where necessary, we are open to offering multiple rounds of funding as well as tailored support for each project. Read more about us and our vision; if you spot the parallels in our thinking and yours, contact us to find out more about how we could collaborate with you and give you the boost you need to get started and make the difference you want to see in the world.