The question of how social enterprises foster social innovation in rural regions remains largely unexplored. In this paper, was developed the assumption that the embeddedness of social enterprises in rural communities and their ability to connect rural communities with supra-regional networks and decision makers are crucial preconditions for generating and fostering social innovation in the countryside.

The innovation systems (IS) approach—developed by Richard Nelson, Christopher Freeman and Bengt-Ake Lundvall, amongst others—has become perhaps the dominant approach in the academic literature for the study of innovation. It has also exerted considerable influence on policy. This paper examines both the theory underpinning the IS approach, which bears considerable affinities with Austrian economics, and also its policy implications.

Farmers’ experiments can be defined as the autonomous activities of farmers to try or introduce something new at the farm, and include evaluation of success or failure with farmers’ own methods. Experiments enable farmers to adapt their farms to changing circumstances, build up local knowledge, and have resulted in countless agricultural innovations. Most research on the topic has been conducted in countries of the south.

Organic farming is recognized as one source for innovation helping agriculture to develop sustainably. However, the understanding of innovation in agriculture is characterized by technical optimism, relying mainly on new inputs and technologies originating from research. The paper uses the alternative framework of innovation systems describing innovation as the outcome of stakeholder interaction and examples from the SOLID (Sustainable Organic Low-Input Dairying) project to discuss the role of farmers, researchers and knowledge exchange for innovation.