Case Study: Enabling a Better Everyday Life for Low-Income Groups in Germany through a Social Lab

IKEA Social Entrepreneurship, in collaboration with Namahn, has developed a Social Lab methodology and toolkit designed to enable corporate employees and social entrepreneurs to better understand complex challenges and find ways to tackle them together.

To pilot the methodology, we teamed up with IKEA Germany, who wanted to understand how it could work with social enterprises to enable a better everyday life for lower-income people in Germany.

We brought together German social enterprises and IKEA co-workers from different parts of the value chain and used insights from interviewing over 18 lower-income households in Germany.

Bringing together diverse stakeholders

IKEA Social Entrepreneurship hosted the Social Lab at Reugio in Berlin, inviting 8 social enterprises operating in Germany to join the 20 IKEA co-workers from across the IKEA value chain, including retail, product design, sustainability and social entrepreneurship. The 35 participants worked in five groups, each focusing on specific groups of low-income people identified from researching recent trends in income, consumption and living conditions in Germany.

Over the past decade, several changes have led to more lower-income people living in Germany. Labour market changes have been a main driver of rising inequality with technological advancements and globalisation making it more difficult for lower-skilled workers to find good jobs, while immigration has also increased and many immigrants struggle to find well-paid work. Housing costs have increased, making it difficult for lower-income individuals to afford suitable housing and environmental concerns and welfare reforms have also impacted the poverty rate - 4.9 million pensioners (30% of pensioners in Germany) had a personal monthly net income of under 1,000 euros in 2021. The increase in inequality is also linked to changes in household structures, such as the increase in the number of people living alone or in single-parent households - nearly 25% of families with children are headed by single parents.

The five groups of low-income people the Social Lab focused on were:

    1. People with a distance from the labour market
    2. Migrants, refugees and asylum seekers
    3. The elderly and people living with disabilities
    4. Single parents
    5. First-generation students

Typically, a Social Lab is designed to include participants who are affected by the challenge being addressed. In this instance, interviews were conducted with 18 lower-low income households before the Social Lab as not all the participants were able to communicate comfortably in either German or English. The findings and insights were synthesised and then shared during the Social Lab to support Step 2: listening to the system

A methodology and toolkit for understanding and action

The Social Lab methodology uses a systemic design approach, combining systems thinking with design thinking principles. This approach helps participants understand the interconnectedness of complex challenges and develop sustainable and effective interventions.
The six-step methodology guided the Social Lab participants through framing the system, listening to the system, understanding the system, envisioning the desired future, exploring the possibility space, and kicking off the transition. The toolkit consists of 22 tools that facilitate each step of the process, including system mapping, field research, personas, intervention strategies, and outcome mapping.

Step 1: Framing the system

During this first step, the participants defined the challenge of enabling a better everyday life for low-income groups in Germany. They identified the system boundaries, stakeholders, and relationships, while also exploring existing solutions to similar challenges.

Step 2: Listening to the system

Through desk research and findings from the interviews, the participants gained insights into the needs and experiences of low-income groups. They processed the findings, adding their own experiences and understanding of life for low-income people, to inform the next steps in the methodology, primarily to support creating the personas in step 3.

Step 3: Understanding the system

This step involved summarising the research findings and creating personas of the actors in the system. Creating a persona is a technique to summarise your findings from the experience interviews by making fictional portraits of the most extreme actors. Personas are input for the next tools in this step. The participants mapped out the variables and their interconnections, focusing on leverage areas for potential change.

Step 4. Envisioning the desired future

Based on the deeper understanding gained in the previous steps, the participants refined the initial challenge and articulated the desired future and the value they aimed to create for people and the system. The value proposition is a tool for exploring the benefits they want to create in the future for individuals, organisations and society in the system.

Step 5: Exploring the possibility space

The participants explored possible interventions by identifying changes needed in the current system and assessing which stakeholders are already involved and who still needs to be added to achieve their goals. At the end of the step, each group presented their roadmap for change, explaining potential collaborations and future stakeholder and partnerships necessary to achieve the required system change.

Step 6: Kicking off the transition

The final step focused on co-creating interventions between IKEA and the social enterprises in the room. After the presentations of potential interventions and collaborations from the previous step, participants created new groups based on where they thought they could add the most value.

In their new groups, participants further developed ideas for small-scale pilots to test their interventions and assessed who was missing from achieving their goals to enable a better everyday life for low-income groups in Germany.  In the final activity of the Social Lab, each group presented their pilots and received feedback from all stakeholders, helping to refine their intervention model. Each person in the room was asked to share feedback, ideas, and connections to support the each group’s pilot.

Outcome and Impact

The pilot Social Lab provided a platform for diverse stakeholders to collaborate and address the challenge of improving the everyday life of low-income groups in Germany. By using a systemic design approach and utilising the toolkit's tools, the participants gained a comprehensive understanding of the complex factors at play and identified innovative interventions. The pilot helped foster new connections, exchange knowledge, and generate energy among the participants. The insights and feedback obtained during the pilot will inform the refinement and scaling up of the interventions to create a broader impact.

The pilot Social Lab successfully demonstrated the power of the methodology and toolkit developed by IKEA Social Entrepreneurship and Namahn in addressing complex social challenges. By bringing together social entrepreneurs and corporate employees, the Social Lab enabled a comprehensive exploration of the challenges faced by low-income groups in Germany.  The collaborative and co-creative nature of the approach, supported by the diverse range of tools, helped participants understand the systemic nature of the challenge and co-create sustainable solutions.

We hope this case study serves as an inspiring example of how Social Labs can foster collaboration and drive positive change.

A fit-for-purpose approach to address today’s biggest challenges

Today’s social and environmental challenges, such as climate change, extreme poverty, and food insecurity are becoming increasingly complex and interconnected – there is no one solution or organisation that can fully tackle them alone.

To best address these challenges and create a more positive future, we need to acknowledge and embrace the complexity and work together. Through understanding the entire system and exploring how each part influences the people affected, we can co-design interventions with those who can enable change.

The Social Lab methodology and toolkit uses a systemic design approach, which helps us to understand the interconnectedness of complex challenges. This enables us to develop sustainable, resilient, and effective interventions while avoiding potential unintended consequences.