The numbers are staggering. China uses 40% of the world's cement. It employs 40m
people in its construction industry and it was recently estimated that it's using more than half of the world's cranes. So you might think China is doing pretty well at regeneration. Yet seen through another lens China's phenomenal growth has been accompanied by social challenges that dwarf anything we face in Europe, with stark inequalities, low level unrest all over the country, decaying healthcare and education, and an urgent task of creating a welfare state virtually from scratch.

These were just some of the reasons why last month we gathered in one room in Beijing several hundred people from organisations as different as the Big Issue and Cisco, along with social entrepreneurs from Paraguay to India, senior officials from the UK and China, mayors and city leaders, radical designers and architects, and people involved in grassroots innovation: all talking about how to help our societies think, learn and innovate faster to deal with problems like ageing populations, unemployment and healthcare.

The idea for a conference on social innovation came up a year ago. Michael Young, whose work led to the creation of the Young Foundation, had been one of the world's great social innovators - and some of his ideas had taken root in China (like the Open University, which Deng Xiaoping adopted following a visit from Ted Heath). When we launched the Young Foundation we were keen to find sister organisations around the world. We had expected to find some in North America - but were disappointed to find none combining research and action, and surprisingly little collaboration across sectoral boundaries. The US foundations and universities are awash with money, but strangely there is much less sense of being on the cutting edge than ten or 20 years ago. In China, by contrast, we found strong partners, an eagerness to learn and a surprisingly common outlook.

We were helped by the fact that the current five year plan commits to making China a harmonious society - with more of an emphasis on social development rather than breakneck economic growth, as well as a commitment to becoming an innovative society. The time was ripe to ask how innovation could be linked to social development.

Organising any event in a foreign country is hard work and China is particularly complex. We were very fortunate to find a strong, creative partner organisation in the China Centre for Comparative Political Economy, which is the lead agency researching social innovation. It is well plugged into the party and government and responsible for an annual prize for local innovations. The centre helped to keep the planning on an even keel, though at one moment it appeared government hardliners wanted to bring the whole thing to a stop. Our other partner was the British Council, which has a particularly energetic and entrepreneurial team in China. The great majority of their staff are Chinese, well rooted in the cities they work in (Beijing, Shanghai, Chongqing and Guangzhou), engaged in civil society and innovation, and a world away from stuffy cocktail parties.

Since the event was meant to help give new direction to the many conversations going on around the world on social innovation, we felt we needed to internationalise. So alongside the British social entrepreneurs we invited others: Ezio Manzoni, who has been pioneering the role of designers in community innovation from his base in Italy; Uffe Elbaek of Kaospilots in Denmark who has been teaching social entrepreneurs for 15 years; Anil Gupta from India, one of the driving forces in the Honeybee network; Roda Kalalie from South Africa who runs the Impulele innovations prize; Carlos Fernandez from Mondragon, the world's largest cooperative group that now has 80,000 employees and 50 plants around the world; John Thackara, whose Doors of Perception network in the Netherlands and India has been one of the most creative gatherings of recent years; and many others from Peru, Brazil, the Philippines and Mexico. To provide background for the conference we did our best to collect what's known about social innovation. The surprise is that so little has been written. We could find not a single serious book on the topic.

The academic centres that in theory work in the area - such as Stanford and Harvard - have gathered plenty of case studies but done little to synthesise what's known. Our report is available free to download; it has plenty of gaps but does at least provide an overview and shows very clearly some of the features of social innovation, such as the importance of hybrids (like the Big Issue, bringing together magazines and the homeless, or NHS Direct bringing together nurses, computers and phones) and the importance of connections across sectors in making things happen.

The next thing we needed was the engagement of people with power. Part of our argument was that social innovation happens through alliances between the ‘bees' - the social entrepreneurs and creatives - and the ‘trees' - the big institutions with the capacity to make things happen. Fortunately the Chinese did us proud with a clutch of ministers, the vice president of the consultative assembly, as well as top policy advisers (all of whom trooped onto the stage with wonderfully bizarre martial music). From the UK we brought some of the most influential figures in and around the public sector: Ray Shostak, director of public services at the Treasury; Richard McCarthy, newly appointed director-general for policy and innovation at the DCLG; Sir Bob Kerslake, chief executive of Sheffield Council; Mike Gibbons, who runs the DfES innovation unit, and Kate Vincent, recently appointed head of delivery and innovation for the Scottish Executive.

The event started slightly stiffly, though all the official speeches were bang on message in talking about how we needed to match innovation in science and technology with innovation in the social field; how the best innovation starts with people and their needs; and how we need to develop new tools and have the courage to take risks. During the first discussion sessions the gaps between the Chinese and some of the Westerner were glaringly apparent. A discussion on sustainable consumption in which the Europeans talked about returning to locally sourced apples clearly baffled those Chinese, who for the first time were enjoying having some choice about what to eat. But fairly soon the discussions became animated and it became clear that the big challenges in different countries were remarkably similar: an ageing population (China's one child policy now means that it is ageing fast); climate change and the environment (a leading Chinese environmental expert delivered a coruscating attack on the appalling levels of pollution and environmental destruction taking place all over his country); globalisation and migration.

Other links also helped, like the Olympics. One of the results of meetings between the planners for Beijing's 2008 Olympics and people involved in London 2012 was the decision to bring open air gyms back to London. We also benefited from lots of excellent presentations. Some looked at what methods could be used to help innovation. David Barrie talked about Channel 4's series on Castleford, which had encouraged the public there to engage with improving the town. John Thackara shared the work under way in northeast England mobilising grassroots design. John Bird talked about the Big Issue as an example of turning people from being problems to being solutions. Rushanara Ali talked about both the Open University and the Summer Universities which are now spreading across Britain's cities. From across China we heard of radical initiatives to set up schools for social entrepreneurs, incubators and funds, projects for urban migrants and HIV/AIDS, and mayors establishing helplines.

Ruthlessly keeping everyone - however grand - to a maximum of eight minutes also helped. Even when the talks were a bit stilted, with strict time limits you're guaranteed something interesting will be along soon. For the second half of the week a smaller group of us went to Chongqing, a city on the Yangtze that is sometimes described as the world's biggest and fastest growing city. Its claim to be the biggest is doubtful (they get to 28m by including people living in the surrounding small cities). But it is a remarkable place and identified by China's leadership as the top priority for the next few years - the motor for growth right across the poorer western half of China.

Chongqing is not the prettiest city in the world, though it has marvellous - and very spicy - food. It has received some fame in the west because of the Three Gorges Dam just down river, which has displaced 1m people, but strikes the visitor for its sheer energy, jam packed with neon signs, bridges, roads, buildings, and a dramatic location. I had been there a year ago and visited schools and hospitals, factories and community projects and been overwhelmed by the generous welcome. This time round we had the full works including a big conference. Since my last visit Gerard Lemos, well-known in Britain as a social policy researcher and also vice chair of the British Council, had been made a visiting professor there, and we were joined by Nick Pearce, director of the Institute for Public Policy Research, Suzanne Fitzpatrick from York's Centre for Housing Policy and Andrew Karney, who explained Language Line's history, starting as a social enterprise and being sold this year for £25m and pioneer of an industry which now helps 750,000 people each year.

The Chongqing discussions were very different, focusing on what the public sector should be doing, but there too we found plenty of appetite for more radical innovation, in particular around health, and several new social enterprise ideas took shape.

What does it all amount to? All of us came away convinced that social innovation is an idea whose time has come. It's an idea that complements social entrepreneurship, just as business innovation and business entrepreneurship do. And all of us came away convinced that China is going to be an extraordinary laboratory for the world over the next few years. For us the next steps will include practical work in several Chinese cities, a new global network sharing practice in social innovation and much more intensive work on the practicalities - how to organise money, incubators, learning - to get the best results. Within China our event received very wide media coverage. The week before the conference the Central Committee of the Communist Party committed China to supporting social innovation, and it was clear that bringing so many people from around the world had contributed momentum.

When I was a child I was taught that most of the big inventions, from gunpowder to printing,
started in China, but that China had ceased to be an innovator. Now that it's back on the move anything is possible.