This is an area that presents significant opportunities to leverage the power of European talent by fully engaging stakeholders
and research agenda to foster DSI in Europe, tracing impacts in a rigorous manner 2. Mobilise a big variety of stakeholders and Support a community of civic innovators and users.
i e. the civil society is considered as a fourth and full stakeholder in addition to the traditional innovation actors,
vibrant picture of social innovation in practice and demonstrates the vitality of this rapidly emerging economy.
ideas and resources 124 Section 3 Ways of supporting social innovation 141 1. Support in the public sector 146 2. Support in the grant economy 167 3
. Support in the market economy 180 4. Support in the informal or household economy 195 Bibliography 209 Index 211 Acknowledgements 220 2 THE OPEN BOOK OF SOCIAL INNOVATION
and tools for innovation being used across the world and across different sectors the public and private sectors, civil society and the household in the overlapping fields of the social economy, social entrepreneurship and social enterprise.
This is as true for the private as for the social economy. New paradigms tend to flourish in areas where the institutions are most open to them,
An emerging social economy Much of this innovation is pointing towards a new kind of economy.
We describe it as a‘social economy 'because it melds features which are very different from economies based on the production and consumption of commodities.
Its key features include: The intensive use of distributed networks to sustain and manage INTRODUCTION 5 relationships,
Much of this economy is formed around distributed systems, rather than centralised structures. It handles complexity not by standardisation
This domestic sphere has previously been seen as outside the economy, as too complex and ungovernable,
In both the market and state economies, the rise of distributed networks has coincided with a marked turn towards the human, the personal and the individual.
(what Jim Maxmin and Shoshana Zuboff call the‘support economy');'it has led to lively innovation around personalisation (from new types of mentor to personal accounts;
With this emphasis on the individual has come an interest in their experience as well as in formal outcomes, in subjective feedback as well as the quantitative metrics of the late 20th century state and economy (hence the rise of innovations like the Expert Patients programmes, or Patient Opinion.
for example, are not always directly transferable to the social economy. Measuring success Measuring success in the social economy is particularly problematic.
In the market the simple and generally unambiguous measures are scale, market share and profit.
trial and error and rapid learning that are accompanying the birth of this new economy. But we can be certain that its emergence will encourage ever more interest in how innovation can best be supported,
including those within each economy: the public sector, the grant economy of civil society, the private sector,
and the household. Some of these conditions are about structures and laws, others are about cultures.
and can deal with new relationships with stakeholders and territories.‘‘Social innovation'seeks new answers to social problems by:
and testing ideas is particularly important in the social economy because it's through iteration,
and innovations take hold in the social economy in many other ways, whether through inspiration and emulation,
private sector, grant economy and household sector, usually over long periods of time. In this part of the book we explore each of these stages in depth,
Within the social economy, especially amongst artists, entrepreneurs and community groups, there is a long tradition of taking advantage of empty, abandoned or derelict buildings and spaces.
or Deming, E w. 2000)‘ The New Economics for Industry, Government, Education.''2nd ed. Cambridge, MA:
Nooteboom, B. 2000)‘ Learning and Innovation in Organisations and Economies.''Oxford: Oxford university Press. 12. Laderman Ukeles, M. 2001) On Maintenance and Sanitation Art.
however, competition is not always the driving force behind the development of new innovations in the social economy.
such as the New Economics Foundation and Forum for the Future. 80) Design labs. In Finland, the national innovation agency SITRA has set up the Helsinki Design Lab,
what the economics look like, and how it could be made cheaper. The driving principles at this stage are speed, keeping costs low,
In the social economy, however, there are arguments for sharing, rather than shifting, the risk. This can be achieved through a stage-gate process
The business concepts of the social economy require as much care and creativity in their generation as the social ideas The two are developed best together to sustain
For the social economy the issues of control, the team and relations with users are likely to have greater priority,
SUSTAINING 63 In the social economy, ownership is an ambiguous concept. Its organisational structures are the site of contending pressures of goals and interests.
for example by creating different categories of shareholder; by giving particular groups voting rights; or golden shares.
These arrangements can be fixed through the constitution, a shareholders'agreement, or the terms of a limited partnership. 113) Limited liability Partnerships are a form of legal ownership that gives the benefits of limited liability,
with a further 95 supporters'trusts having shareholdings in their clubs. There has also been a growth of‘New Mutualism,
There are now 125 NHS Foundation Trusts that have been established as multi-stakeholder mutuals; GPS have organised mutuals to provide out of hours primary care;
But increasingly social ventures are seeking ways to involve stakeholders that do not depend on representation on a board. 120) Boards for innovation.
Most businesses see AGMS as an annoying necessity where small shareholders can vent their anger.
Social movements, by contrast, use AGMS to reinforce commitments to the mission. 122) Stakeholder governance.
which core stakeholders can be incorporated in the structure of an organisation and its processes. These include the constitution
a shareholders'agreement, or the terms of a limited partnership. 123) Open guides. The social sector has started to develop more comprehensive guides to help ventures make decisions about governance models and organisational forms.
These can be used at an early stage to guide negotiations between stakeholders. We anticipate considerable web-based innovation in this field, with websites providing guidance on organisational forms, and governance.
and engaging members and stakeholders. 124) Consumer shareholding can be used to involve consumers more directly in the work of a venture,
This was one of the main reasons Cafédirect opted to have a share issue geared to small shareholders as a means of raising finance. 125) Gold standards and Golden Shares.
Much of the social economy is made up of organisations that are not dissimilar to those in the state or private business
But as with supply chains, the goal is to have the demand chain reflecting the social mission of the venture. 4 SUSTAINING 71 133) Shared backroom economies.
both in what they receive back from a reciprocal economy of information, and in extending the value
In a volunteer economy, roles, relationships and incentives have to be thought about differently to those where there is a contractual wage relationship.
There are distinct forms of lending within the social economy that include saving and lending circles,
400 shareholders. Image courtesy of Andrew Watson. 4 80 THE OPEN BOOK OF SOCIAL INNOVATION 150) Social Impact Bonds are a financial tool being developed in the UK to provide a new way to invest money
The private economy is structured to reserve the benefits of an innovation to its own organisation
The social economy being oriented primarily around social missions, favours the rapid diffusion of an innovation,
This is one reason why the social economy has less compulsion to organisational growth and more towards collaborative networking as a way of sharing innovation. 1 As a result of these differences,
The tools for effective supply include reshaping of projects to reap different kinds of economy (scale,
and express the idea behind the project becomes a key method for the social economy,
and can also lead to economies in processing tenders. The public sector's procurement portal in the UK is Buying Solutions,
Transmitters We look at platforms as the nodes of the new economy, and at other ways in which users and originators can engage in the evaluation
and scale There are currently pressures to promote mergers and takeovers within the grant economy. However, we suggest that in a distributed economy a different conception of scale is needed, one that focuses on economies of information and communication,
and structures that can deliver that. Organisations within the social economy have less compulsion to organisational growth
and more towards collaborative networking as a means of sharing innovation. 200) Organisational growth is the simplest way to grow an innovation.
211) Revealed preference methods come from the field of economics and focus on the choices people have made in related fields in order to estimate value.‘
The benefit of SROI is helping stakeholders to recognise all of the potential benefits a project
describing them instead as processes for discussion between stakeholders. 218) Social accounting methods have been used by many countries.
explores the value associated with public policy. 9 Some of these tie value to notions of opportunity cost (that is,
Where these succeed they create a political constituency for public investment in early years'education as well as effective models for delivery. 234) New models of the support economy.
such as feedback sites on public services or M-PESA's platform for phone-based banking. 246) Rewiring economies, connecting sectors like the utilities and automotive industries for the development of plug-in hybrid cars,
Framing involves linking particular events such as natural disasters, crises of care or of the economy to underlying causes,
They are one of the reasons why economics has found it hard to understand innovation without a substantial dose of sociology added in CONNECTING PEOPLE,
as in private business, we would expect social economy intermediaries to become more explicitly focused on their knowledge and relationships.
and able to engage a wide range of stakeholders in the design, development, and evaluation of innovation. 280) In-house innovation units, such as NESTA's Public services Innovation Lab (launched in 2009)
as well as innovation for the economy. The Department for Business, Innovation and Skills (BIS) in the UK is one example.
and build a functioning website. 136 THE OPEN BOOK OF SOCIAL INNOVATION Innovation networks Networks can serve as alternatives to formal organisational structures within the social economy‘they can leverage the assets that already exist in a system by connecting them to others'.
'5 The very nature of networks bring a range of benefits that are particularly important within the social economy:
At the European level, The Community of Practice on Inclusive Entrepreneurship (COPIE) brings together a wide variety of stakeholders to discuss issues relating to inclusive entrepreneurship, local development,
we discussed the emergence of a new‘social economy'which is characterised by the following features:
This social economy is the source of social innovation. However, while it already plays the key role in developing new models and services to meet social needs,
it could play an even greater role. 142 THE OPEN BOOK OF SOCIAL INNOVATION It has been argued elsewhere that the social economy,
and new kinds of institutions, especially in the fields of finance and formation The french term for the creation of skills and culture. 1 Progress in achieving this has been hampered by the fact that the social economy remains little understood.
So, what is the social economy? The Social Economy The social economy is a hybrid.
It cuts across the four sub-economies: the market, the state, the grant economy, and the household.
Each of these sectors has its own logics and rhythms, its own means of obtaining resources, its own structures of control and allocation,
and its own rules and customs for the distribution of its outputs. But the parts of these economies which we term the social economy are united by their focus on social goals, by the importance given to ethics,
and by their multiple threads of reciprocity. Their production ranges from the micro scale of domestic care in the household to the universal services of a national welfare state.
If the social economy is a hybrid, so are the firms, states, charities and households that operate within it.
Yet organisations like Oxfam and Age Concern are shaped still primarily by the grant economy in how they raise their money,
The shaded area in the diagram opposite represents those parts of the four sub-economies that together constitute the social economy.
The diagram shows that none of the four sub-economies is concerned wholly with the social economy.
if there are four sub economies, there will be six interfaces. The first three interfaces are between the state
and the other three sub-economies. 3 Central to these interfaces is the way finance crosses the borders,
and the platforms and tools provided by the state for the actors in other parts of the social economy.
The fourth interface is between the private market and grant economy. These relations include, for example, corporate sponsorship, charitable donations, mentoring,
and NGOS, exemplified in the work of Philips in developing new models of The State The Market The Household The Grant Economy The Social Economy Source:
The fifth and sixth interfaces (along with the third) constitute the household economy's relations with the other three sub-economies.
The extent to which social networks and a gift economy operate in the sphere of consumption has long been remarked on by anthropologists for example (from Christmas presents to the purchase of rounds of beer.
Between the grant and the household economies there are also two way movements of donations and volunteering from one direction, to a multitude of services from the other.
when associations and movements from the household economy partially transfer themselves into the grant economy,
In practice, however, each sub-economy may relate simultaneously to a number of others. 4 For example,
the state can promote social innovation in the market as well as the grant economy by applying certain policy and regulatory levers such as minimum trading standards,
and apply to the three interfaces between the household and the other sub-economies. First is the development of new systems of support economy as put forward by Jim Maxmin
and Soshana Zuboff in The Support Economy. 5 This is closely linked to the development of co-creation
and co-production representing a partnership between households and professionals. Personal budgets (introduced for people with disabilities in the UK in the 2000s),
Neither the state nor the grant economy has the structure or incentive to innovate in this way.
6 The household on the other hand that most distributed of economic systems generates ideas but on its own lacks the capital, surplus time,
Crisis and the new Social Economy.''Provocation. London: NESTA. 2. This is a wider definition than the more usual one
which refers to the social economy as the third sector namely NGOS and social enterprises.
The definition here includes both the public economy whose values and goals have much in common with those of the third sector
and the informal economy of the household. 3. The social components of these three sub economies outside the state are the economic parallel to civil society,
and could be thought of as the civil economy, that is to say that part of the social economy that is outside the state. 4. There are also interfaces within each sub economy,
for example between the private and social markets. This may take the form of joint ventures, as in the recent case of Grameen-Danone and their collaboration in a social enterprise producing yoghurt for low income households in Bangladesh. 5. Maxmin, J. and Zuboff, S. 2004)‘ The Support Economy:
Why Corporations are Failing Individuals and The next Episode of Capitalism.''New york: Penguin. 6. This is the argument of Beinhocker, E. 2007)‘ The Origin of Wealth.'
but this does not deal with those areas of the economy which are difficult to commodify. 146 THE OPEN BOOK OF SOCIAL INNOVATION 1 SUPPORT IN THE PUBLIC SECTOR In the past,
and paved the way for the sweeping reforms and the unprecedented economic growth of the past three decades.
they could be adapted to fit the economics of social businesses. Legislation and regulation Governments shape the conditions in which social entrepreneurs
and support social innovation. 382) Policy instruments to remake markets to promote the social economy such as compulsory targets,
) 385) Planning and tax rules to promote creative economies such as subsidised rent in art districts,
Crisis and the new Social Economy.''Provocation. London: NESTA. 3. See for example, Murray, R. op cit.;
'No. 7, Winter 2008.1 SUPPORT IN THE GRANT ECONOMY 167 2 SUPPORT IN THE GRANT ECONOMY Civil society and the grant economy are the most common sites of social innovation in campaigns
We describe this sector as the grant economy because grants play an important part, even though much of the income received within this sector comes from other sources, such as contracts with governments and other kinds of trading income.
and encourage the generation and adoption of innovation within the grant economy, there need to be new kinds of finance, platforms, packages of support,
and what mix of funding for individuals, teams The State The Market The Grant Economy The Household 2 SUPPORT IN THE GRANT ECONOMY 169 and enterprises works best,
and procurement'(see methods 170-183) for ways in which the public sector can support innovation within the grant economy.
and connectivity to villages in the developing world. 2 SUPPORT IN THE GRANT ECONOMY 171 408) Intermediaries who allocate grants for specific projects on behalf of the donor,
for example Cordaid's investment and development packages for commodity development projects, or the UK's Department for International Development (DFID) Frich grant programme for UK market development for African supply chains. 413) Inverse tapering:
ECONOMY 173 Governance and accountability Too often within the grant economy, governance and accountability structures do not resonate with the organisation's social mission.
and whether the innovation itself and the process surrounding it meet their needs. 2 SUPPORT IN THE GRANT ECONOMY 175 424) Members and associates as sources of innovation and review,
or‘blended value'measures and‘social return on investment'measures used for stakeholder communications (for more information on metrics see methods 208-229). 426) Effective philanthropy methods,
and formation within the grant economy and identified a lack of training and experience as one of the main barriers to the sector's success. Leaders of nonprofit organisations,
and stakeholder management while keeping the organisation aligned to its mission and values. 430) Developing skills within the grant economy.
Image courtesy of the Young Foundation. 2 SUPPORT IN THE GRANT ECONOMY 177 intelligence model.
and wider scope for charity operations. 435) Planning and tax rules to promote creative economies such as subsidised rent in arts districts,
models and ideas for building a‘bright green'future. 2 SUPPORT IN THE GRANT ECONOMY 179 End notes 1. Blackmore,
There is an asset The State The Market The Household The Grant Economy 3 182 THE OPEN BOOK OF SOCIAL INNOVATION lock,
prisoner rehabilitation or disability services. 447) Extending the cooperative economy in production, including MONDRAGON and Peruvian coffee co-ops. 448) Foundations as owners of corporations,
the active involvement of shareholders and savers in the company's decision making process must be encouraged;
They remain critical to the social economy, both in assessing products and services on the basis of social criteria,
They create their own protected economies with discounts for particular products and services from specified places.
The growth of parallel mechanisms to favour the social economy has been geared primarily at promoting the local economy.
and development of the sector. 483) Specialist academies linked to social economy initiatives, such as: the University of Mondragón in Spain;
which has grown out of the slow food movement. 4 484) Retraining of business leaders to play roles in the social economy,
Rizzoli International. 3 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 195 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY Many innovations begin in the informal life of households a conversation around a coffee, a kitchen table,
Over time what they do may become more formalised and shift into the grant economy and subsequently into the public or market economy.
The informal household economy has generally been recognised under as a source of innovations. But it has played a critical role in fields including the environment and health
Within the household economy, we can see a number of emergent trends. One is new forms of mutual action between individuals whether in the form of open-source software,
Paris. 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 197 providing others, selling information on users and so on. 1 In the field of opensource software,
However, this is not just a virtual economy. It is also about care and support in the home and the neighbourhood,
This question is of course central to current discussions of urban and rural policy (from lighting, The State The Market The Household The Grant Economy 4 198 THE OPEN BOOK OF SOCIAL INNOVATION to curfews
But to spread the benefits of the social economy, we will need to rethink many of the ways in which the household economy relates to the two main sources of finance the market and the state.
Issues such as the distribution of working time, the valorisation of voluntary labour, the content and channels of life skills learning, the role of many of the social and educational services, the arrangements for retirement and unemployment, the size
which provides an online publishing platform for tens of thousands of citizen reporters. 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 199 498) Hosts and moderators as online guides.
Propertising not privatising In the social economy, rather than restricting access to knowledge and information, there is value in diffusing and sharing ideas and information as widely as possible.
and of means to strengthen a reciprocal economy by limiting free riders. Examples include open licences. 500) Open licensing has redrawn the traditional battle lines between the interests of society
or the rights to sabbaticals provided in some professions. 505) Flexible terms of formal employment to enable a sustainable informal economy,
such as the right to request flexible working time. 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 201 506) Training for volunteers the provision of training and incentives for volunteers,
They create an economy based on direct household time and can serve as alternatives to mainstream currencies
OR HOUSEHOLD ECONOMY 203 514) Extending public spaces for domestic production such as allotments and opening parts of parks or schools for residents and students to grow flowers, fruits, and vegetables.
Image courtesy of Mike Russell. 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 205 517) Users as producers such as the Expert Patients Programme,
Image courtesy of San Patrignano. 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 207 This could include educational coaching services, relief and backup for home carers, health coaches, birthing
They have been generated largely from within the household economy, and have developed innovative forms of distributed network organisation and action,
Jim Maxmin and Soshana Zuboff, The Support Economy: Why Corporations are Failing Individuals and The next Episode of Capitalism, Penguin, 2004.
Walter Stahel, The Performance Economy, Palgrave Macmillan, 2006. INDEX 211 INDEX 5 a Day Campaign 86 10:10 Project 87 27e Region 148;
148 Finance For emerging ideas 54-57 For new ventures 78-80 For systemic change 121-122 Public economy 149-161 budgets to promote internal
and means of payment 156-157 public investment 157-160 fiscal moves to promote social innovation 160-161 Grant economy 168-173 grant giving 169-171
71 Grant Economy 142-145; 167-179 Green Homes 88 Green Valleys 55 Greenpeace 28;
31 The Household economy 142-145; 195-208 Hubs 129; 135 I Want Great care 21;
154 New Economics Foundation (NEF) 49 New Philanthropy Capital 171; 175 New york's Open Book 154 New zealand Police Act Wiki 42-43 Niagara Peninsula Homes 206 Nike Foundation 113 Nobel prizes 169
202 Sobrato Family Foundation 169 Social economy 4-6; 63; 82; 84; 136; 141-145;
18 Supply Chains 13,62, 70,94-95,171 Support Economy 5, 111,144 Sure Start 111,150-151 Tällberg Foundation 44 Taproot Foundation 172
THE AUTHORS ABOUT THE YOUNG FOUNDATION Robin Murray is an industrial and environmental economist. His recent work has focused on new waste and energy systems and on projects in the social economy.
He was cofounder and later chair of Twin Trading the fair trade company and was involved closely in the companies it spun off,
and tools for innovation being used across the world and across the different sectors the public and private sectors, civil society and the household and in the overlapping fields of the social economy, social entrepreneurship and social enterprise.
Economies in both developed and (to Geoff Mulgan The Process of Social Innovation Geoff Mulgan is director of the Young Foundation based in London (U k). He previously worked in the U k. government as director of the Strategy Unit
Over the next 20 years, the biggest growth for national economies is likely to come in health education,
because the economics of web-based pilots may make it as inexpensive to launch on a national or continental scale.
Marginal costs close to zero accelerate the growth phase but also the phase of decline and disappearance. Our recent work on scaling up has shown why it is so hard for social innovation to replicate,
and trustees, funders and stakeholders do not impose necessary changes. By comparison, in business the early phases of fast-growing enterprises often involve ruthless turnover of managers and executives.
As well as the study of innovation in economics and science, there is a small emerging body of research into the capacity of formally constituted social organizations (nonprofits, NGOS, charities,
and outcomes of public and social organizations, including the fascinating work led by Dale Jorgensen at Harvard on valuing the informal economy and family work,
As it came to be understood just how important science was to the economy (and to warfare),
see the Economist, Open, but not As usual,<http://www. economist. com/business/displaystory. cfm? story id=5624944>(accessed May 24,
2006). 8. For example, see de E. Bono, Lateral Thinking Creativity Step by step,(London, U k.:Perennial Library, 1970). 9. See Global Ideas Bank,<http://www. globalideasbank. org/site/home/>.
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