However, thisabsenceofimpactoninnovationmaybe caused bythefactthatsubsidiesincroatiaarenot sufficientlylargetoenableafirmtomakesignificant investment ininnovationactivities. Subsidies, firmageandproportionoffull-timeequiva-lent employeesengagedinintramuralr&dareomitted from furtheranalysis. Theremainingfactorsareusedas independentvariablesinalogitmodelwithinnovation variablesasdependent.
Customerpower, strategic investment, andthefailureofleadingfirms. Strategicmanagement Journal 17 (3), 197 218. Cooke, PH.,Wills, D.,1999.
Knowledge creation and A Culture of Innovation are keys to development Research has shown that increased investment in human capital can determine competitive advantage and indeed success in the development of Least Developed Countries (LDCS.
In total they represent an investment in research of almost 870 million euro, of which the European commission funds 570 million euro.
These principles can be validated via direct industrial investment, and roll out real integrated test beds to trial new network and service infrastructures.
and must protect its investments. Examples include the deployment of Deep Packet Inspection techniques by ISPS
when an ISP (the provider) requests a share of an ASP's revenues (the consumer) due to its higher investment risks and operational costs.
in order to improve their return of investments (ROI). Thus, embedding risk/cost analysis in the SDLC is currently one of the key research directions
Such a life cycle model aims to ensure the stakeholders'return of investment when implementing security measures during various stages of the SDLC.
These decisions maximise the value from the infrastructure investment. The final scenario, Investment Governance builds on the first two to demonstrate how they feed back into future business decisions.
Taking a holistic cost view, it provides fine grained SLA based data to influence future investment decisions based on capital
security, compute power and energy efficiency. In order to enable realistic and effective reasoning at provisioning and run time,
Using Key Performance Indicators (KPIS) we evaluate the performance of the lab demonstrator in the areas of IT enabling the Enterprise IT Efficiency IT Investment/Technology adoption The Use Case identifies a hierarchy of KPIS
one of the areas where high investment in research has taken place in recent years is related to the multimedia and multimodal search and retrieval of multimedia objects over the Internet.
which states that a city may be called‘smart'when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic growth and a high quality of life, with a wise management of natural resources,
This will provide the necessary innovation-enabling capabilities for attracting public and private investments to create products and services
Finally, it must be noticed that financial aspects are of the utmost importance considering the investment required to deploy city scale testbeds.
and government policies to facilitate an incentive framework for foreign investment and development of commercial partnerships with small and medium firms in other countries.
and services are positioned to compete more successfully through the development of new products and processes, before competitors in first-mover advantage, increasing market share, return on investment (ROI),
The sharing of information and understanding about opportunities enable firms to attract other human capital, financial investment,
) R&d investments and family firms: an agency perspective. Journal of Business Venturing, 27,248 275. Price et al.
where the core actors and suitable investment priorities and to allocate resources efficiently are more easily identifiable.
The main objective is to provide a clearer understanding of how local quality of government institutions conditions the effectiveness of innovation investments.
the spatial weight of business R&d expenditures, to proxy for knowledge spillovers from R&d investments in neighbouring regions(;
a region may gain higher returns from additional investment in innovation. The Quality of Government Index is subdivided then into its four components to identify the key institutional factors affecting the successful promotion of innovation at the regional level in Europe.
In these circumstances, investments in innovation activities become more costly and the application of long-term development strategies of the kind linked to Smart Specialisation more complex to achieve.
while the value for the‘periphery'is only 0. 59 (recall that the index is normalised between 0 and 1). 9 Investments in R&d from the private sector show a strong connection with innovation in the core group,
Conversely, the evidence of a positive effect from R&d investments is marginal or absent in the periphery.
investment for growth and jobs. For Europe's universities, most importantly, their education and training capacities should be linked crucially to research and innovation activities
It will be the basis for Structural Fund investments in R&i for the period 2014-2020.
investment in high-risk spin-offs and venture capital; local firms and universities to work collaboratively; and ensuring the sustainability of Smart Specialisation Strategies beyond the structural funding timeframe.
For regions, the benefits should not be simply new infrastructure in physical terms but also importantly in investment in human capital development and services to the region.
But their investment is aimed often at short-term rather than long-term goals. Physical buildings and infrastructure can be achieved in the short term (within the political framework/time cycle.
Synergy between innovation policy and regional policy initiatives/investments is often lacking or under-used.
National ministries of education, science and technology are often spatially blind in their R&i investments,
and/or due to the long-term nature of the investment that the partnership requires compared to the shorter-term periods/cycles of governments.
Structural Funds can be used to build research excellence through investment in research infrastructures and attracting leading researchers.
Synergy effects can be seen in the investment in research infrastructures that are required for successful research collaboration.
and collaborative research can be built with those universities to maximise this investment within the country as a whole (at least 50%of the Czech republic's education
Improving R&d infrastructure (incl. construction and renovation of buildings for teaching and research, investments in R&d equipment.
Additionally, the value of ERDF funding for investment projects in research and equipment was €2. 3 million.
The university participated in the local regional board for the investment of approximately €200 million where 10%of funding was allocated to research-and innovation-related activities.
Over that period it would have amounted to approximately 25%(rough estimate) of public investment in university RDI.
The main investment areas have been: research buildings, laboratories and equipment; human capacity building through structured Phd programmes and postdoctoral programmes;
Since 2006 this investment in RDI capacity has been linked strongly to synergies with other major national investments,
Multiple national agencies have been required to cooperate in making this investment. Funding for innovation activities has been directed through a separate agency (Enterprise Ireland) as an open competitive process on a rolling basis. There is thus a considerable synergy between structural funding and national programmes,
and access and use of major infrastructure investments in science and technology facilities, e g. the European Laboratory on Tissue Engineering and Regenerative Medicine, the Institute for Bio-Sustainability and the Incubator Spinpark.
Also, funding for basic research activities in university laboratories through key research staff and equipment investments can be gained through the ON2 programme Consolidation of the Research Network.
The main investments and activities covered by these funds were: Co-financing of the university's research facilities and equipment:
/2010/05/so was it an internet election. html vii http://www. citybeast. com/londoncyclists. html viii http://www. youngfoundation. org/our-work/ventures-and-investment/healthlaunchpad/portfolio
The group argued that the lack of innovation-friendly markets in Europe was the main barrier to investment in research and innovation.
The Alliance argues that an investment of $300 billion (€212 billion) would add more than 3. 3 million jobs to the economy,
and therefore job creating than nonrenewable investment. Social Innovation and EU 2020 Social challenges are real and significant;
Most will have sunk investments of time and money in past practices that they are loath to discard
and consequently only weak incentives for investment, and There are, at best, imperfect markets for social outcomes,
For example, Mars in Toronto, links a university, hospital, business incubator, alongside a social innovation investment fund.
The netherlands Ethical banks provide a broad range of financial products which seek to maximise both social and environmental returns on investment.
'Triodos now has offices in the UK, Spain, Belgium and The netherlands as well as an International Development Investment Unit
In its mission to effect maximum transparency, all savings and investment accounts are available to view on Triodos'website.
Venture philanthropists seek social as well as financial returns on investment although in many areas, the majority of venture philanthropy activity is based on nonreturnable grants
(i e. seeks purely social returns on investment). Over the last decade, venture philanthropy has played an important role in diversifying capital markets for social purpose organisations
57 make investments which are based performance, placing an emphasis on measureable outcomes, achievement of milestones and high levels of financial accountability. lxxxviii There are more than 100 venture philanthropy organisations around the world, working with a range of organisations not solely charities and not-for-profits.
Their portfolio of investments covers four main areas: childcare and families to break the cycle of disadvantage by making investments in organisations dedicated to early intervention
and prevention to create effective family support programmes for national implementation; youth mental health to improve wellbeing
When an organisation finally secures investment from the One Foundation, it is usually for 3-5 years.
Investment is based performance, with annual and quarterly targets set that must be achieved for the following years'money to be released.
The One Foundation uses these investments to leverage funding from alternative sources. The One Foundation also provides a range of nonfinancial tailored support. 58 The household The informal household economy individuals
Dedicated funds exist for early stage ideas, investment, R&d, and incubation (for example, EU programmes such as EQUAL, Framework or at the national level SITRA/Tekes in Finland).
Support for capacities ranging from in-house teams to develop innovations (for example Mindlab in Denmark), to investment in skills and capacities,
and the EU's encouragement of Social Return on Investment methods. 68 However, we emphasise that this is an emerging field without much strong evidence for the effectiveness of particular policies.
and support changes in the Estonian economy through foresight projects and venture capital investments. The fund focuses on initiatives with international potential.
Social Enterprise Investment Fund UK The Social Enterprise Investment Fund is run by The Social Investment Business on behalf of the Department of health in the UK.
Developed in the wake of the 2006 White paper, Our Health, Our Care, Our Say, which identified the potential role of social enterprises in developing health
and provide better incentives for public organisations to make preventative investments. Investing in social innovation is complicated often by problems associated with quantifying the effects of an investment,
especially where those effects are not financial. This is especially the case with investment in programmes
which are preventative. Social Impact Bonds, UK Social Impact Bonds (SIBS) are a financial tool being developed in the UK to provide a new way to invest money in social outcomes.
Investments (by local authorities, commercial investors or foundations; A programme of actions to improve the prospects of a group (for example 14-16 year olds in a particular area at risk of crime or unemployment;
Local authority SIB Under this model, a local authority borrows for a package of investment in a social impact programme
Contractors would raise their own capital either through social investment sources or on the market.
These range from investment in early years programmes (based on the evidence from the Abecedarian and High/Scope Perry Preschool Programmes for substantial long-term paybacks), to NEETS (focused on life time earnings
and investments in health prevention and improvement. Another potential field for action is in employment creation during the downturn.
and secure investment from funds such as the Social Enterprise Investment Fund (SEIF) and the Regional Innovation Funds (RIF) managed by the Strategic Health Authorities (SHAS).
and investment as they completed the various stages. And the further the participants progressed the more NESTA invested in terms of support and specialist advice.
and fails to mobilise private sector investment efficiently or consistently. cxxvi Current risk capital markets lack openness and transparency, leading to limited access and sub-optimal decision-making.
to third sector organisations that need investment to help them bid for, win and deliver public service contracts.
and expects a positive and substantial social return on investment to be audited by a third party.
investees must be able to repay the loan element of their investment. cxxxii Skills and formation While there is growing interest and investment in the development of financial resources for social innovation,
very few resources have, as yet, been devoted to labour market development. Our analysis suggests that this is as important an issue as finance.
A key priority for Europe must be to strengthen the field of social innovation, with proper investment in training materials, understanding of methods,
include (1) a measure of the amount of investment in innovation in the UK economy,
or simple way of applying existing indices for innovation to the field of social innovation given that these typically measure inputs (i e. investment in R&d spending or the number of patents granted) and not outcomes.
and practical applications in the form of tools such as Social Returns on Investment (SROI) and Multi Criteria Decision Analysis methods.
Within the nonprofit world Social Return on Investment Methods (first developed by REDF) translated the methods of the social impact tradition into the language of rates of return.
for example, showed that modest investments in home safety which cost about 3%as much as home repairs generated four times as much value in terms of life satisfaction. clxiv Finally there are the many accounting methods used at the level of national governments and regions.
Early stage/low value promising ideas Late stage/high value approaches considered for serious investment This is done using four main dimensions,
We are less confident that social return on investment models can provide this common architecture for the reasons stated above.
Priority fields for action (for example young people, ageing, carbon reduction) Priority tools for action (investment, capacity, networks, procurement etc) Milestones and targets for achievement over 2, 5
or family of funds to be operated through DGS, EIB etc, covering the full range of financing needs, from seed funding for ideas through investment, growth and so on.
and investment in more rigorous lesson learning. This has been a key weakness in some past programmes.
-European Social Fund-European Investment Bank along the lines of joint EIB and European commission initiatives such as JESSICA, JASMINE, JASPER and JEREMIE-EIF to promote social enterprise alongside enterprise.
not just for return on investments and all sectors of the economy should be drivers for innovation.
Measuring the UK's investment in innovation and its effects. London: National Endowment for Science, Technology and Arts. cxlix Hoegen, M. 2009) Statistics and the quality of life:
SROI A Guide to Social Return on Investment. Lenthe Publishers. clxvi Linkov, I.,Varghese, A.,Jamil, S.,Seager, T.,Kiker, G. & Bridges, T. 2004)‘ Multi-Criteria Decision Analysis:
new initiatives, companies based on technological advances, attracting foreign investment, This enables the creation of a demanding demand which catalyses the entry into an early phase
where participants increase the level of investment as they pass through the various stages. This is how NESTA's Big Green Challenge was organised.
A critical issue is to combine the investment decision and business support. Typical units for individual projects range from £2k-£250k,
and sequencing for example of investment in people, equipment and market growth. Business plans cannot design the future
and is similar to charitable status. CIC status enables social ventures to access equity investment
Some of the methods for effective supply include investment in evaluations and research data to demonstrate effectiveness
and requires more investment in professional skills. 5 84 THE OPEN BOOK OF SOCIAL INNOVATION Inspiration Some ideas spread because of their qualities as ideas they are inherently inspiring, arresting, and engaging.
or provide a means for providers of money to judge between alternatives. 208) Standard investment appraisal methods there are a wide range of tools in use in banking, venture capital and other fields of investment
and is used now as standard for assessing transport investment and large development projects. 210) Stated preference methods monetise social value by drawing on what people say they would pay for a service or outcome.
(which is meant to quantify a potential investment‘s social output), methods developed by the Center for High Impact Philanthropy (CHIP) and various other individual foundations,
and costs. 217) Social Return on Investment (first developed by REDF), has become increasingly popular within the nonprofit world.
One imaginative study of a regeneration scheme, for example, showed that modest investments in home safety
or a new set of investment devices. Systematic approaches to innovation are rare. But the UK health service may be becoming a good case study. It is a huge system by any standards with an annual turnover of £98 billion
It is involved already heavily in innovation through investment in research and development on pharmaceuticals and medical instruments and close links with top universities such as Imperial and UCL,
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.
and investment in community-based solutions focused on prevention. These are part of a‘family'of innovations in criminal justice that see the offender in their social context
and telecare technology (see also method 89). 256) Blocking technology and other investment choices that will impede changes to systems.
Stopping sunk investment, or reinvestment, in an old model can be the key to creating space for investment in new alternatives. 257) Frames for change.
Framing involves linking particular events such as natural disasters, crises of care or of the economy to underlying causes,
Reduced VAT rates have also been used in Europe to encourage environmental investment, as with home insulation in the UK, biofuels, renewable energy equipment and recycled paper in the Czech republic,
Image courtesy of Akuppa. 6 122 THE OPEN BOOK OF SOCIAL INNOVATION systemic ideas they need different methods to those used for investment in established systems.
or environment and transport. 274) The creation of new investment flows can do the same,
connections, knowledge, experience, and investment. Borrowing from the best of a member's club, an innovation agency, a serviced office and a think-tank,
and innovation agency to develop a model that seeks to create new ventures and back social entrepreneurs with a multidisciplinary team, a staged investment model,
and a business incubator, alongside a social innovation investment fund. Mars is a nonprofit innovation centre connecting science, technology,
inwards in the form of taxation and fees, outwards in the form of grants, procurement, and investment.
or windfall taxes from utilities for investment in emerging green technologies and other innovations. 348) Community pledgebanks are a development of the Pledgebank idea:
Public investment Financing public investment is complicated by the common difficulty in quantifying the effects of an investment,
This particularly applies to preventative investment. Private funding can be used where there are clear streams of revenue resulting from the investment,
with the public funding element covering the wider social impact elements of an investment and reducing risk. 359) Local bonds,
including Tax Increment Financing (TIF) and Business Improvement Districts (BIDS. These create flows of resources at the local and very local levels,
and can support new functions at arm's length from the local state. 360) Generating revenue from public investment on the US railroad model.
Prior to investment, property rights are vested in a Community Land Trust (CLT) or public body which then benefits from the increased rental value of sites after the public investment has been undertaken.
The Greater london Enterprise Board financed its operational expenditures for many years through the sale of industrial property it had bought during the recession of the early 1980s.1 158 THE OPEN BOOK OF SOCIAL INNOVATION 361) Social investment funds
such as the proposed Social Investment Bank to be funded from unclaimed bank accounts, which would act as a wholesaler for a range of financing needs (see method 475). 362) Social enterprise investment funds,
such as the Social Enterprise Investment Fund launched by the UK's Department of health with around £100 million,
and the London Climate Change Agency (LCCA) to develop sustainable energy programmes. 365) Joint project financing leveraging public money with voluntary contributions, sponsorship or community investment. 366) Layered
investments combining tranches with different rates of risk/return and different sources of capital (philanthropic, public, private) such as Blueorchard (Switzerland) or Big Issue Invest in the UK. 367
as with The swiss Re insurance of pollution claims from landfill. 369) Investment guarantees, with any claim on the guarantee being paid out with a one year delay.
This is to avoid the full value of the guarantee being counted in a public authority's current investment programme (Sheffield City council pioneered this delayed payment method in the 1980s.
370) Securitising future payment'streams to provide investment capital, as with the Prime Carbon scheme in Australia which contracts sequestered carbon from microbial treatment of agricultural soils to large companies on a five year basis,
allowing these payments to be 1 SUPPORT IN THE PUBLIC SECTOR 159 capitalised to fund farmers'investment.
or corporate energy efficiency measures. 371) Financial instruments for preventative investment including the UK's‘Invest to Save'budget, the USA's Justice Reinvestment programme,
and provide better incentives for public agencies to make preventive investments. They were endorsed in a government white paper in December 2009.373) Health Impact Contracts are a potential new financing device to connect the NHS in the UK with other agencies (primarily local government),
with investments by local authorities (for example in home based care for the elderly) tied to future payments by the NHS determined by
whether the investment leads to lower pressure on hospitals and acute services. 374) Bonus payments on spending aligned to social outcomes such as the UK Government's Performance Reward Grant for local area partnerships
. 375) Public investment aimed at social innovation growth strategies such as the proposed Social Investment Bank, the Toronto Atmospheric Fund,
and improving prospective post-tax rates of return. 377) Exemptions and assistance such as tax relief along the lines of the Enterprise Investment Scheme (EIS) for social enterprises,
These zones provided a range of tax incentives to attract foreign investment and paved the way for the sweeping reforms and the unprecedented economic growth of the past three decades.
credits, allowances and estate duties for personal public investment, such as those for higher education, elder care and environmental investment. 380) Charitable status extended to allow tax allowances on investment funds,
as with charitable investment in Community Interest Companies, or the L3c model in the US
which allows for programme-related investments from foundations. 381) R&d tax credits for the design and development of innovations.
R&d tax credits have been extended to cover design, and although they are designed primarily for commercial companies, they could be adapted to fit the economics of social businesses.
and others are treating grants more like investments alongside project involvement, technical support, continuous funding, and the coverage of core costs. 4 403) Direct funding for individuals, including the grants given by Unltd, The Skoll Foundation,
are used now by nonprofit organisations to secure longer-term funding with a detailed pledge to provide a social return on the‘investment'.
and Teach for America. 411) Grants as investment including tapered grant funding, public equity, and preference shares. 412) Grants as complements to innovation investment packages.
Grant funding for off-balance sheet expenditure, 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:
and social investment circles such as the Funding Network, United Way, Social Venture Network, or the North Virginian Giving Circle of HOPE (Helping Other People Everydy).
and z). Mission-related investment Philanthropy has moved increasingly to softening the distinction between grant and investment viewing funds as supporting projects that contribute to a specific mission,
including transformations of whole sectors for social ends. 419) Strategic investments to transform sectoral provision, for example, the Bill and Melinda Gates Foundation's investment in small high schools across America;
and the Prosperity Initiative; which creates sectoral partnerships to stimulate industries that create income and employment for the rural poor. 420) Venture philanthropy focused on innovation in particular sectors,
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,
Much has been written about social returns on investment, triple bottom lines and‘blended value'2 but how to ensure that the interests of investors remains subordinate to the social mission remains a critical question for social enterprise.
and financial returns on investment or at least, reduce the negative impacts of investments. Investments can be screened negatively to exclude, for example,
companies and organisations which are responsible for exploitative labour practices, cause harm to people and planet or are at odds with the values and mission of the investing organisation.
Investments can also be screened positively to include companies which further social and environmental goals. For example
the Norwegian Government Pension fund follows a series of ethical guidelines issued by the Ministry of Finance these include the stipulation that the fund cannot make investments
'The website Your Ethical Money provides advice on how to direct personal investment into green,
sustainable and ethical products. 457) Mission-connected investment is a form of ethical investing it allows organisations to tie their investments closely to their missions
or so social enterprises in the UK. 459) Social venture funds that use equity-like investments for start-up and early-stage social ventures where loan financing is unsuitable.
These bonds enable investors to release 20 per cent of the value of their 3 SUPPORT IN THE MARKET ECONOMY 187 investment for charity
as with the Mustard seed charity's investment in the fair trade Community Interest Company, Liberation Foods. 465) Investment-readiness support aims to get projects
or promising enterprises to a stage where traditional investors can make investments. This can include
etc) to enable approaches to any funder. 466) Philanthropic investment for growth such as the CAN Breakthrough Social Investment Fund
runs CAN Social Investment, leveraging business support from leading private sector companies, as well as CAN Mezzanine,
seeking a blend of social and financial returns (see also method 361). 3 476)‘ ebays'for social investment, for example, Clearlyso,
Image courtesy of Bill Knight/www. knightsight. co. uk 3 192 THE OPEN BOOK OF SOCIAL INNOVATION Training and formation There is growing interest and investment in the development
This index can be used as a basis for responsible investment, as a way of identifying environmentally and socially responsible companies,
Office of the Third Sector (2009)‘ Social Investment Wholesale Bank: A consultation on the functions and design.'
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
improving the grant relationship 171-172 mission related investment 172-173 Market economy 185-189 social finance 185-187 social finance institutions 188
166 National Health Service Duty to Promote 162 National Health Service Social Enterprise Investment Fund 158 NHS Innovation Hubs 135 NHS Institute
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