Synopsis: Entrepreneurship: Profit:

Policies for high-growth innovative SMES v1. 6 23 increase their profits which does not correspond to socially efficient allocations.

and lobby groups maximise their individual utility and the profits of their members, respectively. Governments may have different objectives.

Growing profitable or growing from profits: Putting the horse in front of the cart? In: Proceedings Max Planck Institute Schloss Ringberg Conference, pp. 1-46, Tegernsee, Germany.

Illawarra Program is a business support program that has been designed to assist Illawarra-based entrepreneurs who are looking to drive their businesses to achieve increased profits and sustainable growth.

any kind of profit-oriented business enterprise not classed as a nonprofit organisation, public sphere organisation, research institute or secondary/higher education institution.

Commercial, profit-oriented research institutes are included also in this category. 44 The regional context of RDI in light of the RDI Observatory's complex indicators 5 The idea of this chapter was suggested by the EU's Regional

Main stakeholders Technology centres, research centres, hospitals and associated foundations, university groups and other public or not-for-profit organisations in the science and technology system, and companies.

Main stakeholders Technology centres, research centres, hospitals and associated foundations, university groups and other public or not-for-profit organisations in the science and technology system, and companies.

not-for-profit institutions have few means to follow through on their initiatives. The RDI system In terms of the number of researchers, the Romanian RDI system is undersized by European standards, with the number of FTE researchers at a quarter of the EU average.

and protection of the knowledge become predominant and decisive for long term profit gaining and sustainability assurance (Nicolescu, 2011).

as compared with profit-based performance measure, is more conducive to firm innovation; and (3) CEO education level, professional background and political connection are associated positively with firm's innovation efforts.

which the contribution the higher education sector was the most significant contribution. 2001 2011 Enterprises 53,3%Government 6, 8%Higher education Private Non 39,5%Profit 0, 4%Enterprises

54,4%Government 9, 9%Higher education 35,6%Private Non Profit 0, 1%Figure 4. R&d expenditure by sectors.

and where‘profit'is reinvested (NESTA, 2007a: 1). Here social enterprises and social entrepreneurs have a key role to play (OECD, 2011.‘

and have limited a distribution of profit Explicitly aim to benefit the community or a specific group of people Source:

Ononehand, agemay affect theabilityofa firm tobuildareputationasacompetent, reliable and trustworthyinventing firm, andconsequentlymayhaveapositive impactonthechancetohaveitsinventionsacceptedbythemarket and profit (Danneels, 2002;

The resultsofthisstudywouldsuggestthatthevcrolecouldbe particularlyimportantwhenmftarenotwellfunctioning, andso vertical integrationisabetteroptionforsmall firms inorderto profit fromtheirinventions. Indeed, VCMIGHTPROVIDE financially-constrained small firms notonlywiththenecessaryresourcesto investintheacquisitionofdownstreamassets (e g.,

Kirzner (1973,1997) stressed the role of entrepreneurs as discoverers and early exploiters of previously-unnoticed profit opportunities.

which eliminates the profit. Innovation occurs as entrepreneurs discover new opportunities. But as opposed to Schumpeter's view of the entrepreneur as a disruptor of markets and instigator of evolutionary economic development

Here the entrepreneur is seen as facilitating economic adjustment by predicting where new profit opportunities will open up

OECD research shows for example how unbalanced taxes on company profits and losses and high average tax rates on SMES relative to large firms can diminish SME and entrepreneurship activity (OECD, 2009).

Knight, F. 1921), Risk, Uncertainty and Profit, Chicago University Press, Chicago. Jensen, M.,B. Johnson, E. Lorenz and B. Lundvall (2007), Forms of Knowledge and Modes of Innovation, Research Policy, Vol. 36, No. 5, pp. 680-693.

An Inquiry into Profits, Capital, Credit, Interest, and the Business cycle, Harvard university Press, Cambridge MA. Shane, S. 2004), Academic entrepreneurship.

Loan repayment rates depend on the firm's success (up to a maximum of 50%of annual profit.

Further, according to selected firm variables (profit, turnover, employment growth, third-party funding and profit turnover ratio),

when teamed up with at least one small or medium-sized for-profit company, or may participate as a member within a joint venture led by a small or medium-sized company.

which would diminish the entrepreneurial profit to the point where present costs outweigh expected returns. One can only conclude, then,

and in entrepreneurship, both commercial (for-profit businesses pursuing as a primary objective economic value and its appropriation) and social (primarily aiming at addressing and satisfying unmet social needs,

Nonprofit wages actually exceed for-profit wages in many of the fields where both sectors operate;

or can it also be found in the for-profit and public sectors? While many social entrepreneurship initiatives can be found in the nonprofit sector,

the for-profit sector (for-profit business reaching outstanding, concrete levels of social responsibility and a high level of creation of social value) and the public sector6 (central and local authorities engaging in

Box 5. 2. Social entrepreneurship attitudes in the for-profit sector Corporate social responsibility (CSR) is a concept distinct from that of social entrepreneurship;

Box 5. 2. Social entrepreneurship attitudes in the for-profit sector (cont. A project for setting up residences to host mentally disabled people who have outlived their parents.

This is very often the case for social enterprises that choose to go where traditional for-profit business do not,

but where services are needed most by a local population that is not always in a position to pay for the services that traditional for-profit business would provide at a higher price.

In order to address complex social issues and challenges (NESTA, 2007) transformative action is needed across the various sectors involved (nonprofit, for-profit, and government.

and innovation in the nonprofit sector or for profit private sector that improves public services or provides new ones.

because it does not have a profit-making dimension as its main goal, and can therefore pay attention to long-term social issues. 11 At the same time the nonprofit/social economy sector is increasingly adopting an entrepreneurial approach to further pursue its social objectives

and power of Web 2. 0. It was founded as a mission-based, for-profit enterprise, in Dublin in 2005 by a serial entrepreneur, Peter Conlon,

The broader definition of social enterprises in the United states (a wide spectrum of entities along a continuum from profit-oriented business engaged in socially beneficial activities (corporate philanthropies) to dual purpose business that mediate

profit goals with social objectives (hybrids) to nonprofit organisations engaged in mission supporting commercial activity (social purpose organisations)( 2006, p. 2) and the narrower one in the EU (usually enterprises

Regardless of profit orientation, social entrepreneurs identify opportunities to solve social problems: both people and planet problems (p. 18). 5. Brouard and Larivet (2009) analyse most of the existing definitions of social entrepreneurship

A comprehensive debate on the contribution of social economy organisations to local development through long-term projects, not constrained by the need of making profits in the short term,

First, in the for-profit sector, social entrepreneurship encompasses activities emphasising the importance of a socially engaged private sector,

'Second, it refers to activities encouraging more entrepreneurial approaches in the not-for-profit sector in order to increase organisational effectiveness and foster long-term sustainability.

p. 326) Hibbert, Hogg and Quinn 2002 Social entrepreneurship can be defined loosely as the use of entrepreneurial behaviour for social ends rather than for-profits objectives,

or alternatively, that profits generated are used for the benefit of a specific disadvantaged group. p. 288) Institute for Social Entrepreneurs 2002 Social entrepreneurship is the art of simultaneously pursuing both a financial and a social return on investment (the‘double bottom line'.(

'p. 1) Thompson 2002 Although social entrepreneurship is in evidence in many profit-seeking businesses sometimes in their strategies and activities, sometimes through donations of money and time.

job creating or licensing ventures undertaken by individual social entrepreneurs, non profit organisations, or nonprofits in association with for-profits.

p. 25) Sullivan Mort, Weerawardena and Carnegie 2003 Social entrepreneurship, the entrepreneurship leading to the establishment of new social enterprise,

or the expansion of an existing social enterprise by an individual, teams of individuals or established social enterprise, with social or community goals as its base and where the profit is invested in the activity

which are motivated generally by profit maximisation and diffused through organisations that are motivated primarily by profit maximisation.

There are of course many borderline cases, for example models of distance learning that were pioneered in social organisations but then adopted by businesses,

or for-profit businesses innovating new approaches to helping disabled people into work. But these definitions provide a reasonable starting point

This is sometimes considered to be the realm of large firms that are constrained by the need to maximise profits on existing products and services.

whose main purpose is not the maximisation of profits, but the attainment of certain economic and social goals.

therefore about solving social problems rather than exploiting market opportunities in order to maximise profits. Social innovation A type of innovation that answers to social problems by identifying

"The Cafu Foundation Project does not seek profit, therefore it is connected not to the market,

detachment from profit with a social vision toward a fraternal attitude with those excluded, the perception of a relational capital to be employed not for its own benefit,

The opening up of the delivery of justice to greater involvement from the private and not-for-profit sectors has, according to the government,

However, alternative funding can be made available within the not-for-profit sector. Significant private and philanthropic funding has been encouraged through the introduction of tax incentives

and profits are dedicated to community purposes (Department for Business, Innovation and Skills). 3 While the Community Interest Company is relatively new, some very old legal forms,

Activity taking place across the public, private and not-for-profit sectors, involving social entrepreneurs,

more than the traditional factors such as purely maximising profit, benefits and experience. Future-thinking companies are going to orient themselves more towards the B2s model.

Moorfields Eye Hospital already profits from running clinics in the middle East, an example the government thinks the NHS could follow.

Patients will receive NHS standard healthcare services outside the UK Government NHS reputation can help generate extra income abroad Profit making hospital branches Revenues can help close the NHS funding gap Solution

This new breed of innovators will also strike a balance between profit for stakeholders and improved lives for individual citizens, focusing on progress both for business and our global society.

and deliver value customer value proposition profit formula key resources key processes''.''e. Ostenwalder et al. define‘‘A business model is a conceptual tool containing a set of objects,

profits associated with the business enterprise delivering value''(Teese 2010). g. Demil and Lecocq, define‘‘business model as,

The economic approach focuses on how a firm can make a profit and key variables from this approach include revenue sources, pricing methodologies, cost structures, margins and expected volumes.

or outsource, configures its resources and ultimately captures profits (Slywotzky 1996). Decision variables focus on stakeholder identification, value creation, visions,

and financial model 4 No No Bertz (2002) Resources, sales, profits and capital 4 No No Hedman and Kalling (2003) Value network, resources, capabilities, revenue and pricing, competitors

a value that is less concerned with profit and more with issues such as quality of life, solidarity and well-being.'

all three schools of thought share the idea that social enterprises have as their explicit and primary aim the creation of‘social value'rather that the distribution of profits generated.

and the degree to which profits are distributed. While there is often an implicit assumption that social enterprises are by nature new, entrepreneurial and innovative,

whilst society as a whole profits a lot when these people are supported (e g . when offenders are rehabilitated instead of relapsing into crime).

Eradicating poverty through profits. Upper Saddle River, NJ: Pearson/Wharton School Publishing. 13. Bernard P. 1999.‘

)‘ Non profits, Innovation and Performance Measurement: Separating Fact from Fiction',Communique No. 17, Centre for Civil Society Studies, Johns hopkins university, 2010 93.

This happened in a global context marked by a general slow down of net sales growth (4. 2%vs. 9. 9%in 2011) and a decline in operating profits(-10.1%).

in a context of sharp profit decreases(-18.4%).%)This R&d growth rate is lower than that of their US counterparts (8. 2),

in 2012 top Japanese R&d investors showed some signs of recovery in net sales and profits,

The main indicators, namely R&d investment, net sales, capital expenditures, operating profits and number of employees are collected following the same methodologies

Company results in terms of operating profits were mixed, 82%of the companies made profits and average profitability was 9. 2,

%however the remaining companies (18%)presented strong losses. Company investment in fixed capital continued to grow at a significant pace.

One-year change,%4. 2 CAGR 3yr,%8. 5 R&d intensity,%3. 2 Operating profits, € bn 1549.3 One-year change,%-10.1

whereas that of companies from the OC group increased at a more modest rate (5. 7%).Companies in three of the four regions decreased profits in 2012 with Japanese companies showing a 4. 2%increase

As a consequence of this, the profitability (operating profits as percentage of net sales) remained level for Japan,

but decreased a lot for the EU (the effect of a low growth rate of net sales can be offset by a lower growth rate of profits).

In the case of the US group of companies, the drop in profits partially reflects the major losses of General motors,

The 2013 EU Industrial R&d Investment Scoreboard 23 9 Operating profits as percentage of sales.

6 8. 4 3. 0 13.0 R&d intensity,%2. 6 4. 9 3. 5 2. 2 Operating Profit, € bn

and net sales by more than 200%since 2004 while showing positive operating profits in the last reporting period.

and net sales by more than 200%from 2004 to 2012 and had positive operating profits in 2012.

Worldwide EU-527 US-658 Japan-353 Rank Sector Sales growth 1y(%)Sales growth 1y(%)Profit.*

*Sales growth 1y(%)Profit.**Sales growth 1y(%)Profit.**1 Automobiles & Parts 8. 8 11.3 5. 2 0. 0-3. 2 11.9 5. 6 2 Software & Computer Services 7

. 4 9. 7 18.2 6. 9 23.9-0. 2 2. 8 3 Food Producers 7. 3 10.1 10.7 3. 8

operating profits as percentage of net sales. Source: The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD 48 The 2013 EU Industrial R&d Scoreboard Changes in indicators by region and sector groups It is interesting to see the distribution of R&d investment of the Scoreboard companies across regions

for 135 German out of the EU1000 companies with data for the whole period*Profitability expressed as companies'profits as percentage of net sales Source:

for 81 French out of the EU1000 companies with data for the whole period*Profitability expressed as companies'profits as percentage of net sales Source:

*Profitability expressed as companies'profits as percentage of net sales Source: The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 56 The 2013 EU Industrial R&d Scoreboard R&d intensity trends by companies

sales and profits of both biotech and pharma companies in the Scoreboard from 2005 to 2012 and how these reflect the changes in the healthcare landscape

and Capex investment to be related to outputs such as Sales, Profit, productivity ratios and market capitalisation.

whereas sales and profits are in respect of all their activities. Unless such groups disclose their R&d investment additional to the other information in segmental analyses

BERD, where R&d intensity is added based on value instead of net sales. 4. Operating profit is calculated as profit (or loss) before taxation

R&d investment Net sales Capital expenditure Operating profit or loss Total number of employees Main company indicators (R&d intensity, Capex intensity, Profitability) Growth rates of main

In 2012, companies continued to increase significantly their R&d investments in a context marked by a slow down of net sales growth and a decline in operating profits.

in terms of operating profit or net sales was not found for these companies. As well as for the EU companies examined here,

trying to make a profit. ISPS, however, are placed often in the uncomfortable position of trying to negoti An Approach to Investigating Socioeconomic Tussles 155 ate a balance between their users'expectations of privacy (which,

the potential profits to be made from monitoring and monetizing the communication of their users, and the demands of government bodies to be able to monitor the networks for illegal or unwanted activities.

as a mean for quality provision and profit, to allow sustainable new forms of multimedia communications with an increasing importance in the future Internet.

which contributed a large percentage of the firm's profits. Subscriptions declined from 12 million paying customers at the end of 2010 to 11.4 million at the end of March of 2011 and continued to rapidly drop until May In response to questions about this decline, the company's CEO,

High levels of performance can facilitate firm growth and subsequent profit performance, which in turn can yield employment gains

or how to turn that knowledge into profit or else the expert would be acting as an entrepreneur.

Methods Currently, the SBA defines a business concern as one that is organized for profit; has a place of business in the USA;

Perception, opportunity, and profit. Chicago: University of chicago Press. Kish, L. 1994. Multipopulation survey designs. International Statistical Review, 62,167 186.

Beyond the participation in transnational co-operation networks, where regional policy-makers can take profit from each other's experience and practice,

Evidence from Firms'Patents, Profits, and Market value, American Economic Review, 76 (5): 984-1001. Kaufmann, D.,Kraay, A.,Mastruzzi, M. 2009) Governance matters VIII:

They are driven not by the need to maximise profit for shareholders and owners. There is currently no universally accepted definition of social enterprise.

There are however some proxy measures such as the size and scope of the non profit sector and the social economy

because much of the work of non profit organisations and the social economy does not necessarily fall under the rubric of social innovation-many non profits

which earn a profit but are focussed on their social goals. lxvii Definitions of social enterprise vary,

Instead, their portfolio of investment funds will cover a range of more than profit companies that have primarily social or environmental goals.

The Halfway Foundation is a non profit organisation that helps those suffering from alcohol addictions, are need in of psychiatric treatment,

Ireland Traditional grant making organisations have for some time been criticised for failing to help non profits build capacity,

In particular venture philanthropy has filled a gap between traditional grants for non profits and commercial market rate equity and loans. lxxxvii There are six main features of venture philanthropy as it has come to be practiced.

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.

not-for-profit organisations, local or regional authorities (town halls,'Diputacion',regional government departments. Again, the most successful programme today is partially coordinated by a university,

half comes from the profits earned through San Patrignano's goods and services, following a principle of autonomy.

'10%of the fund is intended to directly finance not-for-profits, 5%for individual projects,

The Big Green Challenge, aimed at the not-for-profit sector is the first challenge prize of its kind.

'There is also a limit on dividends of 35%of profits. This new legal form has played a critical role in opening up new kinds of finance for social enterprises.

Vigorous independent enterprises meeting social needs or the emergence of‘entrepreneurial not-for profits with limited social liability'?

http://www. youngfoundation. org/files/images/Social venturing full pdf. pdf (accessed 13 january 2010) 124 cxxii Research reveals a vicious cycle fuelling the persistent underfunding of overhead in the not-for-profit sector.

market share and profit. In the social field the very measures of success may be contested as well as the tools for achieving results.

Dialogue Café is a not-for-profit organisation which brings people together from all around the world in conversation through the use of Telepresence screens.

The Big Green Challenge, aimed at the not-for-profit 3 PROTOTYPING AND PILOTS 55 sector is the first challenge prize of its kind.

which partially insulates the enterprise from the private market's imperative for profit maximisation and capital growth.

and supporting spin outs from the public sector. It can be used for various kinds of social enterprises as well as for-profits.

quasi-equity which can be based royalty, or profit based; convertible loans converted to equity linked to trigger points (for example, first equity funding round or turnover targets;

methods focused on profits, residuals, and replacement costs; methods using multiple regressions and stepwise regressions; methods using artificial neural networks

Mcleod Grant, H. and Crutchfield, L. R. 2007) Creating High Impact Non Profits.‘‘Stanford Social Innovation Review.'

such as the Taproot Foundation's Service Grant programme which provides not-for-profit organisations with pro bono marketing,

which earn a profit but are focussed on their social goals. 1 The main challenge for social enterprises is to maintain their commercial position in the market

'There is also a limit on dividends of 35 per cent of profits. The term also covers a wide range of organisations from cooperatives to public service providers,

which give part of a company's profits to a separate foundation, or the US model where an entrepreneur becomes rich through one business

in addition to its users in east Africa. 451) Corporate not-for-profit management of social provision such as Academy Schools in the UK and Charter schools in the US. 452) Partnerships between social enterprises and corporations

with not-for-distributed profits such as BASF-GAIN initiative for Vitamin a in Africa, the Danone-Grameen yoghurt enterprise in Bangladesh and the BASF Grameen venture, also in Bangladesh,

and not-for-profit organisations including Banca Prossima in Italy which is part of the larger banking group Intesa San Paolo. 474) Business angels provide finance for social ventures, often with advisory roles,

as well as beyond that, in the nonprofit sector (e g. charities, foundations, professional/trade associations, service organizations, not-for-profit corporations, trusts, etc.).

and services or for-profit contract research organizations. See http://www. socialsciences. leiden. edu/cwts/research/uirc-scoreboard-2011. html 34 Technology

0. 029*PROFIT 0. 128 0. 458 0. 780 Constant 22.807 1. 280 0. 028*Notes:*

0. 420 0. 300 DIFFEXT 0. 408 0. 327 0. 212 GROWTH 20 935 0. 434 0. 031*PROFIT 20.166

*GROWTH 21.282 0. 510 0 012*PROFIT 20.040 0. 496 0. 936 Constant 23.502 1. 447 0. 016*Notes:*

21.026 0. 435 0. 018*DIFFEXT 0. 496 0. 338 0. 142 GROWTH 20.401 0. 462 0. 385 PROFIT 20.357

In this model (a consortium of) private, for-profit organizations would run the instrument with for-profit objectives.

Profit orientation is a good incentive to be efficient. Profit orientation endangers quality and credibility.

Doubts about financial feasibility, because if HEI experience high workloads with data collection they expect free products in return

This structure also allows the commercial unit to operate as a joint venture with for-profit partners.

for-profit institution (s) Operating Project Consortium national field-based ranking partner (s) Stakeholder advisory council/expert advisory council advice governance

managers have insights on value of data for their organization from profits, revenues, recovery costs derived by critical data loss or inaccessibility.

and transform a wide and varied volume of digital interactions in satisfactory results in terms of market share and profit.

and making a profit on existing markets or that have yet to be created; the consequences of technological innovation.

but also introduced new competitive pressures that have reshaped entire industries by redistributing profits. These factors are forcing companies to rethink from the bottom up the way in

Revenue model 170 9 Reinventing Business models 9. 2. 4 Finance The financial dimension of the BM explains how the company is able to generate sales and profits 15.

In particular, the profit formula defines a company's profitability, specifying how a company creates and captures value for itself in terms of profit

and it is of the utmost importance, because it determines the feasibility of the Table 9. 3 BM dimension:

and generate profits? Two different interrelated aspects seem to have originated this trend: the configuration of the business model in relation to existing products and the alignment between the innovations and the business model. 9. 3. 1 The Business model Configuration The proper structuring of the business model

therefore not enough to build a sustainable competitive advantage that ensures profits, but companies are called also,

However these companies lacked a business model that could convert the number of users who visited their sites in cash flows and profits.

At the base of the failure of this company (and many others) was the inability to build a business model that would allow translating the clicks of users who had been attracted into profits.

on the other hand, they can be able to grab a share of the profit resulting from this enlargement of the market.

allowing the increase of profits through the transfer of these technologies and projects, for example through processes spinning-off and the outsourcing of unused intellectual property.

but also as a profit center, because it operates within a business model capable of transforming the output of R&d in economic value,

but for them too market capture is more important than profits. Adolescent companies are in scale up stage

At this stage, Frontier companies enter the positive territory of the profits J-curve. Traditional companies extend their advantage,

and will have to make trade-offs between making new offerings ahead of the competition and cannibalization of their existing profit engines.

Fig. 4. 4 illustrates how companies growth in every dimension of their operations headcount, sales, profit, assets.

companies trade asset utilization for margin (profits) as business lines mature and their market share consolidates,

profits can be foregone in order to nail the value proposition, offering and customer base. Further themes that were prevalent for successful Young companies included:

A 501 (c)( 3), the foundation contributes 10%of all Chobani post-tax profits to charitable causes.

High-impact Entrepreneurs Who Transform Industries 31 The great convergence The picture along key operational metrics for the Adult stage is very similar to that of the Maturing stage with further convergence in the profit-related metrics.

, strongly pursuing market share at the expense of profit. Frontier companies start firmly (and for quite some time) in the negative part of the J-curve,

beyond pure profits A desire to engage with policy makers and to shape agendas in areas of job creation

and sits on several for-profit and nonprofit boards, including Claridge Inc.,the New Center for Arts & Culture,

and exhibit a strong growth trajectory as measured by market share and profits. The EOY honors marketleading companies that exhibit strong growth and make communities and the world a better place.

We choose EBITDA over other profit measures, as it is both widely used as a valuation metric,

Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is independent,

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