charity capacity-building and social ventures (Young Foundation 2007), helping to develop an estimated £24 billion social enterprise sector that now employs 800,000 people (Social Enterprise UK 2011).
due to the fact that few commissioning and procurement structures are suited to social innovation ventures. In addition, there is a dearth of skills across sectors
There is also a knowledge gap between the number of people who could be employed by digital ventures
A business model is a representation of the strategic choices that characterize a business venture. These choices are made either intentionally or by default,
Business model development may be part of new venture planning, but is often just as useful in sense making around a going concern,
and much new investment being allocated to ventures that remain experimental, and adaptive in nature--more akin to learning than the implementation of chosen routines.
We need to better understand the relationship between scaling a social venture, systemic innovation and societal transformation.
bonds Venture phi l panthropy Tailored courses for social entrepreneurs and other actors SK I LLS FOR INNOVAT ION University programmes for social entrepreneurs Subs idised secondments Mobility schemes NONFINANCIAL RESOURCES Safe spaces for R&d Incubat o r
From scaling to systems innovation What is the relationship between scaling a social venture, systemic innovation and societal transformation?
WEISEL 05/07/2012 Acq. 100%GLAXOSMITHKLINE 250.0 OKAIROS AG NOVARTIS VENTURE 29/05/2013 Acq. 100%SAMSUNG ELECTRONICS 239.9 CSR PLC
A similar concentration of R&d by industrial sector has been observed over the last 10 years. 11 According to the Industry Classification Benchmark (ICB) applied in the Scoreboard. 40 The 2013 EU Industrial R&d Scoreboard The ranking
Companies can use the Scoreboard to benchmark their R&d investments and so find where they stand in the EU and in the global industrial R&d landscape.
while the Scoreboard uses the ICB (the International Classification Benchmark). 21 According to latest Eurostat statistics.
Companies are in industry sectors according to the NACE Rev. 222 and the ICB (Industry Classification Benchmark.
and to benchmark, inform and communicate developments in R&d investment patterns. While the Scoreboard is audited based on the annual accounts of companies and therefore looks at trends ex-post,
Frascati Manual, OECD, Paris, 2002, http://www1. oecd. org/publications/e-book/9202081e. PDF 48 ICB Industry Classification Benchmark (see:
as well as providing benchmarks like the price of anarchy ratio. Ideally a single metric should be used
2. 2 Today's Datacenters as the Benchmark for the Cloud Using technology always constitutes a certain risk.
For the security objectives when adopting clouds for hosting critical systems we believe that today's datacenters are the benchmark for new cloud deployments.
it is necessary to set up an appropriate testbed of a distributed web application like RUBIS benchmark 3,
which to build the venture (West and Noel 2009). The synthesizing of information is ultimately distinctive for each venture
which the venture operates be taken into consideration when measuring performance (Sandberg and Hofer 1987). Therefore, subjective performance measures were utilized indicating the perceptions on performance goals with regard to sales
Family-sponsored ventures. Paper presented at the first annual global entrepreneurship symposium, New york, 29 apr 2003.
) A comparison of methods and sources for obtaining estimates of new venture performance. Journal of Business Venturing, 7, 157 170.
) Clusters, knowledge spillovers and new venture performance: an empirical examination. Journal of Business Venturing, 23 (4), 405 422.
) Cooperative strategy and new venture performance: the role of business strategy and management experience. Strategic Management Journal, 16 (7), 565 580.
) Improving new venture performance: the role of strategy, industry structure and the entrepreneur. Journal of Business Venturing, 2 (1), 5 28.
) The impact of knowledge resources on new venture performance. Journal of Small Business Management, 47 (1), 1. Wiklund, J,
and attracting venture capital for promising projects. 18 iii It is important to note that collecting sensitive information from SMES (i e. information about their innovation projects,
a maturing venture capital scene as well as higher workforce mobility. v Each participating SME's core area of operation was standardized using the Standard Industrial Classification (SIC) system whereby‘Finance,
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.
/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
and attitudes of individuals involved in creating new ventures for social purposes, including the willingness to take risks
But to move from pilots and prototypes to a securely established public innovation, it is often advisable to set it up as a separate venture,
has been the growth of venture philanthropy. Given the variety and breadth of the grant economy,
1. Tackling social exclusion 2. Tackling addictions 3. Using technology to solve social needs 4. Training and skills 5. Venture philanthropy Tackling Social Exclusion
grow and become financially sustainable. lxxxvi Venture philanthropy is a response to this criticism, and seeks to use many of the tools of venture capital funding to promote start-up,
growth and risk-taking social ventures. 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
and reaffirming some key principles for good grant making. 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.
Venture philanthropists: have a close relationship with the social entrepreneurs and organisations they support; provide tailored finance to meet the needs of the projects they support;
provide nonfinancial support (such as strategic planning, marketing and communications, executive coaching, human resource advice and access to other networks and potential funders;
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.
Impetus Trust, CAN-Breakthrough and Venture Partnership Foundation in the UK, d. o. b. Foundation in The netherlands,
Oltre Venture in Italy and the One Foundation in Ireland. The One Foundation, established in 2004,
is a venture philanthropy organisation which aspires to improve the lives of disadvantaged children in Ireland and Vietnam by tackling issues of poverty and disadvantage, mental health,
000 upwards and the average grant is €1 million over 3 years. lxxxix In line with the model of venture philanthropy outlined above,
and others act as public venture funds, providing seed capital to social innovators (for example, the White house Office of Social Innovation and Civic Participation).
and support changes in the Estonian economy through foresight projects and venture capital investments. The fund focuses on initiatives with international potential.
payments based on results against benchmarks. This model is somewhat more complex, with more handovers and transaction costs,
These include specialists in technology transfer, venture capital firms, conferences and academic journals, consultancies which specialise in assessing companies'IP
energise and help entrepreneurs to develop their concept from an idea or modest project to the delivery of a scale-able, sustainable venture.
and growth of social enterprises and ventures. The Business Panel on Future Innovation Policy notes that the current finance system is not fit for the new types of innovation required to address grand societal challenges.
94 Existing support for smaller or innovative companies (grants, seeds, venture capital, loan guarantees) is fragmented 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.
measuring and evaluating the efficacy and success of social ventures, initiatives and services, which incorporate social as well as financial impact,
Some specific examples of a move beyond narrow economic indicators include the UNDP's Human Development Index (HDI) to benchmark countries based on combined measurement of GDP/capita, health and education.
measuring and evaluating the efficacy and success of social ventures, initiatives and services, which incorporate social as well as financial impact,
regional innovation funds, venture capital funds, innovation awards and so on. However, there is currently no equivalent for social innovation.
what foundations can learn from venture capital, Harvard Business Review, Cambridge, MA. lxxxvii Emerson, J, Freundlich, T,
2009)‘ European Venture Philanthropy Directory 2009/2010'.'Brussels: European Venture Philanthropy Association. Available at: http://www. evpa. eu. com/downloads/EVPA DIRECTORY 2010 WEB ISSUE1. pdf lxxxix Andrew Milner,(eds.
2009)‘ European Venture Philanthropy Directory 2009/2010'.'Brussels: European Venture Philanthropy Association. Available at: http://www. evpa. eu. com/downloads/EVPA DIRECTORY 2010 WEB ISSUE1. pdf xc Alvin Toffler (1980) The Third Wave.
London: Collins. 123 xci My Estonia at http://www. minueesti. ee/?/lng=en xcii Homeshare International at:
http://homeshare. org xciii San Patrignano at http://www. sanpatrignano. org/?/q=en xciv Basta Arbeits Kooperativ at http://www. basta. se/page. asp?
Like the social ventures it describes, we want this work to grow and develop. Your comments, thoughts and stories are welcome at the project website:
and setting up a social venture in a way that ensures its financial sustainability; and that its structures of accountability, governance and ownership resonate with its social mission. 1 We have launched also an accompanying website, www. socialinnovator. info,
and venture capital with those from tendering and grant giving. Others are combining ethnography, visualisation techniques from product design, userinvolvement ideas from social movements,
some NGOS are learning from venture capital not only how to finance emerging ideas, but also how to kill off ones that aren't advancing fast enough to free up resources.
But to move from pilots and prototypes to a securely established public innovation, it is often advisable to set it up as a separate venture,
A business model that runs parallel to the core idea of the venture and which sets out how it can become sustainable.
what we refer to as the venture's‘relational capital'.'A staffing model including the role of volunteers.
Any venture driven by a social mission has an interest in maximising the spread of an innovation beyond the level dictated by the venture's own financial interest.
Most social ventures have to do both to remain open and collaborative, while surviving financially. It is this very openness
It is also this openness, together with the social mission of the venture, that attracts voluntary contributions in terms of volunteer time, resources, and donations.
Social ventures have much to gain from keeping open, yet this is easier said than done.
Ventures are subject to the day to day disciplines of keeping the show on the road. They tend to turn inwards behind their organisational moat.
since along with the social idea, it is a key part of a venture's attraction. Business models that work are themselves a prime area for social innovation.
The context for a business model is a business strategy about how the proposed venture is positioned on the economic field of play.
There are a range of social business models that involve recognising the potential value of a venture's assets
which a venture is based. In the diagram below we identify 12 alternative axes which may be more appropriate for social ventures. 62 THE OPEN BOOK OF SOCIAL INNOVATION 4 disaggregating its activities to generate alternative income streams.
Particularly instructive for social ventures are the lessons from the business models adopted by web companies which
like social ventures, have an interest in maintaining free access, while at the same time generating revenues indirectly as the result of the response that the free service attracts. 108) Business plans.
Business models together with business strategies then need to be turned into business plans. Although it is rare for a social venture to be a straightforward implementation of a blueprint (it is much more like a process of discovery and unfolding),
plans help to clarify tasks, milestones, and sequencing for example of investment in people, equipment and market growth.
But they provide a chart for a venture's theatre of operations and demonstrate the competence of those engaged in taking the venture forward. 109) Business plan assessment methods.
There are many methods that help to define business models and business plans. The Bell-Mason methods from the field of venture capital, for example, provide a rigorous framework for paying attention to the many elements that together make up a credible business plan,
such as skills, marketing, and finance. Their model for new ventures has shown 12 axes in the diagram below.
For each of them progress is mapped in four stages. First is the concept stage. This is seeded and then developed as a product.
They have used this diagnostic model to chart the progress of more than 450 ventures, in order to identify key areas for further development.
when every venture has to decide what organisational form to take, what kind of decision making and accountability processes to adopt,
For some social ventures, simple private company models are the most suitable: they may help with raising equity,
Most social ventures depend on restrictions Just a few of the houses built by Un Techo para Chile (A Roof for Chile.
and/or to the terms of exit as key design features to ensure investors place the venture's values before maximising financial returns. 112) Adapted private companies.
and is similar to charitable status. CIC status enables social ventures to access equity investment
As instruments of governance of social ventures, they have a dysfunctional history. They represent a division between moral and manual labour
Yet the success of a social venture depends on an integration of the two. The means of overcoming this division is in part through participation in an active process of formation,
and in part through the engagement of board members in the active work of the venture.
But increasingly social ventures are seeking ways to involve stakeholders that do not depend on representation on a board. 120) Boards for innovation.
The social sector has started to develop more comprehensive guides to help ventures make decisions about governance models and organisational forms.
and engaging members and stakeholders. 124) Consumer shareholding can be used to involve consumers more directly in the work of a venture,
Many social ventures try and avoid strict hierarchical structures by remaining small and by subdividing (like cells)
or collaborating with other similar ventures. Some have adopted a franchised model, to allow each unit to remain relatively small,
while benefitting from economies of scale for the group of ventures as a whole. This is the basis for the expansion of Riverford Organic Vegetables Ltd,
to keep his venture small, and production local. The resulting network now delivers 47,000 organic food boxes a week. 129) Dimensions of management.
and the venture's ability to maintain innovation. The financial and managerial demands of innovation may put pressure on existing business.
Operations The distinctive value and values of a social venture show up not just in its structures but in its operations how it works with others, uses technologies or works in partnership. 131) Socially-oriented supply chains.
Transparent supply chains that reflect the values of the venture are often a key element in sustaining
and expanding a social venture. An organic food box scheme, for example, depends on its certified supply chain.
For some ventures providing intermediate goods or services the challenge is how to develop a demand chain that processes
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.
Many new ventures carry high overheads because of their small scale, or they fail to invest in financial and operational systems that are important for their effective working.
It is important for ventures to find ways of sharing these overheads, or access part-time specialists,
It is often important for ventures to adopt technologies that are flexible, adaptable, and suitable for distributed activity.
Image courtesy of Danone Communities. 4 74 THE OPEN BOOK OF SOCIAL INNOVATION Relational capital New ventures put much of their energy into securing financial capital money to invest in fixed assets on the one hand
and trust built up between a venture and its users and suppliers, and the relationships between a venture and its staff and volunteers.
Conventional accounting takes little account of this intangible capital, yet in all social ventures it is the foundation of their strength,
and of their distinctiveness. We use the concept of relational capital to capture the quality of relationships within
This is the issue of greatest relevance for a social venture as its fortunes depend on the range and depth of its relationships that.
for a social venture the boundaries are more porous internal and external interests mesh. It is one of its greatest potential assets that a social venture can attract support and resources from outside itself,
as well as motivation from within, on the basis of its ideas and the way it works to realise them.
'Investing in human resources to ensure a social venture's openness is as important as investing in a building or machine.
For it concerns the formulation and presentation of a venture's identity, to itself, and to the outside world.
for it is from an open and inclusive culture that a social venture draws much of its strength. 136) Systems for user feedback to keep users at the centre.
Social ventures tend to rely on their idea to galvanise funders and users. They place their operational focus more on supply than demand.
But 4 SUSTAINING 75 to ensure that the venture remains generative rather than static, users should remain central a service should know who they are
Just as no venture can operate without a finance and accounting system, it requires a system of user relationships and feedback as part of its operational spine. 137) Web presence.
All social ventures now have to have a website. But their full potential has begun only to be explored.
Many ventures are by their nature information intensive in respect to the quality and tangibility of their work, the stories of those involved in it,
It has therefore become crucial for ventures to have access to the tools wikis, chat rooms, forums, comment boxes, and blogs.
which can act as feeders to the venture's website. Above all, a venture needs to devote resources to the constant updating
and active hosting of their sites. A good example is the site of the cooperative football team Ebbsfleet United (My Football Club
Social ventures, particularly those that are funded tax or grant-aided, have been suspicious of branding. Governments find themselves criticised for spending money on branding.
But all ventures have an appearance and a style. It is part of the way they communicate.
Social ventures should see branding as a flame that indicates a presence and attracts people towards it.
Some ventures go further and make their workplace into a working gallery or museum. They demonstrate much of their work visually, through photos and graphs.
It is always a useful exercise for a venture 4 76 THE OPEN BOOK OF SOCIAL INNOVATION to consider how it could best present its work
They are an occasion for experiencing the venture's culture. Events of this kind are much more important for social ventures than commercial ones.
They allow a wider group to share in the spirit of the venture. 141) Open forms of intellectual property to maximise the spread and diffusion of the idea or service.
Social ventures have an interest in adopting open forms of intellectual property. They stand to benefit from a shared commons of knowledge
both in what they receive back from a reciprocal economy of information, and in extending the value
Image courtesy of Rolf Disch, Solararchitecture. 4 SUSTAINING 77 venture that initiated the zero carbon development at Bedzed) recently placed its most valuable technical information on the web for open access
Open access or open licensing allows people to build on a venture's knowledge assets and to mix together these assets with others.
For some ventures this may involve the foregoing of possible income streams from the sale of that knowledge,
but there are many alternative means of generating income, not least through the strengthening of the venture's relational capital through a policy of open information. 142) Formation for developing skills and cultures.
The formation or training and shared orientation of those engaged in the venture plays a critical role in providing cohesion to social ventures.
It informs the articulation of the venture's central purpose. It provides meaning for those working for the venture
for investors and volunteers, and it gives to the venture a living, reflexive power that is not limited to particular individuals or levels in the organisation,
but to all those involved. This is important also, for public innovation, through, for example, bodies like the National school of Government (NSG) and the Improvement and Development Agency for local government (IDEA), CELAP in China,
not only for the venture itself, but to create a group of individuals able to put the ideas into practice more widely.
and its operational practices should reflect the venture's mission, and avoid the tensions that can arise between market rates of pay and
and the venture's beneficiaries. 144) Valuing the voluntary. In a volunteer economy, roles, relationships and incentives have to be thought about differently to those where there is a contractual wage relationship.
but there is great potential value to a new venture if it makes one of its goals the attraction and effective employment of a wide range of volunteers.
with simple goals and a strong ethos. 4 78 THE OPEN BOOK OF SOCIAL INNOVATION Venture finance Every innovation process requires some finance.
For social ventures it is key that the sources of finance should share the venture's social goals as the primary driver of the enterprise.
but the goal should always be to find ways for the core finance to come from those who share the venture's mission.
To finance new ventures there are a range of ethical banks and social funding agencies devoted to supporting new and expanding ventures.
All forms of finance bring with them power relationships which can sometimes threaten the values
and relationships which the venture is built on. To guarantee that the initial venture funding remains subordinate to the values of the social mission,
enterprises can raise social equity, limit the quantity of common shares, and seek subordinated loans from sources ready to share early risk without demanding a counterbalancing share in the project's equity. 145) Grant funding is provided sometimes to grow social ventures.
This usually depends on one or two wealthy philanthropists having a sufficient commitment to the project.
but much of the loans now being made for social ventures are coming from specialised social finance organisations, sometimes seeking security (usually from property),
They sometimes have an advantage over venture capital funding in that they can tap investors who want to make social impact their primary incentive rather than financial returns.
or whether they will be used to finance innovation (see also method 368). 151) Venture philanthropy uses many of the tools of venture funding to promote start-up, growth,
and risk-taking social ventures. It plays an important role in diversifying capital markets for nonprofits and social purpose organisations.
Good Deed Foundation in Estonia, Invest for Children (i4c) in Spain, Oltre Venture in Italy,
and both Social Venture Partners and Venture Philanthropy Partners in the US. Sustaining innovations through the public sector Sustaining ideas in the public sector involves different tools to those needed in markets or for social ventures.
There are similar issues of effective supply (the proof that a particular model works) and effective demand (mobilising sources of finance to pay for the idea or service).
A venture may take it on itself to ensure this synchronisation of growth, but it is undertaken also by an industry body like the Soil Association or the UK's energy efficiency body National Energy Services (NES).
In developing a venture's brand there are two models. There are closed brands which are controlled tightly from the centre,
which invite others to play a part in developing the venture and the way it connects,
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
This approach reflects the development of biographical methods as qualitative research techniques in the social sciences. 228) Outcome benchmarks,
The great challenge for bottom-up ventures is how to access the power and money to 6 110 THE OPEN BOOK OF SOCIAL INNOVATION shift big systems.
or any benchmarks to draw on. Instead, assessments need to include some judgement of the broader direction of change in the field as a whole;
They include specialists in technology transfer, venture capital firms, conferences, and academic journals which sit alongside consultants adept at looking at companies'IP,
because their business model draws on the fact that any new venture needs to be based somewhere,
supporting a range of social ventures to become more effective in tackling social problems. We've suggested that much social innovation comes from linking up the‘bees'the individuals
and develop new ventures; places to access experience, knowledge, finance and markets. And above all, places for making connections.
others act as internal public venture funds, such as the UK's‘Invest to Save'budget for crosscutting innovations,
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,
1 per cent of turnover as a rough benchmark (similar to the proportion of GDP now devoted to government support for technological and scientific research and development).
324) Dedicated innovation funds and internal public venture funds, such as the UK's‘Invest to Save'budget for crosscutting innovations, The Enterprise Challenge in Singapore,
New zealand), lotteries provide a primary source of funding for community ventures. 351) Socialising risk. New forms of social insurance for long term care for example
The more recent waves of interest in social entrepreneurship and venture philanthropy have also been better at supporting individual projects than making them more than the sum of their parts,
but visible, trend has been the growth in venture philanthropy, with much greater involvement of donors in projects and organisations.
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 employment for the rural poor. 420) Venture philanthropy focused on innovation in particular sectors, such as the Robert Wood Johnson Foundation's (RWJF's) Pioneer Portfolio which specialises in health and IT. 421) Philanthropic mutual funds such as the Acumen Fund and the Global Fund for Women. 2 SUPPORT IN THE GRANT
providing independent perspectives. 425) Metrics for venture philanthropy such as those developed by Homeward Bound, a project to end homelessness in the US,
Venture philanthropists, including Private Equity Foundation and Impetus Trust, are now using the skills of the private equity industry to help‘turn around'charities and build their internal capacities.
Harpercollins. 4. John, R. 2006) Venture Philanthropy: the evolution of high engagement philanthropy in Europe.‘‘Skoll Centre for Social Entrepreneurship Working Paper.'
http://www. sbs. ox. ac. uk/centres/skoll/research/Documents/Venture%20philanthropy%20in%20europe. pdf. For large scale developments in this field, see:
or Work Ventures in Australia. 444) Consumer co-ops such as the Japanese food co-ops which have 13 million members.
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 fair trade. 458) Social enterprise funds including the new venture capital fund, set up by Triodos Bank,
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.
Examples include Bridges Community Ventures in the UK, which invests in businesses based in regeneration areas
In the UK it has recently been agreed that charities can invest in the start-up equity of social ventures,
which is part of the larger banking group Intesa San Paolo. 474) Business angels provide finance for social ventures, often with advisory roles,
86 Bridges Community Ventures 186 Brokers 134 212 THE OPEN BOOK OF SOCIAL INNOVATION Brookings Institute 48 Budgets 92;
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
198-199 Oliver, Jamie 95 Oltre Venture 80 One Click Organisations 68 Open Open Access Journals 200 Open Brands 83;
207-208 Social Silicon valley 131 Social Venture Network 171 Social Venture Partners 80 218 THE OPEN BOOK OF SOCIAL INNOVATION Sonoma Mountain
, 108,117, Venture Philanthropy 80,167-168,172, 175 Visiting 36,205 Vodafone 183-4, 219, Voting 41,65, 153-154, Volunteers 54,59, 64,74, 77,166
Ventures 183 Working Rite 66-67,220 World bank 19,38, 89, Worldchanging 178 WRAP 135 X-Prize 39 Young Foundation, The 2, 17,126
We have a 55 year track record of success with ventures such as the Open university,‘Which?'
working on over 40 ventures at any one time, with staff in New york and Paris as well as London and Birmingham in the UK.
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