at least 20 million fewer people in or at risk of poverty and social exclusion Social innovation can be a tool to help achieve these targets
•20%of surface water is at serious risk from pollution; 60%of European cities over
One issue that social innovation seeks to address is the risk that each administration will develop its
including the willingness to take risks and find creative ways of using underused assets ï Social enterprises are driven not solely by the need to maximise profit for shareholders and
capital risk funds, local development funds) to support regional and local development and to foster
goods and services to persons in risk of poverty or exclusion. They are involved also often in civil
guarantees, thereby sharing the providers'potential risk of loss, or by providing funding to increase microcredit lending
sufficient revenue from loans to pay staff, costs and cover risk, the model becomes genuinely
ï experimentation and risk taking and ï involvement of stakeholders 88 BEPA definition: Social innovations are innovations that are social in both their ends and their means
However, when looking at long-term risk and the de -velopment of prevention and risk reduction, the human factor in social innovation
could be a strong lever. The European Commission†s contribution to the World Hu -manitarian Summit in 2016 will concentrate more on social innovation;
to the new social risks with new and more effective approaches and shrinking budgets The crisis has enhanced that process.
and manage social performance was the best guarantee against the risks to see exploitation of poor people for the sake of profit and system drifts
-tion, controlled risk taking, and an agile and personalised response to new constituent challenges. This will help unleash the potential of an innovative public sector that can
sharing the providers†potential risk of loss, or by providing funding to increase mi -crocredit lending
•developing offers that meet newly emerging risks, beyond fixed social and participation rights and entitlements
However, there is a risk that inequalities among citizens/individuals will increase in terms of revenue, especially in Europe and the
-stitutions and an increasing aversion to risk. This could translate into a crisis of polit
Yet, innovation may be slowed down by a culture of risk aversion y The interaction of the widening skills gap, digital divide and unequal benefits of
Regarding the rise in inequality leading to vulnerability •Across the spectrum of expected problems is a surge in inequality.
be to break the trend of rising poverty risks, increasing income inequality and long -term unemployment without relying on economic growth as a panacea.
%as well as to have at least 20 million fewer people in or at risk of poverty and social exclusion by 2020.
-aries with equity, debt, and risk-sharing instruments y Improve their visibility (mapping of social enterprises, database of labels
address vulnerability and poverty 121 See 3. 1. 1 122 Full text on http://ec. europa. eu/internal market/conferences/2014/0116-social-entrepreneurs/docs/strasbourg
of risks that an individual can face during his life course. Developing new responses to
offering senior loans, subordinated loans, risk-sharing loans and equity participation to microcredit providers 85p A r T I I †M A i N d E V E L O P m E N t S i N e U P O
Risk management; Reporting Standards; and Management Information Systems The European microcredit market is a young and growing sector
exercise on crowdfunding in late 2013 to explore the benefits and risks of this newly
concerning the rules applicable to crowdfunding, potential risks, such as the risk of fraud or misleading advertising,
or investment risks related to financial-return crowdfunding as well as the high cost of cross-border operation for crowdfunding platforms that host
campaigns offering financial returns The European commission adopted a Communication Unleashing the potential of Crowd -funding in the European Union179 on 27 march 2014.
terms of improving transparency and reducing the risks of fraud. The Commission will also hold regulatory workshops with Member States to discuss any obstacles related
sustainability threats which our society is facing nowadays. It is articulated along the following three main lines
and the motivation of young people at risk of ESL. Emphasis will be on prevention and intervention
or too wary of the risks? Far from it; but certainly more could be done to scale up
shouldering the burden of risk. Indeed, with competitions, it is the participants who are expected to foot the financial risk.
In the social economy, however, there are arguments for sharing, rather than shifting the risk. This can be achieved through a stage-gate process, where
participants increase the level of investment as they pass through the various stages. This is how NESTA€ s Big Green Challenge was organised
and reward community-led innovation in response to the threats posed by climate change. The Big Green Challenge, aimed at the not-for-profit
mitigate the risks of flooding and provide local residents with cheap, renewable energy. Through hydro, wind and
systems for risk management These will be translated into an economic or business plan, which details the service or initiative, how it will be provided, by whom, with what inputs, how
shares, and seek subordinated loans from sources ready to share early risk without demanding a counterbalancing share in the project†s equity
and risks are reduced. They sometimes have an advantage over venture capital funding in that they can tap investors
reliable risk) 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
and risk-taking social ventures. It plays an important role in diversifying capital markets for nonprofits and social
and impact †by increasing capacity, reducing risk, or by facilitating adaptation to changing markets and environments.
brings a number of benefits such as distribution of risk and financing But it can only work
capacities, the diffusion of risk, and increasing efficiency and standards A recent example is Age UK, resulting from the merger Of age Concern
& Jerry†s franchises to help train at-risk youth. †Stanford Social Innovation Review. †Summer, 2003
Incumbents tend to deflect threats, or to reinterpret radical new ideas in ways that fit existing power structures.
and Sure Start providing intensive support for children to reduce risk factors. Where these succeed they create a political constituency for
Innovation in the public sector always risks being a marginal add-on †small -scale in terms of funds, commitment of people and political capital.
317) Appropriate risk management. Public agencies tend to be fearful of risk. The challenge is to manage risk,
not eliminate it. Risk can be managed across a portfolio of projects that span the high return/high risk
1 148 THE OPEN BOOK OF SOCIAL INNOVATION end, as well as medium and low return agendas.
A balanced view of risk is vital †some innovations spread too slowly but others spread too fast
without adequate evaluation and assessment, particularly when they win the backing of leaders. A commitment to evaluation and evidence, and
staged development of new approaches, helps reduce risk 318) Formation and training to integrate innovation into personal
development, training, and culture. Some need to become specialists in spotting, developing and growing ideas.
generally, innovation, including a licence to take appropriate risks should be part of personal development plans
innovation rather than a barrier to healthy risk-taking 1 SUPPORT IN THE PUBLIC SECTOR 155
351) Socialising risk. New forms of social insurance for long term care †for example, to create incentives for providers to develop innovative
social impact elements of an investment †and reducing risk 359) Local bonds, including Tax Increment Financing (TIF) and Business
366) Layered investments combining tranches with different rates of risk /return and different sources of capital (philanthropic, public, private
can handle high levels of risk, and do need not the certainty of returns of the
they face limited access to risk and growth capital, and to highly specialist technical knowledge,
One of the risks of Future Internet is that big industrial players (mainly US-based) will reinforce their dominant position by implementing platform lock in strategies,
computing, data storage and service provision according to the cloud paradigm there is a risk of closing the innovation ecosystem in favour of incumbents or dominant players,
It implies innovating with partners by sharing risk and sharing rewards. Chesbrough (2003 and Forrester (2004) define the main divergences between the principles of closed and open innovation (see
standardisation (due to individual decisions), security threats, existing charging models (some government charge for the data), and uncertain economic impact (it is still not clear
DSI, there are a number of perceived future Internet threats (such as concentration of power and surveillance
A main Internet trend-threat in the current and future Internet ecosystem is recognised today: an increasing
risks of conflict and mutual resentment y The rising incidence of chronic diseases such as arthritis, depression, and
Change rarely happens without some brave people willing to take risks and take a stand.
anyone who does promote innovations risks upsetting powerful vested interests It†s all too easy to conclude that the apparently promising new idea depends too
Innovation is therefore easier where the risks are contained; where there is evi -dent failure; where users have choice
where the risks are contained; where there is evident failure; where users have choice; and where expectations are
so too does funding directed to genuinely risk-taking ideas, exper -iments, and trials. Yet we are not aware of a single government that has developed
The risk of claims resulting from such infringement rests solely with you. If you wish to reuse a
put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and
hazardous construction that puts public safety at risk Where compliance is simple, straightforward and inexpensive, everyone is better off
consider when assessing risk. And they permit borrowers to establish a good credit history that will
significant accounting policies, trends, risks, uncertainties and other factors influencing the reporting Yes 1. 5
tools to facilitate trade†including single windows, risk -based inspections and electronic data interchange systems.
A major risk for the Future Internet is the realisation of the â€oebig Brother†scenario, showing that big industrial players (mainly US based) will reinforce their dominant
-Top (OTT) and largest network operators, there is a risk that the innovation ecosystem will become more
under threat, especially as a result of the lack of participation by young people. They hold that the Internet is the best way to reach out and
This leads to different threat models and a new notion of trust between users What helps to reach goals
ground to achieve similar assurances about other materials used in the phone and to negotiate terms with manufacturers to ensure a living
a commercial venture with global production processes, with the risk of subcontracting critical tasks to global sweatshop factories
Help streamline the design Makers can reduce risk by basing designs on open-source hardware and taking advantage of a proven design that
possible to produce narratives of nuclear risk as numbers, measurement data per se cannot be a useful resource for nuclear risk knowledge pro
-duction. Volunteer Geiger counter users and social media users among others are necessary to produce specific type of nuclear risk knowledge
To date, Safecast volunteers have mapped radiation levels of over 11 million data points, providing a comprehensive and accurate dataset that
As a pro-data organisation, Safecast generates nuclear risk knowledge by harnessing measurement data in multiple ways.
take risks in the pursuit of changing the traditional way that information flows. †To this end, Ushahidi builds technological tools for democratising
A major risk for the Future Internet is the realisation of the â€oebig Brother†scenario, showing that big industrial players (mainly US based) will reinforce their dominant
-Top (OTT) and largest network operators, there is a risk that the innovation ecosystem will become more
under threat, especially as a result of the lack of participation by young people. They hold that the Internet is the best way to reach out and
This leads to different threat models and a new notion of trust between users What helps to reach goals
ground to achieve similar assurances about other materials used in the phone and to negotiate terms with manufacturers to ensure a living
a commercial venture with global production processes, with the risk of subcontracting critical tasks to global sweatshop factories
Help streamline the design Makers can reduce risk by basing designs on open-source hardware and taking advantage of a proven design that
possible to produce narratives of nuclear risk as numbers, measurement data per se cannot be a useful resource for nuclear risk knowledge pro
-duction. Volunteer Geiger counter users and social media users among others are necessary to produce specific type of nuclear risk knowledge
To date, Safecast volunteers have mapped radiation levels of over 11 million data points, providing a comprehensive and accurate dataset that
As a pro-data organisation, Safecast generates nuclear risk knowledge by harnessing measurement data in multiple ways.
take risks in the pursuit of changing the traditional way that information flows. †To this end, Ushahidi builds technological tools for democratising
place in a coherent way addressing technical, commercial and regulatory factors, to minimise risk and
it reduces investment risk Smartgrids: The Vision Europe†s electricity networks in 2020 and beyond will be
•The need to reduce uncertainty and risk to businesses making investment decisions •The progress in technology,
or about the details of investment funding and risk management •It†s not about emission trading markets or
running out and the security of electricity supplies is under threat. Environmental issues have moved to the fore and the EU must meet targets set.
•The perceived risk of adopting new technology will be mitigated and commercial adoption will follow when companies
•By definition it brings risks by and these have to be managed •The risk profile varies significantly across
the innovation chain and its stages •New grid technology cannot be fully proven in the laboratory or on
Prepare to take risks: changing a business †¢model is a continuous process. Integrate an
chemical products, mitigating risks related to the use of chemicals and improving the data manage -ment of the chemicals2
time periods and with generally low-risk investments Creates a socially responsible image for the â€
Global Risks Report 2012 ranked extreme volatil -ity of commodity prices as the fifth most important
risk in terms of potentially negative impacts7. At the same time, Europe is the world region most
Many companies are exposed to risks of raw material supply shortages, price volatility and high material prices.
World Economic Forum Global Risks Report 2012 www. weforum. org/reports/global-risks-2012-seventh-edition
8 European Environment Agency 2010: The European Environment. State and Outlook 2010. Material resources and Waste.
and lower risk by making companies less dependent on imports Eco-innovate! A guide to eco-innovation for SMES and business coaches
What are the risks and opportunities of imple-†¢menting a sustainable supply chain manage
Evaluate risks and opportunities through a †¢risk management approach or an opportunity -based approach Establish a common language
Set sustainability targets and procurement †¢criteria for the supply chain Develop indicators to monitor performance. â€
Evaluating risk, especially long-term costs †¢and benefits may be challenging Understanding the environmental impacts â€
-tion, risk reduction, accessibility, convenience and/or usability? How does improved envi -Business case for eco-innovation
-ness opportunities or threats Identifying product (s) environmental features †¢and business benefits may help determine
What are associated the risks with each †¢source of funding What types of free or subsidised funding or â€
life cycle, in a reduction of environmental risk pollution and other negative impacts of resources use (including energy use) compared
information on the environment and its risks; lack of knowledge (mostly from the management part
and (iii) examining any specific risks linked to the online sale of medicinal products The Commission conducted a public consultation on a common logo for legally
and legal certainty, they present the risk that they undermine the strengths of ADR and ODR, in terms of
contracts, the right of withdrawal, delivery, the passing of risk, etc. but not all (e g
As a result, testing and risk assessments that have already been performed, are repeated unnecessarily. Mutual recognition of those would considerably lighten the burden
potential benefits and risks of new technologies ICT vendors have a responsibility to build awareness as well
creation and risk-taking, for example by reducing the penalties for bankruptcy. At the same time managers have a responsibility to entrench and
ingrained aversion to risk and change. However countries such as Ireland and Sweden show what can
take risks and embark on new ventures. According to Tarek Ghouri director of government practice for Nokia Enterprise
entrepreneurial deficit and ingrained risk aversion compared to the US is a relatively noncontroversial view, accepted by virtually all the studies we have
a willingness to take risks. Empirical research indicates that new firms tend to be the most innovative in their
more innovative countries tend to be risk-averse Martti af Heurlin, deputy director-general of Tekes
and says Europe†s risk-averse business culture does not encourage managers to innovate The more familiar a firm is with changing structures
At the risk of adopting yet another management fad, this suggests that Europe†s managers must take on board
awareness among firms of security threats and of options for dealing with them. When it comes to
security threats such as viruses, SMES are thought to be particularly vulnerable as they tend to have fewer
remove much of the risk associated with investing in competing technologies. Europeans fondly recall the
of a threat to innovative activity in this field. At the time of writing, the revised European commission
will need to understand better the benefits, risks and Part III Unleashing the enablers of growth
creation and risk-taking. Reducing the complexity of tax compliance, streamlining the approval and registration of ownership changes, and lowering
and thereby helps avoid the risk of confusing the role of ICT with other variables.
SCENIHR Scientific Committee on Emerging and Newly Identified Health Risks 4 Preface This Research Report forms part of our series on global societal trends and their impact on the EU in
Identified Health Risks SCENIHR 2009; Siegrist 2010 While NBIC technologies may be expected to bring along cumulatively substantial societal changes until
but also as potential threats to human dignity and autonomy (Heersmink 2011 Hildebrandt 2012; Wright 2011
European Agency for Safety and Health At work, Foresight of New and Emerging Risks to Occupational
. and Melling, K.,Gender inequalities in the risks of poverty and social exclusion for disadvantaged groups in thirty European countries, Expert Group on Gender, Social Inclusion and
††â€, Risk and Regulatory Policy; Improving the Governance of Risk, OECD, 2010 ††â€, â€oedivided We Stand:
Why Inequality Keeps Risingâ€, Paris; OECD Publishing, 2011. As of August 2012: http://dx. doi. org/10.1787/9789264119536-en
Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR), Risk Assessment of Products of Nanotechnologies European commission, Directorate-general for Health and Consumers
and Ecological Risk Assessment, Vol. 16, No. 4, 2010, pp. 837-846 Sigle-Rushton, W.,"England and Wales:
middle age and future risk of dementia: a 27 year longitudinal population based study,"BMJ, Vol
R&d, as decisions must survive several organisational layers of resistance, where an aversion to risk
Germany have not been able to overcome the risks inherent in a high degree of specialisation, and
especially their vulnerability to market changes 45. Despite their specialisation, the German Mittelstand companies pursue a strategy that is not
larger share of the target market, risk diversification, or access to vital information about potential inputs or
professional risk evaluators for new technologies and new business; and rapid access to secondary markets
Financial institutions, as well as government bodies, have difficulty assessing the risk-profit trade offs of innovative ventures.
technological feasibility, commercial risk, and managerial capacity of an SME and its proposed innovative project.
rating that would help reduce the uncertainty that limits private sector investments in high risk innovation
risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative
performance. Overall, the findings of this study point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance
proactiveness and risk-taking because we believe they have a unique role in leveraging innovation.
Next, we distinguish the two well known traits of EO€ proactiveness and risk taking†and examine their specific roles in generating innovative gains through ICTS and ECTS
Risk-taking orientation reflects a firm†s â€oetolerance of uncertainty†and capture a firm†s willingness to involve in
while risk taking affects innovation directly, as well as by reinforcing the positive innovation effect of a firm†s ties
such ties carry major risks The firm†s partner may not be reciprocative in information exchanges,
In spite of these risks, a firm that nurtures its ties through the necessary investments in relationship building and knowledge sharing might stand to benefit more from its linkages than a
While both ICTS and ECTS carry risks, the risks associated with the latter are likely to be higher due to the relatively higher differences in
risk taking may also be higher in respect to ECTS, given the potentially novel and non-redundant
to take business-related risks and seek opportunity in anticipation of future demand (Covin &
Risk taking is a complementary EO characteristic that reflects the commitment to high-risk investment or the willingness to invest resources into
affirm that a successful entrepreneur makes calculated risks for potentially rewarding future benefits (Low & Abrahanson, 1997.
In short, proactiveness and risk taking are two important 9 features that shape how a firm acquire
of proactiveness and risk taking in relation to a firm†s ICTS and ECTS. However, prior literature
influences of proactiveness and risk taking on a firm†s network ties (ICTS and ECTS) in the
and risk-taking orientation both contribute to innovation and enhanced firm performance, we suggest they do so in distinct ways.
risk taking ensures that the firm makes the necessary commitments in order to derive value from its network ties.
How Does Risk Taking Moderate the Effect ICTS and ECTS on Innovative performance Establishing network ties do not necessarily mean that a firm is fully tapping into the
However, such commitments carry an inherent risk. In the first place partners may renege on their promises so the firm may stand to loose the resources it has
Another significant risk is associated the uncertainty with innovation (Zahra & Covin, 1995; Zahra, Nielsen, & Bogner, 1999.
As regards an acceptable level of risk, psychologists posit that this level may be chosen as a compromise between the desire for success
and the desire to avoid risk (Mandel 2003). ) Too low a risk tolerance will prevent a firm from making progress (Naldi, Nordqvist
Sjoberg, & Wiklund, 2007. As observed by Ward (1997, p. 323) â€oewithout risk taking †the
This suggests that some level of risk taking is essential for effective use of firms†ICTS and ECTS.
degree of risk taking though investment of time, money, and effort, the rate of innovation will
The interplay between risk taking on the one hand and ICTS and ECTS on the other can contribute to innovation, right from the discovery of an opportunity or the conception of an idea
Nevertheless, we suggest that the extent to which risk taking is essential can vary for ICTS
Greater trust and the threat of sanction can make risk taking less salient for ICTS compared to for ECTS.
A firm†s risk-taking orientation positively moderates the positive impact of its network ties (both ICTS and ECTS) on innovative performance
A firm†s risk-taking orientation has a greater moderating effect on the impact of its
hypotheses, depicting how the interplay between ICTS, ECTS, proactiveness and risk taking affects innovation Figure 1 Innovative performance and the interplay between ICTS, ECTS, Proactiveness and Risk-Taking
METHODS Proactiveness Intra-cluster ties Extra-cluster ties Innovation Risk taking H1a H1b H1a H1b
Proactiveness and Risk Taking We followed the approach of Covin and Slevin (1989) to measure proactiveness and risk
taking. Respondents were asked about their firms†proactive-orientation and risk-taking behavior on a scale of 1, â€oestrongly disagreeâ€, to 5, â€oestrongly agreeâ€.
We derived multi-item variables using factor analysis, testing for their reliability and validity. We confirmed the reliability of
proactiveness and 0. 78 for risk taking†well above the minimum accepted value of 0. 70 (Field
correlation of proactiveness and risk taking with innovative performance respectively (r=0. 30 p<0. 01) and (r=0. 30, p<0. 01
**5. Risk-taking orientation 6. 16 1. 22 4 9 0. 30**0. 29**0. 39**0. 47
variables, proactiveness and risk taking, along with the control variables. As expected, the coefficients of both these EO variables are positive and significant.
ICT x Risk taking H2a-0. 41 **ECT x Risk taking H2b 0. 22 *R2
0. 17 0. 22 0. 38 0. 22 0. 34 Adjusted R2 0. 13 0. 18 0. 36 0. 17 0. 28
performance, we added to the variables in model 4, the interaction terms ICT x Risk taking and
ECT x Risk taking (model 5). We find a positive and significant coefficient for ECT x Risk
x Risk taking (Î=-0. 41, p<0. 01. These results provide full support for our hypothesis 2b which
stated that a firm†s risk-taking orientation has a greater moderating effect on the impact of the
Figure 2 The Moderating Effect of Risk-Taking on the Relationship between ECTS and Innovative
From figure 2 we can better understand the extent to which risk taking moderates the
a range (from low to high) of ECTS for high-and low-risk taking firms.
the other line, underscoring that risk taking substantially moderates the impact of ECTS on innovative performance.
The EO literature identifies proactiveness and risk taking as two key EO characteristics (Lee, et al.
We argued that the EO traits of risk taking and proactiveness interact differently with a firm†s ICTS and ECTS.
Risk taking on the other hand positively moderates the impact of ICTS and ECTS We empirically tested our conjectures on a sample of 120 SMES in a creative-industry
We found that risk taking strengthens the relationship between ECTS and innovative performance. For SMES in particular, external knowledge is a key source of innovation (Jacob
) In this context, firms that take calculated risk are able to invest resources in their ECTS such that they are able to draw potentially valuable external resources.
found that risk taking negatively moderates the effect of ICT on innovative performance. Too much resource commitment for within-cluster knowledge sharing may be counterproductive as
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