upsurge of social enterprise and innovation: mutual self-help, microcredit, build -ing societies, cooperatives, trade unions, reading clubs, and philanthropic business
Economies in both developed and (to Geoff Mulgan The Process of Social Innovation Geoff Mulgan is director of the Young Foundation based in London (U k). He previ
a lesser extent) developing countries are increasingly dominated by services rather than manufacturing. Over the next 20 years, the biggest growth for national
economies is likely to come in health education, whose shares of GDP are already much greater than are cars, telecommunications, or steel.
-er services, in which public policy plays a key role, and in which consumers co-cre
For all of these reasons, traditional business models of innovation are only of limited use†and much of the most important innovation of the next few
and services that are motivated by the goal of meeting a social need and that are diffused predominantly
is motivated generally by profit maximization and diffused through organizations that are motivated primarily by profit maximization.
There are of course very many borderline cases, for example models of distance learning that were pioneered in social organizations 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
centers for understanding social enterprise and innovation and for doing it. Under Michael Young, widely seen from the 1960s to the 1990s as one of the world†s most
y The growing diversity of countries and cities, which demands innovative ways of organizing schooling, language training,
the Internet is now generating a host of new business models that are set to have enormous impact in the social field. 7 Other possibilities may derive from new
developers and designers to engage with the toughest customers or those facing the most serious problems,
-ly through turning the idea into a prototype or pilot and then galvanizing enthu -siasm for it
up an embryonic organization, rather than waiting for detailed business plans and analyses. The Language Line
prototyping, intensive handholding by venture capital companies, and the use of rigorous milestones against which funds are released.
-ing, and testing new ideas†either in real environments or in protected conditions halfway between the real world and the laboratory.
Incubators, which have long been widespread in business, have started to take off 152 innovations/spring 2006
or services...Exactly the same challenge faces social innovation The Process of Social Innovation in the public sector and among NGOS,
printers, which have made it easier to turn ideas quickly into prototypes; parallel methods are being developed in the social fields to crystallize promising ideas so
That in turn may demand formal methods to persuade potential backers, including investment appraisals impact assessments,
and newer devices to judge success, such as â€oesocial returns on investment†or â€oeblended value. â€
Communication is essential at this stage. Social innovators need to capture the imagination of a community of supporters through the combination of conta
because the economics of web-based pilots may make it as inexpensive to launch on a national or continental scale.
Marginal costs close to zero accelerate the growth phase†but also the phase of decline and disappearance Our recent work on scaling up has shown why it is so hard for social innova
Two necessary conditions are a propitious environment and organizational capac -ity to grow. These are rare with social innovations.
-ities and social enterprises, the founders who were just right for the organization during its early years are unlikely to have the right mix of skills and attitudes for a
trustees, funders and stakeholders do not impose necessary changes. By compari -son, in business the early phases of fast-growing enterprises often involve ruthless
turnover of managers and executives. Indeed, growth in all sectors nearly always involves outgrowing founders.
-ple, the Samaritans in Australia have become a provider of welfare services rather than just a telephone counseling service;
recycling services, and it is now moving into providing primary health care servic -es. Generally, bigger organizations have more â€oeabsorptive capacity†to learn and
free communication is inhibited, or where there are no independent sources of money. Generally, social innovation is much more likely to happen when the right
by competition, open cultures, and accessible capital, and it will be impeded where capital is monopolized by urban elites or government.
In politics and government the conditions are likely to include competing parties, think tanks, innovation funds, contestable markets,
and plentiful pilots, as well as creative leaders like Jaime Lerner in Curitiba or Lee Myung-bak in Seoul.
-sidy of technology and private investment in incubators, venture capital, and start -ups. The equivalent potential supports for
-ing programs and services, and there are few incentives for either politicians or officials to take up new ideas.
when contracts for services reward outcomes achieved rather than outputs or activities, or when there is some competition or contestability rather than monop
-oly provision by the state. How public sectors â€oedock†with the social or nonprofit sector is also important,
opportunities, 16 the analyses of how much innovation is understood best as cre -ative reinterpretation, 17 and the work pioneered by Everett Rogers on diffusion
innovation seems to be a combination of oligopolistic competition between a few big companies and a much larger penumbra of smaller firms (the model that exists
venture units (like Nokia; some grow through acquisition of other innovative companies as well as their own innovation (Cisco for example;
As well as the study of innovation in economics and science, there is a small emerging body of research into the capacity of formally constituted social organi
Jorgensen at Harvard on valuing the informal economy and family work, and the recent work led by Tony Atkinson at Oxford university on the value of public serv
-stood just how important science was to the economy (and to warfare), invention and innovation were taken out of the attics and garden sheds.
-erately designed spaces in public services that encourage experimentation (such as the U k. †s public service zones that allowed national rules to be broken, and
and incubators that deliberately focus on mining new technologies for social applications In all of these, social innovation is likely to be most successful when there is
Daniel Bell the world†s â€oemost successful entrepreneur of social enterprises, †and in his work and
his writings he anticipated today†s interest in social enterprise and the broader question of how
#>7. For details about the open-source business model, see the Economist, â€oeopen, but not As usual, â€
<http://www. economist. com/business/displaystory. cfm? story id=5624944>(accessed May 24 2006 8. For example, see de E. Bono, Lateral Thinking†Creativity Step by step,(London, U k.:
Innovation and Entrepreneurship http://knowledge. wharton. upenn. edu/index. cfm? fa=viewcat&cid=12 16. J. P. Murmann, Knowledge and Competitive Advantage:
services,(London, U k.:Routledge, 1998. For general capacity building, see E. Evans and J Saxton, Innovation rules!
A Roadmap to Creativity and Innovation for Not-For-Profit Organizations London, U k.:NFP Synergy, 2004
mobile communications highway capable of connecting drivers with friends, family and information at a pace they desire
Communication between vehicle and infrastructure to dynamically reroute Integrated parking finder NAVI integrated parking spot
Near field communications for transactions 7  2013 Deloitte Belgium  2013 Deloitte Belgium Driverless cars are a looming disruptionâ€
†and will likely change dynamics in the economy and in our personal lives 9
Car sharing and on-demand solutions are growing increasingly popular, especially with generation Y 10
Northeastern University in Boston, KCR, Economist, Deloitte research â€oeyoung people increasingly view cars as appliances not aspirations, and say that
environment with frequent swings in fuel prices  2013 Deloitte Belgium  2013 Deloitte Belgium
In-car data services Increased safety V2i, V2v, †New revenue opportunities Partnerships European ecall initiative
Personalisation options Regulation App developers Distracted driving Communications industry A world of opportunities  2013 Deloitte Belgium  2013 Deloitte Belgium 14
Car sharing Efficient sharing, enabled by driverless cars Reduced need for cars Shorter planning & business cycles
Irrelevant dealer-based distribution systems Individual ownership fades Cars will be used up & replaced much faster
Shift in customer demand toward commodity products Eroding margins Undercut business models depending on premium autos and large margin options
Reduced entry barriers Reduced necessary engineering expertise and capital costs Reduced supply chain complexity Moore's Law
Requiring different approaches  2013 Deloitte Belgium  2013 Deloitte Belgium We believe dynamics in the automotive industry will
significantly change and new business models will emerge 16 Subsidise purchase price of a car, in return for
services Offer concierge services around the maintenance of the car Be an intermediary who manages car-sharing
and assures that shared cars are treated well and maintained †including having the latest driving
opportunities † 2013 Deloitte Belgium Our commitment to our clients includes access to our timely,
Emerging Markets, Emerging Opportunities This latest article examines how the nature and structure of automotive strategic partnerships have changed, and
Manufacturing Opportunity This report examines some of the main challenges facing any attempt to cultivate
Department of Media and Communications http://www. lse. ac. uk p. dini@lse. ac. uk
-sized enterprises (SMES) in several regions of Europe in the adoption of state-of-the-art business modelling, software
development, and run-time environments The DBE ecosystem community realised that to bring into existence information and communication technologies
ICTS) that help in the achievement of the challenges identiï ed by the objectives of the Council of Lisbon (higher
and the human perception, communication and representation dimensions in one single research domain. This approach, applied to social
linguistics, and communication theory brought to a revolution in the studies of human behaviour, interaction, and
communications, led by the Palo alto school (Watzlawick et al. ï oe967; Bateson, ï oe972. We do not know whether the
DBE research eï €ort will lead to a new science of the interaction and communications between economic and digital
successfully applied and transferred, 3 activating services and mechanisms capable of becoming more intelligent and
applications to the economy of a few regions, but also the future perspectives. We would also like to give an idea of
contribute to a shared enterprise In this introductory chapter we will give a high-level overview of the conceptual foundations, assumptions, and
processes and fair competition, several principles, theories, and processes are summoned to understand which ICTS and which organisations and processes can foster innovation and dense communities of users, leading to a vibrant
Knowledge Economy. The original digital business ecosystem vision (Nachira, 2002) is revisited therefore here on the strength of the outputs of four years of research by traversing most of the topics shown in this ï gure.
software industry and socioeconomic stakeholders, we hope this simpliï ed map will help the readers keep their
Competition Dynamic economy Scientiï c research outputs Open knowledge Open governance Natural and formal languages
Economic outputs Economic empowerment Production capacity Open source tools and processes for the collective representation and formalisation
formalised knowledge, services trainingmodules, skills, business and licencingmodels, laws digital contracts Knowledge Economy Motivation Assumptions Theories and Principles
Strategies Instruments Processes Structures Development Researchsme engagementaction research Multi-stakeholder processes ICTS Socioeconomic Dimensions Biological Metaphors
Fig. 1 Research and development in Digital Ecosystems •••8 Origins The research area related to Digital Business Ecosystems was triggered by the initiative Go Digital (EC, 200ï oea) 4
to economic growth and economic eï ciency: â€oethe decline in EU labour productivity growth rates in the mid-ï oe990s
was attributed equally to a lower investment per employee and to a slowdown in the rate of technological progressâ€
In the presence of roughly 20 million small and medium-sized enterprises (SMES) in the EU25, which make up more
COM, 2004) for â€oe†the most competitive and dynamic knowledge-based economy in the world, capable of sustainable
economic growth with more and better jobs and greater social inclusion†by 20ï oe0, was interpreted as a need to boost
â€oepublic and private information and communication technologies contributed nearly 50%of EU productivity growth between 2000 and 2004†(EC, 2007;
human capital, diï €used knowledge and skills; technical infrastructures; entrepreneurial culture and critical mass of available services.
Such programmes should rather become focused on creating favourable environmental conditions and ecosystems of innovation: â€oelike individual plants or animals, individual businesses
where a multi-stakeholder process of policy development and implementation was likely to be more eï €ective.
environments favourable to SMES€ business and their networking, compatibly with the EC policy for â€oehelping SMES
1. promote a favourable environment and framework conditions for electronic business and entrepreneurship 2. facilitate the take-up of electronic business
3. contribute to providing Information and Communication Technology (ICT) skills It is worthwhile to note the integrated approach which stresses the creation of an environment, a business ecosystem
and the need for IT skills 4) http://ec. europa. eu/information society/topics/ebusiness/godigital/index en. htm
9 ••†¢The Digital Business Ecosystem The synthesis of the concept of Digital Business Ecosystem emerged in 2002 by adding â€oedigital†in front of
and connects services and information over Internet links enabling networked transactions, and the distribution of all the digital †objects†present within the infrastructure.
and processed (by computer software and/or humans), e g. software applications, services, knowledge, taxonomies folksonomies, ontologies, descriptions of skills, reputation and trust relationships, training modules, contractual
This economic community produces goods and services of value to customers, who themselves are members of the ecosystemâ€.
Moore, ï oe996) A wealthy ecosystem sees a balance between cooperation and competition in a dynamic free market
Ecosystem: a biological metaphor that highlights the interdependence of all actors in the business environment, who
â€oecoevolve their capabilities and roles†(Moore, ï oe996. Also, in the case of Digital Business Ecosystem, an isomorphic
and self-optimising environment (Evolutionary Environemnt or Eve 5) Now Networked Enterprise and RFID Unit, Directorate General information Society and Media
6) Inspired by work of Thomas Kurz, Salzburg University of Applied sciences Fig. 2 The stack view of the Digital Business
business models, trainingmodules, skill descriptions, digital contracts, software services, ontologies, dynamic semantic networks and taxonomies, folksonomies, tag clouds
Evolutionary Environment P2p architecture and Execution Environment SME Networks Business Ecosystem of companies, goods and services
•••10 Bringing these three terms together has been eï €ective in broadening the appeal of the approach to a wide range
of stakeholders from academia, industry, business, and policy-making. However, it has rendered also a clear explanation of what the three terms mean
when used together very diï cult. It is especially challenging to show how these three terms necessarily imply some characteristics of the technology and not others,
or how they imply some policy and governance choices and not others. The understanding of the term †digital ecosystem†and of
the stakeholders that populate it has developed during the course of the research over the last few years.
Computing environments likewise spilled over from the single computer to the local area network (LAN) at ï rst,
The faster and more pervasive communications enabled by the technology reinforced the already existing trend from a material economy based on manufacturing toward a service economy based on knowledge
production and distributed value chains If limited to these aspects, Digital Ecosystems are not very original:
in information and communication technologies often a group of applications complementing a speciï c product
8) E g. several authors describe the SAP platform and the surrounding applications and services as a â€oedigital ecosystemâ€
economies of the world a more constructive dynamic of interaction between the local and the global scales can be
economy of the region when when the dominant economic actor experiences economic diï culties. This model also
matches the economic structure of the USA where there is a predominant number of large enterprises at the center of
It looks at new institutional and transaction costs economics (Coase, ï oe937; Williamson, ï oe975
Benkler, 2002) as well as at the economics of sharing (Benkler, 2004) and community currencies. ï oeï oe Perhaps most
A greater opennessï oe2 and a multi-stakeholder approach between academia, business, and local government implies a greater emphasis on a collaborative â€oesense-making†process for analysing the priorities of a particular
ï oe0) Crowdsourcing is deï ned as new business model in which a company or institution takes a job traditionally performed by a
delegating that role to a number of companies that oï €er a range of SME networking services, from meeting and
conference space to ISP services Four years since the emergence of the Digital Ecosystem concept, we still believe that socioeconomic growth depends
Knowledge Economy is not so diï €erent from encouraging spending to stimulate the dynamism of the Exchange
Economy. However, we recognise that â€oespending†ideas are easier to implement in research environments than in
business environments. Therefore, the balance that seems to work in business environments is layered based on a
approach: combining an open source shared middleware infrastructure with software services, models and information that compete on the revenue models
(which can vary from proprietary to shared or free). An open source ecosystem -oriented architecture provides, indeed, a distributed middleware that acts as a new ICT commons,
or as a public road that lowers the cost of ICT adoption and maximises the reuse of models.
of openness, multi-stakeholder approach, and the tactic of using Regional Catalysts) as an eï €ective methodology to
example, Game theory sees â€oeatomised†economic agents in competition to maximise their own utilities as oï €ering a
or even prescription, for a healthy dynamic equilibrium of economic systems. We do not consider Game theory a good framework for explaining what has happened in the regions that have adopted the Digital
 Knowledge is received not passively either through the senses or by way of communication, but is built actively up
subject must somehow receive the information from the environment, i e. it must be instructed"."Cybernetics began
between enterprises and people Autopoiesis and Dynamic Conservatism Maturana and Varela (ï oe973) invented the concept of autopoiesis as a model that generalises the structure and function
human communication and social systems impacting on sociology, psychotherapy, management, anthropology organisational science, and law An autopoietic system can be described brieï y as a self-producing machine,
but is triggered by the environment. Thus, the structure of a given system is not static;
and its applications/services. It was remarked by Lessig when he observed that â€oethe code is the law of cyberspaceâ€
the †spontaneous†creation and implementation of new protocols and services, would not be possible with a diï €erent
The Internet was designed with no gatekeepers over new content or services The Internet is layered based on a,
and recommending services, for reorganising value chains, and for recommending potentially cooperating business partners. The digital ecosystem inï uences the structure of the enterprises and of their social and business networks
whilst the business ecosystem modiï es the structure of the â€oeorganisms†of the digital ecosystem.
DIGITAL ECOSYSTEM (digital representations of economy XXX XXX XXX XXX BUSINESS ECOSYSTEM (economy Pe rt
ur ba tio n /C om pe ns at io n Perturbation /C om pensation
Technologies and paradigms that enable the participation of SMES and innovators in the knowledge-based economy
clustering to achieve greater competitiveness in the global economy In the course of the subsequent debates the concept was developed further into the peer production of a †digital
economy and in the knowledge society, and that empowers the creativity, the potentialities, the capacity, and the
dynamic interactions (the relationships and the cooperation/competition) between all the economic players The public consultation process produced a research agenda (Dini et al.
economy. In this paper we present only a few of these interrelated keystone principles, showing how they have
 Scalability and robustness These principles imply a fully decentralised architecture; the design of a P2p structure that is robust, scalable, self
the (references to the) formalised knowledge and the software services where there is a greater probability of their use
Economic activities cannot help but be related to local cultures and regulations. The ability to produce solutions which
This structure should be able to adapt to diï €erent societal environments, which are constantly changing
considering the services or the business models, this means that in some ecosystems new services will appear, in
others the same services will be modiï ed to be adapted to local conditions, regulations, business models, in yet others
the services will disappear from lack of use. Solutions that need to be developed on a European scale could have
The digital ecosystem is the ICT infrastructure designed to support economic activities, which contains the socially
 the knowledge that expresses diï €erent socially-constructed partial interpretations and views of the economy and
Thus, the ecosystem is an environment with a †life support†architecture designed to enable the †life†of its †digital
The digital ecosystem in its evolution will acquire more services and will be able to include
the more aspects of the economy can be described and mediated. Thus, when we abandon the mirage of
regional stakeholders, but the technology itself needs to grow out of the languages and interactions between these
stakeholders (Vaca, 2005. In other words, having embraced a holistic approach that highlights the dependence of the business models and interactions and of their formalisation into software services on their socioeconomic and
cultural context, no assumptions can be made by external actors about what constitutes an optimum technology
infrastructure and middleware, the software services and applications, all the attendant web technologies, and all the software development, requirements capture,
and their services from their locally and socially constructed point of view, automating the generation of the software
a consequence, due to the scarcity of human resources, very limited aspects of the †real world†have been described
 The movement of information goods to centre stage as drivers of economic growth  The ever more widespread use of the peer-to-peer modes of conducting the distribution and utilisation of
one of the most promising strategies to reduce the digital divide between SMES and large enterprises.
reducing cost and investment, and working at the centre of a peer knowledge production process allows small enterprises to overcome the activation threshold needed
to use ICT in a novel and productive way The Open source approach has thus been the only possible choice for the Digital Ecosystem infrastructure, not only
and transform their business/economic environment according to their shared description of the world. However, access to the code does not solve everything.
Up to now economic theory suggests that long-term incentives are stronger under three conditions ï oe) more visible performance to the relevant audience (peers, labour market, and venture capital community
2) higher impact of eï €ort on performance 3) more informative performance about talent. The ï rst condition gives rise to
what economists call †strategic complementaritiesâ€. To have an †audienceâ€, programmers will want to work on software projects that will attract a large
surely require a variety of business models to be viable and sustainable in the long run. Some of these models will be
based mainly on a new Exchange Economy characterised by peer production behaviour to become integrated with
the Gift Economy. 29 In the gift economy a immediate remuneration is sought not, and in many cases it is expected not
the people who straddle both economies Social constructivism takes a further step to what we have discussed so far in its recognition of language as a medium
interactions by language and communications; and (2) to devise a governance process that can maintain the dynamics of
29) â€oethose who have been waiting for a new and economically viable freestanding business model for free and open source software
instead of any such miraculous business plan, something else has emerged: the apparent willingness of proï t-seeking producers of
complementary goods and services to source software†(Dalle 2005 •••22 also express a process.
socioeconomic development process that can bootstrap the Knowledge Economy in any regional context to construct
Communication & Collaboration Tools Network Fig. 4 Flow of innovation through community to sustain open knowledge productio
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Communication from the Commission, COM (2003) 729. â€oethe EU Economy: 2003 Review†European commission (2004. Communication from the Commission, COM (2004). 480-ï oe3. 07.2004
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