Foundation, The Centre for Social Investment at Heidelberg University, Atlantis Consulting the Catholic University of Portugal, and
The relationship between social investment and social innovation has been researched under and poorly understood. WP4 examined how the
as the acquisition of investment usually brings high capital costs and risks. Enhanced cooperation between different actors will help to
for more investment in the field, as we have found there are a substantial number of innovators ready
and willing to acquire investment WP5: Engaging the public Citizen engagement is recognised widely as a key
Return on Investment (SROI), the Social Reporting Standard (SRS), Social Cost Benefit Analysis SCBA), and Randomized Control Trials (RCTS
and investment the importance of its evaluation has started to grow. Thorough and transparent assessment of interventions which apply efficient
acceptance of the Social Return on Investment SROI), the Social Reporting Standard (SRS Social Cost Benefit Analysis (SCBA), and even
alone finance investments in growth and further innovation. In contrast, if social innovators do operate successfully in regular markets, then their
financing and investments in growth are not such a problem †regular markets and investment actors
will channel required resources to where they are needed and where they will produce regular returns.
problem of investment logics to social innovators The investment logic of commercial or impact investing is applicable on a rather limited basis
partly because of social innovators†income models, but also because of legal and cultural constraints. Online survey results showed that
could service commercial types of investment at market terms, while another 40%of the sample
is potentially capable of repaying an investment at some reduced cost of capital. Therefore, forms
ways to exploit investment models through more effective mechanisms of reducing investment capital costs †which are the main barrier for this form of
financing. Where financial returns cannot serve as the simple measure of organisational success more nuanced ways of capturing impact are needed
link measurement with investment objectives and terms are associated central problems with that Existing and potential instruments
) Report on Social Finance Investment Instruments, Markets and Cultures in the EU All available at tepsie. eu
social investment funds make investments. This suggests limitations to the role that social/impact investment can play in funding
and financing social innovations. Clearly, there remains a significant role to be played by philanthropic organisations and
The Centre for Social Investment at Heidelberg University, Atlantis Consulting, the Catholic University of Portugal, and Wroclaw Research
investments in R&d (Birchall et al. 1996; Oerlemans et al 1998). ) Among other internal factors that were found to be
investment in innovation activities Subsidies, ï rm age and proportion of full-time equiva -lent employees engaged in intramural R&d are omitted
investment, and the failure of leading ï rms. Strategic Management Journal 17 (3), 197†218
Research has shown that increased investment in human capital can determine competitive advantage and indeed success in the development of Least Developed Countries (LDCS.
investment, and roll out real integrated test beds to trial new network and service infrastructures In future Internet end user, service, application and network requirements act as
economic entity and must protect its investments. Examples include the deployment of Deep Packet Inspection techniques by ISPS in order to control how bandwidth is
an ASP€ s revenues (the â€oeconsumerâ€) due to its higher investment risks and opera -tional costs.
in order to improve their return of investments (ROI Thus, embedding risk/cost analysis in the SDLC is currently one of the key
stakeholders†return of investment when implementing security measures during various stages of the SDLC. We can envision several aspects of this kind of SDLC
value from the infrastructure investment. The final scenario, â€oeinvestment Govern -ance†builds on the first two to demonstrate how they feed back into future business
influence future investment decisions based on capital, security, compute power and energy efficiency In order to enable realistic and effective reasoning at provisioning
•IT Investment/Technology adoption The Use Case identifies a hierarchy of KPIS which are established measurable against
Third, one of the areas where high investment in research has taken place in recent years is related to the multimedia and multimodal search and retrieval of multimedia
†smart†â€oewhen investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic growth and a
-sidering the investment required to deploy city scale testbeds. For this reason, apart from serving to its research purposes, it is essential,
incentive framework for foreign investment and development of commercial partnerships with small and medium firms in other
-vantage, increasing market share, return on investment (ROI), and overall firm success Allocca and Kessler 2006;
-portunities enable firms to attract other human capital, financial investment, or technological capabilities (Zahra et al. 2007.
) R&d investments and family firms: an agency perspective. Journal of Business Venturing, 27, 248†275
and functioning regional innovation system, where the core actors and suitable investment priorities and to allocate resources efficiently are more easily identifiable.
investments. This implies discussing the role played by the quality of regional governments in RIS3 on the
knowledge spillovers from R&d investments in neighbouring regions(;the †social filter†index, an indicator of the key social and structural conditions influencing the capacity of a region to
gain higher returns from additional investment in innovation The Quality of Government Index is subdivided then into its four components to identify the key
these circumstances, investments in innovation activities become more costly and the application of long -term development strategies †of the kind linked to Smart Specialisation †more complex to achieve
Investments in R&d from the private sector show a strong connection with innovation in the core group
Conversely, the evidence of a positive effect from R&d investments is marginal or absent in the
skill development, research and innovation investment for growth and jobs For Europe†s universities, most importantly, their education and training capacities should be crucially
will be the basis for Structural Fund investments in R&i for the period 2014-2020. Universities can be crucial
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
new infrastructure in physical terms but also importantly in investment in human capital development and services to the region.
investment is aimed often at short-term rather than long-term goals. Physical buildings and infrastructure can be achieved in the short term (within the political framework/time cycle.
Synergy between innovation policy and regional policy initiatives/investments is often lacking or under-used
National ministries of education science and technology are often â€oespatially blind†in their R&i investments hence not assessing
to unclear benefits of the outcomes and/or due to the long-term nature of the investment that the
investment in research infrastructures and attracting leading researchers. These excellent research groups would be more likely to be successful in the EU Research Framework Programme
investment in research infrastructures that are required for successful research collaboration. Since 2007 the University of Graz has run 26 projects with the EU Structural Funds;
maximise this investment within the country as a whole (at least 50%of the Czech Republic†s education
investments in R&d equipment •Supporting top-level research (e g. centres of excellence programme †12 centres
Additionally, the value of ERDF funding for investment projects in research and equipment was â 2. 3 million
university participated in the local regional board for the investment of approximately â 200 million where
estimate) of public investment in university RDI. The main investment areas have been •research buildings, laboratories and equipment
•human capacity building through structured Phd programmes and postdoctoral programmes •innovation through research directed towards commercial outputs (spin out
Since 2006 this investment in RDI capacity has been linked strongly to synergies with other major national investments, most notably through
Science Foundation Ireland (the largest national research funding agency), and the ability to succeed in
making this investment. Funding for innovation activities has been directed through a separate agency Enterprise Ireland) as an open competitive process on a rolling basis
use of major infrastructure investments in science and technology facilities, e g. the European Laboratory on Tissue Engineering and Regenerative Medicine, the Institute for Bio-Sustainability and the Incubator
and equipment investments can be gained through the ON2 programme †Consolidation of the Research Network.
The main investments and activities covered by these funds were •Co-financing of the university†s research facilities and equipment:
viii http://www. youngfoundation. org/our-work/ventures-and-investment/health -launchpad/portfolio/neuroresponse/neuroresponse
main barrier to investment in research and innovation. The Group recommended the development of innovation friendly markets in a more
The Alliance argues that an investment of $300 billion (â 212 billion) would add more than 3. 3 million jobs to the economy
-renewable investment Social Innovation and EU 2020 Social challenges are real and significant; they threaten to constrain economic
Most will have sunk investments †of time and money †in past practices that they are loath to discard or
consequently only weak incentives for investment, and •There are, at best, imperfect markets for social outcomes, which again
incubator, alongside a social innovation investment fund. In Singapore Biopolis, a two-million square foot research centre brings together scientific
maximise both social and environmental returns on investment. Unlike mainstream commercial banks, ethical banks only lend to
International Development Investment Unit which is responsible for financing micro-financing and fair trade in developing countries. lxxxi
mission to effect maximum transparency, all savings and investment accounts are available to view on Triodos†website
Venture philanthropists seek social as well as financial returns on investment †although in many areas, the majority of venture philanthropy activity is
investment). ) Over the last decade, venture philanthropy has played an important role in diversifying capital markets for social purpose organisations
•make investments which are based performance, placing an emphasis on measureable outcomes, achievement of milestones and high levels
Their portfolio of investments covers four main areas: childcare and families †to break the cycle of
disadvantage by making investments in organisations dedicated to early intervention and prevention to create effective family support programmes
When an organisation finally secures investment from the One Foundation, it is usually for 3-5 years.
Investment is performance based, with annual and quarterly targets set that must be achieved for the
investments to leverage funding from alternative sources. The One Foundation also provides a range of nonfinancial tailored support
funds exist for early stage ideas, investment, R&d, and incubation (for example, EU programmes such as EQUAL, Framework or at the
innovations (for example Mindlab in Denmark), to investment in skills and capacities, whether through intermediaries, universities, or civil
encouragement of Social Return on Investment methods 68 However, we emphasise that this is an emerging field without much strong
foresight projects and venture capital investments. The fund focuses on initiatives with international potential. Innovation labs will support foresight
Social Enterprise Investment Fund, UK The Social Enterprise Investment Fund is run by The Social Investment
Business on behalf of the Department of health in the UK. Developed in the wake of the 2006 White paper, Our Health, Our Care,
preventative investments. Investing in social innovation is complicated often by problems associated with quantifying the effects of an investment
especially where those effects are not financial. This is especially the case with investment in programmes which are preventative
Social Impact Bonds, UK Social Impact Bonds (SIBS) are a financial tool being developed in the UK to
•Investments (by local authorities, commercial investors or foundations •A programme of actions to improve the prospects of a group (for
Under this model, a local authority borrows for a package of investment in a social impact programme and receives a series of payments from national
social investment sources or on the market Full Social Impact Bonds A third alternative focuses on third sector action to achieve outcomes.
investment in early years programmes (based on the evidence from the Abecedarian and High/Scope Perry Preschool Programmes for substantial
and investments in health prevention and improvement. Another potential field for action is in employment
services, and secure investment from funds such as the Social Enterprise Investment Fund (SEIF) and the Regional Innovation Funds (RIF) managed by
the Strategic Health Authorities (SHAS In the UK, innovation has been recognised as critical in delivering excellence
and investment as they completed the various stages. And the further the participants progressed, the more
private sector investment efficiently or consistently. cxxvi •Current risk capital markets lack openness and transparency, leading
support, to third sector organisations that need investment to help them bid for, win and deliver public service contracts.
investment †to be audited by a third party. The Fund does not invest in †bankable†deals (that a mainstream bank would do)
their investment. cxxxii Skills and formation While there is growing interest and investment in the development of
financial resources for social innovation, very few resources have, as yet, been devoted to labour market development.
with proper investment in training materials, understanding of methods, and courses, ranging from quickly accessible online materials and short courses to
investment in innovation in the UK economy, and the effect that this has on economic growth and productivity,
investment in R&d spending or the number of patents granted) and not outcomes In principle, there are some ways of measuring innovation activity at different
as Social Returns on Investment (SROI) and Multi Criteria Decision Analysis methods. The Young Foundation has analysed recently over 150 tools in
Within the nonprofit world Social Return on Investment Methods (first developed by REDF) translated the methods of the social
regeneration scheme, for example, showed that modest investments in home safety which cost about 3%as much as home repairs generated four
•Late stage/high value †approaches considered for serious investment This is done using four main dimensions,
We are less confident that social return on investment models can provide this common architecture for the reasons stated above.
•Priority tools for action (investment, capacity, networks procurement etc •Milestones and targets for achievement over 2, 5 and 10 years
investment, growth and so on. This should include the creation of more outcome focused funds where these are
and investment in more rigorous lesson learning. This has been a key weakness in some past programmes
-European Investment Bank †along the lines of joint EIB and European commission initiatives such as JESSICA, JASMINE
just for return on investments and all sectors of the economy should be drivers for innovation.
Measuring the UK€ s investment in innovation and its effects. London: National Endowment for Science, Technology and Arts
SROI A Guide to Social Return on Investment. Lenthe Publishers clxvi Linkov, I.,Varghese, A.,Jamil, S.,Seager, T.,Kiker, G. & Bridges, T. 2004) †Multi-Criteria
technological advances, attracting foreign investment, †This enables the creation of a demanding demand which catalyses the
participants increase the level of investment as they pass through the various stages. This is how NESTA€ s Big Green Challenge was organised
combine the investment decision and business support. Typical units for individual projects range from £2k-£250k,
and sequencing †for example of investment in people, equipment and market growth. Business plans cannot design
ventures to access equity investment while maintaining the social goals of the enterprise as paramount.
Some of the methods for effective supply include investment in evaluations and research data to demonstrate effectiveness
and requires more investment in professional skills 5 84 THE OPEN BOOK OF SOCIAL INNOVATION
208) Standard investment appraisal methods †there are a wide range of tools in use in banking, venture capital and other fields of investment
which assess current and future cash flows, asset values, etc 209) Cost-benefit analysis (and its variant cost-effectiveness analysis
transport investment and large development projects 210) Stated preference methods monetise social value by drawing on
217) Social Return on Investment (first developed by REDF), has become increasingly popular within the nonprofit world.
a regeneration scheme, for example, showed that modest investments in home safety †which cost about 3 per cent as much as home repairs â€
or a new set of investment devices Systematic approaches to innovation are rare. But the UK health service
It is involved already heavily in innovation through investment in research and development on pharmaceuticals and medical instruments, and close
public investment in early years†education as well as effective models for delivery 234) New models of the support economy.
and investment in community-based solutions focused on prevention. These are part of a †family†of innovations in
256) Blocking technology and other investment choices that will impede changes to systems. This is particularly relevant to key infrastructures
investment, or reinvestment, in an old model can be the key to creating space for investment in new alternatives
257) Frames for change. Framing involves linking particular events †such as natural disasters, crises of care or of the economy †to underlying
environmental investment, as with home insulation in the UK, biofuels renewable energy equipment and recycled paper in the Czech republic
systemic ideas they need different methods to those used for investment in established systems. At an early stage there is unlikely to be any clear
274) The creation of new investment flows can do the same, particularly when these are supported by new kinds of property or asset, such as
knowledge, experience, and investment. Borrowing from the best of a member†s club, an innovation agency, a serviced office and a think-tank
†with a multidisciplinary team, a staged investment model, and an emphasis on linking business expertise with understanding of policy
and a business incubator, alongside a social innovation investment fund Mars is a nonprofit innovation centre connecting science, technology
and investment. There are many others, including the regulatory, fiscal and legal conditions determined by the state,
from utilities †for investment in emerging green technologies and other innovations 348) Community pledgebanks are a development of the Pledgebank idea
Public investment Financing public investment is complicated by the common difficulty in quantifying the effects of an investment,
or capturing returns that are multi -dimensional and diffuse. This particularly applies to preventative investment
Private funding can be used where there are clear streams of revenue resulting from the investment, with the public funding element covering the wider
social impact elements of an investment †and reducing risk 359) Local bonds, including Tax Increment Financing (TIF) and Business
Improvement Districts (BIDS. These create flows of resources at the local and very local levels,
and can support new functions at arm†s length from the local state 360) Generating revenue from public investment on the US railroad
model. Prior to investment, property rights are vested in a Community Land Trust (CLT) or public body which then benefits from the increased
rental value of sites after the public investment has been undertaken The Greater london Enterprise Board financed its operational
expenditures for many years through the sale of industrial property it had bought during the recession of the early 1980s
such as the proposed Social Investment Bank to be funded from unclaimed bank accounts, which would act as a
Investment Fund launched by the UK€ s Department of health with around £100 million, using a mix of loan and equity finance
contributions, sponsorship or community investment 366) Layered investments combining tranches with different rates of risk
/return and different sources of capital (philanthropic, public, private such as Blueorchard (Switzerland) or Big Issue Invest in the UK
369) Investment guarantees, with any claim on the guarantee being paid out with a one year delay.
counted in a public authority†s current investment programme (Sheffield City council pioneered this delayed payment method in the 1980s
370) Securitising future payment†streams to provide investment capital, as with the Prime Carbon scheme in Australia which contracts
capitalised to fund farmers†investment. Similar measures could be used to fund domestic or corporate energy efficiency measures
371) Financial instruments for preventative investment including the UK€ s †Invest to Save†budget, the USA€ s Justice Reinvestment
to make preventive investments. They were endorsed in a government white paper in December 2009 373) Health Impact Contracts are a potential new financing device
government), with investments by local authorities (for example in home based care for the elderly) tied to future payments by the NHS
†determined by whether the investment leads to lower pressure on hospitals and acute services
375) Public investment aimed at social innovation growth strategies such as the proposed Social Investment Bank, the Toronto Atmospheric
Fund, and Enterprise Boards 376) Public Finance Initiatives, also referred to as †public-private
Enterprise Investment Scheme (EIS) for social enterprises, or property tax holidays for early-stage social enterprise and charities
zones provided a range of tax incentives to attract foreign investment and paved the way for the sweeping reforms and the unprecedented
personal public investment, such as those for higher education, elder care and environmental investment 380) Charitable status extended to allow tax allowances on
investment funds, as with charitable investment in Community Interest Companies, or the L3c model in the US
which allows for programme-related investments from foundations 381) R&d tax credits for the design and development of innovations.
R&d tax credits have been extended to cover design, and although they are primarily designed for commercial companies,
are treating grants more like investments †alongside project involvement technical support, continuous funding, and the coverage of core costs. 4
411) Grants as investment including tapered grant funding, public equity and preference shares 412) Grants as complements to innovation investment packages.
Grant funding for off-balance sheet expenditure, for example Cordaid†s investment and development packages for commodity development
projects, or the UK€ s Department for International Development (DFID Frich grant programme for UK market development for African supply
414) Giving and social investment circles such as the Funding Network United Way, Social Venture Network,
Mission-related investment Philanthropy has moved increasingly to softening the distinction between grant and investment †viewing funds as supporting projects that contribute to
a specific mission, including transformations of whole sectors for social ends 419) Strategic investments to transform sectoral provision, for
example, the Bill and Melinda Gates Foundation†s investment in small high schools across America; and the Prosperity Initiative;
which creates sectoral partnerships to stimulate industries that create income and employment for the rural poor
Much has been written about social returns on investment, triple bottom lines and †blended value†2 but how to ensure that the interests of investors
both social and financial returns on investment †or at least, reduce the negative impacts of investments.
Investments can be screened negatively †to exclude, for example, companies and organisations which are responsible for exploitative labour practices,
cause harm to people and planet or are at odds with the values and mission of the investing
Investments can also be screened positively to include companies which further social and environmental goals. For example, the Norwegian Government
investments which †may contribute to unethical acts of omissions, such 3 186 THE OPEN BOOK OF SOCIAL INNOVATION
personal investment into green, sustainable and ethical products 457) Mission-connected investment is a form of ethical investing
†it allows organisations to tie their investments closely to their missions in order to achieve their charitable goals.
So, for example an environmental foundation might choose to invest in recycling and renewable energy companies,
459) Social venture funds that use equity-like investments for start-up and early-stage social ventures where loan financing is unsuitable
investment for charity, and for those paying off loans †all the interest goes to charity as well.
Seed charity†s investment in the fair trade Community Interest Company Liberation Foods 465) Investment-readiness support aims to get projects or promising
enterprises to a stage where traditional investors can make investments This can include, for example, providing interim finance directors or
accelerating product or service testing, in order to allow loan and equity providers to come in. Other useful elements include standardised due
466) Philanthropic investment for growth such as the CAN Breakthrough Social Investment Fund which provides strategic support and growth
capital to established social enterprises with the ambition and potential both to scale up their businesses and maximise their social impact
runs CAN Social Investment, leveraging business support from leading private sector companies, as well as CAN Mezzanine, which provides shared office space for more than 115
476) †ebays†for social investment, for example, Clearlyso, an online market place for social enterprises
There is growing interest and investment in the development of financial resources for social enterprise. As yet, very few resources have been devoted
responsible investment, as a way of identifying environmentally and socially responsible companies, and to track their performance over
Office of the Third Sector (2009) †Social Investment Wholesale Bank: A consultation on the functions and design. †London:
public investment 157-160 fiscal moves to promote social innovation 160-161 Grant economy 168-173
mission related investment 172-173 Market economy 185-189 social finance 185-187 social finance institutions 188-189
Investment Fund 158 NHS Innovation Hubs 135 NHS Institute for Innovation and Improvement 132 national innovation funds 92;
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