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;
as those that aim at supporting long-term R&d investment and economic growth, whilst reducing income inequalities, and increasing competitiveness.
Further support, investment advice and funding for SMES and young companies is also available through the Commission†sâ Startup Europe programme for web and tech
investment, meant to support the business until it can generate cash on its own or until it is ready for further
investment. Seed funding is probably the hardest money for aspiring start-up entrepreneurs to get. However
according to CB Insights (2014), 2013 was a big year of venture investments at the seed stage.
investments. Other companies organise events where start-ups are awarded with seed funding. In February 2014, at the Mobile World Congress in Barcelona, IBM promoted its Watson Mobile Developer Challenge
that invest in mobile are in fact looking for a return on their investment In this respect, the report explores the two main types of business models that are in place:
and 5) the reciprocity and cross investment between project 43 creators and crowdfunders. Another stream of literature (Organisciak, 2008) refers to academia, charity, money
One big issue is how to provide infrastructural investments such as broadband deployments and pan European digital services that underwrite robust, equal,
experimental social innovation, more investment in this area is needed. Policy-making should encourage social innovations to be tested
and to improve investment in those that really work. This is, therefore, also a recommendation related to policy making to support digital social innovation
and whether they should receive continued investment 4. As the basis for understanding and assessing the evidence of impact for a specific intervention or service
including investment appraisals impact assessments, and newer devices to judge success, such as â€oesocial returns on
-sidy of technology and private investment in incubators, venture capital, and start -ups. The equivalent potential supports for
was attributed equally to a lower investment per employee and to a slowdown in the rate of technological progressâ€
reducing cost and investment, and working at the centre of a peer knowledge production process allows small enterprises to overcome the activation threshold needed
investments, so personal assets of the owners are not put at risk. Where governments make registration
doesn†t to calibrate interventions and investments •Addressing barriers to growth and scale. Growth & scale is an ambition that should be fostered;
Providing funding and social investment Nominet Trust Nesta Advocacy and advisory or expert bodies IOT Council
By providing funding and investment Public sector bodies, large foundations and other philanthropic organisations, provide early stage funding
and social return on investment through higher dissemination to citizens, taxpayers, and researchers from other countries and other disciplines, fostering interdisciplinary cross fertilisation and international im
makers, or lack of investment. It is crucial for successful crowdsourcing to design the activity properly to
-tional infrastructure necessary for cutting-edge research no longer requires state investment, and in fact private institutions have near-monopolies over social networks
doesn†t to calibrate interventions and investments •Addressing barriers to growth and scale. Growth & scale is an ambition that should be fostered;
-severance as well as investment in time, money and relationships before good outcomes happen Business cases for implementing the resulting API€ s are currently miss
facilitate †the collective investment in open projects with social, cultural scientific, educational, technological or ecological objectives that gener
investment and support model combines the elements of a research lab startup incubator and public interest initiative
Peerby has received investment from a number of philanthropic as well as private investors including Stichting Doen, Agentschap NL, Sanoma
quite an investment that doesn†t pay off immediately (in salary. Almost all employees of Peerby own a piece of the company through stock op
upfront investment Its robustness and low maintenance requirements make it particularly suitable for harsher environments in many developing countries
doesn†t to calibrate interventions and investments •Addressing barriers to growth and scale. Growth & scale is an ambition that should be fostered;
Providing funding and social investment Nominet Trust Nesta Advocacy and advisory or expert bodies IOT Council
By providing funding and investment Public sector bodies, large foundations and other philanthropic organisations, provide early stage funding
and social return on investment through higher dissemination to citizens, taxpayers, and researchers from other countries and other disciplines, fostering interdisciplinary cross fertilisation and international im
makers, or lack of investment. It is crucial for successful crowdsourcing to design the activity properly to
-tional infrastructure necessary for cutting-edge research no longer requires state investment, and in fact private institutions have near-monopolies over social networks
doesn†t to calibrate interventions and investments •Addressing barriers to growth and scale. Growth & scale is an ambition that should be fostered;
-severance as well as investment in time, money and relationships before good outcomes happen Business cases for implementing the resulting API€ s are currently miss
facilitate †the collective investment in open projects with social, cultural scientific, educational, technological or ecological objectives that gener
investment and support model combines the elements of a research lab startup incubator and public interest initiative
Peerby has received investment from a number of philanthropic as well as private investors including Stichting Doen, Agentschap NL, Sanoma
quite an investment that doesn†t pay off immediately (in salary. Almost all employees of Peerby own a piece of the company through stock op
upfront investment Its robustness and low maintenance requirements make it particularly suitable for harsher environments in many developing countries
public and private investments required for the implementation of the research and development R&d) strategies The time is now
applying efficient investments to solve infrastructure ageing •Security of supply: limited primary resources of
undertake necessary investments to guarantee high levels of power quality and system security, while assuring adequate remuneration for their shareholders
Investment remuneration and stable regulatory frameworks will be necessary for a â€oelevel playing field†competition in a liberalised market
grid companies, technology providers will have important investment decisions to make. A shared vision will be critical to ensuring sound strategic developments that
incentives which secure a grid with increasingly open access, a clear investment remuneration system and keep transmission and distribution costs as low as possible
it reduces investment risk Smartgrids: The Vision Europe†s electricity networks in 2020 and beyond will be
•The need for investment in end-of-life grid renewal in an innovative way to better position the networks for the next 50 years of
investment decisions •The progress in technology, which allows improvements in operation and new services at reasonable costs
or about the details of investment funding and risk management •It†s not about emission trading markets or
Significant investment will be required to develop and renew these infrastructures: the most efficient way to achieve this is by incorporating
Global investments required in the energy sector for 2003 -2030 are estimated an $16 trillion, according to the
investment will be needed to upgrade the electricity transmission and distribution infrastructure The electricity network of the future
•In regulatory frameworks and investment remuneration in innovation The best strategy for managing these uncertainties is to build flexibility and
change on the other is likely to greatly affect decisions on new investments in generation.
commercial activities with respect to long time investments Grids will become intelligent systems with flexible, controlled power flows supported by advanced information
public investments required for the implementation of the RTD strategies In this respect, integrated research and demonstration projects in electricity networks
cooperation and sufficient investment to fund extensive research. It is divided into different bodies, each
and public investments to allow crucial research to be carried out Smartgrids: How will transition be achieved
investments Creates a socially responsible image for the †¢company Figure 4: Hidden waste costs
On average, these investments paid off after 13 months. Micro companies achieved high relative savings (comparable to 11%of annual
investments in energy efficiency by more than half. This leads them to waste at least £1. 6bn every year on energy they could easily save
investment and reduction of materials sent to land -fill. Orangebox has been actively embedding eco -design for a number of years,
Impact investment for eco-innovation Impact investment is investment assessing not only the financial return on investment, but also
the environmental and social impacts in the course of the operations of the business and the con
-sumption of the product or service, which the busi -ness creates. Impact investing is expected to
com (UK), specialise in impact investment for ven -tures that aim to create environmental, social and
meet the infrastructure investment challenge and realize paperless administration. The Commission has called on the 1 Commission Communication â€oesingle Market Act-Twelve levers to boost growth
crowding out private investment in competitive areas The guidelines were drafted after an intensive dialogue with all stakeholders and
jobs through public and private investment in fields where regions have competitive advantages One of the conditions to use the future ERDF is the development of research and
access to and use and quality of ICT Investment Priorityâ€; â€oedeveloping ICT products and services, e-commerce and enhancing demand for ICT€ and â€oestrengthening ICT
costing methodologies in order to stimulate investment in fibre deployment Consistent infrastructure access pricing is key to effective competition and
investments in the EU telecoms markets. Regulatory consistency across Europe ensures that telecoms operators benefit from regulatory predictability and clarity
the large scale investments required to roll out next generation networks capable of supporting the Digital Agenda for Europe's
its substantial investment in information and communication technology (ICT) into greater economic gain ICT has played a central role in helping the United
hasn†t heavy investment in ICT delivered the economic growth and acceleration in productivity experienced in
ICT investment translated into faster growth and productivity This report explores why Europe struggles to
The optimists believe that this heavy investment in ICT will soon pay off in higher productivity and
subsequent slowdown in ICT investment may have tempered wilder claims about the economic benefits of ICT, but interest in the subject remains high
models that focus primarily on ICT investment indicators Using this model, together with a variety of indices
time-lag between ICT investment and returns representing the time it takes for organisations to assimilate and adjust to new technology.
the US in key measures of ICT investment, use and productivity growth. But figures for the EU as a whole
1. ICT investment. Investing in ICT goods and services leads to capital deepening, which in turn leads to
capital investment has made a sizeable contribution to GDP growth in many developed countries in the past decade, accounting for between 0. 3 and 0. 8 percentage
Across the OECD, the share of ICT investment in total investment has expanded over the past decade, especially
in the US, Australia, Canada and the Nordic countries Other European countries are also investing large amounts
of the share of ICT investment in GDP: in the EU in 2001 it accounted for 2. 6%of GDP compared with 4. 2%in the US
Will the high levels of ICT investment that have produced this effect be sustained in the future? Despite a dip since
2000, many economists see ICT investment growth in both the US and Europe remaining buoyant in the medium
saying they plan to increase investment in the next two years. One notable sceptic is Robert Gordon, an economist
investment growth should still continue, but at a much more moderate pace than in the second half of the 1990s
What are your plans for investment in ICT in the next 2 years %respondents Over 100%increase in investment 6
50-100%increase in investment 11 25-50%increase in investment 10 10-25%increase in investment 21
Up to 10%increase in investment 22 Same level of investment 25 Up to 10%decrease in investment 3
10-25%decrease in investment 2 25-50%decrease in investment 0 50-100%decrease in investment 0
ICT investment in the European union, 1995-2001 Gross fixed capital formation in 14 EU countries
in constant 1995 prices, billions of Euros Source: Marcel Timmer, Gerard Ypma and Bart van Ark, â€oeit in the European union
Driving Productivity Divergence? â€, Groningen Growth and Development Centre, 2003 0 100 200 300 400
1995 1996 1997 1998 1999 2000 2001 Software Communication equipment IT equipment  The Economist Intelligence Unit 2004 13
Reaping the benefits of ICT Europe†s productivity challenge 2. The impact of ICT production.
For the handful of countries with a big ICT-producing sector, production of ICT manufactured goods and services has made a large
contribution to GDP growth, according to most studies. The European countries that have benefited most from ICT production are Finland, Ireland and Sweden, which
manufacture large quantities of ICT hardware and software Total factor productivity (TFP) growth, an important
ICT investment since the technology boom began in the early 1990s. By 2000, it accounted for about 14%of
total nonresidential capital investment in the US, and nearly 40%of overall ICT investment growth1
ICT investment in the EU as a whole has been more heavily weighted towards IT and communications infrastructure, where price declines have been
steepest. Software nonetheless accounted for one -third or more of ICT investment in the UK, France and
The netherlands in 2000, and substantially more in the Nordic countries2 Software investment tends to lag purchases of
hardware. This may explain the more rapid growth of software investment relative to total investment in the
US, where firms made an early start in deploying IT and networking infrastructure. Assuming that Europe is
playing catch up to the US in overall ICT investment and has invested heavily in hardware since the late 1990s
levels of ICT investment and adoption do not, in themselves, guarantee faster growth and productivity
With the exception of a dip in 2000-02, ICT investment has grown impressively on both sides of the Atlantic
struggle to turn technology investment into gains in productivity or revenue. The implication is that it is
investments for commercial benefit. Tekes provides funding that enables SMES to receive ICT-related management training directly from Tekes itself or from
generating productivity gains from ICT investments Reorganising the workplace to adapt to new technology can involve anything from automating
ICT investments trigger a decision to spin off a new entity, or to leave and start a new firm themselves
Encouragement of foreign direct investment in ICT sector 23 Policies to promote competition in the ICT sector 35
Financing schemes for ICT-related investment 22 Policies to promote labour mobility 9 Policies to attract ICT skilled immigrants 10
equity investment levels in Europe approach those across the Atlantic, the amount channelled into early
in their investments, partly because they had their fingers burnt in the dot com crash, but also because
aware of the potential benefits of an ICT investment as well as the specific workplace factors that may
investment across countries. Despite the considerable work that has gone into making the ICT investment measures comparable across
countries, a number of question marks about the comparability of these investment figures remain We used instead a"physical"indicator of ICT
endowments (use and infrastructure), based on a composite index of various ICT indicators â The EIU model allows us to estimate the impact of
table 1) include initial income levels, investment shares, demographic variables (rate of growth of total population and rate of growth of population aged 15
INV€ average share of fixed investment in GDP (at current prices) in 1996-2002 POPG 15-65†average annual rate of growth of population aged 15-65
head (the catch up potential) and higher investment rates is cancelled roughly out by the effects of the US's
we use the EIU€ s forecasts of investment shares in GDP in 2004-08, the starting level of GDP per head (in
Investment in OECD Countries and Its Economic Impactsâ€, Chapter 4 of Forthcoming OECD Report Bartelsman, Eric and Jeroen Hinloopen, 2002, â€oeunleashing Animal
Investment in ICT and Economic Growthâ€, mimeo Bartelsman, Eric, Andrea Bassanini, John Haltiwanger, Ron Jarmin
Investment and Innovationâ€, Global Competitiveness Report 2003 -2004, World Economic Forum Gordon, Robert, 2002, â€oehigh-Tech Innovation and Future
Piatkowski, Marcin, 2003. â€oethe Contribution of ICT Investment to Economic growth and Labor Productivity in Poland 1995-2000â€
investment and innovation? This survey, which is by the Economist Intelligence Unit and sponsored by
Lack of incentives to foster innovation and ICT investment 14 Restrictive working practices 14 Publicity ramifications of automating jobs 5
Encouragement of foreign direct investment in ICT sector 23 Financing schemes for ICT-related investment 22
Availability of specialist high tech qualifications in further and higher education 10 Policies to attract ICT skilled immigrants 10
What are your plans for investment in ICT in the next 2 years %respondents Over 100%increase in investment 6
50-100%increase in investment 11 25-50%increase in investment 10 10-25%increase in investment 21
Up to 10%increase in investment 22 Same level of investment 25 Up to 10%decrease in investment 3
10-25%decrease in investment 2 25-50%decrease in investment 0 50-100%decrease in investment 0
Harnessing ICT in business What proportion of your organisation†s overall budget did you invest in ICT in the last 12 months
%respondents Less than 5%28 5-10%34 11-15%19 16-20%9 21-30%4
31-40%5 41-50%1 Above 50%0 Â The Economist Intelligence Unit 2004 41
Appendix C: Survey results Reaping the benefits of ICT Europe†s productivity challenge What proportion of the following business processes are automated in your company
%respondents 1 2 3 4 5 Under 10%10-25%25-50%51-75%75-100
%1. Sales transactions 35 15 19 12 19 2. Back office 8 20 26 28 18
3. Supply chain processes 21 23 31 14 10 4. Customer servicing 24 22 23 21 9
On average how long does it take your company to achieve return on investment from ICT projects
and metrics to measure return on investment from ICT initiatives 40 We measure total cost of ownership for our key technology platforms 32
Return on investment models 32 Impact on customer retention 23 Speed to market 21 We don†t use measures to evaluate ICT benefits 15
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