engaging stakeholders, citizens, and civil society actors in the innovation process by taking advantage of
2. Mobilise a big variety of stakeholders and Support a community of civic innovators and users.
i e. the civil society is considered as a fourth and full stakeholder in addition to the traditional innovation actors, research organisations, businesses and public authorities (Triple Helix;
economy. It is fantastically rich, and demonstrates the diversity of initiatives being led by entrepreneurs and campaigners, organisations
2. Support in the grant economy 167 3. Support in the market economy 180 4. Support in the informal or household economy 195
Bibliography 209 Index 211 Acknowledgements 220 2 THE OPEN BOOK OF SOCIAL INNOVATION This book is about the many ways in
and the household †in the overlapping fields of the social economy, social entrepreneurship and social enterprise.
This is as true for the private as for the social economy. New paradigms tend to flourish in areas where the institutions are most open to them, and
An emerging social economy Much of this innovation is pointing towards a new kind of economy.
It combines some old elements and many new ones. We describe it as a †social
which are very different from economies based on the production and consumption of commodities. Its key features
include •The intensive use of distributed networks to sustain and manage INTRODUCTION 5 relationships, helped by broadband, mobile and other means of
Much of this economy is formed around distributed systems, rather than centralised structures. It handles complexity not by standardisation and
outside the economy, as too complex and ungovernable, but has now come to be recognised as economically critical, with all the needs for support, tools
In both the market and state economies, the rise of distributed networks has coincided with a marked turn towards the human, the personal and the
quantitative metrics of the late 20th century state and economy (hence the rise of innovations like the Expert Patients programmes, or Patient Opinion
social economy Measuring success Measuring success in the social economy is particularly problematic. In the
market the simple and generally unambiguous measures are scale, market share and profit. In the social field the very measures of success may be
and rapid learning that are accompanying the birth of this new economy. But we can be certain that its emergence will encourage ever more interest in how
those within each economy: the public sector, the grant economy of civil society, the private sector,
and the household. Some of these conditions are about structures and laws, others are about cultures
stakeholders and territories. †Social innovation†seeks new answers to social problems by identifying and delivering new services that improve the quality of life of individuals and
refining and testing ideas is particularly important in the social economy because it†s through iteration,
the social economy in many other ways, whether through inspiration and emulation, or through the provision of support and know-how from one
economy and household sector, usually over long periods of time In this part of the book we explore each of these stages in depth, with a
Within the social economy, especially amongst artists, entrepreneurs and community groups, there is a long tradition of taking advantage of empty, abandoned or derelict buildings
Deming, E w. 2000) †The New Economics for Industry, Government, Education. †2nd ed Cambridge, MA:
Nooteboom, B. 2000) †Learning and Innovation in Organisations and Economies. †Oxford Oxford university Press
the development of new innovations in the social economy. This means 2 that competitions need to be structured in such a way that participants
such as the New Economics Foundation and Forum for the Future 80) Design labs. In Finland, the national innovation agency SITRA has set
what the economics look like, and how it could be made cheaper. The driving principles at this stage are speed,
economy, however, there are arguments for sharing, rather than shifting the risk. This can be achieved through a stage-gate process, where
economy require as much care and creativity in their generation as the social ideas. The two are developed best together to sustain and re
For the social economy the issues of control, the team and relations with users are likely to have greater
In the social economy, ownership is an ambiguous concept. Its organisational structures are the site of contending pressures of goals and interests.
creating different categories of shareholder; by giving particular groups voting rights; or golden shares. These arrangements can be fixed
trusts, with a further 95 supporters†trusts having shareholdings in their clubs. There has also been a growth of †New Mutualismâ€,
established as multi-stakeholder mutuals; GPS have organised mutuals to provide out of hours primary care;
stakeholders that do not depend on representation on a board 120) Boards for innovation. Some design features of boards can actively
as an annoying necessity where small shareholders can vent their anger Social movements, by contrast, use AGMS to reinforce commitments to the
122) Stakeholder governance. There are a number of ways in which core stakeholders can be incorporated in the structure of an organisation and
its processes. These include the constitution, a shareholders†agreement or the terms of a limited partnership
early stage to guide negotiations between stakeholders. We anticipate considerable web-based innovation in this field, with websites providing
members and stakeholders 124) Consumer shareholding can be used to involve consumers more directly in the work of a venture, both directly, and through
representation on the board. This was one of the main reasons Cafã direct opted to have a share issue geared to small shareholders as a
means of raising finance 125) Gold standards and Golden Shares. Social businesses like Cafã direct have adopted a detailed Gold standard to provide a constitutional
Much of the social economy is made up of organisations that are not dissimilar to those in the state or private business which have a
133) Shared backroom economies. Many new ventures carry high overheads because of their small scale, or they fail to invest in financial
from a reciprocal economy of information, and in extending the value and impact of the knowledge they contribute.
In a volunteer economy, roles, relationships and incentives have to be thought about differently to those where there is
within the social economy that include saving and lending circles, but much of the loans now being made for social ventures are coming from
It has 2, 400 shareholders. Image courtesy of Andrew Watson 4 80 THE OPEN BOOK OF SOCIAL INNOVATION
The private economy is structured to reserve the benefits of an innovation to its own organisation or to those
The social economy †being primarily oriented around social missions, favours the rapid diffusion of an
economy has less compulsion to organisational growth and more towards collaborative networking as a way of sharing innovation. 1
reap different kinds of economy (scale, scope, flow, penetration etc To grow effective demand, there may then be need a for diffusion through
idea behind the project becomes a key method for the social economy as does developing a capacity to respond to those inspired by the idea
and can also lead to economies in processing tenders. The public sector†s procurement portal in the UK is Buying Solutions,
We look at platforms as the nodes of the new economy, and at other ways in which users and originators can engage in the evaluation and adaption of
grant economy. However, we suggest that in a distributed economy a different conception of scale is needed, one that focuses on economies of information
and communication, and structures that can deliver that. Organisations within the social economy have less compulsion to organisational growth and more
towards collaborative networking as a means of sharing innovation 200) Organisational growth is the simplest way to grow an innovation
However it is surprisingly rare †innovations more often grow through other means. Small social enterprises and other NGOS generally find
211) Revealed preference methods come from the field of economics and focus on the choices people have made in related fields in order to
The benefit of SROI is helping stakeholders to recognise all of the potential benefits a project or program might have,
them instead as processes for discussion between stakeholders 218) Social accounting methods have been used by many countries
value to notions of opportunity cost (that is, what people would give up in order to receive a service or outcome whether through payments
234) New models of the support economy. These reorient services around support for the user rather than the simple delivery of a standardised
246) Rewiring economies, connecting sectors like the utilities and automotive industries for the development of plug-in hybrid cars, or
as natural disasters, crises of care or of the economy †to underlying causes, and using this as the basis for proposing major systemic change
They are one of the reasons why economics has found it hard to understand innovation without a substantial dose of sociology added in
economy intermediaries to become more explicitly focused on their knowledge and relationships. One of their roles is to grow fields and markets:
are multidisciplinary and able to engage a wide range of stakeholders in the design, development,
innovation, as well as innovation for the economy. The Department for Business, Innovation and Skills (BIS) in the UK is one example.
Economics, and the Catholic University of Leuven. There is also the Poverty Action Lab at MIT which tests out alternative interventions
the social economy ††they can leverage the assets that already exist in a
range of benefits that are particularly important within the social economy they can expand rapidly and widely;
stakeholders to discuss issues relating to inclusive entrepreneurship, local development, and social entrepreneurship 305) Action learning sets are groups of between four and seven people
This social economy is the source of social innovation. However, while it already plays the key role in developing new models and services to meet
It has been argued elsewhere that the social economy, as a source of innovation and production, could stand on an equal footing with the private
social economy remains little understood. So, what is the social economy The Social Economy The social economy is a hybrid.
It cuts across the four sub-economies: the market, the state, the grant economy, and the household.
Each of these sectors has its own logics and rhythms, its own means of obtaining resources, its own
structures of control and allocation, and its own rules and customs for the distribution of its outputs.
But the parts of these economies which we term the social economy are united by their focus on social goals, by the importance
given to ethics, and by their multiple threads of reciprocity. Their production ranges from the micro scale of domestic care in the household to the universal
services of a national welfare state. Although analytically distinct from the private market, it includes social enterprises engaging in the market, as well as
some of the activities of private companies that have primarily social goals. 2 If the social economy is a hybrid,
so are the firms, states, charities and households that operate within it. They have a base in one of the four sub
-economies, but also operate across its boundaries. In the market, private firms receive grants from the state, for example,
Age Concern are shaped still primarily by the grant economy in how they raise their money,
sub-economies that together constitute the social economy. The diagram shows that none of the four sub-economies is concerned wholly with the social
economy WAYS OF SUPPORTING SOCIAL INNOVATION 143 The interfaces Formally, if there are four sub economies,
there will be six interfaces. The first three interfaces are between the state and the other three sub-economies. 3
Central to these interfaces is the way finance crosses the borders, inwards in the form of taxation and fees, outwards in the form of grants, procurement
and investment. There are many others, including the regulatory, fiscal and legal conditions determined by the state,
by the state for the actors in other parts of the social economy. Each of these
The fourth interface is between the private market and grant economy. These relations include, for example, corporate sponsorship, charitable donations
The Social Economy Source: The Young Foundation 144 THE OPEN BOOK OF SOCIAL INNOVATION healthcare, combining commercial provision of goods and services with mutual
economy†s relations with the other three sub-economies. Taking the interface between the household and the private market first, this is of course the
extent to which social networks and a gift economy operate in the sphere of consumption has long been remarked on by anthropologists for example (from
economy of environmental change Between the grant and the household economies there are also two way
movements of donations and volunteering from one direction, to a multitude of services from the other.
is when associations and movements from the household economy partially transfer themselves into the grant economy,
appointing professionals paid for by subscriptions or grants These examples are the tidy, analytical depiction of the interfaces.
however, each sub-economy may relate simultaneously to a number of others. 4 For example, the state can promote social innovation in the market as well as
the grant economy by applying certain policy and regulatory levers such as minimum trading standards, and compulsory targets for the employment of
the household and the other sub-economies. First is the development of new systems of support economy as put forward by Jim Maxmin and Soshana
Zuboff in The Support Economy. 5 This is closely linked to the development of co-creation and co-production representing a partnership between households
and professionals. Personal budgets (introduced for people with disabilities in the UK in the 2000s), for example, are an important innovation in this space â€
Neither the state nor the grant economy has the structure or incentive to innovate in this way.
hand †that most distributed of economic systems †generates ideas but on its own lacks the capital, surplus time,
Crisis and the new Social Economy. †Provocation London: NESTA 2. This is a wider definition than the more usual one
which refers to the social economy as the third sector †namely NGOS and social enterprises.
public economy †whose values and goals have much in common with those of the third sector
†and the informal economy of the household 3. The social components of these three sub economies outside the state are the economic
parallel to civil society, and could be thought of as the civil economy, that is to say that part of
the social economy that is outside the state 4. There are also interfaces within each sub economy, for example between the private and
social markets. This may take the form of joint ventures, as in the recent case of Grameen
-Danone and their collaboration in a social enterprise producing yoghurt for low income households in Bangladesh
5. Maxmin, J. and Zuboff, S. 2004) †The Support Economy: Why Corporations are Failing
not deal with those areas of the economy which are difficult to commodify 146 THE OPEN BOOK OF SOCIAL INNOVATION
economic growth of the past three decades. More recently there have been experiments in health insurance in Chongqing, and democratic
fit the economics of social businesses Legislation and regulation Governments shape the conditions in which social entrepreneurs, businesses
economy such as compulsory targets, including the employment of people with disabilities, regulations for renewable energy, fiscal
385) Planning and tax rules to promote creative economies such as subsidised rent in art districts, including Soho in New york and Hackney
Crisis and the new Social Economy. †Provocation London: NESTA 3. See for example, Murray, R. op cit.;
SUPPORT IN THE GRANT ECONOMY 167 2 SUPPORT IN THE GRANT ECONOMY Civil society and the grant economy are the most common sites of social
innovation †in campaigns, social movements, non-governmental organisations and associations. By its nature this sector tends to be fragmented and small in
scale. But its sense of mission often means that it is better than other sectors
We describe this sector as the grant economy because grants play an important part, even though much of the income received within this sector
grant economy, there need to be new kinds of finance, platforms, packages of support, and regulatory, governance and accountability frameworks.
SUPPORT IN THE GRANT ECONOMY 169 and enterprises works best, or how to stage funding to maximum effect
grant economy Grant giving Increasingly, donors are trying to avoid some of the limitations of traditional
SUPPORT IN THE GRANT ECONOMY 171 408) Intermediaries who allocate grants for specific projects on behalf of
investment and development packages for commodity development projects, or the UK€ s Department for International Development (DFID
SUPPORT IN THE GRANT ECONOMY 173 Governance and accountability Too often within the grant economy, governance and accountability structures
do not resonate with the organisation†s social mission. And, in the UK at least there are often questions about who a charitable or nonprofit organisation
SUPPORT IN THE GRANT ECONOMY 175 424) Members and associates as sources of innovation and review
stakeholder communications (for more information on metrics see methods 208-229 426) Effective philanthropy methods, encompass many tools for feedback
grant economy and identified a lack of training and experience as one of the main barriers to the sector†s success. Leaders of nonprofit organisations
of financial sustainability and stakeholder management while keeping the organisation aligned to its mission and values
430) Developing skills within the grant economy. In the UK, ACEVO and the NCVO provide a range of training programmes for nonprofit
SUPPORT IN THE GRANT ECONOMY 177 intelligence †model. Many programmes now include a strong emphasis
435) Planning and tax rules to promote creative economies such as subsidised rent in arts districts,
SUPPORT IN THE GRANT ECONOMY 179 End notes 1. Blackmore, A. 2006) †How voluntary and community organisations can help transform public
ECONOMY The boundaries between the private sector and the social sector are breaking down for many reasons.
Economy TTTHEHEHE Stat Stat Stateee The Granthe Granthe Granttt Economeconomeconomyyythe Househthe Househseholseholseholddd 3 182 THE OPEN BOOK OF SOCIAL INNOVATION
447) Extending the cooperative economy in production, including MONDRAGON and Peruvian coffee co-ops 448) Foundations as owners of corporations, such as the Bertelsmann
of shareholders and savers in the company†s decision making process must be encouraged; each organisation which accepts
They remain critical to the social economy, both in assessing products and services on the basis of social criteria, and in
They create their own protected economies with discounts for particular products and services from specified places
The growth of parallel mechanisms to favour the social economy has been primarily geared at promoting the local economy.
There remains scope for a considerable expansion of these methods to promote social and environmental
483) Specialist academies linked to social economy initiatives, such as: the University of Mondragã n in Spain;
economy, such as Harvard†s Advanced Leadership Programme pioneered by Rosabeth Moss Kanter and launched in 2008/9
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 195 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD
ECONOMY Many innovations begin in the informal life of households †a conversation around a coffee, a kitchen table,
more formalised and shift into the grant economy and subsequently into the public or market economy.
The informal household economy has generally been recognised under as a source of innovations. But it has played a critical
Within the household economy, we can see a number of emergent trends One is new forms of mutual action between individuals †whether in the form
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 197 providing others, selling information on users and so on. 1 In the field of open
However, this is not just a virtual economy. It is also about care and support in
Economy TTTHEHEHE Stat Stat Stateee TTHEHE Ma Marrkekett TTTHEHEHE GGGRANTRANTRANT EEECONOCONOCONOMMMYYY 4 198 THE OPEN BOOK OF SOCIAL INNOVATION
But to spread the benefits of the social economy, we will need to rethink many of the ways in which the household economy relates to the two main
sources of finance †the market and the state. Issues such as the distribution of working time, the valorisation of voluntary labour, the content and channels
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 199 498) Hosts and moderators as online guides.
In the social economy, rather than restricting access to knowledge and information, there is value in diffusing and sharing ideas and information
economy by limiting free riders. Examples include open licences 500) Open licensing has redrawn the traditional battle lines between the
informal economy, such as the right to request flexible working time 4 SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 201
506) Training for volunteers †the provision of training and incentives for volunteers, and networks for linking volunteers and projects (such as
They create an economy based on direct household time and can serve as alternatives to mainstream currencies
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 203 514) Extending public spaces for domestic production such as
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 205 517) Users as producers †such as the Expert Patients Programme, which
SUPPORT IN THE INFORMAL OR HOUSEHOLD ECONOMY 207 This could include educational coaching services, relief and back
economy, and have developed innovative forms of distributed network organisation and action, further facilitated by the advent of the internet
Jim Maxmin and Soshana Zuboff, The Support Economy: Why Corporations are Failing Individuals and The next Episode of Capitalism, Penguin, 2004
Walter Stahel, The Performance Economy, Palgrave Macmillan, 2006 INDEX 211 INDEX 5 a Day Campaign 86
Public economy 149-161 budgets to promote internal innovation 150-152 democratic accountability and democratic innovation 152-155
Grant economy 168-173 grant giving 169-171 improving the grant relationship 171-172 mission related investment 172-173
Grant Economy 142-145; 167-179 Green Homes 88 Green Valleys 55 Greenpeace 28; 99
The Household economy 142-145; 195 -208 Hubs 129; 135 I Want Great care 21; 148
New Economics Foundation (NEF) 49 New Philanthropy Capital 171; 175 New York†s Open Book 154
Social economy 4-6; 63; 82; 84; 136 141-145; 192; 198; 199 Social Enterprise 2;
Support Economy 5, 111,144 Sure Start 111,150-151 Tällberg Foundation 44 Taproot Foundation 172
Robin Murray is an industrial and environmental economist. His recent work has focused on new waste and energy systems and on projects in the social
economy. He was cofounder and later chair of Twin Trading, the fair trade company and was involved closely in the companies it spun off,
economy, social entrepreneurship and social enterprise. It draws on inputs from hundreds of organisations around the world to document the many
Economy Open Democracy Funding Acceleration and Incubation Learn about digital social innovation Index Executive Summary 3
of many organisations and stakeholders: Policy (at all levels) can play a key role in creating coordinated
hackers, designers) Â are key stakeholders in support of innovation for social good. Â In the research we
iii) The collabporative economy;(iv Awareness networks enabling sustainable behaviours and lifestyles;(v) Open Access;
significant opportunities to leverage the power of European talent by fully engaging stakeholders, citizens, civil
collaborative economy, awareness networks; open access, and funding, accelerating and incubating We then created a new visual layout for the 36 DSI case studies that are showcased in on the website and also
is the largest conference in France focussing on the collaborative economy. Francesca Bria participated in a workshop on Collective Awareness Platforms and the collaborative economy in Horizons
2020, together with the European commission. The DSI mapping website and the overall research was presented during a dynamic debate about policy
Collaborative Economy session. We demonstrated how the website worked and how organisations could be added, and went over some of the high points of the final report regarding the potential of digital social
of many organisations and stakeholders: Policy (at all levels) can play a key role in creating coordinated
as those that aim at supporting long-term R&d investment and economic growth, whilst reducing income inequalities, and increasing competitiveness.
2, and Horizons 2020 3 present an integrated approach to help the EU economy become more competitive
examples of multi-stakeholder processes that have already been implemented include the Healthy Democracy process6 and the Thematic Networks of Twinned Towns & Citizens Meetings7
This implies the engagement of various actors and stakeholders in designing and putting in practice novel ways to tackle a social demand.
that innovation policy will support societal challenges and economic growth better in the future. In summary there is a need to reinvent European innovation public policies to guarantee transformational impact
suggests they have a positive impact on the economy and society, creating powerful networks and fostering
the other, they pursue to increase economic value by involving developers and entrepreneurs. The commonly accepted premise underlying these objectives is that the publishing of government data in a reusable format
transition Ecuador to a social knowledge economy The open democracy community Beyond crowdsourcing (and co-producing/co-creating/co-managing g/†for that matter) public services
economic value by involving developers and entrepreneurs. This report will focus on the governments that mainly foster the second objective and,
Some Governments do not interact with other stakeholders and there are many differences between them, both in terms of speed and pace and commitment.
therefore, we can only refer to the governance of relationships with stakeholders (users, first data providers
and how it manages stakeholders and relationships between them Lastly, a lot has been written on open/big data failures.
Generation of economic value Transparency Political incentives (reputation Technical support Monetary incentives Smart citizens Projects Platforms Intrinsic motivations, such as
attracted hundreds of thousands of developers to the app economy. With the exception of some developers
as fostering economic growth, bridging the digital gap, creating innovative societies, or providing support to networks and civil society.
Fostering economic growth is an important motivation as well. The Living Lab for ICT-based Financial Services107 was created in spring 2010 by Ãoelemiste City AS and Mindware OÃOE.
and, therefore, to enhance economic growth Living labs aim at bridging the digital gap as well. Several of their projects have this motivation.
Finally, local governments are driven also by the possibility that companies produce economic value from their public data, creating services and applications from those free data.
and agents (stakeholders in a broad sense including implementers and decision makers. The Digital Futures vision is based on the metaphor of emergent
collective intelligence, according to which stakeholders and policy makers should form a bottom-up social network to co-design policies.
makers and external stakeholders, to gather opinions, improve and validate policy ideas, and ultimately build openness, transparency and legitimacy into the policy making processes
only work when it is perceived as fair by all stakeholders, seeking the right balance between the interests
engage citizens and other public institutions as genuine stakeholders in discussions about key policy issues
process of all organisations and stakeholders: a broad concept of innovation, both research-driven and
and stakeholders actively and proactively. Therefore, innovation policies have to address other issues, that complement funding and regulations.
9. Competitiveness is defined as the capability of an economy to maintain increasing standards of living for
/96. http://www. whitehouse. gov/economy/business/startup-america 97. http://www. knightfoundation. org /98. http://www. kickstartseedfund. com
/99. http://www. visionmobile. com/product/developer-economics-q1-2014-state-developer-nation 100. http://www. visionmobile. com/product/developer-segmentation-2013
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