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SIMPACTPROJECTREPORTReport#D5.1

ImprovedMeasurementoftheEconomicsofSocialInnovation

RenéWintjesa,NordineEs-Sadkia,RüdigerGlotta,AdNottena

a MaastrichtUniversity,MERIT

March2016

The SIMPACT project receives funding from the European Union’s Seventh Framework Pro-grammeforresearch,technologicaldevelopmentanddemonstrationunder�GrantAgreement

No:613411.

AcknowledgementsWewouldliketothankMinnaKanerva,HugoHollandersandotherswhohaveprovidedinputsorcommentstodrafts,

andAnnaBerlina,LeneisjaJungsberg,MariaKleverbeck,TamamiKomatsu,LiisaPerjo,SaeedSamanandJudithTer-

striepfortheirsupportwiththesurveyofSIMPACTcasestudies.

SIMPACTSIMPACTisaresearchprojectfundedundertheEuropeanCommission’s7thFrameworkProgrammefrom2014-2016

andistheacronymfor«BoostingtheImpactofSIinEuropethroughEconomicUnderpinnings».Theprojectconsortium

consistsoftwelveEuropeanresearchinstitutionsandisledbytheInstituteforWorkandTechnologyoftheWestpha-

lianUniversityGelsenkircheninGermany.

LegalNoticeThe informationandviewssetout in thisreportare thesoleresponsibilityof theauthor(s)anddonotnecessarily

reflecttheviewsoftheEuropeanCommission.

DocumentProperties

ProjectAcronym SIMPACT

ProjectTitle BoostingtheImpactofSocialInnovationinEuropethroughEconomicUnderpinnings

Coordinator InstituteforWork&TechnologyofWestphalianUniversityGelsenkirchen

DeliverableD5.1 ImprovedMeasurementoftheEconomicsofSocialInnovation

Author(s) RenéWintjes,NordineEs-Sadki,RüdigerGlott,AdNotten

DocumentIdentifier FP7-SSH.2013.1.1-1-613411-SIMPACT–D5.1

WorkPackage WP5MeasuringtheEconomicsofSocialInnovation

Date 11April2016

SIMPACT–T5.1|i

TableofContents

1 EXECUTIVESUMMARY 1

2 DELIVERABLESTRUCTURE 4

3 DEFININGSOCIALINNOVATION&ITSECONOMICUNDERPINNING 5

3.1 DefiningSocialInnovation 5

3.1.1 SocialInnovationintheLiterature 5

3.1.2 SemanticAnalysis 7

3.2 SIMPACT’sConceptualFramework 8

3.3 TowardsanEconomicFrameworkofSI 10

3.3.1 InvestmentbyFirmsinIntangibles&itsEconomicImpact 113.3.2 AdditionalIntangibles&InnovationsinthePublic&CivicSector 14

3.3.3 UseValue&ValueCo-CreationinaSystemicService-logicofSI 23

3.4 WhattoMeasureorIndicate? 27

4 INDICATORSONSOCIALINNOVATION 30

4.1 SocialInnovationMeasurement 30

4.2 Information&DataforSIMetrics 32

4.3 Micro-levelofSI,Innovators,Beneficiaries&Initiatives 33

4.4 Macro-levelofRegions&Countries 39

4.5 SuggestedIndicatorSets 42

5 EVALUATIONANDIMPACTASSESSMENTOFSOCIALINNOVATION 57

5.1 SIImpactMeasurementTools&Methods 57

5.1.1 SocialAccounting&Auditing(SAA) 58

5.1.2 SocialReturnonInvestments(SROI) 60

5.1.3 OtherSocialImpactMeasurementApproaches 61

ii|SIMPACT–T5.1

5.2 UsageofFormalEvaluation&AssessmentToolsforMeasuringEconomic&SocialImpact 63

5.3 Whyevaluate&assessImpact? 66

5.4 Light,informal&theory-basedImpactEvaluations 68

6 MEASUREMENTGAPANALYSIS:WHATISLACKING? 75

6.1 GapsinMeasurementofSI 75

6.2 GapsintheMeasurementoftheSIsImpact 76

7 INDICATOR-BASEDPROFILINGOFSIATMICROLEVELOFSIMPACTCASESTUDIES 78

7.1 SurveyofSIMPACTCaseStudies 78

7.2 ExplorativeMethodology:CategorisationbyPrincipalComponentAnalysis 83

7.3 ResultsofFactorAnalysis 86

7.4 IndicatorApplicationinfullSIProfilesatMicroLevel 95

8 INDICATORBASEDPROFILINGOFSOCIALINNOVATIONATTHELEVELOFEUROPEANREGIONS 99

8.1 RegionalData 99

8.2 ExplorativeMethodology:CategorisationofEURegionsonSIComponentsbyPCA 100

8.3 ResultsoftheFactorAnalysis 103

8.4 ResultsoftheRegressionAnalyses:ImpactonGDPandbeyond 107

8.5 ResultsofClusterAnalysis&ApplicationofRegionalSIProfiles 111

8.6 Micro-SI-ProfilesperTypeofregionalSIProfile 115

9 CONCLUSIONS 117

References 120

Appendix 127

SIMPACT–T5.1|iii

Figures

Figure1. Instancesofuniquewordsandphrasesusedinsocialinnovationresearch 7

Figure2. Schumpetertypesofinnovation 13

Figure3. TEPSIE’sIntegratedmodelformeasuringSI 14

Figure4. Civicactivismandinclusioninrelationtoeconomicgrowth 15

Figure5 Categorisationofaggregatedsocialinnovativeness* 17

Figure6. Keyallocationmechanismsinthethreeeconomicdomains 19

Figure7. TheEconomicframeworkofSI 20

Figure8. Valueco-creationinaservice-systemsperspective 24

Figure9. ConceptualframeworkofSIasvaluecreation 26

Figure10. TheCreatingSocialValueSpace 28

Figure11. Socialimpactinvestmentmarketframework. 29

Figure12. Philanthropicevidencechart 59

Figure13. TheEUconsumermarketscoreboard(EU,2015c) 64

Figure14. Mappingofimpacttools 65

Figure15. ImpactChainoftheSocialReportingStandard 68

Figure16. TypicalStructureofaLogframeMatrix 72

Figure17. StrengthsandCommonProblemswiththeApplicationoftheLFA 72

Figure18. SIinputprofilesbygeographicalscale 88

Figure19. SIinputprofilesbytheme 88

Figure20. SIinputprofileforNGOs&forinnovatorswithalong-termoutlookratedasverypositive 89

Figure21. OutcomeprofileforregionalandnationalandlocalSIscale 92

Figure22 Outcomeprofilebytheme,mainfunder,typeofSI,andSIwithverypositivelong-termperspective 93

Figure23. SIprofilebyscaleofimplementationandthemeofSI 97

Figure24. SIprofilesbytypeofSI,andlong-termoutlook,basedonaveragefactorscores 98

Figure25. Regionalscoreon‘Governancevs.civil’ 106

Figure26. Regionalscoreson‘Unemployment’ 106

Figure27. Regionalscoreson‘TrustinState&newideas’ 107

Figure28. Regionalscoreson‘Failingeducation’ 107

Figure29. Screeplotwitheigenvaluecurve 108

Figure30. P-PplotsforRegionalHumanDevelopmentIndexandRegionalGDPpercapita 108

Figure31. RegressionsforregionalSIFactor1:‘Governancevs.Civil’withRegionalHDI(left)andGDP(right)asdependentvariables 109

iv|SIMPACT–T5.1

Figure32. RegressionsforregionalSIFactor2:‘Unemployment’withRegionalHDI(left)andGDP(right)asdependentvariables 109

Figure33. RegressionsforregionalSIFactor3:‘TrustinState&newideas’withRegionalHDI(left)andGDP(right)asdependentvariables 110

Figure34. RegressionsforregionalSIFactor4:‘FailingEducation’withRegionalHDI(left)andGDP(right)asdependentvariables 111

Figure35. RegressionsforregionalSIFactor5:‘Engagement’withRegionalHDI(left)andGDP(right)asdependentvariables 111

Figure36. FourtypesofSIregionsinEurope 112

Figure37. MacroSIprofilesforthefourtypesofSIregionsinEurope 113

Figure38. AveragemacroSIprofilesforselectedcasesbythemeofSI 114

Figure40. MacroSIprofilesforselectedcasesbylong-termoutlookoftheSI 115

Figure41. MicroSIprofilepertypeofregion 115

Figure41. Microinput,output,andfullSIprofileforcasespertypeofregion 116

SIMPACT–T5.1|v

Tables

Table1. Top25wordsandphrases 8

Table2. Top10countriesresearchingsocialinnovation 8

Table3. AcategorisationofSIComponents,Objectives&Principles 9

Table4. Classificationoffunctionsofgovernment(COFOG) 16

Table5. ExchangevalueinGood-Dominantlogicvs.Use-valueinService-Dominantlogiconvaluecreation. 23

Table6. Foundationalpremisesofservice-dominantlogic 25

Table7. Aneeds-solutionsmeasurementframework 33

Table8. Paidemployeesandvolunteersasashareofthirdsectorworkforce(FTE),in% 40

Table9. TEPSIEStructureoftheblueprintofSIindicators 41

Table10. AcategorisationofSocialInnovationcomponents,objectivesandprinciples,andpossiblemetrics(usingexistingdatasources) 44

Table11. Macro-level(nationalandregional)IndicatorsetforSI,withEUdatasources 47

Table12. IndicatorsontangibleormonetisableaspectsofSIinausetable,anindicativeinput-outputexerciseonSIenablersandSIbeneficiaries. 50

Table13. MainsurveyquestionsaddressedbytheSIcasesofSIMPACT 53

Table14. Thecombinedsetsofmicro-andmacro-levelofindicatorsforSI,forintangibleandtangibleaspects 54

Table15. Formalandinformallearningfromevaluation 67

Table16. Surveyquestionsandcodeusedindatabaseandgraphs 79

Table17. Overviewofstudiesidentifyingfirmlevelinnovationmodes 83

Table18. Hierarchicalfactoranalysis(2ndstage)oningredientsoffirminnovationstrategies:4modes 85

Table19. Typesofresources/inputstoSI,patternmatrixoffactoranalysis 87

Table20. TwotypesofSIobjectives,patternmatrixoffactoranalysis 90

Table21. TypeofSIobstacles,patternmatrixoffactoranalysis 90

Table22. TypesofSIoutput/outcome,patternmatrixoffactoranalysis 91

Table23. FivecomponentsofSI;patternmatrixoffactoranalysis 95

Table24. Sampleofvariablesinthedatabase 101

Table25. Factoranalysisonregionalindicators:fiveSIcomponents,patternmatrix 103

vi|SIMPACT–T5.1

Thispageisintentionallyleftblank.

SIMPACT–T5.1|1

1 EXECUTIVESUMMARY

ThisreportonimprovedmeasurementoftheeconomicsofSIsynthesisesthere-

sultsofTasks5.2and5.3ofworkpackage5ofSIMPACT.Itoutlinesthefinalsetsof

developedindicatorsandexemplifiestheirapplicationbymeansofindicatortypes

andtheanalysisofSIeconomicsfordifferentcategoriesoftheSIMPACTcasesof

Social Innovation(thecasestudiesofWP3)aswellasthedifferentcategoriesof

nationalandregionalcontextsforSI.

Weconcludethatsocialinnovationhasmanyaspects,andisanevenbroadersoci-

etalconceptthanotherformsofinnovation,suchasthemoretraditionaltechno-

logical,andfor-profitinnovations.Besidesaconceptualbroadening,alsothemet-

ricsandmeasurementapproachesneedtoincorporateabroaderperspective,by

specifically includingthepublicsector,thesocialorthirdsector,andtheprivate

sector,sincesocialinnovationdealsaboutthenewcombinationsofresourcesand

capabilitiesfromthesesectors.Abroadrangeofresourcesandcapabilitiesofthese

differentsectorsserveasinputtothesocialinnovations.Inaddition,theobjectives,

andthebenefitsand impacts fromthesocial innovationsdiffer foreachof these

threesectors.Measuringsocialinnovationthereforeinvolvescapturingtheseas-

pectsforthevarioussectors.Formeasuringsocialinnovationorthemeasurement

ofitseconomicimpacts,itisnotenoughtolimittheindicatorstoonlyoneortwo

ofthesethreeeconomicsectors.

Wecanconcludethatthevalueorimpactofsocialinnovationsderivefromthein-

teractionbetweenthesupplyanddemandforsocialinnovations.Therefore,indi-

catorsetsneedtoincludebothindicatorsforthedemand,orfortheneedsforsocial

innovations,aswellasindicatorsforthepotentialtosupplysolutions.Theinterac-

tionbetweendedemandandsupply-sideofsocialinnovationastheeconomicun-

derpinningofsocialinnovationisnotmediatedbypricesonmarketsforexchange

value.Aswithotherkindsofinnovationstheproducersandusersofinnovations

have to engage in interactive learning, which involves communicating tacit

knowledgeanddiscussionsofintangiblesandusevalueamongcollaboratingpart-

ners.

Regarding themeasurementofSIatmicro level it is relevant tocapturevarious

inputs,outputs,objectivesandobstacles.Theimportanceofcertaininputsdiffers

byforinstancethetypeofmainfunder,thethemeofSI,andthescaleofoperations.

Socialinnovationsatlocalscalehaveonaveragealowernumberofactorsandco-

operation,anda lowerdegreeofdiversityofknowledge thansocial innovations

whichoperateatnationallevel.Thesetwoinput-factors(alargenumberofactors

Socialinnovation-amultifacetedphe-nomenon

Value&impactofso-cialinnovation

Measurementatmicro-level

2|SIMPACT–T5.1

andpartners,anddiversityofknowledge)arealsocharacteristicforthesocialin-

novationswhichhaveaverypositivelong-termperspective.ICTseemsamoreim-

portantsourceofinputforSIinthethemeofDemographicsandEducation,thanfor

socialinnovationsinthethemeofEmployment.ICTinvestmentsseemalsomore

commonamongsocialinnovationswhichareimplementedatnationalscale(com-

paredtothoseimplementedatlocalscale).Ontheotherhand,forSIinthetheme

ofEmployment,knowledgeisarelativelyimportantinput.

Itisdifficultforinnovatorstocombineinonesocialinnovationthetwoobjectives

ofseizingbusinessopportunitiesandincreasingpublicvalueswhichdonotbenefit

themarginalisedtargetgroupdirectly(e.g.:socialcohesion, inclusion, lobbying).

The co-rated importance of organisational and legal obstacles confirms the im-

portanceofthehybridissueforsocialinnovatorsconcerningtheproblemtofind

theappropriatelegalformoforganisationfortheiractivities.

Theconcentrationofsocial,financialandpoliticalobstaclesforcertainsocialinno-

vationsseemstoserveasanidentificationofradicalsocialinnovations.

Severaltypesofeconomicoutputcanbeidentified:economicoutcomesforthein-

novator,economicoutcomesforthetargetgroup,andbenefitsintermsofpublic

budget.Othersocialbenefitscannotdirectly,betranslatedintoeconomicbenefits,

oritwouldtakeamuchlongertimetomaterialise.

Socialinnovationswhichareimplementedatlocalscalehaveahigheconomicim-

pactforthetargetgroupandthepublicbudget,buttheimpactsfortheinnovator

arerelativelysmallcomparedtosocialinnovationswhichareimplementedatna-

tionallevel.SIsimplementedatnationalscalehaveonaveragelessimpactonpublic

budgetand lowerratedeconomic impacts for the targetgroup,but thebusiness

economic impacts for the innovators are rated higher. Social innovations in the

themeof«Employment»arecharacterisedbyonaveragehigheconomicimpactsfor

thetargetgroup.Socialinnovationsthatareproduct/serviceinnovationsdowellon

theeconomicimpactsfortheinnovators.SIswhichinvolveaddressinganewtarget

groupdoverywellonallimpactfields,excepteconomicimpactsfortheinnovator.

Inorderto improvetheir long-termperspective,policymakersshouldtherefore

investinthebusinesscapabilitiesofthesesocialinnovators(withoutapplyingfur-

ther output related objectives concerning benefits for the marginalised target

group).

Socialinnovationsthathaveaverypositivelong-termperspective,haveaboveav-

eragescoresonimpactsfortheinnovator,butalsoforsocialaswellaseconomic

benefits for the target group. Themore general policy implication is that policy

makers,whowanttoincreasethelong-termeconomicimpactfromsocialinnova-

Complexityofbusi-ness&organisational

models

Economicoutputs&benefits

Economicbenefitsfortheinnovator&

targetgroups

Complementarityinimpactsfromem-

poweringinnovator&targetgroups

SIMPACT–T5.1|3

tion,shouldnotmerelyfocusonoutputintermsofempowermentofthemarginal-

isedtargetgroup,butshouldalsoinvestintheempowermentandlong-termper-

spectiveofthesocialinnovators.

Basedonalargesetofregionalstatisticswithrelevancetosocialinnovation,we

canconcludethattheregionalsituationconcerningsocialinnovationdifferswithin

Europe,andnotalldifferencescanbereducedtodifferencesbetweencountries.

TheidentifiedregionalSIfactorsarebothrelatedtodifferencesinregionalGDPas

wellasregionalHumanDevelopmentIndex,anindexwhichcanbeseenasanout-

putindicatortomeasuretheimpactofSIbeyondGDP.

Fourdifferenttypesofsocialinnovationregions(orregionaleco-systems)within

theEUareidentified.Thefirstgrouporclusterofregionswithsimilarsocialinno-

vationcharacteristics,arecharacterisedbythehighscoreontheSIfactor,which

wehavelabelled‘Failingeducation’.Thesecondgroupofregionsarecharacterised

byhighscoresontheSIfactors:‘Governancevs.civil’,and‘Engagement’.

TheSIMPACTcasesinthefirsttypeofregiondowelloneconomicimpactforthe

targetgroup.TheSIMPACTcasesinthesecondtypeofregionhaveratherdisap-

pointingimpactsforthetargetgroup.Knowledgeisamoreimportantinputfactor

fortheSIMPACTcasesinthefirsttypeofregion,comparedtothoseinthesecond

typeofregions.

SIMPACTsocialinnovationswithaverypositivelong-termoutlookareespecially

tobefoundinregions,whichhavehighscoresontheSIfactor‘unemployment’,and

wherelife-long-learningtypeofsocialinnovationsseemstoservethemarginalised

targetgroupsaswellastheirregionaleconomies.

Distinctregional&Europeanpictures

RegionalSIecosystems

4|SIMPACT–T5.1

2 DELIVERABLESTRUCTURE

AsstatedintheDoW,thisreportsynthesisestheresultsofTasks5.2and5.3ofwork

package5ofSIMPACT.Itoutlinesthefinalsetsofdevelopedindicatorsandexem-

plifiestheirapplicationbymeansofindicatortypesandtheanalysisofSIeconom-

icsfordifferentcategoriesofSIMPACTcasesofSocialInnovation(thecase-studies

ofWP3)aswellasthedifferentcategoriesofnationalandregionalcontextsforSI.

Thedeliverablealsoincludesresultsoftasks5.1,sinceitstartswithdefiningsocial

innovationanditseconomicunderpinninginchapter3,wherewestartwithare-

viewandsemanticanalysisofsocial innovation inthe literature.Theconceptual

start isashortsummaryofSIMPACT’sconceptual frameworkofSIComponents,

ObjectivesandPrinciplesinparagraph3.2.Thenextparagraphdevelopsaneco-

nomicframeworkofSIbyemphasisingtheimportanceofinvestmentsinintangi-

blesandthecivilsector,asathirdeconomicsector,nexttotheprivateandpublic

sector.

Chapter4addressesindicatorsofsocialinnovationatthemicrolevelofsocialin-

novationsandthemacrolevelofcountriesandregions.Thischapterresultsinsug-

gestionsforindicatorsetsatbothlevelsinparagraph4.5andthesesuggestionsare

presentedindifferentforms.Chapter5discussesaselectionoftoolsforevaluation

andimpactassessmentofsocialinnovation.Sincethereisnosinglebestpractice

tool,itisimportanttoconsidertheobjectiveoftheevaluationandthecosts.Chap-

ter6identifiesthegapsinmeasurementofSI,aswellasthegapsinmeasurement

of the impactsofsocial innovation. Inchapter7 theanalysisof thesurveyof55

SIMPACTcasesofsocialinnovationispresented.Basedontheresults,indicators-

basedprofilesat thismicro levelofSI isprovided for typesofSI.The indicators

allow to characterise SI inputs, objectives, obstacles, and outcomes for various

groupsofcases.Chapter8presentstheresultsoftheapplicationoftheindicator

setsattheregionallevel.Withtheuseoffactoranalysis,thecollectedregionalsta-

tisticaldataisreducedintoregionalSIfactors.WetestiftheseregionalSIfactors

haveanimpactonGDPandbeyond.Conclusionsaredrawninchapter10.

Inaddition,aworkingpaperonanorganisationalapproachtomeasuringsocialin-

novation,i.e.«SocialInnovationRegimes»andsuggestsindicatorsandamethodto

applytheminordertomaketheconceptofSIregimeoperationalhasbeenelabo-

rated(CastroSpila,Luna&Unceta,2016).

SIMPACT–T5.1|5

3 DEFININGSOCIALINNOVATION&ITSECO-NOMICUNDERPINNING

3.1 DefiningSocialInnovation

TheworkingdefinitionofSocialInnovation(SI)withintheSIMPACTprojectisset

outbyRehfeldandcolleagues(2015)as:

“SocialInnovationreferstonovelcombinationsofideasanddistinctformsofcol-

laborationthattranscendestablishedinstitutionalcontextswiththeeffectofempow-

eringand(re)engagingvulnerablegroupseitherintheprocessofsocialinnovation

orasaresultofit.”(Rehfeldetal.2015:6)

ReachingbacktothetheoriesthatSchumpeter(1912)formulatedoneconomicde-

velopment,andtheroleofinnovationinthisdevelopmentprocess,andbydrawing

onthesubsequentlyformalisedevolutionarytheory(Nelson&Winter,1982;Dosi,

1982)wecanunderstand“socialinnovationasanevolutionaryprocess”which“com-

prisesthedevelopment,implementation,practicalapplication,andconsolidationof

suchnovelcombinations”(Rehfeldetal.2015:7).Thistheoreticalbasisenablesus

totranslateeconomicdevelopmentintosocialdevelopmentandtointroduce,fur-

theron,acategorisationoftherolesthatinnovationplaysinthesocialspheree.g.

society.

3.1.1 SocialInnovationintheLiterature

Ageneralisableandcommonlyagreeddefinitionofsocialinnovationhasprovento

beratherelusiveduetocomplexnatureofsocietyitselfandthepartsofsocietyin

whichsocialinnovationcouldplayarole.

Ifwesurveytheliterature(Howaldtetal.,2014;Caullier-Griceetal.,2012)onso-

cialinnovation,andmakeaninventoryofthedifferentdefinitionsordescriptions

ofwhatauthors thinkmakesupsocial innovation,we find that there isa rather

broadunderstandingofsocial innovationindeedbasedonSchumpeter’soriginal

ideas.Althoughbroad,continuouslypresentinalmosteachofthedefinitionsare

theconceptsofwelfareandsocialexclusion/inclusion.WefindthatPolandVille

(2008,2009)andSerat(2012)findtheconceptofsocial innovationistoovague

andnothingmorethanahype.Abarriertoanunderstandingofsocialinnovation

istherelativelyunderdevelopednatureofresearchintotheareaitself,whichhas

6|SIMPACT–T5.1

received little attention so far.However, the firstmentioned authors, aswell as

Heiskala(2007)andEtorreandcolleagues(2013),alsounderlinethataninnova-

tioncanbetermed“social”ifithasthepotentialtochangeandimprovethequality

andquantityoflife(e.g.welfare)inasocietybyaddressingsocialneedsandaffect-

ingpositivechangesinthesocialstructure.

BenneworthandCunha(2015)remarkthatthereseemstobeageneralawareness

thattheabovedescriptionisofuniversalvalueastheEuropeanCommissionun-

derlinestheneedforasustainableandinclusivesocietyinitsEurope2020strategy

affectedthroughpolicyinterventionsin,amongothers,“employment,innovation,

education,socialinclusionandclimate/energy”(EC,2013).Theyfurthermorepoint

outthattheformulated“GrandSocietalChallenges”cannotbesolvedbyeconomic

developmentalone.Actionbykeyactorsisrequiredtoaddresssocialexclusionand

marginalisationofcommunitieswhichareshutoutof“differentkindsofmarkets

for public services, including housing, health, education, employment and

transport”(Benneworth,2013).Thesecommunitiesofmarginalisedpeople,living

aprecariousexistenceandsometimestermed“theprecariat”(Standing,2011),are

facingamarketfailurefortheir“proletarianclass-in-itself”,andalock-inintothis

economicandsocietalfailurewhichdemandschangesintheexistingsocialstruc-

tures(GarudandKarnoe,2013,MiegandTöpfer,2013).

Fromtheabovewecanrefineourearliergeneralisabledescriptiontoincorporate

threekeycharacteristics:

1. Theinnovationcreatesorhassocietalproblem-solvingcapabilitiesorca-

pacities

2. Theinnovationinvolvesbuildingandorganisingnetworksandstructures

(coalitions)betweenkeyactorsfacilitatingnewwaysofworkingornew

formsofaction.

3. Theinnovationisscalabletoothercontexts.

MoulaertandSekia(2003)addaprerequisitetothesethreecharacteristicsinthat

thesocialinnovatormustbeembeddedwithinthelocalsociallife/society,empha-

sising the importance of the “territorial” (e.g. micro) context of the problems,

causedbyeconomicandsocialfailure,andfacedbytheprecariatactorsononeend

andtheinstitutionalactorsontheother.Therelevanceofthisembeddednessofthe

socialinnovators,andtheirinnovations,canalsobeseeninTable3ofthepaperby

TurkeliandWintjes(2014)wherewecanfitsocialinnovationintotheregional,but

foremostintothelocalsystemofinnovationcontext.

SIMPACT–T5.1|7

3.1.2 SemanticAnalysis

Aconfirmationofthedescriptionofsocialinnovationandoftheaspectsofsocial

innovationhighlightedintheprevioussectioncanbefoundinthefollowingseman-

ticanalysisoftheresearchdoneonsocialinnovationintheyears1966to2015.

Intotal,weretrievedanumber1234documentspresentingstudieson,orreferring

to,socialinnovation.ThisdataweretrievedfromtheScopuscitationindexusinga

query focusingonkeywordssuch“social innovation”, “society”, “innovativeness”

etc.Furthermore,weemployeddata-miningtechniquestogaugethedirectionthat

theresearchinthefieldistaking.Semanticaswellasgeographicindicatorscanbe

harvested,analysedandvisualised.

Figure1. Instancesofuniquewordsandphrasesusedinsocialinnovationresearch

InFigure1,weshowtheuniquewordsandphrasesusedinsocialinnovationre-

search,arrangingthembythenumberofinstancestheyappearintheabstractof

the research papers in question.We find that apart from the social innovation

phrase,whichislessoftenusedassuchthananticipated,alargenumberofterms

arefoundthatsupportthedescriptiveandexploratoryreviewpresentedearlier.If

wenowlookspecificallyatthetop25termsandphrases(Table1)weindeedsee

communityandsocietyrelatedterminologyfeaturinginthetop12,whilethesome-

whatmoreactorandmarketrelatedtermsandphrasesmakeuptheremainderof

thislisting.Theseoutcomespointtotherelevanceofsocialinnovationasaconcept

andtosocialinnovatorsasimportantagentsofchangeinsocietyatlargeandlocal

communitiesonamoremicro,“territorial”,level.

0

50

100

150

200

250

300

socialinno

vatio

nlocalcom

mun

itysustainability

services

Education

socialentrepreneurship

policy

glob

aliza

tion

politics

change

resource

creativity

learning

inclusiveness

food

family

universities

market

consum

ers

serviceusers

company

activism

professio

nal

transitions

agro-socialinn

ovations

adaptatio

nmentalhealth

Aboriginalcom

mun

ities

socialsciences

climatechange

participatorydesig

ndisrup

tiveinno

vatio

nsdemand

immigrants

8|SIMPACT–T5.1

Words&phrasesfromtheabstracts Instances

Words&phrasesfromtheabstracts Instances

socialinnovation 240 Education 39

innovation 181 environment 39

community 73 technologies 39

developed 64 knowledge 38

localcommunity 57 government 38

socialdimension 52 socialentrepreneurship 38

publicsphere 54 working 32

health 53 policy 32

sustainability 52 science 32

socialinclusion 50 globalisation 30

society 45 future 29

services 41 opportunity 27

economics 41

Table1. Top25wordsandphrases

Furthermore,divergingtogeographicindicatorsofSIresearch,weseeinTable2

thetop10countriesengagedinsocialinnovationresearch,ofwhich60%areEU

memberstates.

Country* Numberofpapers Country* Numberofpapers

UnitedKingdom 153 Germany 52

UnitedStates 110 Spain 50

Canada 67 France 39

Italy 59 Japan 37

Australia 57 Netherlands 32

Table2. Top10countriesresearchingsocialinnovation(*asderivedfromauthoraddress)

3.2 SIMPACT’sConceptualFramework

InTable3wehavesynthesizedSIMPACT’sconceptualframeworkofSocialInnova-

tioncomponents,objectivesandprinciples.AsRehfeldandcolleagues(2015)con-

clude, it isapparent fromthecategorisationofSocial Innovationaspresentedin

SIMPACT–T5.1|9

table3,andtheelementsthatmakeupthiscategorisation,thattheinteractionsbe-

tweenthedifferentcategoriesaredynamicandmutuallyinfluencingand“driveso-

cialinnovations’economicandsocialimpact”(Rehfeldetal.2015:44).

SIMPACTinvestigatestheeconomicfoundationofSocialInnovation,it’seconomic

under-pinning.Inthenextparagraphwethereforefocusontheeconomicframe-

work.

Social Economic Political

SocialInnovationComponents

TypesofSIActors

- Informal:e.g.citizensini-tiatingcivilsocietypro-jects,crowds,founda-tions

- Formal:NGOs,associa-tions

- Socialentrepreneurs;- For-profit-companies- Publicenterprises- PPPs

- Politicaldecisionmakersat:Local,regional,na-tional,European,globallevel

SIResources - Education- Social/relationalcapital- Meansofprotest/leader-

ship

- Productionfactors:la-bour,capital,land,knowledge

- Righttovote;- Social&humanrights;- Ideologies

SIInstitutions - Culture- Traditions- Conventions- Legitimacy

- Markets- Sectorrules- Milieus

- Educationsystem- Welfaresystem- Lawsandpoliticalstruc-

tures- Participationrights

SocialInnovationObjectives

SIMotives,objec-tive(aimedim-pact)

- Empowerment- Participation- Socialcohesion- Equity

- Profitmaximisation- Pareto-optimum

- Welfaremaximisation;- Inclusion- Dischargeofpublic

budget- Legitimation

SocialInnovationPrinciples

SocialInnovationEfficiency(di-lemma’s)

- Unclearwhatefficiencymeans(inrelationtoeco-nomicandpolitical)

- Contextualembeddedvs.de-contextualiseddiffu-sion

- Internalaswellasexter-nalefficiency

- Staticvsdynamiceffi-ciency

- Competitionvscollabora-tion

- Shorttermvslongterm- Autonomyvspublicfund-

ingdependency

SocialInnovationGovernance(modes)

- Withorwithoutgovern-ment

- Withorwithoutgovern-ment

- Publicregulation

Table3. AcategorisationofSIComponents,Objectives&Principles

10|SIMPACT–T5.1

3.3 TowardsanEconomicFrameworkofSI

There is no denying that SI is the ‘new kid on the block’ as a societal driver of

change,andconsequentlyalsoininnovationresearch.Itlagsbehindinshowingits

importanceforeconomicdevelopment,andhastocatch-upwithotherformsofin-

novationinraisingawarenessof itsrole invaluecreationandeconomicgrowth.

Wewillthereforefirstdiscusstheeconomicunderpinningsofotherformsofintan-

giblesandotherformsofinnovation,namelyfirstintheprivatesector(firms)and

subsequently thepublic sector.Thediscussionbasically concerns the claim that

someexpendituresonintangiblesshouldnotbeseenascosts,butasinvestments,

becausetheyincreasetheproductivecapacityinthefuture.However,theseintan-

giblesareveryhardtomeasure,andthefuture(returnoninvestment)maytake

quiteawhiletomaterialise.Whenexpandingtheframeworkbyaddingthepublic

sector,andfinallythecivicsector(includingcitizens,households,communitiesand

thirdsectororganisations),itbecomesevenhardertodoso.Withthesethreesub-

sectors,wewillsubsequentlysuggestasystemiceconomicframeworkofSI(onein

whichinvestmentinSIwillleadtoeconomicbenefits),anddiscussitatmicro-level

andmacro-level,referringtosomeSIcasestudiesandliterature.

OurfocusinthisparagraphwillbeonSIasaninputtoeconomicgrowth.Wewould

liketorefrainfromcomplicatingthediscussionatthisstagebyextendingtheanal-

ysisbeyondGDPandwelfare,andtowardshumanwellbeingandqualityoflife,but

doneed topoint toworkdoneon this topicbyPouw&McGregor (2014).They

broadenthenarrowviewofwelfaretohumanwellbeingbydefiningthelatteras“a

state of beingwith others and the natural environment that ariseswhere human

needsaremet,whereindividualsandsocialgroupscanactmeaningfullytopursue

theirgoals,andwheretheyaresatisfiedwiththeirwayoflife”(Armitageetal.,2012:

3).Thisconceptionofwellbeingtakesintoaccountthematerial,relational,andcog-

nitive/subjectiveaspectsofpeople’sneedsandgoalsinlife.Thisabilitytopursue

goalsinlifeisalsocentralintheapproachtakenbyCRESSI(HoughtonBuddetal.,

2015;NichollsandEdmiston,2015).Althoughthesenon-material,intangible,goals

arevery important for those involved inSI,wewould like to focusonthe ‘hard’

materialobjectiveintermsofforinstanceGDP/capita.Thisisnecessarytoconvince

thosewhodonot,atthefirstinstance,careaboutthemore‘soft’passions,purposes,

andgoals(forpeopleandsocietyasawhole),orevenabouthowwelfareisdistrib-

uted,thatinvestinginSImakessense.

SIasaninputforeconomicgrowth

SIMPACT–T5.1|11

3.3.1 InvestmentbyFirmsinIntangibles&itsEconomicImpact

AsStiglitzetal.(2009:144)pointout,economistsareincreasinglyconfrontedwith

the challenge ofmeasuring ‘intangibles’ in the economic system, because an in-

creasingshareof investmentsandan increasingshareofoutputsare intangible,

anditisdifficulttoestimatethemarketvaluebycapitalising/monetisingthesein-

tangibles.Wefirst lookatvariousresearchprogrammes,whichhavestudiedthe

impactofinvestmentinintangiblesbyfirmsoneconomicgrowth.

TheINNODRIVEresearchprojectforinstanceaimedtoprovidenewdataonintan-

giblecapitalandtoidentifyitsimpactoneconomicgrowth.Inthepast,economic

growthcouldbeexplainedbyinvestmentinmanufacturing,improvementsinedu-

cational attainment and investment in R&D. But, this is not enough to explain

growthperformancetoday.TheresultsoftheINNODRIVEprojectshowedthateco-

nomiccompetencerelatedtoorganisationalcapitalofmanagementandmarketing

isoneofthekeydriversofgrowth.Thestudyrecognisestheneedtotreatintangi-

blesas investments,creating futurevalue, rather thanas intermediatecosts. IN-

NODRIVEproducednewestimatestocapitalisetheintangiblesfollowingthe(CHS)

approachofCorradoetal.(2006),buttheyhavealsoadvancedthisapproachby

developingnewdataonintangiblesusingbothexpenditureandperformancebased

estimatesofintangiblecapital.Besidesinnovativeproperty(R&Dandlicencecosts)

and computerised information (software and databases), this new approach in-

cludedeconomicandfirmcompetencesi.e.spendingonreputation(advertising),

firm specific training and organisational capital. They have added items, which

wereoftenexcludedfromboththebookkeepingsystemsofcompaniesandthena-

tional system of accounts. After including all these additional intangible invest-

mentsbyfirms,theGDPintheEU27areais5.5%higher(Piekkola,2011).Thisin-

deedshowsthat, inthewordsofCorrado(2012):“thetraditionalcapitalestima-

tionsareunderstated,becausemanycostsof innovationarenotcountedas invest-

ment”.This isan important implicationof themacro-economicmeasurement,or

capitalisationapproachofCorradoetal.(2006)whohavestatedthat:“anyuseof

resourcestodaydesignedtoincreasetheproductivecapacityofthefirminthefuture

isinvestment”

AnotherresearchprojectCOINVESTconfirmedforaselectionofEuropeancoun-

trieswhathadalreadybeendocumentedfortheUS,namelytherapidgrowthof

investmentsbycompaniesinR&D,salesandmarketing,andorganisationalcapital,

andthattheseinvestments,whichtheycollectivelycalledintangibles,areanim-

portantdriverofoutputgrowthandcompanyvalue.Theydefinedanintangibleas-

setorintangibleinvestmentas:

ResearchonIntangibles

12|SIMPACT–T5.1

“identifiable non-monetary assets that cannot be seen, touched or physically

measured,whicharecreatedthroughtimeand/oreffortandproduceanenduring

knowledgeasset[...]Someknowledgeassetsareprotectedbyformalmeanse.g.trade

secrets(e.g.,customerlists),copyrights,patents,andtrademarks.Othersarenot,such

asknow-how,knowledge,collaborationactivities,leverageactivities,andstructural

activities.”(Haskel&Edlin2010)

Thefocusinthisdefinitionisonknowledge,whereespeciallythemeasuringofthe

valueof the investmentsorassetsregarding informalknowledge ishardtoesti-

mate.Althoughalargepartoftheintangiblesarestilllacking,theresearchshowed

forinstancethatinmanufacturing,intangibleinvestmentexceedstangiblesinall

theselectedEUcountries.Infinanceandbusinessservices,thereverseisthecase

(Haskel&Edlin,2010).

Regarding innovations in firmsSchumpeterdistinguishedbetween fivedifferent

typesofinnovations:

1. Introductionofnewproducts.

2. Introductionofnewmethodsofproduction.

3. Exploitationofnewmarkets.

4. Creationofneworganisationalstructuresinanindustry,

5. Developmentofnewsourcesofsupplyforrawmaterialsorotherinputs.

Ineconomics,mostofthefocusovertheyearshasbeenonthefirstandthesecond

ofthese(thelastone,onnewinputs,ishardlyreferredtoanymore).DataonR&D

expenditurebyfirms(whichismostlyspentonproductinnovation)islargelyavail-

able,andnot longagothesocalledBarcelonaobjectiveofreaching3%R&Dex-

pendituresasashareofGDPhasbeenthekeytargetinaimingforeconomicdevel-

opmentintheEU.Togetherwithorganisationalinnovationandmarketinnovation

(alsoreferredtoasnon-technologicalformsofinnovation)thesefourtypesofin-

novation(seefigure2)arestilldistinguishedintheOsloManual1(theinternational

standardguidelineonhowtomeasure innovation)and inmany innovationsur-

veys,suchastheCommunityInnovationSurvey(CIS).However,thedistinctionbe-

tweenthesefourtypesofinnovationdoesnotcaptureverywellthefactthat(espe-

ciallyconcerningservicedesignanddevelopmentofnewbusinessmodels)innova-

tioninvolvesnewcombinationsofthesefour,whichareoftenveryhardtoseparate

fromeachother(seeFigure2).Thisisespeciallythecaseconcerningnewservices

andnewbusinessmodels(aswellasforSI).

1 Although,whatSchumpeterreferredtoas‘marketinnovation’,hasbeenchangedintheOsloManual

andCISintonewmarketingmethodsorinnovativemarketing.

SIMPACT–T5.1|13

Figure2. Schumpetertypesofinnovation

Whileaninventionconcernsthecreationofthefirstideaofanewproductorpro-

cess,innovationreferstotheuseofthisnewandbetterideaormethod,theattempt

totryitoutinpracticeandtobringitonthemarket,ordeliveritasapublicservice

(Fagerberg, 2013). So where inventions can be seen as technological ‘break-

throughs’inscience,innovationscanbeseenas‘breakthroughs’inmarketsandso-

cieties. Schumpeterdescribed thiswithhis conceptof creativedestruction.This

conceptismoredynamicthentheneoclassicalstrandofeconomicsthatemerged

bythen,andthataccordingtoSchumpeterwasatoopassiveviewoneconomiclife.

Hewanted toexplain that:“a sourceofenergywithin theeconomic systemwhich

would of itself disrupt any equilibrium that might be attained”. (Schumpeter,

1937/1989:166).Innovationisthisdynamicsourceincapitalism.

Inordertoturnaninventionintoaninnovation,aninnovativeentrepreneurcom-

binesseveraldifferenttypesofknowledge,capabilities,resourcesandskills.The

personororganisationalunitwhichcombinesall these factors innewwayswas

labelled‘entrepreneur’.

So,forSchumpetertheconceptofinnovationwasindeedcloselyrelatedtoentre-

preneurship.Althoughheoftenwroteaboutitasaperson(andissometimescriti-

cisedforthat),hereferredtotheentrepreneurialfunctionofcomingtonewcom-

binations,whichreplaceoldones(Fagerberg,2014).

Service InnovationNew Business Model

Process Innovation Market Innovation

Product Innovation Organisational InnovationR&D

Designingnewcombinations

Innovationsasbreak-throughs

Innovativeentrepre-neur

14|SIMPACT–T5.1

Figure3. TEPSIE’sIntegratedmodelformeasuringSI

Source:AdaptedfromKrlevetal.(2014)

Sincehewasoftheopinionthatscientistsshouldleavequestionsthatariseoutside

theboundariesoftheirowndisciplinetoothers,hestucktoeconomics.But,this

doesnotimplythattheentrepreneurialfunctionofcomingtonewcombinations

cannotbeperformedbyan‘EntrepreneurialState’(Mazzucato2013a),orasocial

innovator.InthisrespectKrlevetal.(2014:209)refertothenotionofsectorneu-

trality,since‘socialinnovationcanoccurinanysector’,and‘entrepreneurialactiv-

ity’isthereforecentralintheirmacro-modelformeasuringSIwhichhasbeende-

velopedundertheTEPSIEproject(Figure3)

3.3.2 AdditionalIntangibles&InnovationsinthePublic&CivicSector

Sowhatcanwesayabouttheroleofintangiblesandinnovationinvaluecreation

inthepublicandcivicorthirdsector?Whatkindofcapitalorintangiblesarewe

actuallytalkingabout?

Forthesocialorcivicsector,wecanthinkofsocialcapital.TheIAREGforinstance

hasanalysedtheroleofintangibleassetsonregionaleconomicgrowthinEurope.

Theprojectidentifiedfourkeyintangibleassetsimpactingongrowth:knowledge

capital,humancapital,socialcapitalandentrepreneurshipcapital.Therearesev-

eraltheoreticalexplanationsfortheimpactofsocialcapitaloneconomicgrowth,

SOCIETY

FRAMEWORK CONDITIONS

Political

SocietalClimate

Resources

Institu-tional

Innov. Perfor-mance

Organi-sationalOutput

SocietalOutcome

Proto-typing

Propo-sals

Sustai-ning

EntrepreneurialActivity

Entrepreneurial Activity Framework Conditions Society

Field-spectifc outcome and output

IntangibleAssets

SIMPACT–T5.1|15

e.g.:reducingtransactioncosts,or(assunktransactioncosts)reducingthecostof

transformation(includinginstitutionalchange),oritsimpacton‘spatialsorting’by

firmsorhumancapital(Storper,2011).Therefore,IAREGalsoanalysedtheensem-

ble effects of these intangible assets on the location of firms.2Also Soete et al.

(2009)reportonapositiveimpactonregionaleconomicgrowthfromsocialcapital,

whichiscapturedbyvariousindicatorsontrust.DeHaan(2015)showshow,ata

moregloballevel,aspectsofsocialcohesion(e.g.civicactivismandinclusion)relate

toeconomicgrowth(Figure4).

Figure4. Civicactivismandinclusioninrelationtoeconomicgrowth

Source:DeHaan(2015)

AccordingtoMazzucato(2013a)theroleofthepublicsectorinvaluecreationvia

innovationandhumancapitalformationisundervalued.Sheforinstancepointsout

thateverytechnologythatmakestheiPhoneso ‘smart’wasgovernmentfunded:

theInternet,GPS,itstouch-screendisplayandthevoice-activatedSiri.Mazzucato

showedthattheprivatesectoronlyhadthecouragetoinvestafteran‘Entrepre-

neurialState’madetheinitialhigh-riskinvestments.Moreover,unlikethepublic

sector,theprivatefinancialsectorhasratherextractedvalueanddidnotinvestin

theincreaseofinnovationcapacityorhumancapital.Mazzucatoalsocallsforare-

newedappreciationfortheroleofthestateconcerningvalue-creatinginvestments

intechnologicalinnovationandhumancapitalformation.In“aworldinwhichpri-

vatefinanceispursuingshort-termprofitsandfocusingonvalueextractionactivities,

oftenitisonlypublicfinancethatisabletoprovidethelong-termpatientcapitalthat

nurtureslearningandinnovation”Mazzucato(2013b:7).Itisnotonlythebankers

thatmakeitpossibletocarryoutthenewcombinationsassociatedwithinnovation

(Schumpeter1912,p.74)butalsoanentrepreneurialstatecanmakenewcombi-

nations possible. However, Mazzucato (2013a, 2013b) mainly refers to invest-

mentsinR&Dandeducation,andnotinSI.

Concerning the long- vs. short-term visionwith respect to investment,Hall and

Soskice (2001) have distinguished a number of varieties of capitalism. In some

2 http://cordis.europa.eu/result/rcn/46401_en.html

y = 0.0356x + 0.142

R2 = 0.3758

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0 2 4 6 8 10 12

ISD

Val

ue in

clus

ion

min

oriti

es

Ln GNI/Cap (ppp)

Growth & inclustion go together

0

0.2

0.4

0.6

0.8

0 5 10 15

Civic activism and GNI/cap (Ln)

Roleofpublicsector

Varietiesofcapitalism

16|SIMPACT–T5.1

countrieswithamore‘stakeholder’-typeofcapitalism,suchasGermanyandJapan,

bankshavebeenmorewillingtobe‘patient’financersofinnovation,moresothan

incountrieswitha‘shareholder’typeofcapitalism,suchasintheUSorUK,which

aremoredrivenbyquickreturnsandspeculation(TylecoteandVisintin,2008).

Capitalising(estimatingthemarketvalueof)intangiblesinfirmsisdifficult,butin

thepublicsectoritisevenmoredifficult,andcurrentlymostpublicexpenditures

arenotcountedasinvestments,butasconsumptionbecauseitisseenassatisfying

current collective needs, and not as services intended to create future societal

benefits.Corrado,etal.(2015)makessomesuggestionsonhowtoapproachthe

problems in capitalising public intangibles. After distinguishing various govern-

ment functions, they focuson the investments/assets concerninghealth, culture

andeducation(Table4).Acomplicationwhenextendingtheeconomicframework

byintegratingfunctionsofthegovernmentisthatgovernmentservesmorefunc-

tionsthen‘economicaffairs’,andalsomorethan‘socialprotection’.Thisexplains

whyalmosteachministryinEuropehasdesignedaninnovationstrategyorsystem

ofits’own(silo)toservetheneedsofsocietyintheconcerningpolicydomain.In

this respect, many kinds of innovation (public innovation, business innovation,

technical and non-technical, ICT-innovation, organisational innovation, SI, etc.)

havebecomepervasive,servingmultipleorgeneralpurposes,whichopenspossi-

bilitiesfornewcomplementarycombinations.

Table4. Classificationoffunctionsofgovernment(COFOG)

FUNCTION

� Generalpublicservice1 � Housing&communityamenities

� Defense � Health

� Publicorderandsafety � Culture&recreation3

� Economicaffaires � Education

� Environmentalprotection � Socialprotection4

1 Includesinterestpayments2 Transportationaffairs,generaleconomicandlabouraffairs,agriculture,energyandnaturalre-

sources3 Alsoincludesreligion4 Disabilityandretirementincome,welfareandsocialservices,unemploymentandothertransfersto

persons

Source:Corradoetal.(2015:4)

BasedonthesameCHSlogicthatwasappliedtofor-profitbusinessactivities,Cor-

radoetal.(2015)proposethreenewcategoriesofpublicinvestment:

1. investmentsininformation,scientific,andculturalassets

2. investmentsinorganisationalcompetencies

Publicintangibles

SIMPACT–T5.1|17

3. socialinfrastructure.

Justifyingtheneedforthislastcategory,whichincludeshumanknowledgecapital

andhumanhealth,theyrefertolong-lastingsocietalassets.

Weintenttoextendtheeconomicframeworkbeyondtheprivateandpublicsector.

InthisrespectaninterestingprojectisITSSOIN,whichisaEuropeanresearchpro-

jectthatstudiesthe‘ImpactoftheThirdsectorasSocialInnovation’.Inoneofits

deliverablesAnheieretal.(2014)statethat“theabilitytofostersocialinnovationas

ameansofenhancingsocialproductivitymaynotonlyresultintheproductionofdif-

ferentsortsofcapital(Bourdieu,1986),butalsodependontheorganisations’capac-

itytotapintothem.Thirdsectoractorsmaynotgenerallypossessahighlevelofeco-

nomic capital but they can draw on other sorts of capital, for instance, on social

(whichisvitaltothemobilisationofstakeholders)orculturalcapital(valuesandvir-

tuesthatarecrucialfortheabilitytogainlegitimacy).Wemightadd,‘public’or‘po-

liticalcapital’.

Basedonmacroindicatorscapturingthesizeofthethirdsectorandforcivicen-

gagement(volunteersinthethirdsector)theyprovideaframeworktoestimatethe

SIpotential(seeFigure5).Thesetwocomponentscanberegardedaskeyforindi-

catingthesupplysideofSI.

Figure5 Categorisationofaggregatedsocialinnovativeness*

Source:Anheieretal.(2014)

CzechRepublic Sweden

Denmark

Spain

Italy

UKNetherlands

Germany

France

SI smallest

SI medium

SI medium

SI highest

CIVIC ENGAGEMENT**

SCAL

E OF

TH

IRD

SECT

OR*

LARG

ESM

ALL

LOW HIGH

All of relations are in relative and not in absolute terms.

(*) Scale of the third sector is measured primarily by engagement in welfare activities, then by share of paid national workforce and third by share of GDP

(**) Civic engagement is indicated by volunteers as % of employment in the third sector.

18|SIMPACT–T5.1

InSIMPACTwehavetakenthevariouswelfareregimesinEuropeasbroadersocial-

institutional contexts forSI (Rehfeldetal.2015).Anheieretal. (2014) fromthe

ITSSOINprojecthavealsostudiedhowthe(aforementioned)varietiesofcapital-

ismserveasaneconomic-institutionalcontextforSI.Theyshowhowwelfarere-

gimes(associalcontexts)andvarietiesofcapitalism(aseconomiccontexts)relate

toSIandillustratewherecontradictionsoccuracrosstheseclassificationsandtheir

implicationsforSI.TheyconcludewiththetentativehypothesesthattheSIpoten-

tialofthethirdsectorincreases:

• “With thenumberofmulti-stakeholdercontacts (including thecontacts to

thecommercialandpublicsphere,civicengagement);

• With the diversity of the resource base (including diversity in financial

sources,volunteering,expertise,andknowledge);

• Withtheformulationofvaluesetsthatcan‘connect’toothersintermsofso-

cialmobilisationsanddissemination.”(Anheieretal.2014).

Pouw&McGregor(2014)takeanevenmorepluralisteconomicperspective.Build-

ing onPolanyi (1944), they see economic relationships as being embedded in a

broadercontextconsistingofapoliticalrealm,asocietyandcultureandanatural

andbuiltenvironment3.Fromthisperspective,theydefinetheeconomyasthein-

stitutedprocessofscarceresourceallocation,byandtoeconomicagents.Besides

theprivateandpublicsector,theydistinguishathirdeconomicsectorconsistingof

individuals,householdsandcommunities,andeachof thesethreesectorsordo-

mainshasitsarchetypeallocationmechanism:marketexchangeintheprivatesec-

tor,redistributioninthepublicsector,andreciprocityinthecivicsector(Figure6).

Thisframeworkallowstheauthorstostudytherolesthatmarkets,politicsandso-

cietyplay.Inaddition,itenablesthemtostudyhowtheyinteracttoshapetheeco-

nomic processes and outcomes fulfilling people’s needs and goals (Pouw &

McGregor2014).

Inmainstreameconomics,expensesbycitizensarecountedasconsumption,and

notasinvestments.But,evenwhensomeexpensesbyindividualsandhouseholds

wouldbecountedasinvestments(e.g.inhumanorsocialcapital)theidentification

of reciprocityasan importantallocationmechanism in thecivic sector,explains

whycapitalisationormonetisationofintangiblesinthissectorisverycomplicated.

Comparedtotheprivatesectoritisfarmoredifficulttomeasureorestimatethe

inputsandoutputsintermsofmarketvalueorexchangevalue.

3 AlsotheCRESSIprojecttakessuchamultidimensionalperspective,whichisalsoappliedtoamulti-

dimensionalperspectiveonmarginalisedpeople,innovationandcapabilities,seefigureainAppen-

dix

Welfareregimes

Economyasinstitutionalprocess

ofscareresourceallocation

SIMPACT–T5.1|19

Figure6. Keyallocationmechanismsinthethreeeconomicdomains

Source:Pouw,N.&A.McGregor(2014)

Thechallengeistoconstructacitizen’sversionconcerningtheir‘productivecapac-

ity’oftheearliermentionedstatementofCorradoetal.(2006)that:“anyuseofre-

sourcestodaydesignedtoincreasetheproductivecapacityofthefirminthefutureis

investment”.Inacitizen’sversion,SIinputswhichempowermarginalisedgroups

insociety,andincreasecapabilitiestopursuetheir‘productivegoals’shouldindeed

beseenasinvestments,notascostsorconsumption.Thefourcasestudyexamples

describedintheappendix(textboxI)allinvolveamixofresourceinputsdesigned

toincreasecertaincapacitiesofthevulnerablepeopleinvolved.

InthecaseofVoorleesExpressthekeyresourcesarevolunteers,thetargetedcapa-

bilitiescomprisereadingskillsofchildrenof2-8yearsold;skillsthatareappreci-

atedbylabourmarkets,andcanbeturnedintoexchangevalue10to15yearsafter

VoorleesExpresswhen the kids have grown up and get there first job. Funding

mostlycomesfromlocalpublicgovernments,whichenablesthesocialinnovatorin

itsentrepreneurialfunctionofcomingtoimprovedcombinationsofresourcesfrom

thepublicsector,privatesectorandcivic/thirdsector.

AmajorcomplicationinthecaseofinvestmentsinSIisthattheyareoftendesigned

toincreasetheproductivecapacityofthesectorscombined,theyservethegoalsof

variousstakeholdersfromthethreesectors.Anotherwaytoputit:thevalueadded

ofSIisinthesynergiesbetweenthepublic,privateandcivilsector.Thisalsoimplies

thateconomicimpactnotonlycomesfromtheenhancedcapabilitiesofthepeople

inthetargetgroups,andtheenhancedgrowthofthesocialinnovator,butthereare

Individuals, Households & Communities

reciprocity

Allocation of scare

resources as an instituted

process

PublicSector

redistribution

Private Sector

marketexchange

ExampleVoorleesExpress

20|SIMPACT–T5.1

oftenalsocontributionstotheeconomicimpacttobefoundinthepublicsectorand

theprivatesector.

InthecaseofWORK4ALL,aprojecttacklingyouthunemploymentinducedbylocal

publicprocurementwithsocialreturnobjective(seetextboxIinAppendix)allof

theinvolvedstakeholdersintheSIinvestandeachofthesestakeholdersgetadif-

ferentkindofeconomicreturnontheirinvestment.Theunemployedyouthworks

atlowcostbutgetfreetraining.Theeducationinstituteandtheconstructioncom-

panyinvestedinnewtrainingmethodsandguidanceandthisexperiencecanbe

usedforacquiringnewassignments frompublicprocurement.The localgovern-

mentinvestsintheprocurementanditsprocedure,butforinstancehopestosave

moneyonareductioninunemploymentbenefits.ThejointdevelopmentofthisSI

onlyworkswhentheinvestmentisacombinedeffort.

Asaworkinghypothesis,wecometothefollowingeconomicframeworkofSI(Fig-

ure7).TheinputstoSIcomefromavarietyofresourcesandcapabilities,fromthe

civic,theprivateaswellasthepublicsector.Asanadditionalsourceofvariety,SI

bringsnewcombinationsofsocial,economicandpublic/politicalresourcesandca-

pabilities,which in interactionmaycreatemoreeconomicgrowththanprevious

combinations(Figure7).

Figure7. TheEconomicframeworkofSI

TheinvestmentsinSIinitiativesorprojectscombinethesocial,economicandpo-

litical resources and capabilities of the involved (civil-social/economic/public)

stakeholders.Thecontributiontoeconomicgrowthnotonlycomesdirectlyfrom

thegrowthorincreasedcapabilitiesofthesocialinnovatororSocialEntrepreneur.

Italsocomesfromtheimpacttheseinnovatorsandentrepreneurshaveonothers

insociety,e.g.mostnotablyfromtheincreasedcapabilitiesofthetargetedbenefi-

ciariesinthesocial/civilsector,butalsofromtheimpactontheusersoftheinno-

vation inthepublic/politicalsector,andthe impactonthedonors intheprivate

sector,etc.

Invest in SI EconomicGrowth

as new combinations ofsocial, economic andpolitical capital

and social benefits

ExampleWORK4ALL

SIMPACT–T5.1|21

Atthemicro-levelwerefertotheResourceBasedViewonthis.TheResource-Based

View(RBV)ofthefirm(Penrose,1959),builtonSchumpeter’sperspectiveonvalue

creation(Fagerberg,2014),viewsthefirmasabundleofresourcesandcapabilities.

Appliedtosocial innovatorswecouldsaythatfromasetofscarceresourceswe

shouldnotexpectastrongbusinessstructure.Structuralresourcegapsarebridged

byvolunteers,throughuseofpersonalprivateassets,withstrongpersonalcom-

mitmentofpeopleworkingintheorganisation,andwithastrongorientationon

achievingimpactfortheirtargetgroup.Withtheirfocustoinvestinothers,theydo

oftenforgettoinvestinthemselves.However,theResource-BasedViewalsostates

thatbyuniquelycombiningasetofcomplementaryandspecialisedresourcesand

capabilities(whichareheterogeneouswithinanindustry,scarce,durable,noteas-

ily traded,anddifficult to imitate), this iswhat leadstovaluecreation(Penrose,

1959).Therefore,thescarcityofacertainresourcecouldbecompensatedbyan-

otherspecificresourceorcapability,andtheRBVisaboutthisuniquecombination.

TheResource-BasedViewfitsthesituationofSIquitewellasstatedbyRehfeldet

al.(2015),butthekindofresourceswhicharekeyinSIareoftendifferentfrom

thoseforothertypesofinnovation,e.g.volunteersareakeyresource.

Forinstance,intheSIcaseofVoorleesExpress(seeAppendixTextboxI)volunteers

investtimeinreadingwithyoungchildrenwhichlacklanguageskills.Forthesocial

innovatorwhohasdevelopedandimplementedthemethodthesevolunteersarea

keyresource.Sincehalfofthelocalorganisationshavedifficultiesinacquiringvol-

unteersthesocialinnovatorinvestedinamarketingstudytofindoutwhichkind

ofpeoplearemostinterestedtoreadasvolunteerswiththechildren(forwhomit

ismostrewarding).Oneofthemaintypesoftheresultingmatrixconcernswoman

whoseownchildrenlefttheirhometoliveontheirown.Anothertypeconsistsof

firstyearstudentswhocometoliveinanunfamiliarcity.Forthemitisaniceway

togettoknowthecityandintegrateintheirnewenvironment.Thisexampleshows

whatkindofvaluecreatinginvestmentsaremadebysocialinnovators,whatkind

ofresourcesare tobesecured,andhowdifficult it is toestimate therelatedex-

changevalues.

InallthefourexamplesofSIprovidedintheAppendix,studentsandeducationin-

stitutesplayaroleasaresource.However,notthetechnologicaldisciplines,but

socialsciencesandhumanities.E.g.,social innovatorsseldomconductimpactas-

sessments,butintheirannualreportsandtheirvaluepropositionssocialinnova-

torsrefer torelevantstudies fromsocialscientistsascircumstantialevidenceto

backuptheirvisionandproposals.

TheexamplesofSIsprovidedintheAppendix(TextboxI)showthatindeedthey

canbeseenas‘bundlesofresourcesandcapabilities’,asnewcombinationswhich

havebeendevelopedbysocialinnovators.Thesenewnichesintegrateresourcesof

thecivic,publicandprivatesectorandhavebeenmadepossiblewithfundingfrom

Resource-basedview

22|SIMPACT–T5.1

allthesethreesectors.Besideseconomicresources,thesocialresources(e.g.work-

ingwithvolunteers)orcapabilitiesandpoliticalresourcesandcapabilitiesareof-

tenmoreprominentassets,e.g.inrelationtoservetheneedsofbeneficiariesorin

lobbyingforpublicgrants.Acoreobjectiveforabouttwothird(72%)oftheSIM-

PACTcasesistoempoweranddevelopcapabilitiesofthemarginalisedandvulner-

ablebeneficiaries(Terstriepetal.,2015).Accordingto(Santos,2012)thisempow-

ermentofothers,outsidetheboundariesoftheorganisation,isakeycharacteristic

ofsocialentrepreneurs.

TeeceandPisano(1994)appliedthisRBVviewofthefirmtoinnovationandex-

tendedit intotheconceptof“dynamiccapabilities”,definedas“theskills,proce-

dures,organisationalstructuresanddecisionrulesthatfirmsutilisetocreateand

capturevalue”(Teece2010:680).Thesetwoviewsarequitesimilar,butthemain

differenceisthattheRBVisastaticapproach(totheallocationofresources,andto

efficiency),whilethelatterdynamicconceptrefersalsototheabilitytointegrate,

build,andreconfigureinternalandexternalcompetencestoaddressrapidlychang-

ingenvironments.Inthisrespecttheconceptissimilartothatofresilience,which

isoftenusedatasystemslevel.So,theRBVonlyaddressesefficiencyinrelationto

currentvaluecreation,whiledynamiccapabilitiesrefertodynamicefficiencyand

thecapabilitiestocreatevalueinthefuture.This“dynamiccapabilities’conceptis

lesswellapplicabletoSIasacharacterisation,butitseemsapplicableinexplaining

someofthebarriersofSI.socialinnovatorsdonotinvestenoughindevelopingdy-

namiccapabilities,routineswhichempowerthemtoaddresstheuncertaintiesof

the future; relational routines, broadened perceptions and changed awareness

whichmakes themselvesmore resilient and capable.The lackof investments in

buildingupdynamiccapabilitiesisevidencedinTerstriepetal.(2015),e.g.:inthe

formofalackofmanagerialknowledge(p.51),andskills(p.48).Socialinnovators

shouldempowerthemselvesincooperationwiththeirsurroundingeco-systemof

innovationinwhichtheirmainbeneficiaries,aswellastheirpartnersareembed-

ded.InassessingtheimpactofSIanassessmentoftheincreasedcapabilitiesofthe

socialinnovatorshouldbeincluded.Mostattentioninevaluationsandimpactas-

sessmentsofSIaredevotedtotheeconomicimpactonothers,e.g.onthosewho

fundandusetheSI,suchaslocalpublicgovernments,andtotheeconomicresults

forthebeneficiaries(inourcasethemarginalisedtargetgroups)andthewiderin-

directsocietaleconomicimpactthatgeneratesfromthat.

Dynamiccapabilities

SIMPACT–T5.1|23

3.3.3 UseValue&ValueCo-CreationinaSystemicService-logicofSI

Thevaluecreationconceptofmosteconomictheoriesisbasedongoodsandex-

changevalue,whileforSIalogicofvaluecreationbasedonserviceandusevalue

wouldbemorerelevant.Theconceptofresourcesinservice-dominantlogic(Vargo

etal.2008)hasbeenshapedbytheresource-basedview.Theconceptofservice-

dominantlogicmakesadistinctionbetweenuse-valueandexchangevalue.Vargo

etal.(2008)describehowtheconceptsofuse-valueandexchangevaluehavebeen

addressedintheeconomicliterature;andbefore,sincetheGreekphilosopherAr-

istotle (384–322 BC) was first to distinguish between use-value and exchange-

value(Fleetwood,1997).AdamSmith(1776/2000:31)referredto‘‘value-in-use’’

and ‘‘value-in-exchange’’, but emphasised the latter, and economic theorieshave

sincefocusedonexchangevalue.IncludingthoseofMarx:althoughhehadalsodis-

tinguisheduse-valuefromexchangevalue,hismainpointwasabouttheunfairex-

changebetweencapitalandlabour.Asopposedtoa‘goods-dominantlogic’Vargo

etal.(2008)proposea‘service-dominantlogic’,basedon‘value-in-use’,or‘value-

in-context’(seeTable5).

Service is defined as the ‘‘application of specialised competences (knowledge and

skills)throughdeeds,processes,andperformanceforthebenefitofanotherentityor

theentityitself’’(VargoandLusch2004:2).Servicecanbeseenasthefundamental

basisofexchange,andgoodscanbeseenasadistributionmechanismforservice

provision.Anadvantageofthisframeworkisthatitunifiestheexchangemecha-

nismsofthecivic,publicandprivatesectordomainaspresentedbeforeinFigure

6.

Table5. ExchangevalueinGood-Dominantlogicvs.Use-valueinService-Dominantlogiconvaluecreation.

Good-Dominantlogic Service-Dominantlogic

Valuedriver Value-in-exchange Value-in-useorvalue-in-context

Creatorofvalue Firm,oftenwithinputfromfirmsinasupplychain

Firm,networkpartners,andcustomers

Processofvaluecrea-tion

Firmsembedvaluein‘‘goods’’or‘‘ser-vices’’,valueis‘added’byenhancingorincreasingattributes

Firmsproposevaluethroughmarketofferings,customerscontinuevalue-creationprocessthroughuse

Purposeofvalue Increasewealthforthefirm Increaseadaptability,survivability,andsystemwellbeingthroughservice(ap-pliedknowledgeandskills)ofothers

Measurementofvalue Theamountofnominalvalue,pricere-ceivedinexchange

Theadaptabilityandsurvivabilityofthebeneficiarysystem

Resourcesused Primarilyoperandresources Primarilyoperantresources,some-timestransferredbyembeddingtheminoperandresources-goods

Good-dominantlogicvsservice-dominantlogic

24|SIMPACT–T5.1

Good-Dominantlogic Service-Dominantlogic

Roleoffirm Produceanddistributevalue Proposeandco-createvalue,provideservice

Roleofgoods Unitsofoutput,operandresourcesthatareembeddedwithvalue

Vehicleforoperantresources,enablesaccesstobenefitsoffirmcompetences

Roleofcustomers To‘useup’or‘destroy’valuecreatedbythefirm

Co-createvaluethroughtheintegra-tionoffirm-providedresourceswithotherprivateandpublicresources

Source:Vargoetal.(2008)

Value realisation takesplace inuseof services (or indeedgoods) referred to as

‘value-in-use’or ‘value-in-context’, inotherwordsuserscontinuethevaluecrea-

tionprocessthroughuse.WhenweapplythistoaSI,whichempowersvulnerable

people,theimpactindeed,keepsincreasingeachtimethesebeneficiariesusethe

capabilitiestheyhavedevelopedbecauseoftheSI.Intheexamplesofthecaseof

VoorleesExpressandMothersofRotterdam(seeAppendixTextboxI)thisisactu-

allywhytheseSIsaddresscertainproblemsataveryearlyphaseinlife.Theearly

inlifeinvestmentsinpersonaldevelopmentandskillsarethemostefficient,asthey

givethehighestreturnoninvestment.

Inrelationtoservice(orresource,orintangibles,orknowledge)thereisadifferent

meaningoftheword‘use’fromthetraditionalmeaninginrelationtogoodswhere

‘use’and‘consume’referto‘useup’and‘destroy’.InaService-Dominantlogicusers

co-createvalue.TheinfluenceoftheRBVisevidentinthefollowingstatement:

“Moving the locus of value creation from exchange to use, or context,means

transformingourunderstandingofvaluefromonebasedonunitsoffirmoutputto

onebasedonprocessesthatintegrateresources”.(Vargoetal.2008)

Figure8. Valueco-creationinaservice-systemsperspective

Source:Vargoetal.(2008:149)

Value-in-ExchangeValue Proposition/

Money

Value-in-Context for Service System 1

Access, Adapt and Integrate Resources

Service System 1(Firm)

Value-in-UseDerived Value

Service System 2(Customer)

Value-in-UseDerived Value

Value-in-Context for Service System 2

Access, Adapt and Integrate Resources

Service System(Public)

Service System(Private)

Service System(Market-facing)

Service System(Public)

Service System(Private)

Service System(Market-facing)

Value-in-use

Valueco-creation

SIMPACT–T5.1|25

AlthoughVargoetal.(2008)oftenrefertoaservicefirmandaservicecustomer

(seeFigure8),theymentionthatwecanalsoconsiderindividuals,groups,organi-

sations,firms,andgovernmentstobeservicesystems,oranyothersocialoreco-

nomicactorthatcantakeaction,applyresources,andworkwithothersinmutually

beneficialways.Thischaracterisationverymuchappliestothewiderangeofstake-

holdersinSI.

In theservicedominant logic, the firmcannotdelivervalue,butonlyoffervalue

propositions(Table6).‘‘[T]hereisnovalueuntilanofferingisused–experienceand

perceptionareessentialtovaluedetermination’’.Thisimpliesthatofferingsmustbe

integratedwith theresourcesofothermarket-facing (i.e., fromotherfirms)and

non-market-facing(e.g.,personal/privateandpublic)resourcesforvaluetobecre-

ated.Vargoetal.(2008)providetheexampleofacargainingitsvalueonlythrough

thecombinationofthemanufacturer’sproductionprocesses(includingitssupply

chainandothermarket-facingelements)andthecustomer’sprivate(e.g.,driving

skills)andpublic(e.g.,roadways)resources.

Table6. Foundationalpremisesofservice-dominantlogic

Serviceisthefundamentalbasisofexchange

Indirectexchangemasksthefundamentalbasisofexchange

Goodsareadistributionmechanismforserviceprovision.

Operantresourcesarethefundamentalsourceofcompetitiveadvantage

Alleconomiesareserviceeconomies

Thecustomerisalwaysaco-creatorofvalue

Theenterprisecannotdelivervalue,butonlyoffervaluepropositions.

Aservice-centeredviewisinherentlycustomerorientedandrelational.

Allsocialandeconomicactorsareresourceintegrators.

Valueisalwaysuniquelyandphenomenologicallydeterminedbythebeneficiary.

Source:Vargoetal.(2008)

InthecaseofSI,whenapplyiingthe‘Service-DominantLogic’thesocialinnovator

cannotdelivervalue,butoffermultiplevaluepropositions(comparedtothesingle

valuepropositionaspresentedinFigure8)tothevariousstakeholderswhopro-

videinputsorfunding.Thesocialinnovatorsareresourceintegrators,whocreate

valuebycombiningtheinputs(Figure9).

Applyingtheconceptofusevalue(orvalue-in-use,orvalue-in-context)andtheser-

vicedominantlogicimpliesthatitisdifficulttomeasureandmonetisesocialvalue,

that is, thevaluethatnongovernmentalorganisations(NGOs),socialenterprises,

Valuevsvaluepropositions

Socialinnovatorsasresourceintegrators

Socialvalueinser-vicedominantlogic

26|SIMPACT–T5.1

socialventures,andsocialprogramscreate.InthewordsofMulgan(2010:41)“So-

cialvalueisnotanobjectivefact.Instead,itemergesfromtheinteractionofsupply

anddemand,andthereforemaychangeacrosstime,people,places,andsituations”.

TheinteractionbetweenthedemandforSIandthesupplyofSIisnotmediatedby

price(exchangevalue).InthisrespectwecanrefertoLundvalls’(1992)theoryon

interactivelearningbetweenproducersandusersofknowledgeandinnovations.

Witholdtraditionalsolutionsboththeproducersandusersofthesolutionshavea

reasonable ideaabout theresultsand thevalue thesolutionwillbring,butwith

new,innovativesolutionsthedemand-sideandthesupply-sidewillhavetointeract

and learn fromeachother inorder to transformthe innovationandreach toan

improvedresult/value.ThisishoworiginalprototypesofSIgetchangedintomore

matureSIs,andhowSIsarediffused(orscaled-out)tootherusersandsituations.

InthecaseofVoorleesExpressandGranny’sFinest(seeAppendixTextboxI)the

proto-typeSIhasbeendiffusedtootherlocationswhereithasbeenappliedina

differentcontext,withdifferentpartners,withdifferentneedsandpotential.There-

fore,theapplicationoftheSIandtheresultsandvaluegenerateddiffersfromplace

toplace.

Sincethereismoretobecommunicatedbeyondprice,auctionsareforinstancenot

a good tool topromote interactionbetweendemandand supply for SI.One can

thinkofothertoolstopromoteinteraction,suchasorganisingeventswheresocial

innovators canpresentnew ideas forwhich juriesandaudienceaward thenew

idea’swithprizes.InthecaseofGranny'sFinest(seetextboxinAppendix)winning

suchasocialenterpriseawardwasthemomenttheydecidedtostart-upandthey

usedtheprizemoneytopaytherentofthefirstlocation.

Figure9. ConceptualframeworkofSIasvaluecreation

Demand for SI

Supply of SI

INPUT OF

NEED OF Business Sector Civic/Thrid Sector Public Sector

Business Sector Civic/Thrid Sector Public Sector

SIInteraction

Economic & Social Value

Output/Imapctof SI

Interactionbetweendemand&supply

SIMPACT–T5.1|27

AsexamplesofhowdemandandsupplyforSIcanexplaintheemergenceofSIand

thevalueitgenerates,werefertolocalinnovationstrategiesofmetropolitanareas

suchasStockholm,Hamburg,orAmsterdam,whichhaverelativelyhighsharesof

immigrantsandtheireconomicgrowthorientedinnovationstrategiesemphasise

thatwhentheywanttomaintaintheirinnovativecompetitivenessthatSIisneeded

toforinstancepromotetheintegrationofimmigrantsandthedevelopmentoftheir

capabilities.

Alsoafterthestart-upofVoorleesExpressandGranny’sFinest(seeAppendixText-

boxI) thedemandandsupplyconditionsexplainthediffusionoftheconcerning

SIs. ForVoorleesExpress an important supply-factor is the availability of volun-

teers;e.g.inthesouthernprovinceofLimburgithasprovenmoredifficulttosetup

suchlocalorganisationofvolunteers.ForGranny’sFinestitisimportanttobelo-

catedatanurbancarecentre(asco-funder)wheremanyelderly(effectedbylone-

liness)areconcentrated,whocaneasilyreachthecentre.

Onthedemand-sidethemarketfortheSIofferedbyGranny’sFinestalsoconsists

ofthecivic(consumer)demandforthesocialfashionproductswhichareknitted

byandreducesthelonelinessoftheGranny’s.Thedemandalsoconsistsofthede-

mandfromthelocalcarecompaniesforinnovativesolutionstoidentifyandengage

futureclientsinlonelinessreducingactivities.Theinterestorobjectiveofthelocal

governmentsisinthepositiveexternalitiesfromthesocialactivitiesonthehealth

and independency of the involved elderly,which could save public expenditure

budgets.

3.4 WhattoMeasureorIndicate?

Sincetherelationbetweensocialinnovatorsandtheirtargetedbeneficiariesissel-

domamarketrelationinwhichthebeneficiariespayfortheservicesascustomers

orconsumers,itisdifficulttomonetisetheexchange.Followingthetwopossible

optionsusedbymacro-economicstoestimatetheinvolvedincreaseinintangible

capitalwecouldeitherfollowtheexpenditure-basedestimatesofintangiblecapi-

tal,ortheperformance-basedestimate.Afterdiscussingtheproblemswiththe’10

bestwaystomeasureSocialvalue’Mulgan(2010)suggesttotaketheexpenditure

option (which he defines as ‘effective demand’) more serious. One of the ad-

vantages is that fundingandbudgetdata forSI isoftenmoreeasilyavailable,at

leastasthemeso-leveloforganisationsandprogrammes.Atleastthisexpenditure

datatellthatsomeone,suchaspublicagency,individualcitizens,orfoundation,is

willingtopayfortheoutcomes.

Asseenintheprevioussection3.3.3,thecreationofusevalueisanintegralpartof

SI.This interpretationof thevalueofSIdiffers fromtheoneused in theTEPSIE

Localinnovationstrategies

Expenditure-vsper-formance-basedesti-mates

28|SIMPACT–T5.1

reportonmeasurementofsocialeconomiesinEurope,wheretheauthorsdepart

fromthenotionthatSIsareinprinciple“valueneutral”(Hubrichetal.,2012).As

explained,wefollowtheideathatSIshavea"value-in-use",whichisalsoapparent

intheconceptofsharedvalue(KramerandPorter,2011).

PorterandKramer’sconceptofshared,socialvaluecreation(CreatingSocialValue)

isinspiring,andeventhoughitisclearlyanextensionofCSR(CorporateSocialRe-

sponsibility)principlesthereareanumberofelementswhichcanbetransferredto

SIbysimplyreplacing“corporate”by“society”(Figure10).

Figure10. TheCreatingSocialValueSpace

Source:PorterandKramer(2011)

Inthecontextofmeasurement,therealisationthatsocialneedsrepresentthelarg-

estun-servedmarketopportunitycombinedwiththerealisationthat(social)en-

trepreneurs,andperhapssocietyatlarge,needtocombinetheeconomicvaluewith

thesocialvalueofSIinordertoachievesustainabilityareatthebasisofthiscon-

cept.

Althoughweagreewiththeimportanceofsocially/missiondrivenorganisationsas

akeyactorinSI,asindicatedintheTEPSIEreport,wedoseetheseorganisations

asoneofmany(ThirdSector)actorsinthecivic,publicandprivatesectordomain

systemofSI.

InarecentpaperbytheOECD(2015),onfinancialinvestmentforsocialneedsand

impactmeasurement,anoverviewofplayersincludingthosefromtheThirdSector,

ENERGYUSE

SUPPLIERACCESS &VIABILITY

ENVIRON-MENTALIMPACT

COMPANYPRODUCTIVITY

WATERUSE

EMPLOYEESKILLS

EMPLOYEEHEALTH

WORKERSAFETY

- Social deficits and environmental impact create economic costs for companies

- Community weaknesses affect company produc- tivity

- Social needs represent the largest unobserved market opportunity

SIMPACT–T5.1|29

andtheirdemandandsupplyregardingfunding,havebeendescribedandvisual-

ised(Figure11).

Figure11. Socialimpactinvestmentmarketframework.

Source:AdaptedfromOECD,2015

!!!!"

SUPPLY SIDE- Governments- Foundations- Industrial investors- Philantrophists &

Family offices- Social venture funds- Retail

DEMAND SIDE INTERMEDIARIES- Social enterprise- Charities- Non-profit & Social

purpose organisations

- Co-operatives- Mutuals

- Social banks- Social investment

wholesale banks- Community Development

Financial Institutions- Social exchanges- Funds

Social Needs

Enabling Environment

Ageing, Disability, Health, Children & Families; Public Order & Safety, Affordable Housing, Unemployment

Social Systems, Tax Laws, Regulatory Environment, Financial Market Development

30|SIMPACT–T5.1

4 INDICATORSONSOCIALINNOVATION

4.1 SocialInnovationMeasurement

Much like the complainton “vagueness” thatwasmentionedby someof the re-

viewedauthors,insection3,onthedefinitionofSIwecanechothesameforthe

measurementofSI.AlthoughtheenvironmentinwhichSIfindsitplacemightnot

whollyconformtothepositivistviewofrationalandobjectiveaccountingtherecan

benodenyingthatinanopensocietythereistheneedforaccountabilityoforgan-

isationstowardstheirstakeholders.Acknowledgingthisrequirementfortranspar-

encytherehasbeenapushtocreatemeasurementframeworksforuseinanadmit-

tedlydifficultaccountingenvironment,whichdoesnotadheretothenormaleco-

nomic,andstatisticprinciples.

Althoughthereareseveralsourcescitingtheoretical frameworks forameasure-

menteffort atmacro level, inpractice thereare fewattemptsmadeempirically.

Among the most noteworthy academic efforts, are project related activities to

whichwehavealreadyreferred,suchasTEPSIE:Theoretical,EmpiricalandPolicy

FoundationsforSIinEurope,CRESSI:CreatingEconomicSpaceforSI,andITSSOIN:

‘ImpactoftheThirdsectorasSI’.However,mostempiricalworkisdonead-hocat

themeso-levelofprojects,anditismostlydonebyconsultants.StatisticsonSIas

suchdonotexistjet.InthischapterweaddressindicatorsofSI,butfirst,wegoback

inthepastbygivinganoverviewonmeasurementofmoretraditionalformsofin-

novation.

Themeasurement of (economic/industrial) innovation has been researched for

somedecadesnowandweshouldfirsttakealookattheliteraturewhichresulted

fromthisresearch.AfterinstigationofSchumpeterseveralstepsweretakenwhich

ledtoNelsonetal.’s(1962)“RateandDirectionofInventiveActivity”inwhichfore-

most Kuznets’s article “Inventive Activity: Problems of Definition andMeasure-

ment”isquiteapplicabletoourcurrentproblem.Inconsecutivewavesmorework

wasdonewhichultimatelyledtothepublishingoftheOECDFrascatiandOsloMan-

uals(resp. 1994and1997).Bothmanualsnowcountasdefinitesourcesforthe

collectionandinterpretationofinnovationandR&Drelateddata.Itwouldthere-

forebeopportunetohaveanideaoftheapproachtakenbythesemanuals,inpar-

ticularbytheOsloManualwhichfocusesdirectlyonthemeasurementofinnova-

tion(anditsdifferentfacets).

SIMeasurement’svagueness

Measurementofeconomicinnovation

SIMPACT–T5.1|31

The Oslo Manual details five types of innovations as proposed by Schumpeter

(1912):

1. Introductionofnewproducts.

2. Introductionofnewmethodsofproduction.

3. Exploitationofnewmarkets.

4. Creationofneworganizationalstructuresinanindustry,

5. Developmentofnewsourcesofsupplyforrawmaterialsorotherinputs.

Obviously,thistypologyisalmostexclusivelyfocusedonindustrial/economicin-

novations.However,thisdoesnotexcludetheinformativevalueandinsomecase

directtranslatablenatureofthistypology.AswealreadyhaveseenSIsunlockser-

vicesandmarketsformarginalisedcommunities.SIsalsoaimatbuildingcapacities

(andcapabilities)whicharedirectedatsolvingsocietalproblems.Lastly,SIsfocus

onprocesses involved inorganisingand facilitatingnovelwaysof (social)work,

socialaction,andadjustmentstosocialstructure.Hencewecouldrewritethety-

pologyasfollows:

1. Introductionofnewsocialproducts(BonchekandChoudary,2013)

2. Development/buildingofcapacitiesandcapabilitiesdirectedatsolvingsoci-

etalproblems

3. Creation of new, and adjustments to existing, market/social structures

(Swedberg,1994)directedatimprovingaccesstosuchmarket/socialstruc-

turesformarginalisedcommunities.

4. Introductionofneworganisationalprocessesaimedat(social)workandso-

cialaction

5. DraftinginnewsocietalplayersintheSIeconomicframework.

Althoughindirectlyrelatedtoourgoals,andfocusedontheinvestmentframework

foraddressingsocialneeds, theaboveFigure11doesgiveusaclear ideawhich

indicatorsanddata-pointscanbeenvisagedtoplayanimportantroleinourmeas-

urementframework.Wecanseesupplyanddemandsideactorsaswellastheser-

vices/productsforwhichinvestmentisnecessaryintermsofsocialneedse.g.soci-etalproblems.ThisframeworkcanbemergedwithourSIstypologybylookingat

the characteristics of each of the market frameworks’ main influencing actor

groupsandenvironments.

Typesofinnovation

Typesofsocialinnovation

32|SIMPACT–T5.1

4.2 Information&DataforSIMetrics

As seen in theprevious chapterwe find that themeasurement of SI is all but a

straightforwardexercise.Inconstructingaframeworkformeasurementweshould

takecare to includeall theearliermentionedaspects.However, it ispractical to

departfromtheexistingdatasourceswherewecouldfirsttakeinthepossibletra-

ditionaleconomicactivitymetricssuchasturnover,expenditureandemployment

inthesector.Athirdandforthissectoruniquemetricwouldbethemeasurement

ofvolunteerinputintermsofmanpowerandtimeexpendedonvolunteering.Next

tothesetheThirdSectorhasanotherquantifiableactivity,whichisatadmoredif-

ficultasitismadeofdifferentcomponentsandevendiffersperNPO:income(An-

heier,2004).Incomeinthissectorisofcoursequantifiablethroughmeasuringdo-

nated funds, however there are twomore possible income flows; subsidies and

saleswhicharepotentiallymeasurable(Salomon&Anheier,1996).

The“usevalue”fromtheseactivities,however, is lesseasilymeasurable,at least

not inthetraditionalway.Ethical,environmental,humanrights,communityand

societalbenefitsarealllesseasilyvisibleandmeasurableastheyconcernnon-fi-

nancialandnon-physicalresourcesbuttheyarethemaincontributorstohuman

welfareorbettersaidwell-being.Butevenifthisusevalueisnotdirectlyvisible

therearestilldataandinformationthatcouldbegatheredonimportant“Usevalue”

componentssuchas:

• trustingovernment,institutions,policies,thirdsectorinitiativesand

communityactions(Nicholls,2009);

• interestin,andrecognitionof,theneedsofmarginalisedcommunities;

• capacitiesto,resolveproblems,addressneedsandconflictinginterests,

andactonemergingconflicts;

• participationincommoncauses,workingforthecommongood.

Thesedatacanbetranslatedintometrics,but,itmustberememberedthatthese

metricsandtheirderivedindicatorsarecontextsensitiveandoftenaddressspecific

societalconcernsandstakeholderneeds.

Societalconcerns/stakeholdersneeds SourcesofInformation Metrics

Well-being Poverty,health,education,empowerment,discrimina-tion

PovertyreductionImprovementinaccesstohealthcareIncreasingeducationalattainment(formalandinformal)Genderbiasreductionthroughtheempow-ermentofwomenEliminationofgender/education/income-baseddiscriminationandmarginalisationofdisadvantagedcommunities

Existingdatasourcesaspointoforigin

Measuringusevalue

SIMPACT–T5.1|33

Societalconcerns/stakeholdersneeds SourcesofInformation Metrics

Participation Socialprogramsandactions Numberofpeopleconsulted,numberofparticipants,durationofparticipation

Inclusiveness Inclusion/exclusionofbenefi-ciaries;Geographical,gen-der,educational,andsocialrepresentativeness

Numberofbeneficiariesperterritory,gen-dergroup,educationalattainmentgroup,andorothersocialgroupingspecifictothecontext.

Transparency Accesstoinformation,free-domofspeechandpress,butpossiblyalsocorruption

Numberofnewsoutletsetc.,freedomofspeechmetrics,corruptionmetrics

Accountability Socialresponsibility,visiblethroughinternalandexter-nalreviewsandaudits

Numberofauditsdoneperproject,feed-backandresponserates.

Efficiency Proceduresimplementedtoimproveefficiency;reducecost,increaseaccessibilityandencouragestakeholderinvolvement

Numberofbeneficiariesinvolved,moneysexpendedandaccessibilitybeforeandafterimplementationoftheprocedureorim-provement.

Effectiveness Input,through-putsandout-putsusedformeetingthein-tendedtargets(suchasin-creasedwell-being)

Numberofinterventionsandprogramsstartedunderaproject,Nr.ofbeneficiariesreached(withapositiveoutcome),etc.

Quality QualityassuranceinSIser-vicesandproducts,expecta-tionsandsatisfactionlevelsofstaff,stakeholdersandbeneficiaries

Existenceofprotocols,feedbackfromstaff,stakeholdersandbeneficiaries

Table7. Aneeds-solutionsmeasurementframework

BasedonworkdonebytheCGG(2005),theabovetablesummarisestheseoutlined

concernsandneedswhilerelatingthemtothepossiblesourcesofinformationand

themetricthatcouldresultinameaningfulindicator.

4.3 Micro-levelofSI,Innovators,Beneficiaries&Initiatives

TheinformationandrelationshipsbetweenSIComponents,Objectives,andPrinci-

plesasshowninTable3,andtheargumentsfurtherlaidoutinchapter3bothun-

derlinethatSIhastobeanalysedinaholisticwaywhichdoesnotonlyfocusonthe

organisationperformingtheSIbutalsoconsideritsembeddednessinasocio-eco-

nomic,politicalandculturalcontext.Forinstance,theconditionofthewelfarestate

inwhichanSIemergesandoperatesdeterminestoa largedegreetheproblems

(market failures,welfare state imperfections)and the targetgroups thatSImay

tackle,andthewaysinwhichthesecanbetackled.Tothisend,SIMPACTdistin-

guishesthreedimensionsofSIs,objectives,principlesandcomponents(seeabove).

34|SIMPACT–T5.1

Nevertheless,thecasestudiesexaminedinWP3oftheSIMPACTprojectillustrate

thatthereareanumberofproblemsthatemergeattheleveloftheSIorganisation

itself,namelyproblemsinsecuringthesustainabilityoftheorganisationthatper-

formstheSI.Thisobservationcallsforanumberofindicatorsthatmeasureperfor-

mance and impact of SI at themicro-level. To this endwe refer to thebusiness

modelcanvasofOsterwalder&Pigneur(2010)whichhasalsobeenunderlyingthe

analysisofcasestudiesinWP4.

ThecurrentresultsofSIMPACT(WP3&4)illustratethatmanySIstendtoidentify

targetgroupssolelyby thesocialneed that theyaimtoaddressbutdonotcare

(much)aboutthesizeofthesegroups,howtheycanbereachedbest(ataffordable

costs),andtowhatextentthesegroupsmayallowforscaling,whichincludesan

assessmentofthemarketsizeandtype(e.g.itsgeographicalscope).Finally,given

the focus on the social need, questions like the purchasing power of the target

groups or the identification of additional target groups to which SI services or

goodscanbesoldareoftenneglected.

MostSIshaveparticularstrengthsintheidentificationofsocialproblemsthatare

notsolvablebymeansofthemarketorthewelfarestate.However,theresultsof

SIMPACTsuggestthatmanySIstendtowardsconsideringtheirsolutionasaunique

andisolatedserviceanddonotconsiderwhatalternativeorcomplementaryser-

vicesareorcanbeprovidedbyotheractors.

ThenarrowperspectiveonthesocialmissionthatcharacterisesmanySIsalsoaf-

fectsthevalueproposition.Asexplainedinsection3,forSIs,usevalueistypically

more important than exchange value. However, every organisation that creates

goodsorserviceshastoachieverevenuesatleasttocoverthecoststhatareinevi-

tablyalignedwithsuchanendeavour.Asexplainedinsection3,co-creationplays

animportantroleforSIstorealisevalue.Therefore,itappearsnecessaryforSIsto

identifyco-creationpartnersthathelptotransformthesocialvalueorusevalue

proposedbytheSIintoexchangevaluethathelpstheSItogeneratelong-termrev-

enues.Theseco-creationactorsarenotnecessarilylimitedtothetargetgroupsof

theSI’ssocialmission.Exchangevaluecanalsobeco-createdbythewelfarestate,

bycommercialcompaniesorbyothersocialactors,suchasfoundations.Manyhy-

brid SIs provide examples for this co-creative transformation of use value into

(monetarisable)socialvalue.

AsthecasestudiesofSIMPACThaverevealed,manySIsarenotawareoftheirde-

pendenceoncertainpartnersandof therisks the initiative isalignedwith.This

unawarenessoftenresultsinproblemstooptimiseprocesses,decision-making,re-

sourceallocation,qualityassuranceandtofindanadequatelegalformfortheSI.

Problemsinsecuringsustainability

Definitionoftargetgroupsbyso-

cialneeds

SIsemphasisesocialmission

SIMPACT–T5.1|35

Finally,theregulatorycontextinwhichtheSIevolvesisadecisivefactorfortheSI’s

successandsustainability.However,inmanycasesthiscontextisonlyconsidered

withregardtofailureswithinthiscontext(definingthesocialproblemtargetedby

theSI)buthardlywithregardtoresourcesprovidedbythiscontext.

Regardingobjectives,micro-levelindicatorsofSIshouldprimarilyeasetheassess-

mentofthesustainabilityandimpactoftheSIwithregardtothetargetgroups,the

socialproblemthatcharacterisesthem,andthevalueproposition/noveltyintro-

ducedandofferedbytheSI.

Micro-levelindicatorsoftheeconomicimpactandsustainabilityofSIsattheobjec-

tiveslevelshouldcoverthefollowingaspectsandquestions:

• Goaldefinition:Whatisthesocialproblemaddressedandhowpersistentisit?TowhatdegreehelpstheSItosolvetheproblem?Whataretheshort-

term,mid-termandlong-termgoals?

• Costs:IsthereaclearcostcalculationofallactivitiesandplansoftheSI?

• Exclusiveness/complementarity: Do other actors address the socialproblemidentifiedbytheSI?Ifso,aretheofferingsoftheseotheractors

competitiveorcomplementarytotheofferingsoftheSI?

• Outcomes:HowmuchwouldtheorganisationearnfromtheactivitiesoftheSI? Howmuchwouldthewelfarestateorcompaniesorothersocial

actors benefit (e.g. in form of savings or reaching formerly unreachable

groups)fromtheactivitiesoftheSI?

Regardingprinciples,micro-levelindicatorsofSIshouldprimarilyeasetheassess-

mentoftheorganisationalcontextoftheSI,itsprocesses,itseffectivenessandeffi-

ciency,anditsbusinessmodelandgovernance.AsthecasestudiesofSIMPACThave

revealed,manySIsarenotawareoftheirdependenceoncertainpartnersandof

theriskstheinitiativeisalignedwith.Thisunawarenessoftenresultsinproblems

tooptimiseprocesses,decision-making,resourceallocation,qualityassuranceand

tofindanadequatelegalformfortheSI.Micro-levelindicatorsoftheeconomicim-

pactandsustainabilityofSIsattheprincipleslevelshouldcoverthefollowingas-

pectsandquestions:

• Organisationaldependencies:Whatlegalformhasbeenchosenbywhichcriteria?Onwhatpartners/externalactorsdoestheSIrely?Aretheroles

oftheseorganisationsclear?Isthereawarenessof/aplanforhowtherela-

tionships to these organisations change over time? Are theremeans or

planstoreducethedependencyonexternalorganisations?

• Technologicaldependencies:DoestheSIrelyonanytechnologicalinno-vation?

Regulatoryframe-workasdecisivefac-tor

Objective-relatedSIindicators

Principles-relatedSIindicators

36|SIMPACT–T5.1

• IPR:DoestheSIhave(thepotentialfor)ownershipofanyintellectualprop-erty?DoestheSIrelyonIPRofthirdparties?

• Organisationaldevelopment:Aredevelopmentstagesdefinedandcrite-riaidentifiedthathelptodecidewhentheSIshouldmove(inbothdirec-

tions)fromonestagetoanother?Arethereclearrulesfordecision-making

andconflictresolution?

• Scale:Howmanypeopleareaffectedbyit?

• Scope:What is the geographical scope of the target groups that can beservedbytheSI?

• Scaling:IsthereanopportunityforscalingtheSIupordownifthe“mar-ket”conditionschangeovertime?

• Riskassessment:Arepotentialrisksidentifiedandmitigationstrategiesdeveloped?

• Sustainability/revenues:Can(apartof)thetargetgroupspayforgoodsorservicesofferedbytheSI?Isthereanadditionaltargetgroupthatcan

affordpayingfor(additional)goodsorservicesprovidedbytheSI?Would

publicauthoritiesorfoundationsfinancetheSI?Forwhatperiodoftime

andwhatpurposeswouldpublicfundingorfundingfromfoundationsbe

available?IsthereaplanhowfinancingoftheSImaychangeovertime,at

differentdevelopmentstages?

• Qualityassurance:Aretheremeans(e.g.userfeedback)toevaluatequal-ityoftheprovidedgoods/servicesandtoimprovequalityifnecessary?

• Monitoring:AretheremeansinplacethathelptheactortomonitorandevaluatethedevelopmentandoutcomesoftheSIwithregardtoitsobjec-

tives?

Regardingcomponents,micro-levelindicatorsofSIshouldprimarilyeasetheas-

sessmentoftheregulatorycontextoftheSI.Regulatorylimitationsandopportuni-

tiesareatthefocusinthisregard.Micro-levelindicatorsoftheeconomicimpact

andsustainabilityofSIsatthecomponentslevelshouldcoverthefollowingaspects

andquestions:

• Regulatoryactors:Haveregulatoryactorsbeenidentifiedandhastheir(potential)role(supporting/hampering)fortheSIbeenclarified?Arecon-

ditionsunderwhichsupport fromtheseactors isprovidedorrefusedor

discardedclarified?

• Policycoherence:DoestheSIexplicitlydirectlyaddressobjectivesortar-getsidentifiedinlocalornationalpolicyframeworks?DoestheSIcontra-

Component-relatedSIindicators

SIMPACT–T5.1|37

dictsuchpolicyframeworks?IstheSIawareofthecriteriabywhichpolit-

icalactorswouldevaluatethesuccessoftheSI?WouldtheSIbeallowedto

affectsuchpolicyframeworks?

SIsareusuallyawareoftheimportanceofthepolicycontextinwhichtheyoperate,

thoughmostlywithinalimitedperspective.ManySIsrespondtosocialproblems

thatarenotefficientlyaddressedbysocialpolicyandformanySIspublicbodies

playavitalroleforfinancing.However,hardlyanySIundertakeseffortstosystem-

aticallyevaluatingitspolicycontextwithregardtothesupportivenessoftheor-

ganisationsgoalsandbusinessmodel.

AstheresultsofSIMPACTshow,publicpolicyisexcessivelyfocusedonshortterm

funding,quantifiableoutcomes,politicalfashionandmediaimpact(Totterdilletal.,

2015).Thisoftenresultsinlimitedimpacton“landscapechange”,weakcorecapac-

ity in NGOs, a preference for bureaucracy instead of policy entrepreneurship, a

dominanceoftransactionalinsteadoftransformationaldialogue,fewspacesforin-

novation, conservative interventions, and the undervaluation of intangible out-

comes(ibid.).AnSIshouldthereforecarefullycheckitspolicycontextwithregard

tofollowingaspects(Totterdilletal.,2015):

• Arepublicorganisationsfirforpurpose,especiallywithregardstoorgani-

sationalstructures,staffempowermentandentrepreneurialbehavior?

• Aremodesofpolicyproduction(bureaucratic,programmaticoropen)fit

forpurpose?

• Areserviceusersconsideredasactivepartners?

• Does the relation between public bodies and the SI allow for creating a

sharedvision,acommonunderstandingofeachpartner’srole,andtrans-

formationaldialoguethatvaluesdifficultquestionsandallowsfortaking

risks?

Anexampleofapracticalapproachincorporatingtherequirementslaidoutabove

isprovidedbytheNewEconomicsFoundation(NEF).Theypresentanarrayofin-

dicators4onmicro andmacro levels.The indicatorsprovided target individuals,

communities,theenvironmentandtheeconomy.

Attheindividuallevel,NEFsuggestedthatindicatorscover;well-being,skillsde-

velopment,health,andhigh-riskbehaviour. Inorder tomeasureasocial inven-

tion’simpactonanindividual’swell-being,NEFsuggestsamodelofwell-beingwith

twopersonalandonesocialdimension.Thepersonaldimensionsarepeople’ssat-

isfactionwiththeirlives(includingwork)andtheirsenseofpersonaldevelopment.

4 http://www.proveandimprove.org

Publicpolicy

Example:NewEconomicFoundation

38|SIMPACT–T5.1

Thesocialdimensionshallcapturepeople’ssocialwell-beingasindicatedby“be-

longingtotheircommunities,apositiveattitudetowardsothers,feelingthatthey

arecontributingtosocietyandengaginginwhatcouldbecalled‘pro-socialbehav-

iour’.”

People’sownassessmentoftheirsatisfactionwiththeirlifeisafundamentalindi-

catorforallsortsofmethodsgearedtowardsmeasuringpeople’swell-being.Such

measuresareusuallyaccompaniedbyquestionsabouttheextenttowhichpeople

areaffectedbyfeelingsoffear/anxiety,guiltiness,sadness,happiness,excitement,

confidenceorinterestedness5.

Finally,accordingtotheNEF,indicatorsofwell-beinghavetoincludeameasure-

mentoftheextenttowhichpeoplefeelthemselvesbelongingtoacommunitywhich

memberstheytrustandtowhichtheycontribute.Alsodesirablearetheadditions

of a number of questions capturing people’s relationships to partners, family,

friends,andotherpeople,aswellasquestionstomeasurepeople’ssatisfactionwith

theirjobs,voluntarywork,leisureactivities,andtheirperceivedfeelingofsafety.

InordertomeasuretheimpactofanSIonanindividual’sskillsdevelopmentand

profile,e.g.throughtrainingcoursesthataimtoincreasetheindividual’sattractive-

nesstoanemployerandofitsself-confidenceandwell-being,NEFsuggestsarange

ofquestionsthatshouldhelpdemonstratingthatachangehashappened.

Thesequestionscoverincreasingpeople’sskill/competenceinsocial interaction,

increasingpersonaleffectivenessandaptitudeandlifeskills,andincreasing‘basic’

workskillsandattributes:

1. Indicatorstargetingpeople’sskillsandcompetenceinsocialinteractionask

for:

• Relationshipswithpeers

• Relationshipswithpeoplein‘authority’positions

• Abilitytoworkinateamwithotherpeople

• Increaseinsocialnetworks

• Increaseintoleranceofothers’differences.

2. Indicatorsofpersonaleffectivenessandaptitudeandlifeskillsaskfor:

• Improvedabilitytoplan

• Improvedabilitytoprioritise

• Abilitytoreasonverbally

• Numericalreasoning

• Increasedproblem-solvingskills

5 Amethodological“gap”notidentifiedbyotherinitiatives,andaddressedbyusinsection6.

Peoples’skills&competence

SIMPACT–T5.1|39

3. Indicatorsof‘basic’workskillsandattributesasfor:

• Attainmentofbasicliteracy(reading,writing)

• Basicnumericalskills,includingabilitytomanagemoney

• Timekeeping,reliability

• Abilitytocompleteforms

• CompletionofaCV

• Improvedpresentationskills

• Appearancesuitabletotheworkplace

Giventhecomplexityofpeople’shealth,forhealthindicatorsNEFsuggestsacom-

binationofself-reportedanddirectlyobservedindicators inordertogetamore

holisticpictureofaperson’sphysicalormentalhealth,includingphysicalandmen-

talhealthaswellasanindividual’sprivateandsocialbehaviours(e.g.substance

abuseandpreventivemeasure) thataffect theirhealth. Indicators in this regard

mayaskfortheperson’sratingofhis/herhealth,visitstoGPorothermedicalcare,

weight(gainedorlostasneeded),improvementofconditionthatwaspresentupon

referralorentrytotheorganisation,orforspecificproblemssuchastiredness/fa-

tigue,poorappetite,nauseaandthelike.

Furthermore,indicatorsmeasuringpeoples’highriskbehaviourcoverpatternsof

behaviourthatresultinharmtothemselvesortootherpeople.Suchpatternsmay

beexpressedthroughdrugoralcoholabuse,riskysexualbehaviour,orbehaviour

alignedwithpoorlivingconditions(e.g.homelessness).

TheindicatorssuggestedbyNEFrefertoanumberoftestedandpublicallyavaila-

blemethodsand instruments, suchasNEF’swell-beingmanifesto, theMaudsley

AddictionProfile(MAP),andtheChristoInventoryforSubstance-misuseServices

(CISS) Manyoftheseindicatorsmeasurepeople’swell-beingthroughaseriesof

questionsthatmustbeansweredbytherespondentsonaLikertscale.

4.4 Macro-levelofRegions&Countries

Economic metrics and the resulting indicators at the macro level are normally

abundantandofhighqualityatthenationallevelintheformofnationalaccounts

andothermorededicatednationaldata.Thisisespeciallytrueformost,ifnotall,

EuropeanUnionmemberstatesandOECDmemberstates.InrecentyearstheEu-

ropeanUnionandtheOECD,havebeengearingtheirdatacollectionmoreandmore

towardsregionalcollectionofwhichthewell-knownNUTSclassificationisanex-

ponent.TheuseofsurveysuchastheCommunityInnovationSurvey6,fortheEu-

ropeanUnion,anditsspin-offinnovationpanelsinseveralother(OECD)countries

6 SeeEUROSTAT:http://ec.europa.eu/eurostat/web/microdata/community-innovation-survey

Self-reported&directlyobservedindicators

Patternsofbehaviour

Nationalaccounts

40|SIMPACT–T5.1

havealsoproducedhighqualitydataonthedynamicsofinnovation.Thesemetrics

areused, amongothers, in scoreboards like theUnion InnovationScoreboards7,

capturinginnovationusingabroadeconomicframework.

Asmentionedthroughoutthisreportthecapturingofthesocialdimensionofinno-

vationhasnotbeenanintegralpartofthiseffort,butwehavealsoseenthepossi-

bilitiesforafutureinclusion.Thiscouldbeaffectedbytheinclusionofmetricsfrom

surveyssuchastheonefeedingtheOECDBetterLifeIndex8,ortheEuropeanSocial

Survey9.Thislastsurveyalsousesamixedmethodologywhichpotentiallycouldbe

thewayforwardincollectingcontextualdataonthesocialdimensionofinnovation

whilstpreservingtheearliereconomicfocus.

TheprojectITSSOIN: ‘ImpactoftheThirdsectorasSI’ takesaskeyindicatorsto

measurethepotential(supply-side)ofSIthesizeofthethirdsectorandtheshare

ofvolunteersinthethirdsector(Table8).

Table8. Paidemployeesandvolunteersasashareofthirdsectorworkforce(FTE),in%

Country(Year) Paidemployees(%) Volunteers(%)Changepaidemployees

(sinceyear)

CzechRepublic(2011) 79 21 +18%(2005)

France* 65 35

Germany(1995) 62 38

Netherlands(1995) 62 38

Spain(2002) 59 41 -9%(1995)

Median 59 41

Denmark(2004) 56 44

Italy* 55 45

UntitedKingdom 50 50

Sweden(2002) 22 78 +/-0%(1992)

(*)Countrydataisbasedonestimatesinunpublishedmaterial

Source:Anheieretal.(2014)

Perhapsthemostcomprehensivesetof indicatorsforSIatmacrolevelhasbeen

suggestedbytheearliermentionedTEPSIEproject.However,inpracticeitstillis

toalargeextendawish-listforindicators,sincedataisnotavailableforeverycoun-

tryinEurope,andthedefinitionsoftheavailabledataareoftennotcomparable.

ThequantificationeffortforSIwillneedtofallbackonthemorereadilyavailable

7 SeeEuropeanCommission:http://ec.europa.eu/growth/industry/innovation/facts-figures/score-

boards/index_en.htm

8 SeeOECD:http://www.oecdbetterlifeindex.org/

9 SeeNorwegianSocialScienceDataServices(NSD)and:http://www.europeansocialsurvey.org/

Macro-levelindicators

SIMPACT–T5.1|41

metrics,whichcanbeadaptedand interpreted foruse ina “landscaping” todis-

coverthepotentialandpropensitytoSociallyInnovateintheEU28.Inadditionto

theTEPSIEframework,wewouldliketogivemoreattentiontothedifferencesin

thedemandforSI,whichintheTEPSIEmodel(whichisfocusingonthesupply-side

ofSI)hasbeenhiddenunder‘frame-workconditions’.

Table9. TEPSIEStructureoftheblueprintofSIindicators

FrameworkConditions

ResourcesFramework FinancialResources

HumanResources

InfrastructuralResources

InstitutionalFramework NormativeInstitutions

RegulativeInstitutions

Cultural-cognitiveinstitutions

PoliticalFramework PolicyAwarenessaboutSI

PoliticalEnvironment

SocietalClimateFramework SocialNeeds/DemandsasreferencepointforSI

SocialEngagement/Attitudes

EntrepreneurialActivities

InvestmentActivities ExpenditureinInnovationbySI

ExpenditureinInnovationbyPublicSector

Start-upsActivities Start-upsandDeathRatesofFirmsdedicatedtoasocialpurpose

BusinessEnvironmentforStartingaBusiness

Collaborative&NetworkActivities

Citizens’Involvementinsocialentrepreneurialactivities

ClusterDevelopment

OrganizationalOutput/Socie-talOutcome

Education EqualityOpportunities/Inequalities

SkillAcquisition

Health&Care Access/QualityofHealthFacilities

HealthStatus&Research

Employment Jobs&Earnings

Work&Life

Housing HousingSituation

Access&Quality

SocialCapital&Networks Frequency&Quality

SocialCohesion

PoliticalParticipation Voting&BeingInformed

Citizens’activeInvolvement

Environment Patents&Certificates

PreservationofNaturalCapital

Source:Krlevetal.(2014)

Still,mostofthesub-headingsofthisframeworkprovidethekeyindicatorsetto

measureSI.ThisframeworksuggestedbytheTEPSIEproject(Hubrich,2012)and

afollowuppaperbyKrlevetal.(2014)consistsofeconomic,sociallyorientated,

and more general (including technological and business) innovation oriented

42|SIMPACT–T5.1

macroindicators,(seeTable9).Inthenextparagraphthisindicator-sethasbeen

refined:e.g.more focusedonSI,and thedemand forSIhasbeencapturedmore

prominently.Moreover,indicatorshavebeenchosenforwhichdatahasagoodcov-

eragefortheEU.

4.5 SuggestedIndicatorSets

Thereisevenscopeforapplyinganindicatorsetattheregionallevel,forsomein-

dicatorsdataisevenavailableatNUTS3level.SinceSImostlytakesplaceinalocal

context,theregionallevelseemsveryrelevant.Alsotheinclusionofmorecontex-

tual,qualitativeandquantitative,dataisanoptionthroughuseofsourcessuchas

theearliermentionedEuropeanSocialSurveyandadeeperinterpretationofthe

dataprovidedbystandard,buthighlyrelevant,sourcessuchastheEUStatisticson

IncomeandLivingConditions(SILC)andtheEULabourForceSurvey(LFS).The

resultingindicatorsetofmacro-levelindicatorsispresentedbelowindifferentor-

ganisationalforms.

InTable10belowweshowacategorisationoftheSIcomponents,objectivesand

principlesaspresentedinsection3.2,andthesuggestedmetricsthatareableto

informontheseelementsofSI.

Table11displaysthesuggestedindicatorsetofmacro-levelindicatorsintheform

astheabovepresentedblueprintofTEPSIE.Themainindicatorheadingsreferto

economicandsocialresourcesorcapital:Labour,Financialcapital,PublicCapital,

Knowledge,SocialCapital,andHealth.SinceSIMPACTdoesnothaveathematicfo-

cusonSIsaddressinghealth,thislastmoduleislessrelevantfortheSIMPACTanal-

ysis.AdistinctionhasbeenmadebetweenindicatorscapturingSIpotential(orsup-

ply)andthoseindicatingSIneedsordemand-side,whichbothindicatestheobjec-

tives(asaimedoutput),butalsoservesasoutput-indicators.Alsoadistinctionbe-

tweentangibleandintangibleindicatorsismade.Thecontributiontothepotential

orneedsmaycomefromeitherthepublic,private,orcivic/thirdsector.

Inanexttable(Table12)thefocusisonthetangibleaspects,oratleastthoseas-

pectswhichcanbemonetised/capitalised,andtheyarepresentedinausetableor

asortofinput-outputtablewithSIenablersontheonesideofthematrix,andSI

beneficiariesontheotherside.

Table13displaystheindicatorquestionswhichhavebeenusedtostandardisethe

characteristicsofthevariousaspectsofSIatthemicro-(meso)levelofSIprojects

andcasestudiesastheyhavebeenempiricallycoveredbySIMPACTinworkpack-

age3.

SIMPACT–T5.1|43

Table14showsina2x2matrixthelinkbetweentheabovementionedsetofmacro-

indicators(forcountriesandregionsinEurope)andthemicro-levelindicatorscol-

lectedfortheSIcase-studiesofSIMPACT.Theindicatorsareagaindifferentiated

betweentangibleandintangibleaspectsofSI.

SIMPACT–T5.1|44

Table10. AcategorisationofSocialInnovationcomponents,objectivesandprinciples,andpossiblemetrics(usingexistingdatasources)

SOCIAL ECONOMIC POLITICAL

Description Metrics Description Metrics Description Metrics

SIComponents

TYPESOFSIACTORS Informal:e.g.citizensinitiatingcivilsocietyprojects;crowds;foundations

CrowdfundingAnalyticsWorldGivingIndexDAFNE;CharitiesandFounda-tionsdata

Socialentrepreneurs; ThirdSectorImpact;ITSSOINStart-ups:LMPexpenditurebytypeofaction:EUROSTATlmp_expsumm

Politicaldecisionmakersat: Publicemploymentstatisticspercountry,perministry.

Formal:NGOs,associations UnionofInternationalOrgani-sationsdatabase

For-profit-companies; Highgrowthenterprises(NUTS3)inNACERev2Q88:SocialWorkActivities:Euro-stat

Local,regional,national,Euro-pean,globallevel

Publicemploymentstatisticspercountry,perministry.

Education Educationalattainment:Euro-stat:Populationbyeduca-tionalattainmentlevel,sexandage(%);edat_lfs_9903Eurostat:Earlyleaversfromeducationandtraining;edat_lfse_14

Publicenterprises StructuralBusinessStatistics;EUROSTAT;t_sbs

PPPs WorldBankPPPinInfrastruc-turedatabase

SIRESOURCES Social/relationalcapital WorldValuesSurveyEuropeanSocialSurvey;NumberofvolunteersEUTaxandBenefitsdatabase:Peoplewantingtowork

Productionfactors:labour,capi-tal,land,knowledge.

Economicallyactivepopula-tionbysex,age,etc.EURO-STAT:lfst_r_lfp2acedu

Social&humanrights;Righttovote

HumanRightdata:HumanRightsWatch,CIRIHumanRightsProject.FreedomofInformationGenderequality;unemploy-mentbysex,jobmobility,Peopleatriskofpoverty;EU-ROSTATilc_peps01

Meansofprotest/leadership PewResearchCenter Ideologies PewResearchCenter

SIMPACT–T5.1|45

SOCIAL ECONOMIC POLITICAL

Description Metrics Description Metrics Description Metrics

SIINSTITUTIONS Culture EurobarometersurveyEUROPELIST:OnthesearchforaEu-ropeanculture

Markets Annualsectoraccounts:EUROSTAT:t_nasa

Educationsystem; Pupil-teacherratioinprimary,loweranduppersecondaryeducation.EU-ROSTAT;educ_isteNumberofeducationalinstitutionspercapitaetc.

Traditions Eurobarometersurvey Sectorrules OECDProductMarketRegulationStatis-tics

Welfaresystem;Lawsandpoliticalstructures;

Individualsreliantonsocialsecuritybenefits;

Conventions Eurobarometersurvey Milieus Participationrights WorldValuesSurveyEuropeanSocialSurvey

Legitimacy Eurobarometersurvey

SIObjectives

SIMOTIVES/OBJECTIVE(aimedimpact)

Empowerment; WorldValuesSurveyEuropeanSocialSurvey

Profitmaximisation Annualsectoraccounts:EUROSTAT:t_nasa

Welfaremaximisation

Participation; WorldValuesSurveyEuropeanSocialSurvey

Pareto-optimum Inclusion ESSindicators:TrustinParliamentTRSTPL,TrustinLegalSystemTRSTGLetc.

Socialcohesion WorldValuesSurveyEuropeanSocialSurveyPeopleatriskofpoverty&socialexlu-sion;EUROSTATilc_peps01

Dischargeofpublicbudget

Expenditureonsocialprotection,Structureofsocialprotectionexpendi-ture.Expenditureoncarefortheel-derly,etc.EUROSTAT;spr_exp_sum

Equity WorldValuesSurveyEuropeanSocialSurvey

Legitimation

SIPRINCIPLES

SIEFFICIENCY(dilemma’s) Unclearwhatefficiencymeans(inrelationtoeconomicandpolitical)

GovernanceEffectiveness/Efficiency;RegionalInnovationMonitorSurvey,indicatorRIM_GOV_EFF

Internalaswellasexternalefficiency

GovernanceEffectiveness/Efficiency;RegionalInnovationMonitorSurvey,in-dicatorRIM_GOV_EFF

Shorttermvslongterm

GovernanceEffectiveness/Efficiency;RegionalInnovationMonitorSurvey,indicatorRIM_GOV_EFF

Contextualembeddedvs.de-contextualiseddif-fusion

Staticvsdynamicefficiency Autonomyvspublicfundingdependency

Competitionvscollabora-tion

46|SIMPACT–T5.1

SIGOVERNANCE(modes) Withorwithoutgovern-ment

Withorwithoutgovern-ment

Publicregulation

SIMPACT–T5.1|47

Table11. Macro-level(nationalandregional)IndicatorsetforSI,withEUdatasources

Tangible Intangible

Labour SIPOTENTIAL Numberofworkersinhumanhealthandsocialactivities(NACER2,Q)Available:Eurostattablelfsq_egan2

Voluntarywork:UnpaidworksocialwelfareserviceAvailable:EuropeanValuesSurveyVariableA081

SINEEDS Long-termunemploymentratesbysex,ageandcitizenshipAvailable:Eurostattablelfsq_urgan

Inactivepopulationbysex,ageandwillingnesstoworkAvailable:Eurostattablelfsq_igaww

Jobsatisfaction

Available:EuropeanValuesSurveyVariableC033

FinancialCapital

SIPOTENTIAL GDPatmarketpricesAvailable:WordBank,WDITables

Governmentexpenses–providinggoodsandservices(%ofGDP)Available:WordBank,WDITables

TotalexpenditureofcharitiesandfoundationsAvailable:DAFNEDonorsandFoun-dationsNetworkEurope

TotalpublicexpenditureonsocialbenefitsAvailable:Eurostattabletps00102

Innovativeenterprisesthatreceivepublicfundingasa%oftotalAvailable:Eurostattablehtec_cis6

StartingaBusiness

Available:WorldBank,DoingBusi-nessData

NumberofStart-ups:Businessde-mographicsmainvariablesAvailable:Eurostattabletin00170

SINEEDS Centralgovernmentdept,total(%ofGDP)Available:WordBank,WDITables

Enterprisedeathrates:Businessde-mographymainvariablesAvailable:Eurostattabletin00170

PeopleatriskofpovertyorsocialexclusionAvailable:Eurostattabletipslc10

Claimingstatebenefitswhichyouarenotentitledto

Available:EuropeanValuesSurveyVariableF114

HousingcostoverburdenratebyagegroupAvailable:Eurostattabletessi161

PublicCapital

SIPOTENTIAL InfrastructureInvestment

Available:OECDdoi:10.1787/b06ce3ad-en

Levelofinternetaccess–house-holdsAvailable:Eurostattabletin00134

48|SIMPACT–T5.1

Tangible Intangible

GovernmentExpense–providinggoodsandservices(%ofGDP)Available:Eurostattabletin00134

Modeoftransport–Typicallymostoftenuses

Available:Eurobarometer82.2(Oct2014)Variableqa1

SINEEDS QualityofGovernment

Available:EuropeanQualityofGov-ernmentIndex(EQI)

Internetsubscription–mainfactor

Available:Eurobarometer81.1(Jan2014)Variableqb7a

ModalsplitofpassengertransportAvailable:Eurostattabletran_hv_psmod

Modeoftransportreason:Noalter-native

Available:Eurobarometer82.2(Oct2014)Variableqa2.7

KnowledgeCapital

SIPOTENTIAL Totalpublicexpenditureoneduca-tionAvailable:Eurostattabletps00158

Employmentbysex,occupationandeducationalattainmentAvailable:Eurostattablelfsa_egised

LifelonglearningAvailable:Eurostattabletsdsc440

ResearchonSI(publications&pa-tents)Available:Patstat,ScopusandEUOpenAIRE

Youngpeople’ssocialorigin,educa-tionalattainmentlevelandlabouroutcomes

Available:Eurostattableedat_lfso_00t3

SINEEDS Earlyleaversfromeducationandtraining,agegroup18-24Available:Eurostattabletesem020

Improveknowledge/skills:last12months

Available:ESS7-2014,Variableatncrse

SocialCapital

SIPOTENTIAL Totalexpenditureonsocialprotec-tionbytype(%oftotalexpendi-ture)Available:Eurostattabletps00101

Feelconcernedabout:PeopleintheneighbourhoodAvailable:EuropeanValuesSurvey,VariableE154

Membershipofasocialwelfareser-vice,organisation,charity

Available:EuropeanValuesSurvey,VariableA064

Preparedtohelppeopleintheneighbourhood

Available:EuropeanValuesSurvey,VariableE164

SINEEDS QualityofGovernment

Available:EuropeanQualityofGov-ernmentIndex(EQI)

Trustincountry’sparliament

Available:ESS7-2014,Variabletrstpr1

Genderdifferencesintheat-risk-of-povertyrateAvailable:Eurostattableilc_pnp9

TrustinthelegalsystemAvailable:ESS7-2014,Variabletrstlgl

ImmigrationAvailable:Eurostattabletps00176

Trustinpeople

Available:ESS7-2014,Variableppltrst

Health SIPOTENTIAL Expenditureofprovidersofhealthcarebyfinancingagentsinhealthcare

Available:Eurostattablehlth_rs_prsrg

SIMPACT–T5.1|49

Tangible Intangible

HealthpersonnelbyNUTS2regions

Available:Eurostattablehlth_rs_prsrg

Subjectivegeneralhealth

Available:ESS6-2012,VariablehealthC7

SINEEDS Self-reportedunmetneedsformedicalexaminationbysex,age,detailedreasonsandincomequna-tileAvailable:Eurostattabletgs00064

Hamperedindailyactivitiesbyill-ness/disability/infirmity/mentalproblemAvailable:ESS7-2014,Variablehltphnap

SIMPACT–T5.1|50

Table12. IndicatorsontangibleormonetisableaspectsofSIinausetable,anindicativeinput-outputexerciseonSIenablersandSIbeneficiaries.

needsKnowledgeCapital

potentials

Longterm

unemploym

entratesby

sex,ageand

citizenship

Inactive

population

bysex,age

and

willingness

towork

Central

government

debt,total

(%ofGDP)

Enterprise

deathrate:

Business

demography

main

variables

Peopleat

riskof

povertyor

social

exclusion

Housing

cost

overburden

ratebyage

group

Government

Expense-

providing

goodsand

services(%

ofGDP)

Levelof

internet

access-

households

Modalsplit

of

passenger

transport

Earlyleavers

fromeducation

andtraining,

agegroup18-24

Qualityof

Government

Gender

differences

intheat-risk-

of-poverty

rate

Immigration

Self-

reported

unmet

needsfor

medical

examinatio

nbyincome

quintile

Available

bedsin

hospitalsby

NUTS2

regions

Labour

Nrofworkersin

humanhealth

andsocial

activities(NACE

R2,Q)

v v v v v v

GDPatmarket

pricesv v

Totalpublic

expenditureon

socialbenefits

v v v v v v v v

Innovative

enterprisesthat

receivepublic

fundingasa%of

total

v v v v v v v v

NumberofStart-

Ups:Business

demography

mainvariables

v v v v v v v v

Infra-structure

Investmentv v v v v

Qualityof

Governmentv v v v v v v v v v v v v

Government

Expense-

providinggoods

andservices(%

ofGDP)

v v v v v v v v v v v v

Health

SIBeneficiaries

PublicCapital

PublicCapital SocialCapitalLabour FinancialCapital

FinancialCapital

UsetableofTangibleSI

SIEnablers

SIMPACT–T5.1|51

Totalpublicexpenditureoneducation

v v

Employmentby

educationalattainment

level

v v v v v v

ResearchonSocial

Innovation(PublicationsandPatents)

v v v

Totalexpenditureonsocial

protectionby

v v v v v v v v v

Membershipofasocialwelfareservice,

organisation,charity

v v v v v v v v

Expenditureofprovidersofhealthcarebyfinancingagentsinhealthcare

v v v v v

Healthpersonnelby

NUTS2regions

v v v v v v v v v

SocialCapital

Health

Know-ledgeCapital

SIEnablers

52|SIMPACT–T5.1

Themeticfield(Problemaddressed) Employment(1)Migration(2)Demographics(3)Gender(4)Education(5)PovertyTargetgroup Unemployed(1)youngunemployed(2)migrants(3)children(4)elderly(5)other(6)CountryScopeGeographical local(1),Regional(2),National(3),Europa(4)global(5)NameofRegion(NUTS2code)Developmentstage Ideation(1)Prototyping(2)Implemented(3)Scaled(4)Discarded(5)Prospectsforexpansion veryhigh high moderate low verylowWhattypeoforganisationistheSocialInnovator? Association(1)SocialEnterprise(2),Foundation(3),NGO(4),Other(5)WhattypeofSocialInnovationisit?NewProduct/service no(1)yes(2)Newmarket/ortargetgroup no(1)yes(2)Organisationalinnovation no(1)yes(2)Newmethod,process-innovation no(1)yes(2)Newinputs(expertise,ICT,design-skills,material,etc.) no(1)yes(2)HowwouldyouratetheSocialInnovator'sinternalknowledgebaseonthethemeandtargetgroup veryhigh(5)high moderate low verylow(1)HowwouldyouratetheSI'suseofexternalknowledgeonthethemeandtargetgroup? veryhigh high moderate low verylowHowwouldyouratethebusinessknowledge,andmanagementcapabilitiesoftheSocialInnovator? veryhigh high moderate low verylowAbouthowmanyactorsareinvolvedintheinnercoreoftheSocialInnovationAbouthowmanyorganisationscollaborateaspartners,promotors,andsupportersofthesocialinnovation?Howwouldyouratethediversityoftheactorsinvolved? veryhigh high moderate low verylowFunding&financeRatetheextenttowhichthesocialinnovationgeneratesrevenues/sales? veryhigh high moderate low verylow notatallWhatkindoforganisationisthemainFunder? Individual(1)non-governmental&thirdsectororganisation(2),informalorganisation(3),privatefirm(banketc.)(4),localgovernment(5),stategovernment(6)otherpublicsector(7)Funder2 Nosecondfunder(0)Individual(1)non-governmental&thirdsectororganisation(2),informalorganisation(3),privatefirm(banketc.)(4),localgovernment(5),stategovernment(6)otherpublicsector(7)Funder3 Nothirdtypeoffunding(0)Individual(1)non-governmental&thirdsectororganisation(2),informalorganisation(3),privatefirm(banketc.)(4),localgovernment(5),stategovernment(6)otherpublicsector(7)PleaseratetheImportanceofobjectivesCorrectingamarketfailureinservingun-metneedsoftargetgroup veryhigh high moderate low verylow notatallComplementingpublicpolicyinservingun-metneeds veryhigh high moderate low verylow notatallBusinessopportunities(increaserevenues/profit) veryhigh high moderate low verylow notatallIncreasetheeconomicvalueofcapabilitiesofthetargetgroup(e.g.Employability,work-skills) veryhigh high moderate low verylow notatallIncreasethepersonal&socialvalue/capabilitiesofthetargetgroup(e.g.Empowerment,health,life-skills,self-confidence)Increasethepublicvalue/capabilitiesofthetargetgroup(socialcohesion,inclusion,lobbying,legitimation)veryhigh high moderate low verylow notatallRatetheimportanceofthefollowingresources(andactivities)asinputsKnowledge(e.g.fromexperts,knowledgeinstitutes,students veryhigh high moderate low verylow notatallLabour veryhigh high moderate low verylow notatallCapital/funding veryhigh high moderate low verylow notatallSocialcapital(engagement,volunteering) veryhigh high moderate low verylow notatallRelationalcapital,resources,networking veryhigh high moderate low verylow notatallTraining,education veryhigh high moderate low verylow notatallPoliticalsupport veryhigh high moderate low verylow notatall

SIMPACT–T5.1|53

Table13. MainsurveyquestionsaddressedbytheSIcasesofSIMPACT

ratethelikelyachievedoutcomes/outputsoftheSIIncreasedlifeskillsofthemarginalised veryhigh high moderatelow verylow noneIncreasedworkingskillsofthemarginalised veryhigh high moderatelow verylow noneIncreasedphysicalcapabilitiesofthemarginalised veryhigh high moderatelow verylow noneIncreasedothercapabilitiesofthemarginalised veryhigh high moderatelow verylow noneImprovednetworksofthemarginalised veryhigh high moderatelow verylow noneImprovedself-confidenceofthemarginalised veryhigh high moderatelow verylow noneEmploymentofthemarginalised veryhigh high moderatelow verylow noneImprovedincome/lesscostsforthemarginalised veryhigh high moderatelow verylow noneIncreasedcapabilitiesoftheSocialInnovator veryhigh high moderatelow verylow noneIncreasedmanagementcapabilities veryhigh high moderatelow verylow noneIncreasedmarketingcapabilities veryhigh high moderatelow verylow noneImprovednetworksoftheSocialInnovator veryhigh high moderatelow verylow noneImprovedself-confidenceoftheSI veryhigh high moderatelow verylow noneEmploymentgrowthattheSI veryhigh high moderatelow verylow noneImprovedrevenues/lesscostsfortheSI veryhigh high moderatelow verylow noneReducedpublicbudgetcosts veryhigh high moderatelow verylow noneOthercomplementstopublicpolicy veryhigh high moderatelow verylow noneOtherbenefitsforprivatepartners veryhigh high moderatelow verylow noneOthercivicoutcomes/benefits veryhigh high moderatelow verylow noneHowwouldyouratetheimportanceofobstacles?Financial veryhigh high moderatelow verylow noneOrganisational/logistical veryhigh high moderatelow verylow noneLegal veryhigh high moderatelow verylow nonePolitical veryhigh high moderatelow verylow noneSocietal/cultural veryhigh high moderatelow verylow noneMarketshare(competition) veryhigh high moderatelow verylow noneTechnological veryhigh high moderatelow verylow noneHowwouldyouratethelong-termoutlookoftheSIonascaleof10

Howdoyouratetheextenttowhichthefollowingwp3findingsapplytothiscase?

54|SIMPACT–T5.1

Table14. Thecombinedsetsofmicro-andmacro-levelofindicatorsforSI,forintangibleandtangibleaspects

Micro-levelindicatorsforSIcases

Macro-levelSIindicatorsforcountries/regions

Intangi-ble

TypeofSI(SI)SI’sinternalknowledgebaseonthethemeandtargetgroupSI’sbusinessknowledge,andmanagementcapabilitiesSI'suseofexternalknowledgeonthethemeAimtocomplementpublicpolicyinservingun-metneedsAimtoincreasethepersonal&socialvalue/capabilitiesofthetargetgroup(e.g.Empowerment,health,life-skills,self-confidence)Aimtoincreasethepublicvalue/capabilitiesofthetargetgroup(socialcohesion, inclusion, lobbying,legitimation)NumberofactorsinvolvedDiversityofactorsinvolvedKnowledge(e.g.fromexperts,knowledgeinstitutes,students)asinputSocialcapitalasinput(volunteers)Relationalcapitalasresourceinput(networkTraining,educationasresourceinputPoliticalsupportasinputICTasinputIncreasedlifeskillsofmarginalised:outputIncreasedworkingskillsofthemarginalisedIncreasedphysicalcapabilitiesmrgn.Increasedothercapabilitiesmrgn.Improvednetworksofthemrgn.Improvedself-confidencemrgn.IncreasedmanagementcapabilitiesofSocialInnovator(asoutput)IncreasedmarketingcapabilitiesofSIIncreasedothercapabilitiesofSIImprovednetworksoftheSocialinnovatorImprovedself-confidenceoftheSIOthercomplementstopublicpolicy

QualityofGovernmentClaimingstatebenefitswhichyouarenotentitledtoYoungpeople'ssocialorigin,educationalattainmentlevelandlabouroutcomes;ImmigrationResearchonSI(publications)Voluntarywork:Unpaidworksocialwelfareservice;PreparedtohelppeopleintheneighbourhoodFeelconcernedabout:Peopleintheneighbourhood;TrustinpeopleLifelonglearningLevelofinternetaccess–households/InternetSubscriptionInactivepopulationbysex,ageandwillingnesstoworkImproveknowledge/skills:last12monthsSubjectivegeneralhealth;Hamperedindailyactivitiesbyillness/dis-ability/infirmity/mentalproblem

SIMPACT–T5.1|55



OtherbenefitsforprivatepartnersOthercivicoutcomes/benefitsLegalobstacletoinnovationPoliticalobstacleSocietal/culturalobstacleMarketshare(competition)obstacleOrganisational/logisticalTechnologicalobstacle

Membershipofasocialwelfareservice,organisation,charityTrustinthelegalsystemTrustincountry'sparliament;QualityofGovernmentStartingaBusiness(WorldBank,DoingBusinessData)Modeoftransportreason:Noalternative

Tangible SIgeneratesrevenues/sales?MaintypeofFunderofSI?Aimtocorrectamarketfailureinservingun-metneedsoftargetgroupAimforBusinessopportunities(increaserevenues/profit)Aimtoincreasetheeconomicvalueofcapabilitiesofthetargetgroup(e.g.Employability,work-skills)LabourinputCapital/fundinginputEmploymentofthemarginalisedasoutputImprovedincome/lesscostsforthemarginalisedasoutputEmploymentgrowthattheSIasoutput

(Sizeofthirdsector,%ofGDP)Innovativeenterprisesthatreceivepublicfundingasa%oftotalTotalpublicexpenditureonsocialbenefits;ExpenditureofprovidersofhealthcarebyfinancingagentsinhealthcareGDPatmarketpricesTotalpublicexpenditureoneducationNr of workers in human health and social activities (NACE R2, Q);HealthpersonnelbyNUTS2;(Sizeofthirdsector,employees)Totalexpenditureonsocialprotectionbytype,%oftotalexpenditureTotalexpenditureofcharities&foundationsLong-termunemployment;Employmentbysex,occupationandedu-cationalattainment.PeopleatriskofpovertyorsocialexclusionHousingcostoverburdenratebyagegroup(growthofthirdsector,employment)(Growthofthirdsector,%ofGDP)

56|SIMPACT–T5.1



Improvedrevenues/lesscostsfortheSIasoutputReducedpublicbudgetcostsasoutputFinancialobstacletoinnovationLong-termoutlook

CentralgovernmentdebtNumberofStart-Ups:BusinessdemographymainvariablesEnterprisedeathrate:Businessdemographymainvariables

SIMPACT–T5.1|57

5 EVALUATIONANDIMPACTASSESSMENTOFSOCIALINNOVATION

5.1 SIImpactMeasurementTools&Methods

Althoughitismostlyfocusedontheinvestmentframeworkforaddressingsocial

needs,andnotspecificallyoninnovation,theaboveFigure11doesgiveusaclear

ideawhichSIactorscouldprovideuswithdataandindicatorsthatcouldplayan

importantrole inourmeasurement framework.Wecanseesupplyanddemand

sideactorsaswellastheservices/productsforwhichinvestmentisnecessaryintermsofsocialneedse.g. societalproblems.We find that for thesocialneedsor

societalproblemsenvironmentthecharacteristicsofthebeneficiaries,thetarget

areas(ofneedsandproblems)andtheaccesstoproducts/marketsandservicesare

ofimportance.Theactorsreactingtotheseneedsandproblemsareonthedemand

sideandarecharacterisedbytheirintenttodeliversolutionsbutalsobyajustifi-

cationoftheuseofthesesolutionsthroughmonitoringandmeasuringtheimpact

oftheirinnovations.Onthesupplysidethemaincharacteristicistheexpectation

thatthedemandsidegoalsareachievedandthatthereissomekindofsocialreturn

(sharedvalue).Inaddition,theinvestors’intentisanimportantcharacteristichere.

The intermediariesare inessencenomorethantransactionalbodies translating

thedemandsideneedsintorequestsforthesupplysidewhileputtingtheseintoa

regulatoryframework.Thisbringsustothesocial-economicsystem,whichisthe

enablingenvironmentdictatingthewaythesetransactionsareconductedaswell

asthesocialandculturalappropriatenessofthedemandsandinnovationse.g.so-

lutions.

Aswediscoveredinsection3.3.3,thekeytomeasuringtheimpactofSIistoidentify

theusevalueofSIinterventions.However,asWood&Leighton(2010:20)point

out,“socialvalue’referstowidernon-financialimpactsofprogrammes,organisa-

tionsand interventions, including thewellbeingof individualsandcommunities,

socialcapitalandtheenvironment.Thesearetypicallydescribedas‘soft’outcomes,

mainlybecausetheyaredifficulttoquantifyandmeasure.”

ThoughmeasuringthesocialandeconomicimpactofSIshasbecomeanimportant

task(see,forinstance,Pol&Ville2008)thereisnocommonlyacceptedmethodor

standard to perform this task efficiently.Wood&Leighton (2010: 20-21) name

about30differentmodelsusedtomeasuresocialvaluewithintheUKandtheUSA,

therebyobservinga“fragmented, ‘bottom-up’andsomewhatad-hocapproachto

SIsupplyandde-mandactors

MeasuringSIimpact

58|SIMPACT–T5.1

measuringsocialvalue”.Theyrefertoanon-exhaustiveoverviewofqualityandim-

pactmeasurementtoolsprovidedbyAngier-Griffin(2009).Theypointoutthatdif-

ferenttoolshavebeendevelopedtosupportdifferentapproachestomeasuringso-

cial value and that these different tools reflect the differentmethodological ap-

proacheschosen(SeeFigure14.).Theauthorsdistinguish fourdifferentkeyap-

proachestowardssocialvalue/impactmeasurement:

1. “a‘wholeorganisation’approachora‘projectbased’approach.Thewholeorganisationapproachseekstoaccountforsocialvalueacrossthewholeofanenterpriseandismostlycommonlybaseduponastakeholderapproach.Aprojectbasedapproach is concernedwithappraising the socialvalueofaparticularprojectoractivity(usuallyinordertoaccountforthatsocialvaluetoafunderorcommissioner)

2. useof‘softoutcomes’oruseof‘financialproxies’.Sometoolsseektodemon-stratesocialvaluebydemonstratingtheeconomicbenefitofparticularso-cial, environmental orwell-being outcomes. Other tools use social sciencetechniquestothemeasureandreportthesocialoutcomesusing‘softindica-tors’ (e.g.attitudinal responses,behavioural indicators,opinionsof serviceusers)

3. ‘selfreported’or‘independentlyverified’.Independentverificationcanbeex-pensive.Thusinsomecasesinmaybebothappropriateandmostcost-effec-tive tomeasureandreportsocialvaluebaseduponauditeddata. Inothercontexts,theauthorityofexternalvalidationagainstagreedstandardsmaybeanessentialpartoftheprocess.

4. afourthdynamicisscale.Toolsdesignedforusewithinalargemultinational(e.g.GlobalReportingInitiative,AA1000)willnotbeappropriateforusbysmalleremergingsocialenterprises.

Concluding,Angier-Griffinmaps thesedifferent toolsandmethodsalong twodi-

mensions(seeFigure14.):“Thehorizontalaxisrepresentsthelevelofcomplexity

andresourcesrequiredtousethetool.Theverticalaxisrepresentsthereported

results in termsof economic impact (what is the benefit of social value created

measuredineconomicterms)versussocialimpact(whatisthebenefitsocialvalue

createdmeasuredagainstindicatorsofwell-beingandqualityoflife)(Angier-Grif-

fin.com2009).”

5.1.1 SocialAccounting&Auditing(SAA)

Socialaccountingandauditing(SAA)isanearlierattemptby(commercial)organi-

sations,introducingCSRprinciplesandmeasures,andwantingtoprovidemetrics

forthesemeasureswiththeearmarkofbeingabletojustifythesemeasurestotheir

stakeholderse.g.shareholders.SAAisusedforsocial impactreportingdeparting

Levelofcomplexity&necessaryre-

sources

SIMPACT–T5.1|59

fromawelfareeconomicsinspiredpremisethatanalternativesocialgood/innova-

tioncanbe“priced”atwhatabeneficiarywouldbewillingtopayforit,allowing

inputsandoutputstobecomparedinatraditionalway.However,asSItakesplace

inaspaceinwhichnormalmarketshavefailedtoperform,therearenocomparable

products(Nicholls,2009)andassuchitisextremelydifficulttomonetisemanyof

theSIsimplementedandinnovativeservicesrendered.

Nevertheless,itisimportanttotakenoteofsomeoftheSAAframeworks/systems

developed.Forinstance,theIRISsystem10,developedandmaintainedbytheGlobal

Impact Investment Network (GIIN) has a sizeable set ofmetrics onwhich they

gatherdataandpartsofwhichareofinterest.Furthermore,theseSAAprinciples

have also been applied to the setting of (philanthropic) non-profit foundations,

bringingwiththemausefulcrossoverofmonetisationto“valuation”oftheearlier

mention“Usevalue”orsharedvalue.InthebelowFigure12wecanseethatnext

tocost-effectivenessandcost-efficiencyexercises,practitionerandbeneficiaryin-

sightsarebroughtforwardasoneofthe8sourcesofimpactevidence.

Figure12. Philanthropicevidencechart

Wecanfurthermoreseethatcasestudiesonthefieldexperienceside,stakeholder

inputontheinformedopinion,andtrailsandexperimentalstudiesontheacademic

researchside,couldserveasviableinformationsources.Itisapparentthatpurely

quantitativedataoreasilyquantifiabledataandinformationisnotreallyobvious

looking at the suggested sources.Much like the Community Innovation Surveys

(CIS)anditsnationalspin-offs(alsointheOECDcontext)theinclusionofqualita-

tivedataisnotjustunavoidablebutanecessity(alsoseethebelowsectionSROI).

10See:https://iris.thegiin.org/

Sourcesofinfor-mation

60|SIMPACT–T5.1

UnliketheCIS,adatacollectioneffortforSImetricswillalsoneedtolookfordata

fromunusualrespondents,shiftingfrom,beneficiaries(casestudies)tofirms(CIS)

andpublicsector(NESTA)totheThirdSector.

5.1.2 SocialReturnonInvestments(SROI)

Anothermeasurementapproachthatisoftenreferredtobygovernments(Wood&

Leighton2010:13-14)istheSocialReturnonInvestments(SROI)approach,asin

particulardevelopedbytheSROINetwork(Nichollsetal.2012).“SROImeasures

changeinwaysthatarerelevanttothepeopleororganisationsthatexperienceor

contributetoit.Ittellsthestoryofhowchangeisbeingcreatedbymeasuringsocial,

environmental and economic outcomes and usesmonetary values to represent

them.Thisenablesaratioofbenefitstocoststobecalculated(Nichollsetal.2012:

8).”SROIappliessevenprinciplesandisperformedoversixstages.TheSROIprin-

ciplesare(Nichollsetal.2012:9):

• Involvestakeholders.

• Understandwhatchanges.

• Valuethethingsthatmatter.

• Onlyincludewhatismaterial.

• Donotover-claim.

• Betransparent.

• Verifytheresult.

SocialReturnonInvestmentreportingdetails6stages,whichare(Nichollsetal.

2012:9f.):

• Establishingscopeandidentifyingkeystakeholders.ItisimportanttohaveclearboundariesaboutwhatyourSROIanalysiswillcover,whowillbe in-volvedintheprocessandhow.

• Mappingoutcomes.Throughengagingwithyourstakeholdersyouwillde-velopanimpactmap,ortheoryofchange,whichshowstherelationshipbe-tweeninputs,outputsandoutcomes.

• Evidencing outcomes and giving thema value. This stage involves findingdatatoshowwhetheroutcomeshavehappenedandthenvaluingthem.

• Establishingimpact.Havingcollectedevidenceonoutcomesandmonetisedthem, thoseaspectsofchangethatwouldhavehappenedanywayorarearesultofotherfactorsareeliminatedfromconsideration.

SIMPACT–T5.1|61

• CalculatingtheSROI.Thisstageinvolvesaddingupallthebenefits,subtract-inganynegativesandcomparing the result to the investment.This isalsowherethesensitivityoftheresultscanbetested.

• Reporting,usingandembedding.Easilyforgotten,thisvitallaststepinvolvessharingfindingswithstakeholdersandrespondingtothem,embeddinggoodoutcomesprocessesandverificationofthereport.

5.1.3 OtherSocialImpactMeasurementApproaches

AlthoughtheSROIapproachlargelycorrespondstothedemandsoftheGECESsub-

group(2013)withrespecttoeffectiveimpactmeasurement.This,eventhoughthe

GECESsub-groupalsoclaimsthataquantificationofimpact(asacriticalpointof

SROI is thestrictmonetisationofoutcomes)missesthespecificsocialobjectives

(theusevalue!)ofmanySIsandthus,cannotbeappliedtoallorganisations(Wood

&Leighton2010:14).Otherapproachesthereforepointoutthatsocialimpactas-

sessmentshouldnotonlybelimitedtoquantitativedatabutalsotoqualitativeap-

proachesanddata(see,forinstance,vonJacobietal.2015:13-15).Astrongargu-

mentinthisregardisthatmanyaspectsofSIandtheirobjectivescannotbeade-

quatelyrepresentedinquantitativeterms.Examplesforthisarethedegreeofmar-

ginalisationortheresources(e.g.agency/power,socialties)ofindividualsthatare

targetedbySI.Inaddition,asvonJacobietal.(2015:17-19)pointout,anysocial

impactmeasurementmustbeclearwithregardstotheunitofanalysis.Ameasure-

mentmaybeperformedonthemicro-levelandthuscapture(marginalised)indi-

viduals,familiesorenterprisesandotherorganisations,onthemeso-level,captur-

ing groups, neighbourhoods, ormunicipalities, provinces and regions, or on the

macro-levelandcaptureawholecountry.Eachlevelrequiresspecificindicators.

Equallyimportantforansweringthequestion“whattomeasure”isthedimension

inwhichthescrutinisedsubjectshallbemeasured.SIaimsatmarginalisedpeople

butmarginalisationcanbeconceptualisedandcapturedindifferentways.Forin-

stance,itcanfocusoneconomicmarginalisationandmeasurepoverty,oritcanaim

atwell-beingand/orsocialandpoliticalparticipationandmeasuretheperceived

well-beingofindividualsindifferentcontextsortheirpoliticalandsocialactivities.

Given thatmarginalisation is a multi-dimensional problem there are numerous

waystoapproachandmeasureit,andmanymeasurementstrytocapturethemulti-

dimensionalityofmarginalisationbycombiningdifferentapproachesandmethods.

VonJacobietal.(2015:19-20)suggestcapturingmarginalisationinsixareasoflife

inwhich lack of poweror empoweringprocessesplay a vital role: nature, arte-

facts/technology,culture,economy,military/personalsecurityandpolitics.

Finally,itmustbenotedthatbecausetheterm“SI”itselfisnotclearlydefinedand

assuchallows forvaryingconcepts that in turnaffectmeasurementapproaches

Whattomeasure?

62|SIMPACT–T5.1

andresults.Forinstance,aconceptofSIthatputsanindividual’sorsmallgroup’s

responsetoasocialneedatthecore(e.g.Mumford2002)wouldfocusonthatindi-

vidualorgroupincontextwiththeidentifiedsocialneed/targetgroup.Incontrast,

aconceptofSIfocusingonnetworks(e.g.Young2011,LeBer&Branzei2010,Per-

rinietal.2010)wouldemphasisethenetworkdynamicsanddrawnooratleasta

lessstrictlinebetweeninnovatorsandtargetgroups.

This range of issues provides a strong barrier towards an efficient and realistic

measurementofusevalueandtheimpactofSI.Therequirementsfrommeasure-

ments inthisregardarehigh.For instance, theGECESsub-group(2013:18)de-

mandsthateffectivesocialimpactmeasurementmustbe:

• relevant:relatedto,andarisefromtheoutcomesitismeasuring

• helpful:inmeetingtheneedsofstakeholders’,bothinternalandexternal

• simple:bothinhowthemeasurementismade,andinhowitispresented

• natural:arisingfromthenormalflowofactivitytooutcome

• certain:bothinhowitisderived,andinhowitispresented

• understoodandaccepted:byallrelevantstakeholders

• transparentandwell-explained:sothatthemethodbywhichthemeasure-

mentismade,andhowthatrelatestotheservicesandoutcomesconcerned

areclearlyfoundedonevidence:sothatitcanbetested,validated,andfrom

thegroundsforcontinuousimprovement.

WhileapproacheslikeSROIseemtoformallymeettheserequirementsitisobvious

thattheconceptualanddataproblemsoutlinedabovemakeitdifficulttoproduce

validresultswithregardtotheserequirements.Inaddition,thefactthatsocialim-

pactmeasurementusuallycoversavarietyofstakeholderswithdiverginginterests

even complicates the measurement. For instance, the recommendations of the

GECESsub-group(2013:1)requirefromthemeasurementofsocialimpacttobal-

ance

• theneedsofsocialenterprises,investors,fundmanagersandotherstake-

holders

• comparabilityinreportingandmonitoring.

• costsofmeasurementagainstitsbenefits.

• thediversityofneed,servicesprovided,geographyanddemography,be-

tweenStateandvoluntaryandcommunitysector (“VCS”)provision,and

StateandotherfundingacrosstheMemberStates.

• Betweenaclearandcertainapproach,butonewhichcancopewithchange

andimprovement

Efficient&realisticmeasurement

SIMPACT–T5.1|63

Becker(2001:311)definessocialimpactassessmentas:“theprocessofidentifyingthefutureconsequencesofacurrentorproposedactionwhicharerelatedtoindivid-uals,organizationsandsocialmacro-systems”.Socialimpactassessmentsweretyp-icallycommissionedbygovernmentstoassesstheconsequencesofamajorpublic

project,nexttoassessmentofthesocialconsequencesalsoeconomicimpacts,en-

vironmentalimpactsandfiscal-impactscouldbepartoftheassessment.Bynow,

social impact assessments areobligatory formost governments in theEUwhen

they innovate their laws, institutions orpolicies.According to theVanclay et al.

(2015:.2)socialimpactsarechangestooneormoreofthefollowing:people’sway

oflife;theirculture;community;politicalsystems;environment;theirhealthand

wellbeing;personalandpropertyrights;and/ortheirfearsandaspirations.Later,

alsomanyfirmsandnon-profitorganisationsmadeuseofsocialimpactassessment

whentheyformulatenewpolicy,seekfundingfornewproposals,orreportonpast

activitiesinannualreports.Sinceweprobablystillmostlyhavethelargescale,re-

sourceintensivesocialimpactassessmentsinmindthatarecommissionedbygov-

ernmentsforlargeprojects,mostSIMPACTcasestudiesprobablydidn’tspotthe

many,small-scale,light,tacit,ad-hocsocialimpactassessmentactivitiesconcerning

thechangesinthelivesofbeneficiariesoftheSI.

5.2 UsageofFormalEvaluation&AssessmentToolsforMeas-uringEconomic&SocialImpact

AccordingtotheanalysisofTerstriepetal.(2015)theimpactofSIishardlymeas-

uredorevaluated.Forinstance,Terstriepetal.(2015)reportconcerningthecase

studyKONNEKTid(box3.4-42;p.113)thatit“doesn’tmeasureitssocialimpactin

anywayalthoughinternalcommunicationregardingperformanceandresultsare

discussed,butislimitedtoconcernedstakeholders”.Thisstatementexplainsthat

thesocialinnovatorevaluatestheperformanceandresultsinaninformal,qualita-

tiveway,byexchangingtacitknowledgewithstakeholders.TheSIdidn’tusefor-

mal,quantitativetoolstomeasureresultsintermsofstandardisedindicatorsfor

impact.Vielfalter(Terstriepetal.2015;box3.4-18)hasnotissuedanyformalcom-

municationontheimpactoftheirprogramme,butininternalcommunicationsit

has.ThemainreasonwhytheSIcasestudiesdidnotrecordmanyevaluationsand

impactassessmentscouldbetheconfusionofwhatitactuallyis,sincethereisno

agreementonthedefinitionsandthemethods:

• doonlyformalevaluationsandcodifiedimpactscount?

• doesonlyoutputintermsofexchangevaluecount?

• Istacitknowledgeandlearninglessvaluable?

Impactmeasurement–anexception

64|SIMPACT–T5.1

TherearemanyreasonswhySocialinnovatorsmaynotuseformaltoolsforevalu-

ationandwhyitismoredifficult,anddifferentforSI.Ashasbeenconfirmedinour

casesstudiesJepson(2005)andNicholls(2008)forinstancerefertothe“trustor

legitimacysurplus”whichisgrantedtomanynon-profitorganisationsbecauseof

theircharitablestatusorreputation,whichmeansthatresourcesarenotallocated

based onmeasured performance. Compared to impact assessment of for profit

businessinnovationsitismoredifficultforSItofindoutwhatcauseswhat,since

therearemoredifferentinputsinvolved,fromvariousactors(funders,beneficiar-

ies,donors,implementers,users,partners)withvariousobjectives(oraimedout-

comes),andthereforealsolikelytohaveabroaderrangeofoutcomesandimpacts.

Inthepharmaceuticalsectoritisobligatorytoassesstheimpactfromnewmedi-

cinesonhealth.Innovationsintheautomotiveindustryhavetobeassessedontheir

impactonpollutionandsafety.Thekindsofimpactthatfirmsareobligedtoreport

ondiffersbysectorandpoliticalcontext.Terstriepetal.(2015)statesthatsome

for-profitcompaniesdomoreonsocialimpactassessmentthatSIs.Inordertocon-

vincemarketsthattheyarenotirresponsibletheyvoluntaryshowsomeindications

ofpositivesocialconsequencesoftheiractivities.

Insomefieldsself-reportingisinstitutionalised,whenindustriesareforinstance

requestedtorecordtheuseofchildlabourforoff-shoredproduction.Mostcommon

kindofevaluationsofbusinessinnovationsisperhapscustomersatisfaction,but

this information ismostlykeptprivateoronlypositive, formarketingpurposes.

CustomermarketsarehoweverevaluatedbyforinstancetheEC.Theresultsofthe

10thEUconsumermarketscoreboardforinstanceshowsthatamongtheworstper-

formingsectorsare:bankingandtelecoms(seealsoFigure13).

Figure13. TheEUconsumermarketscoreboard(EU,2015c)

Wearenotawareofevaluationsconductedbybanksortelecomcompaniesonthe

socialandoreconomicimpactfromthesebadperforminginnovativemortgagesor

Our movesOur findings

New EU legislation on mortgages, payment accounts and investment products

Connected Continent proposal

Banking services: poor scores on all components

Telecoms: high number of problems & complaints

Energy: limited choice of providers,comparability of offers & switching

Second-hand cars & vehicle fuels: consistently at the bottom

Promoting transparency in energy bills, prices and offers.

In-depth EU studies to identify causes and remedies

Dootherkindsofin-novatorsmoreoften

evaluateimpact?

SIMPACT–T5.1|65

telecomservices(althoughtheymightcontributetohomelessnessandyoungsters

withhigh-debts).

So,somefirms,inthecontextofcorporateresponsibilitymayvoluntarilyconduct

andreportonsocialandeconomicimpactassessment,butnotall.However,forSI

wecouldevenclaimthattheyallreportonsocialandoreconomicimpactinone

wayoranother,buttheformandthemethodsused,areverybasic,light,qualitative,

low-cost,lessresource-intensive.E.g.:basedonpersonaltestimonialsfrombenefi-

ciariesonaFacebookpagewhichemphasisethesocialaspects,insteadofresource-

intensivetoolswithafocusoneconomicindicatorssuchasSocialReturnonInvest-

ment,orcost-benefitanalysis(Figure14.).The lattertoolsareactuallybasedon

methodstomonetise(estimatingtheconcerningexchangevalue)ofallfactorsand

indicators(social-indicators,environmental-indicators,health-indicators,etc.).Af-

termonetisation,thereareonlyeconomicindicators,whichallowforcalculationof

anestimatedsocialreturnoninvestmentinEuro’s.Foradescriptionofthetools

seesection5.3.

Figure14. Mappingofimpacttools

Source:AdaptedfromWood&Leighton(2010)

AnotherreasonwhysuchmoreformalandresourceintensivemethodsofSIimpact

evaluations are rare, is that it fits their mode of innovation: the scarcity of re-

sources,theirmissionorientedmodeofinnovation,andtheiraversiontobureau-

cracy,standardisationandforms.Impactevaluationsarecostly,soincasethefun-

dersdonotdedicateaseparatebudgetforit,ordemanditforgettingsubsidiesor

grants, social innovators may consider it a waste of resources, resources they

wouldratherspendonsupportingadditionalpeopleinneed.Socialinnovatorsor

ECON

OMIC

IND

ICAT

ORS

SOCI

AL IN

DIC

ATOR

S

ENTRY!LEVEL TOOL/Less resource intensive

COMPREHENSIVE TOOL/More resource intensive

BalancedScorecard

LogicalFramework

SocialFirms

Dashboard

SocialAppraisal

Toolkit

DTA« tell your story »

Quality of life/WellbeingIndicators

Social AuditNetwork

Framework

Social Returnon InvestmentLM3

AAA1000

GlobalReport

Initiative

MisfitbetweenSI&evaluationmethods

66|SIMPACT–T5.1

partnersmaynotseetheneedformeasuringandevaluatingimpact.Theymight

object to the ‘bureaucratic paperwork’, and mistrust the objective. Evaluations

amongbeneficiariesmayforinstancebeconsideredbyvolunteersorotherpartic-

ipantsassignsoflackoftrust.ThiswasforinstancethecaseinVoorleesExpress

(AppendixtextboxI)whereoriginallytheyaskedthechildrentogivethevolunteers

agradeaftereachsession.Butthechildrenactuallydidnotliketodothis,sothey

hadchosenanother,lessjudgingform,atanothermomentintime.Formalquanti-

tativeevaluationscanalsoformanadditionalpushfor‘hyper-exploitation’andget-

tingstuckinamereoutputorientedmodeofinnovation.

5.3 Whyevaluate&assessImpact?

Measurement,evaluationandimpactassessmentshouldbeseenfromalearning

pointofview.Tolearnfromthepast,andtoincorporatelessonsinplansforthe

future.Tolearnfromyourownexperiences,butalsoofthoseofothers.Manyofthe

informalwaysof learningandevaluatingarenot lessuseful,but therearesome

advantagesincodifiedformsandmorestandardisedmodesofevaluationandim-

pactassessment.Agreeingthatlearningistheoverarchingobjective,theEUGuid-

ancedocumentonMonitoringandEvaluation(2014),subsequentlydistinguishes

twopurposesofevaluationsorimpactassessments:supporting(strategicandop-

erational)management and assessingwhether the desired effect has been pro-

duced.CounterfactualimpactevaluationsfocusonthislatterpurposebyansweringthequestionDoesitwork?SincenotallchangescanbeattributedtotheSI,impact

referstothechangethatcanbecrediblyattributedtoaSI(EC,2014,p.6).Thequan-

titativemethodsusedaredevelopedinstatisticsandmedicalresearch,e.g.‘treated’

anda‘non-treated’controlgrouparecomparedtomakeitlikelythatthedifference

canbeattributedtothe‘treatment’orSIinourcase.Theory-basedimpactevalua-tionsservetosupporttheSImanagementbyansweringthequestion:whyandhowdoestheSIwork?Thetheoryofchangeiscentralinthismorequalitativeimpact

assessmentapproach.Thequestionwhycertainactionsproduceeffects, and for

whom,andunderwhichconditions,intentionallyorun-intentionallyisveryuseful

forthesocialinnovatorandforallthoseinvolvedintheimplementation,moreover

costsintermsofresources,timeandcompetencesareless,andintimeevaluation

practicescanevolvetowards,andcomplementedwith,morecodified,formaland

resource intensive forms of impact assessments, possibly involving partners in

theirecosystemsintheevaluation(Table15).

Evaluationsatthelevelofeco-systemsprovideopportunitiesforlearningamong

actorsinrelatedfields,butalsotosharecosts.InthecaseofMothersofRotterdam

(seeAppendixTextbox I) theuniversity haddeveloped a large international re-

searchproposalinwhichthesocio-medicalimpactsofcombinedmedicalandsocial

care(asitisdoneintheSIofMothersofRotterdam)wouldbeassessedatsystems

Learningfromevalu-ation&assessment

ThecaseofMothersofRotterdam

SIMPACT–T5.1|67

level. Probably theywill apply advancedquantitative statistical techniqueswith

controlgroups,becauseinthemedicalfieldthatisthenormforassessingimpact.

Theirfocuswillprobablybeonhealthoutputindicatorssuchasthesizeoftheun-

bornchild.AlthoughtheSocialinnovatoralreadyhasseenenoughevidencefrom

hisowntacitexperiences,andfromhisinformaldiscussionswithhismedicaland

socio-medical partners in the project, hewill of course follow this academic re-

searchwithinterest,andtheresultsmightserveasadditionalpiecesofevidence,

whichhecouldshowtoothers.

However,theconcerningSIwasmoreinterestedintalkingabouthowandwhythe

SIthathedevelopedworks.Hetalkedabouthistheoryofchangewhenexplaining

howtheymanagedtochangethe livesandbehaviourof thepregnantwoman in

problematicneighbourhoods.Heexplainedthattheyfirsttacklethemainstress-

causingproblem.Oftenthemayorproblemishavingahighfinancialdebt.Hehad

also readabout the theoryof scarcity (Mullainathan&Shafir2013),which con-

firmedhisexperience,thatpeopleinfinancialproblemscannotthinkproperlyan-

ymore, their IQdrops, theybehave irrational, andget themselves inall kindsof

otherproblemsasaresultofhavingsuchhighdebts.Wewon’trepeathiswhole

theory-basedimpactevaluation,butwhenweaskedifanevaluationorimpactas-

sessmenthadbeen conductedhe said “no, not yet”, andheonly referred to the

abovementionedresearchproposalofhisuniversitypartner.

EvaluationatActorLevel EvaluationatEcosystemLevel

Tacitknowledge/informallearning

• Self-evaluationindiscus-sionswithbeneficiaries,partners,donors,clients

• Organisesharedevents,net-working

• Humanmobilityschemes

Codifiedknowledge/formallearning

• Standardreportingforms• Satisfactionratings• Surveys(seeAppendix

Textbox1–VoorleesEx-press))

• Evaluationplatforms• Evaluationbyuniversity(see

AppendixTextbox1–MothersofRotterdam)

Table15. Formalandinformallearningfromevaluation

68|SIMPACT–T5.1

5.4 Light,informal&theory-basedImpactEvaluations

ReferringtotheinstrumentsmentionedinFigure14.,lightformsofevaluationare

represented in the lefthalfof thechart.For instance, “DTATellYourStory” isa

guideline for development trusts, issued by the Development Trust Association

(UK)11.Developmenttrustsfocusonpositivesocial,environmentalandeconomic

change.The“CommunityImpactMapping”usedinthisguidelineshallhelpdevel-

opmenttruststostartthinkingaboutwhyandhowtheirorganisationdoeswhatit

doesandtovisualisetheir“journey”andthedifferencetheymaketotheircommu-

nity.

TheSocialAppraisalToolkitissimilarbutincontrastto“DTATellYourStory”itis

anonlinetoolreleasedbythe“ValuingtheDifference”teamintheNorthEastofUK

withfundingfromtheEsméeFairbairnFoundation12.Theusercarriesoutanonline

self-assessmentofgovernance,socialimpacts,andfinancialviability.Thetoolalso

helpstheusertoidentifyhowkeysocialimpactdatawillbecapturedandreported

Whilethesetwotoolshavetobepurchased,theSocialReportingStandard(SRS)

canbeunderstoodasastandardisedapproachofthesamekindasthetwoprevious

tools,isafreelyavailableguidelineprovidedbytheGermanSocialReportingIniti-

ative.13

Figure15. ImpactChainoftheSocialReportingStandard

Source:AdoptedfromSRS(2014)

It aims at anoutcome-oriented learning culturebothwithin theorganisation as

wellaswithpartnersandsponsors.Itissuitableforboththeorganisation’sinternal

11Seehttp://www.dtawales.org.uk/publications/c/152/i/292/

12Seehttp://www.anybodycan.org.uk/sat.html.Thelinktothetooldidnotworkatthetimethisre-

portwasproduced.

13Seehttp://www.social-reporting-standard.de/

SOCIAL PROBLEM

VISION & GOALSRESULTS

(Outcomes & Impact)

RESOURCES(Input)

WORK PERFORMED(Output) TARGET GROUP

Community & Environment

IMPACT CHAIN

DTATellYourStory

SocialAppraisalToolkit

SocialReportingStandard

SIMPACT–T5.1|69

reportsaswellasforthetransparentrepresentationoftheorganisation’sresults

tothepublic.TheauthorshighlightthatSRSisparticularlyusefulfortheprepara-

tionofregularannualreports.Thisreportingstandardimplementstherecommen-

dationsoftheGECESSub-group(2013)insofarasitrequiresfromSItokeeptoa

strictstructure.Itstartswithanoverview(formalinformationontheorganisation,

itsvisionandapproachandthescopeofthereport),proceedswithadetailedde-

scriptionofthesocialproblemtargetedbytheSIandthesolutiontheorganisation

hasfound,includingimpact(SeeFigure15.Itendswiththeorganisationalprofile

oftheSI,whichincludesgovernance,financesandaccountingpractices.

TheSocialFirmsDashboardisnowcalledtheThirdSectorPerformanceDashboard,

whichemanatedfromtheSocialFirmPerformanceDashboardthatwasoriginally

designedforSocialFirmsandemergingSocialFirmstouseasaninternalperfor-

mancemanagement tool for theirownbusiness improvement.Thedashboard is

distributed on CD-ROM by Social Firms UK. 14 The tool helps any organisation

withinthethirdsectortomonitortheirprogressagainstobjectivesandreportas

appropriate internally and externally on actual performance. The tool is based

upon Balance Scorecard principles but acknowledges that organisations in the

thirdsectoraretypicallyshortoftimeandresources,thereforeitusestemplates

andsamples.Overall,organisationscanlogandmonitorprogressinsixdifferent

standardelementsoftheiractivities,whichcanbetailoredtotheneedsoftheor-

ganisation:

• Financial

• Governance

• Customersorexternalstakeholders

• Performanceorenvironmental

• Peopleandworklifebalance

• Marketingandcommunications

LM3standsforLocalMultiplier3andwasdevelopedbytheneweconomicsfoun-

dation(nef)asasimpleandunderstandablewayofmeasuringlocaleconomicim-

pact.15Itaimsatfollowingthe“moneytrail”that,forinstance,isgeneratedthrough

anSI’sspendinginthelocaleconomy,withthegoalofimprovingtheorganisation’s

localeconomicimpact.

14Seehttp://www.proveandimprove.org/tools/socialfirm.php#SectionFootnotesand

http://www.socialimpactscotland.org.uk/understanding-social-impact/methods-and-tools/third-

sector-performance-dashboard/.ThelinktoSocialFirmsUKdidnotworkatthetimethisreport

wasproduced.

15Seehttp://www.proveandimprove.org/tools/localmultiplier3.php

FormerSocialFirmDashboard

LM3

70|SIMPACT–T5.1

“Themeasuringprocessstartswith1)asourceofincome(saytotalincomeintoa

socialenterprise)andfollowshowitis2)spentandthen3)re-spentwithinade-

fined geographic area (that is called the ‘local economy’) (Prove and Improve

2016).”16AnothergoalofLM3istoinfluencethepublicsectortoconsidertheim-

pactofitsprocurementdecisions.Inordertomeettheneedsandcapacitiesofthe

usersitwasdesignedtobequickandrelativelyeasy.Meanwhiletherearealsocom-

mercialversionsavailablefromsuppliersthatsubsidisethenot-for-profitsector,17

thoughnefstillholdsthecopyrightoftheoriginalmanualanddistributesitforfree.

Though it is claimed that the tool is simpleandunderstandable the fivegeneral

stagestoanLM3analysis,especiallystages4and5,appearquitechallengingfor

manySIs:

1. “Determinewhatyour‘local’areais.

2. Identifywhatyourstartingpoint,oryourincomesourceis(Round1).

3. IfRound1istheorganisation’sincome,thenforRound2youneedtobreak

downhowyouspendyourincomewithinthelocalarea.

4. ForRound3,youneedtosurveythebusinessesandpeopleyouspendyour

moneyontofindouthowtheyspendtheirincomes.

5. Collateallresponses,dosomequickmaths,andthenyouhaveyourLM3

score.”18

AlimitationofLM3isthatitmeasuresonlyeconomicimpactbutnosocialorenvi-

ronmental impact. Because only economic indicators are used, this tool is posi-

tionedatthebottomlineinFigure14..

Theadvantageofsuchalightformsofsocialreportingandimpactmeasurementis

thatitisverymuchinlinewithanyorganisationsinterestin(andsometimesobli-

gationto)self-presentationandself-assessment.TheresultsoftheSIMPACTcase

studiesshowthatmanySIsdonothavetheresourcesorthecapacitiestoperform

impactassessmentbutwhensuchattemptsaremadetheycomeclosetothiskind

ofsocialreporting.Forinstance,thecasestudyofEducationforAccommodation

followedtheSocialReportingStandardapproach(Terstriepetal.2015;box3.4-

44).

However,thefactthatanumberoflinkstoorganisationsthatdistributethesetools

ortothesetoolsthemselvesdonotexistanymoreseemstosuggestthatthelifetime

ofsuchtoolsisoftenlimited.Thismaybeduetothelimiteddemandandusageof

suchtoolsbySIs, thedynamicswithin theSIsupportingsectorandthe fact that

16Seehttp://www.proveandimprove.org/tools/localmultiplier3.php

17Seehttps://www.lm3online.com/

18Quotedfromhttp://www.proveandimprove.org/tools/localmultiplier3.php

SIMPACT–T5.1|71

sometoolshavemeanwhileadvancedintoothertoolswithdifferentnames.Area-

son-besidesthelackoftimeandpersonnel-formanySIsnottousereportingand

impactassessmenttools-maybethatquiteanumberofthesetoolsandunderlying

softwareareproprietary,whichimpliesadditionalcostsforSIs.

Therearemanyothersthatonlyfollowedbitsandpiecesofsuchmethodsinanon-

standardisedway,butthisdoesnotmakethemlessaccurateorlessvaluable.Some

followtheexamplesofothersbyenteringmoreinformationintotheirannualre-

ports,whichalsoincludesinformationandindicatorsconcerning‘learning-cycleel-

ements’suchasproblem,goal,inputs,activities,results,impacts.Inseveralcases

thesocialinnovatorsdidn’trefertotheirownscientificimpactassessments,butto

impactassessmentsfromscientistsintheirfieldofSI.Inthisrespectsocialscience

andhumanitiesarewaymoreimportantsourcesforinnovationthanthetechnol-

ogyresearchfromscienceandengineeringdisciplines.Socialscienceresearchpro-

videsakindofcircumstantialevidence,whichisvalidtobackyourvalueproposi-

tion as a social innovator.However, the so-called ‘theories of change’, and logic

frameworks,donotnecessarilyhavetobeused inaheavy,andacademicmode.

Social innovators rather opt for the short catchy colourful statements on such

logics, narratives, andwisdom, onhow thingswork,why and forwhom, and in

whichcircumstances.

Giventhefactthatevensuch“lightweight”toolsareoftentoochallengingformany

SIs,duetotheirlimitedresourcesandcapacities,itisevidentthatthemorecom-

prehensiveandresource-intensivetoolsillustratedinthemiddleandintheright

halfofFigure14.areevenlessattractiveforSIs:

• BalancedScorecards(BSC)arewidelyusedincommercialbusinesses,butseemtobeattractiveprimarilyforlargecorporations.Moreover,thereare

somanyapproachestowardsBalancedScorecardsandmanyofthemhave

advancedfromarelativelysimpleperformancemeasurementtool intoa

fullstrategicplanningandmanagementsystemthatonlyveryfew–rather

largeandhighlyorganised–SIswouldbeabletouseefficiently.19

• LogicalFrameworkAnalysis(LFA)isaprojectmanagementtoolthathasoriginallybeendevelopedspecificallyfordevelopmentaidprojects,butis

meanwhileappliedinotherareasaswell.Itscoreisamatrixoffourcol-

umnsandfour(ormore)rows(theso-calledLogframeMatrix,seeanex-

ample in Figure 16) that describe “the project’s hierarchy of objectives

(ProjectDescriptionorInterventionLogic),thekeyexternalfactorscritical

totheproject’ssuccess(Assumptions),andhowtheproject’sachievements

willbemonitoredandevaluated(IndicatorsandSourcesofVerification)

(EuropeanCommission2004:57).”Eventhoughthematrixdoesnotlook

19Seehttp://balancedscorecard.org/Resources/About-the-Balanced-Scorecard

Availabletoolschal-lengesocialinnova-tors

72|SIMPACT–T5.1

verycomplicatedthecorrectandefficientuseofLFAisalignedwithcon-

siderablerequirements,pitfallsanddifficulties,asillustratedinFigure17.

Figure16. TypicalStructureofaLogframeMatrix

Source:EuropeanCommission(2004:58)

Figure17. StrengthsandCommonProblemswiththeApplicationoftheLFA

Source:EuropeanCommission(2004:59)

• Qualityoflife-andwellbeing-indicatorsmayappeareasytousebutittoidentifythemostsuitabletooloutofthenumerousindexesthatexist, to

PROJECT DESCRIPTION INDICATORS SOURCE OF VERIFICATION ASSUMPTIONS

Overall Objective - The pro-

Purpose

Results

project

Activities

ELEMENT STRENGTHS COMMON PROBLEMS/DIFFICULTIES

Problem analysis and object setting

» Requires systematic analysis of problem, including cause and effect relationships

» Provides logical link between means and ends

» Places the project within a broader development context (overall objective and purpose)

» Encourages examiniation of risks and management accountability for results

» Getting consensus on priority problems

» Getting consensus on project objectives

» Reducing objectives to a simplistic linear chain

» Inappropriate level of detail (too much/too little)

Indicator and source of verfication

» Requires analysis of how to measure the achieve- ment of objectives, in terms of both quantity and quality

» Helps improve clarity and specifity of objectives

» Helps establish the monitoring and evaluation framework

» Finding measurable and practical indicators for higher level objectives and for projects with

» Establishing unrealistic targets too early in the planning process

»

information actually comes from, who should collect it and how frequently

Format and application

» Links problem analysis to objective setting

» Emphasises importance of stakeholder analysis

» Visually accessible and relatively easy to understand

» Prepared mechanistically as a bureaucratic

analysis, objective setting or strategy selection

» Used as a means of top-down control - too rigidly applied

» Can alienate staff not familiar with the key concepts

SIMPACT–T5.1|73

carryoutthesurveyandtoanalysetheresultsrequiresspecificskillsand

mayconsumealotoftime.20

• TheSocialAuditNetworkFramework(orSocialAccountingandAudit–SAA)hasbeendevelopedbytheNewEconomicsForum(nef)andisnow

maintainedbySocialAuditNetwork(SAN)21andAccountAbility22.SAAisa

frameworkforinvestigatinganorganisation’sperformanceagainstsocial,

environmentalandeconomicobjectivesanditsvalues.Itservestomonitor,

evaluateandaccounttointernalandexternalstakeholders.SAAisclosely

relatedtocorporatesocialresponsibility(CSR)asperformedintheprivate

sector.AfteranorganisationhaslearnthowSAAworksandwhatresources

it requires and decided how the processwill bemanaged the social ac-

countingwill beperformed in three subsequentphases. In theplanning

phasetheorganisationhastoclarifyitsmission,objectives,activitiesand

underpinningvalues.Intheaccountingphasetheorganisationdetermines

the scope of the social accounts and sets upways of collecting relevant

(quantitative andqualitative) informationover a specified reportingpe-

riod,whichthenwillbeanalysed.Inthereportingandauditingphasethe

resultsof theanalysisaredocumentedandprovidedtoa listofexternal

experts (theSocialAuditPanel) forreview.After thereviewershaveac-

ceptedthisdraftthefinalreportcanbeproducedandpublished.Difficul-

tiesalignedwithSAAarethatitcanbeverytimeconsumingandthatlend-

ersandfundersdonotexplicitlyrecognisethismethod.23

• TheAA1000AssuranceStandard(AA1000AS)iscloselyrelatedtothesocialaccountingandauditingmovementfromwhichitoriginated.AA100

ASisastandardforassessingandstrengtheningthecredibilityandquality

ofanorganisation’ssocial,economicandenvironmentalreportingandpri-

marilyintendedforusebyexternalauditingbodiesthatassureanorgani-

sation’sreportsorsocialaccounts(AssuranceProviders).Itisfreelyavail-

ableandmaintainedbyAccountAbility24.Stakeholderengagement is the

keycharacteristicofAA1000AS,asitemphasisestherightofstakeholders’

intereststobeheard,andthatorganisationsaccountforthemselvesinre-

lationtotheseinterests.TothisendAA1000ASbuildsuponthreeprinci-

ples:

20Seethe–non-exhaustive–overviewsprovidedbyAlkire&Sawar(2009),Michaelsonetal.(2012),

OECD(2013),

21http://www.socialauditnetwork.org.uk/

22http://www.accountability.org/

23Seehttp://www.proveandimprove.org/tools/socialaccounting.php

24http://www.accountability.org/

74|SIMPACT–T5.1

- Materiality Principle: The organisation must include in its report infor-mation about its social, environmental and economic performance re-

quiredby its stakeholders for them to be able tomake informed judge-

ments,decisionsandactions.

- CompletenessPrinciple:Theorganisationmustbeabletoidentifyandun-derstandthematerialaspectsofitssustainabilityperformance

- ResponsivenessPrinciple: Theorganisationmustprovideevidence that ithascoherentlyrespondedtostakeholderconcerns,policiesandrelevant

standards–thisincludespublicresponsebutalsomanagementofidenti-

fiedmaterialissuesi.e.,improvingperformance.25

25Seehttp://www.proveandimprove.org/tools/aa1000AS.php

SIMPACT–T5.1|75

6 MEASUREMENTGAPANALYSIS:WHATISLACKING?

This section summarise gaps in measurement of SI, of which several already

emergedfromtheprevioussectionsandrelatetothestillnotyetstandardiseddef-

initionsconcerningSI.Comparedtootherformsofinnovation,acommonagreed

consensusondefinitionsasintheOslomanualdoesnotexistyetforSI,andstand-

ardsinpracticesamongstatisticiansconcerningmeasurementarelacking,suchas

theinternationalpracticeoftheCommunityInnovationSurveyforotherformsof

innovation. In addition, there are gaps in themeasurement of the impact of SI.

Therearedozensoftoolstomeasureimpact,whichallclaimtobethebest.Butthe

appropriatenessoftoolsdependsonmeasuringforwhom,forwhatpurposes,and

underwhatconditions.

6.1 GapsinMeasurementofSI

Besidesthefactthatsurvey-datafromsocialinnovatorsorsocialentrepreneursare

lacking,alsothemeasurementofSIinthepublicsectorandinthebusinesssector

arelacking.Thetraditionalinnovationsectorsarestartingtothinkonhowtocol-

lectdataonbeingsociallyresponsible.IntheprivatesectorthethemeisCorporate

SocialResponsibility.ThetraditionalSTIorEUresearchsectorreferstoResponsi-

bleResearchandInnovation,andhaveproposedindicatorsforthis(EU,2015b).

Butnoneofthese‘socialresponsible’initiativestoimproveindicators,isbasedon

informationfromsocialinnovators,theirusers,partners,orbeneficiaries.

MoststudiesonSIrelyoncase-studiesconcerningthemicro-level,andconcerning

themacro-level thedata isoftencollected foranotherpurpose. It concernsdata

thatcanbeusedasan indicator forcertain inputs,conditionsoroutput,but the

actualSIs,theactualactivities,theactualinnovatorsandactualusersandbenefi-

ciariesremainun-known,andarenotmeasuredbystatistics.Butalsodataonfor

instancethesizeofthethirdsectorandvoluntaryworkisnotcomparableamong

MemberStates,andlackingforsome.

TheTEPSIEstudyhasafocusonthemacrolevelofmeasuringofSI.Duetolackof

dataavailability,thisanalysis(Hubrichetal.2012:9-10)showslargedatagapsin

thecountriesconsidered,butitmakesaninterestingproposalforanindicatorset

whichcouldmeasureandmonitorwhatisgoingonconcerningSIatnationallevel.

Theirfocusisonthesupply-sideofSI,andformanyindicatorsthetechnological

Lackofdata&measurement

Casestudiesasmeansofmeasure-ment

76|SIMPACT–T5.1

component(STI)isfullyincluded.Agapinthisrespectconcernstheroleof(indi-

catorsfor)thespecificdemandforSI.Entrepreneurshipisacentralconceptinthe

TEPSIEframework.Oneofthe‘gaps’ordifficultiestheyencounteredconcernsthe

comparabilityofthedatabetweencountries,e.g.itislimitedbyconceptualandsta-

tisticaldifferencesincapturingthe“socialeconomy”orthirdsectorsineachcoun-

try. Evenwithin the same country the underlying concept to capture the social

economymayleadtoverydifferentresultswithregardtoitseconomicimpact.This

isexemplifiedbythecaseoftheUK(Hubrichetal.2012:11),wheretheshareof

expendituresinGDPis2.5%whenthevoluntarysectorisconsideredbutincreases

to 11.7%when the civil society is considered.Neither of the two concepts ade-

quatelyrepresentsthesocialeconomy,asmeantinthecontextofSI,asthevolun-

tarysectorisdefinedtoonarrowlywhilethecivilsocietyisatoobroadconcept.

Besidestheseconceptualdifficultiesthenationalcontext,inparticulartheconcept

ofthewelfarestatethatdetermineshowsocialgoodsareprovided(bypublicau-

thoritiesorbythesocialeconomy),causesadditionalproblemsinaccountingofthe

economiceffectsofSI.But,alsotheregulationsandtax lawsconcerningfounda-

tions,charities,for-profitorganisationsandnon-profitorganisationsdiffer,andare

changingfastandthismakesithardtomakeinternationalcomparisons.

Practicalproblemsofdataavailablefromstatisticaloffices,diverseauthoritiesthat

areresponsiblefortheadministrationofspecificlegalforms,privateinstitutions

thathostunofficialdata,andscientificpublicationshampertogetaclearoverview

oftheimpactofSIontheeconomy.Theseproblemscomprisediversityofdatafor-

matsandunits,dispersion,accessibilityandquality.

Improvementofthemeasurementisagradualprocess,alearningprocess.Itisim-

portantthatthelessonsarelearned,andareinstitutionalisedinnationalandinter-

nationalsurveysandstatisticalpractices.

6.2 GapsintheMeasurementoftheSIsImpact

Therearealsogapsconcerningthemeasurementof the impact.TheGECESsub-

group (2013) concluded from its evaluation of social impact measurement ap-

proachesthatnosinglesetofindicatorscanbedevisedtop-downtomeasuresocial

impactinallcases.Thereasonsforthisdifficultyaremanifold:

1. Thevarietyofthesocialimpactsoughtbysocialenterprisesisverygreatandnosinglemethodologycancaptureallkindsofimpactsfairlyorobjectively;

2. Whiletherearesomequantitativeindicatorsthatarecommonlyused,theseof-tenfailtocapturesomeessentialqualitativeaspects,or,intheiremphasisonthequantitative,canmisrepresent,orundervaluethequalitativethatunderpinsit;

Context-specificity

Dataheterogeneity

SIMPACT–T5.1|77

3. Because,owingtotheworkanddata-intensivenatureofmeasuringimpact,ob-tainingapreciseevaluationisoftenatoddswiththekeyneedforproportional-

ity.Theamountoftimespentandthedegreeofaccuracysoughtandachievedinanymeasurementexercisemustbeproportionatetothesizeoftheenterprise

andtheriskandscopefortheinterventionbeingdelivered;

4. Becauseinanareacharacterisedbywidevarietyinthenatureandaimsofac-tivities,andthetypesofSE(socialenterprise)deliveringthem,thereisacleartrade-off between achieving comparability between activities through usingcommonindicatorsandutilisingindicatorsthatareusefulandrelevantforthe

managementof thesocialenterprise; increasing(artificial)comparabilitycan

leadtoalossofrelevance

5. BecauseimpactmeasurementandtheworldofsocialenterpriseandSIhasbeenevolvingveryrapidly,itisdifficulttosticktoanyonestandardoveranumberofyears.

Anothergapthatshouldbeaddressedisthemethodologywithwhichtoapproach

SI impactmeasurement. The accounting and returns on investment approaches

clearlyleantoomuchtowardsapurelyquantitativeapproach,andareverycostly.

Putting aside the positivist-constructivist debate, the use of mixed methods

(Tashakkori&Teddlie,2003)inthecollectionofmeaningfuldatatomeasureSIis

themostlikelyandproductivewayforward.Themixedmethodsapproachentails

aconvergenceofboththequantitativeandqualitativelyfocusedmethods(andpar-

adigms;seeCreswell&PlanoClark,2007).Anexample,fromsurveying,wouldbe

a follow-up qualitative question to explain, and contextualise, the results of the

quantitativepartofthesamequestion.Thiswouldenablethesurveyorstoaddress

themorequalitative"usevalue"partofSI.Casestudyandinterviewdesigninspired

methodswouldassuchfindaplaceinalargersurveycampaignexploringtheSI

space.

Mixedmethodsapproach

78|SIMPACT–T5.1

7 INDICATOR-BASEDPROFILINGOFSIATMICROLEVELOFSIMPACTCASESTUDIES

7.1 SurveyofSIMPACTCaseStudies

Inworkpackage3ofSIMPACTtwokindsofqualitativecasestudieshavebeenpro-

duced:SIBiographiesandBusinessCases.IntheAppendix,theGuidingquestions

fortheSIB’sareincluded.Theseopenquestionsservedasachecklistfortheinter-

viewsandthetextofthecasestudieshasthesamestructure.TheBusinessCases

haveaslightlydifferentstructure,butlargelythesametopicshavebeenaddressed

inbothtypesofcasestudies.Thesurveywithclosedquestions(Table16.)started

withafewquestionswhichwerethesameasintheSIBs,andtoalargeextentfol-

lowedthestructureandconceptsusedintheguidelinesfortheSIBs(e.g.concern-

ingthethematicfield, geographicalscale,developmentstage,etc.). AllSIBsand

BCsareincludedandtwoadditionalcaseswhichhavebeenperformedunderWP1,

resultingintheSIMPACTdatabaseof55casesofSI.Itemnon-responsehasbeen

addressedbyenteringthemeanvaluefortheconcerningitem.

Thesurveyhasbeenconductedon-lineinthebeginningof2016andthequestions

havebeenansweredasmuchaspossibleby theauthorsof thecasestudies,but

otherwisebyotherSIMPACTpartnerswhofilledinthesurveyafterhavingreadthe

concerningin-depthcasestudyreport.Thefirstpartofthesurveyconsistsofques-

tionswhichcouldbeansweredwithyesorno,butthelargestpartofthequestions

askforaratingonaLikert-typescale,rangingfromveryhightoverylow.

BesidesquestionsonthetypeofSI,theactorsinvolved,andtypeoffunders,there

areseveralmaingroupsofquestionson:objectives,inputofresources,obstacles,

and output/outcomes. The first eight output questions ask to rate the likely

achievedimprovementsforthemarginalisedtargetgroup.Thenexteightoutput

questionsaskforaratingoftheimprovementsforthesocialinnovator.Afterfour

otheroutputquestionsandaratingofthelong-termperspective,thelastpartof

the survey consists of questions related to themain conclusions from thework

package3 analysis as reported inD3.2 (Terstriep et al. 2015).The respondents

wereasked: “Howdoyou rate theextent towhich the followingWP3empirical

findingsapplytothiscase”.Thispartofthesurveyhasnotbeenanalysedforthis

deliverable,butwillservetocomplementtheanalysisofwp3andotherworkpack-

ages.

SIMPACT–T5.1|79

Table16. Surveyquestionsandcodeusedindatabaseandgraphs

Question Code

PleasefillinthenameofSI(Biographyorbusinesscase) case_name

Thematicfield(Problemaddressed)[Employment] Employment

Thematicfield(Problemaddressed)[Migration] Migration

Thematicfield(Problemaddressed)[Demographics] Demographics

Thematicfield(Problemaddressed)[Gender] Gender

Thematicfield(Problemaddressed)[Education] Education

Thematicfield(Problemaddressed)[Poverty] Poverty

Country Country

NUTScode(ornameofregionoforigin/locationofsocialinnovator) nuts

PleaseindicatebelowthegeographicalscaleoftheSI.[Local] scale_local

PleaseindicatebelowthegeographicalscaleoftheSI.[Regional] scale_reg

PleaseindicatebelowthegeographicalscaleoftheSI.[National] scale_nat

PleaseindicatebelowthegeographicalscaleoftheSI.[Europe] scale_eu

PleaseindicatebelowthegeographicalscaleoftheSI.[World] scale_world

Developmentstage[Ideation] stage_idea

Developmentstage[Prototyping] stage_proto

Developmentstage[Implemented] stage_impl

Developmentstage[Scaled] stage_scaled

Developmentstage[Discarded] stage_disc

Prospectsforexpansion[Prospectsforexpansion] prospect

Whattypeoforganisationisthesocialinnovator-[Typeoforganisation] Typeoforganisation

WhattypeofSIisit-[NewProduct/service] typeSI_prod

WhattypeofSIisit-[Newmarket/ortargetgroup] typeSI_newmarket

WhattypeofSIisit-[Newtargetgroup] typeSI_newgroup

WhattypeofSIisit-[Organisationalinnovation] typeSI_orga

WhattypeofSIisit-[Newmethod,process-innovation] typeSI_proces

WhattypeofSIisit-[Newinputs(expertise,ICT,design-skills,material,etc.)] typeSI_input

WhattypeofSIisit-[Other] typeSI_other

Knowledgebase[Howwouldyouratethesocialinnovator'sinternalknowledgebaseonthethemeandtargetgroup-]

KB_int

Knowledgebase[HowwouldyouratetheSI'suseofexternalknowledgeonthethemeandtargetgroup-]

KB_ext

Knowledgebase[Howwouldyouratethebusinessknowledge,andmanagementca-pabilitiesofthesocialinnovator-]

KB_bus

80|SIMPACT–T5.1

Question Code

Actorsandcollaborations[ApproximatelyhowmanyactorsareinvolvedintheinnercoreoftheSI-]

innercore

Actorsandcollaborations[Approximatelyhowmanyorganisationscollaborateaspart-ners,promotors,andsupportersoftheSI-]

supporters

Actorsandcollaborations[Howwouldyouratethediversityoftheactorsinvolved-] act_diversity

Fundingandfinance[PleaseratetheextenttowhichtheSIgeneratesrevenues/sales-] generate_rev

TypeoffunderThemainfunderistheorganisationthatfundsthehighestshareofthebudgetoftheSI.[WhatkindoforganisationisthemainfunderoftheSI-]

type_fund

TypeoffunderThemainfunderistheorganisationthatfundsthehighestshareofthebudgetoftheSI.[Secondmainfunder]

type_fund2

TypeoffunderThemainfunderistheorganisationthatfundsthehighestshareofthebudgetoftheSI.[Thirdmainfunder]

type_fund3

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Correctingamarketfailureinservingunmetneedsofthetargetgroup.]

obj_mark_fail

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Complementingpub-licpolicyinservingunmetneeds

obj_compl

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Businessopportuni-ties(increaserevenues/profit)]

obl_bus

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Increasetheeco-nomicvalueofcapabilitiesofthetargetgroup(e.g.Employability,work-skills).]

obj_ec_cap_target

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Increasetheper-sonal&socialvalue/capabilitiesofthetargetgroup(e.g.Empowerment,health,life-skills,self-confidence)]

obj_soc_cap_target

PleaseratetheimportanceofthefollowingobjectivesfortheSI.[Increasethepublicvalue/capabilitiesofthetargetgroup(socialcohesion,inclusion,lobbying,legitima-tion)]

obj_pub_cap_target

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Knowledge(e.g.fromexperts,knowledgeinstitutes,students)]

imp_res_experts

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Labour]

Imp_res_labour

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Capital/funding]

imp_res_cap

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[ICT]

imp_res_ICT

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Socialcapital(engagement,volunteering)]

imp_res_soc_cap

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Relationalcapital,resources,networking]

imp_res_rel_cap

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Training,education]

imp_res_train

Pleaseratetheimportanceofthefollowingresources(andactivities)asinputsoftheSI.[Politicalsupport]

imp_res_politic

SIMPACT–T5.1|81

Question Code

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Financial] imp_obs_fin

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Organisational/logis-tical]

imp_obs_org

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Legal] imp_obs_legal

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Political] imp_obs_political

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Societal/cultural] imp_obs_soc

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Marketshare(com-petition)]

imp_obs_mark_share

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Technological] imp_obs_tech

PleaseratetheimportanceofthefollowingobstaclesfortheSI-[Other] imp_obs_other

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedlifeskillsofthemarginalised]

outc_lifeskills

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedworkingskillsofthemarginalised]

outc_workskills

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedphysicalcapa-bilitiesofthemarginalised]

outc_phys_cap

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedothercapabili-tiesofthemarginalised]

outc_cap_other

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvednetworksofthemarginalised]

outc_network

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvedself-confidenceofthemarginalised]

outc_self_conf

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Employmentofthemar-ginalised]

outc_employment

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvedincome/lesscostsforthemarginalised]

outc_impr_income

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedmanage-ment/businesscapabilitiesofthesocialinnovator]

outc_SI_bus_cap

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Increasedmarketingca-pabilitiesofthesocialinnovator]

outc_SI_mark_cap

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Otherincreasedcapabili-tiesofthesocialinnovator]

outc_SI_cap_other

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvednetworksofthesocialinnovator]

outc_SI_netw

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvedself-confidenceofthesocialinnovator]

outc_SI_selfconf

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Employmentgrowthatthesocialinnovator]

outc_SI_empl

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Improvedrevenues/lesscostsforthesocialinnovator]

outc_SI_rev

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Aviablebusinessandachievingfinancialsustainability]

outc_SI_stability

82|SIMPACT–T5.1

Question Code

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Reducedpublicbudgetcosts]

outc_SI_pub_budg

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Othercomplementstopublicpolicy]

outc_public_other

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Otherbenefitsforprivatepartners]

outcome_privateother

Pleaseratethelikelyachievedoutcomes/outputsoftheSI.[Othercivicout-comes/benefits]

outc_civic_other

Howwouldyouratethelong-termoutlookoftheSIonascaleof1to10- LT_outlook

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[PublicsectorcanfunctionasinnovatoranddriverofSI]

WP3_pubsect

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[socialinnovatorsfindthemselvesintheconstraintsituationofneitherqualifyingascommercialenterprisenorassocialenterprise]

WP3_constraint

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[socialinnovatorsbehaveADAPTIVEratherthanRATIONAL]

WP3_adapt

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Varioustypesofinteractionswithdistinctactorsarecommonpractice]

WP3_interact

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Interactionswithprivateactorsaremostlyutilisedtocloseexistingknowledgegaps]

WP3_gaps

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Publicauthoritiesoftenonlyengageiftheyhaveadirectbearingontheissueaddressedbythesolution,inparticular,intheearlystage]

WP3_publ_eng

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Combiningeconomic&socialresourcesisamustforSI]

WP3_ec_soc

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[IntheinitialstageoftheSIprocessinnovatorsoftenlackfinancialresources,makingitdifficulttosecuretheirownincome,paystaffwages,etc.]

WP3_secure

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[(Public)fundingnecessitatesrecognition]

WP3_recogn

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Relationalcapitalcontributestoreducinguncertaintyinaconstantlychangingenvironment]

WP3_rel_cap

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[BroadknowledgeindistinctdomainsappearsasakeysuccessfactorinSI]

WP3_know

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Socialinnovatorsknowthesocialproblemverywell,thewayitissolvedmaybringthemincompletelyunknownfieldsofactivityandbusiness.]

WP3_fields

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Lackofbusiness,industryandmanagerialknowledgeleadstofailure]

WP3_lack_skills

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Formulatingavaluepropositioninwhichsocialandeconomicobjectivesarebal-ancedisofparamountimportancetoensuresustainabilityofSI]

WP3_valueprop

SIMPACT–T5.1|83

Question Code

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Scalingout(diffusion)isforemostbasedonthespreadoftheideaorframeworksolution,byimitation,adaptionandlearning]

WP3_diffuesion

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Scalingupismorelikelytobefoundinfor-profitorganisations]

WP3_scaling_up

HowdoyouratetheextenttowhichthefollowingWP3empiricalfindingsapplytothiscase-[Actorsconstellationandformoforganisationaresubjecttochangethroughouttheinnovationprocessandbeyond]

WP3_actors

7.2 ExplorativeMethodology:CategorisationbyPrincipalComponentAnalysis

Table17. Overviewofstudiesidentifyingfirmlevelinnovationmodes

InnovationMetho-dology

Measuresfeedingintomodes Data Study

Mode1:‘Sciencebasedhigh-techfirms’Mode2:‘IT-orientednetwork-in-tegrateddevelopers’Mode3:‘Market-orientedincre-mentalinnovators’Mode4:‘Cost-orientedprocessinnovators’Mode5:‘Low-profileinnovators’

Exploratory Inputs,outputs,linkages

SwissInnova-tionsurvey1999PrivateServicesSector

Hollenstein(2003)

Mode1:‘StrategicInnovators’Mode2:‘IntermittentInnovators’Mode3:‘Technologymodifiers’Mode4:‘Technologyadopters’

Prescriptive Technologicalin-putsandoutputs

EurostatNewCronos(largelyEuro-statCIS3data)

Arundel&Hollanders(2005)

Mode1:‘Science,TechnologyandInnovation’(STI)Mode2:‘Doing,Using,Interact-ing’(DUI)

Prescriptive Inputs,organisa-tional

2001DanishDISKOSurvey

Jensenetal.(2007)

Mode1:‘Science-based’Mode2:‘Specialisedsuppliers’Mode3:‘Supplier-dominated’Mode4:‘Research-intensive’

Exploratory Inputsandoutputs,linkages,organisa-tional

SurveyofSMEsintheNether-lands2003

DeJong&Marsili(2006)

Mode1:‘Science-based’Mode2:‘Supplier-dominated’Mode3:‘Productionintensive’Mode4:‘Marketdriven’

Exploratory Mainlyinputs,link-ages

CIS2forDen-markandFin-land

LeponenandDrejer(2007)

Mode1:‘Research’Mode2:‘User’Mode3:‘External’Mode4:‘Production’

Exploratory AllCISvariablesavailable

EurostatCIS3 Srholec&Verspagen(2008)

Mode1:‘New-to-marketinnovat-ing’’Mode2:‘Marketing-basedimitat-ing’Mode3:‘Processmodernising’

Exploratory Inputsandoutputs Innovationsur-veyof9OECDcountries

Frenz&Lam-bert(2009)

Theuseofexplora-tivemethodologytoidentifyfirmlevelmodesofbusinessinnovation

84|SIMPACT–T5.1

InnovationMetho-dology

Measuresfeedingintomodes Data Study

Mode4:‘Widerinnovating’

Mode1:‘Organisationalinnova-tions’Mode2:‘Technologicalinnova-tions’

Exploratory Mainlyoutputs UKCIS4 Battisti&Stoneman(2010)

Source:Frenz&Lambert(2012)

Manyauthorshaveshownpatternsinthewayfirmsinnovatebyacombinationof

resources,activitiesandcapabilities.Someofthemusesurveydatatoidentifydif-

ferentmodes(types,models,strategies)of innovation,mostlybasedonCISdata

whichrelatestoavarietyofanswersfromfirmstoquestionsconcerninginnova-

tions.Pavitt(1984)wasoneofthefirsttoshowwithhistaxonomyofinnovating

firms that the sources andpurposes of innovation arediverse and that one can

identifydifferentmodesofinnovation.Hemainlyrelatedthetypesandmodesof

innovation to sectors, showing that they are industry-specific in the sense that

somemodesaremorefrequentincertainindustries.ThetaxonomyofPavittisstill

visibleintheresultsofotherswhostudiedthis(Table17).

Table17givesanoverviewprovidedbyFrenzandLambert(2012)ofsomestudies

whichhavefollowed-upthesearchforpatternsinfirm-leveldata,henceidentifying

maintypesormodesofinnovation.Theyrefertothesemodesas‘mixedmodes’,as

they indeedrefer tocertaincombinationsof innovationresources,activitiesand

outputswhichoftencanbefoundin(theCISanswersfor)onefirm.Therearetwo

methodstocometosuchatypology:eitherprescriptiveorexploratory.Theexplor-

atorymethods‘letthedataspeak’byidentifyingpatternswithforinstancefactor

analysis (also known as data-reduction and principle component analysis). We

chooseinthisstudyforthissecondmethodology,becauseitcombinestheinsights

fromtheoryandempiricalobservations,andbecauseitisagoodmethodologyto

developindicatorsinemergingfieldsorresearch,whenstandardsindefinitionsof

conceptsandstatisticaldataarestill lacking.Anexampleof thisexploratoryap-

proach isSrholecandVerspagen (2008;2012)who take thebroadest setofCIS

variablesintotheanalysisanduseatwo-stepfactoranalysis.Theresultleadsto

fourinnovationstrategiesormodes,whichSrholecandVerspagenhavegiventhe

followinglabels:‘Research’,‘User’,‘External’and‘Production’(Table18).Socialre-

sponsibilityispartofthemodelabelled‘production’.

Patternsofinnovation

Prescriptiveandex-ploratorytypology

methods

SIMPACT–T5.1|85

Table18. Hierarchicalfactoranalysis(2ndstage)oningredientsoffirminnovationstrategies:4modes

(1)Research

(2)User

(3)External

(4)Production

R&D 0.70 0.07 −0.16 0.09

Marketing 0.07 0.65 0.01 −0.16

Externalinputs 0.16 −0.13 0.65 0.02

Producteffects −0.01 0.69 −0.03 0.15

Processeffects −0.08 0.06 0.02 0.81

Socialresponsibil-ity

0.08 −0.07 0.01 0.83

Informationfromscience

0.62 0.01 0.31 0.06

Informationfromclientsandindus-try

−0.01 0.61 0.28 −0.07

Informationfromsuppliersandevents

−0.07 0.23 0.69 0.10

Formalprotection 0.36 0.37 −0.27 0.05

Informalprotec-tion

0.42 0.35 −0.18 0.01

Non-technologi-calinnovation

0.00 0.53 0.02 0.12

Innovationco-op-eration

0.78 −0.06 0.06 −0.09

Source:Srholec&Verspagen(2012:1237)

Studieswhichtrytomeasurewhichkindofinnovations(product/process/organ-

isational/marketing)generatemoregrowthintermsofturnoverorjobsgivemixed

results.LachenmaierandRottmann(2010)concludethatprocessinnovationshave

ahigherpositiveeffectonemploymentthanproductinnovations.Productinnova-

tionsontheotherhandaremoreoftenassociatedwithgrowthinturnover.Forpol-

icymakers,however,thelessonisthattherearenogoodreasonstopromoteonly

onetypeofinnovation,oronemodeofinnovation.Innovationpolicieswhichapply

toabroaderunderstandingofinnovationandwhicharenotlimitedtoR&Dorprod-

uctinnovation,aremorelikelytoimpactongrowthoffirms,andSMEsinparticular

(Wintjes2014).

Thefactthatthereareclearsimilaritiesinthemodes,whicharefoundinthevari-

ousstudies(usingvariousmethodsandindicatorsets,andwithdifferentfocusof

analysis in termsofcountriesorsectors), support theconclusionofSrholecand

Verspagen(2012)thattoahighdegreethesemodes(andtheheterogeneitythey

represent)canbefoundinallsectorsandallcountries.There is,sotospeak,no

Nosinglebestpracticemode

86|SIMPACT–T5.1

convergencetoasinglebestpracticemodeof innovation.Fromanevolutionary,

(eco-)systemperspective,itishealthytohavethisdiversity,whichallowsfornovel

combinations.Therefore,policymakersshouldnotreducethevarietyofmodes,but

rathermaintainthediversity,andforinstancestrengthen‘weakmodes’.Thisalso

impliesthatthereisnosinglebestpracticepolicy,whichpolicymakerscancopyas

a‘one-size-fits-all’policyfromotherregionsorsectors.Designingtheappropriate

innovationpolicymixforagiveninnovationsystem,callsforaninteractiveprocess

inordertocometoatailoredpolicymix.

7.3 ResultsofFactorAnalysis

Firstwepresenttheresultsforfactoranalysesperformedonthefollowinggroups

ofvariablesrelatedto:input,objectives,obstacles,andoutput.

Theinformationcollectedwiththe14questionsrelatedtoinput(includingtheim-

portanceofresources,numberofactorsinvolved,andtheratedknowledgebase)

hasbeenreducedintofivefactors(Table19).Thefirstinputfactorwehavelabelled

‘Lownr.Supportingactors’,becauseitconsistsoftwohigh,negativeloadingsfor

questionsonthenumberofactors(innercoreandsupporters)involvedintheSI.

Wenotice thata lownumberofactors isassociatedwitharelativelyhigher im-

portanceofpoliticalsupportasinput(imp_res_politic).

Theimportanceof:actordiversity,labourasaresource(e.g.:volunteers),andthe

useofexternalknowledgeonthethemeandtargetgroup,aretogetherininputfac-

tor2,whichislabelled:‘Diversityofknowledge’.Thecompositionofthisfactorsug-

gest that volunteers not only put in free labour, but also a different kind of

knowledgeonthethemeandtargetgroup.

Inputfactor3islabelled‘Socialcapital’,whichalsoincludeshighratedimportance

asaresourceofrelationalcapital(imp_res_rel_cap)fortheconcerningSI.

Inputfactor4islabelled‘ICT&funding’sincethisresourcecomponentconsistsof

theco-importanceofICTandfundingasaresourceforSI.

The5thinputfactorconsistsofhighfactorloadingsforanswersonthreeknowledge

questions:theimportanceofknowledgeasaninput,e.g.fromexperts,knowledge

institutes,students(imp_res_experts),theratedinternalknowledgebaseofthein-

novatorconcerningthethemeandtargetgroup(KB_int),andtheratedimportance

oftrainingandeducationasaninputtotheSI(imp_res_train).

Numberofsupportingactors

Diversityofknowledge

Socialcapital

Importanceofknowledge,

knowledgebase,training&education

SIMPACT–T5.1|87

Table19. Typesofresources/inputstoSI,patternmatrixoffactoranalysis

INPUTFACTORS:TYPESOFRESOURCES/INPUT

1Lownr.sup-portingactors

2Diversityofknowledge

3Socialcapital

4

ICT&funding

5

Knowledge

innercore -.853

supporters -.818

imp_res_politic .504 .445

act_diversity .771

Imp_res_labour .628

KB_ext .574 .525

KB_bus .511 .443

imp_res_soc_cap .862

imp_res_rel_cap .858

imp_res_ICT .746

imp_res_cap .707 .374

imp_res_experts .770

KB_int .635

imp_res_train .565

Note:ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalisation.

Patternmatrix,rotationconvergedin18iterations.Highfactorloadingsemphasisedinbold,below0.3suppressed.Totalvarianceexplainedby5factors=64.6%

InFigure18weseethatSIswhichoperateonalocalscalehaveafaraboveaverage

scoreonthefactor‘Lownr.supportingactors’.Sincethenumberofinnercoreac-

torsandnumberofsupportershasanegativeloadinginthisfactor,itmeansthat

theSIswhichoperateat localscalehaveonaveragealowernumberof involved

actors,andpoliticalsupport ismore important for them,comparedtoSIswhich

operateatnationalscale.Wehavetonotethatrespondentscouldindicatethatthe

concerninginnovationisimplementedatseveralscales.SIsatanationalscalehave

onaveragearelativelylargenumberofactorsandsupporters,andpoliticalsupport

islessimportantasaninput.Oftentheyoperateinmultiplelocations.ForSIsoper-

atingattheregionalleveltheinputprofilesquiteresemblethosethatareopera-

tionalatnationallevel,exceptforthisfactorconcerningthenumberofactors,on

whichthepositionofthoseatregionallevelisinbetweenthepositionofthoseat

localandnationallevel.

Operationallevel

88|SIMPACT–T5.1

Figure18. SIinputprofilesbygeographicalscale

TherearealsootherdifferenceswhenwecomparetheSIinputprofilesofthecases

accordingtothegeographicalscaleatwhichtheyoperate.Forthosewitha local

scale,thefactorscoreson‘Diversityofknowledge’isbelowaverage(indicatedby

theorangeline,whichistheaverageofallcases).ThisismoreimportantfortheSIs

thatoperateatnationallevel.Characteristicforthoseoperatingatnationallevelis

the relatively low importance of the input factor ‘Knowledge’. The on average

higherinputfactorscoresfor‘ICT&funding’suggeststhatatanationalscale,in-

vestmentsinICTbecomemoreimportantinrelationtothediffusion(scalingout)

orscaling-upoftheinnovation.

Figure19. SIinputprofilesbytheme

-0,2-0,1

00,10,20,3

Low nr. supporting

actors

Diversity of knowledge

Social capitalICT & funding

Knowledge

scale_localN = 26

-0,4-0,3-0,2-0,1

00,10,2

Low nr. supporting

actors



Knowledge

scale_natN = 24

-0,1

0

0,1

0,2

0,3

Low nr. supporting

actors



Knowledge

EmploymentN = 35

-0,3-0,2-0,1

00,10,20,30,4

Low nr. supporting

actors



Knowledge

Migration N=11

-0,6-0,4-0,2

00,20,4

Low nr. supporting

actors



Knowledge

Demographics N=14

-0,4-0,3-0,2-0,1

00,10,20,3

Low nr. supporting

actors



Knowledge

Education N=19

Geographicscales

SIMPACT–T5.1|89

Ahighinputfactorscoreon‘Knowledge’andtherelativelylowimportanceof‘So-

cialcapital’asinputischaracteristicforSIswithinthethemeofemployment(Fig-

ure19).Theonaveragelowinput-factor‘Knowledge’,andahighscoreonthe‘ICT

&funding’componentischaracteristicforSIinputsinthefieldofdemographics.

TheinputprofilesforSIsinthefieldsofmigrationandeducationhavesomesimi-

larities:lownumberofactors,lowon‘Diversityofknowledge’,andhighon‘Social

capital’asinputfactors.However,onaveragethefactorscoresfor‘Knowledge’and

‘ICT&funding’arehigherforSIsinthethemeofEducation.

SIsfromNGOs&thirdsectororganisationshaveaboveaverageinput-factorscores

exceptonthefactor‘Diversityofknowledge’.Thiskindofspecialisationseemsas-

sociatedwithalimitednumberofactorsandcollaborations,andahighimportance

ofpoliticalsupportasaninput.These2inputfactorswhicharecharacteristicsof

SIsbyNGOs, actually seem tobeassociatedwith success, in the sense thathigh

numberofactors,anddiversityofknowledge,seemscharacteristicforSIswitha

verypositivelongtermperspective(Figure20).

Figure20. SIinputprofileforNGOs&forinnovatorswithalong-termoutlookratedasverypositive

Concerningtheobjectives(Table20)thefactoranalysisresultsintwocomponents,

indicatingtwotypesofSIobjectives,whichwecannamerespectively:‘Publicvs.

Business’,and‘Socio-economictargetgroup’.Thefirstfactorinvolvesarelatively

high importanceof theobjective to improvepublicaspects for the targetgroup,

concerning for instance social cohesion, inclusion, lobbying, legitimation

(obj_pub_cap_target),while having at the same time a low rated importance for

business opportunities (increase revenues/profit) as the objective of the SI

(obj_bus).Thecompositionofthisfactorsuggeststhatitisdifficulttoservethese

twoobjectiveswithoneSI.

Thesecondobjectivefactorislabelled‘Socio-economictargetgroup’,becauseboth

the objective to increase the personal & social value/capabilities of the target

group,e.g. empowerment,health, life-skillsandself-confidence (obj_soc_cap_tar-

get),aswellastheobjectivetoincreasetheeconomicvalueofcapabilitiesofthe

-0,10

0,10,20,30,4

Low nr. of supporting

actors



Knowledge

NGO & Third sectororganisation N=14

-0,3-0,2-0,1

00,10,20,3

Low nr. supporting

actors



Knowledge

Very positive LT outlook SI N=32

SIThemes

SIOrganisations

SIObjectives

90|SIMPACT–T5.1

targetgroup,e.g.Employabilityorwork-skills(obj_ec_cap_target)showhighload-

ingswithinthis2ndobjectivefactor.

Table20. TwotypesofSIobjectives,patternmatrixoffactoranalysis

FACTORSOFSIOBJECTIVES

1Publicvs.Business

2Socio-economictargetgroup

obj_bus -.620

obj_pub_cap_target .591 .475

obj_mark_fail .442

obj_soc_cap_target .386 .665

obj_ec_cap_target -.590 .640

obj_compl .309

Note:ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalisation.Ro-tationconverged in2 iterations.Highfactor loadingsemphasised inbold,below0.3suppressed.Totalvarianceexplainedby2factors=44.7%

Regardingobstaclestheanalysisresultsinthreecomponents,whichcanbeinter-

pretedasthreetypesofobstacles(Table21).Thefirstfactor,whichexplainsthe

largestshareofthetotalexplainedvariancecomprisesorganisationalandlegalob-

stacles.Thisresultconfirmstheanalysisofthecasestudiesthat it isdifficult for

manysocialinnovatorstofindoneappropriateorganisationalform,andtheythere-

foreoftenchoseforhybridformsoforganisationbecauseoflegalobstaclestocom-

binetheirbusinessandsocialobjectivesinonelegalorganisationalform.Wethere-

forelabelthisfirstobstaclefactor:‘Hybridissue’.Thesecondobstaclefactorbrings

togethersocietal/cultural,financialandpoliticalobstacles.WhenSIsfaceallthese

obstacleswecanlabeltheconcerningSIsas‘radical’.Adifferentkindofobstacleis

inthethirdfactor,wheretechnologicalobstacleshavethehighestfactorloadings,

butalsowheremarket share (competition) is rate relativelyhighasanobstacle

(imp_obs_mark_share).

Table21. TypeofSIobstacles,patternmatrixoffactoranalysis

THREETYPESOFSIOBSTACLES

1

Hybridissue

2

RadicalSI

3Technologicalcompetition

imp_obs_org .876

imp_obs_legal .833

imp_obs_soc .873

imp_obs_fin .703

imp_obs_political .498 .605 -.318

SIObstacles

SIMPACT–T5.1|91

THREETYPESOFSIOBSTACLES

1

Hybridissue

2

RadicalSI

3Technologicalcompetition

imp_obs_tech .823

imp_obs_mark_share .691

Note:ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalisation.Rotationconvergedin13iterations.Highfactorloadingsemphasisedinbold,below0.3suppressed.Totalvarianceexplainedby3factors=68.7%

Withregardtotheoutcomequestions,wereportonthe6factorsresultingfromthe

principal component analysis,which together explain 67%of the total variance

(Table22).Thefirsttwocomponentsbothconcerneconomicoutcomes,butinthe

firstfactorweseehighloadingsofeconomicimprovementsforthesocialinnovator

in terms of financial sustainability, revenues, business capabilities and employ-

ment.Inthesecondeconomicoutputfactorwenoticehighfactorloadingsforim-

pactonemployment,incomeandworkskillsforthetargetgroup.Athirdtypeof

outputrelatestosocialcapitalofthemarginalised,intheformofimpactonself-

confidenceofthemarginalised(outc_self_conf),andimprovednetworksofthemar-

ginalised(outc_network).Wehavethereforelabelledthisoutcomefactor‘socialfor

targetgroup’.Thefourthoutcomefactorislabelled‘Physicalcapability’,whichalso

includesincreasing‘life-skills’.Outcomefactor5islabelled‘Publicbudget’,butwe

couldalsohavelabelledit ‘economyforgovernment’.Thisimpactfactorisbased

onhighfactorloadingsfor:‘Reducedpublicbudgetcosts’(outc_SI_pub_budg)and

‘Other complements topublicpolicy’ (outc_public_other). Finally, a6th factor in-

volves:‘Othercivicoutcomes/benefits’(outc_civic_other),butbecauseofthelower

contributiontothetotalexplainedvariance,wedonotshowthescoresonthisout-

comefactorintheSIoutcomeprofiles.

Table22. TypesofSIoutput/outcome,patternmatrixoffactoranalysis

TYPESOFSIOUTPUT

1Economyin-novator

2Economy

targetgroup

3Socialfortar-getgroup

4Physicalcapability

5Publicbudget

6

Civicother

outc_SI_stability .856

outc_SI_rev .841

outc_SI_bus_cap .827

outc_SI_empl .817

outc_SI_mark_cap .776

outc_SI_netw .691

outcome_privateother .665

generate_rev .580 .527

outc_SI_selfconf .534 .468

SIOutcomes

92|SIMPACT–T5.1

TYPESOFSIOUTPUT

1Economyin-novator

2Economy

targetgroup

3Socialfortar-getgroup

4Physicalcapability

5Publicbudget

6

Civicother

outc_employment .983

outc_impr_income .897

outc_workskills .880

outc_network .744 -.310

outc_self_conf .691

outc_SI_cap_other .522 .555

outc_phys_cap .873

outc_lifeskills .713

outc_cap_other .331 .430 .400

outc_SI_pub_budg .772

outc_public_other .572 .552

outc_civic_other .771

ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalisation.Rotationconvergedin40iterations.Highfactorloadingsemphasisedinbold,below0.3suppressed.Totalvarianceexplainedby6factors=67.0%

Lookingattheoutcomeprofiles,andcomparingtheaveragefactorscoresofthe15

caseswitharegionalscalewiththeaveragesforthe24whichareoperationalat

nationalscaleshowsthatthecasesatregionalscaleonaveragegeneratemoreeco-

nomicoutput for the targetgroup,while theSIsatnational levelgeneratemore

economicimpactforthesocialinnovator(Figure21).Theaverageoutcomeprofile

of theSIsat localscaleshowahighscoreon the impact factors: ‘Publicbudget’,

‘PhysicalCapability’,and‘Economytargetgroup’.Theeconomicimpactsfortheso-

cial innovators, themarginalised target group, and the public budget, seems to

changewithanincreasinggeographicalscale.FromSIatlocalleveltheeconomic

impactforthetargetgroupandthepublicbudgetisonaveragehigher,butfrom

implementationatnationalscalethebenefitsfortheinnovatorarebetter(Figure

21).

Figure21. OutcomeprofileforregionalandnationalandlocalSIscale

-0,2-0,1

00,10,20,30,40,5

Economy innovator

Economy target group

Social for target group

Physical capabilities

Public budget

scale_reg N=15

-0,4

-0,2

0

0,2

0,4

Economy innovator




Public budget

scale_nat N=24

Outcomeprofiles

SIMPACT–T5.1|93

Theaverageoutcomefactorscoresbythemeindicatethatit isdifficultforsocial

innovators in the themeof employment to generate economic benefits for their

ownorganisation (in termsof increased financial sustainability, increased reve-

nues, increasedmanagement/business capabilities, and increased employment),

butonaveragetheeconomicimpactonthetargetgroupishigherthanforSIsfrom

theotherthemes(Figure22).ForSIinthethemeofdemographicstheaverageeco-

nomic impact for the targetgroup is ratedrelatively low,butonehas tobear in

mindthatwhenthemarginalisedtargetgroupconsistsforinstanceofyoungchil-

drenorelderly,outcomesintermsofincreasedemploymentorworkskillsareless

applicable.Socialinnovatorswithinnovationsinthefieldofmigrationarestrug-

glingandcharacteristicistheonaveragelowincreaseinmanagementandbusiness

capabilitiesandnetworksfortheinnovatorsasanoutcomeoftheinnovation.

Figure22 Outcomeprofilebytheme,mainfunder,typeofSI,andSIwithverypositivelong-termperspective

-0,3-0,2-0,1

00,10,2

Economy innovator




Public budget

scale_local N=36

-0,10

0,10,20,30,40,50,6

Economy innovator




Public budget

Employment N=35

-1,5-1

-0,50

0,51

Economy innovator




Public budget

Demographics N=14

-0,8-0,6-0,4-0,2

00,20,4

Economy innovator




Public budget

Migration N=11

-0,4-0,3-0,2-0,1

00,10,20,3

Economy innovator




Public budget

Education N=19

94|SIMPACT–T5.1

WhenwecomparetheoutcomeprofilesbytypeofSIwenoticethegoodperfor-

manceofSIswhichaddressanewtargetgroup,excepttheverypoorreportedeco-

nomic andbusiness outcomes for the innovators themselves. Given the average

goodperformanceontheotheroutcomespolicymakerscouldsupportsocialinno-

vatorswiththisapparentlyriskykindofinnovation,e.g.withenhancingtheirman-

agementandbusinesscapacities.Aproduct/serviceinnovationislessriskyforso-

cialinnovators,sincetherewardsintermsofeconomicoutcomesfortheinnova-

torsareonaveragefortheproductinnovatorsfarabovetheaverageofallinnova-

tors.Wehavetonotethatrespondentscouldindicatemultipletypesofinnovations,

butwhentheSIconcernsanewproductorservice(in37cases)theeconomicout-

comesfortheinnovatorareonaveragehigh,butthescoreontheotheroutcomes

arerelativelypoor,exceptontheoutcomefactor ‘Physicalcapability’whichalso

includesimprovedlife-skills.

Adifferencebymaintypeoffundercanbeobservedbetweenthelocalgovernment

andstategovernment,inthesensethatintheoutcomesoftheSIsfundedbythe

lattershowhighscoresonthe factor ‘Economytargetgroup’,and lowscoreson

‘Socialfortargetgroup’.Ontheotherhand,theSIswhicharemainlyfundedbythe

localgovernmentshowlowaveragescoresoneconomicimprovementsforthetar-

getgroup,andhighimpactratingsonsocialimpactforthetargetgroup.Boththese

twoversionsofthegovernmentasmainfunderhaveincommonthattheaverage

SIoutcomesintermsofbenefitstothepublicbudgetandimprovedphysicalcapa-

bilitiesandlife-skillsforthetargetgroup,areaboveaverage.

-0,4-0,2

00,20,4

Economy innovator




Public budget

Stategovernment N=14

-0,6-0,4-0,2

00,20,4

Economy innovator




Public budget

Localgovernment N=5

-0,2-0,1

00,10,2

Economy innovator

Economy Target group



Public budget

typeSI_prod N=37

-0,5-0,3-0,10,10,30,5

Economy innovator




Public budget


OutcomeprofilesbytypeofSI

SIMPACT–T5.1|95

AverypositivelongtermoutlookofSIsseemsassociatedwithgoodscoresonall

theoutcomefactors,butespeciallyonthebusinesseconomicoutcomeforthesocial

innovatorsthemselves.

7.4 IndicatorApplicationinfullSIProfilesatMicroLevel

Inthissectionwepresenttheresultsofthefactoranalysisonallthemainvariables

includinginputs,objectives,obstacles,andoutcomes.Itresultsin5factors(Table

23):thefirst is ‘Economicfor innovator’whichconsistsofhighloadingsforeco-

nomicoutcomesforthesocialinnovator,includingimpactonfinancialsustainabil-

ity,revenues,businesscapabilities,networks,employmentandmarketingcapabil-

itiesoftheinnovator.

ThelabelgiventothesecondSIcomponentis‘Economicfortargetgroup’,andis

basedoneconomicoutcomesforthemarginalisedtargetgroupintermsofemploy-

ment,income,workskills,andtherelatedobjective(obj_ec_cap_target).

Factor3 ‘F&SCapitaldependency’standsfordependencyonfinancialandsocial

capital.Thislabelrelatesfirstofalltohighfinancialobstaclesandhighsocialob-

stacles,butalsotorelativehighimportanceoffunding(imp_res_cap),butalsoICT

andrelationalcapitalasaresource.Factor4iswehavelabelled‘Hybridwithvol-

unteers’.Thecombinationoforganisationalandlegalobstaclesisinterpretedasan

indicationfor‘hybridissues’inrelationtofindingaproperlegalformoforganisa-

tion.TheimportanceoflabourasaninputforSIoftenreferstounpaidwork.

Factor5unitessomesocialaspectswithanegativeloadingforoutcomesonlife-

skills of the marginalised (outc_lifeskills), other civic outcomes or benefits

(outc_civic_other), improved physical capabilities of the target group

(outc_phys_cap),andfortherelatedobjectivetoincreasethepersonal&socialca-

pabilitiesofthetargetgroup(obj_soc_cap_target).Onthecontrary,theobstacleof

competition is relativelyhigh in this factor.Besidesbeingan indicator fora low

orientationoftheSItowardssocialimpact,thecompositionofthisfactorsuggests

thatforSIswhicharelessorientedtowardssocialimpact,thereismorecompeti-

tionfromotherSIs.

Table23. FivecomponentsofSI;patternmatrixoffactoranalysis

FIVECOMPONENTSOFSI

1Economicforinnovator

2Economicfortargetgroup

3F&SCapitalde-

pendency

4Hybridwithvolunteers

5Lowonsocial,competingSI

outc_SI_stability .860 outc_SI_rev .832

outc_SI_bus_cap .805

Economicoutcomesforinnovator

Economicoutcomesfortargetgroup

Dependencyonfi-nancial&socialcapi-tal

Socialaspects

96|SIMPACT–T5.1

FIVECOMPONENTSOFSI

1Economicforinnovator

2Economicfortargetgroup

3F&SCapitalde-

pendency

4Hybridwithvolunteers

5Lowonsocial,competingSI

outc_SI_netw .758 outc_SI_empl .754

outc_SI_mark_cap .712 outcome_privateother .671 obl_bus .601

innercore .402 supporters .400

outc_employment .869 outc_impr_income .820

obj_ec_cap_target .802 outc_workskills .778

act_diversity -.508 .405 imp_obs_fin .683 imp_obs_soc .598

imp_res_cap .371 .560 imp_res_ICT .544

imp_res_rel_cap .512 imp_obs_tech .441

imp_res_soc_cap .415 imp_obs_org .806 imp_obs_legal .679 .428

Imp_res_labour .550

imp_obs_political .541

outc_self_conf .479 -.402

outc_SI_pub_budg .468

outc_network .378 outc_lifeskills -.755

outc_civic_other -.598

imp_obs_mark_share .387 .564

obj_soc_cap_target -.554

outc_phys_cap -.537

imp_res_experts -.399

KB_int

Note:ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalisation.Rotationconvergedin27iterations.Highfactorloadingsemphasisedinbold,below0.3suppressed.Totalvarianceexplainedby5factors=51.1%

ComparingthefullSIprofileforSIsimplementedatlocalscalewiththoseofinno-

vationsimplementedatthenationallevel(Figure23)showsthatforthelocalscale

thefactors‘Economicforinnovator’,‘Hybridwithvolunteers’,and‘Lowonsocial,

competingSI’arebelowaverage.Onthecontrary,atnationalscaletheSIsarelow

on‘Economicfortargetgroup’;‘Lowonsocial’andhighoneconomicsfortheinno-

vator.

EconomicoutcomesofSIimplementedatlocalvsnationallevel

SIMPACT–T5.1|97

WithregardstoSIinthethematicfieldsofgenderandmigration,wehavetobear

inmindthattheprofilesarebasedontheaverageofalowernumberofcases.How-

ever,wecanseethattheSIprofilesforthesethemeshaveincommonthattheyare

bothnot‘lowonsocial’,butpooron‘economicforinnovator’.Forthoseinthemi-

grationtheme,wenoticeahighaveragefactorscorefor‘Financialandsocialcapital

dependency’,and‘Hybridwithvolunteers’.ForSIinthethemeofgender,economic

benefitsforthetargetgroupseemtobeaboveaverage.

Figure23. SIprofilebyscaleofimplementationandthemeofSI

In20casestudiestheSIconcernedanewtargetgroup(typeSI_newgroup),in19

casesthetypeofinnovationhasbeenidentifiedas:‘Newinput(expertise,ICT,de-

sign-skills,material,etc.)’.Forthenewtargetgroupsasaninnovationtypeweno-

ticetheaboveaveragescoreonthefactors:‘Hybridwithvolunteers’,and‘F&Scap-

italdependency’,but lowscoreson ‘economic for innovator’and ‘Lowonsocial,

competingSI’.‘Newinputs’astypeofinnovationseemsassociatedwith‘F&Scapital

dependency’,and‘lowonsocial’,thatis:relativelowimprovementsoflife-skillsas

anoutcomeforthemarginalised.AverypositivelongtermoutlookonSIsisbased

ontwocharacteristics.Oneisthishighlysocialimpactfieldssuchaslife-skills(the

lowscoreon ‘Lowonsocial,competingSI’), forwhichthereseemstobe limited

competitionfromotherSIs.Thesecondcharacteristicis:‘Economicforinnovator’.

The8caseswithanegativelongtermoutlookindeedhaveabelowaveragescore

on ‘Economic for innovator’, andhigher scores for ‘Lowonsocial, competingSI’

(Figure24).

-0,3-0,2-0,1

00,10,2

Economic for innovator

Economic for target group

F&S Capital dependency

Hybrid with volunteers

Low on social competing SI

scale_nat N=24

-0,3-0,2-0,1

00,1






scale_local N=36

-0,3-0,2-0,1

00,10,20,30,4






Gender N=9

-0,8-0,6-0,4-0,2

00,20,40,6






Migration N=11

98|SIMPACT–T5.1

Figure24. SIprofilesbytypeofSI,andlong-termoutlook,basedonaveragefactorscores

-0,3-0,2-0,1

00,10,20,3






typeSI_newgroup N=20

-0,3-0,2-0,1

00,10,20,30,4






typeSI_input N=19

-0,4-0,2

00,20,40,6







-2-1,5-1

-0,50

0,5






Negative LT outlook SI N=8

SIMPACT–T5.1|99

8 INDICATORBASEDPROFILINGOFSOCIALINNOVATIONATTHELEVELOFEUROPEANREGIONS

8.1 RegionalData

AsdiscussedearlierintheSIMPACTproject,andaswitnessedbyotherliterature

(Hubrich,2012;andKrlev,Bund&Mildenberger,2014),themeasurementofSIis

allbutastraightforwardexercise.Inseveralincrementalstepswehaveconstructed

anexpandedblueprintforthemeasurementoftheeconomy-wide“macro”dimen-

sionsofSI(seeAnnex).InthisblueprintwetriedtoincorporateboththeSIpoten-

tialsandneeds,asamirrorfortheeconomicprinciplesofsupplyanddemand(and

inputandoutput),aswellascoveringtangibleandmoreimportantlyintangibleas-

setswhichcouldbesuchpotentialsandneeds.Duringthistheorydrivenprocess,

therecomesamomentthatonealsohastotakeapracticalapproachbydeparting

fromtheexplorationofexistingdatasources,sinceitwilltakemanymoreyears

beforestatisticalofficeswillproducestandardiseddataonSIfromEuropeansur-

veys.Departing fromexistingdatawecould first take in thepossible traditional

economicactivitymetrics.Althoughnotalloftheearlierexploredmetricsareob-

tainableat thispoint in time,wehave tried to findalternatives tosubstitute for

theseearliermetrics.

Inourpracticalexplorationofmacro-dataandsubsequentanalysiswetrytohigh-

lightmetricswhichsignify “usevalue”orat least includesome indicatorswhich

havea“usevalue”component.Thisvaluecomponentineconomicactivitiesisless

easilymeasurable,at leastnotinthetraditionalway.Ethical,environmental,hu-

manrights,communityandsocietalbenefitsarealllesseasilyvisibleandmeasur-

able as they concern non-financial and non-physical resources but they are the

maincontributorstohumanwelfareorbetter-saidwell-being.But,evenifthisuse

valueisnotdirectlyvisibletherearestilldataandinformationthatcouldbegath-

eredonimportant“Usevalue”componentssuchas:

• trustingovernment,institutions,policies,thirdsectorinitiativesand

communityactions(Nicholls2009)

• interestin,andrecognitionof,theneedsofmarginalisedcommunities

• capacitiesto,resolveproblems,addressneedsandconflictinginterests,

andactonemergingconflicts

• participationincommoncauses,workingforthecommongood

SIpotential&needs

Usevalue&valuecomponent

100|SIMPACT–T5.1

Toalargeextend,thesecomponentscanalsobereferredtoasSIprocess-indica-

tors.Trustandqualityofgovernanceareexamples,asmetricsontheseissuescan

serveasSIinput,SIoutput,aswellasSIprocessindicators.

TheinclusionofmetricsfromsurveyssuchastheonefeedingtheOECDBetterLife

Index26,ortheEuropeanSocialSurvey27couldprovidesuchviablealternativemet-

rics.Inaddition,moregenericeconomicorientedmetricscanbeadaptedandinter-

pretedforuseina“landscaping”todiscoverthepotentialandpropensitytoSocially

InnovateintheEU.Thislandscapecanconsistofeconomic,ormoresociallyorien-

tated,macroindicatorsassuggestedbytheTEPSIEproject(Hubrich,2012)anda

followuppaperbyKrlev,Bund,andMildenberger(2014).Manyhavefocusedon

nationalindicators,butatthesametimeallemphasisetheimportanceofthelocal

contextconcerningSI.Workingwithregionaldatawouldthereforemeanaconsid-

erableimprovementwithrespecttomeasurementatthemacrolevel.Wefindthat

thereisamplescopetoincludemoreregionalindicators,ofwhichsomeonNUTS3

level. In addition, the inclusion ofmore contextual, qualitative and quantitative,

dataisanoptionthroughuseofsourcessuchastheearliermentionedOECDand

Europeansurveysandadeeper interpretationofthedataprovidedbystandard,

buthighlyrelevant,sourcessuchastheEUStatisticsonIncomeandLivingCondi-

tions(SILC)andtheEULabourForceSurvey(LFS).

8.2 ExplorativeMethodology:CategorisationofEURegionsonSIComponentsbyPCA

InordertoidentifythemaintypesofSIeco-systemsatregionallevel,multi-variate

methods of data-reduction (principal component or factor-analysis, and cluster-

analysis)areveryappropriatetoidentifypatternsintheSImetrics,whichcanbe

used to make a typology of SI systems at regional level. As explained in the

OECD/JRC Handbook on constructing composite indicators (Nardo & Saisana

2005)PrincipleComponentAnalysis(PCA)andFactoranalysisareusefulincon-

structingcompositeindicators.Theyrefertoapplicationfortraditional,technolog-

icalandbusinessinnovation,explainingthat,sincetherearemanypotentiallyrel-

evantindicatorsconcerningknowledge,innovation,economyandsociety,thereis

aneedfordatareductiontechniques.Thesestatisticalmethodsidentifythestatis-

ticalrelationsbetweenthevariousindividualindicatorsandbasedonthatprovide

themainfactorsorcomponents.Thesamemethodologyisusedintheliterature

discussedintheprevioussectionansweringthequestion‘howfirmsinnovate?’,by

identifyingdifferentmodesofinnovationatfirmlevel.Thisexplorativemethodol-

26SeeOECD:http://www.oecdbetterlifeindex.org/

27SeeNorwegianSocialScienceDataServices(NSD)and:http://www.europeansocialsurvey.org/

Inclusionofsurveydata

PatternsinSImetrics

SIMPACT–T5.1|101

ogycanalsobeusedatthesystemslevel,foridentifyingdifferentmodesofinnova-

tionatsystemslevel(Wintjes2016).Asexamplesofapplyingthemethodoffactor

analysis for identifyingtypesofnational/regional innovationsystems inEurope,

werefertoDunnewijketal.(2008),Wintjes&Hollanders(2010),andWintjes&

Hollanders(2011).Forinstance,afterapplyingatwo-stepfactor-analysis,Wintjes

& Hollanders (2011) use a cluster-analysis to come to the main types (or

modes/models)ofregionalinnovationsystems.Forthesameargumentsasputfor-

wardintheaboveliterature,thesemethodsarealsoappropriatetocategoriseEU

regionsoncomponentsofSI.

Usingtheexpandedblueprintandthetheoreticalandpracticalconsiderationsas

detailedabove,wesetaboutcollectingdatafromanumberofresources.Datahas,

amongstothers,been taken fromDAFNE(DonorsandFoundationsNetworks in

Europe),theWorldGivingIndex,OECDHow’sLife:MeasuringWell-being,TheEu-

ropeanSocialSurvey,theEURegionalInnovationMonitorsurvey,andfromEURO-

STAT’sregionaldata.

InthebelowTable24weshowasampleofthemetrics,orvariables,retrieved.For

instance,variables1and2areapracticalexampleof the “usevalue”metricsor

componentswhichwementionedinthesecondparagraphofthischapter.

Table24. Sampleofvariablesinthedatabase

VariablePotential/

NeedTangible/Intangible Source

1 TrustintheEuropeanParliament Need Intangible ESS

2 Trustinthelegalsystem Need Intangible ESS

3 Employeeswhoareinvolvedinlife-longlearn-ing

Potential Intangible Eurostat

4 Studentsleavingcompulsoryeducation Need Tangible Eurostat

5 Earlyleaversfromeducationandtraining Need Tangible Eurostat

6 Sizeofpublicsector:Employment Potential Tangible Eurostat

7 Sizeofpublicsector:Governmentexpenseonoperatingactivitiesandservices

Potential Tangible WorldBank

8 Helpingorattendinglocalareaactivities Potential Intangible ESS

9 WorldGivingIndex Potential Intangible WGI

10 Safetyasapartofwell-being Need Intangible OECD

Withthesemetricswetrytocapturethetrustrelatedlandscape.Theseareintan-

gibleassetsastheynon-physical,non-monetary,“goods”whicharenon-the-lessan

integralpartofSI intheEU.Variablethreeisagoodexampleofanindicationof

potential,oraninput-indicator.Herewemeasurethenumberofemployeeswho

areengagedinlife-longlearning,aftertheirformaleducationcareer.Anincreasein

102|SIMPACT–T5.1

knowledgeduringlifeisaclearpotentialforinnovationanditisthislastpart(ac-

tuallyan intangibleasset) thatwearemeasuring.Wealsousesimilarvariables,

suchas4and5,whichcanbeusedascontrols.Thesevariablesshouldhaveasimi-

larvalueintheanalysisalthoughtheymightbepresentindifferentfactorsdepend-

ingonthecontext.Somesubjectsaremadeupofdifferentcomponentswhichare

interestingtotestseparately.Onesuchsubjectisthesizeofthepublicsector,where

sizecouldbeitsworkforceoritcouldbethefinancialassetsdeployed.Variables6

and7covertheseaspects.Othermoredifficulttomeasurevariablesaretheones

focusingonthephilanthropicnatureofpeopleandsociety.Theinclinationforpeo-

pletohelpothersordonatemoneycanneverthelessbecapturedasisshownby

variables9and10.Finallyanumberofvariablesareincludedwhichmeasurethe

importancethatpeopleattributetocertainaspectsinlife,suchasadequatehous-

ing,havingajobetc.Variable10‘Safetyasapartofwell-being’isanexampleofthis

(Table24).

Insumwehaveretrieved265SIrelatedmetricsandanadditional5metrics for

comparisonandcontrolpurposes.Ofthese271metrics8areavailableatthena-

tionallevelonly.Thisavailabilityofdataatregionalleveliscontrasttowhatprevi-

ousresearchhasmentioned.TheremainingdataisthenonNUTS1andNUTS2level.

WehaveusedtheexistingdatatoextrapolatetotheNUTS2levelinordertohave

sufficientcoverageforallvariables.Indoingsoweendedupwithadatabaseof360

regions(NUTS0-2)and271variables.

Somemayclaimthatwehaveusedatoobroadsetofindicators.Othersmightques-

tionwhywehavenotincludedindicatorsonenvironmentalissues,healthorsecu-

rity.GiventheSIthemesofSIMPACT,itisquiteabroadsetofindicators,butsince

thiskindofempiricalexercisehasnotbeendonebefore,itisbettertostartwitha

broadset,andnarrowitdowninthecourseoftime.Moreover,somemaywantto

steertheindicatorsettowardsaspecificthemeofSI,withinthisset.

Insuchalargedatabase,thereareofcourseafewissues,whichcanobstructthe

statisticalanalysesofthedata.Thetwomostimportantproblemsinthisrespect

aremissingvaluesandlargedifferencesinscalingofthevariables.Inordertoover-

cometheseproblems,wehavefirstimputedthemissingvalueswithameanvalue

correspondingtothemeanoftheseries.Next,wehavestandardised,ornormalised,

thevaluesforeachofthedataseriestoobtainnormaldistributions(z-scores)ready

forfurthercalculation.Thesearebothnormalprocedures,whichgenericsoftware

packagessuchasSTATAandSPSScanperform.

Duetolargesizeofthedatabase,thereisaneedtoreducethedatawithoutlosing

toomuchof the information themetrics themselvescontain.Thiswehavedone

usingaPrincipalComponentsAnalysis(seethenextsection).Becauseweassume

265SImetricsplus5comparison/

controlmetrics

Obstaclesassociatedtolargedatasets

SIMPACT–T5.1|103

thatallthevariablesarecorrelatedweuseanobliquerotationmethod(Oblimin

withKaiserNormalisation).

Inanextstep,withthefactorsretrievedfromthePCAwehavedonetworegres-

sionsinordertotesttheimpactoftheresultingSIfactorsorcomponents,namely

theimpactonregionalGDPandinanotherregressiontheimpactonamoreholistic,

intangibleandsocialoutputindicatorwhichlooks‘beyondGDP’,namelyaRegional

HumanDevelopmentIndex.WehavetriedtoanalysehowourSImetricsrelateto

this regional index of socio-economic development. In a second comparisonwe

haveusedregionalGDPpercapitadatatorelatetheSImetricstoregionalincome

orproductivityas themore tangibleeconomicoutcome. In thiswaywehope to

captureboththeeconomicandsocialrelevanceofSIaswitnessedbythecollected

data.

8.3 ResultsoftheFactorAnalysis

Table25showsthepatternmatrixofthefactoranalysis.Inthismatrixwefindthe

solutionofthePCAasdescribedabove.Thereisacleardistinctionnoticeableinthe

divisionofthevariablesandtheirweightingsoverthe5components.Inthetable

youcanseethevariablesrankedaccordingtothelargestvaluestartingcomponent

1andwithlesssignificantvalues,withaweightbelow0.30suppressed.

Table25. Factoranalysisonregionalindicators:fiveSIcomponents,patternmatrix

1Governancevs.Civil

2Unemploy-

ment

3TrustinState&Newideas

4Failing

Education

5Engage-ment

Helpingastranger -0.899 0.33WorldGivingIndex -0.839

Citizensaretreatedequallyinpubliceducation

0.823

Corruptionpersistsinlawenforce-ment

0.733

Othercitizensusebriberytoobtainpublicservices

0.713

QualityofGovernmentindex 0.688

Shareofparttimeemploymentintotalemployment

0.669

Housingasapartofwell-being 0.646

Qualityoflawenforcement 0.636

Mostpeoplecanbetrusted 0.579

Corruptionpersistsinregionalelec-tions

0.572 0.323

Environmentasapartofwell-being 0.554 0.429

Qualityofpubliceducation 0.503

Shareofinnovatorscooperatingwithothers

0.482 0.344

104|SIMPACT–T5.1

1Governancevs.Civil

2Unemploy-

ment


4Failing

Education

5Engage-ment

Femaleeducationalattainment:Ter-tiaryeducation

0.474 0.332

Mostpeopletreatyoufair 0.456

Structuralfundsallocationsoninnova-tion

-0.409

Independence/AutonomyonRTDI 0.404

Incomeasapartofwell-being 0.402 0.324

Maleeducationalattainment:Tertiaryeducation

0.398

Safetyasapartofwell-being 0.361

Youthunemployment 0.866

Totalunemployment 0.865 Femaleunemployment 0.859

Employeeswhoareinvolvedinlife-longlearning

0.850

Estimatedtotalinternationalimmigra-tion

0.842

Futureinternationalmigration:Extrap-olationfor2020-2030

0.807

Sizeofpublicsector:Employment 0.527 -0.464

Studentsleavingcompulsoryeduca-tionwithoutadiploma

0.508

Regionalpopulationdensity 0.317

Trustinthepolice 0.866

Itisimportanttothinknewideasandbecreative

0.864

Itisimportantthatgovernmentisstrong

0.829

TrustintheEuropeanParliament 0.818 0.330 Trustinthelegalsystem 0.815

Itisimportanttotrynewanddifferentthings

0.813

Trustinpoliticians 0.348 0.693 Feelingpeopleinlocalareahelpeachother

0.643

Helpingorattendinglocalareaactivi-ties

-0.344 0.573

Feelingclosetopeopleinlocalarea 0.447

Independence/Autonomyingeneral Educationasapartofwell-being -0.896

Educationalattainment:Lessthanpri-maryandlowersecondary

0.887

Earlyleaversfromeducationandtraining

0.764

Jobsasapartofwell-being 0.315 -0.676

Longtermunemployment 0.634 Self-employedpersonsasparttotalemployment

0.614

Peopleatriskofpoverty 0.579 -0.383

Accessibilitytoservices 0.506 -0.563

SIMPACT–T5.1|105

1Governancevs.Civil

2Unemploy-

ment


4Failing

Education

5Engage-ment

Peopleatriskofpovertyorsocialex-clusion

0.502 -0.388

Infrastructureaspartofwell-being -0.492 0.301

Internetaccess 0.398 -0.428

Netmigrationplusadjustment 0.302 -0.411

Annualexpenditureofthemunicipalauthorityperresident

-0.358

Sizeofphilanthropicsector:Numberoforganisations

0.347 -0.369 -0.686

Civicengagementaspartofwell-being 0.663

Shareofinnovatorsreceivingpublicfi-nancialsupport

0.588

Sizeofpublicsector:Governmentex-penseonoperatingactivitiesandser-vices

0.339 0.571

Shareofcompaniesthatintroducedaserviceinnovation

0.523

Businesssophistication 0.44 -0.371 0.493

Percapitanumberofsmallfirms 0.464

Healthasapartofwell-being 0.371 0.341 0.422

Shareforeignersintheregionalpopu-lation

0.422

ExtractionMethod:PrincipalComponentAnalysis.RotationMethod:ObliminwithKaiserNormalization.

a.Rotationconvergedin17iterations.

Inthefirstregionalfactor,whichwehavelabelled‘Governancevs.Civil’weseehigh

loadings(negative) for ‘helpingastranger’andtheWorldGivingIndex, together

withhighloadingsformanygovernanceissues,e.g.:‘citizensaretreatedequallyin

publiceducation’. Since factoranalysis canbeseenasa impressionisticmethod,

there is roomforvarious interpretationsof thedifferent factorsorcomponents.

Withamorecynicalviewwecouldsaythatinfactoroneweseepeopleenjoyinga

highqualityoflife;well-educatedandwithagoodjob,enjoyinggoodservicesina

safeenvironment,butatthesametimenotveryopentogivingandhelpingothers

inneed.Perhapsanexponentofanincreasingindividualisticsociety?

Wewillgiveroomforfurtherinterpretationsbyprovidingamapshowingwhich

regionshaveahighscoreonthisregionalSIcomponentwhichwehave labelled

‘Governancevs.civil’(Figure25).

106|SIMPACT–T5.1

Figure25. Regionalscoreon‘Governancevs.civil’ Figure26. Regionalscoreson‘Unemployment’

Factortwoissimplylabelled‘Unemployment’,butitisnotassimpleasthat,since

italsoincludesLife-Long-Learning(LLL),immigration,andforinstancesizeofthe

publicsectorintermsofemployment.Wedonotethattheregionaldataonthese

issuesreferstothesituationofseveralyearsago.Themap(Figure26Fehler!Ver-weisquellekonntenichtgefundenwerden.)showsthatthisSIcomponentisge-ographicallyveryfragmentedacrossEurope.Ofcourse,thereisquitesomeregional

variationwithinthiscomponent,e.g.amongthetop-10highscoresonthisSIFactor

2‘Unemployment’thescoresofSpanishregionssuchasMadrid,AndaluciaandBar-

celonaaretoalargeextentbasedonhighunemploymentrates,buttheveryhigh

scoresonthisfactorformanyotherregionsinthistop-10(e.g.:forLombardia,Lon-

donandBerlin)arebasedtoalargeextentonothervariableswithhighloadings

withinthisfactor(suchasLLL,immigration,publicsector,andpopulationdensity).

Factorthreerevolvesaroundtrust,newideas,andcohesion;importantintangible

socialmetrics.BasedonthefirstfewhighloadingswehavelabelledthisFactor3:

TrustintheState&newideas,butbesidestrustinthepolice,stronggovernment,

andnew ideas it for instancealso includeswithslightly lower loadings: ‘Feeling

peopleinlocalareahelpeachother’and‘Helpingorattendinglocalareaactivities’.

HighscoresonthisSIfactorcanbefoundinregionsofwestGermany,Spain,and

NorthernItaly(Figure27)Figure26.

Very low

No data available

High

Average

Low

Very highCypress

Crete

MaltaVery low

No data available

High

Average

Low

Very highCypress

Crete

Malta

Unemployment

Trust,newideas&cohesion

SIMPACT–T5.1|107

Figure27. Regionalscoreson‘TrustinState&newideas’ Figure28. Regionalscoreson‘Failingeducation’

Factor4wehavelabelled‘Failingeducation’,becauseitscoreshighonthefollowing

variables: ‘Educationasapartofwell-being’(negative), ‘Educationalattainment:

Lessthanprimaryandlowersecondary’,‘Earlyleaversfromeducationandtrain-

ing’,‘Jobsasapartofwell-being’(negative),and‘Longtermunemployment’.This

factoralsogoeswithahighrateofpeopleatriskofpovertyandlowlevelofacces-

sibilitytoservices.Highscoreonthisfactorcanforinstancebefoundinregionsin

Spain,southernItalyandGreece(Figure28).

Thefifthfactoriscalled:‘Engagement’because‘Civicengagementaspartofwell-

being’isveryhigh,butitisnotofthekindthatisrepresentedbythephilanthropic

sector. This factor also includes innovation policy and service innovation. High

scoresonthisfactorcanbefoundinforinstance:France,Belgium,Netherlands,and

Denmark(Fehler!Verweisquellekonntenichtgefundenwerden.).

8.4 ResultsoftheRegressionAnalyses:ImpactonGDPandbeyond

Inthissectionwepresenttheresultsoftheregressionsandacomparisonthereof.

Asdiscussedearlierwecollectedover270macrovariables,whichhaveabearing

onSI.However,suchalargenumberofdata,withdifferentproperties,presenta

challengewhen it comes to interpretation.A statisticalway to solve these chal-

lengesistoreducethedatabyrescalingandsimplifying.Thegeneralmethodused

forthisisthroughaprincipalcomponentanalysis(PCA).InthisPCAwereducethe

Very low

No data available

High

Average

Low

Very highCypress

Crete

MaltaVery low

No data available

High

Average

Low

Very highCypress

Crete

Malta

Failingeducation

Engagement

108|SIMPACT–T5.1

datawehaveon265variablesto5factors. Theremainingvariablesareusedasdependentvariablesfortheregressions.

Wehavefirstresolvedtheissuesofmissingvaluesbysubstitutingthesewiththe

appropriatemean.Next,wehavestandardisedthevaluesasthedatahasdifferent

scalingandproperties,whichneedtobealignedsoastopreventanyskewnessin

theoutcomes.

Inthebelowscreeplot(Figure29)wecanobservetheeigenvaluecurve,wherethe

“elbow”ofthecurveappearsatabout5components.Wethereforeusethisnumber

forourregression.

Figure29. Screeplotwitheigenvaluecurve

AftertherequireddatamanipulationandPCA

weareinterestedindiscoveringwhetherour

dataisindeedfitforacomparisonbychecking

whether the expected cumulativeprobability

ofthestandardisedvalues(Z-scores)followsa,

near,equalpathastheobservedZ-scores.This

wedousingaP-Pplot.

WehaveselectedtheRegionalHumanDevelopment IndexvariablesandtheRe-

gionalGDPvariablesasourdependentvariablesandbelowweshowtheP-Pplots

forboth(Figure30).

Figure30. P-PplotsforRegionalHumanDevelopmentIndexandRegionalGDPpercapita

Inbothplotsthecurvesfollowasufficientlylinearpathforustobeabletostate

thatthereisanormaldistribution.Ofcourse,weneedtotakeintoaccountthelarge

numberofvariablesandthevarianceinthetypesofvariableswearedealingwith

inthisexerciseasstatedbefore.

SIMPACT–T5.1|109

Onthefollowingtwopagesacomparisonismadeofthe5factors,withontheleft

theRegionalHumanDevelopmentIndex(RegionalHDI)asthedependentvariable,

andontherighttheRegionalGDPasadependentvariable.

Figure31. RegressionsforregionalSIFactor1:‘Governancevs.Civil’withRegionalHDI(left)andGDP(right)asdependentvariables

TheregionalSIfactor1:‘Governancevs.Civil’ispositivelyrelatedtobothregional

HDIaswellasGDPpercapita,sothisSIcomponentindeedseemstoimpactGDP,

andbeyond(Figure31).ThepolicylessonofthisSIfactorisnotthatweshouldstop

helpingstrangers,butthatqualityofgovernanceofoursocietiesmatter,andthat

SIcanbemorethatthe‘feelgood’factorofhelpingstrangers.

Figure32. RegressionsforregionalSIFactor2:‘Unemployment’withRegionalHDI(left)andGDP(right)asde-pendentvariables

TheregionalSIFactor2(‘Unemployment’)withhighloadingsforunemployment

couldbeseenasanindicatorforSIneeds.However,wecouldinterpretthelackof

anegativeimpactonthechosenoutputindicators(Figure32),asanindicationthat

SIcomponentim-pactsGDPandbe-yond(HDI)

Unemploymentasin-dicatorforSIneeds

110|SIMPACT–T5.1

alsotheSIsolutionsareincludedinthesamefactor:e.g. theinvolvementin life-

long-learning,whichisalsopartofthisfactor.Thisfurthersuggeststhathiddenin

thisfactorareSIswithsimilarcharacteristicsandimpacts:‘Life-long-learning’kind

ofSIs,whichcanbefoundundermanySIthemes,butespecially:thethemesofem-

ploymentandeducation.

RegardingtheregionalSIFactor3(‘TrustinState&newideas’)wecanconclude

thatthereseemstobenorelationwitheitheroneoftheoutputindicators(HDIand

GDPpercapita)(Figure33).Basedoneachoftheseparateelementsofthisregional

SIcomponentonewouldratherexpectthisfactortohaveapositiveimpact.Wedo

notseemanysocialneedsconcentratedinthisfactor,butratherelementsofpoten-

tial, e.g.: people trust the government; they see the importance of thinkingnew

ideas;andtheyfeelpeopleinlocalareahelpeachother.Perhapsthisfactorrelies

toomuchonnewideasforSImanagedorpromotedbytheState,andassuchcould

beseenasanunder-usedpotentialforSIinitiatedatgrass-rootslevel,oranimated

incooperationwithaless‘strong’government,inaless‘top-down’modeofinter-

actionandSIpolicy.

Figure33. RegressionsforregionalSIFactor3:‘TrustinState&newideas’withRegionalHDI(left)andGDP(right)asdependentvariables

ConcerningtheFactor4‘Failingeducation’thereisanegativerelationwithboth

outputindicators(Figure34).Besidesbetterandmoreeducation,thecomposition

ofthisfactorsuggeststopolicymakersthatalsoaddressinglabourmarketissues,

increasingaccesstoservicesandinfrastructure,andincreasingaccesstointernet

arepotentialremediesandSIthemestobetteraddresstheSIneedsassociatedwith

‘Failingeducation’.

TrustinState&newideasdonotimpact

HDI&GDP

Failingeducationnegativelyaffects

HDI&GDP

SIMPACT–T5.1|111

Figure34. RegressionsforregionalSIFactor4:‘FailingEducation’withRegionalHDI(left)andGDP(right)asde-pendentvariables

WeconcludethatespeciallytheregionalSIfactors1:‘Governancevs.Civil’and5:

‘Engagement’arepositivelyrelatedtobothHDIaswellasGDPpercapita.Factor2

(‘unemployment’)andFactor3(‘TrustinState&newideas’)donotseemtohave

animpactoneitheroneoftheseoutputindicators.The4thregionalSIfactor‘Failing

education’hasanegativeimpactonboththesetwooutputindicators.

Figure35. RegressionsforregionalSIFactor5:‘Engagement’withRegionalHDI(left)andGDP(right)asdepend-entvariables

8.5 ResultsofClusterAnalysis&ApplicationofRegionalSIProfiles

ThefinalstepinourmethodologyconsistsinclusteringthePCAfactors,andconse-

quentlytheEUNUTS2regions,into4clustersasfourtypesofSI-eco-systems.For

thisweusedthehierarchicalclusteringWardmethodwhichisaminimumvariance

methodfocusedonminimisingthewithinclustervarianceof thefactors.Ward's

minimumvariancecriterionminimises the totalwithinclustervariance.Ateach

112|SIMPACT–T5.1

stepoftheclustering,themethodmergespairsofclusterswithaminimumcluster

distance.Inotherwords:ateachstepthemethodsearchesforapairofclustersthat

leadstotheminimumincreaseintotalwithin-clustervarianceaftermerging.This

increaseisaweightedsquareddistancebetweenclustercentres,whichmustbea

squaredEuclideandistance.Theresultingclustersolutionandthecorresponding

classificationofregionsistranslatedintoamap(Figure36).

Figure36. FourtypesofSIregionsinEurope

We find thatCluster1,e.g. thegreencolouredregions,verymuchrepresent the

Mediterraneanregionaswellasthreelargeurbanregions;London,ParisandBrus-

sels,butalsoNord-Pas-de-Calais,andBratislava.ThesecondCluster(2)whichis

colouredorangerepresentsmuchofNord-westernEuropeaswellasAustria,parts

ofItalyandafewregionsinSpainandforinstancealsotheurbanregionofAthens,

andCyprus.ThethirdCluster(3)iscolouredcyanandexclusivelyEast-European

inmake-upanddoesnotincludeotherEuropeanregions.Finally,Clusternumber

4(yellow)ismade-upofthe“old”WestGermanregions.

Whenweaveragetheregionalfactor-scoresfortheregionsincluster1(thegreen

onesonthemap)wenoticethatthistypeofregionischaracterisedbyalowscore

onthefactor‘Governancevs.Civil’,butahighscoreon‘failingeducation’and‘un-

employment’(Figure37).

Cluster 2

Cluster 3

Cluster 4

Cluster 1Cypress

Crete

Malta

The4EuropeanSIregions

SIMPACT–T5.1|113

Theaveragefactor-scoresofthe133regionswhichareinCluster2(orange)indi-

catethatthistypeofSIregionhasonaveragehighscoresonthefactors‘Govern-

ancevs.Civil’and‘Engagement’,whilehavingbelowEUregionalaveragescoreson

thefactors‘Failingeducation’,and‘Unemployment’.Thecluster3typeofSIregions

canbecharacterisedbybelowaveragescoreon‘engagement’andlesshighaverage

scoresfor‘failingeducation’andunemploymentthantheaverageofcluster1.The

cluster4west-GermantypeofSIregionhasonaveragerelativelyhighscoreson

‘trustinStateandnewideas’.

Figure37. MacroSIprofilesforthefourtypesofSIregionsinEurope

TheregionalSIprofilescanalsobeusedtocomparethemacro-SIprofilesbetween

othergroupsofregionsorcountries.Wegivesomeexamples.

The35regions–forwhichwehaveaSIMPACTSIinourdatabasewithinthetheme

ofemployment–haveadifferentscoreoftheregionalSIfactorsthantheaverage

EUregion(Figure38).Especiallythefactor‘Unemployment’ismuchhigher,whichoffcoursemakesmuchsense.Theaverageregionalcharacteristicsofregionswhere

SIMPACTcasesofSIoriginateforthethemeof‘Demographics&Migration’arequitesimilar:withhigherlevelsof ‘Engagement’and‘Governancevs.civil’,andlowon

‘Failingeducation’. Interestingly,SIsinthefieldofeducationcanbefoundinre-

-0,5

0

0,5

1

1,5

Governance vs civil

Unemployment

Trust in state & new ideas

Failing education

Engagement

Cluster 1N = 56

-0,4-0,2

00,20,40,6

Governance vs civil

Unemployment


Failing education

Engagement

Cluster 2N = 133

-1,4-1,2-1

-0,8-0,6-0,4-0,2

0

Governance vs civil

Unemployment


Failing education

Engagement

Cluster 3N = 52

-1,5-1

-0,50

0,51

1,52

Governance vs civil

Unemployment


Failing education

Engagement

Cluster 4N = 30

ComparisonofmacroSIprofiles

114|SIMPACT–T5.1

gionswithverylowscoreson‘failingeducation’,butwithhighscoreson ‘unem-

ployment’.TheregionalSIprofileofthecasesintheEmploymentthemeandthe

averageregionalSIprofileofthecasesinthethemeofeducationarequitesimilar.

AlsotheregionalSIprofilesofthecasesinthethemeofDemographicsandthosein

Migrationarequitesimilar.

Figure38. AveragemacroSIprofilesforselectedcasesbythemeofSI

Note: TheaveragefactorscoresforallEUregionsinthedatabaseiszero,asreflectedbythegreen-line.TheorangelinerepresentstheaveragefortheSIcaseswithaparticularthemeinaspecificregion.Thisorangelinethereforerepresentsasub-sampleaswedonothaveresultsforSIcasesineveryEUregion.

FromtheseregionalSIprofiles,wecanalsoconcludethatonaveragetheSIMPACT

casesofSIareselectedfromregionswhichhaveonaverageahigherrateofunem-

ployment than theaverageEUregion. Inaddition, the factorengagement seems

higherthantheEUregionalaverage.SIswithaverypositivelong-termoutlookare

especiallytobefoundinregions,withevenhigherscoresonthefactor‘Unemploy-

ment’,butalsoinregionswhichhavearelativehighscoreon‘Trustinstate&new

ideas’.Furthermore,theyhavealowscoreon‘Failingeducation’.

-0,50

0,51

1,52

Governance vs civil

Unemployment


Failing education

Engagement

Employment N = 35

-1-0,5

00,51

1,5

Governance vs civil

Unemployment


Failing education

Engagement

Migration N = 11

-1-0,5

00,51

1,5

Governance vs civil

Unemployment


Failing education

Engagement

Demographics N = 14

-0,50

0,51

1,52

Governance vs civil

Unemployment


Failing education

Engagement

Education N = 19

SIMPACT–T5.1|115

Figure39. MacroSIprofilesforselectedcasesbylong-termoutlookoftheSI

Note: TheaveragefactorscoresforallEUregionsinthedatabaseiszero,asreflectedbythegreen-line.TheorangelinerepresentstheaveragefortheSIcaseswithaparticularthemeinaspecificregion.

8.6 Micro-SI-ProfilesperTypeofregionalSIProfile

ThenumberofSIcasespertypeofregionarequitesmallforcluster4andcluster

3.Concerning themicro-profilesofSIper typeof regionwe therefore limitour-

selvestothecomparisonbetweenthetypeofCluster1(green)andCluster2type

ofregions(orange)(seeFigure40).

Figure40. MicroSIprofilepertypeofregion

Themicroprofilesshowmajordifferences.InCluster1thereareonaverageless

SIswhichare‘lowonsocial’,sotheirsocialrelevanceishigh.Alsointermsofeco-

nomicimpactforthetargetgrouptheirperformanceisonaveragehigher.InClus-

ter2,theSIshaveonaveragelowerratedeconomicbenefitsforthetargetgroup.

Thecasesintype2regionsoftenhavelowsocialimpactscoresonissuessuchas

life-skillsofthemarginalised(as indicatedbyahighscoreonthefactor ‘Lowon

social,competingSI’).

-0,50

0,51

1,52

Governance vs civil

Unemployment


Failing education

Engagement

Very positive LT outlook SI N = 32

-0,8-0,6-0,4-0,2

00,20,40,6

Governance vs civil

Unemployment


Failing education

Engagement

Positive LT outlook SI N = 13

-0,8-0,6-0,4-0,2

00,20,4






Cluster 1N = 18

-0,4-0,3-0,2-0,1

00,10,20,3






Cluster 2N = 21

116|SIMPACT–T5.1

InFigure41wepresentthemicroinputprofiles,andoutputprofilesoftheSIsin

bothcluster1andcluster2typeofregions.

Figure41. Microinput,output,andfullSIprofileforcasespertypeofregion

-0,4-0,2

00,20,40,6

Number of actor support



Knowledge

Cluster 1Input factorsN = 18

-0,6-0,5-0,4-0,3-0,2-0,1

00,10,2

Number of actor support



Knowledge

Cluster 2Input factorsN = 21

-0,10

0,10,20,30,40,5

Economy innovator




Public budget

Cluster 1Outcome factorsN = 18

-0,4

-0,3

-0,2

-0,1

0

Economy innovator




Public budget

Cluster 2Outcome factorsN = 21

-0,6-0,4-0,2

00,20,40,6






Cluster 1Very positive LT outlook SI N = 13

-0,6-0,4-0,2

00,20,40,6






Cluster 2Very positive LT outlook SI N = 10

SIMPACT–T5.1|117

9 CONCLUSIONS

WeconcludethatSIhasmanyaspects,andisanevenbroadersocietalconceptthan

otherformsofinnovation,suchasthemoretraditionaltechnological,andfor-profit

innovations.Besidesaconceptualbroadening,alsothemetricsandmeasurement

approachesneedtoincorporateabroaderperspective,byspecificallyincludingthe

publicsector,thesocialorthirdsector,andtheprivatesector,sinceSIdealsabout

thenewcombinationsof resources and capabilities from these sectors.Abroad

rangeofresourcesandcapabilitiesofthesedifferentsectorsserveasinputtothe

SIs.Inaddition,theobjectives,andthebenefitsandimpactsfromtheSIsdifferfor

eachofthesethreesectors.MeasuringSIthereforeinvolvescapturingtheseaspects

forthevarioussectors.FormeasuringSIorthemeasurementofitseconomicim-

pacts,itisnotenoughtolimittheindicatorstoonlyoneortwoofthesethreeeco-

nomicsectors.

WecanconcludethatthevalueorimpactofSIsderivefromtheinteractionbetween

thesupplyanddemandforSIs.Therefore,indicatorsetsneedtoincludebothindi-

catorsforthedemand,orfortheneedsforSIs,aswellasindicatorsforthepotential

tosupplysolutions.Theinteractionbetweendedemandandsupply-sideofSIas

theeconomicunderpinningofSIisnotmediatedbypricesonmarketsforexchange

value.Aswithotherkindsofinnovationstheproducersandusersofinnovations

have to engage in interactive learning, which involves communicating tacit

knowledgeanddiscussionsofintangiblesandusevalueamongcollaboratingpart-

ners.

Regarding themeasurementofSIatmicro level it is relevant tocapturevarious

inputs,outputs,objectivesandobstacles.Theimportanceofcertaininputsdiffers

byforinstancethetypeofmainfunder,thethemeofSI,andthescaleofoperations.

SIsatlocalscalehaveonaveragealowernumberofactorsandcooperation,anda

lowerdegreeofdiversityofknowledge thanSIswhichoperateatnational level.

Thesetwoinput-factors(a largenumberofactorsandpartners,anddiversityof

knowledge)arealsocharacteristicfortheSIswhichhaveaverypositivelong-term

perspective.

ICTseemamoreimportantsourceofinputforSIinthetheme‘Demographicsand

Education’, than for SIs in the theme ‘Employment’. ICT investments seem also

morecommonamongSIswhichareimplementedatnationalscale(comparedto

thoseimplementedatlocalscale).Ontheotherhand,forSIinthetheme‘Employ-

ment’,knowledgeisarelativelyimportantinput.

Supply&demandforSIsdeterminevalue/impact

Measurementatmicrolevel

ICTasimportantinputforSI

118|SIMPACT–T5.1

ItisdifficultforinnovatorstocombineinoneSIthetwoobjectivesofseizingbusi-

nessopportunitiesandincreasingpublicvalueswhichdonotbenefitthemarginal-

isedtargetgroupdirectly(e.g.:socialcohesion,inclusion,lobbying).

The co-rated importance of organisational and legal obstacles confirms the im-

portanceofthehybridissueforsocialinnovatorsconcerningtheproblemtofind

theappropriatelegalformoforganisationfortheiractivities.

Theconcentrationofsocial,financialandpoliticalobstaclesforcertainSIsseemsto

serveasanidentificationofradicalSIs.

Severaltypesofeconomicoutputcanbeidentified:economicoutcomesforthein-

novator,economicoutcomesforthetargetgroup,andbenefitsintermsofpublic

budget.Othersocialbenefitscannotdirectly,betranslatedintoeconomicbenefits,

oritwouldtakeamuchlongertimetomaterialise.

SIswhichareimplementedatlocalscalehaveahigheconomicimpactforthetarget

groupandthepublicbudget,buttheimpactsfortheinnovatorarerelativelysmall

comparedtoSIswhichareimplementedatnationallevel.SIsimplementedatna-

tionalscalehaveonaveragelessimpactonpublicbudgetandlowerratedeconomic

impactsforthetargetgroup,butthebusinesseconomicimpactsfortheinnovators

areratedhigher.

SIs in the themeofEmploymentarecharacterisedbyonaveragehigheconomic

impactsforthetargetgroup.

SIsthatareproduct/serviceinnovationsdowellontheeconomicimpactsforthe

innovators.SIswhich involveaddressinganewtargetgroupdoverywellonall

impactfields,excepteconomicimpactsfortheinnovator.Inordertoimprovetheir

longtermperspective,policymakersshouldthereforeinvestinthebusinesscapa-

bilitiesofthesesocialinnovators(withoutapplyingfurtheroutputrelatedobjec-

tivesconcerningbenefitsforthemarginalisedtargetgroup).

SIsthathaveaverypositivelong-termperspective,haveaboveaveragescoreson

impactsfortheinnovator,butalsoforsocialaswellaseconomicbenefitsforthe

targetgroup.Themoregeneralpolicyimplicationisthatpolicymakers,whowant

to increase the long-term economic impact from social innovation, should not

merelyfocusonoutputintermsofempowermentofthemarginalisedtargetgroup,

butshouldalsoinvestintheempowermentandlong-termperspectiveofthesocial

innovators.

Diverseconomicoutcomes

LocalSIshowhigherimpactsfor

targetgroups

Product/serviceSIhavehighimpactsfor

innovators

Complementingim-pactsfromempow-eringinnovator&

targetgroups

SIMPACT–T5.1|119

BasedonalargesetofregionalstatisticswithrelevancetoSI,wecanconcludethat

theregionalsituationconcerningSIdifferswithinEurope,andnotalldifferences

canbereducedtodifferencesbetweencountries.

TheidentifiedregionalSIfactorsarebothrelatedtodifferencesinregionalGDPas

wellasregionalHumanDevelopmentIndex,anindexwhichcanbeseenasanout-

putindicatortomeasuretheimpactofSIbeyondGDP.

FourdifferenttypesofSIregions(orregionaleco-systems)withintheEUareiden-

tified.ThefirstgrouporclusterofregionswithsimilarSIcharacteristics,arechar-

acterisedbythehighscoreontheSIfactor,whichwehavelabelled‘Failingeduca-

tion’.ThesecondgroupofregionsarecharacterisedbyhighscoresontheSIfac-

tors:‘Governancevs.civil’,and‘Engagement’.

TheSIMPACTcasesinthefirsttypeofregiondowelloneconomicimpactforthe

targetgroup.TheSIMPACTcasesinthesecondtypeofregionhaveratherdisap-

pointingimpactsforthetargetgroup.Knowledgeisamoreimportantinputfactor

fortheSIMPACTcasesinthefirsttypeofregion,comparedtothoseinthesecond

typeofregions.

SIMPACTSIswithaverypositivelong-termoutlookareespeciallytobefoundin

regions,whichhavehighscoresontheSIfactor‘unemployment’,andwherelife-

long-learningtypeofSIsseemstoservethemarginalisedtargetgroupsaswellas

theirregionaleconomies.

-0,5-0,3-0,10,10,30,5

Economy innovator




Public budget

Very positive LT outlook SI N = 32

-0,8-0,6-0,4-0,2

00,2

Economy innovator




Public budget

Positive LT outlook SI N = 13

-2-1,5-1

-0,50

0,5

Economy innovator




Public budget

Negative LT outlook SI N = 8

4typesofregionalSIecosystems

120|SIMPACT–T5.1

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Wintjes,R.,D.Douglas,J.Fairburn,H.HollandersandG.Pugh(2014).Beyondproductinno-

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Wintjes,René(Editor:FedericoBiagi)(2016,forthcoming).SystemsandModesofICTInno-

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ment_4/21285.full.pdf

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SIMPACT–T5.1|127

APPENDIX

Tablea Multidimensionalconceptionofcapital,power,marginalisation,SI,andcapabilitiesinCRESSI(‘integratingSen,Beckert&Mann’)

Kindsof

SourcesofPower2 Marginalisation(1) Socialinnovation(2) Capabilities(3)

1.Cultural(Ideological) Cm Ci Cc

2.Economc Em Ei Ec

3.Security-related(Military) Sm Si Sc

4.Political Pm Pi Pc

5.Artefactual Am Ai Ac

6.Natural Nm Nc

(1) Basedon:RistoHeiskala(2014).RelationMann’sconceptiontoCRESSI(2) NotethatthismatrixisbasedonRH’selaborationofMann’sTheSourcesofSocialPower.Manndistinguishedfour

sourcesofsocialpower:RHaddstwosources(naturalandartefactual)whileremainingthetwoothers(‘ideologicalbecoming‘cultural’andmilitarybecoming‘security-related’)

Source:HoughtonBuddetal.(2015:8)

FigureaCRESSI’sextendedsocialgridmodelandsocialinnovation

Source:HoughtonBuddetal.(2015)

128|AnnexSIMPACT–D5.1

SIB(SocialInnovationBiographies)GuidingQuestions(Checklist)

IntroductoryQuestion

Pleasedescribethe innovationprocessfromtheemergenceofthefirst ideatothe implementa-tion/diffusionofthesolutionincludingtheactorsinvolved,milestonesandpitfallsinthisprocess.

I. Context&FrameworkConditions

WhatiscontextandpolicyframeworkinwhichtheSIemerged?

II. Problemaddressed

Whatparticularproblem,needordemandisaddressedbytheSI?

Whatistheidea/opportunitybehindthedevelopmentoftheSI?

Andwherediditcomefrom?

Incaseitcamefromoutside:Whatwasneededtoadaptittothecontext?

III. Motivation&CoreSolution

WhoinitiatedtheSI?

Whatwastheinitiators`motivationandbackground?

OfwhattypeistheSI:newproducts/services,organisations,oranewmethodortheirprovision,newskills,competences,resources?

TowhichdegreeistheSIboundtoaspecifictargetgroup?

DoestheSIhaveaspecificgeographicaldelimitation(community,city,regionetc.)?

InhowfaristheSIinconflictwiththegiveninstitutionalsetting?

IV. Resources&BusinessStrategy

Whatarethekeyfeaturesoftheorganisationthataredriving/promotingtheSI(informalorlegalstatus,peopleoccupied,dayoffoundationordurationoftheproject)?

Whatresources(economiccapital,socialcapital,politicalsupportandsoon)hadbeenneededtobringtheactivity/projectintolife?

Towhatextentandinwhichwaydidtheresourcebasedchangeinthecourseoftheinnovationprocess?

AnnexSIMPACT–D5.1|129

Isthereastrategytosustainandoptimisetheflowofresources?

Whatresourcesareneededbutarenot/difficulttoachieve?

Whatkindofknowledgeandcompetencieswasgivenatthebeginningoftheinnovationprocessandwhatwasmissing?Howthegapwasfilled?

Howistheactivity/projectinternallyorganised?Isthereadivisionoflabour?Dotrade-offsbetweenengagementandeffectivenessexist?

Whichsectors(divisionoflabour)areinvolvedandwhatwere/aretheirroles(ideation,implementation,financing)?

V. TheNetwork–Governance,Support&Obstacles

Whichactors(individualsand/ororganisations)whereinvolvedandwhataretheirrolesandobjectivesintheSIprocess?

Isthereanycooperationwithotherprojects?Aretheysimilarordotheyfol-lowother,butcomplementingaims?Ifyes,howdoesitwork(roleofcommu-nicationmedia,platformsofexchange)?

Aretherepoliticallinksordoesthenecessityexisttobringtheinnovationtotheforeofthepoliticalattention?

Towhatextentwastheactivity/projectaresultofperceivedfailuresorab-senceofrelatedpublicpolicymeasures?

Whatarethesocialnetworksthatareimportanttosecuretheresources?

Whathavebeenthemostimportantsupporters/opponents?

Wastheprojectconfrontedwithinstitutionalboundaries(e.g.financing),orotherboundariessuchaslaw,politicalobstaclesormissingsocietalaccepta-tion?Howwasitdealtwith?

VI. Results:Outcomes&Impact

Whatkindofvalue(includingeconomic,socialandotherformsofimprove-mentofthesituation)isgeneratedbytheSI?Whoisthebeneficiary?

Whatmustbegiven(results)tomaketheactivity/projectsuccessful?

Whataretherealisedandexpectedoutcomes(intendedaswellasunin-tended)?

Whathasbeendone/isplannedtodisseminateorscaletheapproach?

Isthereinterestinimitators/followers?Doyouworkonitinanactiveway?

DidmediaplayanyroleinthebirthorspreadoftheSI?


Howistheactivity/projectinternallyorganised?Isthereadivisionoflabour?Dotrade-offsbetweenengagementandeffectivenessexist?

VII. Measurement

Whatistheestimatedcontribution/investmentdonebydifferentstakeholders(Euroequivalent)?

Whatistheaveragebudgetperbeneficiary,andwhatarethemaincostitemsonwhichthebudgetisspend?

Whatistheestimatedaveragevaluegeneratedafterparticipationinthesocialinnovationforthebeneficiariesandforotherstakeholders?

Whatistheestimatedlong-termvaluecreation(after5years)forthevariousstakeholdersandsocietyatlarge?

AnnexSIMPACT–D5.1|131

TextboxI. Fourexamplesofsocialinnovations.fullcasestudiesareavailableattheSIM-PACTwebsite

MothersofRotterdamisarecentprojectofBureauFrontlijn,anon-profitDutchorganisa-tionsetupbythelocalgovernmentinRotterdamtoprovidesupporttopregnantwomaninpoorneighbourhoods.Thebasicideaistofirstreducethehighstressexperiencedbythepregnantwoman,by initiallysolvingsomeof theirmosturgentproblemsfor them,andsubsequently,byteachingthemnewlifeskills.Atthesametime,theprojectsupportsthechildrenfrombeforebirthupuntilfouryears,bywhichtimethechildrenstartschool,andcanjoinanotherprojectofBureauFrontlijn.Thehelpandsupportisachievedwithagroupofstudentspayingfrequentvisitstothefamilies.BureauFrontlijnandMothersofRotter-damhavebeensuccessfulpartlybecauseofthecooperationbetweenstudentsandsocialandmedicalcareprofessionals,andbecauseoftheirfairlyradicalapproachtohelpingthemothersandtheirchildreninneed.Granny'sFinest isa socialenterprise setup (originallyasa foundation) in2011by twoDutchstudents,whosawanopportunityforcreatinganewkindofabusiness,andendeduphelpingelderly,andoftenlonelypeopleintheNetherlands.ApartfromthecentralofficeinRotterdam,themainpartoftheorganisationconsistsofknittingclubsmanagedbyvol-unteersinseveralDutchcitieswhere'grannies'(people,mainlywomen,overtheageof55)cangettogetherandknitfashionproducts,suchasscarvesandhatsfromhighqualitywooltobesoldonlineandincertainshops.Theideaisthatthepeoplegettogethersocially,andthereforereducetheirloneliness,andfeelusefulandproudbymakingthefine,mar-ketableproducts.Thebuyerscanevensendanincludedfeedbackcardtothegrannies.Co-fundingisprovidedbylocalcareproviderswhowanttogetintouchwiththeirfuturecli-ents.Meanwhile,theactivitiesimprovethewellbeingofthegrannies,reducingtheirneedformoreformalcareservices.Thefashionproductsaredesignedbyyounggraduatede-signers,creatingthemopportunitiesforpositiveexposureintheirearlycareers.VoorleesExpress isanalreadywell-establishedprojectofSodaProductiessetupin2006anddevelopedbyAnneandMariekeHeinsbroekinUtrecht.SodaProductiesisafoundationorganisedoriginallyaround theVoorleesExpressproject,whichsupportsyoungchildren(between2and8years)withdifficultiesintheirDutchlanguageskills,aswellastheparentsofthesechildren.Volunteersvisitthefamiliesonaregularbasisforhalfayear,readwiththechildren,andtrytogettheparentstotakeoverthereadingresponsibilitybyengagingthemintheactivity.Tacklinglanguageproblemsearly,wellbeforetheynegativelyaffectfurthereducationalandjobopportunities,aswellasgenerallifemanagement,issupportedbyliteratureasaneffectiveapproach.WORK4ALL isa localpublicprocurementwithsocial returnprojectsetup inRoermond(TheNetherlands)withthepurposeoftacklingfairlyhighlevelsofyouthunemploymentandrelianceonwelfaresupport.WORK4ALLinvolvescompanieshiringunemployedyouthonatemporarybasisforconstructionwork.Inadditiontoasmallmonthlypayment,theyoungpeopleareoffereda simultaneous trainingprogram in civil engineering, and thehope is that theyget furtheremploymentafter the initialphase,getoffsocialbenefits,


becomemoreindependent,andstayawayfromcriminalactivities.Aresponsibilityfortak-ingonthesepeople(asaproportionofallthoseemployedinaproject)isincorporatedinthepublicprocurementcallsfortendersthatthemunicipalitieswritefortheircivilengi-neeringprojects.Aftersomeinitialproblemsduetotoomuchtop-downplanninganden-forcement,theprogramhasbeentailoredtotheneedsofallthestakeholdersinvolved:theconstructioncompanies,themaintargetgroupofunemployedyouth,thetraining

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