Following the empirical research done in the download reportComparative Analysis the work package «Stronger SI Concepts» (WP4) concentrates on the analysis and formulation of business models of social innovation. Taking stock of the 25 SI Business Case Studies, we performed a process of reverse engineering to extract the business models underlying social innovation. Reverse engineering is the application of tools and processes used to study new business ventures in comparison with existing ones. As such, it sheds further light on the broad characteristics of social innovation business models and their value creation mechanisms. The resulting evidence informed the creation of a revised business model canvas for social innovation and a typology of business models of social innovations.

1. Firstly, we found that as a result of integrating commercial revenue streams in their activities, most SIs are faced with new tensions emerging not only from conflicting strategies (social and economic), but also, from tensions arising from antagonistic assets inherent to their social mission (e.g. the employment of vulnerables). While traditional companies assemble complementary assets to serve the single goal of maximizing profits, we found that SIs have to implement creative ways to reach complementarity both in their objectives and in their means/processes. Furthermore, we observed that social innovators are ill equipped to face these challenges, the majority of whom, lack the transversal managerial skills necessary to create a financially sustainable business, while also lacking vertical competences in the industry. Bridging this gap is critical to establishing concrete solutions that respond to market needs while contemporarily reaching social impact.
2. Secondly, contrary to other forms of innovation, social innovations are often characterized by a divergence in allocation of costs, use and benefit. Where typically the subject who pays for the innovation, uses it and benefits from it, in social innovations, this is often not the case as often those who pay for the SI (welfare systems, donors, customers) may not use it and may not benefit from it (or at least not directly). Multiple value propositions are thus needed in social innovations to target each segment in the aim of producing and capturing value to reach social impact.
3. Lastly, refusing to be constrained by resource limitations, we observed that most social innovators have adopted a bricoleur approach to coping with their structural gaps in knowledge and resources (both financial and human) by leveraging their networks to gain what is necessary. By consequence, most social innovators have been forced to adopt frugal solutions, bootstrapping on a lean budget with limited start-up capital and often using their own savings and assets. Finding the right evaluation and generative tools able to facilitate the social innovator to both analyze and construct a sound solution is thus pivotal to supporting the development of healthy and robust SIs.

In conclusion, we found that SIs were often able to tap into resources found in their local contexts, allowing them to grow by embedding their solution in a vast actor-network and cut down on costs and leverage inputs to maximize social value. The vast actor-network supporting SIs, along with the multiplicity of their value propositions, is at the core of the complexity of SI business models. Informed by our empirical findings, we created a modified version of the business model canvas, which includes the different features that social innovations present.

In our research, we observed that while most social innovations excelled in creating networks of in-kind supporters they were less acute in creating a customer base and a suitable value proposition. Thus, the current challenge for mission-driven organizations is to understand how to monetize social value: a question that is framing the innovation need in social innovation business models today. It was also observed that as most social innovations are able to find sustainability thanks to heavy in-kind support, replicating and scaling these innovations could prove more tricky as sustainability is based on the social capital, know-how and resources found in the local context.

In conclusion to our analysis, we have observed the below clusters of characteristics that could lead towards typologies of SI business models, SIs that:

• Employ or engage the beneficiary in the production of commercial value (Beneficiary as an Actor SI Business Model);
• Sell at (often highly) subsidized prices goods/services to the beneficiary (Beneficiary as a Customer SI Business Model);
• Provide a service for beneficiaries that is completely financed by third parties (Beneficiary as a User SI Business Model);
• Engage the community in the creation of the solution (Community Asset Based SI Business Model).

It must be noted, however, that SIs can fall into more than one cluster and that the above typologies are meant to serve as initial observations for further study.

The typology of SI business models is also useful in identifying how SIs generate social value. As seen in our discussion, SIs generate social value in both the value proposition as well as in their value constellation; in other words, in the processes and choices of activities performed, who performs them and who supports them in their endeavours. Table 1 provides a brief summary of different social innovation business models and the process through which social value is generated and sustained. Examples from the SIMPACT Case Collection are also listed to provide case-based support.

In conclusion, social innovations require a, or a combination of, complex business models to ease the tensions that arise between their pursuit of creating social value and remaining financially autonomous. However complex, social innovation business models have the potential of representing a corrective measure to the current failures in capitalism and the welfare state and hence represent an interesting focus of further study.

The construction of a sound business model built around the specificities of SIs may become the doorway to the implementation of self-sustainable solutions. Considering this framework, the POLIMI team is currently developing a toolbox where the selection and the eventual implementation of new tools, is connected to the building blocks of the SI Business Model Canvas. Unlike other toolboxes for social innovation, the business model canvas is not simply one of the tools that can be used to support the generation of innovative solutions or the improvement of existing ones, but is the interface to access the whole toolset. The tools, coming primarily come from the fields of service design, business and impact assessment tools, are meant to provide a clear answer to the core question that each block poses to the innovators.

The assembly of the building blocks and the construction of an overall coherent business model is the core objective of the toolbox, which has been conceived to combine the traditional analytical perspective with a designerly approach. It can be used at the same time to generate new solutions and assess and refine existing ones including three different categories of users: innovators, intermediaries and investors (figure right).

As the research project is still on going, the construction of the toolbox is still in progress. During the 3rd Project Progress Meeting held in Milan the 16th to 18th May 2016, we had a daylong workshop with external experts coming from five European countries to gather feedback and critics on the SI Business Toolbox ratio. We are also partnering with one of the analysed social ventures, winner of the European Social Innovation Competition, to experiment the use of the toolkit so as to test, assess and improve it before the release of its final version, scheduled for the end of 2016.

On the 18th of May the Politecnico of Milano - Department of Design - hosted the SIMPACT workshop on the evaluation of the business toolbox for innovators and intermediaries.

The panel of experts was composed of different expertise coming from the research field as well as from the field of practitioners, intermediaries and municipalities.

The workshop was organised into main blocks. The first block was devoted to the discussion of SIMPACT's main findings. Judith TERSTRIEP introduced SIMPACT project, it's rational and proceeding. Tamami KOMATSU presented the results derived from the in-depth analysis of SIMPACT's 26 business case studies.

Results mainly illustrated the peculiarities of social innovation business models, i.e.:

• solutions depend on availability & accessibility of resources;
• SI seems to work on a hyper-efficiency mode in the use of the resources;
• SI seems to adopt a bricolage attitude which leads to frugal solutions;
• SI seems to be structured on a divergence in allocation of cost, use and benefit;
• SI shows multi-actor business models.

On the basis of these peculiarities a new proposal for a modified canvas for SI business models was proposed. The modified canvas takes into account the peculiarities discussed above to create a framework for mapping the complexities of SIs. It pivots on the creation of social value, which in social innovations is produced on both sides of the canvas. Boxes were also added to concentrate on the social problem that the innovator is facing, the found solution compared to existing alternatives and the governance structure that encompasses it.

As most social innovations present a divergence in allocation of cost, use and benefit and hence multiple value propositions, separate boxes were made for the social and commercial value proposition, as well as separate boxes for beneficiaries and financing supporters (i.e. investors, funders, donors, paying customers, etc.). Lastly, we emphasized the role of in-kind supporters in SI Business Models as key partners and resource providers. The discussion that followed focused on providing constructive feedback of the research results. Two questions were raised:

• 1

  Does the proposed SI Business Model Canvas capture all of the specificities of social innovations? And could it be useful as a generative tool?

• 2

  Are the typologies identified useful?

The panel experts considered the business case study results as interesting and original. They discussed the fact that some of the results challenge the general assumptions on social innovation as they are based on data from reality. However, the derived business model typology was assessed as being too complex.

In order to make them beneficial for social innovators, intermediaries and investors, a simplification was suggested. In particular, the following recommendations were drawn up by the expert panel:

• Simplify the language of the business model typologies
• Test the typologies with different users (innovators, intermediaries, policymakers)
• Design a small toolkit for each area of the canvas
• Clarify the logic of the model (how it has to be read and applied)
• Complexity of the canvas would require someone that can facilitate its use, for example, intermediaries

The second block of the workshop was devoted to the presentation and discussion of the SIMPACT SI business toolbox. and experts where invited to express their opinion on the SIMPACT Toolbox. Alessandro Deserti introduced the SI business toolbox: rationale, users and objectives. A set of questions led the discussion:

• 1

  Is there a risk of setting up just another toolbox?

• 2

  Is there a risk of not considering the resource-intensity of tools?

• 3

  Is there a risk of information overload and a process of «toolification» of activities?

• 4

  Is there a risk that tools simply put a sexy dress on unfit ideas and solutions?

In general experts reported that even though many toolboxes are already available the idea of having one to support SI designers/developers from the point of the economic sustainability is interesting and original. However, the toolbox organised around the business model canvas is complicated and it requires a lot of resources to be used. Forasmuch, the organisation of a series of tools on the different area of the canvas is helpful to support innovators move from the stage of design to that of implementation of a SI solution.

The toolbox as it is conceived should be of great support and use in formal education contexts. Experts suggest also to consider the possibility of exploiting the SIMPACT toolbox as an education tool in universities. In this respect, it would be interesting to link the toolbox with the SIMPACT cases study.

Also experts suggest to develop an example of use of the toolbox on one of the SIMPACT cases. Other toolboxes are delivered with handbooks that support their use in different formal and informal contexts of education (from school and universities to intermediaries). Another possibility is to link the use of the toolbox with the use of a self-assessment analysis. In this way, users would be aware of their level of knowledge and the information they need to use the toolbox in the right way.

Despite, the toolbox should take into account the different levels of expertise people have with the tools, as well as, in general, the knowledge and expertise people have on economic sustainability. One final suggestion was to take into account the possibility of designing the toolbox for different levels of expertise: from a simplified to a very complex version.

Existing forms of Social Innovation

In the report download report«Existing forms of SI» (Part I), the authors discuss the processes of SI and business models that underlie them, as discussed above. In regard to SI processes, the authors compare the differences and the similarities between technological and social innovation. The results show that the two typologies differ along 4 main dimensions: (i) persude aims, (ii) segmentation of the targets, (iii) innovation paradigm, and (iv) expected impacts.

The results of the comparison were then analysed against the results of download reportSIMPACT's empirical findings (Terstriep et al., 2015). What emerged is a significant contradiction between the literature review and the empirical findings on the processes of SI development. Moreover, while the literature review illustrated that there is no difference between technological and social innovation development processes, SIMPACT's case studies indicated the opposite. The report discusses this contradiction and delineates a series of specific differences between social and technological innovation in terms of their respective development processes.

Considering the specificity of the SI process and the complexity of SI Business Models emerging from the analysis of Part I, the report download report«Existing Forms of SI» (Part II) offers, a deeper, multidisciplinary study to advance the understanding of the different factors influencing the specificities of the model. The collection of essays describes and analyzes the dynamic aspects of SI connected to its peculiar development process which is affected by: the scarcity of resources in R&D compared to technological innovation; the lack, in SI, of a culture of prototyping and trial and error; the lack of specific vertical knowledge and transversal cross-sector knowledge; and the relatively little importance that SI lends to economic value compared to social value and immediate impact which in turn leads to complex SI business models.

Criteria &Recommnendations to Strengthen SI

The report download report«Criteria & Recommendations to Strengthen SI» functions as a funnel between the project's empirical findings and the business toolbox, developed towards the end of the project. While download reportSIMPACT's empirical report displays the functioning of social innovations (e.g. legal forms, actors' relationships, production factors and economic circumstances) and the business toolbox will compile numerous instruments for the economic support of social innovations (e.g. business plans, resource plans, self-analysis tools), this report analyses the context variables of socially innovative initiatives and condenses them into a self-analysis questionnaire.

For this purpose, the report initially focuses on existing models for describing the «context» resp. «ecosystems» of social innovations. However, the authors conclude that none of the examined models considers the preliminary empirically determined context components to an adequate extent and thus suggest adapting a context model derived from the analysis of media systems to the requirements of the exploration of social innovations. As a result, they introduce social innovation as beging embedded in four layers of context which affect social innovation inwardly and have to be perforated outwardly in order to initialize diffusion processes. The report ends with a catalogue of questions which can be used by social innovators to examine the context of "their" social innovation with the aim to grasp existing solutions as well as the connected interests, actors and system relations.

In late 2016, SIMPACT will with its SI business toolbox introduce a range of instruments which can be used to follow up on the inquiries of context to improve the economic underpinnings of social innovations.

Policymakers rank their interest into a new topic to the degree to which such topic has impact on economic growth. The more economic growth a topic can generate, the more interest it will receive. The national accounts offer the possible to measure impact on economic growth. It is clear for a project such as SIMPACT that it should be investigated to which degree social innovation can be integrated into a national accounts framework. The team from TNO investigated this issue and published a report with some first results. On June 2nd, these results were presented and discussed during a datalab-session in Brussels. The participants to this datalab were specialists from the SIMPACT-team, experts from Eurostat, the Belgian Planning Bureau, the European Commission and another EU-project. The datalab helped to assess the statements made by TNO.

TNO presented the main line of reasoning to the datalab-participants. In fact there were two lines of reasoning. The first is that most information on social innovation can be found in several topics of the national accounts. The main issue is however to separate the data on social innovations. The common opinion was that at best, there could only be a partial image of social innovation in current national accounts. The report provided several examples of social innovation and what elements of these social innovations could be traced back into national accounts.

The second line of reasoning is that you should not only look at the current inputs and outputs covered by national accounts. Social innovations have an objective, that is to improve the human and social capital of persons (and therefore of societies). Statistical offices have developed techniques to cover information on new topics with satellite accounts. Such an approach can help to identify the impact of social innovation. A lively discussion followed on what such a set of satellite accounts could deliver as insight on social innovation. The effort by national statistical offices will be considerable to develop such insights. Eurostat offered a possible third kind of approach to national accounts, next to satellite accounts. National accounts can also be brought into a systems perspectives. Social innovations can help to improve the resilience of systems. This approach is currently in discussion.

The datalab led to some new directions for the TNO-team. An updated report will follow soon. The outcome is that more insight into social innovation in national accounts is a possibility, but will require significant efforts by statistical offices. Policy makers will not quickly be served on this issue.