Presentation by Esteve Almirall, Esade Business School, on how policy can support digital social innovation (DSI). Presented at February 3rd 2014 DSI workshop in Brussels.

1. Digital Social
Innovation
- Policy Mila Gasco
Esteve Almirall
ESADE
Business
School
mila.gasco@esade.edu
esteve.almirall@esade,edu

2. the need for
innovation

5. innovation
frameworks

6. Innovation Policy Frameworks
50’s and 60’s
Innovation Policy based on the provision of
Research and Knowledge
National Science Foundation,
National Laboratories,
DARPA,
National Institute of Health
(NIH),
etc.
Vannevar Bush

7. Innovation Policy Frameworks
50’s and 60’s
Main factors of change
§ The entrance of the industry in basic
research.
§ Growing importance of academic
institutions.
§ Success of academic institutions
promoting entrepreneurship.

8. Innovation Policy Frameworks
90’s
Systems of Innovation
Key Idea: Innovation as a result from a complex
set of interrelationships between
different actors: companies, universities,
research institutes, ..
Lundval, Freeman, Edquist, ...

9. Innovation Policy Frameworks
Systems of Innovation 90’s
Main factors of change
§ Large stock and availability of
knowledge.
§ Increased connectivity.
§ Good access to financing.
§ Highly educated and mobile workforce.
§ Need of innovation for competing.
§ The experimentation economy.

10. Innovation Policy Frameworks
Open Innovation
Key Idea: Internal and external knowledge should
be at the same level.
§
§
§
§
Outside-in movement.
Inside-out movement.
Coupled.
The Importance of the Business Model.
Chesbrough, Wim Vanhaverbeke, West, Gassman, ...

11. the need for
intervention

12. The need for Intervention
a) Spillovers as an argument for policy legitimation
Key idea: Social benefits of Innovation exceed the
benefits of individual actors (Gustafson and
Autio, 2006)
Types of Spillovers
(Jaffe, 1996;Griliches, 1992)
Knowledge Spillovers. Knowledge developed by one
actor becomes available to others, e.g. workforce
mobility, publications, informal contacts, . . .
Network Spillovers. Technologies developed in
separated contexts that are complementary, e.g.
hardware and software, . . .
Rental Spillovers. Unability of companies to
fully appropriate the benefits of Innovation.

13. The need for Intervention
b) Market Failures
Key idea: Markets result in suboptimal outcomes
(Arrow, 1962; Nelson, 1959)
Innovation Market failures
(Gustafsson and Autio, 2006;
Chaminade and Edquist, 2006)
Lack of appropriability. Innovators many times
lament that competitors profit more from their
innovations (Teece, 1986).
Uncertainty. Companies, specially small ones, are
reluctant to invest, even if the expected value is
positive, because the outcome is uncertain.

14. The need for Intervention
b) Market Failures
Key idea: Markets result in suboptimal outcomes
(Arrow, 1962; Nelson, 1959)
Indivisibility. A very step minimum scale of both
knowledge and capital.
Asymmetric Information. Companies find sometimes
difficult to persuade investors and/or recruit
staff.
Policies. Subsidizing R&D, promoting basic
research at universities, creating and protecting
intellectual property rights, . . .

15. The need for Intervention
c) System Failures
Innovation System: All important economic, social,
political, organizational, institutional
and other factors that influence the
development, diffusion and use of
innovations (Edquist, 1997)
Key idea: Identification and removal of
bottlenecks that can hinder the system is
of primary importance.

16. The need for Intervention
c) System Failures
System Failures
(O’Doherty and Arnold, 2003; Gustafon and Autio,
2006)
Capability failures. Underdeveloped parts: venture
capital, research organizations, etc.
Network failures. Support for interorganizational collaboration, risky and prone to
failure, limiting inter-organizational learning
and preventing innovation.

17. The need for Intervention
c) System Failures
System Failures
(O’Doherty and Arnold, 2003; Gustafon and Autio,
2006)
Institutional failures. Institutions such as
patent laws or norms, influence the relation
between universities, research centers and
companies. Inability to (re)-configure needed
institutions.
Framework failures. Referring to both the
regulatory framework and social conditions such
as culture, sophisticated consumer demand and so
on.
Policies. Incubators, Collaborative Programs,
Support for Research Organizations, etc.

18. The need for Intervention
1)
2)
3)
4)
Spillovers
Market Failures
System Failures
Ecosystem Failures

19. 2003 - 2014

20. 2003

21. 2003
dyadic relationships
company to company
2014
multiple relationships
ecosystems

22. 2003
own the innovation
2014
Innovation of others

23. 2003
buy & license
2014
foster & enable

24. 2003
IP
2014
governance
business models

25. 2003
Intermediaries
for search
2014
Intermediaries for
enabling processes
and maintaining
communities

26. 2003
2014
incubators
accelerators

27. 2003
Competing
with your own
products and
services
2014
Competing
with the
ecosystem

28. Platform
Service
- govs. - orchestrators
Providers
resources to regulate
(zero-sum game)
resources to leverage on
(non zero-sum game)

29. Platform
Service
- govs. - orchestrators
Providers
developed in-house
always fall short
high-cost
no sharing
local offer
fragmented
co-developed
with users, communities
free and not-free
empowering entrepreneurship
driven by innovation
stimulating growth

30. innovation
policy

31. innovation policy
1) More targeted
2) With more specific objectives
3) Tapping into behavioral mechanisms
4) Applied to non-linear systems
5) In complex environments
6) New affordabilities because of IT
7) Poorly evaluated

32. e-i
r
nt
ve
n
innovation policy
1) Co-created using with
distant agents
2) Experimental
3) Higher level of
abstraction depending on
the capabilities of the
agents.

33. Open Data
- success story ?? -

35. 1) > 385.000 data sets (2011)
2) > 200 organizations including federal
agencies, sub-agencies and PPP
3) > 50 Open Data challenges with prices
going from $30 to $15,000,000

36. … however …
> 4M downloads since 2009
1) out of the 137 apps for android only 24%
have more than 10K downloads
2) no app ranked in top 100
3) Open Data downloads declining since 2011

37. … example …
Dept of Energy Challenge
Leafully (leafully.com) allows citizens to
analyze their own energy behavior
First prize $100,000
A year later only a few thousands users out
of the 34M potential users

38. DSI - Analysis

39. DSI WORK BY THE EU
Policy perspective
•
•
•
•
•
•
•
•
•
The Renewed Social Agenda
The Integrated Lisbon Guidelines for Growth and Jobs
The Strategic Guidelines and Regulations on Cohesion Policy
The second pillar of the Common Agricultural Policy
The Sustainable Development Strategy for an Enlarged EU
The 2020 Vision for the European Research Area
The Innovation Union
A European Information Society for Growth and Employment
The Digital Agenda
39

40. DSI WORK BY THE EU
Main programs and supporting schemes
The European Regional Development Fund
The European Social Fund
Open Method of Coordination
The European Agricultural Fund for Rural Development
The Framework Programmes for Research and
Technological Development
• The Lifelong Learning Programme and other educational
and cultural programmes
• The Competitiveness and Innovation Framework
Programme
•
•
•
•
•
40

41. DSI WORK BY THE EU
Tools
• Knowledge sharing and dissemination
• Participative processes for stakeholders in the
preparation and implementation of policies
• Policy coordination and capacity building
• Supporting studies, research and evidence of good
practice for policy planning and policy development and
for advancing knowledge on social innovation
• Support of social experiments
• Support of social entrepreneurs and enterprises
• Infrastructure and enabling factors
41

42. DSI Ecosystem Communities
Open
hardware
and
open
source
Developers
Smart
ci<zen/Civic
Society
Open
government
Innova<on
labs
Open/big
data
42

43. MACRO LEVEL ANALYSIS
Communities
Focal
actors
Enablers
Governance
Failures
Open hardware
and open source
Firms
supporting
Open Source
Activists
Open Source
platforms(giithub)
Communities
Peer governance.
Use of technological
platforms.
High entry barriers (technological
skills).
Lack of conflict-resolution mech.
Tension bt hierarchy and equality
Developers
Developers/
entrepreneurs
Tech events
Accelerators /
Incubators
VCs
Tech blogs &
magazines
Decentralized.
Micro governance
High entry barriers (technological
skills).
Lack of interconnection between
developers
Lack of visibility
Difficulties in value capture
Innovation labs
Innovation labs
themselves
Networks (ENoLL)
Networked. Formal
enabling/servicing
structures
Lack of interconnection between
different types of labs.
Cost of being a network member.
Open/big data
(Local)
governments
Competition
organizers
Networks of
developers
O.D. accelerators
O.D. evangelists
Top down (govs decide
what, when and how to
open)
Lack of standardization
Lack of reuse
Little sharing of good practices
Lack of visibility of datasets
Apps’ discovery problem
Internal conflicts in govs
Smart citizen/
Civic Society
Local govs
Intermediary org
providing
structure.
Project based.
Use of social media
platforms
Lack of interconnection between
citizens and between initiatives.
Lack of awareness. Lack of skills
Open democracy
Political
activists
Organizations.
Evangelists.
Blogs.
Distributed. Use of
social media platforms
Lack of interconnection among
groups.
43

44. MICRO LEVEL ANALYSIS
Communi'es
Instruments
Mo'va'ons
Incen'ves
Open
hardware
and
open
source
Gov
contracts
and
procurement
Crea<ng
fast
growing
plaGorms
(companies).
Reducing
cost
(companies).
Value
capture
(companies)
Reputa<on/skills/signaling
(dev)
Scalability.
Less
cost.
Increase
of
profit.
Contracts
/
Employability.
Developers
Seed
funding.
Organiza<on
of
events,
Support
to
entrepreneurs
Incubators
and
accelerators
Building
a
company
Developing
new
products
/
services
Solving
ini<al
support
problems.
Exposure
and
capital.
Innova<on
labs
Public
funding
(ini<al
and
projects).
Fostering
growth.
Bridging
the
digital
gap.
Crea<ng
innova<ve
socie<es.
Providing
support
to
networks
and
civil
society.
Extrinsic
monetary.
Opportuni<es
for
learning
and
networking.
Visibility
and
reputa<on.
Open/big
data
Organiza<on
of
compe<<ons.
Support
for
networking.
Knowledge
sharing
and
dissemina<on.
New
services
(apps).
Poli<cal
incen<ves
(Ci<es).
Reputa<on/learning
(developers).
Value
capture
(apps).
Percep<on
of
transparent
(ci<es)
Services
with
less/no
cost.
Contracts
/
hiring
(developers)
Gains(developers)
Smart
ci<zen
/Civic
Society
Projects.
PlaGorms.
Direct
public
funding.
Intrinsic
&
personal
fulfillment.
Reputa<on.
Personal
sa<sfac<on.
Increase
in
visibility
&
reputa<on.
Open
democracy
Legisla<on
–
transparency
ini<a<ves.
Par<cipa<on
projects.
Increase
in
democracy
(govs).
Reputa<on
(govs).
Intrinsic
mo<va<ons
(ci<zens).
BeZer
electoral
results
(gov).
Personal
fulfillment
(ci<zens).
Development
of
projects
(ci<zens).
44

45. esteve almirall
esteve.almirall@esade.edu