Policy Making and Innovation to support Sustainable Lifestyles & Entrepreneurship by Kristian Road Nielsen, Christiane Mera, Rosina Watson, Hugh Wilson

1. This project has received funding from the European Union's Seventh Framework Programme
for research, technological development and demonstration under grant agreement no 613194
EU-InnovatE: Sustainable Lifestyles & Green
Economy in Europe to 2050
POLICY MAKING AND INOOVATION TO SUPPORT SUSTAINABLE LIFESTYLES
&ENTREPRENEURSHIP
19 OCTOBER 2016

2. Agenda
3
15:00 Webinar opens
15:05 Introduction & context
Simon Pickard, Director General, ABIS
15:10 Presentation of emerging evidence & findings
Kristian Roed Nielsen – Copenhagen Business School
Mera Christine – Cranfield School of Management
Wilson Hugh - Cranfield School of Management
Watson Rosina - Cranfield School of Management
15:35 Questions and comments
15:55 Summary & forthcoming events
16:00 Webinar closes

3. Context: Sustainable Lifestyles at EU Level
4
Strategic policy objectives:
1. Promoting smart, sustainable and inclusive growth in the
single market
2. Managing an ageing population while reducing current
levels of energy, transport and resource use
3. Rethinking consumption / production systems as part of a
transition to low-carbon economy by 2050
Ref: SPREAD 2050
(www.sustainable-lifestyles.eu)

4. EU Policy Research Questions
5
i. Links between economic, ecological, human and technological
systems and their influence on consumers' values and behaviour
ii. Short and long-term obstacles and opportunities associated with the
transition to European sustainable lifestyles and green economy
iii. New ways and new business models to manage natural resources
while reducing consumption and improving quality of life
iv. Prospects for sustainable lifestyles and the green economy
(i.e. trends up to 2050)

5. EU-InnovatE Consortium

6. Key Idea
7
„ ... investigate
the creative, innovative and
entrepreneurial roles of users
in developing novel sustainable
products, services and systems
(Sustainable Lifestyles 2.0).“

7. Towards User Innovation
8

8. WP 7
Synthesis
SL 2.0
WP 8 Dissemination
WP 9 Management
WP 6 Policy Design for SL 2.0
WP 5 Measuring Trends SL 2.0
WP 3
Company
Sustainability
Innovation
Integrating Users
WP 4
User
Sustainability
Innovation and
Entrepreneurship
WP 2 Future of SL 2.0
WP 1 Past and Present of SL 2.0
9

9. This project has received funding from the European Union's Seventh Framework Programme
for research, technological development and demonstration under grant agreement no 613194
POLICY MAKING AND INOOVATION TO SUPPORT
SUSTAINABLE LIFESTYLES &ENTREPRENEURSHIP
PRESENTERS:
Kristian Roed Nielsen – Copenhagen Business School
Mera Christine – Cranfield School of Management
Wilson Hugh - Cranfield School of Management
Watson Rosina - Cranfield School of Management

10. Introducing the Presenters
11
Kristian Roed Nielsen
Copenhagen Business School
Mera Christine
Cranfield School of Management
Watson Rosina
Cranfield School of Management
Wilson Hugh
Cranfield School of Management

11. 12
The development of the
mountain bike was achieved
not by a company or firm,
but by biking enthusiasts
(end-users) who started
tinkering with existing
commercial bikes that were
otherwise not suited for
rough use.
What is user (consumer) innovation?

12. 13
”Active” End-users
Co-innovation
Co-production Co-creation
User innovation
Community
innovation
Open source
Crowdfunding and
-sourcing
Prosumer
What is user (consumer) innovation?

13. 14
The policy gap

14. 1. Assess the current policies and instruments
2. Suggest policies and instruments to support consumer driven
innovation
3. Empirically test these novel elements by means of experiments as
well as in a social-media enabled consumer conference.
15
Work Package 6: Objectives

15. Data collection phases
16
1) Assessing the status quo – Barrier and Enablers
• Systematic literature review 84 articles
• EU-Innovate General Meeting Jan 15 40 academics
• Workshop 1, Copenhagen 25 innovators
• Interviews with policymakers 25 policy makers / shapers
2) Generating novel elements of EU policy
• EU-Innovate General Meeting Jan 16 45 academics
• Workshop 2, Copenhagen 27 innovators, policy makers, academics
• Workshop 3, London 27 innovators
3) Testing and refining policy suggestions
• Sustainability Innovation Exchange 150 citizens
• Policy Roundtable 12 policymakers and academics

16. Literature Review: Classifying the literature
17
Driver of the innovation process
Goal of that
innovation process

17. Independent SEI Facilitated SEI
Framework Individual and social-needs framework. Market-driven framework.
Drivers Personal projects based on interests, passions
and idealism. Typically facilitated by
individuals or small groups.
Typically firm, government or university driven
projects. Typically facilitated by one or more
institution(s).
Solutions Localised and context specific solutions to
larger issues.
Dominance of system innovation.
Generalisable solutions to larger issues, built in
part on end-user knowledge.
Dominance of incremental innovation.
Resources Grant funding, voluntary input, crowd sourced
competences via e.g. internet forums. Some
commercial resources if successful.
Income from commercial viability of the given
product or service. Larger government and
university grants. Small SMEs can also seek
crowdfunding
18
Literature Review: Frameworks

18. Literature Review: Barriers
19
Barriers to Independent SEI
Complex and inaccessible
funding opportunities.
Innovating products is
expensive. Loss of warranty.
Lack technical know-how
and necessary tools.
Funding regimes do not cover
their specific innovation.
Fear of ”selling out” prevents
the dissemination of
inventions
Barriers to Facilitated SEI
End-users seen as irrational,
troublemakers and
incapable of contributing.
Inflexible funding schemes
do not facilitate end-user
feedback gained.
Sticky information makes
knowledge facilitation
difficult btw end-user and
project leaders.

19. Policy maker / shaper interviews: Findings
• 25 interviews with policy makers / shapers from across EU
• Lack of knowledge of phenomenon
• Lack of clarity around the terminology
• Silo thinking / working
20
“When I hear co-creation I get 3-4 ideas
of what it could be”
“The concept of consumer-led innovation is not a
concept I was familiar with”
“The traditional way of establishing and implementing
policy is very much top-down (…) in many fields of
policy we do not yet use all the available tools to carry
through reactive policy implementation”
“The interesting issue is how such a concept
would translate into a business model and
how it could be seen to generate business,
turnover, jobs, and welfare creation”

20. 21
But what do users say?

21. This project has received funding from the European Union's Seventh Framework Programme
for research, technological development and demonstration under grant agreement no 613194
Emerging Recommendations @ Sustainable
Entrepreneurship & Citizen / User Innovation

22. Focus on independent end-user innovation
23

23. 24
Lifecycle of a sustainability entrepreneur

24. Testing and refining:
The Sustainability Innovation Exchange
25
• 150 people from
• 40 countries
• 6 x 60 minute topic discussions
• 2 x 30 minute plenaries
• 1,700 unique comments
• Website still live (register to view):
www.globescanforum.com/sie
 Seeded the conversation with specific policy proposals
 Evaluated these policy proposals for impact and feasibility (though user polls)
 Invited users to propose variations to these policy initiatives or indeed to propose
radically different initiatives, and for these to be equally debated

25. 26
The Sustainability Innovation Exchange

26. Policy themes & recommendations: Education
27
Sustainable entrepreneurs of the future
#2: Upscale sustainable entrepreneurship in
Erasmus
Sustainable entrepreneurs of the future
#1: Align sustainability & entrepreneurship
in strategic frameworks for education &
training

27. I. Align sustainability & entrepreneurship in strategic
frameworks for education & training
28
What? Recognise and promote the synergies between societal challenges, education &
training, and entrepreneurship.
How? • Make sustainable development and entrepreneurship issues a tangible,
material part of ongoing Bologna Process negotiations (not mentioned in the
last Bologna Process Implementation report – 2015) for integration into the
European Qualifications Framework
• Integrate a clear link between skills development (in particular
entrepreneurship) and progress towards meeting Europe’s sustainable
development and societal challenges.

28. II. Upscale sustainable entrepreneurship in Erasmus
29
What? Expand the boundaries and focus of Erasmus + and Erasmus for Young
Entrepreneur (EFYE) Programmes to accelerate sustainable entrepreneurship
How? • Modify the current application and evaluation processes for the EYEP scheme,
by incorporating specific sections dedicated to the intended social and
environmental purpose / benefits of applicants’ intended commercial activity,
and the sustainability of their business model. Include an option for host
enterprises to identify themselves as having a social / environmental mission to
stand out to sustainability entrepreneurs
• Refine marketing and promotion of the EFYE scheme to target existing
networks of sustainability (social / green) entrepreneurs, both as potential hosts
for successful applicants and as multipliers to find excellent candidates

29. Policy themes & recommendations: Networks (1)
30
Entrepreneurial ecosystems
#3: Create a sustainable entrepreneurship
Knowledge & Innovation Community

30. III. Create a sustainable entrepreneurship
Knowledge and Innovation Community
31
What? Establish a new Knowledge and Innovation Community through the European
Institute of Innovation & Technology.
Expand the current KIC model to address undergraduate education
How? • Engage with the European Institute of Innovation & Technology to ensure that
Sustainable Entrepreneurship is considered a priority theme for the next Call
for KIC Proposals
• Include criteria for application and evaluation which prioritise citizen and user /
consumer engagement in the KIC. This seems to be absent in existing KICs,
and the feedback from a new approach would provide valuable data and
insight to strengthen the impact of such knowledge & innovation ecosystems.
Criteria should also include requirements for education and training delivery at
undergraduate (even secondary) level, aligned with Bologna and the EQF
www.eit.europa.eu/activities/innovation-
communities

31. Policy themes & recommendations: Networks (2)
32
The power of stories
#4: Leverage the Europe Enterprise
Network for better learning resources
Entrepreneurial ecosystems
#3: Create a sustainable entrepreneurship
Knowledge & Innovation Community
“it is not only about educating those in formal
programs, but also in informal settings, showing
inspiring examples, but also teach the tools to
integrate sustainability into our work and life”
Sustainability Innovation Exchange

32. IV. Harness the Enterprise Europe Network for better
education and learning resources
33
What? A dedicated Topic in the H2020 2018-2019 Work Programme for Societal
Challenge 6 to analyse sustainable / social entrepreneurs in the Enterprise
Europe Network database, to augment the current database with new cases, and
to translate findings into wide-ranging education and learning resources
How? • Stipulate pan-EU analysis of the EEN database to identify common and
distinctive characteristics of successful sustainable entrepreneurs and start-
ups
• Include explicit impact criteria in the Call for Proposals around the creation of
open access / open source teaching materials and toolkits for any education
provider seeking to promote sustainable or social entrepreneurship

33. Policy themes & recommendations: Funding (1)
34
Prioritised investment
#5: Expand European funding for
sustainable ventures

34. Theme: Prioritised investment
• It is a widely accepted reality that the current financial system is too focused on
short term and purely financial returns
• Sustainable entrepreneurs often struggle to secure financing given the hybrid
nature of their ventures and / or increased emphasis on societal impact vs. pure
profitability. Public funding is a major enabling factor for entrepreneurs
• Investors need help to find easier and more stable ways of making their
portfolios more environmentally sustainable
• The EIB and EIF are vital channels for alternative funding, filling an important
gap in the conventional investment market both through venture capital, green
loads and social loans
35
Case Studies
Cozify and Greenrider funding from
Tekes (the Finnish funding agency for
technology and innovation);
Polarstern EXIST grant from the
German Ministry for Economic
Affairs and Energy
www.nib.int
www.greeninvestme
ntbank.com

35. V. Expand European financing for sustainability ventures
36
What? Expand the supply of finance to ventures delivering environmental and /or social
benefits
How? • Increase scale of investments under EIB Microfinance scheme with
prioritisation on social / environmental benefits and impacts of sustainable
entrepreneurship
• Amplify mechanisms to prioritise funding sustainability ventures across other
products (e.g. evaluation criteria)

36. Policy themes & recommendations: Funding (2)
37
The wisdom of the crowd
#6: Leverage crowdfunding for sustainable
innovation
Prioritised investment
#5: Expand European funding for
sustainable ventures

37. Theme: The conviction of the crowd
• Crowdfunding has become a popular alternative source of finance for a variety
of for- and non-profit ventures and projects. By enabling small incremental
investments, typically through intermediary platforms like Indiegogo, crowd-
funding increasingly allows non-professional investors to directly support their
preferred project/venture
• It has been suggested that this form of finance could significantly enable more
sustainable innovation, since crowdfunders are driven by a different investment
logic that focuses on the projects’ core values and legitimacy
• Many of our respondents welcomed crowdfunding as method for “riskier”
sustainable ventures to gain early “seed investment”
• However, there was caution over protection for investors and the ‘blind’ nature of
crowd investment, and agreement that additional sources of finance are needed
to achieve scale
38
“They can give kickstart funding and give early stage
businesses enough time to prove the concept and then
go for private equity”
Sustainability Innovation Exchange

38. VI. Leverage crowdfunding for sustainability innovation
39
What? Expand the current policy knowledge base on crowdfunding to address unique
characteristics linked to sustainability innovation and sustainable entrepreneurship
How? • Recommend that the European Crowdfunding Stakeholder Forum report on
Crowdfunding for Sustainability Innovation (role of sustainability innovation
currently absent from Forum’s forward objectives): ensuring the inclusion of
perspectives from the European Crowdfunding Network
• Report on best practice on specific sustainability platforms (e.g. Ecocrowd,
funded by German Environmental Foundation) and government co-financing
• Understand whether EU regulatory framework is required to protect EU
investors (e.g. USA regulation model)

39. Policy themes & recommendations: Funding (3)
40
Giant green incubators
#7: Align European VC funding with corp-
orate venturing for sustainable enterprise
“Corporate venture financing can
provide legitimacy to a start-up,
it can provide access to networks and
resources within the business
and, most importantly,
it can provide options for scaling
through existing markets”
(Sustainability Innovation Exchange)

40. 41
What? Explore closer alignment / harmonization of current EIB and European Investment
Fund (EIF) venture capital funding instruments with corporate venturing to
promote new sustainable enterprise development, including enterprises with
social purpose
How? • Design of a public Venture Capital investment scheme based on the
implementation of a new co-financing scheme pioneered by EIB which creates
framework conditions and favourable environment for companies to co-invest
in new sustainable enterprise development
VII. Align European VC financing with corporate
venturing for sustainable enterprise

41. Policy themes & recommendations: Funding / Scaling up
42
Giant green incubators
#7: Align European VC funding with corp-
orate venturing for sustainable enterprise
A class of their own
#8: Recognise new legal enterprise form
for sustainable ventures
“Entrepreneurs want to command higher
valuations, achieve greater impact, and build
companies to last at scale with integrity. The
B Corp legal and performance standards help
ensure that B Corps and their investors meet
all three of these objectives”
(B-Corp website)

42. VIII. Recognise new legal enterprise form for
sustainable ventures
43
What? Expand the legal definitions of companies to recognise the emerging
phenomenon of sustainable enterprises and hybrid forms
How? • Formalise For Benefit Corporations ‘B Corps’ as legal form at EU level
• Could be achieved through revision/modification of the existing Societas
Europaea legal framework

43. Policy themes & recommendations: Impact
44
Modelling impacts
#9: Enhance strategic policy making through
agent based/scenario driven impact
modelling

44. Theme: Modelling impacts
45
Country’s household CO2 emissions to 2050

45. Model outputs - % reduction in total CO2 emissions by 2050
by innovation type
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Cooperative
living
PV / Green
energy
Reduced km
travelled
Electric cars
%reductionintotalCO2emissions
Innovation type
UK
Germany
Spain
46

46. IX. Enhance strategic policy making through household
based / scenario driven impact modelling
47
What? Use household (agent) based / scenario driven modelling to enrich policy thinking
and decision making
How? • Use household (‘agent’) based modelling to assess potential impacts of range
of innovations types under required scenarios
• Leverage governmental databases to provide meta-inputs for scenarios and
impact modelling
• Build deeper understanding in policy agencies about interdependency of
systems and domains (e.g., food, energy, mobility, living)
• Expand and enhance the toolkits available to policy makers through training
workshops and demonstrations

47. Policy themes & recommendations: Open policy making
48
Beyond legitimacy
#10: Analyse user & citizen roles in
innovative policy making
“There are advantages we see of
encouraging more open dialogue to shape
our thinking around an issue…. We tend to
get better ideas and stronger inputs as a
result of exploring broader perspectives
on an issue other than our own”
Sustainability Innovation Exchange
“Toolkits for citizens in how they can turn their views into policy could help”
Sustainability Innovation Exchange

48. X. Analyse user & citizen roles in innovative policy making
49
What? Support new research into the emerging phenomenon and structures that
surround user and citizen innovation for sustainability, and the implications for
open policy-making at EU, national and regional levels
How? • Prioritize analysis of the factors that support and empower new clusters of
users and citizens to engage in policy-making for sustainable futures
• Require the creation of new platforms to give access to wider participation,
whether to provide input to proposed policies or to remove financial barriers to
participation in politics, and to share examples across government domains /
departments and nations of open policy making in practice
www.mind-lab.dk/en www.represent.me www.citizenlab.co
www.crowpac.co.uk

49. Q&A
50
Modelling impacts
#9: Enhance strategic policy making though
agent based/scenario driven impact
modelling
Beyond legitimacy
#10: Analyse user & citizen roles in
innovative policy making
A class of their own
#8: Recognise new legal enterprise form
for sustainable ventures
Giant green incubators
#7: Align European VC funding with corp-
orate venturing for sustainable enterprise
The conviction of the crowd
#6: Leverage crowdfunding for
sustainability innovation
Prioritised investment
#5: Expand European funding for
sustainability ventures
The power of stories
#4: Harness the Europe Enterprise
Network for better learning resources
Entrepreneurial ecosystems
#3: Create a sustainable entrepreneurship
Knowledge & Innovation Community
Sustainability entrepreneurs of the future
#2: Upscale sustainable entrepreneurship
in Erasmus
Sustainability entrepreneurs of the future
#1: Align sustainability &
entrepreneurship in strategic frameworks
for education & training

50. This project has received funding from the European Union's Seventh Framework Programme
for research, technological development and demonstration under grant agreement no 613194
Questions & Feedback from Participants

51. 52
Summary & Forthcoming Events
FINAL CONFERENCE
 TUESDAY, NOVEMBER 22
 HOSTED BY ABIS @ ATELIER
DES TANNEURS IN BRUSSELS
 EXPLORATION OF PATHWAYS TO
ACCELERATE SUSTAINABILITY
ENTREPRENEURSHIP
 NO CONFERENCE FEES!

52. 53
For More Information
www.euinnovate.com

53. This project has received funding from the European Union's Seventh Framework Programme
for research, technological development and demonstration under grant agreement no 613194
Thank you for your time!