Innovation, Value Creation and Impact Assessment

Abstract

Emerging technologies can be defined as a set of technologies whose development and application areas are still expanding rapidly, and their technical and value potential is still largely unrealised. Naturally, this leads to a vivid innovation environment for these technologies. In this book, tech-savvy people can easily read and understand the working principles of 34 different emerging technologies. And then, they can see in what areas these technologies are used and how they can create value. Moreover, the book starts with an “Innovation Journey” chapter. This chapter focuses on innovation and how ideas are converted into value and business. By value, we mean monetary, environmental and social value. In addition, for entrepreneurs and start-ups, we also show the funding and financing mechanisms for innovative ideas.

The author would like to acknowledge the help and contributions of Emre Çağatay Gümüş, Abdullah Talip Akgün, Ali Kağan Önver, Nisa Erdem, Mert Yavaşca and Mehmet Akif Ekrekli in completing this chapter.

Climate change and sustainability are alarming subjects in the world. On the other hand, mitigating the adverse effects of climate change, protecting the economies and supporting green business growth are other concerns as well. “Emerging Technologies: Value Creation for Sustainable Development” compiles 34 emerging technologies and investigates their use cases in 17 United Nations Sustainable Development Goals fields. After reviewing thousands of companies worldwide, we explore the business models of 650 noteworthy and innovative companies from 51 countries. These models demonstrate how technologies are converted to value to support sustainable development. The technologies are the ones with market diffusion. Thus, we deliberately omitted the research and development stage ones that are not commercially available. The book focuses on the use of emerging technologies to support sustainable development. Authorities and policymakers will investigate how technology is utilised to foster any of the 17 goals by seeing the novel and innovative business models all around the world.

One purpose is to attract the attention of the technological world. Emerging technologies can be defined as a set of technologies whose development and application areas are still expanding rapidly, and their technical and value potential is still largely unrealised. Naturally, this leads to a vivid innovation environment for these technologies. In this book, tech-savvy people can easily read and understand the working principles of 34 different emerging technologies. And then, they can see in what areas these technologies are used and how they can create value. Moreover, the book starts with an “Innovation Journey” chapter. This chapter focuses on innovation and how ideas are converted into value and business. By value, we mean monetary, environmental and social value. In addition, for entrepreneurs and start-ups, we also show the funding and financing mechanisms for innovative ideas. On the other hand, the companies and investors will be able to see what sort of skills and competencies are used in various fields. They can follow bright and successful use cases and see how they can expand their businesses in other sectors. The 650 companies include international corporations as well as numerous bright and promising start-ups. This will give corporations an opportunity for acquisition and investment opportunities.

This book aims to present that emerging technologies can create economic, environmental and social value to achieve United Nations Sustainable Development Goals. The book is organised as follows: Chap. 1 investigates the innovation journey by focusing on the innovation process, supporting mechanisms for innovation, funding and financing mechanisms, business model theory and value creation and, finally, impact assessment. Chapter 2 presents 34 emerging technologies, including 3D Printing, 5G, Advanced Materials, Artificial Intelligence, Autonomous Vehicles, Big Data, Biometrics, Bioplastics, Biotech and Biomanufacturing, Blockchain, Carbon Capture and Storage, Cellular Agriculture, Cloud Computing, Crowdfunding, Cybersecurity, Datahubs, Digital Twins, Distributed Computing, Drones, Edge Computing, Energy Storage, Flexible Electronics and Wearables, Healthcare Analytics, Hydrogen, Internet of Behaviours, Internet of Things, Natural Language Processing, Quantum Computing, Recycling, Robotic Process Automation, Robotics, Soilless Farming, Spatial Computing and Wireless Power Transfer. The following chapters briefly provide information about 17 United Nations (UN) Sustainable Development Goals (SDGs) and present the business models of 650 use cases from 51 countries worldwide. The 17 SDGs with their respected UN SDG numbers are: (1) No Poverty; (2) Zero Hunger; (3) Good Health and Well-being; (4) Quality Education; (5) Gender Equality; (6) Clean Water and Sanitation; (7) Affordable and Clean Energy; (8) Decent Work and Economic Growth; (9) Industry, Innovation and Infrastructure; (10) Reduced Inequality; (11) Sustainable Cities and Communities; (12) Responsible Consumption and Production; (13) Climate Action; (14) Life Below Water; (15) Life On Land; (16) Peace, Justice and Strong Institutions; and (17) Partnerships for the Goals. Finally, we conclude the book with a conclusion and a brief discussion.

1.1 Innovation

Innovation means creative destruction or a process of industrial evolution (Schumpeter 1942). Innovation can be achieved by new products or processes, manufacturing methods, markets and supply chains and new organisational structures and more (Joseph Schumpeter 1934). From the built environment perspective, social innovation has come forth as a tool to address challenges faced by the environment and societies and foster sustainable development (Horgan and Dimitrijević 2018). Moreover, social innovation is necessary to respond to “an unmet social need” (Murray et al. 2010). Procurement of innovation can be done by purchasing the process of innovation or its outcomes. On the other hand, public procurement is a term used to represent the purchase of goods, services and works by government units and state-owned institutions (Crisan 2020). The public acquisition enables public institutions to perform their functions. The procurement of innovation can be used to achieve social outcomes (Crisan 2020). As a result of those benefits, public institutions are in favour of innovation and public procurement. To take advantage of those benefits, fostering innovation is a reasonable strategy for public management.

Demand-side policies to trigger innovation, including public procurement, can be applied through the whole life cycle of innovation. Innovation life cycle follows the pattern of identifying problems, generating ideas, developing proposals, implementing projects, evaluating projects and finally diffusing lessons (OECD and Statistical Office of the European Communities 2005). Public procurement can be used as an innovation fostering tool in two ways: public procurement of innovation (PPI) and pre-commercial procurement (PCP). PPI refers to buying an innovation that is new to the market or is not commercialised, whereas PCP means buying an innovation that does not exist in the market and is looking for help in its R&D (Rolfstam 2012). PPI is realised when products are ready to enter the market or already in the market in small sizes (European Commission 2020). The innovation process of goods or services does not end. Publicly procured goods or services may have a chance to gain scale in time, such as production in high volumes, acquisition of new customers and procurement overseas. Corporate growth can be determined by the market’s available resources and consumption rates (Bettencourt et al. 2007). When the solution posed by the project has other buyers both from public and private institutions, production and consumption will increase by nature. The next question that should be examined is why growth in PPI projects is beneficial for governments? The answer is that the scaling of PPI projects leads to a more stable and stronger market (European Commission 2020). Public procurement of innovation will endorse innovation through (Lember et al. 2011):

• (i) Creating new markets for products and services

• (ii) Creating demand and providing use cases

• (iii) Providing a testbed for innovative ideas

• (iv) Encouraging innovation by leading the market

In addition to the increase in production and innovation, companies with public sector support for innovative solutions can become more successful in exportation. It means that growth from globalisation in those small- and medium-sized enterprises (SMEs) is more likely to happen (Love and Roper 2015). Scaling and growth are crucial in terms of sustainable innovation. A successful local start-up with an innovative solution should extend its products and/or services overseas for growth.

A broader definition of PPI refers to a policy instrument that supports innovation and includes small- and medium-sized enterprises (SMEs) in the public procurement process (Radoslav Delina 2021). Public procurement of innovation is a powerful tool for regional authorities since it encourages innovation in small firms, which is easier than PPI at large firms and is helpful for economic growth in those firms (Crisan 2020). Based on earlier research, several conditions to achieve an effective public procurement are identified as (1) expertise in PPI laws and procedures, (2) strategic management of PPI, (3) market interaction, (4) risk management, (5) coordination and communication and (6) capacity building (Radoslav Delina 2021).

On the other hand, as catalysers of the innovation ecosystem, cities can serve as testbeds to trial innovative and novel ideas, services and solutions. As we will see in section Innovation Districts, various innovative solutions need city infrastructure to test their ideas, services or products. Therefore, cities often step forth as an ideal place to provide this support and see the innovation’s performance in the whole phases of the innovation journey.

When it comes to the efficient use of resources, we must underline technology diffusion. By diffusion, we mean one technological solution to a problem that might answer fully or partially other problems as well. This tells us that one particular technological application may diffuse to other areas where it was not intended at the beginning of the design phase. We reviewed numerous approaches and wished to highlight the outcome-based approach which is adopted by the London Office for Technology & Innovation (LOTI). Figure 1.1 shows the LOTI outcome-based approach ideology.

Fig. 1.1

The outcome-based approach of the London Office for Technology & Innovation. (LOTI 2021)

The LOTI approach starts with looking for real-life outcomes that the local authorities wish to achieve. Then they go back to discovering the problems preventing these outcomes. After defining and developing phases, the process is achieved by delivering a prototype that performs the best. We reviewed widely adopted mechanisms globally and briefed some of the prominent ones in the following section.

1.1.1 Mechanisms for Supporting Innovation

1.1.1.1 Innovation Districts

These districts are characterised as places where cutting-edge anchor organisations and companies cluster and interact with start-ups, business incubators and accelerators. They are also functionally compact, usable for transport and technically wired and offer lodging, office and retail for mixed use (Brookings 2014). Figure 1.2 illustrates the components of an innovation district.

Fig. 1.2

Components of an innovation district. (Brookings 2014)

1.1.1.2 Regulatory Sandboxes

Regulatory sandboxes allow a targeted testing atmosphere under a particular testing strategy for new products, facilities or business models, which typically entail a degree of regulatory leniency along with some protections (PARENTI 2020). Table 1.1 summarises the potential benefits of regulatory sandboxes.

Table 1.1 Potential benefits of regulatory sandboxes (PARENTI 2020)

1.1.1.3 Living Labs

With the collaboration and co-creation of customers, collaborators and other parties, living labs bring innovation from the R&D teams of businesses to real-life environments. Utiliser-driven, enabler-driven, provider-driven and user-driven living labs are four different types of networks characterised by open innovation. The typology is based on interviews with participants in Finland, Sweden, Spain and South Africa from 26 living laboratories. Companies will benefit from learning the features of each type of living laboratory; this information can help them recognise which actor drives creativity, predict future consequences and determine what kind of function they can play in a “living laboratory”. Living labs are networks that can help us build technologies that are superior to consumer requirements that can be easily upgraded to the global market. Table 1.2 represents the details of these living labs (Leminen et al. 2012).

Table 1.2 Characteristics of different types of living labs (Leminen et al. 2012)

In some countries or in different contexts, the concept of living labs and innovation districts might be used in similar fashions. For example, in Finland, Forum Virium Helsinki is a typical living lab and innovation ecosystem usually held for the innovation districts. One of the prominent characteristic differences between living labs and innovation districts is that the former is more product-focused, while the latter is more focused on market creation. Innovation districts step forth in transforming products that come out of the living lab into marketable, feasible and useful assets for the residents of the cities (Cosgrave et al. 2013).

1.2 How to Finance and Fund Innovation

The approval of an innovative idea in the eyes of the public is somewhat reflected in the market’s reaction to the idea. For this reason, a test almost all entrepreneurs face when formulating an innovation is the task of finding essential funding. Depending on the business model, an innovation may require and take advantage of different funding options, each with its advantages and disadvantages. An innovation with a focus on improving a problem the public faces, despite a lower profitability prediction, might be more eligible in obtaining grants provided by governments, intergovernmental organisations, universities, non-governmental organisations and entities or a hybrid of these mentioned bodies. Yet, a new business with a clearer high-growth business plan that would potentially provide a high return to investors on their investment could attract different kinds of funds, such as those made by venture capitalists or angel investors. Alternatively, a small company formed with smaller short-term goals or ones that require smaller amounts of initial investment might benefit by taking out a small bank loan or asking family and friends for funds. All the mentioned funding options each have their advantages and disadvantages, and we will try to mention some of them independently.

1.2.1 Loans as a Means of Financing Innovation

One of the main tools of financing used throughout many sectors of the business world is loans. A loan is described as “an amount of money that is borrowed… and has to be paid back” (Cambridge Dictionary 2021). Most scenarios under these loans take place either by obtaining a loan from a personal relative or getting credit from a bank. With smaller amounts required to finance innovation, this method would be highly effective, as it does not have any implication on the business itself, and there is a definite method of paying back. Furthermore, different forms of financing have been present in the start-up ecosystem. The National Endowment for Science, Technology and the Arts (Nesta) is an organisation that promotes innovation. Out of several different financing options Nesta provides, project-specific loans and convertible loans to equity options are two we find important to mention. Although details vary with each project and each agreement, a “repayable grant” option used with project-specific loans states that a loan is only required to be paid back if the innovation is successful. Some agreements also include a zero-interest loan structure (Nesta 2018).

1.2.2 Grants as an Incentive to Fuel Innovation

A widely used form of financing that is generally beneficial to new innovative ideas is the obtaining of grants. The State of Queensland states that “…grants have specific application requirements and usually relate to… certain stages of the business cycle…” (Queensland Government 2021). This is the case with many models of grant funding systems. For example, the European Commission’s Innovation Fund states that projects that will be awarded will be selected on the following criteria: “effectiveness of greenhouse gas emissions avoidance, degree of innovation, project maturity, scalability, and cost-efficiency” (European Commission 2021). Similarly, the European Investment Bank InnovFin Energy Demonstration Projects (EDP), which is a product produced by the European Investment Bank that supports innovations, points out several different eligibility criteria (European Investment Bank 2021). InnovFin EDP’s funding eligibility requirements, among others, include the innovativeness of the project, readiness for demonstration at scale and prospects of bankability.

1.2.2.1 Example Case Study for Eligibility and Procedures for Grant Approval

In November 2018, the Government of Canada launched the Sustainable Development Goals Funding Program to further the world’s goal of achieving the 17 Sustainable Development Goals (SDGs) by 2030, advancement of research and increasing partnerships (Government of Canada 2020). All members of the United Nations had committed to the same goals and had mobilised similar financial incentives for the advancement of the 17 SDGs. This specific Canadian funding program was open for application to nonprofit organisations, networks or committees, research organisations and institutes, for-profit organisations and many more. If you could describe how your project proposal would advance 2 of the 17 SDGs, require less than $100,000 and last no longer than 12 months, you would be eligible to apply for this funding program.

While the contents of the project are of utmost importance, similar to the eligibility requirements, the application assessments are clear. Firstly, the fund requires your project to explicitly identify what problem your project will solve and procure reasoning for your methodology. Secondly, the project application should provide clear and specific timelines and descriptions for every aspect of activities. Later on, the application then requires expected and desired outcomes of the project that link to the SDGs. Furthermore, and more importantly, the application requires you to include result measurement indicators. Lastly, a detailed report indicating required funds and how they correspond to different costs is required.

Grants from such financiers have many similar properties to this case. While it is extremely important to straighten out bureaucratic and procedural details, many funds intend to incentivise innovations without deterring bright and entrepreneurial minds.

1.2.3 Role of Venture Capitals and Business Angels in Innovation Financing

Startup Genome’s Global Startup Ecosystem Report from 2019 indicates that 11 in 12 new businesses fail (Startup Genome 2019). These new businesses with high risks might not be able to take out huge amounts of loans from banks without any collateral. In such cases, taking out loans would not be a feasible and sensible option to finance your innovation. Venture capital meets the needs that not many institutions can, “…as traditional financing such as bank loans became more complex to attract, the development of alternative investments, like seed and start-up capital investments, crowdfunding, venture capital, and business angels, became a bold topic” (Dibrova 2015). Although, for VCs to fill in this void of high-risk investments, VCs expect a high enough return to “…attract private equity funds, attractive returns for its participants, and sufficient upside potential to entrepreneurs to attract high-quality ideas that will generate high returns” (Zider 1998). Robinson’s (1987) study indicates that personal motivation, organisation skills and executive experience were the most critical criteria of VC’s choice of investment in an investee company/person. Moreover, in a growth industry, substantial growth objectives by a complete management team with enough expertise had a very important role in the decision. Albeit these criteria, it is accepted that VC investments tend to be risky investments (Schilit 1993). Thus, informational asymmetries, a high amount of required capital and very important business risk in venture capital led to the requirement of a higher overall return by venture capital companies (Manigart et al. 2002). From the perspective of an innovative business idea leader, the pressure caused by the expectation of a lucrative exit option may be a disadvantage. Along with giving up some equity and voting power to the venture capitalist, independence in setting a course for your company may be curtailed. Furthermore, reports indicate that the agency problem associated with venture capital firms means that each venture capital professional may only spend less than 2 hours per week on a specified investment (Zider 1998). On the other hand, business angels provide extensive mentoring services as they invest their own money into the business; they see a potential of profit. “Business angels are individuals who offer risk capital to unlisted firms…” (Politis 2008). A comparison with venture capital is that business angels give more importance to the entrepreneur and “investor fit” issue (Mason and Stark 2004).

1.2.4 Venture Capitals

Venture capital (VC) is an important source of capital for small businesses that has steadily grown into a major part of funders’ portfolios (Javed et al. 2019). Fresh and creative businesses that cannot obtain conventional financing (such as bank loans) can find VC investments a valuable option (Bellucci et al. 2021). VCs can invest in innovation and firms at several stages of the innovation journey. VC investment certainly helps in scaling and growth of the innovative ideas as they come into the picture in these late phases. Lerner and Nanda (2020) list three concerning matters regarding the role of VCs in the financing of innovation:

• 1. The very narrow band of technological innovations that fit the requirements of institutional venture capital investors

• 2. The relatively small number of venture capital investors who hold and shape the direction of a substantial fraction of capital that is deployed into financing radical technological change

• 3. The relaxation in recent years of the intense emphasis on corporate governance by venture capital firms

The European VC funds, with an average of €56 million, are much smaller than the US VC funds, which are €156 million on average (VentureEU 2020). Furthermore, venture capitalists invested about €6.5 billion in the EU compared to €39.4 billion in the USA in 2016 (VentureEU 2020). We may conclude that Europe needs bigger VC funds to support R&D and innovation.

1.2.5 Crowdfunding as a Modern Alternative to Financing Innovation

Crowdfunding had emerged and developed within the Internet community, mostly within the creative industries such as the arts and media; thus, it was mostly unnoticed by the outside world (Hemer 2011). Accordingly, data shows that the interest revolving around the concept of crowdfunding has emerged largely post-2010 and peaked around 2015, as can be seen in Fig. 1.3 (Google Trends 2021). Consequently, today, crowdfunding has become a prevalent mode of financing and has a very wide usage across several sectors. Today, crowdfunding is a method for funding new ventures that allows founders to request funding from many people in exchange for future products or equity (Mollick 2014). There are two major forms of crowdfunding: entrepreneurs soliciting individuals either to pre-order the product or an advancement of a fixed amount of money in exchange for equity (Belleflamme et al. 2014). While some innovators use crowdfunding platforms such as Kickstarter and GoFundMe to utilise early adopter financing for their needs, some tend to rely on this method as a continuous financing tool similar to a subscription model. In this regard, the dynamic nature of this form of financing creates new uses constantly.

Fig. 1.3

Global search interest over time – “crowdfunding”. (Google Trends 2021)

1.2.6 Public-Private Partnerships

Public-private partnerships (PPPs) are a collaboration between a governmental agency and a private sector corporation that can be used to fund, develop and run projects such as public transit networks, parks and conference centres. Financing a project in a public-private collaboration will help it get done faster or even get it started in the first place. Tax or other operating income compromises, liability insurance and partial ownership interests to nominally public services and land are all standard features of public-private partnerships (Brock 2021). The smart city is a holistic concept for dealing with urbanisation problems in modern cities. Public-private partnerships (PPPs) are a blueprint for the public and private sectors to cooperate on designing and implementing smart city infrastructure projects (Liu et al. 2020).

Apart from the mechanisms we list here, there might be other useful approaches in the procurement and support of innovation. Further tools and mechanisms for the funding and financing of innovation will be explained in the following sections.

1.3 The Business Model Theory

1.3.1 What Is a Business Model?

A business model has no universally accepted definition. The origin of the business model definition goes back to Drucker’s (1994) definition of this model with four fundamental questions:

• Who is the customer?

• What do customers value?

• What are our revenue streams?

• What economic reasoning explains how we can provide value to customers at a reasonable price?

Figure 1.4 summarises the business model core components.

Fig. 1.4

Components of a business model. (Hamel 2000)

These components are developed to solve these core concerns for every company. Companies use business models to describe how they create income by referring to the value chain structure and its relationship with the industry value system (Fisken and Rutherford 2002). Rambow et al. state that businesses striving for long-term commercial success are being pushed by digitisation to adapt business models to new market scenarios or build new business models when the old ones become outdated due to technological progress (2019). To take advantage of new technology and develop an innovation (as in Apple’s case), a new model is frequently required. Apple revolutionised portable entertainment, created a new industry and transformed the firm when it debuted the iPod and the iTunes store in 2003. In just 3 years, the iPod/iTunes combo became a roughly $10 billion product, accounting for over half of Apple’s sales. Apple’s market value soared from less than a billion dollars in early 2003 to more than $150 billion by late 2007 (Johnson et al. 2008).

Companies sometimes find themselves in a predicament that appears insurmountable. The core reason for all of these catastrophes is not that things are not done well. The seeming paradox arises from the fact that the assumptions upon which the organisation was founded and is still operating no longer hold. These are market-related assumptions. It’s all about figuring out who your consumers and rivals are, as well as their beliefs and behaviours (Drucker 1994). All of these crisis processes may be managed by creating a proper business strategy. According to Masanell and Ricart, the success or failure of a company’s business model, on the other hand, is mostly defined by how it interacts with the models of other industry participants (2011). For instance, one firm model may appear to be superior to others when analysed in isolation, but when interactions are taken into consideration, it provides less value than the others. Isolating models lead to inaccurate assessments of their strengths and faults, as well as bad decision-making. This is a big reason why so many innovative business concepts fail.

1.3.2 How to Create a Business Model?

The notion of a business model has grown significantly more popular as a result of digital developments. New applications, services, platforms, data and gadgets have created a crowded playground for all types of businesses looking to capitalise on new opportunities. New businesses have sprung on the scene, with varying degrees of success and exponential expansion. Both experienced and new players have the need to overcome similar obstacles in common. They need to generate value for connected consumers by developing new business models that function in the digital environment (Zott and Amit 2017).

The business model is a system of interrelated and interdependent activities that governs how a firm interacts with its stakeholders. How can a corporation improve its chances of establishing the best business model for its circumstances (Zott and Amit 2017)? Answers to questions seen in Fig. 1.5 and their repercussions make up a business strategy.

Fig. 1.5

Business model creation diagram. (HBS 2019)

A business model consists of four interrelated components that work together to create and provide value. Every component of the model should be compatible with the rest of the model:

• Value proposition

• Targeted customer

• Value creation and value delivery

• Value capture and revenue model

1.3.3 Value Proposition (What Are They Offering?)

Developing a business model entails more than just finishing your business strategy and deciding which goods to pursue. It is also about figuring out how you’ll provide your clients with continuous value. At the start of their business, every firm seeks to figure out if their business model will meet demand and be accepted by the market. It is not enough to know how to produce, create or supply anything; the product or service offered also has to be valuable to potential clients. It is a misconception to believe that “They will come” if you build it. Figure 1.6 depicts a value proposition canvas, which is useful for determining a new product or service’s business model. The value proposition that will be built with the components on the canvas will aid in determining the point of junction of the firms’ products and the customer. Offering value propositions and marketing approaches feed customer awareness of firms (Myler 2013). ​​Customers must find an advantage at least as much as the extra value they receive from the product they are now using to move from another to yours (Golub et al. 2000).

Fig. 1.6

Value proposition. (Thomson 2013)

The purpose of the value proposition is to provide answers to the following questions:

• Why should customers buy your product?

• What is the benefit to them?

Firms make strategic decisions about how to position their innovations to disrupt rival firms. Disruptive innovations should be assessed in the context of a company’s business strategy (Christensen et al. 2018, p. 1050). Accordingly, enterprises must propose and regularly renew new value propositions as part of their innovation operations and business strategy for a business model to disrupt other companies. In this way, companies can attract mainstream customers from their competitors (Schmidt and Scaringella 2020).

Companies create completely new consumer value propositions by solving a challenge that has never been solved before. One of these new propositions may be Apple’s iPod and iTunes electronic entertainment distribution system (Johnson et al. 2008). As another example, when GE Aircraft Engines changed from selling airlines jet engines to selling them flying hours, they created a unique value proposition. This transferred the risk of downtime from the airline to GE, allowing the company to build a very successful service operation (Chesbrough 2007).

1.3.4 Targeted Customers (Who Are They Targeting?)

It is all about establishing your target market for marketing your company. A conceptual model for measuring the impact of marketing tactics on both targeted and untargeted clients is shown in Fig. 1.7. ​​The individual you believe is most likely to buy your items is your targeted customer. The target customer base includes a certain age rather than a variety of ages, a specific income level rather than a wide range of income kinds and the possibility that these people will buy your items (Belcher 2019). This phase in the business model development process aids in the development of marketing strategies as well as the estimation of income and costs, taking into consideration the various types of business models and clients.

Fig. 1.7

Differential perceptions of marketing tactic. (Belcher 2019)

Recent techniques to engage with your consumer base faster and more accurately for targeting are available in the digital world. By utilising digital technologies to broaden conventional marketing channels, a wide range of channels may be supplied, going beyond the usual usage of established tools such as newsletters or email marketing (Schrock et al. 2016). In addition, digital technologies enable companies to collect new information about customers. In industrial marketing contexts, digital technologies enable communication between firms and their consumers in B2C environments and allow for the use of various channels to identify and target customers (Spieth et al. 2019).

Companies may appeal to various customer groups while retaining their current financial ratios by using a new value network. Nestlé, for example, created Nespresso, a coffee shop that has been compared to an upscale Starbucks, to appeal to young urban professionals. Nestlé’s coffee company, which had historically offered instant coffee to the mass market through department and grocery shops, gained a new value network and a different customer base with Nespresso (Koen et al. 2011).

1.3.5 Value Creation/Value Delivery (How Are They Planning to Create and Deliver Their Service?)

After firms have decided on a value proposition, you need to ensure that it “echoes” across the business system, ensuring that every corporate activity reinforces the chosen value. A relevant framework for examining this echoing process is the value delivery system (Golub et al. 2000). Golub et al. state that customers base their purchase decisions on two factors: the advantages and pricing of a product or service. Generally, customers choose the item or service that provides the highest value among competing options. There is a significant point that the winning approach is usually the one that best executes the value proposition, not the one with the most appealing value. Figure 1.8 depicts the purchase decisions of customers and its relation to value creation and delivery.

Fig. 1.8

Purchase decisions of customers. (Golub et al. 2000)

In more conventional elections, managers split firms’ systems of production into three segments: create value, develop a product and sell it. This method could be more useful for production-side issues like cost reduction. However, when developing a complex value offer, it is more beneficial to make the business system customer-centric: choosing the value, delivering the value and communicating the value to the customer. A value distribution system is a business system created in this manner. According to Daeyoup and Jaeyoung (2015), businesses plan how to distribute their value proposition to the value network and deliver to value users to have an effective business. The process of creating and delivering value has some advantages for businesses. Firms aim to enhance their methods for boosting customer satisfaction, understanding consumer preferences, lowering inventory, increasing inventory turnover, reducing stock-out situations and improving time to market as part of this process, which might lead to financial gains. Furthermore, the creation and delivery planning process provides insight into which values are more widely accepted by consumers, market participants and suppliers (2015).

1.3.6 Value Capture/Revenue Model (What Are the Sources of Their Expected Revenue, and How Are They Planning to Create This?)

The main goal of a business model is to produce money by extracting value from what it creates. According to Richardson (2008), it does not follow that a company that develops a compelling value proposition and effectively generates and distributes that value would earn higher returns or even be sustainable. It must also have a revenue-generating mechanism with a profit margin over its costs. The revenue model is made up of this part of the business model. It’s important to distinguish between the income model and the economic model. The income model identifies the many sources of income or income that the company gets. On the other hand, the economic model is concerned with the firm’s expenses, margins and different financial elements.

The business model should have well-defined strategies for monetising corporate value through value generation and capture (Daeyoup and Jaeyoung 2015). The revenue model consists of all strategy research to achieve this profit potential. Pricing the offer, service delivery and infrastructure improvements should all offer attractive profit potential for growth and innovation under a viable revenue model (Advantage 2021).

Different methods can be used when creating a revenue model – advertising models, subscription models and sales tactics, to name a few. As an example of a revenue model, Spotify introduced its product to US audiences in 2011. Spotify’s revenue model was noticeably different from other music streaming services. Unlike Pandora, which relied on advertising revenue, and Apple Music, which went with a premium approach, Spotify went with a freemium strategy. That is, it provided a free basic service and a paid premium service with additional material, functionality and a superior user experience (Tidhar and Eisenhardt 2020).

1.4 What Is Value?

1.4.1 What Do We Mean When We Say “Value”?

The word “value” is used in a variety of ways in today’s commercial and economic environment. It often refers to the monetary worth that a person, company or the market assigns to a commodity, goods or service. In truth, in today’s economy, most goods and services such as commodities, tangible properties, intangible properties, services and labour, lands and businesses are priced according to their monetary value. However, the term value has gained a different dimension in economy and business, especially with the emergence of the “triple bottom line” approach, first coined by John Elkington in 1994 as mentioned in “Enter the Triple Bottom Line” (Elkington 2004). In the following section, we will first analyse economic, monetary and business value, discuss the distinctions between them, examine the concepts of environmental and social value for businesses and analyse the triple bottom line.

1.4.2 Economic Value, Monetary Value and Business Value

1.4.2.1 Economic Value

A product or service’s economic value is a metric used in economics to assess its benefit to a particular economic agent. It is often calculated using the people’s willingness to pay for the product, which is usually expressed in monetary units. A person’s preferences influence the economic value of an item or service, as well as the trade-offs they are prepared to make to get it. Suppose a person owns an apple, for example. In that case, the economic value of that fruit is the advantage that they obtain from using it. If they plan to eat the apple, the economic value is the pleasure they expect to gain from doing so. Economic value cannot be directly assessed since it is subjective and reliant on a person’s preferences. However, several approaches for quantifying or estimating economic worth have been created, such as “willingness to pay (WTP)” or “hedonic pricing”.

1.4.2.2 Monetary Value

The monetary worth of an item or service is the price that would be paid for it if it were transferred to a foreign party. The monetary worth of physical, intangible, labour and commodity assets, for example, is used to determine their prices. The financial effect of risk is estimated using the expected monetary value.

1.4.2.3 Business Value

In management, the phrase “business value” refers to all types of value that have a long-term impact on the health and viability of a company. The idea of a company’s “business value” extends beyond its “economic worth” to encompass a variety of other types of value, such as the value of its employees, customers, suppliers, channel partners, alliance partners, managers and society at large. In many cases, various types of value can’t be explicitly monetised. There is no agreed-upon definition of business value, yet there are some economists who argue that focusing just on financial metrics, such as profit and shareholder value, is not enough to help businesses make decisions.

1.4.3 Environmental Value

Environmental values and valuation of nature are difficult to understand in part because these terms are used in so many contexts and so many ways. Human and ecological values may be quantified as assistance to decision-making in certain cases. Some people are against environmental value because they believe it equates to “putting a price label on nature” or “lowering ethics to statistics and numbers”. Yet environmental value remains a hot topic today that every company, organisation or community strives to integrate into their operations, plans and activities.

Economists who study the relationship between the economy and the environment confront an ever-increasing need for environmental values to be calculated now. There are several instances of how people profit from the use of natural resources, such as forests, rivers and other ecosystem services, which may be used as examples of how essential nature is to the economy. Because of this, environmental concerns are becoming a more prominent part of our daily lives and, as a direct result of this, in political and policymaking circles. Cost-benefit analyses (CBAs) commonly include environmental values as a consideration. This kind of research is used to examine and evaluate current and prospective programs and policies and to evaluate their impact on society.

The use of economic values to influence environmental decision-making has been embraced and implemented by many institutions and organisations that have developed environmental processes and standards for public sector projects that emphasise the need for environmental valuation and cost-benefit analysis. Environmental value is becoming more significant in policymaking, considering the stronger ties between natural capital and economies in emerging nations. Multilateral institutions, such as the World Bank, have begun incorporating environmental valuation methodologies and norms into their planning processes in response to the UN Sustainable Development Goals inception and adoption.

As stated above, there are many views and debates on environmental values, whether it can be evaluated through monetary evaluation techniques or whether it is ethical to value the environment within economic terms. As an expected result of these discussions, there are many views or criteria on valuation techniques of the environment. In this subsection, five basic categories for environmental valuation that are proposed by Harris and Roach (2017) are discussed (Harris and Roach 2017).

• A. Market Valuation

Harris and Roach suggest that forests, fish populations, minerals and groundwater are just a few examples of environmental assets that are already being traded on the open market. They say that economists can assess the direct-use value of these resources by calculating the consumer and producer surplus (Harris and Roach 2017).

• B. Cost of Illness Method

The cost-of-illness analysis is a method for estimating the financial toll that a particular sickness or condition has on a person. Harris and Roach define the cost-of-illness method as pollution’s negative effects may be valued using the cost-of-illness method, which estimates the costs of treating illnesses caused by the pollutant (Harris and Roach 2017). Environmental impacts and operations of businesses often affect human life directly or indirectly.

• C. Replacement Cost Methods

The cost of restoring or replacing a resource, such as fertilising the soil to restore fertility, is estimated using the replacement cost method. Harris and Roach state that these techniques consider the costs of acts that offer human-made replacements for lost ecological services. For instance, if a forest ecosystem were to disappear, a town may build a water treatment facility to compensate for the loss of water purifying advantages. To some degree, the pollination of plants by bees might be done manually or mechanically by some automatic system. They say that we can approximate society’s willingness to pay for these environmental services by estimating the construction and labour costs of these alternative activities (Harris and Roach 2017).

• D. Revealed Preference Method (RPM)

RPM indirectly infers market participants’ values of environmental products and services. For instance, individuals’ value on clean drinking water may be deduced from their expenditure on bottled water. This way, the environmental value of clean water can be estimated (Harris and Roach 2017).

• E. Stated Preference Method

Surveys are used to understand market agents’ preferences on environmental values. The main advantage of this method is that people can be surveyed on every type of environmental value such as carbon storage, nuclear energy, forest area for future generations, etc. But as a disadvantage, the validity of the results can be dubious (Harris and Roach 2017).

1.4.3.1 Planning and Creating Environmental Value

The key to effective planning is turning it from an intellectual exercise that culminates in another report on the shelf into a dynamic business integration process. Environmental specialists must enter the business, get a grasp of the larger organisation, listen to the requirements and objectives of other departments and find strategic options for resolving corporate difficulties. It entails transcending typical job descriptions to assume roles as strategists, entrepreneurs, sales agents and instructors. Therefore, successful planning may uncover value-creating possibilities while also providing essential insight into the most effective communication methods with important persons and groups.

A well-thought-out strategy has four key components: (1) knowing your business, (2) taking inventory of potential environmental impacts, (3) identifying value-creating opportunities and (4) prioritising activities (Global Environmental Management Initiative 2014).

• A. Know Your Business

Evaluate the environmental actions’ business perspective. Corporate environmental specialists are often uninformed of other divisions and employees’ unique aims, priorities and requirements. Three things are required to provide value-added solutions. To begin, determine who the present and prospective environmental services clients are. Second, understand the business problems that your clients are attempting to address. Finally, be familiar with your company’s long-term business strategies (Environment: Value to Business, Global Environmental Management Initiative 2014).

• B. Evaluate Inventory Potential

Check the environmental impacts of the business. An environmental impact may be caused by the use of resources and production of wastes, the production and use of goods and the disposal or recycling of items. To begin compiling an inventory of environmental effects, identify the organisation’s principal business operations and activities, including production and operational procedures. Finally, inquire about the environmental implications of each department’s activities and products. How are the company’s actions controlled in terms of their environmental impact? Whose earnings, development and public image are in danger due to environmental impacts (Environment: Value to Business, Global Environmental Management Initiative 2014)?

• C. Identify Value-Creating Opportunities

Identifying value-creating possibilities at various levels of firm operations may be done after an inventory study on environmental effects has been completed. It is possible to cut expenses and increase profits by implementing environmental efforts beyond the minimum compliance standards. Search your organisation for areas and branches where value might be produced. According to corporate and government requirements, various environmental criteria and actions must be met. Even while these actions may be seen as a corporate expense, they have a basic environmental benefit. These may include things like obtaining a permit, avoiding environmental damage fines and so forth.

Finding creative methods to achieve more with fewer resources should be the objective of operations. Focusing on resources is essential. The costs of manufacturing, compliance and waste disposal and management may be reduced by lowering overall resource inputs, hazardous inputs or unwanted by-products. In addition, lowering environmental risk may avert major environmental damage as well. Among other things, ARCO recently obtained a new hazardous waste authorisation. In the future, an oil tank might be built on land once used to dispose of hazardous garbage. The tank’s permit and construction were expedited. The approach was supported by long-term environmental data and a sturdy working connection with the local authorities. One million dollars in monitoring expenses were saved because of the company’s innovations. In addition, they were able to recover the refinery-related landscape. Long-term monitoring costs have been reduced because of this project’s successful repurposing of unused land and the subsequent savings (Environment: Value to Business, Global Environmental Management Initiative 2014).

Long-term costs connected with capital investment and design decisions cost businesses millions of dollars. Purchase of land, construction of facilities, start-up or redesign of manufacturing lines and new products may have significant financial repercussions. Environmental managers may provide value when it comes to capital budgeting and decision-making. For example, it is crucial for Duracell to have a supplier development program. To improve performance, Duracell engages with its providers continuously. There have been environmental measures included in supplier rankings for some time. A decrease in Duracell’s greenhouse gas emissions and considerable cost reductions prompted the business to incorporate its energy management approach into its global supplier development program. During a meeting of major suppliers, Duracell invited them to join a cooperation agreement. Each business agreed to establish energy efficiency objectives, initiate actions to achieve those goals and adopt best practices throughout the group. Duracell vendors, in the majority, have agreed to participate in the project. Recognition will be given to the best performers. New cost-cutting initiatives for Duracell, new supplier contacts and assistance for suppliers in their cost-cutting efforts are some of the benefits of this arrangement (Environment: Value to Business, Global Environmental Management Initiative 2014).

• D. Prioritising

There isn’t enough time, personnel or money for corporate environmental professionals to explore all of the possible value-creating possibilities in the business. Environmental managers must prioritise environmental tasks and concentrate their efforts to efficiently use limited resources. Typical decision-making factors include the relevance of the project to the company’s objectives, the project’s magnitude in terms of money and resources needed and the project’s level of complexity. Just because a job is simple and inexpensive, it is not implied that it should be done first. There is always a plan that considers the benefits that might be gained while also considering the financial and political resources needed (Environment: Value to Business, Global Environmental Management Initiative 2014).

1.4.3.2 Assessment and Measurement of Value Added

An essential yet difficult duty for environmental experts is determining the worth of environmental projects. The preceding Impact Assessment section presents an in-depth analysis of the environmental value discussion. Let us provide a quick overview of how to calculate the environmental value added. In this case, the right tools and methods are dependent on the questions being answered:

• Which of the following are you measuring: the effect of a single project, the value of environmental activity or the total value of all environment-related operations in the organisation?

• What are you doing? Do you evaluate the value that a proposed plan may generate, or are you looking to see whether an existing project has already created a value?

It is possible to utilise impact assessment and value measurement to check the results of environmental initiatives, giving useful input for future program adjustments as well as results that can be communicated to key stakeholders to keep their support. In addition to planning and prioritising environmental initiatives, impact assessment and value measurement are also really important. According to P&G’s cost ratio analysis, health, safety and environmental (HSE) initiatives pay more than twice for themselves in terms of cost savings. Salary, employment, healthcare and facility activities such as dumping waste are included in the ratio as costs. Pollution prevention and eliminating the materials thrown away during manufacturing are included as utilities of the HSE initiative.

1.4.4 Social Value

1.4.4.1 What Is It?

A rising number of organisations look at their operations from a holistic perspective, including their activities’ broader social, economic and environmental consequences. It’s hard to define what exactly constitutes “social value”, but companies that make a determined effort to guarantee that their outcomes are good might be considered to be benefiting the long-term well-being and resilience of individuals, organisations and humanity as a whole. The United Nations’ Sustainable Development Goals are, in essence, a global social, moral charter. Including social value in the policy and spending decisions may help public sector organisations better serve their communities. Both what a company does and how it does it may positively impact society. By reporting on social value, corporations may externalise their programs by connecting them with precise, quantifiable results and doing so in an easy-to-understand manner for the benefit of consumers and other stakeholders.

Numerous entrepreneurs’ principal objective is to establish a profitable firm. Apart from serving as a means of earning money, a business can also help to promote social ideas that benefit others. Social values can be incorporated into daily company plans or serve as the impetus for beginning a new firm.

Environmental stewardship is a value that can simply be included in your company procedures. Try to purchase recycled items, such as paper and printer ink cartridges, and correctly dispose of hazardous waste materials. Conserve energy by shutting off computers and lights when not in use and maintain proper operation of business vehicles to minimise hazardous emissions.

Additionally, businesses may utilise the company to assist humanitarian issues relevant to the corresponding industry. For instance, a food-related company, such as a restaurant or bakery, might consider donating a percentage of their profits to help feed the poor. Figure 1.9 summarises the benefits of social value.

Fig. 1.9

Creating social value and its benefits. (UKGBC 2018)

Businesses may also express social ideals via their operations. Charging a fair price for products and services while putting a high emphasis on customer service is one possibility. Provide an equitable work environment and recruit workers that share the same values as the company or business. As can be seen from Fig. 1.9, there are so many easy ways to create social value, and the benefits of this approach are not limited to society. It comes back to the businesses themselves too. The main strategy for generating this type of social value is to balance the desire to operate a profitable business and the desire to manage it ethically and bring benefits to society.

1.4.4.2 How Social Value Is Measured and Reported?

Although there are many ideas about what social value is, it is difficult to define and draw the boundaries of the concept of social value. For this reason, reconciling on a measurement criterion for social value is another complicated task. Geoff Mulgan (2010) argues that social value measurement was a hot topic among funders, NGO leaders and lawmakers. Unfortunately, they could not even agree on what it was, much less how to evaluate it. Geoff Mulgan suggests that the corresponding main problem was thinking that social value was absolute, set and stable. Yet it’s easier to measure social worth when it’s seen as a subjective, changeable and variable concept. Despite this, the assessment of social value is already becoming increasingly standardised. The National Social Value Measurement Framework, abbreviated National TOMs (TOMs stands for “Themes, Outcomes and Measures”), was created and released in 2017 by the Social Value Portal. It is a strategy for documenting and quantifying social value using a consistent metric. It serves as the “golden thread” connecting an organisation’s broad strategy and vision to its execution. The TOMs serve as a “golden thread” connecting strategy and delivery of social impact in the following ways (Social Value Portal 2017):

• Themes: the elements that comprise an organisation’s “vision” of social value.

• Outcomes: the intended positive consequences for the organisation.

• Measures: What types of measures will be utilised to determine whether these results are positive?

In addition to these three “golden threads”, TOM provides more themes that can be counted as goals to accomplish social value. To achieve these goals, we need to encourage the development of responsible regional businesses and the creation of healthier, safer and more resilient communities (Social Value Portal 2017).

1.4.4.3 Seven Principles of Social Value

Social Value UK proposes seven principles for accountability and maximising the social value created by businesses. These principles serve as the foundation for anybody seeking to make decisions with a broader social impact (Social Value UK 2021b):

• 1. Involve Stakeholders: By incorporating stakeholders, influencing what is assessed and how it is quantified and assessed in a social value account.

• 2. Understand What Changes: Distinguish between good and bad changes and between those that are planned and those that aren’t, using data and facts.

• 3. Value the Things That Matter: Stakeholders’ values must be taken into consideration when deciding how to allocate resources since an outcome’s significance is determined by its value.

• 4. Only Include What Material Is: Identify which data and information should be included in the reports to provide an accurate and fair picture that enables stakeholders to make reasonable judgments about the effect.

• 5. Do Not Over-claim: Claim only the value that corresponding actions produce.

• 6. Be Transparent: Provide evidence of the foundation on which the analysis could be deemed reliable and honest and evidence of the fact that it will be presented to and discussed with key stakeholders.

• 7. Verify the Result: Ascertain that suitable independent assurance is in place to provide evidence.

Finally, Social Value UK states that the implementation of these principles will assist organisations in being more responsible for the outcomes of their work, which includes being accountable for more than whether the organisation met its goals (Social Value UK 2021b).

1.4.4.4 Creating Social Value: Business Approach

To grasp the idea of “social impact”, it is a must to grasp the meaning of the term “social value”. For example, efforts made by businesses and individuals to address social issues are referred to as “positive social effects”. Business leaders must first establish the fundamental principles that drive their actions to effect social change. These values are often centred on critical social and environmental concerns affecting society, such as global warming, poverty, unemployment and other serious social and environmental difficulties. Purpose-driven executives might gain confidence to make a significant difference when their beliefs guide their decision-making and strategy. Matt Gavin (2019) from Harvard Business School Online suggests four business strategies to guide business leaders for their attempt at social change.

• A. Conduct Business in an Ethical Manner and Encourage Ethical Business Operations

Gavin (2019) suggests that it is essential that firms examine their own practices to make sure that social responsibility is an integral part of what they do. It can be understood that businesses wishing to have social impact and create social value should explore how their procurement and production procedures may be more ethical and how they may be able to use social responsibility to modify their business practices.

• B. Establish Strategic Alliances with Charity Organisations

Being a pioneer for systemic transformation is not an easy process. It demands a thorough awareness of society’s issues and the tenacity necessary to overcome them. For this, Gavin (2019) thinks that increasing a company’s social impact may be as simple as forming strategic alliances with nonprofits that focus on the world’s most critical issues. An example he gives is the partnership between Peet’s Coffee and TechnoServe. Thanks to this partnership, farmers from Ethiopia, Guatemala and Rwanda have been educated about farming, business skills, sustainability practices and improving their quality of living.

• C. Encourage Employees to Participate in Volunteer Activities

Being a purpose-driven organisation takes a commitment that transcends the corporate level. Employees must be convinced of the importance of their work and the organisation’s transformational goals. Creating a work environment that encourages employees to give back may help companies solve important issues and foster a sense of belonging.

• D. Motivate Action with Corporate Platforms

Gavin (2019) also believes that, in addition to creating programs and activities to address global issues, corporations may use platforms like blogs and other online channels as activism tools.

1.4.4.5 Ten Impact Questions to Maximise Social Impact

Considering effect entails making choices, such as between two strategies, one product or two attempts to enhance one product. Choices are made to have a greater influence than before. Constantly investigating new choices and altering your behaviour increases the likelihood of having the greatest influence possible. To make these decisions, businesses have to address several questions. “Social Value UK” proposes ten impact questions that are fundamental to maximising impact. These questions can function as a guide for businesses to evaluate and maximise their impact on social concerns and social value (Social Value UK 2021a):

• What issues are being attempted to resolve?

• What is the proposed solution to the corresponding issue?

• Whose lives are altered because of actions taken?

• Which outcomes or results are expected to be seen?

• What is the amount of change done by outcomes?

• How long should outcomes be measured for?

• How can the relative importance of the different changes be measured?

• How important is this distinction?

• How much of the change is done by the proposed solutions and actions?

• What are the most important changes?

1.4.5 Triple Bottom Line

Companies need to assess their social and environmental impact and financial performance as part of the “triple bottom line” concept. Financial, social and environmental accounting are all included in the three-part accounting paradigm of the triple bottom line. As Lim Mei said, using the term “triple bottom line” refers to reporting on the degree to which a company has helped society accomplish the three interrelated objectives of economic success, environmental preservation and social equality (Lim 2004).

Both governmental and commercial organisations are increasingly disclosing the environmental and social impacts of their actions, and environmental performance monitoring is becoming more and more commonplace around the globe. E. S. Woolard said in 1994 that industrial businesses are the only ones who can implement the green economy and culture of the twenty-first century. Next-century environmental performance is the goal of the industry. A lot of companies are attempting to get there, but not everyone has yet. Because they won’t be there in the long run, those who aren’t trying aren’t a long-term concern (Woolard and Global Environmental Management Initiative 1994). Companies are required to report environmental and social performance information, although there is a general lack of oversight. As a result of this lack of measurement, a business assessment method known as the triple bottom line (TBL) has grown in prominence, which incorporates economic, environmental and social factors. Figure 1.10 provides an overview of the TBL.

Fig. 1.10

Triple bottom line. (Lim 2004)

Three critical elements in triple bottom line, as can be seen in Fig. 1.10, are used as criteria to measure organisational performance. These are economic value (prosperity), social value (social justice) and environmental value (Lim 2004). As “what gets measured, gets managed”, accurate measurement is critical for demonstrating how sustainable business practices may be utilised to improve a company’s performance and analyse the organisation’s progress. What can be derived from the triple bottom line is that for an organisation to be sustainable, it must be financially secure (i), behave in a way that minimises the negative environmental effect (ii) and act in harmony and convenience with societal expectations (iii) (Lim 2004).

1.4.5.1 Economic Bottom Line

The economic bottom line encompasses profit and the ideas that underpin a company’s strategy or behaviour and the business’ long-term sustainability. The following measures should be included while conducting an economic bottom line report (Lim 2004):

• Income and expenditures

• Taxes

• Annual operating performances

• Cash management and investor returns

• Job growth

• Credit rating

The economic bottom line part of TBL provides a guide to organisations or businesses to make more with what they have. Suppose an organisation wants to develop and grow within TBL. In that case, they need to determine the economic activity they want and examine how well other organisations are performing concerning sustainability criteria.

1.4.5.2 Environmental Bottom Line

The environmental value refers to the environmental effect of a company’s goods or activities and the type of its emissions and waste and how the environment manages them. The following measures should be included to determine how much negative impact an organisation’s processes and products have on the environment (Lim 2004):

• Fossil fuel consumption

• Solid waste

• Sulphur dioxide concentration

• Wastewater quality

• Change in land cover

• Hazardous gas-waste management

It is vital to comply with the environmental bottom line criteria because organisations build demand by specifying ecologically sustainable processes and goods. The need for environmentally friendly processes and goods will motivate and reward businesses, encouraging them to engage in research and development to enhance their processes and production that is less harmful to the environment. Furthermore, shareholders, investors and clients also get benefits from these new ecology-friendly processes and products (Lim 2004).

1.4.5.3 Social Bottom Line

The term “social bottom line” relates to an organisation’s attitude towards gender and cultural diversity, work hours and compensation, employee safety and participation and social assistance or facilities. There is no consensus on whether an organisation meets its social responsibilities. However, these are some measures that could be used while analysing an organisation (Lim 2004):

• Employee safety

• Workplace stability

• Engagement with community and community support

1.4.6 Conclusion of Value Discussion

In today’s world, especially in the business world, people think of the monetary value of a product or goods when we say value. In a world where the success of companies and businesses is measured in terms of realised profit, this is normal. However, especially with the emergence of the United Nations’ Sustainable Development Goals, the success criteria of companies have started to change in the business world along with the rest of the world. Nowadays, importance is given to various definitions and metrics to measure the success of companies, and their contribution to social life and the environment is increasing. For this reason, it is imperative to establish and set a basis for the environmental value and social value concepts after installing the definitions of economic value and monetary value. This section explained how environmental and social value could be planned, measured and applied briefly for companies and businesses. Finally, the role of the triple bottom line concept in this process of paradigm shift has been introduced.

In the following section, we explain in detail how the impact of companies and organisations on the environment and social life can be measured over the definitions made in this section.

1.5 Impact Assessment

When enterprises and institutions desire to evaluate their effects on the stakeholders and the system, they eventually need techniques for impact assessment (IA onwards). In scholarly discussions, the measurement and evaluation of the actors’ impact are becoming increasingly influential (Simsa et al. 2014). This section will provide findings from academic literature and the business environment on IA to guide involved actors such as businesses and institutions. First, IA will be defined regarding different points of view. Second, the question of why actors desire to conduct IA will be investigated. Third, there will be a brief examination of the actors involved in IA. Fourth, we will inspect several methodologies for conducting IA. Then, we will share examples of IA use from both institution and business sides.

1.5.1 Definition

To assess impact accurately, a distinction between impact and outcome must be made. However, there is no unanimity on this subject (Simsa et al. 2014). Definitions differ significantly since distinct sectors and stakeholders require diverse viewpoints to assess the unique dynamics of their activities. To provide a general perspective, Stern examines the literature and divides IA definitions into two categories: content and methodological definitions. Content definitions seek to explore any effect, acknowledge that there can be constructive or adverse effects and address the long term (Stern 2015). OECD, for example, describes the impact as “the positive and negative, primary and secondary, long-term effects produced by a development intervention, directly or indirectly, intended or unintended” (2010, p. 24). On the other hand, methodological definitions are more tightly concentrated and employ experimental data, resulting in a shorter-term focal point (Stern 2015). For instance, according to Roche, the impact is the methodical investigation of a major change in people’s lives that is caused by an activity or series of activities (1999, as cited by Stern 2015).

1.5.2 Reasons for Conducting IA

Although definitions vary substantially, reasons for desiring to conduct IA share commonalities. The first common reason is that actors put such a remarkable effort into receiving funds that they cannot risk losing credibility and being eliminated from further funding. IA is an immense way to demonstrate success and be accountable. Second, when they receive further funding, the need for improvements emerges, again, to show their accomplishments. To attain advancements, involved actors can also utilise the findings from IA to comprehend the effects of their efforts. Third, since public voice is an important part of the business process, actors should find advocates to continue their journey. They can build this support by exhibiting the results from IA. In a nutshell, O’Flynn lists the motivations for assessing impact as follows: (1) demonstrating success both to explain received funds and to obtain additional funding, (2) learning to understand the implications of initiatives to enhance effectiveness, (3) being accountable and (4) using IA results to advocate for changes (2010).

1.5.3 Who Is Involved in IA?

As indicated earlier, monetary, environmental and social values are assessed while managing a business. When we link the process with the outcome, we see that these values should also be looked at during the IA. First, the monetary value of the impact is mainly regarded for financing reasons. So, we can say that the actors in the funding mechanism, such as institutions, venture capitalists, banks, etc., play a significant role in the IA process. Second, businesses disclose their environmental value, to exemplify, showing their environmental dignity to the actors in the ecology, such as environmental non-governmental organisations, besides animals and plants. Lastly, there is a necessity to demonstrate social value. Social actors such as individuals and states can be said to be affected by the actions of the companies or institutions. Therefore, IA should be designed to cover those monetary, environmental and social stakeholders as well as the businesses and institutions as the main actors of the process.

1.5.4 How to Conduct IA

IA is studied in various contexts as an interdisciplinary topic. However, empirical and methodological literature is scarce on quantifying the impact at the macro-level (Simsa et al. 2014). The key, argued by Stern, is that evaluators should begin by imagining what they want to know about programs rather than focusing on a certain toolkit. Designing IAs necessitates making informed decisions on various issues, including the objective, required resources and skills, ethical requirements, data collection and analysis and methods for encouraging assessment adoption (Stern 2015). We will investigate some of the existing techniques for conducting IA in this subsection.

1.5.4.1 Approaches to IA

Simsa et al. emphasise the importance of the fields of evaluation research, social accounting, ecological and social IA, nonprofit organisation (NPO) research, social entrepreneurship, profit-oriented entrepreneurship, business ethics or corporate social responsibility (CSR) (2014). First, in evaluation research, three categories of appraisals can be recognised: (1) analysing program theory, (2) assessing program process and (3) computing program impacts (Schober et al. 2013, as cited by Simsa et al.). Second, in the realm of accounting and accountability, IA incorporates non-monetary impacts in accounting, balancing and profit calculation. Third, in ecological IA, the natural environment was the focus initially, where social components were included later. Fourth, in NPO research, it is important to note that impact is not always synonymous with success. Countable and measurable outputs can be used as success criteria. Fifth, in entrepreneurship, social impact investors consider not only the financial but also the societal implications of their investments. As a result, indicator systems comparable to those used by traditional for-profit businesses are established. Lastly, the impact has been taken up by firms primarily in the context of CSR within the issue of business ethics. Initially, the emphasis was mostly on environmental sustainability; later, the social dimension gained prominence as in the case of ecological and social IA (Simsa et al. 2014).

In terms of technique, according to O’Flynn, there are three general approaches for impact assessment: (1) retrospective, (2) process-driven and (3) ex-post studies as described in Fig. 1.11 (2010).

Fig. 1.11

Approaches to IA. (O’Flynn 2010)

1.5.4.2 Methodologies

IAs come in a variety of shapes and sizes. It is vital to understand and build the underlying assessment architecture to measure the impact of a project, an organisation or a sector (Simsa et al. 2014). The impact value chain or logic model is shown by Simsa et al. (2014). Arising from evaluation research, the logic model is a representation of the theoretical functioning of a program, an organisation or a sector that is used to appraise the intended goals. The model recognises and differentiates the input, activity, output, outcome and impact components. Let us define what those listed indicators mean. First, all resources invested in an organisation’s activities are called input. Second, activities refer to specific acts, tasks and the organisation’s achievements to fulfil its goals. Third, the term output refers to physical items and services that can be quantified directly as a result of an organisation’s activity. Fourth, particular alterations in attitudes, behaviours, knowledge, abilities, etc. that occur due to an organisation’s operations are hinted at as outcomes. Fifth, deadweight is the amount to which the outcomes would have happened anyhow and must be deducted from the outcome to spot the impact. Sixth, above and beyond the outcome that would have happened anyhow is named impact. Here, assessors should differentiate between performance measurement and IA. When it comes to performance evaluation, the activities or outcomes are the focus of attention. However, in the case of IA, identifying, measuring and valuing outcomes, including deadweight, is pivotal. The associated indicators, items and scales build the basis to measure impact empirically (Simsa et al. 2014).

Furthermore, Stern provides focal points to consider before starting to create an IA model. While there is no one-size-fits-all approach to making these decisions, some logical stages to follow might help guide decision-making. These steps are depicted as (1) evaluation questions, (2) program attributes and (3) available designs (2015). Various assessment commissioners will ask different types of impact questions, or even a different combination of such questions, such as how much of an effect can be attributed to the interference. When considering the program attributes, evaluators must generate a control group or comparator. There are designs and procedures such as instrumental variables that can help evaluators to discover specific impacts when an investigation is not possible. Furthermore, insisting on a precise measurement under all situations in many complicated program contexts is futile. Assessment commissioners frequently regard the advantages of combining approaches. Therefore, combined methods research that incorporates quantitative and qualitative techniques will increase the confidence of the results as they are formed on numerous different sources of information acquired in various ways. Few evaluations focus on a single subject; instead, they aim to measure impacts and explain what works where and when (Stern 2015).

Briefly, Stern argues that there are colossal differences in the shape, form, location, purpose, interrelationships and life cycle of programs. Then, it is not surprising that these attributes affect IA design. Determining the unit of analysis, creating theories of change and accounting for unpredictability are all the possible requirements of program features (Stern 2015).

Alternatively, according to Hailey and Sorgenfrei, the key is not the framework itself but how it is utilised – making the process as vital as the output is critical. It is also crucial to build breathing frameworks that demonstrate what actors attempt to assess the dynamic and multidimensional nature. Moreover, concerns such as power and authority, culture and context, as well as complexity and change, must be considered (Hailey and Sorgenfrei 2004).

1.5.4.3 Possible Failures and Solutions

Like all techniques, IA techniques also might come up with failures. According to O’Flynn (2010), eight possible reasons behind these failures are listed in Fig. 1.12.

Fig. 1.12

Possible reasons behind failures. (O’Flynn 2010)

O’Flynn (2010) also provides solutions to beat those challenges. Actors can overcome the first obstacle by devoting more time to figuring out how various processes are linked and complementing one another. To surpass the second one, it is suggested that assessors comprehend and explain the organisational zone of influence. The third challenge can be overcome by comprehending that measuring, evaluating and correlating facts have their own validity. Also, measurements should be done within their sphere of influence. To beat the fourth one, organisations should establish assessments for their purposes and then alter them regarding the demands of other stakeholders. To surmount the fifth one, evaluators can build rolling baselines and employ more quantitative data. The sixth possible reason for failure can be beaten through employing a small number of user-friendly tools. For the seventh one, assessors should devote effort to assuring that partners and stakeholders understand the assessment’s purpose. For the last challenge, findings can be utilised to facilitate consensus and planning workshops, generate case studies and so on (O’Flynn 2010).

1.5.5 Examples of IA Methods

Now, it would be convenient to illustrate IA systems and principles through examples. First, the Anticipated Impact Measurement and Monitoring (AIMM) system of International Finance Corporation (IFC) will be investigated. Second, we will review the principles of EBRD for its IAs. The third example coming from the World Bank presents possible IA techniques and their comparison. Fourth, we will share our findings on IA by a business by examining Intel’s corporate responsibility report.

1.5.5.1 International Finance Corporation (IFC)

IFC developed its own IA method, named the AIMM, to measure project-level and systemic outcomes of its actions. It is also an emerging model for impact investors and a tool to incentivise impact. Project and market outcomes are the two dimensions of this system. Project dimension looks into the influence in three different effect categories: (1) stakeholder effects, (2) economy-wide effects and (3) environmental effects. Second, the market outcomes dimension evaluates how well an intervention enhances market structure and function by encouraging competitiveness, resilience, integration, inclusivity and sustainability goals. IFC has created sector frameworks to evaluate projects in each of the IFC businesses. Sector frameworks assign ratings in four areas, as described in Fig. 1.13, to assist in IA (IFC 2021).

Fig. 1.13

Areas to be rated. (IFC 2021)

In the project outcomes dimension, the gap analysis evaluates the respective scale of the development problem that each intended effect is addressing. The intensity analysis assesses a project’s contribution to reducing divergence in development. Evaluating intensity is based on normalised sector-specific criteria. When a gap evaluation and an intensity assessment are combined, as shown in Fig. 1.14, an overall potential impact rating is appointed. The potential for an effect to have an influence is determined by both the size of the problem (the size of the gap) and the effectiveness of the intervention (its intensity). This method prioritises projects that address larger development gaps and/or unique or constructed programs to generate results quickly (IFC 2021).

Fig. 1.14

Assessing project outcome. (IFC 2021)

The market creation dimension appoints market stages to market development for each of the five market features. On the other hand, market movement is used to analyse a project’s efforts to change markets’ structure and functioning. As shown in Fig. 1.15, an overall potential impact rating is authorised after the market stage is combined with the market movement. The market’s capacity for systemic change is determined by the market stage of development and the catalytic change that IFC anticipates its project to engender (IFC 2021).

Fig. 1.15

Assessing market outcome. (IFC 2021)

The AIMM approach incorporates the uncertainty of realising and maintaining the desired impacts over time for both the project- and market-level dimensions. As shown in Fig. 1.16, the likelihood assessment is used to distinguish the potential results that a project could produce and the risks that could prevent them from being realised (IFC 2021).

Fig. 1.16

Likelihood assessment. (IFC 2021)

The IFC uses AIMM evaluations to choose and compose interventions with the most significant impact possible. IFC administers its pipeline of interferences and develops plans to remedy inadequacies by aggregating AIMM ratings for different business areas. Portfolio ratings will also assist IFC in balancing strategic goals to pursue the portfolio strategy. They aim to maximise the development effect while making sustainable and risk-adjusted financial returns. Furthermore, IFC monitors and reports on ex-ante expectations, develops information feedback loops and compiles a lesson inventory (IFC 2021).

1.5.5.2 European Bank for Reconstruction and Development (EBRD)

The EBRD has published a brochure to share its principles while assessing the impacts of its projects. There are nine principles, as listed in Fig. 1.17 (EBRD 2021).

Fig. 1.17

Principles of EBRD for IA. (EBRD 2021)

Following the first principle, the manager must develop strategic impact goals for the portfolio or fund to create positive and measurable social or environmental impacts consistent with the Sustainable Development Goals (SDGs) of the UN or other broadly accepted objectives. The manager shall also ensure that the investment strategy has a plausible foundation for reaching the impact goals (EBRD 2021).

For the second principle, the manager must have a procedure in place to administrate IA on a portfolio basis. The principle’s goal is to construct and track impact performance throughout the entire portfolio while considering that impact might differ between individual investments. The manager shall also acknowledge connecting staff incentive schemes with impact achievement besides financial performance (EBRD 2021).

For the third principle, the manager must attempt to build and record a believable story on its input to each investment’s impact. Contributions can be made in various ways, including financial and non-financial. The story should be told and backed up by proof whenever available (EBRD 2021).

The fourth principle requires that the manager examine and measure the concrete, constructive effect potential resulting from each investment beforehand. The evaluation should be conducted using a proper results framework that strives to address the following key questions: (1) What is the destined effect? (2) Who is influenced by this effect? (3) What is the magnitude of this effect’s significance? The manager should also try to assess how likely the investment will have the desired effect. Moreover, substantial risk factors that could cause the impact to differ from ex-ante estimates should be identified. Furthermore, the evidence should be gathered to estimate the relative size of the difficulty addressed within the chosen geographical context. The manager must also discover ways to boost the investment’s effect. Lastly, indicators must be adjusted with industry standards and best practices (EBRD 2021).

Within the fifth principle, the manager shall recognise and prevent. If avoidance is not practicable, alleviate and administer environmental, social and governance (ESG) risks for each investment as part of a systematic and documented approach. The manager must engage with the investor to obtain its promise to address gaps in current systems, procedures and standards, utilising best international industry practices. In addition, investees’ ESG risk and performance should be audited. The manager should engage with them, if needed, to avoid gaps and unforeseen events (EBRD 2021).

The sixth principle necessitates that the manager utilises the results framework in principle four to track the process to achieve positive impacts for each investment. A predetermined method to communicate performance data with the investee should be used to track progress. This should specify how frequently data will be gathered, the design for gathering data, data sources, data collection duties and how the data will be reported. Besides, the manager must strive to take necessary steps if monitoring reveals that the investment is no longer believed to reach its desired effects (EBRD 2021).

To comply with the seventh principle, when undertaking an exit, the manager must examine the effect of timing, design and exit procedure on the sustainability of influence (EBRD 2021).

For the eighth principle, the manager is responsible for revising and recording each investment’s impact achievement and comparing the projected and actual impact as well as other consequences. Moreover, these conclusions should be used to enhance operational and strategic investment decisions and administrative procedures (EBRD 2021).

In the last principle, the manager must publicly report the consistency of its IA methods with the principles annually and arrange for separate proof of this alignment regularly. Furthermore, the findings of this verification report should be made public (EBRD 2021).

1.5.5.3 The World Bank

The World Bank desires to discover by using IA whether the changes in consumption and health could be linked to the program itself rather than to some separate aspect. It has issued a guidebook that explains the most common quantitative approaches used in ex-post IAs of programs and policies. The guidebook also goes through ways to quantify distributional impacts and ex-ante approaches for predicting program consequences and methods (Khandker et al. 2010).

To assure that IA is functional, various measures should be followed, as stated by the guidebook. The importance and objectives of the evaluation, for example, must be explicitly stated throughout project identification and preparation. The nature and timeliness of evaluations are also a source of concern. To isolate the influence of the program on consequences, IAs should be planned ahead of time to assist program administrators in assessing and updating targeting throughout the intervention. The availability and quality of data are also valuable factors in dictating the capability of a program. Hiring and training fieldwork staff and establishing a consistent data management and access strategy are critical. From an administrative standpoint, the evaluation team should be carefully constituted during project implementation to include enough technical and managerial knowledge to assure precise data and result reporting and transparency in execution to interpret the data properly (Khandker et al. 2010).

As the first approach in the book, randomised evaluations attempt to determine the effectiveness of a program by finding a group of participants with similar observed features and randomly assigning the treatment to a subset of this group. This strategy overcomes the problem of unobserved characteristics causing selection bias (Khandker et al. 2010).

The double-difference method is another method that allows the World Bank to see if consequences are traced for both participants and nonparticipants over a long enough period to capture any intervention effects. This strategy indicates that tracking results for both participants and nonparticipants over time will offer a solid foundation for determining the program’s influence by utilising the double-difference method; nonparticipants’ observed changes over time yield the counterfactuals for participants (Khandker et al. 2010).

In addition, adding a third variable that affects just the treatment but not unobserved factors, an instrumental variable method reveals exogenous variation in treatment. These methods can be used with cross section or panel data. Instruments can be created via program design as well as other exogenous shocks that are unrelated to the desired consequences. Furthermore, regression discontinuity and pipeline techniques are the extensions of instrumental variable and experimental methods that use exogenous program rules to compare participants and nonparticipants in a narrow area (Khandker et al. 2010).

Although experimental methods are ideal for IA in theory, nonexperimental methods are commonly used practically, either because program managers are hesitant to exclude certain segments of the population from an intervention randomly or because a randomised approach is inappropriate for a rapid-action project with little time to experiment. The quality of IA, even with an experimental design, is determined by how the development and implementation are done. Compliance issues, spillovers and unobserved sample bias frequently obstruct the clean recognition of program impacts from randomisation. However, nonexperimental procedures, such as propensity score matching, double difference and the use of instrumental variables, have their own strengths and shortcomings. Thus, they are susceptible to bias for several reasons, including inaccurate evaluation framework design (Khandker et al. 2010).

According to the World Bank, no single assignment or evaluation method is flawless. Thus it is a good idea to double-check the results using other approaches. Ex-ante and ex-post evaluation methodologies, as well as quantitative and qualitative approaches, can all be integrated. It is important to utilise specific approaches. Understanding the planning and execution of an intervention, the aims and processes by which program goals can be met and the precise features of targeted and nontargeted areas are all key components in IA. One may also decide whether certain components of the program can be changed to make it better by directing pleasant IAs throughout the program and beginning early in the plan and execution stages of the project (Khandker et al. 2010).

1.5.5.4 Intel Corp.

To take a look at IA examples from the business side, let us investigate Intel’s corporate responsibility report of 2020. Intel claims in this report that incorporating and expanding ethical business practices into their worldwide operations and supply chain reduces risks and promotes human rights respect. Intel’s 2030 goals include taking steps to preserve and enhance their focus on maintaining and establishing a strong safety culture as their business evolves and grows, as well as expanding the global reach of their wellness programs. The goals also include a large increase in the number of suppliers covered by their engagement initiatives to increase human rights accountability throughout their global supply chain. Intel, as it asserts, is also at the forefront of industry-wide initiatives to enhance ethical mineral sourcing and responsible mobility (Intel 2021).

As we can see above, Intel seeks to demonstrate its respect for people, the environment and, generally, the future well-being of all living species. But how does Intel evaluate the real-world impacts of their actions? IA commissioners present their beliefs and how they have progressed over the past year in their corporate responsibility reports. They track a comparable approach in all of their values while doing so. Let us look at the employee safety and well-being value as an example. They begin by describing in their report in 2021 that they want to ensure that more than 90% of their employees believe Intel has a solid safety culture and that 50% of their employees participate in their worldwide corporate wellness program. They continue with establishing a baseline. First, 37% of Intel employees engaged in Intel’s EHS Safety Culture Survey, with a baseline average of 79% on “safety is a value” metrics; and second, 22% of Intel employees participated in Intel wellness initiatives at the start of 2020. Following that, Intel summarises its progress for the previous year. During 2020, their health and wellness teams worked to enhance employee knowledge and engagement in Intel’s programs, emphasising preventative and early intervention programs and participation in the newly expanded virtual offerings of the Intel Vitality Program. They finish the assessment by looking ahead. Intel’s safety culture aim will be to boost employee and management engagement in their safety programs, increase company-wide participation in their safety culture survey and expand the poll to 50% of employees by the end of 2021 (Intel 2021).

As a result, Intel, as a technology giant, uses these corporate responsibility reports to demonstrate its social and environmental dignity to the public. It uses several IA principles while doing so. First, it identifies the desired impact as ensuring more than 90% of their employees believe that Intel has a solid safety culture and that 50% of their employees participate in their worldwide corporate wellness program. Second, it creates baselines such as the Safety Culture Survey, with a baseline average of 79% on “safety is a value” metrics, etc., to compare improvements. Third, as we can see, it displays the progress using experimental data. Lastly, it learns lessons from its evaluation to set further goals, such as expanding the poll to 50% of employees by the end of 2021 (Intel 2021).

1.5.6 Summary of IA Discussion

In this section, we have provided our findings on IA from the academic literature and business environment. Since the definition of impact differs among businesses and institutions, distinctions are also present across existing IA techniques. It is crucial to start conducting IA by remembering this fact. To sum up the IA debate, it is vital to comprehend the design and implementation, the aims and processes by which action goals can be reached and the precise attributes of targeted and nontargeted areas of a business or institution’s action. While forming the IA, evaluators should (1) decide on what is being assessed, (2) ensure the implementation of programs with impact in mind, (3) address the normative and ethical issues that activities raise and (4) differentiate between actors’ “program theory” and the “theories of change” of how the program works in practice (Stern 2015). Furthermore, as stated by Hailey and Sorgenfrei, it is crucial to make the process as vital as the output (2005). In addition, it is not only necessary to identify impacts in IAs, but it is also necessary to comprehend how the various initiatives, programs and organisations operate (Simsa et al. 2014). When the businesses or institutions design and implement an effective IA, they consequently demonstrate success for the received fundings, making them eligible for further fundings, and understand the implications of initiatives to enhance effectiveness, be accountable and attain public advocacy for their actions.

1.6 The Innovation Journey

From the literature review and discussion above, Fig. 1.18 can summarise the innovation journey how ideas translate and transform into products and/or services as follows.

Fig. 1.18

The innovation journey

Before we explain the journey, we should stress that this is not a linear process; instead, it is a combination of interrelated complex processes. As the outcome-based approach or the LOTI approach suggests, Phase 0, envisaging, begins with looking for real-world outcomes and setting a vision. Then we proceed to the discover phase. This phase discovers and defines problems preventing the desired outcomes. After completing this, one should enable the necessary skills and competencies to solve the listed problems. The company can proceed to the develop phase when the skills are sufficient. In this phase, a product or service prototype is developed and tested. If the results are successful, we continue with the appraise phase. Assessing the impact and value of the innovation is essential in deciding whether the product/service will be scaled up for a more extensive commercial use or will stay as a prototype. If market conditions suggest scaling up, the innovation will penetrate into the market and reach a broader range of consumers and customers. Supporting mechanisms are vital to foster product/service development during this whole process.

Innovation districts and living labs are ideal testbeds for innovation development and trials. Regulatory sandboxes will alleviate the regulatory burden and pave the way to a vivid market environment, especially for start-ups. Funding and financing are other key issue for the innovation journey. Grants and loans could be a starting point for the process. As the journey proceeds to the develop and appraise phases, the public sector and private investors will see the opportunity and come into the picture as public-private partnerships or venture capitalists. The journey will also shape the business models of the innovations as innovators might change, adapt or update their value proposals, value creation and value capture as the product/service evolves. When the value is mentioned, we should highlight that revenue or the monetary value is not the only value. There is growing pressure on tackling climate change and achieving sustainability in the industry and businesses. Hence, the innovations should also provide environmental and social value to increase their overall impact, receive more funding and achieve better market diffusion.

The remainder of the book is organised as follows. Chapter 2 presents brief descriptions and working principles of 34 emerging technologies. We solely focused on those in the “market diffusion and commercialisation of products/services” phase when deciding on which technologies should be included in this book. After this, we continue with 17 United Nations Sustainable Development Goals and 650 companies. We chose the companies and use cases with a comprehensive market scanning and by reviewing numerous sources that list start-up competitions and “best start-up” or “most innovative company” awards.¹ The use cases are presented in the “business model” approach by briefly mentioning value proposition (what?), value creation (how?) and value capture (revenue). When mentioning value capture, instead of the revenue model of the companies or how companies make money, we deliberately focused on how technologies capture economic and business, environmental and social and ethical value. Finally, we complete the book with a brief conclusion.