Perspectives of Value Co-Creation: impact-based Models

This book is framed within the public management (henceforth, PM) field of studies and aims to investigate the most recent tools of partnerships or contracts between governments and other sectors – namely private, non-profit and finance, with a special focus on Social Impact Bonds (henceforth, SIBs). There is an ever-increasing scarcity of public resources that have been caused by the recent global economic crisis, which has resulted in a need for increased innovation in public relations between public bodies and private organizations. Public subsidies, public funding, specific projects and specific achievements have come from public-private partnerships (henceforth, PPPs) that are based on a level of performance achieved through payment by results techniques (henceforth, PbR). The Organization for Economic Cooperation and Development (henceforth, the OECD) has written a report on ‘New investment approaches to meeting social and economic challenges’ (Wilson, 2014) where the topics of social investment and the impacts of such investment are addressed. These investments are viewed as the natural evolution of the relationship between finance and philanthropy, and a corresponding strategic reallocation of private resources. This reconfiguration presents the challenge of a hybrid market with unexplored potential involving financial intermediaries, local authorities, SMEs, large enterprises, non-profit organizations and civil society. This book includes a reflection on the role that SIBs and other tools of outcome-based commissioning (henceforth, OBC) might have in forming the rationale for contemporary public sector interventions. The aim of this research is to more fully explore certain aspects of the scenario described above, with an empirical focus on the Italian context. This the book attempts to cover key issues connected to this new scenario, identifying the “what”, “who” and “how” of the evolution of the relationship between finance and philanthropy, focusing on a different issue in each chapter. The book opens with an insight into the international context in with impact-based models are framed, it is developed in the introduction. The first chapter focuses on value and the new geographies of value creation. Non-economic X values, such as public, social and shared are at the heart of this new scenario: value is the “what” – the aim that the whole of society needs to achieve. The second chapter focuses on the “who”, that is, the individual or body who generates this value. Traditionally the state, for-profit enterprises and the organizations of civil society have been instrumental in value creation, but their boundaries are blurred and they have undergone significant recent transformation. This chapter focuses on the relationships between different sectors and on the transformation of the public administration (henceforth, PA) and non-profit sector within this new framework of hybridization and the social innovation paradigm. The third chapter – the “How”, focuses on a specific tool where the value of different sectors might be studied to find the most optimum way to respond to social needs and maximise public expenditure through SIBs. This chapter has a particular focus on the scenario of social finance and the use of this as a tool. Aspects of SIBs are seen as developed components of PPPs. They not only serve a useful role in rationalizing spending, but their qualification and configuration can also significantly improve the extent to which the needs of a community may be met. The fourth chapter explores the topic of evaluation, in deepening its core aspects as a trans-discipline, its evolution, its methods and the current debate. Since the book aims at exploring, with a holistic approach, the possible developments and impact-based models, the topic of evaluation could not be excluded. To achieve the transition from a fee for service model to an outcome-based one (therefore the title impact-based models), it is vital to define the options and the advancement for evaluating those impacts. The book concludes with broader considerations on the future of impact-based models in relation to the actors involved and the need for further research for defining metrics and patterns for outcome measurement.