Keywords: social value creation, social entrepreneurship, social innovation, discounted cash flow analysis, dynamical systems, access to resources, financial modelling
Mechanisms of social value creation: extending financial modelling to social entrepreneurship and social innovation
We focus on the identification and selection of innovation initiatives that are intended to create cumulative social value. We suggest that a process like discounted cash flow (DCF) is needed, but developing such a process is complicated in the social value context due to a lack of metrics and consistent social value constructs. Taking a dynamical systems perspective and using economic modelling as a guide, we argue that access to resources and information about their future use represent measurable social value. Further, we describe innovation as the recognition and exploitation of patterns in the environment that create social value.