Recommendations for Investors
Based on the empirical insight gained through the survey and case studies, recommendations for different stakeholders about how to develop RRI-like practices while deriving a competitive advantage are provided below. First, recommendations for industry, which is the principal actor of competitive advantage at the micro level, are provided. These are followed by recommendations for the main actors of competitive advantage at the macro level: policymakers. Then, recommendations for supporting stakeholders that help to create the context in which RRI-like practices are developed are provided, with the aim of supporting their role in accompanying the principal actors in competitive advantage concerns, allowing for sustainable socio-economic development. These are recommendations for research performing organisations, research funding organisations, investors, civil society, and NGOs and association bodies.
Set of Recommendations for Investors
- Understand the benefits of RRI-like practices and how to overcome the barriers
For investors, it is important to understand what the benefits of RRI-like practices are in terms of market and financial performance. There are many ways in which RRI-like practices drive competitive advantage; mainly, being able to avoid noncompetitive regulation, increasing social acceptance, accessing new markets, increasing the efficiency of innovation and obtaining reputational effects. Mostly, the link between RRI-like practices and financial performance is not direct, as observed in both the survey and the case studies, but mediated by customer performance and reputational effects derived from engaging in such practices. Asking for risk assessment plans that include risks derived from the management of socio-ethical issues and how these will be hedged through RRI-like practices is advisable. Besides, engaging in RRI-like practices might also come with certain barriers (lengthening the innovation process, protection of intellectual property issues, lack of consumer awareness and other barriers derived from the institutional environments). It is important for the investor to understand the benefits of RRI-like practices for competitive advantage, but to also acknowledge the barriers and to assess, based on business plans, what actions the investee is adopting to overcome such barriers (if applicable to the project, domain and geography).
- Introduce social and environmental ROI in expectations
The inclusion of indicators of progress is linked to the need to understand return on investment from a triple-bottom line perspective. Even if RRI-like practices have shown to be a driver of competitive advantage in many contexts, sometimes through mediated relationships, (such as improving customer performance), there is a call for the inclusion of environmental and social indicators of progress, adjusted to the project, in addition to the financial pay off of the investment, to ensure that the outcome dimensions of RRI-like practices are realised in sustainability performance. In addition, expectations about when to receive financial payoffs might need to be adjusted to longer research and innovation processes (derived from the inclusion of ethical state-gates) plus the potential mediating effects of customer performance on market and financial performance (although further, longitudinal research is needed on such mediated relationships). The inclusion of such indicators on the social and environmental pay off would also help to ensure that the investee is following up with plans to introduce RRI-like requirements in the research and innovation processes and outcomes.
- Introduce ethical requirements relevant to context
As also noted for other stakeholders, it is very important to adapt the expectations of RRI-like practices in detail for the local environment. Even if the main procedural and outcome dimensions of RRI-like practices were observed throughout regions, the detail of practices was not, as well as the underlying societal values and need to be addressed. These varied in different geographies and domains and called for different application of RRI-like practices (as observed in the contrasting practices utilised by organisations in the bioeconomy and ICT cases, respectively). Consequently, it is important to develop ethical indicators that measure not only economic progress but also progress related to sustainable development and procedural dimensions of RRI-like practices that are well adapted to the organization and research and innovation project in terms of measuring how the investee is dealing with such issues.