Appendix A: The IIPP's Mission-Oriented Framework for the Bank
83. The IIPP's Framework identifies that a mission-oriented approach will encourage efforts towards addressing significant societal challenges which require different sectors to invest and innovate. A mission-oriented approach further encourages transformative solutions that are sector and technology neutral. The missions, therefore, will not specify the solutions or the types of businesses in which the Bank should invest.
84. A mission-oriented approach to investment recognises key principles which will allow the Bank to create its intended impact. These principles are:
- Economic growth has not only a rate but also a direction;
- Innovation requires investments and risk-taking by both private and public actors;
- The state has a role in not only fixing markets but also in co-creating and shaping them;
- Successful innovation policy combines the need to set directions from above with the ability to enable bottom-up experimentation and learning; and,
- Missions may require consensus-building in civil society.
85. This Mission-Oriented Framework makes a distinction between 'grand challenges' and 'missions'. Grand challenges are defined as "broadly defined areas that have been identified as a priority in Scotland, either through political leadership, or the outcome of a movement in civil society". Missions are defined as "a set of concrete problems that different sectors can address to tackle the [grand] challenge."
86. Under this Framework, working towards a mission will involve 'sectors' and 'solutions'. Sectors are understood as "sectors of the Scottish economy that are well placed to invest and innovate in ways that will contribute to a mission". Solutions are then defined as "a portfolio of potential projects from across different sectors that could be financed by [the Bank] to help support a mission".
87. The IIPP's Framework also sets out that working towards missions can lead to "cross-sectorial spillover effects" which can create additional impact. These are unexpected benefits which materialise outside of the immediate policy area. These may not be known beforehand but can nonetheless lead to further innovation, the creation of new markets, and positive outcomes. These can be hard to predict and measure.
88. Figure 4 below demonstrates the relationship between a mission and its corresponding grand challenge, and the role sectors and solutions will play towards achieving a mission:
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