The second part of this report will explore alternative models for social innovation that are beyond the impact start-ups but are also relevant to understand the context around social investments and the different approaches and solutions that exists in the Nordic countries. As previously mentioned, social impact bonds (SIBs) have been used, specifically in Finland and Sweden, as a tool for testing innovation while reducing risk. In addition to reviewing examples of SIBs, Part II will also consider the motivations of private investors to finance impact and examine different examples of public-private partnerships that also contribute with social value to society.

A social impact bond (SIB) is a financial model where the public sector pays for results rather than efforts. With this model, the public sector can offer preventive services to citizens instead of reactive services (in terms of intermediate financing), and private capital bears the risks. This new payment and financing model has not yet gained much traction in the Nordic Region. However, there are some flagship initiatives from Finland and Sweden from which others can learn.