International Journal of Economics and Management Engineering (IJEME) IJEME Volume 2, Issue 3 Aug. 2012, PP. 98-103 www.ijeme.org © World Academic Publishing - 98 - Linking Value Assessment to the Business Model Framework in High Innovative Services of Public Utility — A Simulation from the Aerospace Industry Lucia Marchegiani 1 , Maria Elena Nenni 2 , Enzo Peruffo 3 , Luca Pirolo 4 1 University of Roma, via Silvio d’Amico, 77 – 00145, Rome, Italy 2 Department of Management and Economics Engineering, University of Naples Federico II Piazzale Tecchio, 80 – 8015 Naples, Italy 3 LUISS University, Viale Pola, 12 – 00198 Rome, Italy 1 lmarchegiani@uniroma3.it; 2 menenni@unina.it; 3 eperuffo@luiss.it; 4 lpirolo@luiss.it Abstract- This paper is focused on the highly innovative R&D activities involving both private and public partners. The public goals pursued by these projects make them substantially different from the most common profit driven R&D ventures usually analyzed by the literature. In many cases, socio-political issues determine the decision to fund such projects within a specific initiative or sector. The lack of analytical tools to address this multiple stakeholders’ often-conflicting ventures is noticeable observing big ongoing projects where the risk of conflicts among public and private stakeholders may arise. We have validated the PPBM to the satellite services industry on the Emergency Response Core Services (ERCS). Keywords- Business Model; Economic Sustainability; Value; Organization and Risk Management; Satellite Services I. INTRODUCTION Public investments in highly innovative industries are deemed fundamental to drive the competitiveness of countries, the overall economic development and the effective response to global crisis [1]. This tendency exacerbates the rise of public-private ventures. Over the last decade, a vast amount of Private Public Partnerships has been signed in the European Union, accounting for an estimated capital value of more than €250 billion [2]. Yet, despite such evidence and a growing body of knowledge about Public-Private Initiatives, still analytical tools are lacking to address multiple stakeholders in highly innovative industries. Differences in public vs. private organizations can be traced back to Blau and Scott's typology [3], which designates a category of commonweal organizations whose prime beneficiaries are the public in general, as distinguished from business organizations whose prime beneficiaries are their owners. As far as highly innovative industries are concerned, public interests are of evidence. This requires adapting managerial tools to ensure sustainability of these ventures, in economic terms as well as with respect to the public interests. Moreover, highly innovative industries are often project- based, which requires adopting specific managerial tools and accounts for new theoretical insights. This work is focused on the highly innovative R&D activities involving both private and public partners who are substantially different from the most common profit driven R&D ventures as they pursue public goals. In many cases, socio-political issues determine the decision to fund such projects within a specific initiative or sector (e.g. the GMES and GALILEO projects inside the aerospace EU initiatives). As underlined by the European Commission, a Space Policy is pursued within the Europe 2020 strategy, developed in collaboration with the European Space Agency and Member States. In order to deeply investigate the management of such projects, it is possible to ideally break them up into three main phases: i) the idea generation (decision phase), ii) the realization (design phase), iii) the distribution of the related services (execution phase). To the best of our knowledge, most of the works that addressed this topic take into account either the earlier stage of this process (decision), or the execution phase (e.g. [4]). So far, little progresses have been made in managing the design phase that is topical just now when discontinuous innovation and open innovation require more and more new systems and tools for idea management [5]. Yet, conflicts among private and public values appear more relevant in this stage [6], due to the opposite interests of public institutions and private stakeholders. Public partners pursue goals such as economic development, safety, reliability and accessibility (e.g. [7]). Profit-driven partners instead focus on the design of the service infrastructure to assure at least the economic and financial equilibrium in the execution phase. Prior works focused on: i) how to assess the goodness of business arrangements [8], [9]; ii) the relevance of social costs and benefits [10]. Nevertheless, none of them has combined these two perspectives in a single model to assess the sustainability of the initiatives after the decision phase. Combining public and private values is even more relevant in highly innovative industries, due to the high amount of investment required and uncertainty of its returns. We think that the business model framework can be emended to accommodate such diverse (if not diverging) goals. We apply this new framework to t he GMES (Global Monitoring for Environment and Security) initiative as a case study. The overall contribution of the business model conceptualization lays in the opportunity to frame an integrated view of all the actors involved in a specific business. This is particularly relevant in high technological context in which the business model framework can be useful to define the organizational arrangements among firms, partners and costumers [11] and an approach that links