Once the value configuration, a distinct value proposition, and an initial plan for the revenue mechanism or the internal benefits of the innovation are clarified, it is time to scope the business potential of the innovation. This involves thinking through the resources and activities needed to implement and deliver the innovation and assessing how they should be organized and how much they would cost to offer or access. The innovator now needs to identify the resource base needed for the value configuration designed in the first stage. This chapter analyzes how the value configuration relates to the broader business ecosystem in which it is embedded.

The appropriate choice between business and public enterprise is determined by the interaction between a financial time horizon and the product or project’s economic life. The prevailing interest rate defines a precise credit time horizon which is a temporal outer bound for commercial enterprise. Projects which need longer to break even cannot be funded by business alone. Long-term projects face uncertainty and attempts to control it by means of rigid contracts lead to inferior outcomes. A ‘franchise’ overcomes the temporal boundary. Protection from uncertainty is provided by social and government agencies. Investment ‘manias’ set aside time horizons and can leave a legacy of real assets. Public–private partnerships for infrastructure development are a franchise intended to overcome credit time horizons. They were embraced by New Labour, but have given rise to inefficiency and corruption and are currently in decline. The time-horizon model undermines the standard argument for market superiority. It turns Hayek on his head: it is financial markets that require certainty, whereas social and public agencies manage in its absence.