European Policy on Social innovation

1. European Policy on Social innovation Change Your Mind-set to Change Society Europese instrumenten voor sociale innovatie en sociaal ondernemerschap in Vlaanderen Sociale Innovatie Fabriek, Brussels, 31 March 2014 Filippo Addarii

2. change view of the world to change the world After lunch…. let’s start with an episode of the TV show West Wing on Peters’ world-map: https://www.youtube.com/watch?v=n8zBC2dvERM

4. Socrates (Athens 470 – 399 BC) A model of radical search of truth: Oracle of Delphis defined him the wisest man on earth but his reply: “I know I do not know” What’s truth? “It’s not solitary research but it’s like the job of the nurse helping the mother to give birth” Accused of challenging the gods of the city and corrupt the youth he was sentenced to death He accepted the death penalty because ‘if my fellow citizens do not accept my criticism how foreigners would do it?’ Lessons: Our is a collective quest (not ideology) bounding us to our community The quest puts us in collision with status quo, and puts at risk our own fortune

6. Cristoforo Colombo (1450– 1506) An anti-hero and counter-intuitive story of innovation: He had a dream, ambition, knowledge, expertise and bravery (like Ashoka fellow) He lived in the time of transoceanic expeditions: demography, science, technology booming - Europeans were looking for new lands, resources He offered his services to anybody, fooled his investors, lied on the returns (no gold), became a fanatic religious for opportunism, and died in poverty & disgrace His business plan was wrong, but was lucky, ‘discovered Americas’ by accident and changed the lives of 200m people: he built the basis for Europeans’ conquest of the world, for the prosperity we still enjoy, but caused the death of 90% indigenous population - diseases Lessons: Innovis a collective & complex process with social impact despite the intentions Innovation is unpredictable – not individual goals & values predefine impact We are the explorers of the new word

8. Michael Young (1915 - 2002) Social innovation is institutional change: He left central government & party politics (experts’ top-down solutions) to work within the community (Bethenal Green)engaging people directly (ethnography) He believed in the creativity and entrepreneurship of people and their communities to develop solutions for social progress (bottom-up & collective solutions) Established 80 new institutions such as the Open University (distant learning for 250’000 students), British Consumer Association, School of Social Entrepreneurs (1997) and NHS Direct Lessons: The success is to spin-off, become mainstream, and scale up by partnership Social innovation is not just making new product, services or methods, but building the new institutions of market, democracy, and redefine the social contract

9. Is the EU on the right track? • What EU needs: • Collective quest of truth • The explorers of the new world • A new social contract to rebalance the power between markets, politics and society • What EU is doing: • Led by rules and procedures… • Sides with public & nonprofit incumbents, lobbyists and dated public bodies eg EESC • Redefinition of the non-profit sector, philanthropy & ancillary welfare services ie job inclusion of marginal groups

10. What the EU has done Policy: Europe 2020 – Innovation Union Flagship Initiative (2010) Single Market - Social Entrepreneurship Initiative (2011) • Social Investments (2013) • EUSEF: label for Social Impact Investment Funds (2013) • Public procurement directive: social impact as an optional criteria (2013) • CSR directive: mandatory (to be approved by the Council) • Social impact measurement (in discussion) Public engagement: Social Innovation Europe , digital platform for networking and knowledge sharing (2011) GECES - expert group on social entrepreneurship (2012) • Conference in Strasbourg - 2000 participants, the largest ever organised (Jan 2014) • Conference by DG EMPL on 19 – 20 June 2014

11. What the EU has done Funding: • DiogoChallenge: Social Innovation Prize Competition to tackle unemployment (2012) • Social Impact Accelerator: €52m fund of funds for social entrepreneurship (2013) • Collective Awareness Platform for Sustainability & Social Innovation (2013) • Programme for Social Innovation & Employment: €900m (2014 – 20) • Cohesion Policy: socent & socinn included as priorities (2014 – 20) • Horizon 2020: new programme for R&D - socent& socinnincluded as dedicated call and horizontal priority (2014 – 20)

12. What the EU got right Important for the EU: Acknowledged social innovation and entrepreneurship to tackle the crisis Horizontal policy impacting every programme and DG A new generation of officials who are knowledgeable Important today: Large amount of funding Progresses on CSR, public procurement, social impact investing Reputation amongst media and large public (although EU has got a pretty bad reputation) Important for the future: Prize challenges (funding results) Social Investments: a new framework for financing and delivering welfare services (the basis for a review of the European social model) Impact on member states (at least some of them)

13. Where & Why EU has failed Lack of political leadership (blame the financial crisis?!?) & internal reform: Ancillary policy: neither visionary, nor systemic as changes in the rules of markets Policy hijacked by incumbents: public authorities, non-profit, lobbyists, statutory bodies eg EESC Funding rules and procedures lack room for experimentation and risk-taking Missed partnership with corporate sector (real cash and transformative potential) Policy limited to EU instead of expand to the rest of Europe Lack of synergy with G8 task force for social impact investing Independent causes: Cohesion policy not adopted by local authorities for lack expertise & vested interests Social impact measurement stuck (fight between legal status vs realized impact)

14. Besides EU keep an eye on… G8 task force on social impact investments (results delivered on 19 – 20 June 2014) All new forms of finance eg crowd-funding, microfinance, electronic coins Payment by results and government moving from funding products & services to funding results eg Social Impact Bond Corporate social innovation – multinational corporations moving beyond CSR Traditional nonprofit organizations jumping in the filed eg Misericordia Lisboa & Social Innovation Bank Coops and mutuals investing in the sector eg Legacoop Emerging sharing economy eg car-sharing, open-hardware, all forms of electronic barter A rapidly changing market: robots replacing jobs… and jobs that can not be replaced by robots

15. Social Impact bond in Belgium First SIB in non Anglo-Saxon country Professional insertion of migrants Partners: Koisinvest.com, Duoforajob.be, Brussels Region (Dept in charge) Targets: 320 migrants – 50% success rate (current rate 30%) 3 years - 500’000 total budget Return 6% to investors if targets are met Investors: wealthy individuals and foundations Considerations: Took a year to develop it (probono) Too small to repay the cost of developing the financial product Future larger SIBs under discussion

16. To which tradition do you belong: Rousseau, Lenin or the Leopard?

17. Thanks! • filippo.addarii@youngfoundation.org • Twitter: filippo.addarii @the_young_fdn