Social Enterprises in Market Economies and Public Policy: A European Perspective

1. Comenius University Bratislava, April 2008 Social Enterprises in Market Economies and Public Policy:A European Perspective Prof. Jacques DEFOURNY Center for Social EconomyUniversity of Liège (Belgium) EMES European Research Network

2. OVERVIEW 1. Some historical backgrounds 2. The approach built up by the EMES European Research Network 3. Work integration social enterprises in Europe 4. Policies supporting social enterprises 5. Social enterprises in the whole social economy 6. Conclusions

3. 1. Some historical backgrounds • SOCIAL ENTREPRENEUR, SOCIAL ENTREPRENEURSHIP, SOCIAL ENTERPRISE • Appearance of these notions around 1990 (US and Western Europe) • Development of a whole literature since the mid-90's • United States: around Ashoka, business schools and pro-active foundations supporting social entrepreneurs or NPOs’ strategies to earn market income • Western Europe: social enterprises reflect new developments within the "third sector" or the "social economy" (voluntary organizations, NGOs, cooperatives,…) • Social entrepreneurship: spectrum of initiatives much wider than the concept of social enterprise

4. B. ITALY: THE BOOM OF « SOCIAL CO-OPERATIVES » • Withdrawal of the state from some social services • Power of large co-operative federations • As soon as 1990, launching of the « Impresa Sociale » journal • Law of 1991 creating the legal form of « social solidarity co-operative » • A-type social co-operatives: social services co-operatives • B-type social co-operatives: work integration social co-operatives • End of 2005: 7,300 social co-operatives having created 244,000 jobs

5. a common European approach to the social entrep. European overview of « WISEs » Book « Social Enterprise. At the Crossroads of Market, Public Policies and Civil Society » (M. Nyssens, ed.), Routledge, 2006 A European overview of social enterprises (main areas: work integration, personal services, local development) Book « The Emergence of Social Enterprise » (Borzaga and Defourny, eds), Routledge, 2001 C. THE WORKS OF THE « EMES EUROPEAN RESEARCH NETWORK » • The emergence of social enterprises in the 15 member states of the EU (1996-2000) • Social enterprises in the field of integration by work - « Work Integration Social Enterprises » (2001-2005)

6. D. THE UNITED KINGDOM: A GOVERNMENTAL STRATEGY FOR THE PROMOTION OF « SOCIAL ENTERPRISES » • 2002: publication of the document « Social Enterprise: a Strategy for Success » (P. Hewitt, Secretary of State for Trade and Industry) • Definition: « A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners. » • Tools of the British government strategy: creation of a « Social Enterprise Unit », support to training programmes, support to the « Social Enterprise Coalition », evaluation reports etc. • 2006: SE Unit moved to the Office of the Third Sector

7. The situation of « social enterprises » in the United Kingdom • about 15 000 soc. entr., 450 000 jobs, 300 000 volunteers • sectors of activity: « health and social care » (personal services, childcare, guidance, support to housing), « community and social service » (environment, culture, arts, sports…), estate activities (rental, access to property, sale), and education. • users/beneficiaries: handicapped people (19% of enterprises), children and young people (17%), elderly people (15%), people with low income (12%) • for 88% of social enterprises, more than 50% of their resources originate in the sale of goods and services Rather market-oriented conception of the social enterprise

8. 2. The approach built by the EMES Network • The social enterprise can be identified on the basis of • 4 economic criteria • 5 social criteria • The 4 economic criteria: • A continuous activity producing goods • and/or services • A high degree of autonomy • A significant level of economic risk • A minimum amount of paid work

9. The 5 social criteria: • An explicit aim to benefit the community • An initiative launched by a group of citizens • A decision-making power not based on capital ownership • A participatory nature, which involves the persons affected by the activity • Limited profit distribution Conception of the social enterprise deeply rooted in the social economy

10. The concept of social enterprise is double-sided: Social enterprises can be NEW ENTITIES OR ALREADY EXISTING ORGANISATIONS reshaped by a new dynamics

11. THE EMES DEFINITION AS AN « IDEAL-TYPE » • The nine criteria are not conditions to be strictly met to deserve the label of social enterprise • They rather define an « ideal-type » (abstract construction) that enables to position oneself within the « galaxy » of social enterprises A methodological tool rather than a normative framework

12. 3. Work Integration Social Enterprises (WISE) in the European Union A. THE FIELD UNDER STUDY • Besides the main criteria of the « working definition », • a WISE is characterised by two major elements: • Goal : occupational and social integration of handicapped or marginalised people • Means : productive activity with guidance or training, with the view of achieving a lasting integration, be it within the social enterprise or within a traditional enterprise

13. B. TYPOLOGIES OF WISEs Identification of 39 WISE models across 12 EU countries For each of these categories of WISE, spotting of the main characteristics: legal form, goals, types of jobs, importance of training, target group, resources… Identification sheet for each category of WISE

14. Three main types of WISEs • WISEs with a specific and comprehensive legal framework, focussing only on integration (ex: B-type social co-operatives in Italy) • WISEs focussing only on integration but operating without a comprehensive legal framework (ex: work integration enterprises in Belgium and in France) • Other types of social enterprises with various goals (ex: worker co-ops in the United Kingdom)

15. C. MODELS OF WISEs IN THE EU Germany SBGa= Soziale Betriebe und Genossenschaften = social firms and co-operatives KBa = Kommunale Beschäftigungsgesellschaften = municipality-owned social enterprises BWa= Beschäftigungsgesellschaften von Wohlfahrtsverbänden = social enterprises organised by welfare organizations BLUIa = Beschäftigungsgesellschaften von Lokalen, Unabhängigen Initiativen = social enterprises organised by local initiatives

16. Belgium EIb = entreprises d’insertion = work integration enterprises ETAb = entreprises de travail adapté = sheltered work enterprises EFTb  = entreprises de formation par le travail = enterprises for training through work SOLIDRb= entreprises sociales d’insertion SOLID’R = SOLID’R work integration social enterprises ESRb  = entreprises sociales d’insertion actives dans la récupération et le recyclage = work integration social enterprises with recycling activities SWb  = sociale werkplaatsen = social workshops IBb  = invoegbedrijven = work integration enterprises BWb  = beschutte werkplaatsen = sheltered workshops AZCb= arbeidszorgcentra = work health centers

17. Spain CEEe = centros especiales de empleo = special employment centres COe= centros ocupationales = occupational centres ONCEe = empresas de la Organización Nacional de Ciegos de España = enterprises of the Spanish National Organisation for the Blind EIe = empresas de inserción = social integration enterprises (for people at risk of social exclusion) Finland LCOfin= labour co-operatives CSFfin = co-operatives and social firms for disabled people

18. France CAVAf =centres d’adaptation à la vie active = centres for adaptation to working life EIf = entreprises d’insertion = work integration enterprises AIf = associations intermédiaires = intermediate voluntary organisations RQf= régies de quartier = neighbourhood enterprises ETTIf = entreprises de travail temporaire d’insertion = temporary work integration enterprises GEIQf= groupements d’employeurs pour l’insertion et la qualification = employers organisations for work integration and training EINf= entreprises insérantes = long-term work integration enterprises

19. Italy COSOi= cooperative sociali di tipo b) = B-type social co-operatives Ireland SEIrl = sheltered employment LDIrl = local development work integration social enterprises SEWIrl = Social Economy (National Programme) work integration social enterprises Portugal EIp = empresas de inserção = integration companies EPp = emprego protegido = sheltered workshops

20. United Kingdom WCOuk= worker co-ops CBuk = community businesses SFuk = social firms ILMOuk = intermediate labour market organisations Ruk = Remploy (large quasi-state enterprise) Sweden SOCOsw = social co-operatives SHsw = Samhall (network of sheltered workshops)

21. Main characteristic of target groups Women at risk Minorities Low- qualified young people «Social handicap» (alcohol, drug) «Hard-to-place» (long-term) BVdk PDLDuk CSFDPfin SOCOsw SHsw Aif RQf EIb SOLIDRb IBb AIf ETTIf EINf KBa BWa LDirl EIp SBGa UCSirl LCOfin CSFfin RQf GEIQf BLUIa LVdk RQf SOLIDRb ESRb SWb AZCb WCOuk BWb COSOi EPp CEEe ONCEe COe SBGa BWa EFTb WCOuk CBuk LDirl CSFfin EIe RQf ETTIf GEIQf CBuk ILMOuk CSFfin SBGa BWa CBuk KBa SEWirl LDirl SEWirl Eip Eie CAVAf RQf SEWirl CSFfin LVdk ETAb COSOi

22. Integration goals SBGa BLUIa EFTb EIf AIf ILMOuk LCOfin LVdk EIp EIe ETTIf GEIQf EIe EIb IBb EINf SOLIDRb WCOuk Ruk CSFfin ONCEe RQf COSOi COe ESRb Ruk SOCOsw CEEe AZCb ETAb BVdk SWb SHsw EPp Transitional employment supported by short-term subsidies KBa Permanent self-financed jobs Socialisation through productive activity CAVAf CBuk SFuk SEirl Jobs supported by long-term subsidies

23. Resources used CBuk COe CEEe ILMOuk SEirl RQf SOCOsw EFTb BLUIa BVdk CSFfin EPp SOLIDRb ESRb SFuk SHsw EINf ETTIf GEIQf SFuk Ruk COSOi BWb ETAb LVdk EIe WCOuk EIb IBb AZCb EIp SWb Donations/Volunteering ONCEe LDirl KBa LCOfin Non-market resources Market resources

24. 4. Policies supporting social enterprises • Public policies focusing explicitly on the promotion of SE (UK since 2002, EQUAL programme,…) • Creation of federative bodies providing various types of technical support (for instance, the Italian Consorzi) • Setting up of public or public-private funds providing seed capital, loans and other financial supports (France, Belgium,…) • Promoting access of SE to public procurement (e.g. local public goods) • New legal frameworks designed for SE (see comparative analysis published by CECOP, 2006).

25. New legal frameworks related to the "cooperative model": • Italy (1991): "social cooperative" • Portugal (1998): "social solidarity cooperative" • Spain (1999): "social initiative cooperative" • France (2001): "cooperative society of collective interest" • Poland (2006): "social cooperative" • New legal frameworks based on a more "open model": • Belgium (1995): "social purpose company" • United Kingdom (2004): "community interest company" • Finland (2004): "social enterprise" • Italy (2006): "social enterprise"

26. 5. Social enterprises in the whole social economy A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS Co-operatives Non-profit Organisations

27. Non-profit Organisations Co-operatives Worker Co-ops Social Co-ops User Co-ops A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

28. Co-operatives Non-profit Organisations NPOs transformed into social firms Production- oriented NPOs Advocacy NPOs A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

29. Co-operatives Non-profit Organisations SOCIAL ENTERPRISES A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

30. Redistribution Social economy (third sector) State (public agencies) Not-for profit For-profit Public Private Community (households, families) Private companies Reciprocity Market Informal Formal B. LOCATING SE IN THE WHOLE ECONOMY

31. C. A FEW INNOVATIVE LINES OF RESEARCH • The social enterprise as a multiple-goal and multi-stakeholder organisation  first attempts of empirical testing with WISEs • The social enterprise as a specific system of « contracts » and « incentives » (new institutional economics) • The social enterprise as a structure which mobilises and reproduces « social capital » in specific forms

32. 6. Conclusions • Soc. entr.: new forms of partnership among socio-economic actors (civil society, public authorities, etc.) • Soc. entr.: new combinations of resources which enable • provision of innovative goods and services • Soc. entr.: new tools for jobs creation for vulnerable groups • Soc. entr.: a concept shedding new light on the social economy and emphasizing the need of a plural economy