Growth

Social enterprises and the social economy going forward

Social enterprises and the social economy going forward
Published on: 31/10/2016
Author: Expert Group on Social Entrepreneurship (GECES)

This report by the Commission Expert Group on Social Entrepreneurship (GECES) represents a call for action issued to the European Commission, EU countries and social enterprises organisations. It argues for a European Action Plan for the Social Economy and Social Enterprises, which would provide new impetus to promote an enabling environment for social enterprises and the social economy to flourish, building on their core values such as democratic governance, social impact, innovation, profit reinvestment or the central place given to the human in the economy.

The report proposes a series of key recommendations for policy-makers, structured according to 4 key thematic areas.

Increasing visibility and understanding of social enterprises

The first area examines ways to effectively increase the visibility and recognition of social enterprises, and to promote a better understanding of what social enterprise means. Three recommendations are put forward:

  • The Commission, EU countries and social enterprise organisations should gather stronger evidence on the added value of social enterprises and better communicate it, with actions encompassing data collection, the co-creation of an EU-wide communication strategy, the sharing of social impact management know-how and tools, and the building of better capacity to report on the social value generated by social enterprises. 
  • To nurture a more assertive and coordinated social enterprise community, the report recommends forging diverse and inclusive representative networks that make it possible to take advantage of synergies, while promoting mutual learning. 
  • To support a stronger place for social enterprise in public policy and actions at all levels, the Commission, EU countries and their local and regional authorities, should mainstream the social economy and social enterprises in all relevant policies, programmes and practices. This would involve including social enterprises as eligible entities in all relevant European funding programmes, promoting the participation of the social economy and social enterprises in relevant European mobility schemes, and promoting mutual learning and capacity building between regional and local authorities so as to develop integrated support strategies.

Helping social enterprises to access finance

The second thematic area in the report deals with the development of a European economic environment that enables the social economy and social enterprises to access finance. Recommendations in this area address the capacity building, financing and infrastructure needs of social enterprises. Specifically, it is recommended that increased resources be provided to training programmes, incubators and intermediaries that provide tailored capacity building support, helping social enterprises to build their managerial skills and achieve financial sustainability. Concrete measures to unlock more funding that is better suited to social enterprises include awareness building among the broader funding community about how to finance social enterprises, building capacity within the 'impact community', enhancing the suitability of social investment, alleviating regulatory hurdles and the mapping of existing tax incentives associated with investment in social enterprise in order to disseminate best practice. Public funding should continue to be directed to social enterprises and also be used to mobilise private capital, through investment in and de-risking of social enterprise funding, as well as by putting proper governance structures in place.

Improving the legal environment 

To facilitate the development of an ecosystem within which social enterprises can thrive, a number of key recommendations have been made with respect to the legal environment and the provision of legal and regulatory frameworks to
encourage the creation and development of the social economy and social enterprises. Here, it is recommended that the Commission proposes a soft legal measure to help EU countries design an adequate framework to support the social economy and social enterprises. Cross-border operations should be stimulated for mutual organisations and cooperatives, to enable them to use the full potential of the Internal Market to expand their activities. Public buyers should make the best use of the new public procurement rules and incorporate social considerations into their tendering procedures. And policy-makers should increase awareness of state aid rules and their impact on social enterprises providing services of general economic interest.

Driving economic growth

The final section in the report deals with measures to help the social economy and social enterprises reach their potential as key drivers of equitable and socially-inclusive economic growth. The aim here is to increase EU support
for social enterprises within the context of international development, with a view to achieving the post-2015 Sustainable Development Goals. With these objectives in mind, the Commission/EEAS should contribute, through the next cycle of its international development programmes, to a significant increase in open source intelligence about the social economy and social enterprises. The Commission should take a leading role in encouraging global cooperation in social enterprise support by acting as a market convener and by fostering knowledge exchange. Furthermore, having identified overlaps and gaps in funding, the EU and the EEAS should mainstream tailored support in all its existing and future policies and initiatives promoting social and economic development, to build supportive ecosystems for social enterprises.

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