Interne Markt, Industrie, Ondernemerschap en Midden- en Kleinbedrijf

Social enterprises

Social enterprises

Social enterprises combine societal goals with an entrepreneurial spirit. These organisations focus on achieving wider social, environmental or community objectives. The European Commission aims to create a favourable financial, administrative and legal environment for these enterprises so that they can operate on an equal footing with other types of enterprises in the same sector. The Social Business Initiative, launched in 2011 identified actions to make a real difference and improve the situation on the ground for social enterprises. 

What are social enterprises?

A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities.

The Commission uses the term 'social enterprise' to cover the following types of business

  • Those for who the social or societal objective of the common good is the reason for the commercial activity, often in the form of a high level of social innovation
  • Those whose profits are mainly reinvested to achieve this social objective
  • Those where the method of organisation or the ownership system reflects the enterprise's mission, using democratic or participatory principles or focusing on social justice

There is no single legal form for social enterprises. Many social enterprises operate in the form of social cooperatives, some are registered as private companies limited by guarantee, some are mutual, and a lot of them are non-profit-distributing organisations like provident societies, associations, voluntary organisations, charities or foundations.

Despite their diversity, social enterprises mainly operate in the following 4 fields

  • Work integration - training and integration of people with disabilities and unemployed people
  • Personal social services - health, well-being and medical care, professional training, education, health services, childcare services, services for elderly people, or aid for disadvantaged people
  • Local development of disadvantaged areas - social enterprises in remote rural areas, neighbourhood development/rehabilitation schemes in urban areas, development aid and development cooperation with third countries
  • Other - including recycling, environmental protection, sports, arts, culture or historical preservation, science, research and innovation, consumer protection and amateur sports

The Start-up and scale-up initiative

The Commission is determined to supporting social economy ecosystems. The start-up and scale-up initiative was launched in 2016. It aims to give Europe's many innovative entrepreneurs every opportunity to become world leading companies.  The main proposals of the start-up and scale-up initiative are:

  • to remove barriers for start-ups to scale up in the single market
  • to create better opportunities for partnership, commercial opportunities and skills
  • to facilitate the access to finance

The Social business initiative

The social business initiative (SBI), launched in 2011, aims to introduce a short-term action plan to support the development of social enterprises, key stakeholders in the social economy and social innovation. It also aims to prompt a debate on the avenues to be explored in the medium/long term. There are 11 priority measures, organised around 3 themes:

Theme 1: Making it easier for social enterprises to obtain funding

Action 1 : Put forward a European regulatory framework for social investment funds.

Action 2: Encourage the development of microcredit in Europe, specifically by improving the related legal and institutional framework.

Action 3: Set up an EU financial instrument to provide easier access to funding.

Action 4

: Make social enterprises an investment priority of the European Regional Development Fund and European Social Fund.

Theme 2: Increasing the visibility of social entrepreneurship

Action 5 : Identify best practices by establishing an exhaustive register of social enterprises in Europe.

Action 6: Create a public database of labels and certifications applicable to social enterprises in Europe.

Action 7: Help national and regional governments introduce measures to support, promote and finance social enterprises.

  • National and regional administrations - promotion of mutual learning and their capacity building: Guide to social innovation (5 MB)

Action 8: Create a multilingual information and exchange platform for social entrepreneurs, business incubators and clusters, as well as social investors. Increase the visibility of EU programmes to support social entrepreneurs and make it easier to obtain funding.

Theme 3: Making the legal environment friendlier for social enterprises

Action 9 : Simplify the rules regarding legal recognition as a European Cooperative Society ; put forward a regulation creating a legal status for European foundations. Conduct a study on the situation of mutual societies.

Action 10: Make quality and working conditions more important criteria for the awarding of public procurement contracts, particularly for social and health services.

Action 11: Simplify the rules for awarding public aid to social and local services (which would benefit many social enterprises).

Initiated by the SBI, the Commission and the expert group on social entrepreneurship, established a 5 pillar strategy aimed at increased access to funding, access to markets, improved framework conditions, foster social innovation and continue to work on internationalisation. See more on the implementation of the 5 pillar strategy.

Expert group on social entrepreneurship

The Expert group on social entrepreneurship (Groupe d'experts de la Commission sur l'entrepreneuriat social – GECES) was set up in 2011 for a 6 year period. GECES was consulted by the Commission on the development, set up and implementation of all the actions mentioned in the SBI and the further development of social entrepreneurship and social economy.

Key documents




Other policy actions linked to social economy

Research projects financed by the European Commission

  • BENISI – Building a European Network of Incubators for Social Innovation
  • CRESSI - CReating Economic Space for Social Innovation
  • EFESEIIS – Enabeling the Flourishing and Evolution of Social Entrepreneurship for Innovative and Inclusive Societies
  • ITSSOIN – Impact of the Third Sector as SOcial INnovation
  • SEFORIS – Social Enterprise as Force for More Inclusive and Innovative Societies
  • SI-DRIVE – Social Innovation: Driving Force of Social Change
  • SIMPACT – Boosting the Impact of Social Innovation in Europe through Economic Underpinnings
  • Third Sector Impact – The Contribution of the Third Sector to Europe's Socio-economic Development
  • TRANSITION – Transnational Network for Social Innovation Incubation


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