Participation, inclusion and local development: the institutionalization of social enterprises from a comparative perspective Giulia Galera, Euricse First International Forum for Economic Democracy Lisbon, 16th and 17th November 2013
May 11, 2015
Participation, inclusion and local development: the institutionalization
of social enterprises from a comparative perspective
Giulia Galera, Euricse
First International Forum for Economic Democracy Lisbon, 16th and 17th November 2013
Main contents
• Background• What are social enterprises?• What is the impact of social enterprises?• Social enterprise development • Social enterprises in Italy: key facts and data• Success factors for social enterprises
Background• At the end of XIX century significant contribution of civil
society organizations (coops, mutuals, and voluntary organizations) to socio-economic development o Social Economy developed especially in French-speaking
countries (e.g. France and Belgium)o Widespread diffusion of charities and voluntary
organizations in the provision of health and social services• Role of civil society organizations downsized as part of
the process of constructing European welfare states
Background• In the bi-polar model based on Market&State, civil
society organizations confined to play a minor role • From the 1970s crisis of the Market&State model
and failure of reforms • Revival of civil society organizations as a bottom-up
reaction to new needs arising in societyo associations and charities strengthened their
entrepreneurial stanceo cooperatives strengthened their commitment towards
the community
Background
• Social enterprises developed to grasp a new dynamic characterizing civil society
• Social enterprises evolved both:o from old Social Economy organizational forms following
their commitment in new activities addressed also to non members
o as new types of enterprises explicitly aimed at pursuing social goals
• In Europe, a gradual convergence towars a common definition of social enterprise has taken place over the last years
What are social enterprises?Main dimension General definition
Entrepreneurial/
economic dimension
Social enterprises (SEs) are engaged in the carrying out of stable and
continuous economic activities, and hence show the typical characteristics that are shared by all enterprises.
Social dimension
The social dimension is defined by the aim and/or products delivered. Aim: SEs pursue the explicit social aim of serving the community or a
specific group of people that shares a specific need. By promoting the
general-interest, SEs overcome the traditional owner-orientation that typically distinguishes traditional cooperatives.
Product: when not specifically aimed at integrating disadvantaged people to work, SEs must deliver goods/services that generate a beneficial societal impact.
Inclusive
governance-
ownership dimension (social means)
To identify needs and involve the stakeholders concerned in designing
adequate solutions, SEs require peculiar ownership structures and
governance models that are meant to enhance at various extents the participation of stakeholders affected by the enterprise.
SEs often limit the distribution of profits. The non-profit distribution constraint is meant to ensure that the general-interest is safeguarded. The
non-profit distribution constraint can be operationalized in different ways.
What is the impact of social enterprises?
Social enterprises: o complement the supply of general-interest services (eg
social services, elecricity, gas, safe drinking water, etc. ) that public agencies and for-profit enterprises fail to deliver
o Italian social enterprises account for 5,000,000 users (Rapporto IRIS, 2012)
What is the impact of social enterprises?
Social enterpriseso generate new jobs in their fields of activity
• Create new employment in the sectors in which they are engaged
• employ unoccupied workers (women with children)o some social enterprises are specifically aimed to
integrate into work disadvantaged workers• In Italy more than 30,000 disadvantaged workers
are integrated by social coops (Unioncamere, 2009)o develop new forms of work organization
What is the impact of social enterprises?
Social enterpriseso contribute to a more balanced use and allocation of
resources available at local level to the advantage of the community
• “Internalization” of economic growth to the advantage of the entire community
• community dimension allows to adjust to local contexts and take stock of local resources
What is the impact of social enterprises?
Social enterprises• help foster social cohesion and enhance social
capitalo they supply goods/services that are
characterized by high social potentialo adopt inclusive and participatory institutional
structures which stregthen trust relations among concerned stakeholders.
What is the impact of social enterprises?
Social enterprises:• support the institutionalization of informal activities
belonging to the underground economyo several social enterprise-like initiatives arise
informallyo Institutionalization allows irregular workers to get
out of the black market
Stages of development
• Social enterprises are a structural and global dynamic, involving countries showing various levels of economic development and welfare systems
• Pattern of development and capacity to impact upon local communities depends on the interplay of various endogenous and exogenous factorso historical, cultural, and social factors o availability of supporting legal and institutional structures
• 4 main stages of development of social enterprises
Stages of Development
• Embryonic development of social-enterprise initiatives
• Progressive emergence of social enterprises• Gradual consolidation• Institutionalization
Embryonic development of social enterprise-initiatives: CIS countries• Unrecognized needs start being addressed by self-organized
groups (e.g. mental diseases; drug-addiction) • Spontaneous development of bottom-up initiatives not legally
recognized as social enterpriseso mostly isolated, invisible initiatives o lack of umbrella organizations
• High degree of innovation and strong reliance on voluntary work• Not enabling environment:
o cultural obstacleso public policies centralized/weak welfare systems/legal&fiscal constraints
Progressive emergence: Romania, Bulgaria, Serbia,
• Social enterprises start growing in size• Entrepreneurial activity becomes more stable• Social enterprises start relying on paid staff in addition to
volunteers• Networking relations grow in importance • New needs start being recognized by public providers• Social enterprises mentioned in relevant policy documents• Still predominance of cultural and/or legal/political
obstacles
Gradual consolidation: Greece, Hungary
• Gradual change in mindseto move towards the recognition of private welfare providers
• Social enterprises better structuredo better organizedo sometimes organized in second level organizationso lobbying activity more relevant
• Interaction with public policies becomes more stable• Pioneering, but often not systematic support by public
authorities (e.g. grants)• New legal forms sometimes introduced, but still not fully
enabling legal environment
Institutionalization of social enterprises: Italy, UK
• Full political/legal recognition of social enterpriseso legal forms designed for SEs introduced and successfully
implementedo provision of welfare services contracted out by public
agencies on stable basis• Social enterprises supplying welfare services recognized as
welfare providerso integrated in the welfare systems/enjoy systematic public
supporto But:
o run the maximum risk of isomorphismo sometimes decrease in autonomyo weakening of civil society engagement
Social enterprise development patterns
Institutionalization
ItalyUKBelgiumFrance
ItalyUKSpainBelgiumFrance
Gradual consolidationItalyBelgiumFrance
Sweden SwedenGreeceHungarySlovenia
Progressive emergence
Italy
SwedenSpain
GermanySpainHungaryGreece
Germany RumaniaBulgaria
Embryonic social enterprise initiatives Italy
SwedenSpainFranceBelgium
UKRumaniaBulgariaHungarySloveniaGermanyGreece
RumaniaBulgariaSlovenia
UkraineBelarusRussiaArmenia
UkraineBelarusRussiaArmenia
1970s 1980s 1990s 2000s 2010s
Key facts: social enterprises in ItalySince approval of Law 381/1991 annual growth rate from 10 to 20%
• in 1993: 1,479 social coops (National Cooperative Department)• in 2003: 6,159 (ISTAT)• in 2005: 7,363 (ISTAT) – 59% A-type; 32.8% B-type; 8.2% mixed
or consortiaIn 2011 (Unioncamere):
• 12,647 social cooperatives, with• 513,000 people employed• more than 30,000 disadvantaged workers integrated• more than 4,000,000 users• more than 10 million euros turnover
Success Factors
• Key factors contributing to social enterprise development include
o Adequate legal/fiscal frameworko Decentralization o Networking within and among the families
of the social economyo Clear partnerships with public authoritieso Research
Thank you very much!