The story of social entrepreneurship so far: an overview in numbers

Carlo Borzaga Euricse/University of Trento

Main contents

• Conceptual issues• Background• Changing role of civil society organizations• The emergence of social enterprise • Social enterprise according to an European approach• Defining social enterprise• EU definition• Data on social economy and social enterprise• Success factors for social enterprises

Conceptual clarification• Social entrepreneurship refers to a mindset and/or trend

o Covers a broad set of activities, which fall along a continuum, including CSR practices up to trends in non-profit organizations

• Social enterprise refers to an institution, which shows specific features

Background• All over Europe at the end of XIX century significant contribution

to socio-economic development of civil society organizations, including: coops, mutual aid societies, and voluntary organizations o Significant Social Economy history in specific EU countries

• used also as a synonym of Third Sector, developed especially in French-speaking countries (e.g. France and Belgium)

o Widespread development of charities and voluntary organizations in the provision of health and social services

Changing role of civil society organizations

• Up until the 1970s, civil society organizations organizations were confined to play a minor role in the socio-economic model based on the interaction of the private (Market) and public sectors (State)

• From the 80s, following the crisis of the bipolar model and the decreasing ability of the public institutions to provide social and general interest services, in several countries civil society organizations gained a more relevant role and went through an evolutiono Associations and charities stregthened their

entrepreneurial stanceo Cooperatives stregthened their commitment towards the

community

The emergence of social enterprise• The social enterprise was developed to grasp this

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

Social enterprise according to an European approach

Core product produced by social enterprise = activities of interest to the entire community

Refers to a “different way” of doing business and providing general-interest services

It encompasses:new cooperative forms (social/solidarity

cooperatives)entrepreneurial non-profit organizations

(e.g. associations)shareholder companies that decide to

comply with key social criteria

Defining social enterpriseMain 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.

EU DefinitionAccording to the definition of the European Commission a social enterprise “operates by providing goods and services for the market in an entrepreneurial and sometimes innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involve employees, consumers and stakeholders affected by its commercial activities” (COM(2011) 682; Brussels, 25.10.2011)

Beyond theoretical definitions

• Since the 1990s the previous definition has been incorporated in specific pieces of legislation in several EU countries througho adaptation of coop lawo introduction of general legal brands

• At the moment, in several EU countries governmental working groups and draft legislations are taking place

Social Economy organizations (CIRIEC, 2012)

Social Economy organizations (CIRIEC, 2012)

Totalnumber

%

Cooperatives and other similar accepted types

208,655 7%

Mutual companies and other similar accepted types

21,790 1%

Associations, foundations and other similar accepted types

2,595,324 92%

Social Economy employment share (CIRIEC, 2012)

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 billion euros turnover

Key facts: social enterprises in the UK

• Number of CICs registered in 2005-2012: 7,891• 98% of applications to become a CIC processed in CIC Office

within 72 hours (2012-2013 CIC Annual Report)• Main sectors of activity (90% of CICs):

o Real Estate, Renting &Businesso Educationo Health and Social Worko Other Social or Personal Service

• 20% increase in CICs on the public register (2012-2013)• annual turnover at least £1 billion annually

Success Factors

• Key factors contributing to social enterprise development include

o Adequate legal/fiscal frameworko Networking within and among the families

of the social economyo Clear partnerships with public authoritieso Research