At a time of growing disenchantment with the European Union, a report calling for a European Action Plan for the Social Economy and Social Enterprises (download) offers a vision of a community of nations that responds more effectively to the social and economic needs of its citizens and to the problems they face.
The Plan was published in October by the European Commission Expert Group on Social Entrepreneurship (GECES), to which the British Council contributes. It offers concrete recommendations to support the growth of social enterprises and the social economy as a driver of inclusive and impactful economic growth. The recommendations are aimed at the European Commission, EU member states and various actors in the social economy.
To find out more, we interviewed Dr. Lisa Hehenberger, a GECES member and expert on social impact investment and venture philanthropy.
What explains the European Commission’s growing interest in social enterprise? Why now?
I believe that the consequences of the financial crisis and the societal challenges Europe is facing such as the refugee crisis, unemployment and social exclusion are top priorities for Europe, while also recognising the need for economic growth.
Social enterprise and the social economy provide innovative solutions to address these challenges and are therefore attractive to support further.
Do the meaning and practice of social enterprise vary widely across Europe?
Yes. In Southern Europe there is a strong tradition of cooperatives and associations. In Scandinavia, the strong welfare states take care of the basic social services, but many vulnerable groups are not properly attended to – including the elderly.
In the UK, the social enterprise sector is very strong and there is has been a deliberate strategy to find different funding and support systems for them – but also because in many cases social services are outsourced to social enterprises.
In Central and Eastern Europe, the social sector is emerging, and faces the typical challenges of a new sector: lack of infrastructure, lack of resources, etc.
There is an opportunity for the less developed markets to learn from the successes and failures of the more developed ones, while recognising the particular context where they are emerging.
What common challenges do social enterprises face across the region?
The GECES report addresses some of the key challenges in the sector: lack of visibility, lack of funding, lack of legal frameworks and incentive structures, as well as a lack of recognition of the role of social enterprise within international development strategies.
What can policy makers do stimulate the social economy in Europe?
I believe that policy makers have an important role to play in stimulating the social economy.
The report identified four main action areas: 1. Increasing the visibility and recognition of social enterprises, 2. Increasing the access to funding of social enterprises, 3. Improving the legal environment, and 4. Driving international development and growth.
What do you see as the report’s key recommendations?
I am probably a bit biased as a rapporteur to GECES on access to funding, but my key priorities are:
- improve the complementarities between public and private funding streams to social enterprise, so that they work together towards greater societal impact. Examples include hybrid financing instruments;
- increase the benefits of using the social enterprise model (also in funding terms), so that we provide incentives rather than additional costs for operating such entities. Examples include tax incentives and improved legal structures; and,
- encourage current funding sources to social enterprise by providing resources to incubators, accelerators, venture philanthropy and social impact investors – and share best practices to mainstream such funding approaches more widely.
I also think it is important to increase EU support for social enterprises within the context of international development, especially in the context of achieving the post-2015 Sustainable Development Goals.
What do you hope the report will achieve?
The report gives legitimacy to social enterprises and explains why and how they should be supported, but it will only be important if the proposed actions are implemented.
Social economy actors, including social enterprises and social investors, should work with policy makers – also at national and local level - to make sure that the sector grows.
How can an enhanced social economy address some of the big challenges facing the EU?
Europe needs to grow in a smart, sustainable and inclusive way to build on the foundations and values that unite us as a continent and as a Union.
When faced with a trade-off between economic growth and positive social and environmental impact, we can no longer justify choosing a path that delivers only one or the other.
We need to develop new innovative models that enable us to grow without destroying the welfare system, the respect for each other and our environment, and the peace between people and nations that we have fought so hard to build.
Therefore, I would say that it is not an option for Europe to grow in any other way.
About Dr Lisa Hehenberger
Dr. Lisa Hehenberger is a lecturer in Strategy and General Management at ESADE. She is a renowned expert on venture philanthropy and social impact investment. Lisa is a member of the European Commission’s Expert Group on Social Business (GECES), and has been a member of the French National Advisory Board and the Impact Measurement Working Group of the Social Impact Investment Task Force established by the G8. Until recently, Lisa was the Research and Policy Director of the European Venture Philanthropy Association (EVPA). Lisa has a PhD in Management from IESE Business School and a Master's degree in Business and Economics from Stockholm School of Economics and HEC (CEMS). Previously she worked in investment banking at UBS and GB Investment Banking in London, Madrid and Barcelona. Lisa is a Swedish national, based in Barcelona, and speaks five languages.