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UCL The Role of European Social Enterprises in Economies and Public Policy Prof. Marthe Nyssens CIRTES, Catholic University of Louvain Prof. Jacques DEFOURNY.

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Presentation on theme: "UCL The Role of European Social Enterprises in Economies and Public Policy Prof. Marthe Nyssens CIRTES, Catholic University of Louvain Prof. Jacques DEFOURNY."— Presentation transcript:

1 UCL The Role of European Social Enterprises in Economies and Public Policy Prof. Marthe Nyssens CIRTES, Catholic University of Louvain Prof. Jacques DEFOURNY Center for Social Economy University of Liège Belgium

2 UCL 1.The socio-economic context of the debate 2.The EMES conception of SE 3.Social enterprises in the whole social economy 4.Social Enterprises between ideal-type and institutionalisation 5.Conclusion OVERVIEW

3 UCL The pioneering initiatives Late 1970’ – beginning 1980’ Context –Increasing structural unemployment –Unmet emerging social needs –Limits of public financing Limits of traditional social and employment policies to tackle social exclusion : –Long term unemployed or low qualified people –Social problems –Refugees, immigrants –“De – institutionalisation” of mental ill people (Italy, Sweden…) –…–… 1. The socio-economic context of the debate

4 UCL Innovative entrepreneurial behaviours driven by a primary social purpose mainly took place within the third sector (WISE, Personal services…) Changes in public funding of the third sector played an important role: forms - rather than the volume - of public funding transformed: –quasi-market –second labor market programs Key social actors shaping the debate –Federative bodies advocate for a better recognition of their specificities (for instance, the Italian Consorzi)

5 UCL PUBLIC POLICIES PROMOTING SOCIAL ENTERPRISES IN EUROPE Public policies focusing explicitly on the promotion of SE (UK since 2002, EQUAL programme,…) Setting up of public or public-private funds providing seed capital, loans and other financial supports (France, Belgium,…) Promoting access of SE to public procurement (e.g. local public goods) New legal frameworks designed for SE

6 UCL New legal frameworks related to the "cooperative model": Italy (1991): "social cooperative« (pioneering role) Portugal (1998): "social solidarity cooperative" Spain (1999): "social initiative cooperative " Greece (1999) " social co-operative with limited liability " France (2001): "cooperative society of collective interest " Poland (2006): " act on social cooperative " New legal frameworks based on a more "open model": Belgium (1995): "social purpose company" UK (2004): "community interest company" Finland (2004): " act on social enterprise " Italy (2006): "social enterprise "

7 UCL Characteristics of these laws reflecting Economic democracy (14/16 laws) limits in voting power limits return on capital shares cap on distribution of profit asset locks Multiple stakeholders ownership

8 UCL 2. The “EMES” approach An « ideal-type » social enterprise defined by An economic project –A continuous production with some paid work –An economic risk Primacy of social aim –Limited profit distribution A participatory governance –A high degree of autonomy –Stakeholders’ involvement –A decision-making power not based on capital ownership

9 UCL THE EMES DEFINITION AS AN « IDEAL-TYPE » These criteria are not conditions to be strictly met to deserve the label of social enterprise They rather define an « ideal-type » (abstract construction) within the « third sector » like a star within the « galaxy » of social enterprises A methodological tool rather than a normative framework

10 UCL The concept of social enterprise is double-sided: Social enterprises can be NEW ENTITIES OR ALREADY EXISTING ORGANISATIONS reshaped by new dynamics

11 UCL Co-operativesNon-profit Organisations 3. Social enterprises in the whole social economy A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

12 UCL Co-operatives Non-profit Organisations User Co-ops Worker Co-ops Social Co-ops A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

13 UCL Co-operativesNon-profit Organisations Production- oriented NPOs Advocacy NPOs transformed into social firms A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS

14 UCL Co-operativesNon-profit Organisations SOCIAL ENTERPRISES A. THE SOCIAL ENTERPRISE AS A BRIDGE BETWEEN THE ASSOCIATIVE (NPOs) AND THE CO-OPERATIVE WORLDS...

15 UCL Social economy (third sector) Redistribution State (public agencies) Not-for profit For-profit Market Private companies Reciprocity Community (households, families) Public Private InformalFormal B. LOCATING SE IN THE WHOLE ECONOMY

16 UCL 4. Social Enterprises Between ideal-type and institutionalisation

17 UCL Empirical field: Work Integration Social Enterprise (WISE) The major objective of WISE is to help poorly qualified unemployed people, who are at risk of permanent exclusion from the labour market. WISEs integrate them back into work and society in general, through productive activity. PERSE project : 15 WISEs by country (162 WISEs across Europe)

18 UCL STOfin = sosiaalinen työosuuskunta = labour cooperatives VOfin = vajaakuntoisten osuuskunta = co-operative social firms for disabled people TKfin = työkeskus = work centres MSJOYfin = muut sosiaalialan järjestöjen omistamat yritykset = other enterprises owned by associations for the disabled Pekka PättiniemiWISEs in Finland

19 UCL Social Enterprise: between ideal-type …

20 UCL SOCIAL ENTERPRISE Economic Goals Social Goals Socio-political Goals a) Multiple Goals Social Enterprise

21 UCL In the board : not only in the hands of shareholders to avoid profit maximizing behavior (social benefit mission) Different types of stakeholders for different goals b) Multiple Stakeholders Social Enterprise

22 UCL Market Donations, volunteers Public financing c) Multiple Resources Social Enterprise SOCIAL ENTERPRISE

23 UCL ( Social Enterprise: between ideal-type … …and institutionalisation

24 UCL In the 1980’ : WISEs implementing Active Labor Policies (ALP) before their institutional existence From the 1990’: With the process of institutionalisation, most of the WISEs are supported by (specific) public schemes. => These Active Labor Policies frame their action …

25 UCL - New public schemes targeting work integration social enterprises : Entreprise d’insertion, association intermédiaire, FR Entreprises de formation par le travail, entreprises d’insertion,… Belgium Social economy program, Ireland Beschäftigungsgesellschaften, Germany Integration enterprise program, Portugal Integration enterprise program, Spain Social Enterprise, Finland => This has even led to the concept of social enterprise, in some countries, being systematically associated with such employment creation initiatives

26 UCL CAVA f SOCIALIZATION THROUGHPRODUCTIVYSOCIALIZATION THROUGHPRODUCTIVY ACTIVITYACTIVITY EI f AI f ETTI f GEIQ f EFT b LV dk BW g KB g BLUI g STO fin ILMO uk VO uk TRANSITIONAL EMPLOYMENT SUPPORTED BY SHORT-TERM SUBSIDIES GF sw CB uk WCO uk SBG g EI p EI b IB b EIN f P E R M A N E N T S E L F - F I N A N C E D J O B S (*) SW irl ETA b BW b SW b SH sw EP p SE irl JOBS SUPPORTED BY LONG-TERM SUBSIDIES Tk fin MSJOY fin BV dk VO fin ONCE s EI s CEE s COSO i RQ f SF uk R uk SK sw AZC b CO s ES b Types of work integration in WISEs Source : ELEXIES/PERSE

27 UCL Main characteristic of target groups Persons with mental or physical disabilities « Abled » unemployed workers WCO uk ETA b Women at risk Minorities Low- qualified young people «Social handicap» (alcohol, drug) «Hard-to- place» (long-term) BW b COSO i EP p CEE e ONCE e CO e SBG a BW a Ai f RQ f CB uk KB a SEW irl LD irl CB uk LD irl CSF fin RQ f EFT b EI e RQ f ETTI f GEIQ f CB uk ILMO uk CSF fin SBG a BW a Ei p Ei e CAVA f RQ f SEW irl CSF fin BV dk PDLD uk CSFDP fin SOCO sw SH sw EI b SOLIDR b IB b AI f ETTI f EIN f KB a BW a LD irl EI p SBG a UCS irl LCO fin CSF fin RQ f GEIQ f BLUI a SOLIDR b ESR b SW b AZC b COSO i SEW irl LV dk

28 UCL SOCIAL ENTERPRISE Economic Goals Social Goals Socio-political Goals a) Multiple Goals Social Enterprise

29 UCL Economics goals: support work and social integration –adapted to the capacities of disadvantaged groups

30 UCL Type of production of European WISEs Nb WISE Source : PERSE

31 UCL WITH THE PROCESS OF INSTITUTIONALISATION – no public financing for collective type of production… – pressures from new entrants : for profit firms Economics goals: support work and social integration –adapted to the capacities of disadvantaged groups –developing market niches : a successful strategy –collective dimension of the production : social services, environmental field

32 UCL Social goals : –For all: work integration at the core of the mission –For some of them: collective dimension of the production –Empowerment of excluded workers through democratic management structure WITH THE PROCESS OF INSTITUTIONALISATION – Instrument to the integration in the first labour market based on a transitional model of WISE

33 UCL CAVA f SOCIALIZATION THROUGHPRODUCTIVYSOCIALIZATION THROUGHPRODUCTIVY ACTIVITYACTIVITY EI f AI f ETTI f GEIQ f EFT b LV dk BW g KB g BLUI g STO fin ILMO uk VO uk TRANSITIONAL EMPLOYMENT SUPPORTED BY SHORT-TERM SUBSIDIES GF sw CB uk WCO uk SG g EI p EI b IB b EIN f P E R M A N E N T S E L F - F I N A N C E D J O B S (*) SW irl ETA b BW b SW b SH sw EP p SE irl JOBS SUPPORTED BY LONG-TERM SUBSIDIES Tk fin MSJOY fin BV dk Types of work integration in WISEs Source : ELEXIES/PERSE

34 UCL Social goals : –For all: work integration at the core of the mission –For some of them: collective dimension of the production –Empowerment of excluded workers through democratic management structure WITH THE PROCESS OF INSTITUTIONALISATION – Instrument to the integration in the first labour market based on a transitional model of WISE => Weaker participation of workers

35 UCL Economic goals : – as a support of work and social integration Social goals : – for some : collective dimension of the production : social services, environmental field … – for all: work integration at the core of the mission Socio - political goals – multiple interactions between WISEs and public bodies In tension

36 UCL Multiple goals WISEs facing institutionalization WISEs’ mission = multiple goals ? or a tool of active labor policy => Contested nature of WISEs’ mission

37 UCL Type of ownership Nb WISE % Single-stakeholder 6441 % Multi-stakeholder % TOTAL % Members of board of European WISEs Source : PERSE b) Multiple Stakeholders

38 UCL Influence of stakeholder categories in multi- stakeholder European WISE Stakeholder category UsersVolun teer StaffParti ci- pant Busi- ness Gover n-ment NPOOtherTotal Average5%20%21%7%10%13%14%11%100 % Source : PERSE

39 UCL Influence of stakeholder categories in multi- stakeholder European WISE Stakeholder category UsersVolun teer StaffParti ci- pant Busi- ness Gover n-ment NPOOtherTotal Average5%20%21%7%10%13%14%11%100 % Source : PERSE => Linked to the transitional mode of work integration

40 UCL c) Multiple resources Source : PERSE 53% 39% 8% Market Redistribution Donations, volunteers Total resources : monetary and non – monetary (volunteer, tax deductions, loans of equipment) SOCIAL ENTERPRISE

41 UCL The origin of resources Source : PERSE

42 UCL Resources used Non-market resources Market resources Donations/Volunteering ONCE e KB a LCO fin LD irl CB uk BLUI a BV dk EI b IB b EI e SOCO sw EFT b ILMO uk SF uk AZC b EI p CO e CEE e SOLIDR b ESR b SF uk SH sw SW b R uk COSO i BW b ETA b CSF fin EP p LV dk SE irl RQ f EIN f ETTI f GEIQ f WCO uk

43 UCL Source: PERSE Type of WISEs according resource mix structure

44 UCL Importance of market sales Importance of the public sector “Re-embedding” of market relationships Voluntary resources embedded in civic networks Diversity of resource mix according to the type of social mission Multiple resources WISEs facing institutionalization But public schemes put WISEs « into the market or the non-market box »

45 UCL => Managing hybridity constitutes a challenge: Bulwark against isomorphism or threat for their identity ? Institutionalisation generates strained relationships between the different goals and put WISEs into « boxes » Hybridity appears to be a channel to sustain the innovative capacity of WISEs linking people from different backgrounds and resources from different nature


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