Eurada News nº393 – October 2019

Providing effective support to social enterprises

Three development agencies have concluded that it is important to promote social entrepreneurship by facilitating the creation of a network of contacts, increasing the funding allocated to social entrepreneurship and giving social character to all kind of entrepreneurship projects.

Economic developers agree over the key role played by social enterprises for our territories. According to the European Economic and Social Committee (EESC) there are 2.8 million social economy enterprises and organisations in the European Union, which employ 13.6 million people and account for 8% of the EU’s GDP. Social enterprises combine social goals with entrepreneurial activity while addressing socio-economic challenges in innovative ways.

Social enterprises are important for territories because they have proved to be resilient to economic adversity: between 2008 and 2014 in Italy and Belgium their employees grew at a rate of 20% and 12%, while the mainstream enterprises underwent a deep crisis. These enterprises are natural allies for governments, as their primary goal is to improve service delivery and the lives of the most vulnerable individuals with little to no strain on public resources. However, in many countries, governments still do not put in place public policies able to unlock and exploit the full potential of social enterprises and the whole social economy.

Instituto Aragonés de Fomento (IAF), the Regional development Agency of Aragón, has just finalised a peer learning project about social entrepreneurship support. During 12 months and through the use of Twinning Advance Methodology, IAF together with Pannon Business Network (Hungary) and Lamoro Agenzia di Sviluppo (Italy) identified and shared best practices based on their experience in entrepreneurship and business development within the social impact framework. The result was recorded in a Design Option Paper (DOP), which describes implementation options, guidelines and implementation alternatives that the partners experienced. This is an interesting document for other innovation-supportive service agencies.

IAF is one of the leading development agencies supporting entrepreneurs. They coordinate the working group of entrepreneurship in the Spanish Association of Development Agencies (Foro ADR). Beyond the horizontal support to the creation of start-ups, IAF created several years ago a specific line for social entrepreneurs. It has been proved to be an important activity that has provided valuable impact.

During the peer learning project, the three development agencies made an exhaustive internal analysis of the mechanisms that they are implementing to support social enterprises. This analysis was validated with the external view of the main stakeholders (foundations, NGOs, associations, financial intermediaries…) of each territory. They have provided a list of priority actions that could be done by a development agency to promote social enterprises. Some of the ideas are the following:

  • There is a need of promotion activities, such as workshops to showcase projects which have emerged from this initiatives. These workshops will allow potential entrepreneurs to better know programmes and do networking. Create a network of social entrepreneurs on that regions where it does not exist. More diffusion in mass media and social networks. Considering new channels dedicated only to social enterprises, to avoid missing valuable information.
  • Making entrepreneurship known among university students, to increase the possibilities that they consider it as a real option for they future.
  • More Government support, not only finantial but also strategical. Not to focus only on obtaining funds, because training and recognition are also important. Need of experts on social entrepreneurship to work on the programs. Mentoring activities during all the stages of the project.
  • It is dificult to evaluate other regions´ practices because the territorial context is of the utmost importance for the correct development of an initiative. Although all the good practices are potentially transferable, the need to adapt each one to each territory must be considered.
  • Necessity to involve more investors and funding, despite the difficulties that economic downturn has created.

The project Peer learning on social entrepreneurship and social enterprise support (SocEn) has been supported by the H2020 programme of the European Union. If you want further details of the project please contact Rafael Sanchez from IAF.

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Written by Esteban Pelayo, Director of EURADA