Is the European social enterprise agenda losing steam?

Lobbyists and vested interests have tended to hijack the European Commission's expert group on Social Entrepreneurship, put together by DG Internal Market. But the EU Executive has already scored some points and still has cards left to play, writes Filippo Addarii. 

Filippo Addarii is Executive Director of the Euclid Network, a pan-European civil society organisation funded by the European Commission, which promotes a more innovative, professional and sustainable European civil society. 

In French you say  "On ne change pas l'attelage au milieu du gué!". Once you are in the middle of the river you don’t change course or you might be washed away by the flow. This is the risk the European social enterprise agenda is facing if it doesn’t stick to the course set at the beginning.

On 27th November 2012 the Commission reunited the members of GECES – group of experts on social entrepreneurship – in Brussels. A year after the launch of the Social Business Initiative (SBI), the meeting followed the launch of the Single Market Act 2 (SMA2) in October.[1].

After starting with a sprint in 2011 SBI seems to be losing steam. None of the recommendations provided by this expert group were included in SMA2. The Commission has reverted to its usual mode of engaging with stakeholders through a media briefing, rather than facilitating a genuine discussion with peers. Finally, the clash between the purists of non-profit and new innovators has become more intense, blocking substantial progress.

The only relevant achievement has been made with social impact measurement, it is now seen as a priority and a subgroup of experts established. This choice makes sense. The Commission must show the added value of social entrepreneurship to Member States, investors, and consumers, before making any other commitment. It is funding two projects moving towards the same goal:  the first one is mapping social enterprise across Europe, and the second one is collecting related national statistics.

So what’s the problem?

This strategy doesn’t solve the fundamental problem at the core of SBI that surfaced again in November. That is the clash between the purists of non-profit who look for incremental benefits under a new ‘tag’ and the innovators who see SBI as a third way between competitiveness and social inclusion policies.

The stumbling blocks are the usual ones: the role of private investments and their profitability, special protection from competition rules, privileged access to public funding, and aversion to using the transformational power of the web and new technologies for public engagement.

The Commission initially developed its policy agenda engaging with an informal group of experts selected on their track-record: a bold approach that paid off. But lobbyists and vested interests have regained ground as the new policy started to take off. They rebranded themselves as social innovators and entrepreneurs because these are the new tags getting the ears and funding of Brussels. In the end, The Commission opened the floor to every stakeholder claiming a place at the table.

Such a consciously inclusive approach has not only slowed down the pace but has already had an impact in the selection of the experts on impact assessment. If the Commission doesn’t take a bold stance and dare to explore new avenues what’s the point of European policy?

Achievements

This is not a requiem but rather a wake-up call. The Commission has already scored some points and still have cards left to play.

The legislation on the label for social investments (EUSEF) has been approved by the Parliament after months of negotiations and the Council has given its informal OK.[2] We expect it to come into force in the next months. This should give the green light to the European Investment Fund to finally launch its pilot fund on social investments after more than a year of delays. It will also have an impact on the implementation of the €90m fund as part of the Programme for Social Change and Innovation in 2014.[3]  

The Commission has confirmed social enterprise as a funding priority for 2014 – 20. But every member state must also select it as a priority in national programmes before social entrepreneurs can take advantage.  Improvements have been made in public procurement to address quality as selection criteria,[4] and state aid rules have been simplified.[5]

Progress has been made with the digital platform to connect practitioners and share good practice.  DG Connect has taken the lead and is expected to fund the platform building on what has already been developed with Social Innovation Europe (SIE) as we advocated.[6] The Commission is also looking into other innovative uses of new technologies such as crowd-founding.

Finally, even Commissioner Tajani in charge of industry and entrepreneurship has actively joined the group of supporters including, for the first time, social entrepreneurship in the new strategy of the Commission (Entrepreneurship 2020) launched this year.[7]  

Major challenges and untapped opportunities

Some major challenges faced by Europeans are still not centre stage, when success here would prove the value of the new policy.

For the second time the case of Greece was presented at the November meeting but no progress has been recorded, despite the availability of €70m and a dedicated taskforce. The even greater issue of youth unemployment across Europe has barely entered the conversation. It is a social time bomb and social enterprise is well positioned to deactivate it.

The Commission keeps ignoring the requests of GECES members to look into the barriers to cross border trading within the Single Market, and the extension of SBI to enlargement and development policies. The potential is massive but officials don’t dare to step on the toes of reluctant colleagues.

National differences have to be addressed more forcefully. A ‘one size fits all’ approach cannot work. Look at the gap between Western and Eastern Europe. Specific regional interests will not  undermine the European spirit if they can find their place in the agenda and are not left lingering in the dark trying to hijack a piece of SBI.

Euclid engagement

Euclid will continue its engagement with the Commission, members and partners within the GECES and beyond to promote knowledge sharing, facilitate cross boundary partnerships and foster innovation.

To regain momentum the Commission should start changing how the group is managed. As already suggested by Jan Olson, a Brussels veteran, the Commission needs to move to a co-designed agenda. I would add that the use of new technology is necessary for a lively debate beyond the two annual meetings. We should not leave room for old-fashion manoeuvres behind the scenes cherished by Brussels lobbyists.