EU Sector 3 Project
Social Enterprise and Social Business in participating regions of Cyprus, Germany, Lithuania, Portugal, Spain, Turkey and the UK
State of the Art Report (A summary)
George Isiaias, SYNTHESIS Center for Research and Education Ltd/ CY
Franziska Guenther, Technical University of Dresden/ DE
Antonio Benaches, AC Amics de la Biblioteca de la Fonteta/ ES
Diana Kontrimienė, VšĮ Socialinių inovacijų centras/ LT
Allan Lawrence, The Enterprise Centre, Bury, Greater Manchester/ UK
Nuno Frazao, Instituto De Empreendedorismo Social/ PT
Reyhan Turkman, Aydin Valiligi Ab Ve Dis Iliskiler Koordinasyon Merkezi/ TR
“The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.”
The State of the Art Report . A summary.
Section 1. Country Specific Analysis.
This is Intellectual Output No. 2 as defined within the EU Sector 3 Project funded by Erasmus Plus. The full report is a snapshot of Social enterprise/ business in each region of the seven partners of the project. They are based in Nicosia, Cyprus (CY), Dresden, Germany (DE): Valencia, Spain (ES): Siauliu, Lithuania (LT): Cascais, Portugal (PT); Aydin, Turkey (TR), and Greater Manchester, UK.
The situation is very different in each partner region so what I’m not going to do is describe the situation in each of the seven partner regions in detail. However I will provide some snapshots of the situation as identified by each partner and their full report can be found in the pdf download.
The Situation in Cyprus/ CY
There is a long history of a co-operative tradition, volunteering and charity organisations in Cyprus, yet Social entrepreneurship is a relatively new concept.
The first conference in Cyprus on Social Enterprise was organized by Synthesis in 2010. The key question in Cyprus is whether the sector be regulated or operate in a more informal basis? The first Multiplier Event held in the University of Nicosia gave the project and its partners to engage in this dialogue with representatives of the Cyprus government.
Three Case studies for Cyprus– Synthesis Center, Cans For Kids and Agia Skepi
The Situation in Germany/DE
Again, there is a long history of social business and a strong social economy movement, e.g. co-operatives, welfare organisations, foundations, associations etc.. The Federal Ministry of Family Affairs (2013) defined social entrepreneurship as combining entrepreneurship and solving social problems. There is no specific legal framework other than the National Engagement Strategy (2010), which defines, supports and promotes social enterprise.
Three Case studies for Germsany – Dresden Place To Be, Buergerstiftung Dresden, AWO (Arbeiter – Wohlfarht)
The Situation in Lithuania/LT
Social enterprise is a new phenomenon in Lithuania with a favourable legal framework created in 2004 A clear definition of a social enterprise was set in 2014 and they now receive some state support and tax exemption. The spectrum of social business includes social enterprises, NGOs, social enterprises of the disabled, co-operatives, for example.
Three Case studies for Lithuania – Social innovation Centre, Mano Guru, Sekmes Mokykla
The Situation in Portugal/PT
There is a diverse range of social enterprise and social business (SESB) in Portugal ranging from co-operatives, foundations, associations and SMEs all operating in a broad ecosystem. As in most countries and regions, the SESB sector developed in response to a wide range of societal problems, common to most of Europe.
Three case studies for Portugal – IES (Social Business School), Social Innovation Lab and WOW (Word of Women)
The Situation in Spain/ ES
The sector was formally recognised and regulated in 2011. Social enterprise is independent from public authorities and takes many forms such as co-operatives, mutuals, labour societies and foundations. In Spain, the Social Economy is well developed within the central concept of business efficiency linked to social responsibility
Three case studies for Spain – Socialnest, Jovesolides, RuralDev
The Situation in Turkey/ TR
This is a very new idea within Turkish society, and as a consequence, the sector is under development and exists informally. Social entrepreneurs were recently recognised along with NGOs. The First International Social Entrepreneurship conference in turkey was held in Istanbul in 2012. The Turkish Entrepreneurship Strategy and Action Plan (2015-2018) was prepared by Ministry of Development.
Three case studies for Turkey – Senem Güll, Naşide Buluttekin (Gleam of Hope) and Zeynep Uluer
The Situation in the UK
Thesocial enterprise sector, or Third Sector, is well established both formally and informally in the UK. There is no specific legal framework but social businesses may have specific corporate structures, e.g. Companies Limited by Guarantee (CLG), Community Interest companies (CIC), each with a specific corporate framework. Co-operatives first established in Nineteenth Century in Rochdale in Greater Manchester. There is no specific tax framework for social enterprise in the UK_ not sure if that is a good thing or not!
Four case studies – The Enterprise Centre, GMCVO, Threshold, Bread And Roses
Section 2. The Key Issues
It will be far more illuminating to identify some general trends within the following headings: Legal frameworks; Funding and finance; Leadership and management; Marketing and Social Impact.
Social business in its many forms appear to operate in some key public sectors such as mental health, education and training and community cohesion and well-being. The definition of social business is a ‘business’ activity with a social purpose and committed to social service.
Within this category there are some key issues. Should the sector be formalized or continue to operate in an informal environment and remain relatively un-regulated? Are private or public organisations most suited at providing social services and is the emergence of the third sector synonymous with austerity budgets and shifting the provision of social service from the State to private business entities?
Funding and finance
Many social enterprises/ social businesses rely on grants, rather than commercial income, the latter is only achievable if there are discreet products and/ or services made available by the social business. Most survive by a reliance on either local and national government funding, or commissioning, EU Structural funding and other EU Initiatives or national or regional trusts, charities or associations. Increasingly significant are large private companies and their Corporate and Social Responsibility (CSR) agenda and potential funding and partnership opportunities for social businesses.
Social Impact Assessment (SIA)
Often the key to accessing funding and/ or grants is the need to prove how useful you are? How successful are you at making a difference and saving public funds. SIA can be Quantitative and focus on proving the value of the intervention, and to prove Return On Investment (ROI). Qualitative assessment may seek to place a value, in terms of an estimate of value on development on a personal, social and community level, financial gain, or the achievement of future-enabling knowledge as an investment for the future.
Social enterprises usually do not have large marketing budgets so for them the
use of Facebook, Twitter, LinkedIn, Youtube and other social media platforms is particularly important, as are local events, local and regional networks and community engagement, in other words, capacity building. Nevertheless, it is important to have an understanding of the principles of marketing and marketing theory to direct these energies in the right way.
The research materials that have been sourced during this project and its research identify social enterprise leadership as less autocratic and more inclusive and more flexible than the leadership of private companies.
Higher levels of emotional intelligence, intuitive and creative leadership are also more apparent in social businesses. Leadership and management seeks to be Transformational and Collaborative, and there are larger numbers of women represented at a senior management level within this sector.
The Main Challenges
There are challenges for the future identified in the state of the art report. These can be categorized in the following way:
- Social businesses face increasing demand within an environment of decreasing funds;
- As state provision of services decline, there is greater competition between social enterprises, between social enterprises and larger private corporations and between social enterprises and local government directly;
- Owners/ proprietors of social enterprises/ businesses face issues of delegation and succession planning. The development of middle management is lacking amongst smaller organisations.
The Possible Solutions
- New sources of funding need to be explored and operationalized such as crowd-funding and social investment;
- New grants based on new political strategy, e.g. Health & Wellbeing, Sugar Tax (UK), links to CSR agendas, new approaches to Structural Funding need to be explored and targeted;
- Consortium building – we need to learn to learn from each other
- Knowledge sharing and knowledge management – we need to understand more about current theory regarding knowledge management and consortium and partnership building.