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Internal Market, Industry, Entrepreneurship and SMEs

Social enterprises combine societal goals with an entrepreneurial spirit. These organisations focus on achieving wider social, environmental or community objectives. The European Commission aims to create a favourable financial, administrative and legal environment for these enterprises so that they can operate on an equal footing with other types of enterprises in the same sector. The Social Business Initiative, launched in 2011 identified actions to make a real difference and improve the situation on the ground for social enterprises.

What are social enterprises?

A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities.

The Commission uses the term 'social enterprise' to cover the following types of business

  • Those for who the social or societal objective of the common good is the reason for the commercial activity, often in the form of a high level of social innovation
  • Those whose profits are mainly reinvested to achieve this social objective
  • Those where the method of organisation or the ownership system reflects the enterprise's mission, using democratic or participatory principles or focusing on social justice

There is no single legal form for social enterprises. Many social enterprises operate in the form of social cooperatives, some are registered as private companies limited by guarantee, some are mutual, and a lot of them are non-profit-distributing organisations like provident societies, associations, voluntary organisations, charities or foundations.

Despite their diversity, social enterprises mainly operate in the following 4 fields

  • Work integration - training and integration of people with disabilities and unemployed people
  • Personal social services - health, well-being and medical care, professional training, education, health services, childcare services, services for elderly people, or aid for disadvantaged people
  • Local development of disadvantaged areas - social enterprises in remote rural areas, neighbourhood development/rehabilitation schemes in urban areas, development aid and development cooperation with third countries
  • Other - including recycling, environmental protection, sports, arts, culture or historical preservation, science, research and innovation, consumer protection and amateur sports

The Start-up and scale-up initiative

The Commission is determined to supporting social economy ecosystems. The start-up and scale-up initiative was launched in 2016. It aims to give Europe's many innovative entrepreneurs every opportunity to become world leading companies. The main proposals of the start-up and scale-up initiative are:

  • to remove barriers for start-ups to scale up in the single market
  • to create better opportunities for partnership, commercial opportunities and skills
  • to facilitate the access to finance

The social business initiative

The social business initiative (SBI), launched in 2011, aims to introduce a short-term action plan to support the development of social enterprises, key stakeholders in the social economy and social innovation. It also aims to prompt a debate on the avenues to be explored in the medium/long term. There are 11 priority measures, organised around 3 themes:

Initiated by the SBI, the Commission and the expert group on social entrepreneurship, established a 5 pillar strategy aimed at increased access to funding, access to markets, improved framework conditions, foster social innovation and continue to work on internationalisation. See more on the implementation of the 5 pillar strategy.