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:
Action 1 : Put forward a European regulatory framework for social investment funds.
Action 2: Encourage the development of microcredit in Europe, specifically by improving the related legal and institutional framework.
Action 3: Set up an EU financial instrument to provide easier access to funding.
: Make social enterprises an investment priority of the European Regional Development Fund and European Social Fund.
- Thematic guidance on Social Economy and Social Enterprises from the Directorate-General for Regional Policy
- Presentation of the event in Strasbourg (January 2014): video | presentation (370 kB)
Action 5 : Identify best practices by establishing an exhaustive register of social enterprises in Europe.
Action 6: Create a public database of labels and certifications applicable to social enterprises in Europe.
Action 7: Help national and regional governments introduce measures to support, promote and finance social enterprises.
- National and regional administrations - promotion of mutual learning and their capacity building: Guide to social innovation (5 MB)
Action 8: Create a multilingual information and exchange platform for social entrepreneurs, business incubators and clusters, as well as social investors. Increase the visibility of EU programmes to support social entrepreneurs and make it easier to obtain funding.
- Social Innovation Community
- (former Social Innovation Europe Platform - electronic data exchange platform for social investors and entrepreneurs)
- Access to EU education and training programmes
Action 9 : Simplify the rules regarding legal recognition as a European Cooperative Society ; put forward a regulation creating a legal status for European foundations. Conduct a study on the situation of mutual societies.
- Simplification of the European Cooperative Regulation - please see Report from the Commission 23 February 2012
- Proposal for a regulation on the statute for a European Foundation (adopted by the Commission 8 February 2012)
- Study on the situation of mutual societies and their cross-border activities (received by the Commission 12 October 2012)
Action 10: Make quality and working conditions more important criteria for the awarding of public procurement contracts, particularly for social and health services.
- Enhancement of the element of quality in awarding contracts in the context of the reform of public procurement (adopted by the Commission 20 December 2011)
- Procurement opportunities for social enterprises under the new EU procurement rules (June 2014, 223 kB)
Action 11: Simplify the rules for awarding public aid to social and local services (which would benefit many social enterprises).
- Simplification of the implementation of rules concerning State aid to social and local services (161 kB)
- Commission staff working document: Guide to the application of EU rules on state aid, public procurement and the internal market to SGEI, and in particular to social services of general interest (610 kB)
- Presentation at the event in Strasbourg (January 2014): presentation (763 kB)
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.
The Expert group on social entrepreneurship (Groupe d'experts de la Commission sur l'entrepreneuriat social – GECES) was set up in 2011 for a 6 year period. GECES was consulted by the Commission on the development, set up and implementation of all the actions mentioned in the SBI and the further development of social entrepreneurship and social economy.
- News archive: 25 November 2011 to 13 October 2015 (311 kB)
- Leaflet: The Social Business Initiative of the European Commission (1 MB)
- Press releases (25 October 2011)
- Frequently asked questions
- The Communication on the Social Business Initiative (2011)
- Commission staff working document accompanying the Communication on the Social Business Initiative (49 kB)
- Citizens’ summary (22 kB)
- Report of the workshop, 'A European Ecosystem for Social Business', (May 2011) (223 kB)
- Exploratory Opinion of the European Economic and Social Committee (26 October 2011)
- Follow up of the Social Business Initiative (49 kB)
- Becker Report on the Social Business Initiative – Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation (adopted by the European Parliament 20 November 2012)
- Opinion of the European Economic and Social Committee (INT/606 - 23 May 2012)
- The European Commission supports social enterprises (26 February 2016)
- Social enterprise: a new business model for Europe (11 December 2015)
- Message from Commissioner Elzbieta Bienkowska to the seventh GECES meeting (16 September 2015)
- Speech by Michel Barnier, Vice-President of the European Commission, at the presentation of the Social Business project (in French, 16 October 2014)
- Commissioner László Andor’s address on Social Business at the E3M Conference (March 2013)
- E3M Conference (March 2013)
- Michel Barnier, European Commissioner, reaffirms his support for socially inclusive companies (in French, October 2012)
- Promoting social entrepreneurship in the European Single Market (November 2011)
- A recipe book for social finance - A practical guide on designing and implementing initiatives to develop social finance instruments and markets
(5 MB) (February 2016)
- Proposed Approaches to Social Impact Measurement (January 2015)
- Social Innovation - A decade of changes (August 2014)
- Policy Brief on Social Entrepreneurship, OECD/European Commission (May 2013)
- Social economy and social entrepreneurship - Social Europe guide Volume 4 (April 2013)
- Side event to the Social Summit, Gothenburg (16 November 2017)
- Cooperation between the European Commission and the OECD: Capacity Building Seminar: Building enabling ecosystems for social enterprises (17-18 February 2016)
- Interactive event: Social Entrepreneurs: Have Your Say! (January 2014)
- Conference organised by the European Economic and Social Committee: Social Enterprises and the Europe 2020 Strategy: innovative solutions for a sustainable Europe (3 October 2012)
- Conference: Social Economy and Social Business (18 November 2011)
- Social farming
- Social services and enterprises in rural areas
- G8 social impact investment Taskforce
- EESC final report of the Social Enterprise project
Research projects financed by the European Commission
- BENISI – Building a European Network of Incubators for Social Innovation
- CRESSI - CReating Economic Space for Social Innovation
- EFESEIIS – Enabeling the Flourishing and Evolution of Social Entrepreneurship for Innovative and Inclusive Societies
- ITSSOIN – Impact of the Third Sector as SOcial INnovation
- SEFORIS – Social Enterprise as Force for More Inclusive and Innovative Societies
- SI-DRIVE – Social Innovation: Driving Force of Social Change
- SIMPACT – Boosting the Impact of Social Innovation in Europe through Economic Underpinnings
- Third Sector Impact – The Contribution of the Third Sector to Europe's Socio-economic Development
- TRANSITION – Transnational Network for Social Innovation Incubation
On Twitter: @SocEntEU