The social economy as an engine for social innovation

Reflections on the EESC seminar of 22nd October 2009

The European Economic and Social Committee held a seminar on 22nd October 2009 on the subject Getting to the End of the Tunnel: Creating the Right Environment for the Social Economy.

Social innovation was on the agenda and one of the speakers was Matteo Bonifacio from the Bureau of European Policy Advisers (BEPA), the Commission’s think tank on future policy that has taken over from the Future Studies Unit.

He noted that, today, economic and social challenges are becoming indistinguishable. This poses policy makers with a question: social issues can be addressed either as a separate complement to economic policy, or by viewing the two as inseparable. You can view the social economy as “the enterprises that do the rest” – what business enterprises don’t do – or you can take the view that all enterprises have a social responsibility. In other words, he posed the distinction between targeted policy – things like prizes and incubators for social entrepreneurs – and mainstreaming – making “social” a key word in all policies that make up the post-Lisbon strategy.

A number of Commission DGs are working on social innovation, and BEPA had held a seminar on the subject on 19-20 January 2009. A report will be published probably in February 2010, after consultation throughout the Commission.

Speaking from the floor, I argued two points:

1. Mainstreaming can go too far

The social economy, by definition, combines private and public resources. The main public source of financial support for its development has in practice been the European Social Fund (ESF). Its high point has been EQUAL, which had a €3 bn budget over 6 years. The social economy was the 3rd most popular theme, with 424 development partnerships in 18 member states accounting for about 9% of that sum.

The problem is that now EQUAL is over, there is now no Community Initiative in the ESF, and the momentum and visibility that had been built up has been lost. Where is the follow-up?

What has survived is a seven-country learning network led by Poland, which is part of the Learning for Change programme, and is designed to build the capacity of the public administrations and key stakeholders to manage the ESF better. The Better Future for the Social Economy (BFSE) network addresses the key European issues for the social economy – public procurement, impact measurement, state aid, SSGIs, finance and social franchising. But it has a relatively small budget – about half a million euros.

It’s not true that all has been lost – the Swedish and Spanish examples presented at the conference show that progress is still being made – but work on the ground is now fragmented and incoherent. The social economy and inclusive entrepreneurship is explicitly mentioned in about 30% of the 117 new ESF operational programmes but it’s very difficult to get an overview of what’s happening. The “brain” of the innovation system in the ESF has been disconnected.

So, the policy of transferring the learning of EQUAL into the mainstream ESF seems to have backfired. There is still an important place for targeted policy, especially where innovation is concerned.

2. The social economy as social innovator

Mr Bonifacio wondered whether the distinction between the social economy and CSR was negligible. I think it is very far from that. The BEPA seminar on social innovation did include “citizen” representatives from the Social Platform (for instance from the European Anti-Poverty Network), and it did include individual examples of social economy initiatives (such as San Patrignano). But it did not include the social economy as an organised sector or movement, and this is symptomatic of what seems to be a persistent blind spot in EU policy.

Social innovation is about meeting people’s needs in new ways, and in order to do that it needs to connect with citizens and find out what those changing needs are. This relies on stimulating the participation of citizens. And it is the social economy that is the way of organising citizen participation in the economy. Therefore, the social economy must be involved in systematic efforts to promote social innovation. To overlook this means that you waste the capacity of the social economy to network, to spread new ideas and transfer expertise. It is folly to ignore the strength of the social economy as a mutual support system.