Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

Social Business Initiative

Creating a favourable eco-system for social enterprises, key stakeholders

in the social economy and innovation

Key challenges to European policy development reflected in the SBI

The crisis calls for reengineering our economic and social fabric, for reprogramming our policies and actions. SE are drivers in social innovation

• The guiding principle for further developing the single market is the social market economy. SE need a level playing field with all economic actors

• Cohesion policy instruments are to tackle economic, social and territorial disparities which the Single Market does not reduce by itself. Many SE have a mission that falls into the ESF scope of intervention.

• The economic crisis is not just a crisis of economic and financial management but of values too. SE are the vanguard of responsible business

What is a social enterprise?

Definition of social enterprise that tries to take into account the diversity of economic structures, cultural traditions and legal frameworks across Europe:

• Trading on the market• main objective: make a social impact rather than a profit

for owners or shareholders• uses surpluses mainly to achieve social goals• governance structures involve workers, customers and

stakeholders • accountable and transparent, innovative and

entrepreneurial management

Support to social enterprises is on the EU’s growth and jobs agenda.

Social entrepreneurs are innovators and drive social change.

• They generate sustainable jobs, facilitate social and work integration, provide inclusive social services and improve the quality of social and health care;

• They introduce efficient ways to reduce emissions and waste, and to use natural resources and energy more efficiently ;

• They focus on innovation and the participatory use of the internet

Traditional private

company

to generate shareholder value

Revenue from

trading on the market

primary purpose

Main source of

income

Public body

Revenue frommembers, charities,subsidies, investors

Any entity engaged in a regular economic activity, irrespective of its legal form. COM Regulation 800/2008

CSR

to generate value in the general interest/through services/products and/or ways of production

serving social objectives

Hybrid SE

Not for profit organisation/ Citizen sector organisation

SocialEconomy

Social enterprise

Social enterprise

Traditional private

company

Participation & empowerment of employees

& clients

Profits are retained in

organisation or community

Power & hierarchy

Profits distributed to shareholders

Governance

Use of surplus

Embedded in a community

Quality of work

Employee share ownership

Barriers to start, develop and scale social enterprises that can be addressed by EU level action

An underdeveloped finance system - throughout the life cycle of a business;

Insufficient investment in education and training for developing the necessary mindsets, skills and competences

Inadequate support networks and infrastuctures.

Lack of awareness and recognition of the social value which social enterprises generate

Social Business Initiative Improving access to funding for social enterprises

tailored to meet the specificities of social economy actors: a new framework for social investment funds operating EU-wide and a new financial instrument (fund of funds).

Improving the visibility and recognition of social enterprise, facilitate mutual learning and capacity building, and to promote skills development

Simplifying European legal and regulatory frameworks to ensure that these include social enterprises on equal terms with other forms of businesses, notably in the fields of pubic procurement, state aid measures for social and local services and capital markets

Map, portray & spread business models of SE

Collect, compare & spread SE labels & social impact metrics

Set-up and manage a web exchange platform for social enterprise & social investors

Increase knowledge, transparency, recognition and visibility of the SE sector

Improve management capabilities & create market places

Improve the effectiveness of public policies towards the sector

Increase numbers, scale, scope and impact of social enterprisesby boosting management, public governance and recognition of the social enterprise sector

Support mutual learning & capacity building for administrations in promoting & financing SE

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Establish/Improve regulatory frameworkfor SIFs operating EU wide

Establish an EU level instrument that provides equity and debt instruments to SIFs and financial intermediaries

Introduce an investment priority „social enterprise“ in the SF Regulations

Mobilise more private and public investors in SIFs

Mobilise Structural Funds investments in SIFs

Increase of quantity and quality of social investment supply

Support tosocial enterprises

Assistance for support infrastructures BDS, networking etc

Increase numbers, scale, scope (by issue & territory) and impact of social enterprisesby increasing the access to finance

Increase of quantity & quality of plans for social enterprise start-up, development & scaling-up

Establishment and operations of intermediaries in the social impact market

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