Social enterprise: Entrepreneurship with a social impact

As pointed out by the European Commission, entrepreneurship and self-employment help create jobs, develop skills and give unemployed and vulnerable people an opportunity to fully participate in society and the economy.

Accounting for 14% of total employment, self-employed people play an important role in the EU economy. The latest Eurostat figures show that 30.6 million people aged 15-64 in the EU were self-employed in 2016. Considering that SMEs make up 99% of companies in the EU and account for two thirds of total employment, it’s clear why the Commission supports these businesses.

To promote entrepreneurship and self-employment, the Commission:

focuses on business start-ups by unemployed people and people from vulnerable groups;

supports social entrepreneurs;
helps entrepreneurs access financing by supporting microcredit providers through the Employment and Social Innovation (EaSI) programme;
supports microfinance via the European Social Fund.

Social enterprise: Business with a human touch

Recent years have seen a growing interest in social enterprises across Europe. For example, there are around 43,000 social enterprises in Spain that are responsible for over 2.2 million direct and indirect jobs, according to a study commissioned by the European Parliament’s Committee on the Internal Market and Consumer Protection. The same report shows that the social economy’s turnover represents 10% of national GPD.

The growth of social enterprises has been driven by an increasing recognition of the role they can play in tackling societal and environmental challenges and stimulating inclusive growth. By focusing on people, they foster a sense of social cohesion and promote the common good.

Basic characteristics of social enterprises

Social enterprises:

serve the community’s interest (social, societal, environmental objectives) rather than profit maximisation;
have an innovative nature, through the goods or services they offer, and through the organisation or production methods they use;
employ society’s most fragile members (socially excluded persons), thus contributing to social cohesion, employment and the reduction of inequalities.

According to the Commission, a social enterprise must also fulfil the following conditions:

engage in an economic activity;
pursue an explicit and primary social aim;
have limits in terms of distribution of profits and/or assets;
be independent;
have inclusive governance.

In some Member States, these businesses are still in their infancy but they are already making a social impact.

Best practice: Greece’s Klimax Plus

Klimax Plus develops sustainable business activities in the social and green economy through tailored work integration of persons with mental health problems and of socially excluded persons (e.g. homeless, Roma, ex-prisoners, refugees and immigrants). This Greek social cooperative, which was set up in 2005, generates income from paper collection and recycling services for private sector companies, (e.g. health companies, hospitals, banking groups) and public bodies. It also offers catering services and runs a restaurant. At its cultural centre, Porfyra, people from different cultural and social backgrounds can meet and share their experiences and ideas, and learn about mental illness and social exclusion. The centre is also open to third parties for cultural, training and corporate events.

Klimax Plus also has an online radio station, which produces shows combining entertainment with information on disadvantaged people. Employees can also participate in wall-clock manufacturing. To date, over 150 people have been employed at the social cooperative.

Related links:

Entrepreneurship and self-employment

European Commission

Eurostat

Employment and Social Innovation

European Social Fund

Study commissioned by the European Parliament’s Committee on the Internal Market and Consumer Protection

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