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  • Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 11/7/2012

Social entrepreneurship: The point of view of the European Commission 

Social entrepreneurship
In this joint interview from the 2012 Barometer of Social Entrepreneurship, Michel Barnier, the European Commissioner for Internal Market and Services, and Andris Piebalgs, the European Commissioner for Development, discuss social entrepreneurship in Europe.

In what way can social entrepreneurship contribute to growth and development in Europe?

Michel Barnier

 

Michel Barnier Social entrepreneurs are central to the model for new growth in Europe put forward by the Commission. The main aim of their projects is not immediate and maximal profit or returns simply for the shareholders. These projects can be more labour-demanding and generally offer more sustainable jobs. Management methods, for example, are based on innovative partnerships between the private and public sectors or on fairer pay policies which may include reduced salary scales thus limiting major disparities or at least certain excesses. Relocation is also less of a risk since these enterprises have strong local links and are deeply attached to economic development in their area. Finally, for public authorities, the social entrepreneurship sector is definitely an investment for the future. A recent survey in France showed how much was both saved and gained by authorities through their support for social enterprises. It is essential to pursue reflection, innovation, action and projects in this domain. And France is very well placed, in particular with a ministry dealing specifically with the question, to move quickly ahead.”

In what way can social entrepreneurship contribute to growth and development in developing countries?

Andris PiebalgsAs with any enterprise, social enterprises contribute to growth through their activity – the production of goods or services. At the same time, the chief aim of social enterprises is to have a positive impact on society and not simply to generate profit. Their contribution to a country’s development thus goes far beyond their economic contribution to growth and helps to make this growth more inclusive, through the goods and services offered or though their mode of production. The model for development and growth put forward by social and solidarity-based enterprises is therefore based on solidarity, fair practices and responsibility. Guaranteeing sustainable growth for the benefit of all is at the heart of the European development policy that I am in charge of, together with the Agenda for Change launched in October 2011. Social entrepreneurship is one of its most concrete applications.”

How is the European Commission supporting the development of social entrepreneurship in Europe?

Michel Barnier – Following on from the Initiative for Social Entrepreneurship adopted in October 2011, the Commission has put forward a three-part plan for the creation of a favorable ecosystem. First, improve financing possibilities for social enterprises by making European funds more accessible, but also by making the enterprises more attractive for private investors, for example through a European passport for funds invested in social entrepreneurship. The structural funds, which include the European Social Fund (ESF), are also targeted since the ESF program will henceforth give priority to social enterprises. Secondly, increase the visibility of social enterprises to help them win the confidence of public authorities and banks, and attract more young people with qualifications. Thirdly, adapt regulations, making the rules governing State aid and procurement contracts more favorable to social enterprises and introducing a European status for foundations and an improved status for European cooperatives and mutual insurance companies.”

How is the European Commission supporting the development of social entrepreneurship in developing countries?

Andris Piebalgs

 

Andris Piebalgs The European Union supports the development of social entrepreneurship, business models and market solutions which contribute to the sustainable integration of the poorest populations in the global economy in two complementary ways. First of all, support is given to the development of a private sector which stimulates local economy and growth. The EU supports actions to improve the business environment, to help small and medium-sized enterprises gain access to financial and non-financial services, and to promote entrepreneurship and develop the trading capacity of small producers. Like all private traders, social entrepreneurs benefit from an improved business environment. Secondly, the European Union supports more specifically the development of a more inclusive form of growth through technical assistance for small producers and small farmers, and by supporting the development of inclusive value and supply chains, fair trade and the creation of enterprises and market solutions responding to the needs of the poor. The European Union thus gives its backing, for example, to the development of cooperatives for the development and marketing of guaranteed organic or fair-trade products. One example of this is its contribution to the increased production of organic, fair-trade olive oil in the Palestinian territories which have tripled their production and the area set aside for organic farming.”

What future do you see for social entrepreneurship in Europe?

Michel BarnierI am fully confident. We are living at a time when consumers, public authorities and even investors want their action to be meaningful. The recent crises have clearly demonstrated the need to strengthen solidarity, the fight against all forms of exclusion, and environment protection. Such a frame of mind is very much in favor of the development of social entrepreneurship, while the crises also force authorities to rethink their modes of action. The experience of social enterprises can offer innovative responses. On 18 November 2011, we organised a major conference on social entrepreneurship in Brussels. Over 1,000 participants, including President Barroso, several European Commissioners, the Polish presidency of the European Union, members of the European Parliament, gifted entrepreneurs from all over the European Union, specialists from the financial world and public authorities all came together for this exceptional event. We cannot afford to disappoint such expectations.”

What future do you see for social entrepreneurship in developing countries?

Andris Piebalgs All those involved in development and the enterprises themselves are increasingly aware of the need to find ways of combining competitiveness, environmental sustainability and social inclusion. In the same way as fair-trade and inclusive enterprise models, social enterprises are being carefully explored by the European Union for the market solutions they offer with regard to development. This is why we are piloting two projects in Africa, one aiming at the development of inclusive business models through calls for proposals, the other concerned with the development of a green economy and social and environmental entrepreneurship in Africa. Encouraging this type of pilot initiatives is essential to test new approaches. There is clearly a need to innovate in this domain, both in the way dialogue and cooperation are established between the traditional actors in the field of development and the private sector, as well as concerning financing mechanisms. As the world’s largest donor, the European Union of course intends to contribute to this effort.” Do you agree with Commissioners Michel Barnier and Andris Piebalgs? Are social entrepreneurs central to the model for new growth in Europe put forward by the European Commission?

Christophe Bernard

Christophe Bernard
I am a KPMG partner based in the French firm’s Paris office, responsible for encouraging the growth of our firms’ middle markets practice across Europe, Middle East and Africa, a majority of that market comprises of family businesses.
 

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