This document summarizes the development of social enterprises from a comparative perspective. It discusses how social enterprises have progressed from embryonic initiatives to becoming institutionalized in some countries. Social enterprises complement public services, create jobs, and contribute to local communities. Their impact and development depends on historical and cultural factors as well as supportive legal and institutional structures. The document uses Italy as an example country where social enterprises are fully recognized and supply contracted welfare services, enjoying public support. Key success factors for social enterprises include an enabling legal framework, decentralization, networking, partnerships with public authorities, and research.

1. Participation, inclusion and local
development: the institutionalization
of social enterprises from a
comparative perspective
Giulia Galera, Euricse
First International Forum for Economic Democracy
Lisbon, 16th and 17th November 2013

2. Main contents
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Background
What are social enterprises?
What is the impact of social enterprises?
Social enterprise development
Social enterprises in Italy: key facts and data
Success factors for social enterprises

3. Background
• At the end of XIX century significant contribution of civil
society organizations (coops, mutuals, and voluntary
organizations) to socio-economic development
o Social Economy developed especially in French-speaking
countries (e.g. France and Belgium)
o Widespread diffusion of charities and voluntary
organizations in the provision of health and social services
• Role of civil society organizations downsized as part of
the process of constructing European welfare states

4. Background
• In the bi-polar model based on Market&State, civil
society organizations confined to play a minor role
• From the 1970s crisis of the Market&State model
and failure of reforms
• Revival of civil society organizations as a bottom-up
reaction to new needs arising in society
o associations and charities strengthened their
entrepreneurial stance
o cooperatives strengthened their commitment towards
the community

5. Background
• Social enterprises developed to grasp a new dynamic
characterizing civil society
• Social enterprises evolved both:
o from old Social Economy organizational forms following
their commitment in new activities addressed also to non
members
o as new types of enterprises explicitly aimed at pursuing
social goals
• In Europe, a gradual convergence towars a common
definition of social enterprise has taken place over
the last years

6. What are social enterprises?
Main dim ension
Ent repreneurial/
econom ic dimension
General definit ion
Social enterprises (SEs) are engaged in the carrying out of stable and
continuous economic activities, and hence show the t ypical
charact erist ics t hat are shared by all ent erprises.
Social dimension
The social dimension is defined by the aim and/or products delivered.
Aim : SEs pursue the explicit social aim of serving the community or a
specific group of people that shares a specific need. By promoting the
general-interest, SEs overcome the traditional owner-orientation that
typically distinguishes traditional cooperatives.
Pr oduct : when not specifically aimed at integrating disadvantaged people
to work, SEs must deliver goods/services that generate a beneficial societal
impact.
I nclusive
governanceow nership dim ension
( social m eans)
To identify needs and involve the stakeholders concerned in designing
adequate solutions, SEs require peculiar ownership structures and
governance models that are meant to enhance at various extents the
participation of stakeholders affected by the enterprise.
SEs often lim it t he dist r ibut ion of profit s. The non-profit distribution
constraint is meant to ensure that the general-interest is safeguarded. The
non-profit distribution constraint can be operationalized in different ways.

7. What is the impact of social enterprises?
Social enterprises:
o complement the supply of general-interest services (eg
social services, elecricity, gas, safe drinking water, etc. )
that public agencies and for-profit enterprises fail to
deliver
o Italian social enterprises account for 5,000,000 users
(Rapporto IRIS, 2012)

8. What is the impact of social enterprises?
Social enterprises
o generate new jobs in their fields of activity
• Create new employment in the sectors in which
they are engaged
• employ unoccupied workers (women with children)
o some social enterprises are specifically aimed to
integrate into work disadvantaged workers
• In Italy more than 30,000 disadvantaged workers
are integrated by social coops (Unioncamere, 2009)
o develop new forms of work organization

9. What is the impact of social enterprises?
Social enterprises
o contribute to a more balanced use and allocation of
resources available at local level to the advantage of
the community
• “Internalization” of economic growth to the
advantage of the entire community
• community dimension allows to adjust to local
contexts and take stock of local resources

10. What is the impact of social enterprises?
Social enterprises
• help foster social cohesion and enhance social
capital
o they supply goods/services that are
characterized by high social potential
o adopt inclusive and participatory institutional
structures which stregthen trust relations
among concerned stakeholders.

11. What is the impact of social enterprises?
Social enterprises:
• support the institutionalization of informal activities
belonging to the underground economy
o several social enterprise-like initiatives arise
informally
o Institutionalization allows irregular workers to get
out of the black market

12. Stages of development
• Social enterprises are a structural and global dynamic,
involving countries showing various levels of economic
development and welfare systems
• Pattern of development and capacity to impact upon local
communities depends on the interplay of various endogenous
and exogenous factors
o historical, cultural, and social factors
o availability of supporting legal and institutional structures
• 4 main stages of development of social enterprises

13. Stages of Development
• Embryonic development of social-enterprise
initiatives
• Progressive emergence of social enterprises
• Gradual consolidation
• Institutionalization

14. Embryonic development of
social enterprise-initiatives: CIS countries
• Unrecognized needs start being addressed by self-organized
groups (e.g. mental diseases; drug-addiction)
• Spontaneous development of bottom-up initiatives not legally
recognized as social enterprises
o mostly isolated, invisible initiatives
o lack of umbrella organizations
• High degree of innovation and strong reliance on voluntary
work
• Not enabling environment:
o cultural obstacles
o public policies centralized/weak welfare systems/legal&fiscal
constraints

15. Progressive emergence: Romania,
Bulgaria, Serbia,
• Social enterprises start growing in size
• Entrepreneurial activity becomes more stable
• Social enterprises start relying on paid staff in addition to
volunteers
• Networking relations grow in importance
• New needs start being recognized by public providers
• Social enterprises mentioned in relevant policy documents
• Still predominance of cultural and/or legal/political
obstacles

16. Gradual consolidation: Greece, Hungary
• Gradual change in mindset
o move towards the recognition of private welfare providers
• Social enterprises better structured
o better organized
o sometimes organized in second level organizations
o lobbying activity more relevant
• Interaction with public policies becomes more stable
• Pioneering, but often not systematic support by public
authorities (e.g. grants)
• New legal forms sometimes introduced, but still not fully
enabling legal environment

17. Institutionalization of
social enterprises: Italy, UK
• Full political/legal recognition of social enterprises
o legal forms designed for SEs introduced and successfully
implemented
o provision of welfare services contracted out by public
agencies on stable basis
• Social enterprises supplying welfare services recognized as
welfare providers
o integrated in the welfare systems/enjoy systematic public
support
o But:
o run the maximum risk of isomorphism
o sometimes decrease in autonomy
o weakening of civil society engagement

18. Social enterprise development
patterns
Italy
UK
Belgium
France
Institutionalization
Italy
Belgium
France
Gradual consolidation
Progressive emergence
Embryonic social enterprise initiatives
Sweden
Spain
Italy
Sweden
Spain
France
Belgium
Italy
1970s
1980s
UK
Rumania
Bulgaria
Hungary
Slovenia
Germany
Greece
1990s
Italy
UK
Spain
Belgium
France
Sweden
Sweden
Greece
Hungary
Slovenia
Germany
Spain
Hungary
Greece
Germany
Rumania
Bulgaria
Rumania
Bulgaria
Slovenia
Ukraine
Belarus
Russia
Armenia
2000s
Ukraine
Belarus
Russia
Armenia
2010s

19. Key facts: social enterprises in Italy
Since approval of Law 381/1991 annual growth rate from 10 to
20%
• in 1993: 1,479 social coops (National Cooperative
Department)
• in 2003: 6,159 (ISTAT)
• in 2005: 7,363 (ISTAT) – 59% A-type; 32.8% B-type; 8.2%
mixed or consortia
In 2011 (Unioncamere):
• 12,647 social cooperatives, with
• 513,000 people employed
• more than 30,000 disadvantaged workers integrated
• more than 4,000,000 users
• more than 10 million euros turnover

20. Success Factors
• Key factors contributing to social enterprise
development include
o Adequate legal/fiscal framework
o Decentralization
o Networking within and among the families
of the social economy
o Clear partnerships with public authorities
o Research

21. Thank you very much!
giulia.galera@euricse.eu
www.euricse.eu