Social enterprise – has its time finally come?

By Tanya Lalor and Gerard Doyle

Recent moves by the EU Commission on social enterprise will have a significant influence in years to come.

The Commission now sees social enterprise as being at the heart of the drive to create a more inclusive model of economic development than the current market-led one.

Social enterprises are part of the wider social economy sector, which is estimated to employ over 11million workers, or 6% of the total EU workforce. However, the EU Commission acknowledges that if a number of barriers affecting social enterprises are addressed, the sector can play a more central role in developing a more inclusive economy. So it proposed a number of actions:

·  Facilitating access to private funding.

·  Mobilisation of EU funds for social enterprises.

·  Encouraging member states to put more of the EU’s allocation of structural funds into social enterprises.

·  In awarding public contracts, social enterprises should be allowed compete for work.

Recent developments

Since the launch of the EU Commission’s ‘Social Business Initiative’ the following has happened:

·       In December 2011, a review of the Procurement Directives was announced by Commissioner for the Internal Market and Services, Michel Barnier.  One of the aims is to ensure greater consideration for social and environmental criteria which could really provide an impetus for social enterprises in the coming years. It is hoped legislation will be forthcoming by December coming.

·       The Commission introduced proposals for a new ‘European Social Entrepreneurship Funds’ label so investors can easily identify funds that focus on investing in European social businesses.

·       Also in December 2011, Commission László Andor announced plans for the promotion of the social economy and social enterprises through the European Social Fund. Further financial support will also be provided over the period 2014 to 2020 through the Programme for Social Change and Innovation.

Implications for Ireland

The Programme for Government has already made a commitment to promoting the development of a vibrant and effective social enterprise sector.  This has been followed up to in the recent ‘2012 Action Plan for Jobs’ in which the government commited to commissioning a report on the potential of social enterprise to create jobs, with a view to completion by end this year.

Ms Lalor and Mr Doyle work for TSA Consultancy.