COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEEAND THE COMMITTEE OF THE REGIONS Social Business InitiativeCreating a favourable climate for social enterprises, key stakeholders in the social economy and innovation
Date: 2011-10-25
Institutions: European Commission
Subjects: action programme, aid to undertakings, business start-up, cooperative, corporate finance, corporate social responsibility, financing method, market economy, small and medium-sized enterprises

EUROPEAN COMMISSION 

Brussels, 25.10.2011 
COM(2011) 682 final 

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 climate for social enterprises, key stakeholders in the social 
economy and innovation 

{SEC(2011) 1278 final} 

 
 
 
 
  
 
 
 
TABLE OF CONTENTS 

TABLE OF CONTENTS .................................................................................................... 1 

1.  WHY IS THE COMMISSION TAKING THIS INITIATIVE? ................................. 2 

2.  SOCIAL  BUSINESSES:  PARTICIPANTS  WHO  COULD  DERIVE  A 

GREATER BENEFIT FROM THE SINGLE MARKET ........................................... 5 

3.  AN  ACTION  PLAN  TO  SUPPORT  SOCIAL  ENTREPRENEURSHIP  IN 

EUROPE ..................................................................................................................... 6 

3.1. 

Improving access to funding ............................................................................. 6 

3.1.1.  Facilitating access to private funding.................................................. 6 

3.1.2.  Mobilisation of EU funds .................................................................... 7 

3.2. 

Increasing the visibility of social entrepreneurship........................................... 8 

3.2.1.  Developing tools to gain a better understanding of the sector 

and increase the visibility of social entrepreneurship ......................... 8 

3.2.2.  Reinforcing  the  managerial  capacities,  professionalism  and 

networking of social businesses .......................................................... 9 

3.3. 

Improving the legal environment ...................................................................... 9 

3.3.1.  Developing appropriate European legal forms which could be 

used in European social entrepreneurship ........................................... 9 

3.3.2.  Public procurement............................................................................ 10 

3.3.3.  State aid ............................................................................................. 10 

4.  BEYOND THE ACTION PLAN: OTHER IDEAS FOR DISCUSSION................. 11 

5.  CONCLUSION ......................................................................................................... 12 

 
 
 
 
1.  WHY IS THE COMMISSION TAKING THIS INITIATIVE? 

The  single  market  needs  new,  inclusive  growth,  focused  on  employment  for  all, 
underpinning the growing desire of Europeans for their work, consumption, savings and 
investments  to  be  more  closely  attuned  to  and  aligned  with  'ethical'  and  'social' 
principles. 

In order to promote a 'highly competitive social market economy', the Commission has 
placed the social economy and social innovation at the heart of its concerns, in terms of 
both  territorial  cohesion  and  the  search  for  new  solutions  to  societal  problems,  in 
particular the fight against poverty and exclusion, under the Europe 2020 strategy,1 the 
flagship  initiative  'The  Innovation  Union',2  the  European  Platform  against  Poverty  and 
Social Exclusion3 and the 'Single Market Act'4 (SMA). 

The public consultation for the SMA5 revealed high levels of interest in the capacity of 
social enterprises and the social economy in general to provide innovative responses to 
the current economic, social and, in some cases, environmental challenges by developing 
sustainable,  largely  non-exportable  jobs,  social  inclusion,  improvement  of  local  social 
services, territorial cohesion, etc.  

A social enterprise is an operator in the social economy whose main objective is to have 
a social impact rather than make a profit for their owners or shareholders. It operates by 
providing goods and services for the market in an entrepreneurial and innovative fashion 
and uses its profits primarily to achieve social objectives. It is managed in an open and 
responsible  manner  and,  in  particular,  involve  employees,  consumers  and  stakeholders 
affected by its commercial activities6. 

The  Commission  uses  the  term  'social  enterprise'  to  cover  the  following  types  of 
business:7 

•  those for which the social or societal objective of the common good is the reason for 

the commercial activity, often in the form of a high level of social innovation, 

•  those  where  profits  are  mainly  reinvested  with  a  view  to  achieving  this  social 

objective, 

•  and  where  the  method  of  organisation  or  ownership  system  reflects  their  mission, 

1   Europe 2020 – A strategy for smart, sustainable and inclusive growth, COM(2010) 2020. 
2   Communication on the Innovation Union COM(2010) 546 final, 6 October 2010. 
3   Communication  on  the  'European  Platform  against  Poverty  and  Social  Exclusion:  a  European 

4  

framework for social and territorial cohesion', COM(2010) 758 final of 16 December 2010. 
'SMA – Twelve levers to boost growth and strengthen confidence', COM(2011) 206 final of 13 April 
2011. 

5   http://ec.europa.eu/internal_market/smact/consultations/2011/debate/index_en.htm. 
6   For  the  purposes  of  this  Communication,  the  terms  'social  business'  and  'social  enterprise'  are 

equivalent. 

7   Under the rules of the Treaty on the functioning of the European Union and the case-law of the Court 

of Justice of the European Union. 

2 

 
 
                                                 
using democratic or participatory principles or focusing on social justice.8 

Thus: 

•  businesses providing social services and/or goods and services to vulnerable persons 
(access to housing, health care, assistance for elderly or disabled persons, inclusion of 
vulnerable  groups,  child  care,  access  to  employment  and  training,  dependency 
management, etc.); and/or 

•  businesses  with  a  method  of  production  of  goods or services with a social objective 
(social  and  professional 
to  employment  for  people 
integration  via  access 
disadvantaged  in  particular  by  insufficient  qualifications  or  social  or  professional 
problems leading to exclusion and marginalisation) but whose activity may be outside 
the realm of the provision of social goods or services. 

The  social  economy  employs  over  11  million  people  in  the  EU,  accounting  for  6 %  of 
total  employment.9  It  covers  bodies  with  a  specific  legal  status  (cooperatives, 
foundations, associations, mutual societies), many of which are also social enterprises in 
terms of the characteristics referred to above, as well as social enterprises in the form of 
an  ordinary  private  or  public  limited  company. The specific  legal statuses  of the social 
economy  are  particularly  suited  to  social  enterprises  as  their  method  of  governance 
favours participation and openness. 

A 2009 study10 assessed the share of the population involved in social entrepreneurship11 
as 4.1% in Belgium, 7.5 % in Finland, 3.1 % in France, 3.3 % in Italy, 5.4 % in Slovenia 
and  5.7 %  in  the  United  Kingdom.  Approximately  one  in  four  businesses  founded  in 
Europe  would  therefore  be  a  social  enterprise.  This  figure  rises  to  one  in  three  in 
Belgium,  Finland  and  France.12  These  companies  are  often  more  productive  and 
competitive  than  one  might  think.  This  is  due  to  the  very  high  level  of  personal 
commitment on the part of their employees and the better working conditions that they 
provide.13 

Social  enterprises  contribute  to  smart  growth  by  responding  with  social  innovation  to 
needs that have not yet been met; they create sustainable growth by taking into account 
their  environmental  impact  and  by  their  long-term  vision;  they  are  at  the  heart  of 
inclusive  growth  due  to  their  emphasis  on  people  and  social  cohesion.  In  other  words, 

8   For example, with a reduced range of pay. 

9   CIRIEC 'The Social economy in the European Union', page 48. 
10   Terjesen, S., Lepoutre, J. , Justo, R. and Bosma, N. 2011. Global Entrepreneurship Monitor Report on 

Social Entrepreneurship. 
http://www.gemconsortium.org/about.aspx?page=pub_gem_special_topic_reports 

11   Defined here as 'an activity with a social, environmental or general interest objective. This can include 
provision of services or training to socially disadvantaged or disabled persons, the use of profits for 
social purposes, organisation of mutual assistance groups for action in the general interest', etc., ibid., 
p. 44. 

12   Terjesen, S., Lepoutre, J. , Justo, R. and Bosma, N. 2011. Global Entrepreneurship Monitor Report on 

Social Entrepreneurship. 
http://www.gemconsortium.org/about.aspx?page=pub_gem_special_topic_reports 

13   For  example,  in  France,  absence  due  to  sickness  is  significantly  less  than  in  companies  in  general: 
5.5%  as  opposed  to  22%,  'Absence  from  work  for  health  reasons  in  the  social  economy',  Chorum, 
April 2011, http://www.cides.chorum.fr. 

3 

 
                                                 
 
 
their  key  aim  is  to  effect  social  and  economic  transformation  which  contributes  to  the 
objectives  of  the  Europe  2020  Strategy.  This  Communication  is  part  of  the  promotion 
and development of social innovation initiated by President Barroso in 2009.14 

The various characteristics of social enterprises mean that, for the most part, they exhibit 
an especially high level of social and environmental responsibility. The social business 
initiative  supplements  the  Communication  of  the  Commission  on  Corporate  Social 
Responsibility (CSR) adopted on the same day,15 and will also help them to assert their 
social added value.  

Some examples of European social businesses: 

In  Italy,  a  medical  centre  provides  high-level  specialised  assistance,  including 
cultural  mediation,  particularly  in  areas  poorly  served  by  public  services,  with  a 
particular  emphasis  on  people  in  fragile  socio-economic  situations  (such  as 
immigrants). 

In Romania, a company with 5 members of staff and 5 volunteers has been working 
since 1996 to provide cultural services in the Romanian language to blind people by 
adapting media (especially audio books and adapted films) for an estimated 90 000 
people. 

In  France,  a  business  launched  an  innovative  concept  of  water-free  car  washing 
services  in  2004  using  biodegradable  products  and  employing  unqualified  or 
marginalised staff in order to reintegrate them in the labour market. 

In Hungary, a foundation set up a restaurant employing disabled staff (40 employees) 
and provided training and childcare to ensure the transition to stable employment. 

In the Netherlands, a company teaches reading using innovative digital tools and a 
method based on play. This method is particularly suitable for hyperactive or autistic 
children but can also be used for illiterate people and immigrants. 

In  Poland,  a  social  cooperative  comprising  two  associations  employs  long-term 
unemployed and disabled staff and provides a variety of services: catering and food 
services,  small  construction  and  handicraft  jobs  and  employability  training  for 
disadvantaged people. 

In its approach to this varied sector, the Commission does not seek to provide a standard 
definition which would apply to everyone and lead to a regulatory straitjacket.  
It offers a description based on principles shared by the majority of the Member States, 
while respecting their diversity of political, economic and social choices and the capacity 
for innovation of social entrepreneurs. 

This  is  why  the  Commission  will  only  adopt  a  more  specific  definition,  as  required,  if 
regulatory measures or incentives require the scope of application to be precisely set out, 
with the representatives of the sector being closely involved in the process. 

14   Empowering  people,  driving  change:  Social  innovation  in  the  European  Union,  Bureau  of  Policy 

Advisers (BEPA), European Commission, July 2010, pages 11 and 109. 

15   COM(2011) 681 final 

4 

 
  
                                                 
The Commission seeks to support the development of social enterprises and to learn from 
their  experiences  in  support  of  the  whole  of  the  economy.  In  this  Communication,  the 
Commission is pursuing two aims: 

•  To introduce a short-term action plan to support the development of social enterprises, 

key stakeholders in the social economy and social innovation. 

•  To prompt a debate on the avenues to be explored in the medium/long term. 

2.  SOCIAL  BUSINESSES:  PARTICIPANTS  WHO  COULD  DERIVE  A  GREATER  BENEFIT 

FROM THE SINGLE MARKET 

The  growth  and  distribution  potential  of  the  social  enterprise  model  in  the  internal 
market has still not been explored in full and is coming up against obstacles identified by 
several reports,16 the most recent being the BEPA report17 in mid-2010.  

Most often, they face the same challenges as any SME and therefore can benefit from the 
initiatives  of  the  Small  Business  Act  for  Europe.18  However,  they  also  face  their  own 
particular problems. 

Social  enterprises  should  be  able  to  benefit  from  the  advantages  of  the  internal  market 
just as much as other businesses. This applies, of course, to large enterprises which may 
be  able  to  expand  at  continental  level  or even  only across the borders of their country, 
but small social enterprises, which mainly have their roots solely in local activities, are 
also  directly  affected  by  the  rules  of  the  internal  market  on  bank  regulation,  access  to 
structural funds or public procurement. 

Above all, social enterprises have difficulty finding funding, for which their needs vary 
according  to  their  level  of  development  (conceptual  support,  development  of  pilot 
projects or prototypes, large-scale development). Constraints concerning redistribution of 
profits  or  employment  of  vulnerable  workers  often  give  the  impression  to  creditors  or 
potential  investors  that  they  are  higher-risk  and  less  profitable  than  other  businesses. 
More so than other businesses, social enterprises are confronted with the imperfections in 
the  financial  markets  (fragmentation,  absence  of  pan-European  platforms  for  lending, 
etc.).  Investors  therefore  do  not  have  a  clear  enough  idea  of  the  real  social  impact  of 
some  solidarity  investment  funds.  Access  to  public  funds  is  frequently  impeded  by 
systems that are too rigid or too bureaucratic. For example, social enterprises may find it 
difficult  to  obtain  access  to  structural  funds  if  the  managing  authorities  finance  only 
short-term  projects.  The  large  number  of  different  programmes  at  both  national  and 
European level makes them difficult to access for small organisations. 

This  phenomenon  is  reinforced  by  the  low  degree  of  recognition  of  social 
entrepreneurship.  The  lack  of  interconnection  between  stakeholders  from  different 
regions or countries prevents dissemination of best practices, creation of partnerships and 

16   Study on Practices and Policies in the Social Enterprise Sector in Europe, Austrian Institute for SME 
Research and TSE Entre, Turku School of Economics, Finland Vienna, June 2007, a report compiled 
for the European Commission. 

17   Empowering  people,  driving  change:  Social  innovation  in  the  European  Union,  Bureau  of  Policy 

Advisers (BEPA), European Commission, July 2010. 

18   Re-examination of the 'Small Business Act' for Europe, COM(2011)78 final. 

5 

 
                                                 
discovery of new opportunities. In European education systems, social entrepreneurship 
is  still  under-promoted,  although  its  integration  into  initial  and  ongoing  training  is  a 
prerequisite for reinforcing its credibility. An increasing number of young graduates opt 
to  work  in  social  enterprises,  but  traditional  businesses  do  not  value  their  experience 
because  they  are  unfamiliar  with  the  sector.  This  phenomenon  is  accentuated  by  the 
range  of  definitions  in  Europe  which  explains  the  variety  of  available  data.  Social 
entrepreneurship is often not defined and, if it is, it does not mean exactly the same thing 
from  one  country  to  another.  The  data  are  often  old,  piecemeal  and  unharmonised, 
making it difficult to adapt and coordinate public policies. 

For this reason, it is hardly surprising that the regulatory environment at European and 
national  level  does  not  always  take  sufficient  account  of  the  specific  characteristics  of 
social enterprises in particular with regard to the rules on public procurement or existing 
statutes.  This  complicates  mobilisation  of  investors  and  access  to  grants  or  public 
contracts  and  sometimes  forces  them  to  use  complex  legal  arrangements.  Social 
enterprises which are not associations are thus sometimes unable to take advantage of the 
facilities offered by local authorities to associations. 

3.  AN ACTION PLAN TO SUPPORT SOCIAL ENTREPRENEURSHIP IN EUROPE 

In order to meet these challenges, the European Union and international organisations are 
already developing horizontal policies in the context of the social economy and targeted 
programmes  to  support  social  enterprises  and  social  innovation.  A  Commission  staff 
working paper, published at the same time as this Communication, contains a summary 
of all the existing measures as well as some experiences in other countries which might 
inspire the European Union. 

In  addition,  to  enable  social  enterprises  to  use  their  full  potential,  the  Commission 
proposes  an  action  plan  in  general  support  of  social  innovation  to  help  create  a 
favourable climate, in close partnership with stakeholders in the sector and the Member 
States. 

The Commission therefore proposes eleven key actions to be launched before the end of 
2012.  

3.1.  Improving access to funding 

3.1.1.  Facilitating access to private funding 

The  Commission  considers 
underdeveloped in relation to that used by other businesses.  

that 

the  funding  system  for  social  enterprises 

is 

Increasing numbers of investors are seeking to combine social or environmental results 
with  their  legitimate  concern  of  obtaining  a  financial  return  on  the  investment,  while 
pursuing long-term objectives in the general interest. 

In  addition  to  socially  responsible  investment,  which  is  the  subject  of  proposals  in  the 
Communication  on  the  Responsible  Business  Initiative,19  a  European  instrument 

19   COM(2011) 681 final 

6 

 
                                                 
supporting funding of social enterprises would provide an impetus to private and public 
sector stakeholders to invest more in these enterprises, via a stake in the capital or loans.  

A  regulatory  framework  designed  to  create  such  investment  vehicles  at  European  level 
might be desirable. 

Furthermore, the Commission welcomes the action of the European Investment Fund20 in 
exploring  the  possibility  of  setting  up  an  equity  window  (ESIEF21)  dedicated  to 
investment  in  funds  with  the  objective  of  generating  a  social  impact.  This  pilot  action 
could  pave  the  way  for  the  new  European  financial  instrument  proposed  by  the 
Commission on 6 October 2011 (Key action No 3).  

For many social enterprises, start-up and development is dependent on access to credit. 
However,  as  they  are  not  well-known  or  are  deemed  more  risky,  they  have  more 
difficulty than SMEs in finding the necessary funding. 

The  Commission  also  notes  that  the  two  regulatory pillars of the 2007 Communication 
on  the  micro-credit  initiative22  (improvement  of  the  legal  and  institutional  environment 
and  creation  of  a  favourable  climate  for  entrepreneurship)  have  not  been  sufficiently 
developed at national level. 

Key action No 1. 

•  As  set  out  in  the  SMA,  to  propose  a  European  regulatory  framework  for  social 
investment  funds  before  the  end  of  2011  to  facilitate  access  to  the  financial 
markets  for  social  enterprises,  taking  into  account  the  public  consultation  carried 
out and the impact assessment. The objective will be to stimulate creation of dedicated 
funds, enabling them to be active across the whole of the single market. 

Key action No 2. 

•  In  addition  to  continuing  to  ease  access  to  micro-credits  through  the  Progress 
Microfinance  Facility  and  developing  this  instrument  by  strengthening  institutional 
capacities  under  the  European  Union  Programme  for  Social  Change  and  Social 
Innovation  for  2014-202023,  to  improve  analysis,  promotion  and  development  of 
the legal and institutional environment for micro-credits. 

3.1.2.  Mobilisation of EU funds 

Practical  experience  of  structural  funds  should  be  summarised,  assessed  and  discussed 
with  the  national  management  authorities  in  order  to  encourage  Member  States  to 
develop wider and more effective support for social enterprises in the next programming 
period. In addition, the Commission will take specific action to fund social enterprises. 

20   European Investment Bank Group. 
21   European  Social  Investment  and  Entrepreneurship  Fund  (ESIEF),  which  would  invest  in  10  to  15 

vehicles across the Member States. 

22   European  initiative  for  the  development  of  micro-credit  in  support  of  growth  and  employment, 

COM(2007) 708. 

23   COM (2011) 609 final of 6.10.2011. 

7 

 
 
 
                                                 
Key action No 3. 

•  The  Commission  has  proposed  that  a  90-million  euro  European  financial 
instrument  be  set  up  to  facilitate  access  to  funding  for  start-up,  development  and 
expansion of social  enterprises by  way  of  investment in solidarity investment funds, 
which provide own-capital and debt-financing instruments, under the European Union 
Programme for Social Change and Social Innovation.  

Key action No 4. 

•  The Commission has proposed that an investment priority for 'social enterprises' 
be expressly introduced in the ERDF and ESF regulations from 201424 in order to 
provide  a  clear  legal  basis  and  enable  the  Member  States  and  regions  to  include 
targeted activities in their ESF and ERDF programmes for 2014-2020.  

3.2.  Increasing the visibility of social entrepreneurship 

3.2.1.  Developing  tools  to  gain  a  better  understanding  of  the  sector  and 

increase the visibility of social entrepreneurship 

One of the things all stakeholders say they need is simple and fast access to the available 
information  concerning  social  enterprises,  enabling  discussion  in  order  to  share  best 
practices. In particular, this concerns the need to have ways of assessing and evaluating 
the  impact  and  social  performance  of  these  activities  (e.g.  by  using  the  experience  of 
Member  States  which  have  set  up  satellite  accounts  to  gather  statistics  on  social 
enterprises,  in  particular  cooperatives  and  mutual  societies).  Labelling  and  certification 
are tools that could potentially be used to meet these challenges. It is also important to 
promote social enterprise among the younger generations. 

Key action No 5. 

•  To  identify  best  practices  and  replicable  models  by  developing  a  comprehensive 
map  of  social  enterprises  in  Europe,  specifying  their  characteristics,  their  business 
model,  economic  weight,  cross-border  growth  potential,  applicable  rules  and  criteria 
for legal statuses and for specific tax regimes, as well as existing labelling systems. 

Key action No 6. 

•  To  create  a  public  database  of  labels  and  certifications  applicable  to  social 

enterprises in Europe to improve visibility and comparison.  

Key action No 7. 

•  To  promote  mutual  learning  and  capacity  building  of  national  and  regional 
administrations in putting in place comprehensive strategies for support, promotion 
and  financing  of  social  enterprises,  especially  via  the  structural  funds,  by  means  of 
analysis, sharing of best practices, awareness-raising, networking and dissemination.  

24   http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_fr.cfm 

8 

 
 
 
 
 
 
                                                 
3.2.2.  Reinforcing 

the  managerial  capacities,  professionalism  and 

networking of social businesses 

Both  young  and  established  social  entrepreneurs  need  to  build  the  necessary  skills  to 
ensure  that  their  business  is  well  managed  and  can  grow.  The  Commission  therefore 
wishes  to  promote  cross-fertilisation  with  innovative  entrepreneurs  and  academic  and 
research  fields.  This  may  take  place  in  particular  in  the  context  of  business  incubators 
(for social start-ups). The few existing examples in these fields deserve to be supported 
and  expanded.  Social  entrepreneurs  should  also  be  able  to  receive  advice  and  support 
from other business leaders or bankers. 

Key action No 8. 

•  To  create  a  single,  multilingual  electronic  data  and  exchange  platform, 
associated, where appropriate, with the Social Innovation Europe Platform25 and the 
‘Enterprise Europe Network’ for social entrepreneurs, incubators and clusters, social 
investors and people working with them.  

•  To promote and increase accessibility of Community programmes in support of 
social  entrepreneurs,  such  as  ERASMUS,  ERASMUS  for  Young  Entrepreneurs, 
TEMPO, 'Youth in Action' 2007–2013 (in particular the 'Youth Initiatives' activities) 
and HORIZON 2020.  

3.3.  Improving the legal environment 

3.3.1.  Developing  appropriate  European  legal  forms  which  could  be  used 

in European social entrepreneurship 

The study on the implementation of the Statute for a European Cooperative Society26 has 
highlighted  the  complexity  of  the  text  and  recommended  several  options  to  make  this 
system  more  simple  and  attractive  and  to  make  it  possible  to  meet  the  needs  of  social 
entrepreneurs.  Foundations  often  consider  that  it  is  difficult  for  them  to  operate  in  the 
internal market since regulatory differences lead to requirements and procedures that are 
sometimes  complex  (especially  in  relation  to  tax).  Finally,  the  mutual  sector  regularly 
states that it wants to be able to rely on a European statute whereas others see no need for 
this.  

25   http://www.socialinnovationeurope.eu/. 
26   Study  on  the  implementation  of  the  Regulation  1435/2003  on  the  Statute  for  European  Cooperative 

Society (SCE), 5 October 2010, 
http://ec.europa.eu/enterprise/policies/sme/files/sce_final_study_part_i.pdf. 

9 

 
 
                                                 
 
Key action No 9. 

•  Depending on the results of the consultation with the parties concerned, to present a 
proposal  for  simplification  of  the  regulation  on  the  Statute  for  a  European 
Cooperative Society in order to reinforce its independence in relation to national laws 
and to make it easier to create social cooperatives. 

•  To  propose  a  regulation  for  a  European  foundation  statute,  in  order  to  facilitate 
foundations'  cross-border  activities.  This  would  exist  alongside  national  legal  forms 
and would be optional. 

•  To  initiate  a  study  on  the  situation  of  mutual  societies  in  all  Member  States  in 

order to examine their cross-border activities in particular. 

3.3.2.  Public procurement 

Despite  the  range  of  options  provided  by  regulations  on  the  matter,  social  enterprises 
often  believe  that  they  face  disproportionate  difficulties  concerning  access  to  public 
contracts.  This  situation  arises  from  European  rules  on  the  matter  as  much  as  national 
rules,  which  differ  greatly  among  the  Member  States  where  the  practice  of  goldplating 
has  not  always  made  it  possible  to  take  full  advantage  of  the  Public  Procurement 
Directives. However, certain public entities do not always make the most of the existing 
potential  for  innovation  in  social  services.  Most  of  the  responses  received  by  the 
Commission  to  its  Green  Paper  on  the  future  of  public  procurement  consider  that  the 
potential  use  of  social  or  environmental  criteria  in  public  procurement  should  be  given 
greater emphasis in the Directives.  

Key action No 10. 

•  To further enhance the element of quality in awarding contracts in the context of 
the  reform  of  public  procurement  especially  in  the  case  of  social  and  health 
services, and to study ways in which the working conditions of persons involved 
in  production  of  goods  and  services  under  the  contract  could  be  taken  into 
account,  provided  that  the  Treaty  principles  of  non-discrimination,  equal  treatment 
and transparency are fully complied with. 

3.3.3.  State aid 

On 23 March 2011 the Commission adopted a Communication on the reform of EU rules 
concerning  State  aid  applicable  to  services  of  general  economic  interest,27 which could 
be  relevant  to  social  enterprises  providing  an  SGEI.  The  Commission  specified  that  it 
intends  to  adopt  more  varied  rules  in  accordance  with  the  effects  of  aid  in  the  form  of 
public  service  compensation  on  the  intra-Community  market.  It  also  recognised  that 
certain  types  of  social  services  demonstrate  specific  features  relating  to  their  financial 
structure and their objectives.  

27   COM(2011)146 final 

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Key action No 11. 

•  To simplify the implementation of rules concerning State aid to social and local 
services.  Such  a  simplification  could  also  benefit  social  enterprises,  when  they 
provide  social  services  or  services  that  do  not  have  an  effect  on  trade  between 
Member States. In the proposals for reform of the rules concerning Services of general 
economic interest (SGEI), made public in September 2011, the Commission aims to 
respond  to  this  simplification  objective  for  social  and  local  services  in  particular  by 
proposing  a  de  minimis  Regulation  for  local  SGEIs  and  a  new  Decision  exempting 
social  services  under  certain  conditions  from  the  obligation  to  provide  prior 
notification.  It  is  anticipated  that  the  new  rules  will  be  adopted  by  the  Commission 
before the end of 2011. 

4.  BEYOND THE ACTION PLAN: OTHER IDEAS FOR DISCUSSION 

In addition to the  priority actions  listed above, the Commission proposes the following 
topics for discussion where the details and methods involved need to be looked at more 
closely, in particular: 

•  Creating a network and enabling the experience of banks, often public or semi-public 
and  dedicated  partly  or  fully  to  funding  social  entrepreneurship,  to  be  shared,28 
thereby  restoring  dormant  funds  to  the  economy  (e.g.  bank  accounts  of  deceased 
persons that have not been closed); 

•  Developing  access  to  venture  capital  for  social  enterprises,  in  accordance  with  its 

proposal concerning the European framework for venture capital funds; 

•  Promoting social entrepreneurship among older people, in the context of the European 
Year  for  Active  Ageing  in  2012  (career  change  or  development  of  volunteering 
among retired persons); 

•  Promoting  research  concerning  the  features  and  socio-economic  impact  of  social 
entrepreneurship  and,  in  particular,  financing  national  projects  to  set  up  satellite 
accounts29 so that social enterprises appear in national accounting systems; 

•  Examining  the  possibility  of  increasing  and  including  new  aid  categories  during  the 
review  of  the  General  Block  Exemption  Regulation,  which  is  applicable  until  31 
December 2013; 

•  Developing  best-practice  sharing  between  Member  States  concerning  the  adaptation 
of national tax regimes for the benefit of social enterprises and ethical investment. 

•  Developing best-practice sharing between Member States regarding the use of capital 
accumulated in social enterprises and, in particular 'asset locks' in order to enable this 
capital  either  to  stay  in  the  business  or  be  released  for  investment  in  other  social 
enterprises. 

28   Relevant  examples 

the  KfW 
Entwicklungsbank (Germany), the Big Society Bank project (United Kingdom) or the Triodos Bank 
(Belgium, Netherlands). 

the  Caisse  des  dépôts  et  consignations 

(France), 

include 

29   http://www.socialeconomy.eu.org/spip.php?article705&lang=en. 

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The Commission also suggests giving further consideration to: 

•  New  strategies  to  improve  access  to  funding,  promoting  dialogue  between  social 

enterprises and financial institutions, e.g. in the SME Finance Forum; 

•  Following the adoption of the Innovation Union and the European Council request of 
4 February 2011 to establish a Europe-wide intellectual property promotion tool, the 
Commission  commits  to  researching  the  extent  to  which  social  enterprises  could 
access dormant patents to assist their development; 

•  Development  and  networking  of  trading  platforms  (stock  exchanges30)  dedicated  to 

social enterprises; 

•  The possibility for social enterprises generating profits to make use of volunteers and 

receive donations without a negative tax impact. 

•  The need for a possible European statute for other forms of social enterprise such as 
non profit-making associations and/or a possible common European statute for social 
enterprises. (To achieve this, once the European Foundation Statute proposal has been 
adopted, the Commission will organise a high-level meeting between key stakeholders 
from all sectors involved in social entrepreneurship, the European Parliament and the 
Council in order to consider the initiatives to be taken to improve the legal framework 
for social enterprises at European level.) 

5.  CONCLUSION 

The Commission shall: 

- 

submit the analyses and measures proposed in this Communication to all parties 
concerned in order to continue the dialogue that has been widely opened up with 
the  European  stakeholders  and  invite  all  concerned  to  participate  in  the 
conference on social entrepreneurship and the social economy in Brussels on 18 
November 2011. This conference will be an opportunity for everyone to express 
their opinion on this Communication; 

-  call  on  the  Member  States  and  local  and  regional  authorities  to  support  and 
encourage  development  of  social  enterprises  within  their  sphere  of  competence, 
in  particular  via  economic  development  structures  and  chambers  of  commerce, 
taking into account the cross-border aspect of the partnerships and initiatives that 
they support; 

-  also  call  on  them  to  develop  a  comprehensive  strategy  to  support  capacity-
building, networking and mobilising of private and public funds and to integrate 
social enterprises in pacts for employment and social inclusion initiatives. 

The Commission, for its part, shall: 

30   After  Brazil  (Bovespa  -  2004)  and  South  Africa  (SASIX  -  2006),  the  first  European  social  stock 
exchange was set up in Portugal in 2008 (Bolsa de Valores Sociais) under Euronext Lisbon. A London 
Social Stock Exchange project could be completed in the next few months. 

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–  implement  its  initiatives  in  partnership  with  the  Member  States,  in  accordance  with 
the  principle  of  subsidiarity  and  taking  into  account  issues  of  social  and  economic 
cohesion at local, regional and national level; 

–  set  up  a  consultative  multi-stakeholder  group  on  social  business  to  examine  the 
progress  of  the  measures  envisaged  in  this  Communication.  Building  on  the 
experience  of  the  SBA  Advisory  Group,31  this  group  could  be  made  up  of 
representatives  of  the  Member  States,  local  authorities,  social  entrepreneurs' 
organisations, the banking and finance sector and the academic and university sector. 

31   Review of the ‘Small Business Act’ for Europe’ (COM(2011)78) final, p. 20. 

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