Peer Review on Social entrepreneurship to tackle unmet social challenges

Peer Review on Social entrepreneurship to tackle unmet social challenges Peer Denmark Social entrepreneurship and social enterprise Same, different or both? Norway, 12-13 December 2017 DG Employment, Social Affairs and Inclusion Written by Professor, PhD Lars Hulgård November, 2017

EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs and Inclusion, Unit C1 B-1049 Brussels Contact: Dijana Ror Boone and Bent-Ole Grooss E-mail: EMPL-SPSI-PEER-REVIEWS@ec.europa.eu Website: http://ec.europa.eu/social/main.jsp?catid=1024 European Commission B-1049 Brussels

EUROPEAN COMMISSION Peer Review on Social entrepreneurship to tackle unmet social challenges Norway, 12-13 December 2017 Directorate-General for Employment, Social Affairs and Inclusion Peer Review on Social entrepreneurship to tackle unmet social challenges NORWAY, 12-13 December 2017 December, 2017

Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE The information contained in this publication does not necessarily reflect the official position of the European Commission This document has received financial support from the European Union Programme for Employment and Social Innovation "EaSI" (2014-2020). For further information please consult: http://ec.europa.eu/social/easi European Union, 2017 Reproduction is authorised provided the source is acknowledged.

Table of Contents 1 Introduction... 1 2 Situation in Denmark... 1 2.1 Emergence and institutionalization of social entrepreneurships in Denmark. 2 3 Assessment of the policy measure... 5 3.1 Differences between Denmark and Norway... 5 4 Assessment of success factors and transferability... 7 5 Questions... 7 6 List of references... 8 Annex 1 Summary table...10 Annex 2 Example of relevant practice...11 December 2017 5

1 Introduction 1 This paper has been prepared for the Peer Review on Fostering social entrepreneurship to tackle unmet social challenges in Oslo 12-13 December. It provides an assessment of the situation in Denmark compared to the policy example of social entrepreneurship in the Host Country (Norway). Norway and Denmark share a trajectory of both belonging to the so-called state friendly Scandinavian type of welfare states marked by a public welfare state financed through a diversified tax system and aimed at redistribution and universal provision of social services in such areas as health, education, and personal services. Accordingly, the Scandinavian countries display high degrees of trust, equality and universal coverage when compared to other world regions. However, in the inter related areas of social entrepreneurship and social enterprise there are significant differences when using the Host Country report on Norway as background information. These differences concern two aspects to be dealt with in the following sections. Firstly, in Denmark it is necessary to distinguish between social entrepreneurship and social enterprise, since although these may be interrelated and even to some extent overlap, there are considerable differences. Secondly, the development of the area both in terms of emergence and institutionalization differ, in the sense that the period of emergence started earlier in Denmark, and that several steps have been taken by public agencies and interest organizations to provide an institutional support structure for both social entrepreneurs and social enterprises. However, more recently these initiatives may have been set back due to a lack of permanent national policy focus. 2 Situation in Denmark In Denmark, it makes sense to distinguish both conceptually and with respect to practical evidence and experience between social entrepreneurship and social enterprise. Following the definitions of social entrepreneurship provided by the international research community (Dees et al, 2003; Austin et al, 2006; Nicholls, 2008; Hulgård, 2007; Hulgård & Andersen, 2015) this type of activity is aimed at creating social change with an explicit social value proposition irrespective of organizational identity. Accordingly, social entrepreneurship is not about starting a business or becoming more commercial. It is about finding new and better ways to create social value (Dees, Emerson & Economy, 2003). This perspective is repeated in another seminal contribution to the scholarly understanding of social entrepreneurship, that from Harvard professor, James Austin and his colleagues, who argue, the underlying drive for social entrepreneurship is to create social value, whereas in commercial entrepreneurship the underlying value to earn an attractive return on investment (Austin et al, 2006). At Roskilde University, a leading Danish research- and education institution in the area of social entrepreneurship and social enterprise, we have been following this international trend in understanding the two types of SE (social entrepreneurship and social enterprise) as being separate but occasionally in related institutional configurations. However, next to the New / Innovation and Social Value, we have added a third common characteristic for social entrepreneurship, which is the role of civil society. The reason for adding the third characteristic, civil society, is due to empirical evidence, showing that most social entrepreneurship activities usually implies some kind of contribution from civil society agents. Thus, we define social entrepreneurship as "the creation of a social value that is produced in collaboration with people and organizations from the civil society who are engaged in social innovations (Hulgård, 2010). 1 As part of the research for writing this peer report, I have had a talk with the representative from the Danish Ministry of Social Affairs appointed for the Peer Review in Norway December 12-13, 2017. This talk has been purely informative and the content of the paper is only reflecting the interpretations of the author. December 2017 1

2.1 Emergence and institutionalization of social entrepreneurships in Denmark Whereas the Norwegian Host Paper does not distinguish between social entrepreneurship and social enterprise this is necessary when trying to depict the evolution of the SE field (social entrepreneurship, social enterprise and social economy) in Denmark (and internationally) since the period of emergence in the mid 1990s. Furthermore, the distinctions follow the results of research provided by the international scientific community in the area. Thus, on many occasions social entrepreneurship potentially shares more common features with the notion of social innovation than with social enterprise (Hulgård, 2010). If we look at the definition of social innovation provided by the Bureau of European Policy Advisers (BEPA, 2011) we see clearly how social entrepreneurship and social innovation are phenomena and activities that are difficult to distinguish from each other. Accordingly, BEPA defines social innovation as innovations that are social in both their ends and their means, meaning that the process of producing social value counts as much as the end result itself (BEPA, 2010: 9). Whereas the host paper does not address such differences and distinctions, from a Danish perspective it is important. In contrast to social entrepreneurship and social innovation, social enterprise will always imply a certain degree of economic activity, since as stated in the word enterprise is about the production and exchange (often selling) of goods or services. Three periods of emergence and institutionalization of the SE field in Denmark In this paper, it makes sense to divide the evolution towards an SE policy field in Denmark into three phases, although some important historic details get lost (Hulgård & Bisballe, 2008). The first period had an immense impact on the Danish society from the mid-1800 and onwards all the way up to the evolution and foundation of the welfare state. This period is the entrepreneurial, educational and popular activities of the farmers and workers co-operative movements. The second period is that of social innovation and emergent social entrepreneurship activities shaped by numerous crosssectoral development programmes (1985-1995) aimed at facilitating bottom-up solutions to social problems, and by a more top-down oriented transition towards active welfare programmes, by some experts labelled a transition from welfare to workfare. Finally, in the third period starting slowly in the late 1990s the emergence of an explicit SE vocabulary with agents from mainly social work, civil society and urban regeneration (innovation) gradually beginning to self-identify as social entrepreneurs. Whereas the two first historic periods draw upon important national characteristics from the history of the Danish welfare state with popular participation, international trends have inspired the third wave of SE more explicitly. In the following, we shall take a closer look at the third period, since it relate directly to that of the host country paper. The third period of SE Already in 2006 and 2007, it became visible that the situation in Denmark calls for a distinction between social entrepreneurship and social enterprise. Firstly, in 2006 the Danish Parliament (Satspuljen) funded the Centre for Social Entrepreneurship at Roskilde University with a grant of almost 20 mio DKK. Secondly, in 2007 the Danish Parliament funded the establishment of a Centre for Social Economy (CSØ) with a lesser grant targeting specifically the initiation of an institutional support system for social enterprises. At the time, both these centres were a priority for the Danish government in the sense of capacity building. Whereas CSE was building capacity of social entrepreneurship with a focus on contributions from civil society, often in a cross-sectoral perspective, targeting the most vulnerable parts of the population, the CSØ was aiming at capacity building in the area of social enterprise. In a policy perspective, a gradual leaning towards the commercial and the market potential marks the most recent history of social entrepreneurship in Denmark. The national and local policy interests as well as the interest generated by agents from the private December 2017 2

sector, such as corporate foundations is on social enterprises with a market potential rather than on non-commercial social entrepreneurs providing social innovation and social change without a specific interest in providing business plans or scaling their activities on the market. In short, some interesting changes of the social entrepreneurship and social enterprise landscape have occurred between 1998 and 2017 in Denmark. This calls for a periodization of the last period of SE: 1997 2007: The phase of emergence. In 1998, scholars from the Danish National Centre for Social Research (SFI) and Roskilde University joined the formation of the European research Network EMES. This network contributed to the foundation for a research and policy agenda of SE in the European Union as well as in particular Member states. Between 1997 and 2006, social enterprise and social entrepreneurship gradually became part of the Danish vocabulary on social change. In 2000 a national conference on social capital further explored links between social capital and social enterprise. In 2004, an MA degree of social entrepreneurship (part time, continued education) was established at Roskilde University with support from the European Social Fund. In this phase, the SE field started to emerge with practitioners beginning to gain interest in the subject and gradually self-identify as social entrepreneurs. 2007 2013: The phase of consolidation and policy interest. In this phase, social entrepreneurship and social enterprise started to consolidate as a new field of policy attention. Particularly municipalities began to collaborate with people and organizations that self-identified as social entrepreneurs and social enterprises. Accordingly, a number of municipalities adopted strategic programs for collaboration with organizations in the SE field. In 2012, Århus, the second largest town in Denmark, the department for employment adopted a Strategy and action plan for collaboration with social entrepreneurs and social enterprises in Århus (Strategi- og handlingsplan for fremme af social- økonomiske iværksættere og virksomheder i Aarhus). This period was marked by a gradual development of a national eco-system, although still only at an embryonic stage. Activities launched by the two centres (CSE and CSØ) were followed by a gradual attention towards the new field of activity by municipalities and such agencies as Mandag Morgen, a national social-liberal think tank with an impact on national, regional and local policy making, and by the gradual establishment of interest organizations targeting social enterprise. Thus, in 2011 both Dansk Erhverv and Kooperationen started organizing self-identified social enterprises. Support provided by these organizations include legal aid, policy making and to some extent training and capacity building. In 2010 a national conference gained wide national attention when 400 participants engaged in dialogue at Roskilde University where two government ministers and the crown princess spoke. The event was a joint venture between CSE, CSØ, Mandag Morgen, the Global Entrepreneurship Monitor (GEM) and University of Southern Denmark. In 2012, the bottom-up formed alliance Sociale Entreprenører I Danmark (SED) was formed first as an alumni association for graduates from the Master of Socialt Entreprenørskab (MSE) program at Roskilde University and later broadened to include all people and organizations with a particular interest in the area. With little financial funding and a high degree of social capital, SED is engaged in local, national and international development in the area on a continuous basis. 2013-2017: The phase of institutionalization and normalization. In terms of policy change, this period has been dramatic. It began with a formal initialization and institutionalization of a national support system for social enterprise with the expectations from stakeholders to move towards an ambitious eco-system for social enterprise, but it ended with a lesser interest from national public policy in the area as such. In 2013, social enterprise became a post in the national budget with a decision to establish a fast working committee that should both draft a national eco-system and propose a law for the benefit of social enterprise. Accordingly, several concerted actions were taken in the period of 2013-2014. These included: December 2017 3

Establishment of a National Growth Centre for Social Enterprise (Vækstcenter) in 2013. The Law on registered social enterprises (lov om registrerede socialøkonomiske virksomheder) was adopted by the Parliament in June 2014. The National Council for Social Enterprise (Rådet for socialøkonomiske virksomheder) was appointed by the government in 2014 to underpin the development of a national Danish eco-system for social enterprise ( Støtte op om indsatsen for socialøkonomiske virksomheder og fungere som sparringspartner I forhold til Vækstcentret for socialøkonomiske virksomheders aktiviteter ). In 2017 only the law remains, since the change from a government by a centre-left coalition to a centre-right coalition resulted in a termination of both the National Growth Centre and the National Council by the end of 2015. Accordingly, one of the most significant and lasting outcomes of the policy attention between 2013 and 2017 was the procedure to become a Registered Social Enterprise (RSE, a kind of social enterprise mark). Whether the RSE has led to an increase in the number of social enterprise is insecure since new reliable data is not available. However, from the perspective of an eco-system, in 2017 the areas of social enterprise and social entrepreneurship in Denmark is left in a kind of vacuum. Both social entrepreneurship and social enterprise are embraced by politicians, policy makers and interest organizations but with a lack of particular follow up measures concerning programs for training, funding and collaboration after the Law on Registration of Social Enterprise was adopted by the parliament in June 2014. In spite of the downgrading of the ambition of institutionalizing an eco-system to the support of social enterprise and social entrepreneurship some interesting inter-agency support systems have appeared: The committee on social enterprise, consisting of previous members of the National Council for Social Enterprise and other representatives for social enterprises and interest organizations meets a number of times annually to coordinate activities and lobbying. Practical coordinator is the employers organization, Selveje Danmark related to Dansk Erhverv (The Danish Chamber of Commerce). The government has moved some of the activities formerly performed by the National Council for Social Enterprise to the Forum for Dialogue on Social Responsibility and Growth hosted by the Danish Business Authority. A few of the 15 members represents the area of social enterprise. The purpose of the Forum is to support conventional businesses to take social responsibility and to support social enterprises to create growth. In accordance with the principles of inter-agency coordination, the government in March 2017 announced that 23 mio DKK from the European Social Fond should be targeted towards Work Integration Social Enterprises wanting to develop their business potential. Implementation of the means would happen after consulting the Forum for Dialogue and Danmarks Vækstråd (The Danish Growth Council). The situation in Denmark is that of a diversified, but active contribution of both social entrepreneurship and social enterprise to the generation of welfare services and work integration. Increasingly it seems important to maintain the observations from the founding mothers and fathers of social entrepreneurship. Accordingly, it is important to repeat that social entrepreneurship is a particular approach to social change (and not about becoming commercial) and about infusing process of societal change with social objectives, while social enterprise is the same but in the way of building enterprise and engaging in commercial activities. December 2017 4

3 Assessment of the policy measure Like in the Norwegian host country example the evolution of social entrepreneurship in Denmark is closely related to the context of an institutional and universally oriented welfare state. As emphasized by the host country paper, in a Scandinavian type of welfare state the emergence and institutionalization of social entrepreneurship is shaped by the continuously changing relationships between the public, voluntary and private sectors (p. 4). However, as we have seen in the previous sections of this paper, there are significant differences that may contribute to mutual learning between different countries and interests. 3.1 Differences between Denmark and Norway The differences between Denmark and Norway may be summarized as in the following: 1. The history (emergence and institutionalization) of social entrepreneurship and enterprise differ considerably between Norway and Denmark when addressed from the perspective of the Norwegian host country paper. 2. Following the introduction of social entrepreneurship and social enterprise as new types of scholarly and practical perspectives starting in Denmark in the late 1990s it gradually became more and more evident to distinguish between social entrepreneurship and social enterprise both in a policy perspective and when looking at the different experiences made by social entrepreneurs and social enterprises. This seems not to be the case in Norway 3. The more recent initiatives to build an eco-system for social entrepreneurship and social enterprise vary between the two countries. In Denmark, steps were taken especially in the period between 2010 and 2015. Although, Denmark has experienced a setback in terms of building an eco-system, a similar move towards the initiation of an eco-system seems still to be made in Norway. 4. There a similarities and differences when looking at particular experiences with social entrepreneurship targeting children and young people at risk of poverty and social exclusion and support for labour market integration of those furthest from the labour market. Differences relate to the possibility of Danish social enterprises to register as social enterprises, which indeed many WISE have done. Similarities relate to the way municipalities and other public agencies collaborate on local level with social entrepreneurs. Following the research undertaken for this peer report, the situation in Denmark can be summarized as the following: Social entrepreneurship and social enterprise Important to distinguish between social entrepreneurship and social enterprise. Social enterprise in Denmark is a legal framework that provides opportunities and conditions for social enterprise: Not obvious that social entrepreneurial activity takes place within the framework of social enterprise / the Law on Registered Social Enterprise. To delimit social entrepreneurial activities to the framework of social enterprise will hollow out the concept of social entrepreneurship. Social enterprise is not a framework for social innovation and social entrepreneurship. The definition of social enterprise does not imply an element of innovation, whereas this is at the core of both social entrepreneurship and social innovation. Social enterprise as a legal and conceptual framework came later than social entrepreneurship and social innovation as ways of creating social change. December 2017 5

Social entrepreneurship and social enterprise with respect to the two target groups. Children and youth - Leisure time and sport activities are dominant areas of social entrepreneurship activities: - Policy examples: Red Barnet (RB), Plads til Alle project. Assisting children who are cut off from participating in social life due to social, economic or cultural reasons to become part of a community. RB facilitates and mediates between several sectors and resources and is thus an example of the hybridity and resource mix of many social entrepreneurial activities. - DIF Get2sport and GAME are both illustrative examples of sport and street sport / street game as an innovative and cross-sectoral approach for a better integration of potentially marginalized citizens, including refugees. - In general, public agencies and interest organizations observe leisuretime activities and sport as a good way of integrating and building resources among refugees and other potentially socially excluded parts of the population. Labour market integration of socially excluded - Activity concerning labour market integration takes place in the framework of WISE (Work Integration Social Enterprise) first of all targeting adults but with some examples also targeting children and youth. - WISE is institutionalized in Denmark with a combination of the Law on Registered Social Enterprise; several interest organizations, such as Kooperationen and Selveje Danmark; municipal strategies and access to capital (f.i. the Social Capital Foundation). - The Country Report: Denmark (part of A Map of social enterprises and their eco-systems in Denmark in Europe by the European Commission, 2014) estimate that there are 115 WISE in Denmark. - The author of this report estimate that the total number of WISE is higher than the estimate of 115. Many social enterprises and social entrepreneurial activities do include work or labour market objectives without being formally registered as a social enterprise. - On November 22 nd 2017, 248 social enterprises are formally registered as Social Enterprises recognized by the public registration system according to the principles in the Law from 2014. - The author of this report estimates that the total number of social enterprises is higher than 248, since many social enterprises do not register as such. However, there is no definitive and valid data available. Policy regulating the area - examples Here it is important to emphasize that research indicates that involvement of target groups in terms of increasing levels of participation in governance and decision making is the weakest of the three dimensions of social, economic and governance. Accordingly, if policy makers want social innovation, social entrepreneurship and social enterprise to be ways of stimulating and empowering citizens to participate and articulate active citizenship, then this need special attention. Since social December 2017 6

entrepreneurship and social enterprise differ, it is necessary to look into different types of policy schemes and public support structures to identify a sample of policies and programs within the area. The following is an illustrative sample: Civilsamfundsstrategien: A new national initiative published by the government in October 2017 aimed at stimulating and increasing local voluntarism. The government has reserved 120 mio DKK to implement the strategy during a period of four years. Several of the 11 target areas are relevant when addressed from the perspective of social entrepreneurship. This includes the ambition of building strategic partnerships between voluntary associations and municipalities; strengthening of civil society in rural areas; local innovation through civil society. Local municipal strategies: Including strategies and public programs to enhance collaboration with social enterprises; strategies for volunteering; local councils for socially excluded people; local strategies to active employment. Active Labour Market Policy: A framework of public policies targeting potentially socially excluded people. Increasingly socially excluded are addressed from the dual perspective of being either ready for employment or ready for activity. Both are step stones into the labour market. In certain situations, Active Labour Market Policy serve as a policy framework for the SE field. 4 Assessment of success factors and transferability Given the common trajectory of the Danish and Norwegian societies, being strong and universally oriented welfare states there is plenty of space for transferability between the two countries. In bullet points factors to be taken into account when transferring experiences and engaging in mutual learning may be summarized: An eco-system to the support of the entire SE field Financial support based upon a recognition of the hybrid character and resource mix of both types of SE Learning and knowledge building Municipal and local strategies Building skills across Nordic countries 5 Questions Using a phrase from James Austin, Jane Skillern and Howard Stevenson (2006) it seems as urgent to day to ask if social entrepreneurship and social enterprise are the same, or different? This may be the most urgent question when entering into exchange, dialogue and mutual learning on social entrepreneurship and social enterprise. If addressed without any attention to possible differences social entrepreneurship cannot avoid being co-opted/colonized by conventional market forces. In a critical perspective we seem to have moved a long distance in less than 15 years from a period when scholars of social entrepreneurship and social enterprise argued that social entrepreneurship is not about becoming commercial (Dees, 2003) and social enterprise must be identified by three set of criteria (Borzaga and Defourny, 2001). If these challenges are not taken serious, we face a situation where we as scholars and experts of social entrepreneurship, social enterprise and social innovation present to the public an image of a singular type of social action / organizational entity that are actually three distinct phenomena. December 2017 7

6 List of references Austin, J., Stevenson, H. & Wei-Skillern, J. 2006. "Social and commercial entrepreneurship: same, different, or both?", Entrepreneurship: Theory and Practice, Vol. 30, No. 1 (January) BEPA-Bureau of European Policy Advisers. 2010. Empowering people, driving change: Social innovation in the European Union. Bruxelles: European Commission. Borzaga, C. & Defourny, J. (eds.). 2001. The Emergence of Social Enterprise. London: Routledge. Dees, J.G., Emerson, J. & Economy, P. (eds.). 2002. Strategic Tools for Social Entrepreneurs: Enhancing the Performance of Your Enterprising Nonprofits. New York: John Wiley & Sons. European Commission. 2014. A map of social enterprises and their eco-systems in Europe. Country Report: Denmark. European Union. Hulgård, L. 2007. Sociale entreprenører - en kritisk indføring. Copenhagen: Hans Reitzel. Hulgård, L. & Bisballe, T. 2008. Work Integration Social Enterprises in Denmark. EMES: Working Paper no. 04/08 Hulgård, L. 2010. Social Entrepreneurship. In The Human Economy (Hart, Laville and Cattani, eds.). Cambridge: Polity Press. Hulgård, L & Andersen, L.L. 2015. Sosialt entreprenørskap og sosial innovasjon. In Sosialt entreprenørskap og sosial innovasjon. Kartlegging av innsatser for sosialt entreprenørskap og sosial innovasjon i Norden. Nordisk Ministerråd: TemaNord 2015:502. Nicholls, A. (2008) (ed.) Social Entrepreneurship: New Models of Sustainable Social Change, Oxford: Oxford University Press. December 2017 8

December 2017 9

Annex 1 Summary table The main points covered by the paper are summarised below. Please summarise the main points covered by the paper. Give a maximum of five bullet points per heading. Situation in the peer country Necessary to distinguish between social entrepreneurship and social enterprise Three periods of emergence and institutionalization Last period between 2013-2017 depicts as blurred situation Policy embrace of SE, but limited support for a national eco-system Many activities at municipal level Assessment of the policy measure Policies and programs targeting SE differ between the two countries Not obvious that social entrepreneurship takes place within the framework of social enterprise Social entrepreneurship targeting children and youth concerns leisure-time and sport Social entrepreneurship targeting socially excluded labour market situation takes place in the framework of WISE Assessment of success factors and transferability Due welfare state trajectory potential for transferability is large In both countries a formal eco-system concerning both social entrepreneurship and social enterprises is needed Transferability of Danish experiences with learning and education Questions Consequences of not distinguishing between social entrepreneurship and social enterprise? Potential of social entrepreneurship being exposed to forces of colonization from either state or market (Habermas) or intensified processes of isomorphism (DiMaggio & Powell) December 2017 10

Annex 2 Example of relevant practice Short summary of a relevant policy practice/example, key fields indicated below (max. 1 page) Name of the practice: Year of implementatio n: Coordinating authority: Objectives: Law on Registered Social Enterprises (Lov om registrerede socialøkonomiske virksomheder) - https://www.retsinformation.dk/forms/r0710.aspx?id=163865 June 2014 The Danish Business Authority To provide a platform for social enterprise to become registered. To provide a database for stakeholders to contact registered social enterprises Main activities: Platform for becoming a registered social enterprise Results so far: As of November 2017, 248 Danish social enterprises has registered. When established the registration was meant to be part of an ecosystem targeting the SE field. However, the platform / registration mark provides a possibility for municipalities and other agencies to be sure that the social enterprises that they intend to collaborate with live up to certain standards as identified in the Law of June 2014. There is no institutional support structure related to the platform: lack of policy advice concerning requirements for becoming a social enterprise; lack of learning, training and scaling activities, since the platform is a bare possibility of becoming registered. Platform only targeting social enterprise and not social entrepreneurship as such. It is worth to consider if a similar registration possibility be tailored for social entrepreneurship? December 2017 11