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Mission-led business – building another half-way house 13 June 2016

Posted by cooperatoby in Social enterprise.
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The British government is trying to consolidate a newly-defined sector of what it defines rather broadly as the ‘social economy’.

It has coined the term ‘mission-led business’ (MLBs) to fit between social enterprise and corporate social responsibility. The definition is stronger than the latter in that it ‘identifies an intention to have a positive social impact as a central purpose of its business; makes a long-term or binding commitment to deliver on that intention through its business and operations; and reports on its social impact to its stakeholders’ – but weaker than the former because it ‘can fully distribute its profits’.

Rob Wilson, the UK’s Minister for Civil Society, has published a call for evidence on MLBs, saying: “I want every UK entrepreneur to be able to easily establish a business that makes a good profit while at the same time making a commitment to social impact. And I want everyone – consumers, governments and companies – to integrate mission-led businesses into their buying and investing habits.”

This initiative thus seeks to give an identity to businesses which want to a have a positive social impact – and who doesn’t? – but whose investors are unwilling to share any profit or power with other stakeholders. The definition is silent not only about ownership and participation, but also about the distribution of profits or assets. It relies solely on good intentions and social reporting.

The evidence will be considered by an advisory panel led by Nigel Wilson, CEO of Legal & General, but which has no representation from co-operatives, social enterprises or charities.

To comment, before 8 July 2016, go to: https://www.gov.uk/government/consultations/mission-led-business-review-call-for-evidence See the Pioneer Post report at: https://www.pioneerspost.com/news-views/20160512/global-social-innovation-round-34

See Senscot post – thanks Alison Lamond in Facebook Worker co-operatives group.

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A slight change of tack? 14 April 2016

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It’s good news that Elżbieta Bieńkowska, the hitherto elusive Commissioner in charge of social enterprises (her portfolio comprises the internal market, industry, entrepreneurship and SMEs), has finally found the time to meet members of the European Parliament’s Social Economy Intergroup, as Social Economy Europe reports.

Sadly, one thing the Commissioner did not do is announce that the Commission is planning to launch a “Social Business Initiative II”, though this has been hinted at by officials. But she did at least signal her desire to avoid any potential rift between the two main tendencies in the social enterprise sector – those that institutionalise participation and democracy in their legal structures, and those that don’t. So the drift in terminology from “social business” to “social enterprise” continues and the buzzword is now “social economy enterprise”: “The Commissioner agreed on the necessity to share -within the different EU institutions- a common and inclusive understanding of the social economy. In this way, she stressed that the term “social economy enterprises”, seems to be the consensual one and therefore it should be used by the different institutions whilst developing its policies.”

Hopefully this hatchet-burying means that the Commission and the sector can concentrate on increasing the number, scale and impact of social economy enterprises. Their potential contribution is recognised. It would be a wasted opportunity if the Commission did not focus efforts on maximising it.

Found in translation 8 April 2016

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Every Christmas my cousins ask me what it is I actually do in Brussels and every year they claim they still don’t understand. Waiting to board a plane for Manchester at Charleroi on Tuesday to go to Keith Richardson‘s funeral, I piloted the following non-technocratic response: “We help European governments to improve their employment, inclusion and training policies by learning from each other” – and it worked brilliantly. The young woman who’d asked said she’d started to turn off when she heard the word ‘government’ but it sounded really interesting. I’m glad to say: it is.

It reminds me of the dictum attributed to Einstein that if you can’t explain something to your grandma then you don’t understand it. Here’s the more technical version.

Social innovation is more than start-up support 8 March 2016

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The BENISI project aimed to identify 300 social innovations and help them to scale up. But faced with the enormity of this task it seems to have fallen back on promoting start-ups, without assessing whether they are either social or innovative.

I’ve just come back from the BENISI final conference and I have to say I am disappointed. I encountered at least two circular arguments, and ended up quite unsure whether the project was promoting social innovation, social enterprises or just start-ups.

A circular notion of growth

Firstly, the presentation of the project’s outcomes was couched in purely economic terms. It measured whether a business had scaled up by whether its revenue hadP1000111 BENISI grown – and then reported that one of the requirements for growth was financial investment. An unsurprising deduction. Even less surprising is that innovations that generate revenue are easier to scale. The only social outcome reported was employment growth, which is a by-product of revenue growth rather than a social outcome in itself. Social impact can grow even without revenue growth – for instance if a better method of delivering social services was replicated. If it was more efficient, revenue might even fall. In fact many ‘social innovations’ rely on using IT to cut the cost of service provision, and along with it cut the jobs they provide.

A circular notion of impact

Then there was the workshop on impact measurement, in which I was astounded to be told that the three factors making for impact are the values of its workers, the corporate culture and the management methods. That’s all very well, but these are not indicators of impact. They are drivers of impact, or as another participant contributed, indicators of a capacity to achieve impact. Impact is what happens in the outside world, and is about improved quality of life for the enterprise’s intended beneficiaries. Intention should not be confused with success.
Regrettably values, culture and management are not enough – witness how many social enterprises run by the best-intentioned value-led people you could possibly imagine nevertheless go bust and fail to achieve any impact.

Where’s the evidence?

Maybe BENISI could not have been expected to prove scaling in a 3-year timeframe. Maybe the project has served its purpose in making social innovation visible to a larger number of people – reportedly 14,000 have been reached.
But there is deep confusion over what the object of the exercise was. The discourse was about social enterprise, but no one is measuring these enterprises’ social impact – or at least the summary report did not attempt to make any sense of what social impacts the 300 projects did report. Surely one must at least one of them must have got some clients into jobs, or taken x tons of poisonous heavy metals out the waste stream, or housed some poor people, or cut its energy consumption, or even just got some letters of appreciation from its clients?
Unless an enterprise has a notion of what it is trying to change, and measures and reports on whether it is achieving that, then it is not a social enterprise. Having an explicit social goal is one of the principles of social enterprise the European Commission set out in the Social Business Initiative.
Social enterprises reportedly measure impact mostly as an internal management tool (“you can’t manage what you can’t measure”), but it’s also useful in building customer loyalty and essential in getting impact investors on board. Also see EVPA guide.
Public funders like the ESF are also keen to fund social innovation – but taxpayers’ money has to been seen to be benefitting somebody. Otherwise the fascination will fade.

Social what?

It seems to me that the Impact Hubs are hard at work promoting start-ups, and that many of these will be innovative in some way, but that doesn’t make it social innovation and it doesn’t make the start-ups social enterprises.
I also missed any explanation of what the different methods for scaling are – are they social franchising or organic growth or new products or new markets or acquisition or what? And then I’d like to have known which of them were tried, and which worked best in the sample of 300 enterprises. I was left wondering whether scaling is any different from good old growth. Maybe it is just that ‘growth’ is a taboo word which is too reminiscent of capitalist economics.
I left when a speaker pronounced that it was a problem that no social enterprise had yet done an IPO. That’s a key feature of a social enterprise – it can’t be floated on the stock market as a financial investment!
So that’s the trouble: social innovation is everything to everybody, and the name of social enterprise is being taken in vain.
To protect the guilty, this report is made under Chatham House rules.

Horizontigo 27 February 2016

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CIMG9333 Horizontigo. Twiske mill in the distanceI thought I’d coined a new word to describe that feeling of disorientation I still get when faced with an entirely unrelievedly flat landscape – horizontigo. It still gets to me even after 2 decades of constantly travelling through it in Flanders and Holland; I long for a rolling Chiltern hill or a Yorkshire moor.
So I was disappointed to find the Urban Dictionary has got there first, defining it as the feeling you are going backwards when the vehicle next to you starts up. I think the Germans have a great train-related word for that, but I can’t find it.

3 factors in mainstreaming social innovations: needs, social policy-makers and financers 24 February 2016

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I’ve just been at the kick-off meeting of the Social Innovation Community (SIC) project, which involves many of the big names in social innovation and is co-ordinated by AEIDL. Its job is to establish a Europe-wide community of social innovators, comprised of 8 or more networks on issues such as public sector innovation, corporate innovation, digital innovation and the social economy.
I was struck by the debate on which part of the phrase ‘social innovation’ is more important. For ZSI in Vienna, the more important point is that innovation policy should become more social. For me, the point is that social policy-makers should become more innovative.
It seems to me to be misleading to model social innovation too closely on the model of technological innovation. New products are often invented out of love for the product itself – a desire to improve the way something works. Inventions become innovations once they have successfully made it to the market – i.e. they are economically successful. The main beneficiaries are the producer and the purveyors of the new thing.
Social innovation on the other hand has to start with the apprehension of a human need, and the people who benefit will typically not be the inventor or the purveyor, but the clients. Ideally, as in the case of a co-operative, both producers and customers will benefit, and altruism and self-interest will both be satisfied.
In mainstreaming social innovations, it seems vital that the theoreticians of innovation as a process take a back seat and prioritise three things:
– the identification of need, through stakeholder participation and mapping
– the engagement of social policy-makers who are the people who can close the implementation gap
– the bringing on board of the institutions which can provide finance for social innovations – including public authorities, funds likes the European Social Fund and corporate philanthropists as well as crowdfunding platforms.

New beer and old trams 24 February 2016

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I’m delighted to have discovered, albeit 7 months after its opening, Brussels’s 3rd brewery . The first is the venerable Cantillon and the second is my staple  Senne, which is currently brewed on the wrong side of the tracks in the not-to-be-dreaded Molenbeek) but, being faced with 30% annual growth, is soon to move to Tour & Taxis. En Stoemlings is just round the corner from the renovated art nouveau Palais du Vin with its restaurant, conference centre, small business incubators (one of whose tenants uses the brewery’s spent grain to grow mushrooms) and excellent biomarché. What complementarity! It’s making the Rue des Tanneurs a very hip place to be.

En Stoemelings – a Brussels phrase meaning ‘on the sly’ – brews a 7% triple called Curieuse Neus which I will report back on when I’ve had the chance to extract it from its 75cl bottle. They say it is well balanced as they are leaving very hoppy beers (the IPA craze) to Senne, and recommend it be drunk cold, which I hesitate to do but will experiment with. What’s more, the beer-and-trams nexus heaves back into view with the forthcoming launch of draught lemon-flavoured Geele Tram (in memory of the town’s old tram livery) at Moeder Lambic in Place Fontainas.

Brasserie Stoemelings
Rue du Miroir 1, 1000 Bruxelles
https://www.facebook.com/enstoemelings

Late news: Yet another beer-tram-wholefood triad – the Beerdays on 14-15 May 2016 at the Ecuries van de Tram in Schaerbeek.

EU funding for sustainability and inclusion 22 February 2016

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The Green Group in the European Parliament has compiled a very useful compendium of sources of European funding for sustainability and inclusion. Your Guide to EU Funding covers the ESF (p14), CLLD (p19), FEAD (p25) and everything else from Horizon 2020 downwards.

Download: http://www.greens-efa.eu/fileadmin/dam/Documents/2014_2020_YourGuidetoEUFundingLowRES.pdf

By contrast, as part of building up the European Fund for Strategic Investments (EFSI), the Commission has issued guidance on how to combine public and private funds – for instance in a ‘layered fund’ where the Structural Funds can be used to limit the risk too private investors.

Webpage: http://ec.europa.eu/regional_policy/en/newsroom/news/2016/02/22-02-2016-investment-plan-for-europe-new-guidelines-on-combining-european-structural-and-investment-funds-with-the-efsi

How to use CLLD 21 February 2016

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LEADER in peopleCommunity-led local development means delegating development decisions to multistakeholder Local Action Groups. There’s a goldmine of info on how to implement CLLD from the FARNET transnational conference in Edinburgh on 8-10 Dec 15.

Well-proven through LEADER, CLLD is now taking off more broadly with €9.3 bn of ESIF funds allocated across 28 Member States and an expected 2,500 rural areas and 300 fisheries areas setting up LAGs and FLAGs. CLLD is also possible in urban areas in 11 MSs.
One key tip is how Poland uses 3 simplified cost options (SCOs), for:
– a lump sum for preparatory support (rather like the €15,000 preparatory grant in Flanders’s ESF transationality call in Jan 16 [link]
– a flat rate for running costs and animation
– a lump sum for business start-up

Another is how Sweden is using CLLD to integate migrants

Social innovation & migration 5 February 2016

Posted by cooperatoby in Social enterprise.
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I’ve been thinking briefly about the relevance of social innovation to migration. Many social innovations rely on one of two mechanisms: user involvement and new technologies.

On the first point, the people who facilitate migration are typically portrayed as exploiters – people traffickers – but they are clearly fulling a market niche. They are providing services that migrants want to buy. The principal problems are price and quality – i.e. a high profit is being made through providing unreliable and dangerous transport and accommodation. If the public sector is unwilling or unable to find solutions, and the private sector exploitative, is there a third way?

Could one look at addressing the problem from the users’ point of view? Before the Second World War, migrant services like the famous ”Kindertransport” were laid on by philanthropists. Today, those looking to emigrate for whatever reason could form co-operatives to manage good value, safe means of transport.

On the second point, migrants already apply new technologies to this social problem, even if only by using Google Maps. But surely some Uber-like matching of supply and demand could also be useful.

Objecting that all this is illegal is not only inaccurate but beside the point: just as in treating drug addiction as a medical rather than a criminal issue, this is all on the principle of harm reduction.

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