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Ecosystem means self-organisation 2 July 2013

Posted by cooperatoby in social economy, Social enterprise.
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tangleThe trope of describing the world – real or desired – of social enterprise as an ‘ecosystem’ has become popular, and was given poetic wings by the speech of Commissioner László Andor at the launch conference of the Social Business Initiative in November 2011 (inspired one may well imagine by Gerhard Bräunling’s fertile imagination).

When talking of recommendations for government policy, as in the Social Enterpreneurship Network, I prefer to talk of a “comprehensive support environment”. But the biological imagery sets one’s mind thinking. There are good grounds to draw analogies from the natural world when trying to describe the behaviour of humans and their organisations – after all the world has survived so far so by Darwinian principles it must have got something right. Therefore organisations that behave in the same way are more likely to survive. Hence for instance Jon Walker’s application of Stafford Beer’s Viable Systems Model or Keith Richardson’s comparison of social franchising to flocking starlings.

Red in tooth and claw

The speech looked at all the good parts of an ecosystem. It invited member states and other actors to become enabling and ‘responsible gardeners’ which ensure water and fertiliser, facilitate pollination, minimise pollution, and tend to the life cycle. Responsible gardeners don’t try to drive evolution but rather to strengthen endogenous systems.

But ecosystems are not cuddly. One of the most basic concepts is the food chain – a system which has weaker and stronger elements ineluctably linked by the process of death and consumption. A second concept is that of dynamic equilibrium, according to which there will be a continuous process of death and renewal which moves forward through continuous creative destruction. We need then to look at what sorts of social enterprises will starve and die out (go bankrupt), which will be eaten up (taken over) and which will degenerate through an excess of inbreeding. Supply your own examples.

To cultivate biodiversity we ought also to try to prevent ecosystem collapse, where the environmental conditions become so harsh that life is wiped out. We ought to try to build ecological niches – safe havens where species can carve out enough space to live beneath the radar of more powerful competitors.

We should also be aware that innovation, like evolution, is slow and random: a mutation in a gene enables a species to succeed in a certain niche, and then other species rearrange themselves around this new kid on the block. But the mutation and the niche are not planned by a divine intelligence.

Organise!

In some ways this atavism is misleading, because competition is at the heart of ecosystems, and what civilisation allows humankind to do is to rise above brute competition, and to promote loftier values. In the niches that social enterprises occupy, competition takes place in more than one dimension. Social enterprises strive to win hearts and minds as well as fill pockets and bellies.

If we want to shift the point of equilibrium of the banking and business system towards satisfying human needs then we should seek to strengthen self-reinforcing mechanisms – positive feedback loops. These principally comprise all the federal and membership bodies that go to make up a movement, which provide role models, share ideas, boost confidence, help through difficult patches and reward success. They include the more technical types of network such as through consortia and social franchising.

Public bodies should support such self-organisation, not view it as ‘rent-seeking behaviour’ or an unnecessary overhead. This is the thought breakthrough in Commissioner Andor’s speech referred to above.

Why is it all kicking off? 24 January 2012

Posted by cooperatoby in cooperative.
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Paul Mason in his Guardian video says that the Capitalist Realism of the Neocons – the belief that while we studied reality they were remaking it – has come crashing to a halt. A generation has had the future they predicted cancelled just like that, and some have adopted very radical beliefs: from Lib Dem to Black Block anarchist. Many of them don’t read ‘old stuff’, but rely on social media, which are consistently 14 hours ahead of the mainstream. In the 20th century telephone companies extracted value from the network effect; what today’s protesters are doing is extracting another kind of value, which is non-monetary. Social media give you a free hit of momentum – and of ‘dis-momentum’ – protesters know when to swarm and when to break off. Sociologists have thought this mercurial nature of the social media generation is a weakness, but it can be a strength.

There seems to be a link with the flocking behaviour of birds like starlings, the preferred image of the European Social Franchising Network.

Europe’s social franchisers – doomed to succeed 2 November 2011

Posted by cooperatoby in cooperative, EU, social economy, Social enterprise.
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Research recently carried out by the European Social Franchising Network (ESFN) shows that Europe’s social franchises probably employ around 13,000 people – two-thirds of whom are disadvantaged or disabled. And they are growing fast. The ESFN conference held on 18th October 2011 in Coin Street Neighbourhood Centre on London’s South Bank celebrated this fact.

Social franchising conference, Coin St, 18 Oct 11. L-R: Jürgen Blondeel, Emmanuel Vallens, Bosse Olsson, Toby Johnson, Elisabeth Mattsson, Ian Rothwell

Social franchising has slowly built up quite a head of steam among policy-makers, and ESFN itself, established as a European Economic Interest Group in 2008, now has 31 member businesses. The conference attracted people from 11 countries – including not only many young social franchisors of the future, but also UK’s Minister for Civil Society, Nick Hurd. He said that we need social franchises more than ever to resolve social problems in a vital way, by giving people a voice and keeping government of the way. He pointed to the need for better links between social enterprises and the financial establishment, and looked forward to the launch of Big Society Capital with £600 million to invest. There will also be a £10 million technical assistance fund to help social enterprises become ready for investment.

Introducing the event, ESFN’s chair, Keith Richardson, positioned social franchising as being the tool to create a step change in the size of the social economy, taking it from being 10% of the economy to being 25%. Firstly, he said, it is essentially about a structured exchange of information for mutual benefit. Secondly, it is market-oriented: unlike other business development techniques, it lives or dies with the success of the businesses it creates. Its strength is that when the franchises own the franchisor, all the parties share the same interest in growth, because costs fall dramatically with scale. Mr Richardson hoped that through such solidarity, social enterprises created to preserve public services could avoid the fate of the employee-owned bus companies of the 80s, which were picked off one by one by larger firms.

Inspiring examples

The scene was set by inspiring examples from several countries. Elisabet Mattsson and Renate Goergen of Le Mat described their transnational model, in which hotel chains in Italy and Sweden share an umbrella. Alistair Wilson told how the School for Social Entrepreneurs has spread round the globe. Ewa Sadowska described how, after the fall of communism in Poland, her parents set up the Barka Foundation which settled in a disused collective farm and turned it into a home for people suffering from mental illness. This has grown into a system of 60 therapeutic, education, employment and housing initiatives across Poland. She herself has come to London to work with Polish immigrants who have fallen on hard times. Sven Huysmans described how FIETSenWERK (Bike & Work) provides 600 full-time equivalent jobs servicing bicycles at railway stations across Flanders.

The conference also heard from what is believed to be the largest social franchise, Komosie, which operates 140 enterprises in Flanders. Komosie started out renovating and retailing second-hand goods, but has since branched out into energy saving.

A 21st century model

The event discussed the theoretical foundations of the social franchising idea as well as its practical implementation and benefits. Keith Richardson, Chair of the ESFN, talked about how starlings manage to co-operate without having a boss because their self-interest is in harmony with the collective interest. Robin Murray of the Young Foundation gave hope to our new wave social franchisors by drawing up a 2 x 2 matrix: he set out the two dimensions of subsidiarity – top-down versus bottom-up – and openness – standardisation versus the ‘generative’ method of social franchising. The way forward in his view is to be generative, and to open up possibilities for new enterprises, rather than forcing them into straightjacket. This seems to describe exactly the way franchisers like Le Mat describe and think of themselves.
He also reframed the process that social franchising enables, talking about it not as scaling up (a mass-production concept) but as diffusion. “In the social economy we sometimes haven’t recognised the benefits of structure,” he said. “Social franchising means moving from implicit to explicit systems. I think social franchising can become a real model for the expansion of the social economy.”

Echoing Nick Hurd, he felt that policy had laid too much stress on new starts and not enough on helping existing firms to expand. A 21st-century model of how to expand would include not only demand-side measures such as a kitemark, common sales and marketing, lobbying and policy campaigning, but also supply-side measures like training, technology, systems, methods and supply chains. The goal should be to find a way of reaping the benefits of scale without losing the benefits of smallness.

New EU fund for social enterprises

In the workshop on the European Social Fund, Lloyd Broad from Birmingham city Council, to whom the UK government has delegated the management of transnationality and innovation in the ESF ‘England and Gibraltar’ programme, familiarised us with the recently published Commission proposals for the 2014-2020 period. The ESF has been given four thematic objectives – employment, lifelong learning, inclusion and – in the poorest ‘cohesion’ areas – administrative reform. At least 20% of funds should be allocated to inclusion, and 80% of the money should be concentrated on just four out of 18 ‘investment priorities’. Six of these fall under the heading of social inclusion, and ‘social economy and social enterprise’ is one of these six. Even if governments do not select it – and on the face of it this is unlikely – social enterprise activity can just as well be carried out within other investment priorities such as ‘active inclusion’ or ‘community-led local development’. The overall message is that social enterprise is firmly embedded in the future of the ESF.

The ESF will be worth about €84 billion between 2014 and 2020. But in addition to this, the Commission also proposes to reserve nearly a billion euro for a new programme called the Programme for Social Change and Innovation (PSCI). This brings together the existing Progress programme with EURES and the European Progress Microfinance Facility. It will carry on the existing mutual learning activities such as the social inclusion peer reviews and beef up the international labour exchange role of EURES. Particularly interesting to social franchisors is the intention to practically double the current investment into the EPMF and to open it out to include investment in social enterprises. Approximately €95 million is set aside for social enterprise investment in the seven-year programming period.

At this stage the regulations are not finally agreed. The European Parliament and Council will now consider them, and they should be finalised by the middle of 2012.

What do social enterprises want?

The day closed with a the panel discussion, in which Elisabet Mattsson put forward the priorities for improving the environment for social franchising: a solid legal basis, more and smarter finance, a five-year competence development plan in each country, a mentoring programme and better organisation through long-term networking. For Jürgen Blondeel of Komosie Europe’s biggest social franchise with 4,000 employees, the priorities are development finance for the franchisor for the initial period of 3-5 years and a learning network for franchisors and franchisees on finance and methodology.

From the side of the public authorities, Emmanuel Vallens of the European Commission’s Internal Market DG outlined the content of the forthcoming communication on the Social Business Initiative (SBI). The motive behind the Commission’s rediscovered interest in the social economy is to relaunch the European single market and bring it closer to citizens. This means it should promote not only competitiveness but also social inclusion. The first step in that is to make clear that social enterprise is not just about labour market inclusion, but a much broader concept embracing businesses that make a profit in order to create social value. The SBI will act in three areas:
• access to finance – streamlining the Structural Funds, creating a framework for social investment funds and spreading microfinance;
• visibility – better information about social enterprises, as well as better information to them;
• the regulatory environment – in such areas as legal statutes, public procurement and state aid.

Further information:
European Social Franchising Network: http://www.socialfranchising.coop
Guardian’s Social Enterprise Network article: http://www.guardian.co.uk/social-enterprise-network/2011/oct/10/social-franchising-effective-european-network
Online Q&A session: http://www.guardian.co.uk/social-enterprise-network/2011/oct/19/best-bits-social-franchising-social-enterprise

Gearing up by using intermediary organisations 18 March 2010

Posted by cooperatoby in EU, social economy.
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I’ve been coming across repeated instances of official scepticism of the role of intermediaries in delivering services and benefits to citizens.

It was suggested to me that it is more than a theory of perfect markets. This holds that the problem is an assymetry of information – poor or excluded people don’t benefit from the same quality of information as those they deal with – and so they get exploited. The solution according to this paradigm is better information, training, education. This will supposedly allow everyone to compete under fair conditions. Cf. “There is no such thing as society” (Margaret Thatcher), now toned down to “There is such a thing as society, but it isn’t the state” (David Cameron).

The trouble with this bland worldview is that it minimises the possibility of prejudice, discrimination, , the old boys’ club, class interest… It objectifies needs and believes that they are expressed as demands that can be met by products and services. It leaves out the way that what we desire is a social and cultural construct – and in fact that many of our desires are relative: we desire not the thing itself but a fair distribution of things among us and our neighbours. (This is why ‘poverty’ is defined as an income of less than 60% of mean income, making it a meaure of inequality not absolute deprivation).

Three fears or arguments may underlie this blinkered view:

1) Bureaucrats aim to be impartial. If you think of individuals as exercising their rights through organising, then you run the risk of being partial, through regulatory capture. (Tools like the register of lobbyists are tinkering with this issue.) Which perversely means you have regulatory capture by deregulators.

2) Desire for efficiency. Intermediaries are accused of “rent-seeking” i.e. trying to take a cut to make the relationship. I think that is clearly contradicted by the facts: most intermediaries are public-spirited and are vastly under-rewarded compared to officials. Who are the real rent-seekers?

3) A recognition of the impossibility of micromanagement. This one I think is perverse. Administrators

    need

intermediary organisations – civil society – to aggregate demands and translate them into policy-friendly terms, and to deliver services and benefits. They are not an overhead – they are a gearing mechanism. To disregard or disrespect them simply adds to the workload and leads to ineffective, badly targeted policy to boot.

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