Social enterprises in Europe

The UK Government 2003 defined S.E. as businesses with primarily social objectives, whose surpluses are generated through the marketing and trading of goods and services which are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners. Thus it can be seen that S.E. organisations are autonomous businesses with governance structures based on participation by stakeholders. The UK Government has viewed the development of S.E. as the potential solution to area based deprivation by being an alternative vehicle for the delivery of formerly public funded services as well as helping to provide employment for youth and other excluded members of society (Teasdale et al.2013). In the UK S.E. have achieved high growth rates with success in pursuing their aims of empowering and shifting power to local communities, to tailor approaches to meet local circumstances and to encourage young people into work, be entrepreneurial and take an active role in their communities (Chell et al 2010)  The S.E. UK 2015 survey found that the social enterprise sector is a dynamic movement in which 49% of all social enterprises are five years old or less and  the majority have reported a surplus that allows them to further their social and environmental aims.

Evidence suggests that many successful S.E. in the more developed western and southern European countries have grown by developing their organizational capacity. This has allowed such organisations to achieve the needed investment funding to deliver their aspirations and mission statements. The former focus of social enterprises looking for grant aid to support an exciting new idea needs to change; social entrepreneurs, S.E. managers and their potential investors must recognize that excellence in innovation is insufficient on its own to generate lasting business results. The co-production of local solutions to social problems needs S.E. organizations to be innovative and have the capacity to attract investors by being able to demonstrate their impact and develop the organisational profile, leadership and management approach to deliver the services and goods required in the locality.

In the northern, central and eastern parts of Europe the concept of S.E. is not yet fully appreciated or understood and its potential as a vehicle to tackle youth unemployment, and consequent social and economic exclusion in disadvantaged locations is subsequently not as widely recognised.  As a result there is a need to build capacity in this sector on a cross European basis so as to enable existing social S.E. and new potential social entrepreneurs to develop, grow and become sustainable.