Job creation through social entrepreneurship
Current issues in social entrepreneurship
- The European Commission published recommendations to the Member States on the implementation of the social economy action plan. The proposal aims to create favourable conditions for social economy organisations to thrive and grow, and raise awareness of their potential, particularly in creating quality jobs, supporting innovation and social inclusion.
- The book Social enterprises is intended for all those interested in social entrepreneurship. It is also suitable as a textbook. The book discusses the diverse opportunities offered by social enterprises from different perspectives, including examples.
- In May 2023, the Government’s analysis, assessment and research activities published a study on the current state and effectiveness of social innovation activities of Finnish social enterprises and on the needs for support and funding. Read more:
- During the 2021–2027 funding period, funding from ESF+ will be used to implement a national coordination project to improve the business conditions of social enterprises. The coordination project supports the implementation of the national strategy for social enterprises and creates networks for those involved in the theme of social entrepreneurship and improved business competence of the social economy. Read more:
Centre of Expertise for Social Enterprises
Finland’s strategy for social enterprises was adopted in 2021. One of its key objectives is to employ people with impaired capacity to work as well as others who are in a difficult labour market position.
- Strategy for Social Enterprises (Publications of the Ministry of Economic Affairs and Employment 2021:41)
The strategy is implemented by the Centre of Expertise for Social Enterprises. The Ministry of Economic Affairs and Employment granted EUR 3 million in discretionary government grants for its launch in 2021–2023. The project is coordinated by the Finnish Association of Social Enterprises Arvo. The other participants are Diaconia University of Applied Sciences, Rehabilitation Foundation, Pellervo Coop Centre, Silta-Valmennusyhdistys and Vates Foundation.
The Centre’s tasks include:
- creating national advisory and guidance services specialising in social enterprises and introducing measures to raise awareness of the business model among experts working in business and employment services as well as in entrepreneurship education in educational institutions.
- systematising statistics and data collection on social enterprises and promoting research in the area
- increasing skills in responsible and impact-based business among social enterprises
- strengthening structures and network cooperation that support the expansion and commercialisation of social innovations
- developing national models for employing people with partial work ability and others in a difficult labour market situation as part of social entrepreneurship and strengthening the networks of social enterprises that integrate people into the work
- finding ways to market social enterprises and assessing the need for new funding models and opportunities for expansion.
The Centre’s services can benefit companies and those interested in social entrepreneurship as well as educational and research institutions, ELY Centres, regional business services, and other organisations providing public business and financing services.
The website of the Centre of Expertise for Social Enterprises contains a large amount of information to support social entrepreneurship. For example, information on different social enterprises by industry, size, area and type of company is available on the data pages.
One of the Centre’s key objectives is to increase the number of jobs available to people with impaired capacity to work and others who are in a difficult labour market position. The Centre of Expertise has prepared a policy recommendation on the objectives and measures to help social enterprises create new jobs for 100,000 people, especially those with impaired capacity to work and others who need support in their employment. The means for this already exist, and no additional public funding will be needed for their introduction.
EU social economy supports social entrepreneurship
Social economy organisations are corporations that put social and environmental objectives first. They also invest most of their revenue to promote these objectives. The EU’s objectives therefore support the activities of social enterprises and the Centre of Expertise for Social Enterprises in Finland.
Promoting the social economy is based on the benefits that it can bring for employment and the economy in Europe as a whole. The Commission published recommendations to the Member States on the implementation of the social economy action plan in summer 2023.
Its implementation will focus on:
- improving the operating conditions for the social economy
- providing development opportunities for those involved in the social economy
- raising awareness of the social economy
The European Commission’s industrial strategy includes 14 industrial ecosystems, one of which is related to the digital green transition of the local and social economy.
In summer 2022, the OECD Council also published its recommendations on the social and solidarity economy and social innovation. The recommendations resemble those issued by the EU, but take a slightly more practical approach. The International Labour Organization (ILO) Resolution on concerning decent work and the social and solidarity economy also dates back to 2022.
What is a social enterprise?
A social enterprise
- engages in business activities in order to achieve its social objective
- uses most of its profits or surplus to promote its social objective
- confirms this objective in the articles of association or rules of the corporation.
A social enterprise emphasises responsibility, openness and transparency in its activities as well as inclusion and democracy in its administrative model.
A social enterprise can be
- a limited liability company
- a co-operative, or
- a foundation or association engaged in business activity
Social enterprises do not have a special status based on legislation and they do not receive more public financial support than other companies.
There are approximately 3,500 social enterprises in Finland with a combined turnover of over EUR 6 billion. The majority of companies operate in the health and social services, environmental, recycling and employment services sectors. They employ more than 60,000 people.
Read more about them on the website of the Centre of Expertise for Social Enterprises at yyo.fi/en/home/
Kimmo Ruth, Ministry of Economic Affairs and Employment