Ulla Engelmann: “Social economy and social innovation are part of the pillar of social rights”

Ulla Engelmann: “Social economy and social innovation are part of the pillar of social rights”
01/08/2018
The Head of Unit for Clusters, Social Economy and Entrepreneurship at the EC has pointed out that traditional industries and social economy enterprises are creating value together. This is clear trend of future for Europe

Ulla Engelmann is the Head of Unit for Clusters, Social Economy and Entrepreneurship at European Commission. Last May she visited Navarra because, so far, it is the only European region including “social economy” into its Smart Specialisation Strategy (S3) - an innovative approach that aims to boost growth and jobs in Europe, by enabling each region to identify and develop its own competitive advantages.

The social economy is generally defined as the proportion of the economy that aims at making profits for people other than investors and owners, including cooperatives, non-profit associations, mutual societies, foundations or even in some countries commercial enterprises with societal concerns. The European Commission has placed the focus on these initiatives as potential solutions for many social problems in Europe, empowering a social economy through different platforms and projects.

How can the social economy help the industrialisation of the EU? What are the new initiatives and experiences that are being developed though this innovation process?

We realised that social economy requires many diverse policies and it has different political dimensions. This is way the EU decided to include it in the documents of the new industrial policy. An important and growing group of the social economy are the social enterprises. Their main objective is to generate a social or environmental impact in the interest of the general public. To generate a business environment that will promote the social economy, policy-makers need to ensure that the specificities of these enterprises, like ethos, working style, corporate governance, specific accounting modes, asset locks, profits retaining or special 'social' objectives, are considered. Right now, social enterprises are struggling to find the right funding opportunities due to the lack of understanding of their functioning and their small size.

The Commission finances projects to review legislation, share good practices, organise awareness raising events and collect statistical data for cooperatives, mutuals and social enterprises.

One of the workshops of this new industry age took place in the region of Navarre (Spain) where the new industrial policy was highlighted together with the concept of social economy. The workshop was called: "Social economy, social innovation and industrialisation". The event was part of a pilot European Social Economy Regions. Similar pilots are being developed in more than 32 regions from 16 European countries. The Smart Specialisation Strategy of Navarra, a roadmap for the economic development of the community, identifies the main tools needed to develop this objective, such as the preparation of an industrial plan, a cluster policy, an entrepreneurship plan, an internationalisation plan and the preparation of a Social Economy Plan.

The EU's social economy sector, which involves the industry, requires unique support and policy responses to take advantage of the sector's innovation capacity. The first objective of this platform will be to develop a mapping exercise to offer a more detailed vision of the actions of the social economy sector in relation to the policies, practices and principles of smart specialisation. It will also seek to highlight examples of how EU regions and actors are working with partners in the social economy to support the objectives of economic growth, innovation and competitiveness. As a secondary goal, it aims to develop an action to encourage regional actors, so that the regions that are working with their social economy sectors can promote inclusive growth, employment and innovation.

We have a high level group on social economy and a high-level industry group. So, in this workshop we will have all kinds of experts in the social area. The governance of the European Union involves social economy.

What do you think is the feeling regarding social economy in big companies?

In order to understand company attitudes and to establish a link between traditional enterprises and social economy enterprises, we have requested a study to investigate which are the best ways to link both sectors, traditional and social, and which are the main barriers. And at the “Creating value together”, conference on the 4th July, in Brussels we looked into the links between traditional enterprises and social enterprises and we found a lot of very different but good practices. Soon this study will be released and will give the companies an idea on how to engage social economy enterprises.

The European Commission policies are focusing more on aspects such as social challenges or the inclusion of social innovation actions in the projects they finance. Which is the main reason for this emphasis during the last years? Have there been any turning points?

The European Commission published the Pillar of Social Rights during the summit that took place in November last year. It’s linked to the declaration made in the “Social Summit for Fair Jobs and Growth” that took place in Gothenburg, where they considered the social economy as an essential part of the future labour market. Social economy and social innovation are part of this pillar. We really highlight the importance of having a European pillar of social rights.

As well as the regulatory contents of the European laws, there are some rules that big companies must take seriously regarding the social economy because they must promote social responsibility. Is this a big step into the subject?

That is why we established a link between traditional enterprises and social economy enterprises and are now looking forward to getting the study wrapped up. We will then see which are going to be the next steps.

We have already to highlight the fact that since a decade, new legal forms are emerging in different countries, encouraging traditional business to serve a (social, societal, environmental) mission defined in the social object, opposable by the stakeholders, with their economic performances.

The "mission led business" overcomes the discretionary approach of the corporate social responsibility (CSR) policies, assuming an enforceability of its engagements regarding extra financial impacts. It establishes new governance rules and repositions the business within society.

In the dynamism of solidary and social economy, it assumes its economic performances and activities impact measure research. The subject raises numerous questions about ownership, governance, enforceability of strategic decisions for various stakeholders that we will need to reflect on.

In the context of entrepreneurship, start-ups and accelerators, which is the role of the social economy? Could it be a development engine for this ecosystem?

Yes, this was also one of the trends of this conference where we looked in. We emphasised the role of clusters, because clusters can help to promote start-ups and accelerators. We looked at how we can create a link between social clusters and how this works with the social economy enterprises. We realised that clusters have shared value, and even though it is something recent, we are looking into how clusters can become competitive companies and how they can be mutually dependent with the health of the communities around it.

At your conference in Pamplona, you also spoke about the role of disruptive technologies such as artificial intelligence, is it clear that its application is also necessary for social improvement?

Yes, it is. These disruptive technologies will have an effect on other companies and, of course, on the social economy enterprises, so it is important to look for the opportunities that new technologies can bring. We have seen several examples, particularly on how blockchain can help to the transition of the social economy enterprises. We are working on examples to demonstrate which will be the use that society will make of these technologies in the future.

Would you like to emphasise any project?

Yes, we were very pleased that Navarra was part of the pilot. We are eager that the regions participate all together (32 countries) for social economy, because it is a real engagement; so it is very important that we reach these cities and bring them together.

Interview and photo by Susana Garayoa