EXECUTIVE SUMMARY
The Socio-Economic Performance of Social Enterprises
in the Field of Work-Integration (PERSE)
A. SOCIAL ENTERPRISE AND WORK INTEGRATION SOCIAL ENTERPRISE
In almost all industrialised countries, we are currently witnessing a growth in the 'third sector'. In
many ways, this trend represents a new expression of civil society against a background of
economic crisis, weakening of social bonds and difficulties and restructuring of the welfare state.
The persistence of structural unemployment in many countries, the need to reduce public budget
deficits, the difficulties of traditional social policies and the need for more active integration
policies have naturally raised the question of how far the third sector can help to meet these
challenges. In this important debate, we see the emergence of an increasing numbers of
economic initiatives, which have been called 'social enterprises' (SE), driven by a new
entrepreneurial spirit but focused on social aims. These social enterprises are new organisations
within the third sector, but they also reflect a process which derives from older experiences inside
the third sector. In this sense, they reflect a trend involving the whole of the third sector.
Social enterprises have been defined by the EMES group as organisations with an explicit aim to
benefit the community, initiated by a group of citizens and in which the material interest of capital
investors is subject to limits. They place a high value on their independence and on economic
risk-taking related to ongoing socio-economic activity. The previous book by the EMES
(www.emes.net) Research Network, The Emergence of Social Enterprise (Borzaga and Defourny
2001a), traced the most significant developments in social entrepreneurship emerging in Europe.
The final chapters of that book presented an initial attempt to outline a theory of social enterprise:
an 'ideal-typical' social enterprise could be defined as being a 'multiple-goal, multi-stakeholder
and multiple-resource enterprise'.
The main objective of the present project was to further develop this theory of social enterprise
through a comparative analysis of 160 social enterprises in Europe. In order to do so, we chose
an empirical field which is emblematic of the dynamics of social enterprises, namely 'work
integration social enterprises' (WISEs), as it is a major sphere of activity of social enterprises in
Europe. The main goal of work integration social enterprises is to help poorly qualified
unemployed people who are at risk of permanent exclusion from the labour market. These
enterprises integrate them back into work and society in general through productive acivity.
Beside work integration, social enterprises are also active in the spheres of the rapidly developing
sector of personal and social services; these two areas sometimes overlap since, in some cases,
work integration social enterprises produce this latter type of services.
If the 160 WISEs of the PERSE sample are active in a wide spectrum of activities, an important
subset of WISEs provide public goods, such as maintenance of public spaces, or quasi-public
goods (childcare, elderly care, second hand shops for needy people, delivery of meals, shopping,
transport services for people with reduced mobility….) and valorise this kind of production in itself,
and not only as a means to achieve their integration goal. In this perspective, the public mission
of these WISEs is twofold: integration of poorly qualified unemployed people, who are at risk of
permanent exclusion from the labour market, and production of a (quasi)-public good.
Forty-four different types of WISES have been identified. They address, through various modes of
integration, the problems of long-term unemployment and occupational inactivity of
disadvantaged people. Four main groups have been distinghuished.
- The first group includes enterprises offering occupational integration supported by
permanent 'subsidies'. This group includes mostly the oldest forms of WISEs, i.e.
those for the handicapped. These organisations exist in most European countries and
aim to remedy the discrepancy between the productivity required by the 'classical'
labour market and the capacities of the handicapped. It was decided to leave aside, in
the present study, social enterprises for the disabled, which were pionneers in the
field, in the 1960s, in a majority of European countries. As a matter of fact, in most
cases, these initiatives have been heavily regulated by public bodies and now
constitute a field of its own. However, some work integration social enterprise
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integrate disabled persons besides other persons who are at risk of permanent
exclusion in the labour market; this kind of organisations is represented in our sample.
- A second group is constituted by the types of WISEs that provide permanent, selfsubsidised employment, i.e. stable jobs, economically sustainable in the medium
term, to people who are disadvantaged in the labour market. In the initial stage, public
subsidies are granted to make up for the lack of productivity of the target group.
These subsidies are often temporary, and they taper off until the workers become
competitive in the mainstream labour market. After this subsidised stage, these
WISEs must pay the workers in integration from their own resources.
- A third large group comprises the types of WISEs that mostly aim to (re)socialise
people through productive activities. These WISEs target able-bodied workers with
serious psycho-social problems or handicapped people. They generally do not
provide real work but rather sheltered employment and not a work contract as such
(food and, most often, shelter in exchange for work, for example).
- The fourth group – the largest among the WISEs studied – comprises WISEs offering
transitional employment or traineeships. These inititatives, even though they all share
a common goal – namely to help workers in integration find work in the mainstream
labour market – are sometimes very different in the way they implement this goal.
Finally, it should be mentioned that several types of WISE are difficult to classify in any of these
four main groups because they implement simultaneously several modes of integration.
B. PROFILES AND TRAJECTORIES OF THE DISADVANTAGED WORKERS
The European sample of disadvantaged workers employed by work integration social enterprises
is quite large; it included 949 disadvantaged workers. For each WISE, a sample of approximately
seven disadvantaged workers who had entered the social enterprise in year 2001 was
constituted. However, the flow of workers who had entered social enterprises during the year
2001 varied among countries, and in some cases it has not been possible to consider only the
year 2001, as the flow was too weak; in such cases, the period has been enlarged to include the
years 2000 and 2002. Consequently, the sample is constituted of workers who entered the social
enterprise in the years 2000, 2001 and 2002. Managers have been interviewed about the
situation of these workers more or less two years after their entry in the WISE.
At the European level, when studying the characteristics and trajectories of these workers, the
first main conclusion is that workers employed by WISEs are effectively disadvantaged, both
regarding their labour market situation (unemployment) or/and with respect to other factors (social
marginalisation, low education, family problems). The target group of the social enterprises is
thus the one that might have been expected. But beyond the fact that the workers share the
characteristic of being disadvantaged in one way or another, our results also show that the target
group of WISEs is highly heterogeneous and can be divided into different subgroups. These
persons experience different situations in the labour market. Some of them suffer from an
important lack of skills, and might not be able to find a job due to a shortage of jobs adapted to
their kind of profile. The question in this case is whether the social enterprise can develop their
human capital sufficiently to enable them to find a job in the normal labour market or if social
enterprises can develop stable jobs adapted to their profiles. At the opposite end of the spectrum,
others groups seem easily employable; they most probably suffer from temporary
'unemployability'.
Concerning the trajectories of the workers, the majority (54.3 per cent) of the 949 workers
constituting the sample were still employed in the WISE about two years after their entry; among
those who had left the WISE, some had found a new job in another organisation, and some
others had ended the project successfully, gaining professional skills and personal autonomy.
There is also a number of people who did not complete the integration programme and left the
social enterprise before their expected time of departure for any reason (health problem, for
instance). For those still employed in the WISE, levels of income had increased thanks to the
employment experience inside the WISE; their personal abilities had also improved, thus helping
these people in the process of gaining or regaining autonomy. For those who had left the WISE,
our data indicate that their human capital had also increased significantly through their stay in the
WISE, although this improvement was more pronounced among the persons who were still in the
WISE than among those who had left it.
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Another important conclusion is the existence of quite significant differences among the WISES of
the sample, especially regarding the types of integration schemes, as underlined above. If it is
possible, the workers do not leave autonomously the social enterprise, but the decision is hardly
influenced by the programmes offered. If the WISE is a tool for fixed-term programmes designed
for specific target groups (such as long-term unemployed people), the workers benefiting from the
programme have to leave the social enterprise at the end of it; conversely, if the WISE has the
purpose of providing stable jobs to disadvantaged workers, it is more common for the workers to
stay inside the organisation. But our results tend to show that the types of programs are not
sufficiently linked to the actual profiles of the workers. If we cross-analyse the situation of the
workers (still employed in the WISE or having left it) with data about age, sex, working status
before entering the WISE, level of education, typology of disadvantage and level of employability,
it appears that, surprisingly, none of these factors has an impact. The main factor influencing the
situation of the workers seems to be the type of integration scheme, defined by labour market
authorities in order to support certain kinds of workers, in which the workers are engaged.
Other signs of the links with public bodies are shown by the analysis of the channels of entry of
the workers in the social enterprise; this analysis also clearly reveals the relations of social
enterprises with the welfare systems. The channels of entry are quite strongly influenced by the
relationship between the social enterprise and the local services, which constitute the privileged
channel for the integration of disadvantaged people. The different strategies enacted by local or
national authorities for the disadvantaged workers in the different countries mirror the different
welfare systems. The analysis of the channels of entry reveals the role played by the various
actors, such as the 'non' role of the labour office in Italy (no worker arrived in the WISEs surveyed
through this channel) or the strong role that this office plays in Germany or in the UK (where half
of the workers entered a WISE through this channel). This is linked to the fact that in some
countries, the WISE constitutes a tool of labour market policy (Germany or UK) while in other
countries, such as Italy, WISEs are actors of social policies. Italian social co-operatives mainly
employ people with social problems, who are directed to the WISEs by the social services offices.
The case of Spain is unique in that the main channel of entry is the recommendation of other
non-profit organisations (37.3%). There is a high level of co-operation with the aforementioned
organisations, and workers often reach WISEs via NPOs and organisations fighting against
poverty, drug addiction, etc.
The success of work integration social enterprises can be estimated in different ways and the
situation can be very different from one WISE to another: in some cases the main goal of the
enterprise is to provide a temporary alternative to a needy condition, while in other cases the
mission is to re-integrate people into society, both in personal and professional terms. WISEs
have a tendency to focus on personal development and rehabilitation rather than only on
instrumental improvements regarding the labour market. Social enterprises pursue a social aim,
which is, for work integration social enterprises, to provide job opportunities for the disadvantaged
workers; and these enterprises also have to deal with a business aim, which is the economic
sustainability of the enterprise. This explains the full involvement of WISEs in active labour
market policies and justifies significant financial support by the public authorities in charge of
labour market policies.
C. THE CORE HYPOTHESES OF THE PERSE PROJECT
The PERSE research project was articulated around three main theoretical ideas:
1. Multiple goals and multiple ownership of social enterprises
One of the main goals of social enterprises is to serve the community. We made the hypothesis
that, in order to develop this mission, the subset of social enterprises active in the area of work
integration – i.e. WISEs - usually have a complex mixture of goals. It could be argued that WISEs'
mission includes at least three different categories of goals: social goals, connected to the
particular mission of social enterprises to benefit the community; economic goals, connected to
the entrepreneurial nature of social enterprises; and socio-political goals, connected to the fact
that social enterprises come from a 'sector' traditionally involved in socio-political action.
Moreover, regarding this mission of work integration and the nature of ownership of social
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enterprises, a hypothesis has been put forward: multi-stakeholder ownership would be an
efficient way to develop this public benefit mission which entails a mix of different goals.
The analysis carried out in the framework of the PERSE project is a qualitative one, based on a
semi-structured questionnaire, submitted by researchers to the managers of WISEs. The latter
had to answer both closed and open questions about their WISE's goal structure and the
composition of their boards.
One of the results of the PERSE project has been to confirm the multiple-goal structure of
European WISEs: nearly all the organizations of the analysed sample declare to have more than
one goal. Moreover, these objectives, as hypothesized by literature, belong in an overwhelming
majority of cases to the following three main categories: occupational and social integration,
production of goods and services and lobbying and advocacy. Production is part of the identity of
WISEs as a support of their work and social integration objective. Indeed, carrying out a
continuous activity of production of goods and services, facing a certain level of economic risk
and pursuing the integration of their workers through a productive activity are all part of WISEs'
mission. Moreover, as regards WISEs' goals structure, it is noteworthy that the multiplicity of
objectives in these organizations can derive not only from the existence of social and
occupational integration goals and production ones but also from the nature of the commercial
activity itself. That is, when WISEs' aim is the production of public interest goods, the general
social aim to serve the community is concretely translated in two different social goals: integration
of disadvantaged people, on the one hand, and production of general interest goods/services
(environmental ones, for instance), on the other.
Regarding the multi-stakeholder nature of WISEs, collected data show that 58 percent of
organizations of the sample involve more than one category of stakeholders in their decisionmaking process. Moreover, data collected within the PERSE project seem to indicate that the
participation of stakeholders in these WISEs leads to the exercise of a real influence within
Boards because of the equilibrated and democratic governance structure.
Some hypotheses about the reasons for the existence of multi-stakeholder structures have been
confronted to empirical elements of analysis. The research project allowed to discard the
hypotheses according to which the multi-stakeholder structure would be linked to the resource
structure of the WISE or would reflect the multiplicity of organizational goals. It can thus be
concluded that, if multi-stakeholder governance is a means to better manage multiple-goal
structures, it is not the only one: WISEs with a single-stakeholder Board can also manage their
multifaceted goals structure. However, this assertion is based on formal elements only:
interviewees were asked about formal participation in the decision-making bodies, but informal
tools potentially linking the organization and its stakeholders were not studied.
2. Multiple resource enterprises
The second set of hypotheses concerns the types of resources mobilised by social enterprises to
sustain their goals: they sell goods and services on the market; public financing generally
supports their public benefit mission; and finally, social enterprise can rely upon volunteer
resources. Therefore, social enterprises are located in an intermediate space between market,
state and community. Thus, this study cannot content itself with merely crunching numbers even
though, as far as monetary resources are concerned, a budgetary analysis is required. One must
then seek to understand how the socio-economic organization is working, by interviewing leaders
of the organization, and thus resolve the issues at stake. This approach was used for a total of
146 enterprises on the basis of the analysis of their accounts for the year 2001 and of a
comprehensive approach based on interviews of WISE managers.
The PERSE study highlighted that it is necessary to go beyond an approach to the funding of
these enterprises according to which WISEs would only mobilise market resources (just like any
other form of enterprise) and non-market resources from the public sector (aiming to make up for
the lack of productivity of their workers in integration and the specific needs of the latter in terms
of support and training). Such a point of view ignores: the reality of the markets in which these
enterprises position themselves thanks to the mobilisation of their social networks; the existence
of socio-politically embedded markets, in which the social and socio-political goals of these
enterprises are taken into account; the importance of the public sector as a source of resources;
and the mobilisation of reciprocity-based resources. These enterprises do not operate using a mix
of market- and redistribution-based resources only; their resource mix is more complex and builds
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upon four types of economic relationship: the market and redistribution, but also the sociopolitically embedded market and reciprocity. Moreover, there appears to be a diversity of ways of
mixing resources according to the goals which are pursued; an innovative typology has been
constructed in this perspective on the basis of a sample of 160 social enterprises.
The need to put the market into perspective
This analysis of the resource mix of WISEs challenges certain preconceptions about these
enterprises on the part of public authorities and of some WISEs' federations, which tend to
apprehend WISEs on the basis of their participation in the market. In their view, redistribution, in
the form of public subsidies, is provided only to compensate for the productivity deficit of the
workers in integration, their social support and training, and the intensive supervision that this
entails. While the analysis of these enterprises' budgets confirms this type of mixed economic
operation, reliant on both the market and redistribution, our approach allows to apprehend in a
more accurate way the various types of resources mobilised by these enterprises and the
mechanisms of involvement of public authorities – which go further than simply making up for the
cost of integration; finally, it underlines the importance of an often ignored economic principle:
reciprocity.
Reciprocity and the re-embedding of market relationships
Beyond support provided by other third sector organisations via direct or indirect aid, and beyond
voluntary involvement on the part of administrators, volunteers and workers, reciprocity also
expresses through the capacity to construct market economic relationships that take into account
WISEs' social and socio-political goals.
The analysis of economic relations between purchasers and WISEs shows that the former are not
only motivated by the search for the maximisation of the interests of exchangers. There is a will to
take the other party into account in the framework of the relations, although the latter are centred
on the exchange of goods and services on the basis of price setting. Granovetter (2000)
highlighted the importance of social networks for the building up and operation of markets,
underlining the reticulated embeddedness of market relations. By highlighting the taking into
account of socio-political goals in the sales of WISEs, the analysis shows that these purchases
reflect not only a reticulated embeddedness of the market but also a socio-political re-embedding
of the market. If, like any other enterprise, WISEs produce market goods and services and if, like
any other enterprise, they are able to call upon local social networks, what seems important - and
is too often ignored — is the recognition, by purchasers, of WISEs' social and socio-political
goals.
These socio-politically embedded markets are not often built with households and the private
sector; they are generally created with public authorities, whose purchases from WISEs are, in
three quarters of the cases, motivated by the latter's social and socio-political objectives, whether
these be simply linked to the integration of disadvantaged workers, or whether public bodies also
recognise the social benefit of their production.
These observations should not lead to the conclusion that work integration enterprises are not
enterprises producing goods and services; they simply demonstrate that the manner in which
these enterprises obtain their orders is very closely linked to their embeddedness in social
networks as well as to the taking into account, by public purchasers, of their work integration
objectives.
The importance of the public sector
Through these purchases, as well as through direct and indirect public subsidies, the public
sector is the main provider of resources to WISEs. WISEs seek to develop their economic
relationships with those public bodies whose calls for tenders include clauses demanding the
best social value instead of the cheapest service.
This socio-political re-embedding is achieved through the mobilisation of redistribution-based
resources which allow individuals in integration to find a job and not to be excluded from the
labour market. It is also achieved through reciprocity which, beyond providing enterprises with
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voluntary resources, also leads to the purchase of services taking into account the social and
socio-political goals of WISEs.
Faced with accusations of unfair competition by the for-profit private sector, WISEs may be
reluctant to highlight their privileged relationship with the public sector and the importance of
reciprocity-based resources for their economic equilibrium, although these elements appear to be
vital. By 'copying' the dominant market vision, they underestimate types of economic resources
that are crucial to their operation: redistribution and reciprocity.
3. Institutionalisation and movement of isomorphism
The dynamic of institutionalisation can lead to a movement of 'isomorphism' on the part of social
enterprises, towards public organisations or for-profit enterprises. Applied to the particular field of
WISEs, the hypothesis of organisations becoming isomorphistic over time would in fact predict
that WISEs would adopt core features of organisations that exhibit different societal functions and
rely on distinctive stakeholder structures, such as for-profit firms or public bureaucracies. Based
upon national reports written by the national research teams of the PERSE project it has been a
special task to deal with these questions by retracing histories of the respective organisational
fields in a wide range of Western European countries. The idea was to portray typical case
histories on the basis of organisational narratives and some hard data, in addition to a review of
the existing literature.
The general framework guiding the in-depth case studies was based on a typology of trends of
organisational change (organisational stability, institutional flexibility, or organisational
metamorphosis). Regardless of the very different configurations in which WISEs have developed
and do still develop, one overarching tendency can be singled out: there is a growing tension
between the economic rationale and the social orientation of the WISEs, the principal challenge
being maintaining the balance between work and social integration purposes, on the one hand,
and productive purposes, on the other hand. The overall question is how WISEs cope with this
challenge.
Mixing resources can be sustainable in organisational fields of work integration through social
business, albeit under specific conditions. WISEs live in precarious environments, and this
research has been seeking to give a name to the sources of this precariousness. Against this
overall background, one final question arises: What is the best national model, or put otherwise:
In which country is the mixing of resources most sustainable and potentially conducive to high(er)
impacts of social integration? Regarding the evidence there is no clear answer to this question.
Our comparative findings suggest that, in every country, more than one single pattern of social,
political and economic embeddedness can be figured out. In each country we find WISEs that
manage to stick to their multiple goal approach, even in hard times. Conversely, the trend of
rising tensions between social and economic goals obviously is an international one, with some
national organisational fields being shaped by bureaucratic state interference to a comparatively
high extent and others tending more towards commercial business. It is noteworthy that these
institutional models, although they give WISEs a firm place in the organisational landscape of a
given society, are not exempt of drawbacks. Likewise, WISEs have been able to emerge and
evolve even in institutionally unfriendly settings. It remains that while national peculiarities matter,
the movement of WISEs has been (and still is) international – with all its ups and downs.
D. WORK INTEGRATION SOCIAL ENTERPRISES
RECOMMENDATIONS FOR POLICY-MAKING
AND
PUBLIC
POLICIES:
Public policies in the field of social enterprises are the results of interactions between the
promoters of the latter and representatives of public bodies. The dynamic of institutionalisation
can lead both to a movement of 'isomorphism' on the part of social enterprises, towards public
organisations or for-profit enterprises, and to the development of innovative public schemes. We
have analysed the multiple interactions between WISEs and public policies through the
progressive institutionalisation of these organisations.
The first European WISEs emerged 'in contestation' of the traditional public policies, without any
WISE-specific legal scheme and without any public support in some countries, or with the support
obtained through the mobilisation of social policies or second labour market programmes in other
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countries. They played a pioneering role in the development of active labour market policies in
the 1980s, implementing the latter before their institutionalisation.
In a second phase, of 'dialogue', in some countries, new public schemes, specific to WISEs, were
developed. But such dialogue has not always been smooth and has not emptied the debate
about the contested nature of WISEs. If public schemes encouraged some initiatives, they also
excluded others, as for instance the WISEs characterised more by a self-help dynamic in France.
More generally, the active labour policies increasingly constituted the framework in which WISEs
developed and somewhat framed their objectives and actions. We can thus see that, as WISEs
are embedded in the socio-political context, they reflect the changing regulatory role of the State,
with also the development, since the end of the 1990s, of the 'activating labour market policies',
that in some cases fostered the co-operation of the public bodies with WISEs.
The accommodation between the views of WISEs and those of public bodies on the nature of the
mission of WISEs seems not to be easy. We can then understand why some WISEs choose not
to enter such a path of institutionalisation, privileging in some cases private paths of
institutionalisation that can coexist with the public one.
Five main policy recommendations can be drawn from theses key results.
1. Keep a wide diversity of integration schemes in the labour policy field in order to allow
WISEs to integrate a variety of profiles of workers
The hiring and occupational integration of disadvantaged workers are at the very heart of WISEs'
mission. Both public authorities and promoters of WISEs agree on this point. However,
differences arise regarding the way in which this integration is understood. We saw that WISEs in
the European Union were able to provide a vast array of integration models. However, the kind of
integration highlighted in most public scheme is a 'springboard integration', in which the workers
are deemed able to acquire, within a determined time, the work experience necessary to allow
them to subsequently find a job in the mainstream labour market – or to stay in the WISE, but
without subsidies – thus allowing the enterprise to hire new disadvantaged workers. This
presupposes that these enterprises hire workers with a more or less similar profile and who are
relatively close to the labour market. This dominant public policy model of WISEs' integration
pushes in some cases WISEs to cream off their workers, hiring only the ones who suffer from
temporary 'unemployability'.
However, the experience of WISEs shows that this profile does not always correspond to the
target groups actually hired and that, for a certain number of workers, who are especially
disadvantaged, this conception of a 'springboard integration' proves inadequate. As a matter of
fact, according to our results, WISEs' target group is highly heterogeneous and can be divided
into different groups. These persons experience very different situations in the labour market. The
analysis of the trajectories of the workers also reveals that a high percentage of workers were still
employed in the social enterprise at the time of interview (58.5%), more or less 2 years after their
entry. A way of taking into account such WISEs' specificity could be to differentiate integration
subsidies according to the type of profile of the worker, allowing some workers to keep a
'sheltered employment' for a longer time. Such experiences exist in some countries, e.g. in Italy,
where social co-operatives show that it can be efficient to develop a certain mix of types
accompanied with differentiated models of subsidisation inside WISEs.
In the absence of a control group, we are aware that we are not able to grasp the net effects of
such policies. Indeed, we can measure the number of participants to the program and the gross
placement rate at the end of it, but we cannot know what would have happened to the
beneficiaries of the program if they had not participated to it. However, for the Belgian sample, we
could measured not only the rough effect of the passage in WISE, but also its net effect, thanks
to the constitution, on the basis of administrative data provided by the public administration, of a
control group. Through the exact matching method, we concluded to a net effect of 47 per cent,
which means that nearly one worker out of two was employed, in the WISE or in another
enterprise, and would not have been so without the WISE. In the light of European research
assessing the net effect of active labour policies, this is an impressive result.
We also computed the direct fiscal impact of hiring a disadvantaged worker in a publicly labelled
WISE. The direct fiscal impact is the difference, for public bodies, between costs and benefits
linked to two distinct situations: the one in which the person is hired by the WISE and the one in
which this same person would have been without the WISE (social assistance, unemployment
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benefits, employment…). This comparison takes into account all the variations regarding fiscal
and para-fiscal benefits (direct and indirect taxes, social contributions…) and costs (social
benefits, work subsidy…). It appears that supporting the WISE does not generate costs for public
bodies. The net benefit for public bodies is comprised between 267.47 and 720.12 euros per
worker and per month. This type of analysis would have to be developed in other countries to
confirm this result in other contexts.
2. Public schemes should recognize the production goal of WISES
A key question in matters of public policies is the recognition of the production goal of WISEs,
especially when this production has a collective dimension, as in the case of social services. As a
matter of fact, if most WISEs consider their goal of production of goods and services as important
(since it is part of their identity of social enterprises carrying out integration through a productive
activity), some of them also pursue a production goal deemed important for society because it is
generating collective benefits and equity (for example, the production of social services). If all
WISE-specific public schemes valorise the production goal as the main support of work
integration, only a few of them recognize this possibility to produce (quasi)-collective goods. And
when it is the case, this collective dimension is rarely sustained by specific public financing, which
renders more difficult for these WISEs to maintain the concomitant pursuit of different collective
goals that characterises them.
The production which has an equity-generating effect has to be partly financed by redistributive
resources and voluntary-based resources. However, it seems that most of the redistributive
resources are linked to the integration goals of the WISEs. A key recommendation arising from
this research is to differentiate public subsidies according to their goal: public subsidies to support
the integration mission and, if justified, other public subsidies to support the production of (quasi)collective goods. One should also note that the double goal orientation is more easily maintained
when the disadvantages of the involved workers remain limited.
Another efficient way for public policies to sustain WISEs' production goal is through the
development of social dimensions in the public markets. Sales to public bodies represent 19 per
cent of the total resources of WISEs. In three quarters of public sector purchases, the social and
socio-political objectives of the social enterprise feature amongst the criteria for choosing the
service provider. This is a way for public bodies to sustain WISEs: through sales motivated by
social or socio-political criteria. In small markets, this can occur in a discretionary way: in the
decision of purchase of a product or service by the public bodies, the social mission of WISE is
also taken into consideration. When the amount of the market is in financial terms above the
threshold established by the Community law, a public call for tenders has to be issued; the
question is then whether social dimensions can be introduced in the public tenders through social
clauses, in order to support the public benefit mission of WISEs. This issue is situated at the
European level, with the debate concerning the evolution of the European legislation and the
possibility of taking into account social dimensions in public markets, in a general interest
perspective. The latitude that the new European directives will leave or not to the diversity of
national practices in this matter is an important issue for the future development and sustainability
of WISEs.
3. Public bodies should recognize the diversity of resources mobilised by WISEs in
accordance to their social mission
European Union WISEs show a particular capacity to articulate resources in various ways, in
order to pursue their complex set of objectives; this capacity appeals to go beyond the traditional
dichotomy between the market and the state. WISEs do not rely only on a mix of market- and
redistribution-based resources; they are the scene of a more complex mixing of resources, built
upon four types of economic relationships: the market and redistribution, but also the sociopolitically embedded market and reciprocity. The different types of resource mixes can be
analysed in relation to the types of social purposes of enterprises: the integration of workers but
also the production of goods and services generating collective benefits.
The probably most visible effect of the institutionalisation of WISEs is that, by forcing the latter to
position themselves in the 'market economy' or in the 'redistributive economy', it fails to recognise
and take into account the fact that they combine various market, redistributive and voluntary-
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based resources. However, it is noteworthy that some WISEs have proved to be able to maintain
their innovative capacity despite this process of institutionalisation, through mixing different types
of financing. The dynamic of social capital also seems to be crucial to support the multiple-goal
nature of WISEs in this process of institutionalisation.
This diversity should be recognized by public bodies. Volunteer work could be supported through
specific public scheme (for example by offering volunteers the possibility to have access to social
protection). Besides, networking of social enterprises or even with other third sector organisations
should be encouraged, since this is a way to foster the mutualisation of resources coming from a
variety of sources on a territory.
4. Foster networking of WISEs
In order to support the development of WISEs, it is desirable to sustain the development of
intermediate - or 'umbrella' - structures which could play a vital role in:
- negotiating contracts either with private enterprises or with public bodies. We stressed the
importance of embedded market resources, which introduce social criteria alongside
traditional quality/price criteria. Umbrella organisations could develop special know-how in
negotiating this type of contracts on behalf of WISEs;
- interacting with public bodies for the construction of specific public schemes. Public
policies in this field are the results of interactions between the social actors, in particular
the promoters of WISEs, on the one hand, and representatives of the public bodies, on
the other hand. In other words, public schemes are not the result of top-down processes
only; they are the result of a co-construction between representatives of WISEs and those
of public bodies. Although public policies have recognised the mission of WISEs and
sustain them, the dominant model tends to recognise only one kind of benefits – namely
those linked to the work-integration goal – in the framework of active labour policies.
Consequently, WISEs tend to adopt a single goal structure, maintaining only the goal of
integration of workers into the normal labour market, which entails a risk of reducing the
innovation capacity of WISEs. Umbrella organisations must ensure a role of lobbying
public bodies in order to valorise the complex set of goals of WISEs;
- exchanging best practices not only at the national level (within an umbrella organisation
or between umbrella organisations), but also between different European countries.
5. Supporting the extension of the field of research to other types of social enterprises in
the field of services of general interest, in order to better inform public policies
Social enterprises are most active in two major spheres of activity: on the one hand, the training
and absorption into employment of persons excluded from the labour market and, on the other
hand, the rapidly developing sector of personal services. But the border between these two areas
is not always clear as, sometimes, as showed earlier, work integration social enterprises produce
personal services.
After studying WISEs, it seems important, therefore, to extend the research on goals structure,
stakeholder involvement and multiple resources to social enterprises engaged in another field of
activity, namely the provision of services of general interest. This is a key issue in the current
context, with the organisation of services of general interest being discussed at the European
level. In-depth studies have to be developed to better understand the role of social enterprises
compared to public organisations and business in delivering social services. It would be, in fact,
very relevant for the development of specific literature and for public policies to verify, for all the
forms of social enterprise, features such as the presence of a multiple-goal structure, the degree
of stakeholders' involvement, their resource mix, the relationship between resources and the
multi-stakeholder structure, etc.
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CO-ORDINATION AND PARTNERS OF THE PROJECT
Scientific co-ordination: Marthe Nyssens, CERISIS, Catholic University of Louvain-la-Neuve,
Belgium
Technical co-ordination: DIESIS, Brussels, Belgium
Partners:
Monica Loss and Carlo Borzaga from ISSAN, University of Trento, Italy
Olivier Grégoire and Jacques Defourny from the Centre d'Economie Sociale, University of
Liège, Belgium
Adalbert Evers, Andreas D. Schulz from the Justus Liebig University, Giessen, Germany
and Ingo Bode from the University of Duisburg-Essen, Germany
Lars Hulgaard from the Department of Social Sciences, Roskilde University, Denmark
Laurent Gardin and Jean-Louis Laville from CRIDA, CNAM, Paris, France
Andreia Lemaître, Alexis Platteau and Marthe Nyssens from CERISIS, Catholic University
of Louvain-la-Neuve, Belgium
Mary O'Shaughnessy from the Centre for Co-operative Studies, University College Cork,
Ireland
Pekka Pättiniemi from the University of Kuopio, Finland
Susana Nogueira and Heloísa Perista from CESIS, Lisbon, Portugal
Mike Aiken and Roger Spear from the Co-ops Research Unit, Open University, Milton
Keynes, United Kingdom
Yohanan Stryjan from the Södertörns Högskola, Huddinge, Sweden
Nuria Claver and Isabel Vidal from CIES, Barcelona, Spain
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These results are developed in the forthcoming book :
Social Enterprises in Europe, between Market, Public Policies and Community
edited by Marthe Nyssens, Routledge.
The main objective of this book, entitled Social Enterprises in Europe, between Market, Public
Policies and Community, is to develop the theory of social enterprise through a comparative
analysis of 160 social enterprises in Europe. More precisely, the book is articulated around three
main theoretical ideas:
(1) Social enterprises usually have a complex mixture of goals. It could be argued that social
enterprise’s mission includes at least three different categories of goals: social goals, connected
to the particular mission of social enterprises to benefit the community; economic goals,
connected to the entrepreneurial nature of social enterprises; and socio-political goals, connected
to the fact that social enterprises come from a 'sector' traditionally involved in socio-political
action. Multiple stakeholder ownership could be an efficient way to develop this multiple goal
mission.
(2) Social enterprises mobilise different kinds of market and non-market resources and therefore
are located in an intermediate space between market, state and community.
(3) Social enterprises are embedded in the political context. The public policies in the field of
social enterprises are the results of interactions between their promoters and representatives of
the public bodies. This dynamic of institutionalisation can lead to the development of innovative
public schemes and at the same time to a movement of 'isomorphism' on the part of social
enterprises, towards public organisations or for-profit enterprises.
To develop this theoretical perspective, we chose an empirical field which is emblematic of the
dynamic of social enterprises, namely work integration social enterprises, as it is one major
sphere of activity where social enterprises are active in Europe. Work integration social
enterprises (WISEs) have as a major objective to help poorly qualified unemployed people, who
are at risk of permanent exclusion from the labour market. They integrate them back into work
and society in general through productive work activity.
This book makes a major contribution to the study of social enterprise through a transversal
European comparative analysis for each theoretical theme. It breaks new ground both in its
articulation of multidisciplinary theoretical frameworks for this important new field of social
enterprise, and through its rigorous analysis of empirical evidence based on the same data
collection methodology. The book is structured around a number of key themes developed
through a transversal European analysis, illustrated with a few short country experiences that
reflect the diversity of welfare models across Europe.
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