More social enterprises on the horizon in Denmark

More enterprises must run and spend their surplus on promoting social goals. That is the aim both within the EU and in the Nordic countries. Denmark’s government now wants to give social enterprises concrete help.   

Minster for Social Affairs, Children and Integration Annette Vilhelmsen promised to increase help to enterprises with social goals on 4 September 2013 when she presented a range of proposals developed by a committee on social enterprises which she had established:

“Social enterprises are increasingly appreciated for the new ways in which they use their business to introduce more people with social challenges to the labour market. I want to spread knowledge about social enterprises,” the minister said. 

The committee’s proposals include a public register of social enterprises, an information campaign, better guidance and finance opportunities for the companies and a strengthening of skills initiatives. Annette Vilhelmsen is now going to discuss these recommendations with the rest of the government. She has set up a cross-party coordination group, and there is already money set aside in this year’s budget for some of the coming initiatives.

A strong growth sector

Experience from both Denmark and internationally shows that social enterprises can help solve some of our major social challenges. Their aim is not to create a profit for their shareholders, but apart from that they operate as normal businesses which should be able to create value. This gives them a unique potential to upgrade the skills of vulnerable people and find jobs for them, which in turn will be a first step into the ordinary labour market and a better life.

That’s why the minister’s committee recommends that social enterprises should solve more important social challenges and that a large and diverse sector of social enterprises should be created in Denmark. This doesn’t come from just anybody: until recently the committee was headed by one of the leading names in Danish business, former head of Novo Nordisk Mads Øvlisen.

The committee has presented a range of visions for how social  enterprises can succeed:

• Appropriate legislation and cooperation with authorities
• Solid knowledge of the social economy sector 
• A high level of competence within the social economy sector 
• Good finance opportunities. Investors should be willing to accept risk and provide long-term capital
• Social considerations should be a parameter in public tenders, and there should be many public-private business partnerships

So far the gap between vision and reality is wide: there are not many social enterprises out there, and the ones that do exist are generally small. But the number is rising fast according to the committee’s mapping of Denmark’s social economy sector. It says a long-term push to increase that number along with a national strategy is needed.  

A world-wide issue

Decision-makers across Europe are looking at how social enterprises can benefit the social economy and get vulnerable people into work. In 2012 the EU Commission published ‘The social business initiative’ in which the Commission President José Manuel Barroso describes social enterprises as ‘a potentially very powerful agenda for change. Europe must not only be part of these changes. Europe should be in the lead’. The Vice-President of the European Commission and Commissioner for Industry and Entrepreneurship, Antonio Tajani, calls social enterprises “a good example of an approach to business that is both responsible and contributes to growth and jobs.”

The UK has a long tradition of stimulating social enterprises. Today there are more than 70,000 social enterprises contributing nearly £20bn to the British economy and employing nearly one million people. One of the best known is TV chef Jamie Oliver’s restaurant chain Fifteen. 

The Nordic Council of Minsters recently established a pan-Nordic working group on social entrepreneurship which will map initiatives which can stimulate social entrepreneurship and social innovation in the Nordic region as part of a drive to include vulnerable groups of people into working and social life. This is part of the Sustainable Nordic Welfare programme. One of the programme’s main aims is to promote research and to develop knowledge and models which can help contribute welfare for all. 

Muhammad Yunus is one of the international promoters of social enterprises. The Nobel Peace Prize laureate and founder of the Grameen Bank works with the multi-national Danone group on a social business in Bangladesh and has written a book on how social enterprises can represent innovative development aid and create new social solutions in western welfare states. He was the key speaker during a conference on the subject in Denmark in January 2013, hosted by the Danish Ministry of Foreign Affairs.  

A better and cheaper employment policy

Senior researcher at the Danish National Centre of Social Research Frederik Thuesen has been mapping Danish social enterprises. He says the current booming interest in social economic enterprises makes sense:

“There is massive interest among politicians both in the EU and here [in Denmark]. They hope to get better value for their labour market policy money. Today many billions are wasted on activation projects which don’t lead to jobs. When a socially vulnerable person gets a job in a social enterprise, the chances for developing permanent ties to the labour market are considerably higher, because those kinds of businesses are geared towards taking the necessary considerations,” he says.

Anders Lynge Madsen, Deputy Permanent Secretary at the Danish Ministry of Social Affairs, Children and Integration, sees three reasons for the large political interest in social enterprises both in the Nordic countries and in the rest of the world:

“The area is experiencing strong growth, for which there are several explanations. One is the general desire to create innovation within businesses. Another is the fact that all countries are keen to find new ways of getting vulnerable groups integrated into the labour market. Many larger businesses and foundations are also interested in showing corporate responsibility and can obtain concrete results by investing in social enterprises,” he says.