pb 4-easi-may-2014

Research Project SFERA PUBBLICA

www.bonetti4reforms.com

Policy Brief N. 4

Research Area: Europe

Policy Brief N. 4

ANTONIO BONETTI

May 2014

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Policy Brief N. 4

Promoting SI and SPE: the role of the EaSI Programme

Antonio Bonetti May 2014

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‘What is needed is a fully-fledged understanding of the division of innovative labour in capitalism […] and the role that both the private and public sector

play in creating, producing and diffusing innovations.’

Mariana MAZZUCATO (Economist) The Entrepreneurial State (2013, p. 13)

Table of Contents

1. Introduction: the debate over Social Innovation in Europe and EaSI p. 3

2. EaSI at a glance p. 4

3. In focus: the PROGRESS Axis p. 9

Annex I – The Social Business Initiative and the ‘Strasbourg Declaration’ p. 14

Annex II – Thematic sections and beneficiaries of EaSI p. 17

Annex III – ‘Logical framework’ of the COSME Programme p. 18

Key Words: Social Innovation, Social Policy Experimentation, Counterfactual evaluation, Social Business Initiative N.B. Completed on 24 May 2014 (This Policy Brief is based on a significant revision of Tool N. 3 ‘Financing Social Innovation in Europe: the Programme for Employment and Social Innovation’, January 2014)

Antonio BONETTI is an independent expert in Local Economic Development, Strategic Planning, and EU Policies and Funds.

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1. Introduction: the debate over Social Innovation in Europe and EaSI

The Programme for Employment and Social Innovation (EaSI) is the main financial instrument of the EU aimed at sustaining social innovation and ‘social policy experimentations’ (see paragraph 3.2.) within the ‘Europe 2020’ strategy, that was endorsed by the European Council in June 2010. Furthermore, EaSI (ex Programme for Social Change and Innovation) lays emphasis on the importance of enhancing the access to finance for social enterprises, microenterprises and vulnerable people who face serious difficulties in securing capital (equity or traditional bank loans). Against the bleak background of a prolonged and very painful recession, which has resulted in higher levels of unemployment and social exclusion, the European Commission (EC) has progressively increased its commitment to the following goals: � finding new ways of addressing old and new social problems (‘social innovation’); � sustaining the start-up and the development of social enterprises, because they are increasingly

regarded as an important lever for combining objectives of economic recovery and social inclusion. Social Innovation is regarded as front and center in the search of ‘new solutions to societal challenges.’ It is ‘innovation’ meant to focus on new or inadequately met social needs and promote social change. ‹‹Compared to mainstream innovation, ‘social innovations’ are critically driven by an extra-motive: a social mission, and the value they create is necessarily shared value, at once economic and social›› (see EC (2010), Guide to Social Innovation, p. 7). In particular, in the ‘BEPA Report’ it is pointed out that “Social innovation can be defined as the development and implementation of new ideas (products, services and models) to meet social needs and create new social relationships or collaborations. It represents new responses to pressing social demands, which affect the process of social interactions. It is aimed at improving human well-being. Social innovations are innovations that are social in both their ends and their means. They are innovations that are not only good for society but also enhance individuals’ capacity to act.”1 ‹‹Social innovation describes the entire process by which new responses to social needs are developed in order to deliver better social outcomes. This process is composed of four main elements:

� Identification of new/unmet/inadequately met social needs; � Development of new solutions in response to those social needs; � Evaluation of the effectiveness of new solutions in meeting social needs; � Scaling up effective social innovations.›› (see EC (2010), Guide to Social Innovation, p. 6).

The political promotion of Social Innovation (SI) was started by the EC president Barroso in 2009, who adopted the approach suggested by the late Diogo Vasconcelos. In the last year, social innovation has been rising to the top of the EU’s political agenda mainly because of two reasons: 1. an increasing acknowledgement that the time has come to institute a concrete social dimension of the Economic and Monetary Union, by implementing new social policies and instruments more effective in the framework of tighter public spending constraints. As affirmed in the Communication on the ‘Social Investment Package’, launched in February 2013, ‹‹modernisation of social policies requires systematic introduction of ex-ante result orientation in financing decisions and a systematic approach of the role social policies play in the different stages in life: from education via work/unemployment to sickness and old-age›› (see EC(2013), Towards Social Investment for Growth and Cohesion – Including implementing the European Social Fund 2014-2020, COM 2013(83) final, p. 3); 2. social innovation’s importance within ‘Europe 2020’ strategy, structured around 3 overarching objectives (smart growth, sustainable growth and inclusive growth) and 7 Flagship Initiatives.

1 See Hubert, A. (2010), Empowering People, Driving Change: Social innovation in the European Union, Bureau of European Policy Advisors – BEPA, Brussels, available at: http://ec.europa.eu/bepa/pdf/publications_pdf/social_innovation.pdf

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As clearly stated in Regulation (EU) No 1296/2013, EaSI is strongly anchored in two ‘Europe 2020’ Flagship Initiatives: � ‘Innovation Union’2; � ‘European Platform Against Poverty and Social Exclusion’. Furthermore, EaSI is consistent with other ‘Europe 2020’ Flagship Initiatives, in particular ‘Youth on the Move’ and ‘An agenda for new skills and jobs’. The main reasons for this are: � Social Innovation, by its nature, is a cross-cutting concept that ‹‹can be about projects, but also about

process, strategy and governance››3; � EaSI is a multi-target, multi-dimensional Programme, that relates to social inclusion and social

innovation, to labour mobility in Europe, and to social entrepreneurship as well. The Social Innovation Europe Initiative was launched by the EC on the 16th and 17th of March 2011. The key actions of this Initiative are: (i) to publish reports and recommendations in order to support and scale-up the best actions, (ii) to provide the latest information on EU actions in the field, through the website www.socialinnovationeurope.eu, (iii) to support the take up of new partnerships interested in Social Innovation across sectors, and across States. Furthermore, over the recent years the EC has widely stated the importance of alternative forms of entrepreneurship, named social enterprises or social businesses, in order to meet objectives of sustainable growth as well as objectives of social inclusion. The most important European initiative to support social entrepreneurship is the Social Business Initiative (SBI) that was launched in November 2011 (see Annex I). The EC considers Social Innovation (SI) and social entrepreneurship absolutely intertwined. ‘Social enterprises contribute to smart growth by responding with social innovation to needs that have not yet been met; they create sustainable growth by taking into account their environmental impact and by their long-term vision; they are at the heart of inclusive growth due to their emphasis on people and social cohesion.’4 Within this policy framework, the ‘mission’ of the EaSI Programme is ‘to contribute to the implementation of Europe 2020 […] by providing financial support for the Union’s objectives in terms of promoting a high level of quality and sustainable employment, guaranteeing adequate and decent social protection, combating social exclusion and poverty and improving working conditions’ (see article 1 of Regulation (EU) No 1296/2013). 2. EaSI at a glance

2.1. General features of EaSI The political agreement between the European Commission, the European Parliament and the Council on the EaSI Programme was reached on 28 June 2013. Regulation (EU) No 1296/2013 was endorsed on 11 December 2013 (see the Official Journal of the EU L 347 of 20 December 2013).

EaSI increases political scope and support of three existing Initiatives/instruments:

2 The European Commission (EC) has put a wide concept of innovation at the heart of the ‘Europe 2020’ strategy. As stated in the Communication on the Flagship Initiative ‘Innovation Union’, ‘our capacity to create millions of new jobs to replace those lost in the crisis and, overall, our future standard of living depends on our ability to drive innovation in products, services, business and social processes and models.’ (see EC (2010), Europe 2020. Flagship Initiative Innovation Union, COM (2010)546 final). 3 See EC (2013), Guide to Social Innovation, p. 57. 4 See EC (2011), Social Business Initiative. Creating a Favourable Climate for Social Enterprises, Key Stakeholders in the Social Economy and Innovation, COM (2011)682 final, p. 3.

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� the Programme for Employment and Social Solidarity (PROGRESS), established by the Decision No 1672/2006/EC;

� EURES (the network of European Employment Services) that promotes labour mobility and job matching within all the EU Member States, EEA Countries and the Swiss Confederation;

� the European Progress Microfinance Facility for employment and social inclusion, established by the Decision No 283/2010/EU.

In fact, the EU has formulated EaSI as a ‘framework programme’ structured around three axes (PROGRESS, EURES and Microfinance and Social Entrepreneurship), in order to improve administrative simplification and streamline the use of financial instruments (see Chart 1).

Chart 1 - Structure of EaSI

PROGRESS

Period 2007-2013

EURES

ProgressMicrofinance

Facility

Progress

Microfinance& SEEURES

Period 2014-2020

EaSI

Reg. (EU) No 1296/2013

The general objectives of the Programme are: � strengthen ownership among policy-makers at all levels, and produce concrete, coordinated and innovative actions at

both Union and Member State level (article 4.a of Regulation (EU) No 1296/2013); � support the development of adequate, accessible and efficient social protection systems and labour markets and

facilitate policy reform (article 4.b); � ensure that Union law on decent and sustainable employment, social protection and inclusion, social innovation, social

entrepreneurship is effectively applied, and, where necessary, contribute to modernising Union law, in line with decent work principles (article 4.c);

� promote workers' voluntary geographical mobility on a fair basis and boost employment opportunities by developing high-quality and inclusive Union labour markets (article 4.d);

� promote employment and social inclusion by increasing the availability and accessibility of microfinance for vulnerable people who wish to start up a micro-enterprise as well as for existing micro-enterprises, and by increasing access to finance for social enterprises (article 4.e).

As illustrated in Chart 2 and Table 1, in addition to the general objectives and actions of the Programme, all the axes have specific sections, objectives and actions (also see Annex II).

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Chart 2 – Map of Axes, Sections and Objectives of EaSI

EaSI

Reg. (EU) No. 1296/2013

PROGRESS

EURES

Microfinance

& SE

Thematic sections (art. 14)


Specific objectives (art. 20)




General Objectives (art. 4)

Table 1 – Axes of EaSI: missions and thematic sections

Axes Axes’ missions Thematic sections

PROGRESS Axis

To support the development and implementation, monitoring and evaluation of policies aimed at

sustaining employment, guaranteeing adequate social protection, combating poverty and improving working

conditions.

To promote evidence-based policy-making, social innovation and social progress.

Employment

Social protection

Working conditions

Cross-cutting issues

EURES Axis

To support activities carried out by EURES, to promote voluntary geographical mobility for workers on a fair basis and to contribute to a high level of

quality and sustainable employment.

Transparency of Job vacancies

Development of services

Cross-border partnership


Microfinance & Social Entrepreneurship Axis

To increase the access to, and availability, of financing for legal and physical persons.

Microfinance

Social Entrepreneurship


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The general budget of the Programme amounts to EUR 919 469 000 in current prices. Chart 3 shows the breakdown of the whole financial envelop by Axes. EaSI-PROGRESS Axis accounts for 61% of the whole budget.

Chart 3 – Breakdown of operational expenditure by Axes (as a % of total budget)

Also, it is worth pointing out that: � ‘from the overall allocation for the PROGRESS Axis, and within its different thematic sections, 15% to 20% shall

be allocated to the promotion of social experimentation as a method for testing and evaluating innovative solution with a view to up-scaling them’ (see article 5 of Regulation (EU) No 1296/2013);

� as referred to in article 25, the budget allocated to the Microfinance and Social Entrepreneurship Axis will have to respect the following minimum percentages: (i) 45% to microfinance for vulnerable groups and micro-enterprises5, (ii) 45% to social enterprises6.

2.2. Synergies between EaSI and other EU funds An in-depth analysis of 2014-2020 Multi-Annual Financial Framework of the EU and new European financial instruments provides supporting evidence to the existence of many synergies between EaSI and several other EU funds. This is mainly due to: � the high internal consistency of the ‘Europe 2020’ strategy; � the fact that the fight against unemployment (especially youth unemployment), social exclusion and

poverty is high on the EU political agenda. Accordingly, there are several EU funds that support public actions and reforms in these areas;

� the specific nature of social innovation, that is a cross-cutting theme covered within other EU funds besides EaSI (in particular, the European Social Fund and the European Regional Development Fund, Horizon 2020, the Rights, Equality and Citizenship Programme and specific Initiatives aimed at tackling long-term unemployment, social exclusion, and poverty).

5 Micro-enterprise is an enterprise, including a self-employed person, that employs fewer than 10 people and whose annual turnover or annual balance sheet total does not exceed EUR 2 million (see article 2). 6 As referred to in article 2, social enterprise is an undertaking, regardless of its legal form, which aims at attaining measurable, positive social impact as its primary objective, and provides services or goods which generate a social return. Moreover, it uses its profits first and foremost to achieve its primary objective and is managed in an entrepreneurial, accountable and transparent way.

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The following table illustrates the pertinence of other Initiatives/financial instruments of the EU to each Axis of the EaSI Programme.

Table 2 – Synergies between EaSI and other EU Funds and Initiatives7

Axes (sections) DIRECT CONSISTENCY

INDIRECT CONSISTENCY

PROGRESS

EES/ESF

Fund for European Aid for the Most Deprived YEI/Youth Guarantee8

SIE Initiative European Globalisation Adjustment Fund

ERDF

Rights, Equality & Citizenship Programme H2020 (Societal Challenges)9 Asylum and Migration Fund

Health for Growth

EURES

EES/ESF

YEI/Youth Guarantee

ERASMUS Plus

European Globalisation Adjustment Fund

Microfinance & Social Entrepreneurship

EES/ESF

SBI/The Strasbourg Declaration

COSME10

H2020 (Industrial Leadership) JASMINE

EIB/EIF – Microfinance EIF – Social Impact Accelerator11

7 Acronyms: � EES: European Employment Strategy, � ESF: European Social Fund, � ERDF: European Regional Development Fund, � YEI: Youth Employment Initiative, � H2020: Horizon 2020, � SIE: Social Innovation Europe (Initiative), � SBI: Social Business Initiative, � COSME: Competitiveness of SMEs, � EIB: European Investment Bank, � EIF: European Investment Fund, � JASMINE: Joint Action to Support Microfinance Institutions in Europe (see Annex I). 8 The ‘Youth Guarantee’, established by the Council’s Recommendation of 22 April 2013, is the main programme that supports the Youth Employment Initiative (YEI). It is worth pointing out that the PROGRESS Axis and the ESF are both managed by the Directorate-General for Employment, Social Affairs and Inclusion of the European Commission. 9 Horizon 2020 is a very complex Programme. It is structured around three main sections (funding areas): � Excellent Science, � Industrial Leadership (this section focuses on three actions: (i) Leadership in Enabling and Industrial

Technologies, (ii) access to risk finance, (iii) innovation in SMEs), � Societal Challenges (it covers, inter alia, the research area ‘Europe in a changing world – Inclusive, innovative

and reflective society’, that supports research on social innovation). 10 According to Regulation (EU) No 1287/2013, the COSME Programme is aimed at improving: (i) access to finance for SMEs, (ii) access to markets, (iii) framework conditions for the competitiveness of European enterprises, especially SMEs, (iv) entrepreneurship and entrepreneurial culture (see Annex III). 11 The Social Impact Accelerator (SIA) is a pilot initiative launched in May 2013 by the EIB’s Group in order to cope with a very challenging barrier to social entrepreneurship, id est lack of equity finance for social entrepreneurs. For more information, see: http://www.eif.org/what_we_do/equity/sia/index.htm.

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3. In focus: the PROGRESS Axis

3.1. General features The PROGRESS Axis builds on the 2007-2013 Programme for Employment and Social Solidarity (PROGRESS). It is mainly meant to sustain reforms of labour market and the experimentation of new initiatives/projects in order to address old and new social needs still not met, or met insufficiently. In other words, it is the Axis specifically aimed at promoting: � social innovation, � social policy experimentation. The EaSI Programme is highly consistent mainly with the ESF, essentially because of the following reasons: � ‘together with the ESF, the Fund for European Aid for the Most Deprived and the European Globalisation

Adjustment Fund, EaSI forms the fourth pillar of the EU Initiative for Employment and Social Inclusion 2014-2020.’12 As stated in Article 7 of Regulation (EU) No 1296/2013, ‘the Commission, in cooperation with the Member States, shall ensure that activities carried out under the Programme are consistent with, and complementary to, other union action, such as the European Structural and Investment Funds (ESIFs) […] and in particular under the ESF’. Specifically, the ESF and EaSI are the main instruments for implementing the Employment Guidelines (part of the Europe 2020 Integrated Guidelines) and the so called ‘Youth Guarantee’, endorsed by the European Council in February 2013 and established by the Council’s Recommendation of 22 April 2013;

� both the ESF and EaSI are also meant to promote social entrepreneurship; � social innovation is a cross-cutting objective of the ESF, as referred to in article 9 of Regulation

(EU) No 1304/2013 of 17 December 2013 (‘The ESF shall promote social innovation within all areas falling under its scope, as defined in Article 3 of this Regulation, in particular with the aim of testing, evaluating and scaling up innovative solutions, including at the local or regional level, in order to address social needs in partnership with the relevant partners and, in particular, social partners’)13.

This is particularly true of the PROGRESS Axis, specifically aimed at: � raising social awareness (by promoting the general debate on social issues as well as mutual learning,

and financing research, information-sharing and evaluation of policies), � improving legislation and reforms in the fields of employment, social inclusion and decent work, � testing new initiatives/reforms in order to fight social exclusion and poverty, as well as to boosts

the modernization of social policies14, � disseminating information on new valuable social practices and scaling up/exchanging these

practices. Chart 4 on the next page describes synergies between the PROGRESS Axis and other EU Funds.

12 See EC (2013), Employment and social inclusion: Commission welcomes agreement on new programme for Employment and Social Innovation (EaSI). MEMO 13/628, Brussels, 28.06.2013. 13 The Regulation on the ESF also establishes that ‘Member States shall identify, either in their operational programmes or at a later stage during implementation, fields for social innovation that correspond to the Member States' specific needs’ (Art. 9.2). 14 Actually, the EaSI PROGRESS Axis is highly consistent with the ‘Social Investment Package’ as well. The ‘Social Investment Package’, launched in February 2013, ‹‹provides a policy framework for redirecting Member States’ policies, where needed, towards social investments throughout life, with a view to ensuring the adequacy and sustainability of budget for social policies and for the government and private sector as a whole.›› (See EC(2013), Towards Social Investment for Growth and Cohesion – Including implementing the European Social Fund 2014-2020, COM 2013(83) final, p. 3).

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Chart 4 – Europe 2020 Flagship Initiatives that support the PROGRESS Axis and its links with other EU Funds

Fund for Aid for the Most Deprived

The PROGRESS Axis

Innovation Union

ESF

Platform against poverty

Europe 2020

European Employment Strategy (EES)

European Globalisation

Adjustment Fund

Social Investment Package

The relevance to the ESF is based on the strategic choice of testing new initiatives or new reforms on the ground by using EaSI, and replicating the most promising ones by using the ESF. In other words, the EU follows the four stages of ‘the spiral model of social innovation’ presented in the aforementioned EC’s Guide to Social Innovation (see chart 5).

Chart 5 – The spiral model of social innovation showing the four stages

Source: EC (2013), Guide to social innovation, p. 9

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The PROGRESS Axis of EaSI will be mainly focused on the stages ‘Ideas’ and ‘Prototyping and piloting’. The ESF will mainly focus on the final stage, in which the most successful pilots will be scaled up and become part of ordinary practices. As clearly explained in the aforementioned Guide, ‹‹the challenge for policy makers is to identify which ideas are the most promising to take to the pilot stage, and to identify which pilots are best able to improve on existing models of practice.››15 The table below illustrates the specific synergies between the EaSI axes and the thematic objectives of the European Structural and Investment Funds supported by the ESF in the programming period 2014-2020 (thematic objectives which correspond to the main investment priorities of the ESF16).

Table 3 – Synergies between EaSI and the ESF

The EaSI Axes

Investment priorities of the ESF

Supporting sustainable

and quality employment and labour

mobility

Promoting social inclusion, combating poverty and any discrimination

Investing in education, training and vocational training for skills and lifelong learning

Enhancing

institutional capacity of public authorities and

stakeholders PROGRESS

Indirect consistency

Direct consistency

-


EURES

Direct consistency

-



Microfinance & Social Entrepreneurship

Direct consistency


-


15 See EC (2013), Guide to Social Innovation, p. 9. The ‘four stages of the spiral model of social innovation’ is based on the six stages of social innovation (1. Prompts, inspirations and diagnoses; 2. Proposals and Ideas; 3. Prototyping and pilots, 4. Sustaining, 5. Scaling and diffusion, 6. Systemic change) presented in The Open Book of Social Innovation (see pages 11-14) available at www.nesta.org.u/publications/open-book-of-social-innovation. 16 In the programming period 2014-2020, the European Structural and Investment Funds (ESI Funds) are the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund, the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF), which operate under a common framework, id est the Common Strategic Framework. The Common Strategic Framework ensures the relevance of these Funds to the ‘Europe 2020’ strategy by laying down the following 11 thematic objectives:

� strengthening research, technological development and innovation; � enhancing access to, and use and quality of, ICT; � enhancing the competitiveness of SMEs, of the agricultural sector (for the EAFRD) and of the fishery

and aquaculture sector (for the EMFF); � supporting the shift towards a low-carbon economy in all sectors; � promoting climate change adaptation, risk prevention and management; � preserving and protecting the environment and promoting resource efficiency; � promoting sustainable transport and removing bottlenecks in key network infrastructures; � promoting sustainable and quality employment and supporting labour mobility; � promoting social inclusion, combating poverty and any discrimination; � investing in education, training and vocational training for skills and lifelong learning; � enhancing institutional capacity of public authorities and stakeholders and efficient public

administration.

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Funding under the PROGRESS Axis is open to: (i) EU Member States, (ii) EEA countries and EFTA Member States; (iii) candidate countries and potential candidate countries. The following table shows thematic sections of the PROGRESS Axis, as well as beneficiaries and activities financed under this Axis17.

Table 4 – Thematic sections, beneficiaries and activities of the PROGRESS Axis

Thematic

Sections (art. 14)

Employment

Social protection, social inclusion, and prevention and reduction of poverty

Working conditions

Eligible Bodies

(art. 18)

(a) national, regional and local authorities,

(b) employment services,

(c) specialist bodies provided for under the Union law,

(d) the social partners,

(e) NGOs,

(f) higher education institutions and research institutes,

(g) expert in evaluation and impact assessment,

(h) national statistical offices,

(i) the media.

Activities (article 16)

Analytical activities

Gathering of data and statistics

Surveys, studies, and reports, including through the funding of networks of experts and development of expertise in thematic sections

Qualitative and quantitative evaluations and impact assessments carried out by both public and private bodies

Monitoring and evaluation of the transposition and application of EU law

Preparation and implementation of social policy experimentation ad a method for testing and evaluating innovative solutions with a view to up-scaling them

Dissemination of the results of those analytical activities

Mutual-learning,

awareness and

dissemination activities

Exchanges and dissemination of good practice, innovative approaches and experience, per reviews, benchmarking and mutual learning at European level

Council Presidency events, conferences and seminars

Training of legal and policy practitioners

Drafting and publication of guides, reports and educational material and measures relating to information on initiatives financed by EaSI

Information and communication activities

Development of information systems in order to exchange information on EU policies and legislation on the labour market

Other activities

Operating costs of activities of Union-level networks relating the PROGRESS Axis

Capacity building

Organisation of working groups of national officials to monitor application of EU law

Networking and cooperation among specialist bodies and other relevant stakeholders

Funding of European-level observatories

Exchange of personnel between national administrations

17 Article 17 of Regulation (EU) No 1296/2013 points out that funds awarded through call for proposals will not exceed, as a general rule, 80% of the total eligible expenditure.

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3.2. PROGRESS Axis, social policy experimentation and counterfactual evaluation

According to the European Commission, ‹‹what Europe lacks is not only social innovation, but also its scaling up and capacity to influence the policy framework›› (see European Commission, 2013, p. 17). This is the reason why the EaSI Programme promotes social policy experimentation. ‹‹‘Social policy experimentation’ refers to small scale projects designed to test policy innovations (or reforms) before adopting them more widely›› (see European Commission, 2013, p. 18). Social policy experiments are key to establishing which new practices, that are meant to tackle and solve social problems, can be labeled as ‘social innovations’. Hence, they are also meant to promote evidence-based policies. To make this happen it is necessary to develop robust methods that are meant to assess the likely impact of new social interventions or policy reforms before putting them in practice. Since the 1970s, social policy experiments and impact evaluation have been developed together in order to establish which policy reforms work and which do not. In this respect, it is particularly important the so-called ‘National Supported Worked Demonstration’ carried out in the US18. Given a certain socio-economic objective, the main purpose of impact evaluation is to separate effects of specific policy reforms (or social innovations) from that of other socio-economic factors. In particular, this is a task for counterfactual evaluation, that answers mainly two questions:

� Do the public interventions/policy reforms have an effect? � How big was the effect?

To put it another way, how can scholars and policy-makers confidently attribute certain results to specific public actions? And how much those actions influenced outcomes/results? Social policy experiments and counterfactual evaluation are based on the general principle that only by defining a ‘counterfactual control group’, scholars and policymakers could ‘measure’ what would happen to a certain ‘target group’ if specific interventions or policy reforms were not implemented - ‘counterfactual situation’. Without a ‘control group’ (‘comparison group’) similar to the ‘target group’ (‘treatment group’) in relation to relevant socio-economic variables, it is not possible to separate the effects of public interventions from those of other factors. Social policy experiments (‘demonstrations’) allow to establish a ‘target group’ and a ‘comparison group’ that are statistically about similar in a random way before the implementation of new public interventions or policy reforms. The EaSI-PROGRESS Axis, as aforementioned, promotes both social innovations and social policy experiments as a strategic choice in order to improve both efficiency and impact of social policies, while respecting tighter public spending constraints. This choice is consistent with the EU’s general objective of improving good governance and effectiveness of public policies, despite the reduction in public spending.

18 See LaLond R. (1986), Evaluating the Econometric Evaluations of Employment and Training Programmes with Experimental Data, ‘American Economic Review’; Greenberg D., Shroder M. (2003), Digest of Social Experiments, Washington, The Urban Institute Press.

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Annex 1 – The Social Business Initiative and the ‘Strasbourg Declaration’

The most important European initiative to support social entrepreneurship is the Social Business Initiative (SBI) that was launched by the European Commission (EC) in November 2011, shortly after it issued the Communication on SBI on the 25th of October. The aforementioned Communication states that ‹‹a social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives.›› 19 The focus of the SBI is on creating an enabling environment in which European social businesses (social enterprises) can flourish and increase their capacity to contribute to inclusive growth and social innovation more effectively. In particular, the SBI aims at tackling three barriers to social entrepreneurship: � access to sustainable finance, � lack of recognition of social entrepreneurship, � access to markets because of the legal and regulatory environment (legal constraints on their

activities, public procurement policy, and the fact that social businesses have difficulty benefiting support measures available to SMEs).

Accordingly, the ‘action plan’ is structured in three overarching objectives directly consistent with the aforementioned issues, and 11 key actions (see the synoptic table below).

The SBI Framework

Overarching objectives Key actions

1. Improving access to funding

European regulatory framework for Social Investment Funds Analysis, promotion and development of the legal and institutional environment

for micro-credits New European financial instrument to facilitate access to funding under EaSI

New investment priorities for social enterprises financed by the ERDF and the ESF

2. Increasing the visibility of social entrepreneurship

Identification and dissemination of best practices, by developing a map of social enterprises in Europe

Creation of a public database of labels and certifications applicable to social enterprises

Mutual learning and capacity building of national and regional authorities Creation of a single, multilingual electronic data and exchange platform

Accessibility of EU Funds in support of social enterprises 3. Improving the legal environment

Simplification of the Regulation on the Statute for a European Cooperative society

Proposal on a Regulation for a European Foundation statute Studies on the situation of mutual societies Reform of public procurement in order

to further enhance elements of quality in awarding contracts Simplification of the implementation of State aid rules

Source: EC (2011), Social Business Initiative , COM (2011)682 final

19

See EC (2011), Social Business Initiative. Creating a Favourable Climate for Social Enterprises, Key Stakeholders in the Social Economy and Innovation, COM (2011)682 final, p. 2.

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The SBI Framework sets out how access to capital (risk capital and traditional bank loans) is regarded as one of the main obstacles that prevent social ventures from flourishing. Thus, over the last years, the EU and the EIB’s Group have started new initiatives and new financial instruments in order to make access to sustainable finance easier both for social entrepreneurs and vulnerable people at risk of social exclusion (in particular young people, women and the unemployed). To this end, the main instruments are being used are: (i) JASMINE (Joint Action to Support Microfinance Institutions in Europe). In accordance with the agreement between the European Parliament, the EC Directorate-General for Regional Policy and the EIB’s group (2008), it equips European microfinance institutions and microcredit providers with technical support in order to improve their processes; (ii) European Progress Microfinance Facility for employment and social inclusion, that was launched in 2010 in order to ease access to funds for people, social enterprises and micro-enterprises. It will run alongside EaSI until 2016; (iii) EuVECA: the new regulation on managers of venture capital funds should facilitate access to risk capital for SMEs, including micro-enterprises and hybrid ventures (see Regulation (EU) No 1345/2013 on “European Venture Capital Fund” - Official Journal of the EU L 115 of 25 April 2013); (iv) EuSEF: it is a voluntary label for managers of funds investing in European social enterprises (see Regulation (EU) No 1346/2013 on European Social Entrepreneurship Funds - Official Journal of the EU L 115 of 25 April 2013). (v) Social Impact Accelerator (SIA): ‘it is the first pan-European public-private partnership supporting social enterprises. Launched in May 2013 with the collaboration of private sector investors, SIA is a pilot initiative which aims to address the growing need for availability of equity finance to support social enterprises. SIA operates as a fund-of-funds managed by EIF and invests in social impact funds which strategically target social enterprises across Europe. SIA will also ensure that knowledge-sharing between private sector actors committed to social impact investing and EIF becomes a core part of the initiative from the outset. To this end, Crédit Coopératif and Deutsche Bank have joined the EIB Group as founding investors and as part of an undertaking to pioneer strong public-private partnership in the sector.’ (source: European Investment Fund - http://www.eif.org/what_we_do/equity/sia/index.htm). On the 16th and 17th of January 2014 there was the event ‘Social Entrepreneurs – Have your say’, organised by the European Commission (DG Enterprise and Industry) in order to debate those public interventions that best suit the purpose of creating a favourable eco-system for social enterprises20. After two days of conferences and meetings held in Strasbourg, 10 key actions for governments and public bodies across Europe to implement, in order to create a conducive environment for social entrepreneurs and to improve their access to capital and markets, were agreed under the ‘Strasbourg Declaration’ (see the Box on the next page).

20

See http://ec.europa.eu/internal_market/conferences/2014/0116-social-entrepreneurs/index_en.htm.

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Empowering social entrepreneurs for innovation, inclusive growth and jobs: Strasbourg Declaration

1. The EU must follow through on all the actions in the SBI. It should develop a second phase of the SBI that broadens its scope, deepens its partnership with Member States, regional and local authorities, civil society organisations and key players in the ecosystem. 2. The European Economic and Social Committee, the next European Commission (with a dedicated inter-service structure) and the next European Parliament must take full ownership and deliver on the actions suggested in Strasbourg. 3. There must be a stronger engagement at EU, national, regional and local levels with the social enterprise community in the co-creation of new policies to support social enterprise, suited to the local context. 4. The Commission must ensure that its commitment to create an eco-system for social enterprise is mainstreamed in its policies. 5. In partnership with the social enterprise sector, Member States, regional and local authorities must fully support the growth of social enterprises and help them build capacity. For example through legal frameworks, access to finance, business start-up and development support, training and education and public procurement. 6. The European institutions and Member States should reinforce the role of social enterprises in structural reforms to exit the crisis, notably where the social economy is less developed. 7. The Commission, the Member states and regions must boost cooperation between social enterprises across borders and boundaries, to share knowledge and practices. Similarly, all public authorities should cooperate better between themselves and enhance their capacity to support social enterprise growth. 8. Public and private players must develop a full range of suitable financial instruments and intermediaries that support social enterprises throughout their life-cycle. 9. Social enterprise still needs further research and national statistical collection for a better understanding, recognition and visibility of the sector, both among policymakers and the general public. 10. In this new Europe, all players need to look at growth and value creation from a wider perspective, by including social indicators and demonstrating positive social impact when reporting social and economic progress. See http://ec.europa.eu/internal_market/conferences/2014/0116-social-entrepreneurs/declaration/index_en.htm.

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Annex 2 – Thematic sections and beneficiaries of EaSI

The PROGRESS Axis

Thematic

Sections (art. 14)

Employment

Social protection, social inclusion, and prevention and reduction of poverty

Working conditions

Eligible Bodies (art. 18)



(c) specialist bodies provided for under the Union law,

(d) the social partners,

(e) NGOs,

(f) higher education institutions and research institutes

(g) expert in evaluation and impact assessment,

(h) national statistical offices,

(i) the media.

The EURES Axis

Thematic

Sections (art. 19)

Transparency of job vacancies, applications and any related information for applicants and employers

Development of services for the recruitment and placing of workers in employment through the clearance of job vacancies and applications at Union level, in particular targeted mobility schemes

Cross-border partnerships


The EURES Axis shall be open to all bodies, actors and institutions designated by a Member State or by the Commission which fulfill the conditions for participating in EURES, in particular:



(c) social partner organisations and other interested parties.

The Microfinance and Social Entrepreneurship Axis

Thematic

Sections (art. 25)

Microfinance for vulnerable groups and micro-enterprises

Social enterprises


Participation under the Microfinance and Social Entrepreneurship Axis is open to public and private bodies established at national, regional or local level in the eligible countries providing:

� Microfinance for persons and micro-enterprises,

� Financing for social enterprises.

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Annex 3 – ‘Logical framework’ of the COSME Programme Reg. (EU) No 1287/2013 - Official Journal of the EU L 347 of 20 December 2013

General objectives

(see article 3)

Strengthening the competitiveness and sustainability of the Union’s enterprises, particularly SMEs

Encouraging entrepreneurial culture and promoting the creation and growth of SMEs

Specific objectives

(fields of action ex

article 4)

Improving access to finance for SMEs in the form of equity and debt

Improving access to markets, particularly inside the Union but also at global level

Improving framework conditions for the competitiveness and sustainability of Union enterprises, particularly SMEs, including in the tourism sector

Promoting entrepreneurship and entrepreneurial culture

Actions

to improve access to finance

Actions which aim to facilitate and improve access to finance for SMEs in their start-up, growth and transfer phases

Actions to improve cross-border and multi-country financing, thereby assisting SMEs to internationalize their activities

Actions to develop innovative financial mechanisms, such as crowdfunding

to improve access to markets

Actions to improve SME access to the internal market

Specific actions to facilitate SME access to markets outside the EU

Actions to foster international cooperation, including industrial and regulatory dialogue

to improve the framework conditions for entrepreneurship

Actions to improve the framework conditions for enterprises, by improving regional policies or reducing the administrative burden

Actions to develop new competitiveness and business development strategies

Actions to promote the emergence of competitive industries with market potential

to promote entrepreneurship

Actions to reduce obstacles to the setting-up and development of enterprises

Mobility programmes for new entrepreneurs

Enterprise Europe Network (EEN)

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Research Project SFERA PUBBLICA

Antonio Bonetti Website/blog: www.bonetti4reforms.com

The acronym SFERA stands for: SF – Social Finance E – Europe R – Reforms A – Agriculture (and rural development). In Italian, the term SFERA PUBBLICA indicates, by and large, the boundaries of public intervention in the economy. These boundaries change over time. Moreover, they are flexible, due to “public” actions carried out by communities, associations, foundations, NGOs, and increasingly the same for profit companies. This means that my personal project research covers the debate over public intervention in the economy, the renewal of objectives, actors and features of social policies and new financial instruments (and new forms of Public Private Partnership) to support public policies. It also covers European policies and funds, as well as topics linked to public policies oriented at improving agricultural practices and food security, because they are part of my professional background. Regardless of the “institutional” features of “SFERA PUBBLICA” (e.g. institutional framework, decentralization of public powers, organisations that are involved in the provision of collective services, etc.) the purposes of this personal research project are: - to discuss new ideas and new trends about public intervention in the economy, from the European jurisdictional level to the local one; - to propose my personal view about reforms in public policies, taking into consideration the decision-making process and the administrative procedures as well. Antonio Bonetti Independent expert in Local Economic Development, Strategic Planning and EU Funds Website: http://www.bonetti4reforms.com LinkedIn profile: http://it.linkedin.com/pub/antonio-bonetti/37/783/2b8 E-mail: [email protected] Skype ID: a.bonetti70 Mobile Phone: + (39) 335 5914711

pb 4-easi-may-2014

Economy & Finance

social change

social innovation easi

social exclusion

social mission

social inclusion

social demands

financing social innovation

new social policies