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Contribution to EC DG Industry’s consultation on innovation. The third leg of Europe: untapped resources for innovation

Author: Louise Pulford
Published Date: 6 October 2009

To frame the question about social innovation in the European

context on can use a metaphor describing the EU as three leg stool with

one atrophied. Over the last 50 years the EU has progressively

strengthened public institutions and the single market but left civil

society to lag behind. The European stool can stand up on just two legs.

Civil society has a long history of generating social innovation in

Europe but it has been confined within national borders. Except for few

multinational NGOs like Oxfam or one-issue federations, civil society

has not been able to develop a European dimension where innovation

could flow across borders.

This is exemplified in the lack of a single concept to refer to it.

If you look in the official documents of public institutions and

academia you will find many denominations: civil society, third sector,

social economy, non-profit or NGOs. Although civil society shares

values and aims the differences in origins prevail.

Moreover, there is still skepticism towards the value created by

civil society. However, In our network society innovation is not a

monopoly of public institutions and corporations anymore but it emerges

within society. Civil society must be mobilized and its creativity

liberated putting it in the driving seat of the European project.

The EC can tackle both problems working in partnership with national

third sector organisations and networks. One out of four citizens in

Europe is a member of one of them (see CIRIEC’s research in The EC can link to citizens through them.

At the same time, the EC can encourage national organizations

collaborate with one other through European networks, the other

partners of European institutions. European networks provide the

infrastructure of a European civil society. However, the European

institutions can’t create these bodies directly as it happened in the

past with some Brussels-based umbrella organisations - which led to

polemics against ‘European propaganda’ as this summer with the paper by

the think tank Timbro (see The EC must create a friendly environment through incentives and investments.

First of all, the EU should increase investments in the development

of European networks and the skills of practitioners. The development

of an Erasmus-like programme would be a good starting point to promote

professionalism and create a job market for the third sector through

cross border knowledge-sharing, cross-fertilization and cross

boundaries partnership.

Nurturing leadership and equipping civil society leaders with a

toolkit to face 21st century challenges would be another help build the

European sphere and increase mobility. Practitioners and organisations

must find tangible benefits to cross national borders and traditional


Well targeted programmes could reinforce social cohesion through

developing a sense of belonging to a European community and catalyze

scale-up and replication of successful stories as we have experienced

within Euclid Network.

Secondly, the EC should prioritize the reform of European funding (see Euclid Network’s consultation in

cutting red tape and developing a culture of social investment. As on

of our members defined it ‘moving from processes to results’

The EU is one of the largest donors of civil society within the EU

and globally. Moreover, European funding is vital in such a crisis when

governments, foundations and corporations are cutting their budgets.

However, its funding procedures are too expensive and time consuming

for organisations and their constraints hinder risk-taking and

experimentation. The underpinning logic is still based on a command and

control approach. As several EC officials confirm the priority is

accountability to taxpayers not return on investment.

Reducing bureaucracy dramatically would save time for European

officials and generate more resources for social economy without

increasing the expenses of the EU.

Besides increasing the efficiency of existing funding, the EC should

increase investments to foster growth and innovation of social economy.

This can be easily done earmarking some of existing funding and

establishing a Bank or Fund for social investments. There are already

such social funds nationally like Future Builders in the UK and CoopEst

in Hungary but there isn’t anything similar at the European level.

However, it should be clear that such investments must build the

capacity and sustainability of the sector without creating a new aid

industry and new forms of dependency on public money. Therefore I call

it investments and not donations.

Such approach has shown the results in the UK where the Blair

government identified the third sector as a strategic partner of

government in innovating in fields as health, education, social

services (SSGI), environment, immigration, poverty relief and

international development

To summarize the results and benefit for the public I can report

some figures (Office of the Third Sector, British Government see

* In 2006/07 there were 870,000 civil society organisations in the

UK with a total income of £116 billion and assets of £210 billion.

* In 2006/07 there were over 137,000 general charities in England with

a total income of £33 billion of which 51% was earned, 41% was

voluntary and 8% was investment income; a 40% (£9 billion) increase

since 2000/01.

* In 2005, There were approximately 61,800 social enterprises in

England with a turnover of £27 billion and contribution of £8.4 billion

to the UK economy.

* 464,000 full-time employees were employed in the sector in England in 2007/08, an increase of over 50,000 FTEs since 2000/01.

* 73% of adults took part in some form of volunteering in England in 2007/08; this level is unchanged since 2001.

* Income from Government totalled £12 billion in the UK in 2007/08

including £7.8 billion from contracts and £4.2 billion from grants; an

increase of £3.6 billion since 2000/01.

* Across Government departments 65.7% of grants on average are for three years or more.

* In 2005, 78% of people in England had given to charity in the four weeks prior to interview.

The New commission led by Barrosos might consider to set up a specil

unit in the Cambinet for thie third sector as Blair government did and

Jospin government as well in the ‘90s.

These are our main recommendations in the short and medium term:

- Reform of European financial regulation (simplification, coherence and social investments)

- Establishment of a European bank or Fund for Social investments

- Connecting good governance (Accountability and

transparency) in third sector organisations to more flexibility in

funding through a European certification

- Increment of support for European networks

- Development of an Erasmus-like programme specific for the third sector

- European accreditation to recognize professionalism of third sector practitioners and create a European job market

I would like to add that in the long term the European Institutions

must create a new sense of purpose for the European project which put

civil society in the frontline and doesn’t reduce it to be just a

watch-dog. Because of its track record the right direction could be

redefining the European project as a ‘universal mission of

reconciliation’ quoting the Ambassador Pierre Morel. European civil

society would not only find a place in such a mission but would be its

driving force. If you prefer you could call it the ‘European dream’

quoting Jeremy Rifkin.

Tags: Europe