This policy guidance note describes different approaches to create supportive institutional frameworks for social entrepreneurship and social enterprise development. It is structured around good practice statements included in the action area "Institutional Frameworks" in the Social Entrepreneurship component of the Better Entrepreneurship Policy Tool developed by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities and the Directorate-General for Employment, Social Affairs and Inclusion of the European Commission: www.betterentrepreneurship.eu
Governments increasingly value social enterprises as important partners in their efforts to achieve sustainable, inclusive, and prosperous societies. They hence strive to build conducive ecosystems to support the development and growth of social enterprises in different stages of development, and according to the specificities of their business models.
This action area will help the user to assess whether there is a formal institutional framework (e.g. in the form of a national policy, strategy, action plan, dedicated programme), and a co-ordination mechanism ensuring coherence across government departments or agencies (horizontally) and different government levels (national, regional, local) (vertically). It will also examine the process for developing, implementing, and monitoring the institutional framework (e.g. through the engagement of and co-construction with relevant stakeholders). Finally, it will assess the extent to which institutional bodies, such as chambers of commerce or umbrella organisations, engage with social enterprises.
Setting up a formal institutional framework, for example in the form of a national policy, strategy, action plan, or dedicated programme is a good practice when it comes to supporting social enterprise development. A dedicated statutory body is another viable, and sometimes complementary, policy option. It is also important that other institutional bodies, like chambers of commerce or umbrella organisations, engage with social enterprises. A system for formal recognition, like a registry, can also help to enhance the visibility and support to social enterprises.
The institutional framework also needs to be coherent and coordinated across policy areas. In this regard, a coordination mechanism can ensure coherence across government departments or agencies (horizontally) and between national, regional, and local government levels (vertically). At the same time, the institutional framework needs to be inclusive, ideally co-created with the stakeholders that are part of the wider ecosystem. This will increase the chances of effective implementation and sustainability. Finally, the institutional framework needs to be actionable, and progress against its objectives and actions should be easy to monitor.
Policy levers for a supportive institutional framework:
- Establish partnerships with relevant stakeholders from the outset of the policy and/or strategy development process.
- Take stock of the existing institutional framework and the way it can be adapted to support the development of social enterprises.
- Ensure coherence and coordination of different policy actions that may impact social enterprise development.
- Enhance communication and coordination efforts within and across ministries, government agencies, and levels of government (i.e. national, regional, local).
Pitfalls to avoid
- Designing an institutional framework for social enterprise development without consulting with the relevant stakeholders and taking into account the strategies developed by the sector itself.
- Developing an institutional framework without considering the existing ecosystem, including various stakeholders, norms and procedures that might have an influence (direct or indirect) on the development of social enterprises.
- Allowing overlaps or inconsistencies with other policies and actions that may have an impact on social enterprises.
Guidance per assessment statement
We invite you to assess the degree to which your institutional framework for supporting social enterprises is coherent. You can examine how well government agencies coordinate their actions among them and across different government levels.
Why is it important?
Social enterprises often operate at the intersection between different policy areas. Therefore, their activities touch upon the portfolios of different ministries and government agencies. At the same time, the coordination of policy actions across national, regional, and local levels impact social enterprises as well. For example, the effective implementation of a national strategy for social enterprises will to a large extent depend on actions taken at regional (if applicable) and local level. Therefore, it is essential to have a coherent institutional framework that effectively allocates responsibilities among government agencies and across government levels, so as to avoid inconsistencies and confusion.
Smooth information flows across ministries, government agencies, other institutional bodies and relevant stakeholders is also essential for providing comprehensive and coordinated support to social enterprises. Sharing of information can be done both through formal and informal channels - what is essential is that it happens on a regular basis and that the information is easily accessible.
Some common good practices for effective coordination include:
- Openly sharing information on social enterprise development schemes across ministries, agencies, and with relevant stakeholders.
- Establishing a formal communication channel between the different levels of government that can be easily accessed.
- Organising information sessions for civil servants and employees from other relevant bodies with the help of stakeholders from the social enterprise ecosystem.
- Making sure there are regular opportunities for informal communication among policy officers in different ministries, departments and agencies and with other relevant stakeholders.
In order to score high, in your context:
- Coordination among government agencies works well.
- Coordination across government levels works well.
Good practice example
The SPP Integration Sociale Agency (Belgium)
In Belgium,“SPP Integration Sociale”, a public agency dealing with poverty, social economy, and policies for big cities – has been entrusted by the federal government to be responsible for activities undertaken in partnership with social enterprises. The agency thus coordinates policies related to social enterprise on the basis of a partnership agreement between the federal government, regional governments and the German-speaking community. A key principle in the preparation and implementation of policy actions coordinated by SPP Integration Sociale is the involvement of stakeholders. The agency works in close cooperation with social economy platforms from the different regions based on a relationship at eye-level, rooted in the mutual recognition of common needs and interests.