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Last month Germany unveiled its first ever national strategy for social innovation and “companies oriented towards the common good”.
The long-awaited document (available in German) from the federal government sets out 11 focus areas – covering procurement, finance, research, visibility and more (see box below).
But is it any good?
Above: Social entrepreneur Zarah Bruhn, who was appointed Germany’s commissioner for social innovation within the federal government last year (credit: SEND)
Last year we heard that social entrepreneurs had become “fed up” with slow political progress; almost 80% of those surveyed by national umbrella organisation, Social Entrepreneurship Netzwerk Deutschland (SEND) felt only a little or not at all supported by policymakers. There were some positives: representatives of the three parties (the Social Democrats, the Greens and the Free Democrats) in the coalition government were “really engaged with the topic and the sector”, and social entrepreneur Zarah Bruhn had been appointed commissioner for social innovation, located within the education ministry but working across government.
We caught up again with David Korenke, policy lead at SEND, to find out what’s changed. He told us why dormant assets are a focal point now, why €1bn earmarked for innovation may soon open new opportunities for social businesses – and why the coming two years are crucial for the sector.
Pioneers Post: What’s the general feeling among Germany’s social entrepreneurship community about this new strategy?
David Korenke: The general feeling is that the strategy represents a very important step for social entrepreneurship, social enterprises and the social innovation community in Germany, because it’s been finally recognised as a serious enough sector of the economy and of society to get its own national strategy. That said, the German government publishes a tonne of national strategies. They don’t tend to have legal consequences attached to them. So it’s more an expression of will. But that still is extremely important.
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Germany’s strategy on social innovation and common-purpose organisations: 11 action areas
Summarised from Nationale Strategie für Soziale Innovationen und Gemeinwohlorientierte Unternehmen |
PP: The European Commision chose a very broad concept of the ‘social economy’ to cover all kinds of organisations in its action plan. Is this similar? Which organisations does this strategy cover?
DK: It’s actually quite broad. Part of the reason is that the two ministries spearheading the effort both have their own focus areas: social enterprises for the ministry for economic affairs; and social innovation for the ministry for education. That meant, from the start, that the strategy was going to be very broad. I think one can sense that it’s trying to cover a lot of ground, which leads to a lack of depth at points.
It’s been finally recognised as a serious enough sector of the economy and of society
PP: Could you highlight a few particular areas that the strategy proposes that you think are encouraging, or are likely to lead to real action?
DK: There’s a lot of encouraging stuff in there. Whether a lot of the actions will actually soon develop meaningful impact is an open question.
There are a lot of general commitments to very positive things, for example, the fact that social innovation is finally recognised as equal to technological innovation. But in many parts of the strategy, there’s definitely a lack of detail, of a set timeframe and of clear responsibility. We’ve got some quite specific actions that have the potential to be very impactful in the area of access to finance, for example. But there’s a lot of work to be done.
There are a few positive things – one important one, a clear commitment to use dormant accounts for social innovation and social enterprises. That represents a newer and larger commitment – we’ve had the commitment in the coalition agreement, which said dormant accounts are supposed to be used for the good of society, but no specific commitment to social innovation. We’ve got that in the strategy now, which is great.
There is a clear commitment to use dormant accounts for social innovation and social enterprises
PP: Is there something in Germany’s approach that other countries could borrow or learn from?
DK: The government has said they want to essentially check all types of innovation funding to make sure all that is effectively open to social enterprises and to social innovation, which is quite a big step. That could have a major positive impact. The number that’s been floated, among others by Zarah Bruhn, the commissioner for social innovation, was €1bn of existing and new funding that’s now going to be opened up for social innovation and social enterprises.
But again, is that going to happen within the current parliamentary term, so meaning until September 2025? Or is it going to be delayed by other factors?
PP: What’s missing from the strategy, in your view?
DK: We hoped for a little more ambition. For example, in the area of access to finance, opening these innovation funding programmes would be great. But we don’t really know when that’s going to happen, and how exactly. We would have liked to see clear commitment to a specific programme that finances social enterprises. In the last year we have had, using ‘React with Impact’ funding from the European Union, a new programme that supports consulting services for social enterprises, but doesn’t finance them directly. Our point of reference is always the funding that the startup community gets from the government – we just haven’t seen a similar programme for social enterprises or even for young social enterprises.
In the area of visibility, we would have liked to see social innovation and social enterprise ‘anchored’ in every single federal ministry. We’d like to have someone who’s in charge of the topic in every single ministry.
The third point would be more ambitious, structural changes. For example, there was a quite intense discussion about steward ownership in Germany, and the introduction of a new legal form; that hasn’t been included in this strategy, which is unfortunate. [Currently social entrepreneurs often choose a structure that combines an association, a foundation and a business.]
And last but not least, opening up KfW – which is the German public sector bank, that finances a whole lot of different programmes – making sure that nonprofit businesses can take advantage of their programmes. That’s in the strategy, but it’s sort of broad and vague.
Our point of reference is the funding that the startup community gets – we haven’t seen a similar programme for young social enterprises
PP: What’s next for SEND?
DK: Making sure that what’s in the strategy is implemented in the next few years. Even though there is, to an extent, a lack of ambition there, we need that as a basis to then formulate another strategy that’s more ambitious.
We are lucky that the current coalition government of Greens, Social Democrats, and Liberals are all quite open to the topic of social economy. My assessment right now would be that it’s unlikely that this composition is going to continue, meaning that we’ll probably have someone in the coalition that isn’t as much in favour of the topic. So we’re probably going to face more of an uphill struggle next time around. That’s why the next two years are so important.
Top photo by Jörn Heller on Pixabay
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