Social Enterprise in Western Europe

Theory, Models and Practice

Jacques Defourny, Marthe Nyssens, Jacques Defourny, Marthe Nyssens

• Publisher: Routledge
• Year: 2021
• eBook ISBN: 9780429619625
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

In the last two decades, the quest for a widely accepted definition of social enterprise has been a central issue in a great number of publications.

The main objective of the ICSEM Project on which this book is based was to show that the social enterprise field would benefit much more from linking conceptualisation efforts to the huge diversity of social enterprises than from an additional and ambitious attempt at providing an encompassing definition. Starting from a hypothesis that could be termed "the impossibility of a unified definition", the ICSEM research strategy relied on bottom-up approaches to capture the social enterprise phenomenon in its local and national contexts. This strategy made it possible to take into account and give legitimacy to locally embedded approaches, while simultaneously allowing for the identification of major social enterprise models to delineate the field on common grounds at the international level.

Social Enterprise in Western Europe –the third volume in a series of four ICSEM-based books on social enterprise worldwide – will serve as a key reference and resource for teachers, researchers, students, experts, policy makers, journalists and others who want to acquire a broad understanding of the social enterprise and social entrepreneurship phenomena as they emerge and develop in this region.

Part I National Overviews of Social Enterprise

1 Unity in Diversity Exploring the Multiple Facets of the Belgian Social Enterprise Landscape

Benjamin Huybrechts, Marthe Nyssens and Jacques Defourny

DOI: 10.4324/9780429055140-1-3

Introduction

Over the last two decades, the notion of social enterprise (SE) has increasingly gained visibility in the Belgian landscape. Nevertheless, unlike more established notions such as the social economy and the non-profit sector, social enterprise is still a fuzzy and debated notion in Belgium. Some use this term as a synonym for social-economy organisations. Others refer to any business focusing on generating social impact, regardless of its legal structure and governance practices. Still others use social enterprise to describe the entrepreneurial approach adopted by an increasing number of non-profit organisations. In this chapter, we build on the EMES Network’s ideal type of social enterprise, which defines the economic and entrepreneurial dimension in a broad way, emphasising dynamics of production and risk-taking rather than strict criteria in terms of market-based incomes, as is the case in other SE approaches (Defourny and Nyssens 2006; 2010). Such a view of social enterprise has affinities with the notion of “social economy” (Defourny 2001).

In Belgium, since 1990, the social economy has become increasingly recognised both in Flanders (the Northern, Dutch-speaking part) and in Wallonia (the Southern, French-speaking part). All regional governments now have a minister in charge of this domain (often with other spheres of competencies). As a result of this recognition, various tools have been set up in the last ten years to provide social enterprises with credit facilities, securities and seed capital as well as technical support through dedicated consultancy agencies. However, in some cases, the concept tends to be understood in a quite narrow sense, due to its association with specific missions. In Flanders and in Brussels, as a competence of the Ministry of Labour, the social economy has often been associated only with the integration of low-skilled workers on the labour market. In Wallonia, as a competence of the Ministry of Economy, it has frequently been considered only in its more market-oriented version.

This chapter is structured as follows: The first section reviews the main historical roots that have led to the emergence of a diversity of models related to social enterprise and the social economy in Belgium. The second section reviews the legal recognition of the concept and its evolution over time. The third section sketches how the main SE models, as observed internationally, find resonance in the Belgian context, and what these models imply in terms of building statistics. Finally, the conclusion sketches some of the main challenges lying ahead for social enterprises and their supporters in the Belgian context.

1.1 Historical Roots

The SE phenomenon in Belgium has been fed by various traditions: the associative, cooperative and mutual traditions, often highlighted as the backbone of the “social economy”; the support by public authorities in the context of specific public policies; the support of philanthropic actors through donations and “social investment”; and the inputs of a more business-oriented approach. These different roots have led to specific SE models, but they have also enriched each other; the notion of social enterprise is thus best understood as the combined outcome of a plurality of roots.

1.1.1 The Associative Tradition

A first historical tradition that has contributed to feeding the practices and conceptualisations of social enterprise is the associative tradition. The law of 27 June 1921 regulates the associative form in the civil code, stating that it is a private grouping of people that does not aim to provide personal gains to its members. This law was substantially amended in 2019. The law of associations is now incorporated into the Belgian Commercial Code. This new law defines an association as “constituted by an agreement between two or more persons, called members. It pursues a disinterested goal in the exercise of one or more specific activities that constitute its purpose. It may not distribute or procure, directly or indirectly, any patrimonial benefit to its founders, members, directors or any other person except for the disinterested purpose determined by the bylaws of the association”.

Contrary to what was the case before the 2019 amendment, associations can—like commercial companies—develop economic activities of an industrial or commercial nature, even as their main activity, but the income generated by these economic activities has to be allocated to the achievement of the association’s disinterested purpose. With this new law, the only criterion that distinguishes a company from an association is the fact that, in an association, there are no formal owners and the distribution of profits or the granting of benefits to the organisation’s members, partners, or managers is prohibited. As a result, market-oriented activities that, in other countries, would typically be undertaken by cooperatives (such as work integration or fair trade) can be conducted under the associative form in Belgium.

From 2004 onward, specific statistics on associations have been constructed under the supervision of the Belgian National Bank (through a satellite account). In 2017, there were 109,000 active associations in Belgium, of which, however, only 17,000 had salaried workers. Employment in Belgian associations exceeded 350,000 full-time equivalents (FTEs), representing nearly 12% of all employment in the country (Fondation Roi Baudouin 2018). There are, however, boundary cases of organisations and fields that are located close to the public sector, such as associative hospitals and schools that are highly regulated by the state in their practices. Competition and entrepreneurial practices and discourses are, nowadays, part of the everyday life of associations, especially those with paid workers. The entrepreneurial behaviour is also a matter of legitimating one’s activities as worthy of attention, including in economic terms (Dart 2004). Illustrative of this trend is the “rebranding” of the major employers’ associations in the non-profit sector, from “non-profit” or “non-market” (non-marchand) into “social-profit” organisations.

1.1.2 The Cooperative Tradition

As in many other countries, cooperatives emerged in Belgium around the middle of the 19^th century. The cooperative legal form was officially recognised in 1873 but, unlike in other countries, compliance with the rules and practices prescribed by the International Cooperative Alliance (ICA) was not embedded in the law until the recent reform of 2019; the resulting ambiguity around the cooperative legal form was an obstacle to building a strong identity and recognition for cooperatives in Belgium (Defourny et al. 2002; Van Opstal et al. 2008). The new law adopted in 2019 brings more clarity, to the extent that the “transactional relationship” between a cooperative and its members is now part of the identity of this legal form: meeting the needs of members is the ultimate goal of a cooperative. Organisations that hitherto operated as cooperatives but do not want to adopt such identity can choose to transform into limited-liability companies. However, in this new cooperative law, there is still no reference to the other principles of the International Cooperative Alliance (regarding, e.g., the distribution of profit or voting rights). As a consequence, the cooperative legal form still remains very flexible. For cooperatives willing to comply with the seven ICA principles, an accreditation process through the “National Council for Cooperation”, created in 1955, remains possible. Moreover, a “social-enterprise” label has been created by the law of 2019. Surprisingly, the access to this SE label is now restricted to cooperatives; by contrast, the “social-purpose” qualification, that had been created in 1995 but has now been abolished, was accessible to all types of companies willing to express their strong social orientation. In other words, although the Belgian legislation about cooperatives was in need of clarification regarding the very identity of the latter, the recent law tends to add confusion in terms of identification of social enterprises in the Belgian landscape.

The bulk of “true” cooperatives appeared at the end of the 19th and the beginning of the 20th centuries in a few key sectors: agriculture, retail pharmacy industry, retail shops, banking and insurance. Cooperatives organised themselves in networks that were not really structured on an industry basis (except for agriculture), but rather on an ideological basis, corresponding to the major “pillars” in Belgian society: socialist, Christian and, to a lesser extent, liberal. In spite of major developments and economic successes until the 1960s, traditional cooperatives then began to suffer from economic crises and from competition with conventional enterprises in most of their fields of activity. As a consequence, a large number of important cooperatives disappeared (typically in the ...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Contents
• Preface and Acknowledgements
• Editors
• List of Contributors
• Introduction: Documenting, Theorising, Mapping and Testing the Plurality of SE Models in Western Europe
• PART I: National Overviews of Social Enterprise
• PART II: Comparative Analyses and Perspectives
• Conclusion: Social Enterprise, Welfare Regimes and Policy Implications
• Index