Social Entrepreneurship in Deprived Areas of Amsterdam

Dr. Isabel J. Gallin,

Procesmanager, Social Development Department

City of Amsterdam

The Learning Network - Milan

Friday, February 11th, 2005

Economic Development DepartmentSocial Development Department

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The Amsterdam Experience

Content

From Third Sector to Social Enterprise The Dutch Tradition: ‘Pillarisation’ and Welfare state Ethnic Entrepreneurship Empowerment Situation in Amsterdam Social Entrepreneurship and Local Development

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The Third Sector

Non Profit Sector / Social Economy

Public Private

1970’s

Third SectorCo-operatives, Associations, Mutual Societies

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Non-Profit Sector

1. Tax exemption as a key criterion (USA)

2. For cross-national comparative purposes

Formal they have a certain degree of institutionalisation (presupposes a legal personality)

Private Distinct from both state & those organisations issuing directly from the public authorities

Self-governing They have their own regulations & decisions making bodies

Non-distribution constraint They cannot distribute profits to either their members, their directors or a set of ’owners’

Voluntary contribution Some level of voluntary contribution & founded on free and voluntary affiliation of their members

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1. Legal / institutional

Co-operative style enterprisesMutual type organisationsAssociations

2. Normative

Serving members of the community rather than generating profitIndependent managementDemocratic decision making processPrimacy of people & labour over capital in distribution of income

usually combinations of both approaches

Social Economy

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Points of divergence → Social economy approach:

1. Specification of goals → Serve members of the community rather than to seek

profitNon Proft: Not explicit as to the goals of the organisation

2. Control over the organisation→ The requirement of a democratic decision-making

processNon Profit: No formal democratic requirement

3. Use of profits→ Redistribute a part of the surplus to the membersNon Profit: prohibits any profit distribution and thus excludes

the entire co-operative component of social economy

Dynamics & emergence of social enterprises?

Social Economy or Non-Profit Sector?

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Non-Profit Sector Social Economy

New entrepreneurship

Social enterprises

Social Economy & Social Enterprises

11 February 2005 8EntrepreneurshipCriteria of Innovative Behaviour

Entrepreneurs are responsible for introducing changes

in at least one of the following ways:

1. New product / quality of product

2. New production method

3. Opening of a new market

4. Acquisition of a new source of raw materials

5. Reorganisation of a sector / activity

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New economic trends in their behaviour are compatible

with explicit social dimensions if

1. They benefit the community or target groupsPurposes of the activity → requirement for the production surplus to be ‘socialised’ / reinvested in the development of the activity / used for the benefit of people other than those who control the organisation

2. Non-commercial resourcesBroad mobilisation of resources across the society (non-monetary, voluntary work, donations)

3. Particular organisational methodsDemocratic decision-making process, members involved in management

Enterprises which may be called ‘social’

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Criteria of Social Enterprises

Economic / entrepreneurial dimensions Continuous activity producing goods and / or selling

services High degree of autonomy Significant level of economic risk Minimum amount of paid work

Social dimensions Explicit aim to benefit the community Initiative launched by a group of citizens Decision-making power not based on capital ownership Participatory nature, which involves the persons affected by

the activity Limited profit distribution

11 February 2005 11Definition of Social Enterprises EMES-network

Purpose of activity

Non-commercial resources

Particular organisational methods

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NL has the largest non-profit sector in the world in terms of

employment (1995)

→ 12 %

or 670.000 full-time jobs in education, healthcare & welfare

Comparison:

→ United Kingdom 6,2 %

→ Germany 4,9%

→ France 4%

The Dutch Situation

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‘Pillarisation’

groups of citizens organised themselves along religious

& political lines Catholics, Protestants, Liberals, Socialists and others

Emancipation of different population groups Not confined to the non-profit sector

political parties, labour unions, housing associations, newspapers, schools, broadcasting associations, sport clubs, hospitals, shops, etc.

All kinds of service providing organisations were set up

along the lines of the pillars, financed by collective

arrangements

How come?

11 February 2005 14Have we got social enterprises in Amsterdam?

The Dutch Welfare state

All-encompassing approach of Dutch government

leaves little room for independent local initiatives

Almost no project can meet the complete set of

entrepreneurial and social criteria defining social

enterprises

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Ethnic entrepreneurship

General notions Stimulation of (deprived) areas Stimulates participation to society Enhances creativity & dynamism in an area ‘Bridge’ between present location and land of origin

Facts Quota for migrants is lower than for non-migrants … But growth is much higher for migrants 2nd generation chooses entrepreneurship more often

than 1st generation Differences: more Turkish and Chinese entrepreneurs

than Moroccan, Surinam, Antillean or African

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Ethnic Entrepreneurship in NL

Not a big issue & no specific policies

Monitors Preconditions Remove barriers for (ethnic) entrepreneurs

Empowerment

strengthening position of inhabitants in social, physical,

cultural, mental and economic respects

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Amsterdam City Center

Total population 79.919 inhabitantsJanuary 1, 2004

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Amsterdam within the “Ring A10”

Total population 439.847 inhabitants

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City of Amsterdam

Total population 738.763 inhabitants

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Deprived Areas of Amsterdam

Parts of:

West - ParkstadCampus New WestD’Oude Huygens

SoutheastSocial venture competitionsArena‘Entrepreneurial houses’

NorthVEBAN, VMBO Business Schools, RABA, Bredero College, Shell area

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Conclusions

Definition debateNarrow interpretation of social enterprise, less attention on the non-profit sector that provides the preconditions (welfare, healthcare, housing, education etc.)

Empowerment as a policy / an instrument Goal is to enable inhabitants of Amsterdam to participate to societyto grow from ‘social entrepreneurs’ to ‘entrepreneurs’

Social enterpriseFocus on the enterprise part, potentials, chances

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Thank you for your attention!

Acknowledgements

Mr. Drs. Edwin A. Oskam,

Economic Development Department, City of Amsterdam

Mr. Dr. Piet H. Rennoy,

Regioplan Policy Research

Further reference:

The results of the EMES-network are published in:

The Emergence of Social Enterprise,

Edited by Carlo Borzaga and Jacques Defourny

London & New York 2001