Berlin, 26 October 2016 – Social enterprises are major contributors to Europe’s economy and, while firmly anchored in market realities, they maintain a profound commitment to their social mission, according to a pioneering international study, to which the Hertie School contributed. The study also shows that German social enterprises contribute to the development of the social sector through strong collaboration patterns and important innovations in products and services.
The in-depth study – carried out by the EU-backed SEFORÏS research consortium throughout 2015 – draws on an average of two hours of interview time with 1.030 social enterprise directors in seven countries across Europe, Russia and China. Johanna Mair, Professor for Organisation, Strategy and Leadership at the Hertie School of Governance, led the German research team.
The 107 social enterprises surveyed in Germany employed 7.500 people, generated over two billion Euros and helped nearly 900 people gain access to the labour market in 2014 by offering training opportunities.
“Analysing social enterprises in Germany in the context of the SEFORÏS project allows us to compare and benchmark across nine countries. It allows us to identify and reflect upon the specific features of social entrepreneurship in Germany and helps decision makers across sectors to make better decisions in advancing and supporting entrepreneurial activity to tackle complex social challenges,” says Professor Mair.
German social enterprises collaborate and innovate
Besides collaborating with non-profit organisations (42%), and other social enterprises (35%), almost half of the German social enterprises surveyed collaborate with corporations (40%). They also collaborate with government. However, Germany was the only country in which the collaboration with the national government (21% of social enterprises) was more important than collaboration with local and regional government. The collaborative attitude towards other social organisations is a defining feature of German social enterprises: they scored the lowest (alongside Spanish ones) on competitive aggressiveness.
Following the example of German companies, German social enterprises stand out as highly innovative. According to the 2014 Innovation Union Scoreboard, the yearly innovation performance report of the European Commission, German companies rank 3rd among the most innovative in the EU after companies in Sweden and Denmark. Eighty-eight percent of the German social enterprises in the survey created a new product, service or process in 2014. Only social enterprises in Sweden (99%) and China (97%) scored higher.
Innovation and collaboration go hand in hand. Twenty-three percent of the surveyed German social enterprises collaborated as part of their innovation processes, most of them with individuals (55%), followed by non-profit organisations (29%) and businesses (27%). Collaborations with other social enterprises and the government were mentioned by 15% and 18% of the organisations respectively.
More about German social enterprises
According to the German country report of the study, German social enterprises focus primarily on community development, employment and training (25%), education and research (22%), and health care (15%).
The main sources of funding for German social enterprises were fees and sales on the market or to governments (43%), grants (29%) and donations (10,5%). Revenues from investment were mentioned only by 6,5% of organisations.
German social enterprises are the most evenly distributed age-wise compared to the other countries: 29% have been in business five years or less, 42% between 5-20 years and 36% of them were founded over 20 years ago. This shows that German social enterprises cover a variety of development stages, which allows them to fulfil the innovation and networking role in the social sector.
Fifty-five percent of the German social enterprises in the survey were run by male CEOs. Sixty-eight percent of the CEOs of German social enterprises were over 40 years old, and 60% of them have a Master’s degree.
SEFORIS is a three-year project funded by the European Commission’s Seventh Framework Programme. It seeks to understand the potential of social enterprise in the EU and beyond (Germany, Hungary, Portugal, Romania, Spain, Sweden, the UK, Russia and China) to improve social inclusiveness of society through greater stakeholder engagement and changes to social service provision. The survey used a respondent-driven sampling method that allowed a deep dive into the diversity and breadth of these organisations.
Download the full cross-country report, prepared by the SEFORIS research consortium in English (http://www.seforis.eu/cross-country-report ). Individual country reports include Germany, China, Portugal, Spain, Sweden and the United Kingdom.
The Hertie School of Governance is a private university based in Berlin, accredited by the State and the German Science Council. Interdisciplinary and practice-oriented teaching, first-class research and an extensive international network set the Hertie School apart and position it as an ambassador of good governance, characterised by public debate and engagement. The School was founded at the end of 2003 as a project of the Hertie Foundation, which remains its major partner.
Press Contact: Regine Kreitz, Head of Communications, Tel.: 030 / 259 219 113, Fax: 030 / 259 219 444, Email: pressoffice(at)hertie-school.org