3 Things European Governments Should Do For Social Entrepreneurship

June 21, 2013

Ashoka is the world’s first and foremost association of leading social entrepreneurs, with 3,000 Ashoka Fellows in 70 countries. Ashoka systematically selects social innovators with potential for large scale social impact, and supports them financially and with a network of business entrepreneurs.


Our experience has shown us that supporting social entrepreneurship requires a holistic viewpoint. We need to consider, firstly, where great ideas come from, secondly, who drives them, and thirdly, how they grow. Each of these questions challenges governments to think outside of the box when it comes to providing investment capital.


1.) Filling the pipeline for later stage investments requires a robust identification and support mechanism for early stage social entrepreneurs, most of whom do not identify themselves as such but are to be found in the most unlikely of places. The best mechanisms here are not governmental but philanthropic; however, governments can help drive a culture of recognizing and celebrating change-makers not only in London and Brussels but in Transylvania and Sicily.


2.) Social entrepreneurs are entrepreneurs, and entrepreneurs are rare. They are also typically not as naturally equipped or inclined to apply for government support as managers in long-established welfare organizations. In this case, governments need to create regulation-free special social development zones with no questions asked seed funding, tax exemptions and trouble-free borderless giving.


3.) Growing the best ideas across borders will be the true test for the EU internal market. Ireland has recently started importing, or “localizing” social innovations and the troubled economies ranging from Portugal to Greece should do the same. This would provide instant job creation, and would not require waiting for the next great idea to emerge from local change-makers.


And here is a final idea, one that could help the investment schemes above to jumpstart a market. How about we copy the idea behind billion-Euro export credit insurance schemes that enable much of Europe’s exports to help with the default risk of investments in social entrepreneurs? (Thanks to Norbert Kunz who had the same idea). With the risk lowered, investors would be able to fund more innovation and more early stage organization. After all, fixing our societies’ most urgent social problems sounds no less relevant than selling machinery.


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