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 Department Social Development Department

11 February 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

11 February The Third Sector Non Profit Sector / Social Economy PublicPrivate 1970’s Third Sector Co-operatives, Associations, Mutual Societies

11 February 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

11 February  1. Legal / institutional Co-operative style enterprises Mutual type organisations Associations  2. Normative Serving members of the community rather than generating profit Independent management Democratic decision making process Primacy of people & labour over capital in distribution of income usually combinations of both approaches Social Economy

11 February Points of divergence → Social economy approach: 1.Specification of goals → Serve members of the community rather than to seek profit Non Proft: Not explicit as to the goals of the organisation 2.Control over the organisation → The requirement of a democratic decision-making process Non Profit: No formal democratic requirement 3.Use of profits → Redistribute a part of the surplus to the members Non 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?

11 February Non-Profit SectorSocial Economy New entrepreneurship Social enterprises Social Economy & Social Enterprises

11 February Entrepreneurship Criteria 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

11 February New economic trends in their behaviour are compatible with explicit social dimensions if 1.They benefit the community or target groups Purposes 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 resources Broad mobilisation of resources across the society (non- monetary, voluntary work, donations) 3.Particular organisational methods Democratic decision-making process, members involved in management Enterprises which may be called ‘social’

11 February 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 Definition of Social Enterprises EMES-network  Purpose of activity  Non-commercial resources  Particular organisational methods

11 February NL has the largest non-profit sector in the world in terms of employment (1995) → 12 % or full-time jobs in education, healthcare & welfare Comparison: → United Kingdom 6,2 % → Germany 4,9% → France 4% The Dutch Situation

11 February ‘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 Have 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

11 February 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

11 February 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

11 February Amsterdam City Center Total population inhabitants January 1, 2004

11 February Amsterdam within the “Ring A10” Total population inhabitants

11 February City of Amsterdam Total population inhabitants

11 February Deprived Areas of Amsterdam Parts of:  West - Parkstad Campus New West D’Oude Huygens  Southeast Social venture competitions Arena ‘Entrepreneurial houses’  North VEBAN, VMBO Business Schools, RABA, Bredero College, Shell area

11 February Conclusions  Definition debate Narrow 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 society to grow from ‘social entrepreneurs’ to ‘entrepreneurs’  Social enterprise Focus on the enterprise part, potentials, chances

11 February 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