How is Brussels going on with the social enterprise agenda?

A friend has just come back from Heraklion (Crete, Greece) where the last meeting of the Commission’s experts in social entrepreneurship gathered for 3 days.

You might wonder why the Commission is spending our taxes to pay for a jolly on the Greek beaches. I’m sure this is music for Euroskeptic as Grillo, Farage and Le Pen. How to blame them. We hope that this is a contribution to the economic recovery of Greece at least.

Here is a genuine report of what happened… toned with an enthusiasm for Brussels’ potential in which I do not believe in anymore unless it goes through a dramatic overhaul.

Enjoy the reading:

“You asked what I thought about the 5^th GECES meeting recently held in Heraklion. I have some positive reflections but there is also room for improvement.

It was excellent news that the Impact Measurement paper by the GECES subgroup was formally adopted by GECES and that it can therefore now serve the Commission as a useful first step towards an EU wide framework on this very difficult but valuable issue. It is understandable that many people wanted the paper to do more, take a different approach, or even be more explicit about specific indicators that should be used for specific activities – but I think that it has been right to first focus on establishing a common best practice process that itself can accommodate plurality and diversity as well as respond dynamically to needs on the ground. These are of course some of the guiding principles we identified in our communique on social investment to Commissioner Barnier – which 3 years later is still as valid as it was then.

This departure from other top-down and one-size-fits-all policies is very sensible and makes a refreshing break, so the Commission should be commended for stepping outside its comfort zone and being supportive of the approach mapped out in the paper. It is a significant milestone that the Eu Commission now has a single starting point for how impact measurement should be implemented across the full gamut of EU areas and bodies –EaSI, EuSEF, ERDF, ESF, EIB, EIF etc  – it would have been a disaster to have had different approaches taken by all.

It is accepted by the authors that the approach to measuring social impact needs further work because it is an emerging science and that regular review and evolution of the detailed implementation  is essential. I think it would be helpful looking at impact measurement through the lens of how we collect and aggregate the impact data so that we have useful benchmark data that is comparable. Although it is important to know what we want to measure, we should now start thinking about what we want to do with that data so that it can come together to form useful market-wide information that improves decision making about how capital can be more effectively deployed to achieve social outcomes. So we need to see which financing instruments are better able to deliver certain outcomes, or address certain areas of social concern or beneficiary groups. It is important to be able to evaluate the relationship between financial returns and social returns by evaluating a rich dataset that incorporates both in a readily accessible and comparable way.

Adoption of the impact measurement paper also means that the EU will now make a significant contribution towards shaping and influencing the global debate via the G7 task force on social impact investing. It is a shame that the GECES only has one subgroup that aligns with the G7 taskforce activity, because the G7 seems to be making stronger progress across more issues and in a shorter space of time than GECES. Arguably speed will come at the expense of quality in parts and so therefore it is vital that the EU community engages more strongly in all these G7 workstreams so that it can help embed a representative and more pluralistic global narrative – this opportunity should be embraced by GECES but I fail to see it being recognised by the group with the priority I think it needs.

I recommend that the GECES ramps up its activity and sets up another 4 subgroups to align with the 5 workstreams of the G7 task force.

In my view the G7 narrative on social impact investing still risks being too strongly influenced by the Anglo-Saxon perspective and not sufficiently inclusive and embracing of the full breadth of global opinion. Every time I raise this issue it strikes a chord so I am convinced that I have identified a very relevant pressure point. There is nothing wrong per se with the Anglo-Saxon narrative – I agree with it – but by definition it can never be a global narrative and it will be a wasted effort if the emerging G7 narrative ignores this important dimension – this will just result in fragmentation and confusion in the market and ultimate impede the increase of mainstream capital being deployed globally for an explicit social purpose. Unfortunately the GECES group as a whole remains stubbornly unable or unwilling to see the value it could bring to the global debate both in real terms but also using this agenda to (re)establish Europe’s forward thinking leadership on the global stage. Our parochial and myopic introspection risks us having to accept what others decide on our behalf.

We should bear in mind that the G7 initiative on social impact investment (under the UK presidency) will be taken over by the G20 (under the Australian presidency) – this is relevant because we know that the EU listens more strongly to the G20 than the G7 – so it would be enlightened self-interest to engage more strongly now. Perhaps under the Italian presidency of the EU, which comes at an interesting juncture between the outgoing and incoming EU commission and also effectively the handover of the social investment baton from the G7 to the G20. The Italian Government would be wise to recognise this significant opportunity it has to take the lead Europe whilst the handover of the Commission is in flux with new Commissioners being elected – it would be a lost opportunity if Europe capitulates on these important social-economic issues that it actually has the intellectual leadership of – the question is whether there is the political leadership to engaged?

The results of recent European elections have revealed disillusionment in the establishment. Clearly the frustrations of the Occupy movement and the Indignados et al in the wake of the financial crisis has now been directed towards the political classes – so in my view it is obvious that any new political leadership should harness the power of the emerging social sector as a credible and proven way of filling the gaps of the financial crisis and government austerity. The challenge is of course how to make it sexy and cool so that the take-up is rapid, deep and sustainable – in other words, significantly recalibrate the rules of the mainstream capitalist model towards have a more explicit social objective!

Back to the last GECES meeting and how could it be improved to respond to this changing landscape and potentially increasing relevance of its activity:

1. The format and structure of the GECES meetings need changing to more effectively harness the collective brain-power in the room. It is a very wasteful cost of time and money for us all to attend meetings only to be spoken to and not engaged in productive working sessions. We should use these meetings to have more dynamic workshops and hackathons etc to actually deliver useful solutions to the problems. We have people in the GECES group who are excellent at doing this, but they are not being sufficiently engaged in the formal process – although I think many of the officials will individually be receptive and supportive. We should be able to address multiple topics at once, not just one. For example, the next GECES meeting will focus on procurement policy – personally I don’t think I can contribute much to that but I certainly will enjoy the chance to get an expenses paid trip to Rome – this is not wise use of EU money and will just fuel the anti-EU / anti-establishment sentiment.
2. The Eu Commission services should take encouragement from the success of delivering the bottom-up impact measurement paper by stepping further outside their comfort zone. But to do this I suspect they need a more dynamic mandate (stronger leadership?) within the Eu Comm, SBI, GECES. This needs to be by people who deeply understand the social sector and importantly how to harness more effectively the resources of the GECES group.
3. I thought this last meeting in Heraklion might have been be more useful because the GECES meeting was linked to a conference by the Greek government, and that the Greek government would have asked us to try help them brainstorm solutions to some burning issues or problems they are experiencing. But again we were just spoken to about stuff we either knew or wasn’t relevant. So instead many of us found it more productive (and enjoyable) to network amongst ourselves in the rooftop pool of the hotel instead of actually attend the conference. Again very wasteful use of EU money, but very valuable networking for us so I am grateful – but in reality we could have done both!

So in summary, GECES has convened an excellent bunch of people and it has the potential to be very influential and valuable in helping to create consensus and articulate solutions to our EU/global social-economic problems… but, like with all things that have been running for a few years, I recommend that it is time for a strategic review to take on board changes in context so that it can be more effective and a more useful use of EU money”.