The Third Leg of Europe: Untapped Resources for Innovation

Dear readers this time my entry is just about our contribution for EC DG Industry’s consultation on innovation and the new Lisbon Strategy. Below you can read the full text keeping mind that immigrants and Muslim are untapped reources… especially in a ageing Europe. Diversity is the key for innovation. We should invest in diversity instead of repress it.

Do you want to leave in a multicolour thriving and vibrant Europe or do you prefer a sleepy and quite monochromy?

‘To frame the question about social innovation in the European context on can use a metaphor describing the EU as three leg stool with one atrophied. Over the last 50 years the EU has progressively strengthened public institutions and the single market but left civil society to lag behind. The European stool can stand up on just two legs.

Civil society has a long history of generating social innovation in Europe but it has been confined within national borders. Except for few multinational NGOs like Oxfam or one-issue federations, civil society has not been able to develop a European dimension where innovation could flow across borders.

This is exemplified in the lack of a single concept to refer to it. If you look in the official documents of public institutions and academia you will find many denominations: civil society, third sector, social economy, non-profit or NGOs. Although civil society shares values and aims the differences in origins prevail.

Moreover, there is still skepticism towards the value created by civil society. However, In our network society innovation is not a monopoly of public institutions and corporations anymore but it emerges within society. Civil society must be mobilized and its creativity liberated putting it in the driving seat of the European project.

The EC can tackle both problems working in partnership with national third sector organisations and networks. One out of four citizens in Europe is a member of one of them (see CIRIEC’s research). The EC can link to citizens through them.

At the same time, the EC can encourage national organizations collaborate with one other through European networks, the other partners of European institutions. European networks provide the infrastructure of a European civil society. However, the European institutions can’t create these bodies directly as it happened in the past with some Brussels-based umbrella organisations – which led to polemics against ‘European propaganda’ as this summer with the paper by the think tank Timbro. The EC must create a friendly environment through incentives and investments.

First of all, the EU should increase investments in the development of European networks and the skills of practitioners. The development of an Erasmus-like programme would be a good starting point to promote professionalism and create a job market for the third sector through cross border knowledge-sharing, cross-fertilization and cross boundaries partnership.

Nurturing leadership and equipping civil society leaders with a toolkit to face 21^st century challenges would be another help build the European sphere and increase mobility. Practitioners and organisations must find tangible benefits to cross national borders and traditional boundaries.

Well targeted programmes could reinforce social cohesion through developing a sense of belonging to a European community and catalyze scale-up and replication of successful stories as we have experienced within Euclid Network.

Secondly, the EC should prioritize the reform of European funding (see Euclid Network’s consultation) cutting red tape and developing a culture of social investment. As on of our members defined it ‘moving from processes to results’

The EU is one of the largest donors of civil society within the EU and globally. Moreover, European funding is vital in such a crisis when governments, foundations and corporations are cutting their budgets. However, its funding procedures are too expensive and time consuming for organisations and their constraints hinder risk-taking and experimentation. The underpinning logic is still based on a command and control approach. As several EC officials confirm the priority is accountability to taxpayers not return on investment.

Reducing bureaucracy dramatically would save time for European officials and generate more resources for social economy without increasing the expenses of the EU.

Besides increasing the efficiency of existing funding, the EC should increase investments to foster growth and innovation of social economy. This can be easily done earmarking some of existing funding and establishing a Bank or Fund for social investments. There are already such social funds nationally like Future Builders in the UK and CoopEst in Hungary but there isn’t anything similar at the European level.

However, it should be clear that such investments must build the capacity and sustainability of the sector without creating a new aid industry and new forms of dependency on public money. Therefore I call it investments and not donations.

Such approach has shown the results in the UK where the Blair government identified the third sector as a strategic partner of government in innovating in fields as health, education, social services (SSGI), environment, immigration, poverty relief and international development

To summarize the results and benefit for the public I can report some figures (Office of the Third Sector, British Government):

• In 2006/07 there were 870,000 civil society organisations in the UK with a total income of £116 billion and assets of £210 billion.
• In 2006/07 there were over 137,000 general charities in England with a total income of £33 billion of which 51% was earned, 41% was voluntary and 8% was investment income; a 40% (£9 billion) increase since 2000/01.
• In 2005, There were approximately 61,800 social enterprises in England with a turnover of £27 billion and contribution of £8.4 billion to the UK economy.
• 464,000 full-time employees were employed in the sector in England in 2007/08, an increase of over 50,000 FTEs since 2000/01.
• 73% of adults took part in some form of volunteering in England in 2007/08; this level is unchanged since 2001.
• Income from Government totalled £12 billion in the UK in 2007/08 including £7.8 billion from contracts and £4.2 billion from grants; an increase of £3.6 billion since 2000/01.
• Across Government departments 65.7% of grants on average are for three years or more.
• In 2005, 78% of people in England had given to charity in the four weeks prior to interview.

The New Commission led by Barroso might consider to set up a specil unit in the Cambinet for thie third sector as Blair government did and Jospin government as well in the ‘90s.

These are our main recommendations in the short and medium term:

Reform of European financial regulation (simplification, coherence and social investments)

Establishment of a European bank or Fund for Social investments

Connecting good governance (Accountability and transparency) in third sector organisations to more flexibility in funding through a European certification

Increment of support for European networks

Development of an Erasmus-like programme specific for the third sector

European accreditation to recognize professionalism of third sector practitioners and create a European job market

I would like to add that in the long term the European Institutions must create a new sense of purpose for the European project which put civil society in the frontline and doesn’t reduce it to be just a watch-dog. Because of its track record the right direction could be redefining the European project as a ‘universal mission of reconciliation’ quoting the Ambassador Pierre Morel. European civil society would not only find a place in such a mission but would be its driving force. If you prefer you could call it the ‘European dream’ quoting Jeremy Rifkin.