International Support for Internationalisation

Sep 17, 2019

by INTSENSE

International Support for Internationalisation

When social enterprises consider trading, operating or replicating into a new country, many look for sources of support and help. Most of this support is offered at a local or national level, but there are some sources of support that operate internationally. This can be divided up into four areas:

The legal or policy framework
Business support
Networks
Finance

Legal / Policy Framework

The European Commission identified the value and potential of social enterprise and set up the Social Business Initiative in 2011[i]. This has helped to create a positive narrative about social enterprise within the EU, supported the development of social enterprise friendly policies at a national level, and led to the inclusion of social enterprise within EU funding programmes.

While not specifically focussing on internationalisation, some of these programmes do have an impact on this area. And the Commission is committed to developing support for international scaling in future. For example, in their communication on the Start-up and Scale-up Initiative, the European Commission states:

“[Many social enterprises] have potential for scaling proven business models which could be replicated in other territories. However, these companies still find it hard to secure funding and support, especially due to the following factors:

lack of recognition and understanding of their economic potential;
insufficient exploitation of modern technologies.

… Building on the Social Business Initiative, the Commission will encourage social start-ups to scale up, including through measures focussing on better access to finance, improved access to markets, and strengthening regulatory frameworks by advising Member States on policy design.”[ii]

The GECES report from October 2016 recommends stimulating cross border operations for mutuals and cooperatives to use full potential of internal market[iii].

Business Support Infrastructure

Most business support infrastructure is organised and delivered at a local or national level. There are a small number of international organisations that do provide some form of business support to social enterprises, and which are increasingly recognising the importance of connecting social entrepreneurs globally, often using the shared language of the Sustainable Development Goals[iv] to aid communication and collaboration.

Ashoka[v], for example, now has over 3,500 fellows across 93 countries, but this specialist support is not open to any social enterprise, only those few who are chosen.

Impact Hub[vi] is a network of incubators and co-working spaces as well as an online community reaching more than 40 million people. Until recently the Hubs have been locally focussed, but this vision is now becoming one of global collaboration.

The British Council[vii] runs a social enterprise support programme in 29 countries, and while this utilises international expertise, the focus of social enterprise development is national rather than international. Nevertheless, this support had been extremely valuable to some of the social enterprises in this research.

“A very important partner and network is the British Council that has helped our extroversion in various ways: through its involvement in our projects; through the dissemination of our actions and outcomes is its network; by providing training opportunities for our team; with mentoring sessions; and with financial support.”
(Greece)

NESsT[viii] also operate support for a small number of social entrepreneurs across several countries, including the Baltics. But again, while the organisation is international, the support tends to be nationally focussed.

Plus Acumen[ix] run online courses and connect social entrepreneurs in 190 countries, but do not provide specific advice or support for individual social enterprises.

Spring Impact[x] (formerly the International Centre for Social Franchising) was specifically founded to help organisations scale and replicate their impact internationally.

Meanwhile the EU funds a network for national social enterprise support intermediaries. COP-SE[xi] provides online resources and a directory of support organisations across Europe. They also offer a Connector Service[xii] that links intermediaries supporting social enterprises with international scale-up plans to support organisations and other partners within Europe.

The Global Social Entrepreneurship Network (GSEN)[xiii] also links social enterprise intermediaries with international counterparts to share best practice, but this doesn’t focus on the internationalisation of social enterprises themselves. .

Some EU funded projects, particularly through the Interreg programme have provided cross-border business support for social enterprises. These projects generally connect project partners from different European countries, and provide some opportunities for cross-border learning for the social entrepreneurs involved. Examples include:

SPARK[xiv], a social enterprise accelerator involving partners from England, Belgium, Holland and France as part of INterreg 2 seas programme

European Certificate in Community Enterprise (ECCE)[xv] is a vocational qualification developed by partners from UK, France, Spain, Sweden and Romania. The project also developed a cross border social enterprise learning network.

RAiSE[xvi], which connected intermediaries to improve the level of social enterprise business support across Spain, Hungary, Ireland, Scotland, Italy, Sweden and Austria.

SuNSE[xvii], provides support for potential social entrepreneurs in the UK, the Netherlands, Ireland, France, Switzerland and Luxembourg.

There is also support available to SMEs looking to internationalise, which is relevant to some social enterprises, through Enterprise Europe Network (EEN), set up by the European Commission[xviii]. Through partnerships with local providers, EEN provides personalised advice and support with internationalising. The offer varies from country to country. Italy has 50 centres offering this support, Ireland has 32 the UK 24, Greece 9, Lithuania 3, Latvia has only one.

Networks

Most social enterprise networks in Europe are still relatively weak, informal and disconnected. Many of the social enterprise related networks funded through the EU connect intermediaries to share best practice, rather than the social enterprises themselves[1].

Some areas have local or national networks where social enterprises themselves can meet and exchange ideas, learn from each other and collaborate. However these networks do not provide the cross-border connections necessary for internationalisation.

There are some international networks.

The Social Enterprise World Forum[xix] started 11 years ago as a one off event in Scotland and has now become an annual gathering of over 2,500 social entrepreneurs and experts from 49 countries. This provides opportunities for social entrepreneurs to learn from each other, and develop international partnerships.

The EUCLID Network[xx] is supported by the EU to deliver exchange programmes, events and programmes designed to connect social entrepreneurs across Europe.

Ashoka[xxi], as already mentioned, connects a network of 3,500 high-performing social entrepreneurs across 93 countries. They also run Changemakers, which is a global peer support network open to all social entrepreneurs.

Citizen Network [xxii] also connects social entrepreneurs across the globe through an online network.

Finance

The European Commission recognises the importance of providing appropriate finance for social enterprise. Its primary levers for achieving this are:

Creating guarantee schemes to encourage lending and investing in social enterprises
Creating grant programmes which include funds for social enterprise, managed at a national level

Initiatives that help social enterprises access finance include:

The EaSI Programme[xxiii], which helps social enterprises access investments of up to EUR 500,000 via public and private investors at national and regional level.

European Fund for Strategic Investments (EFSI) Equity instrument[xxiv] which helps social enterprises access equity for pilots.

Most of the EU funding programmes are too large and bureaucratic for social enterprises themselves to access directly. However, some organisations involved in this research had accessed European funding through such programmes as Interreg and LEADER and International funds such as the UN Environment Fund.

“Well, of course the Interreg programme was helpful. This was also so sustainable / because it tied us together over a certain period of time and I don’t know if we would have done it so intensively without the Interreg programmes. “The disadvantage with Interreg, or at least with us in the region, is that it has a relatively high level of co-financing… 40 percent co-financing has to be provided by the participants themselves.”
(Germany)

Most EU funds though, are distributed to social enterprises through national or local intermediaries. Some of these funds can be used to scale, and even to internationalise, but they do not have an international focus. In fact, many of the outputs the intermediaries commit to delivering are specifically local or national (jobs created, for example). This can make these funds inappropriate for any internationalisation where the social impact is abroad rather than local[xxv].

The European Commission provide a summary table[xxvi] of EU finance for SMEs, some of which is appropriate for different social enterprises wishing to internationalise:

Another potential pan-European source of finance for scaling and internationalising is the European Venture Philanthropy Association (EVPA)[xxvii] This includes international impact investors such as Ananda[xxviii], who invest in growth social enterprise headquartered in Europe. None of the social enterprises in this research had used it however.

There are also interesting new models of international social finance developing. For example the world’s first cross-border social impact bond was launched in Germany in 2016[xxix].

References:

[1] For example COP-SE, Social Entrepreneurship Network, and RAISE.

[i] http://ec.europa.eu/growth/sectors/social-economy/enterprises_en

[ii] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0733

[iii] https://www.ripess.eu/the-geces-2016-report/

[iv] https://www.un.org/sustainabledevelopment/sustainable-development-goals/

[v] https://www.ashoka.org/en-gb/home

[vi] https://impacthub.net/wp-content/uploads/2018/09/Impact-Hub-Global-Impact-Report-2018.pdf

[vii] https://www.britishcouncil.org/society/social-enterprise

[viii] https://www.nesst.org/

[ix] https://www.plusacumen.org/courses/social-entrepreneurship-101

[x] https://www.springimpact.org/