Working for the common good

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New government strategy Working for the common good

Fair supply chains, climate-friendly manufacturing and creating jobs for disadvantaged people, and, above all, never losing sight of impacts. These are the hallmarks of social innovation and social enterprises. The Federal Government plans to strengthen these forces for the future, for which it has developed the National Strategy for Social Innovation and Social Enterprises.

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Common good

The Federal Government is supporting social enterprises with a range of funding opportunities.

Photo: Getty Images/Luis Alvarez

Social enterprises promote sustainability, participation and climate friendliness. Federal Ministry for Economic Affairs Robert Habeck emphasised the critical importance of such businesses: “they not only play a major role as the drivers of social innovations. They are also an important economic factor in solving social challenges through entrepreneurial means.” These businesses also create jobs and growth. “In order to increase their impact, we are making it easier for them to access financial support, investing in expanding the ecosystem and improving the wider legal and regulatory environment,” said the Minister when describing the approaches set out in the Strategy.

Germany: a thriving entrepreneurial culture

Federal Research Minister Bettina Stark-Watzinger also stressed how “the Strategy at long last gives social innovation a visible place in our innovation and economic policies.” She also emphasised the need for creative and entrepreneurial solutions for major social challenges.

The strategy was developed under the joint leadership of the Federal Ministry for Economic Affairs and the Federal Ministry of Education and Research. The strategy is also important to a thriving entrepreneurial sector in Germany. According to the German Startups Association monitor, over 40% of entrepreneurs consider themselves social entrepreneurs. The 4th edition of the German Social Entrepreneurship Monitor provides a good overview of the key issues and trends in businesses working for the good of all.

What is social innovation? Social innovation refers to new social practices and organisational models which solve current challenges in a robust and sustainable way. Examples include new care concepts, ways of using technology, novel networks, and new transport concepts. Innovations like these come from higher education, businesses and civil society. Social innovations often come from care, social support and health charities and associations often come up with social innovations.

Improving funding and support

The strategy includes 70 very different measures aimed at improving access to funding and advice for entrepreneurs, and also at creating a tailored legal framework.

For example, the strategy proposes to extend the INVEST start-up grant to socially responsible forms of funding, and to target the EXIST programme more at sustainability. The EXIST Women programme also acknowledges that women are more likely to set up businesses which focus on the common good. Other programmes such as the REACT with impact social entrepreneurship funding programme include support for businesses focused on working for the good of all. The government also plans to further digitalise the law of associations and update company law.

What are social enterprises? For social enterprises, working towards the common good in society or for the environment represents the sense and purpose of their commercial activity. They reinvest the majority of their profits in order to achieve these goals, and these attitudes are reflected in their organisational and ownership structures, often in the form of giving staff voting and participation rights. In a new podcast from government circles, two social entrepreneurs describe their motivations and experiences from setting up their own businesses. 

Learning from one another and working collaboratively

Another key Federal Government project involves the creation of a Platform for Social Innovation as a central point of contact where users can find information, network and learn. The launch is planned for October. Collaboration and cooperation are also at the forefront of so-called “open social innovation processes”. These aim to forge alliances which ensure ongoing impact even after government incentive funding has ended.

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