Social Entrepreneurship in Deprived Areas of Amsterdam

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Social Entrepreneurship in Deprived Areas of
Amsterdam
Economic Development Department Social
Development Department

• Dr. Isabel J. Gallin,
• Procesmanager, Social Development Department
• City of Amsterdam
• The Learning Network - Milan
• Friday, February 11th, 2005

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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

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The Third Sector
Public
Private
1970s Third Sector Co-operatives, Associations,
Mutual Societies
Non Profit Sector / Social Economy
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Non-Profit Sector

• Tax exemption as a key criterion (USA)
• For cross-national comparative purposes
• Formal
• they have a certain degree of institutionalisatio
  n (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

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Social Economy

• 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

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Social Economy or Non-Profit Sector?

• Points of divergence ? Social economy approach
• Specification of goals
• ? Serve members of the community rather than to
  seek profit
• Non Proft Not explicit as to the goals of the
  organisation
• Control over the organisation
• ? The requirement of a democratic decision-making
  process
• Non Profit No formal democratic requirement
• 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?

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Social Economy Social Enterprises

• Non-Profit Sector Social Economy

New entrepreneurship Social enterprises
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EntrepreneurshipCriteria of Innovative Behaviour

• Entrepreneurs are responsible for introducing
  changes in at least one of the following ways
• New product / quality of product
• New production method
• Opening of a new market
• Acquisition of a new source of raw materials
• Reorganisation of a sector / activity

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Enterprises which may be called social

• New economic trends in their behaviour are
  compatible with explicit social dimensions if
• 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
• Non-commercial resources
• Broad mobilisation of resources across the
  society (non-monetary, voluntary work, donations)
• Particular organisational methods
• Democratic decision-making process, members
  involved in management

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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

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Definition of Social Enterprises EMES-network

• Purpose of activity
• Non-commercial resources
• Particular organisational methods

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The Dutch Situation

• NL has the largest non-profit sector in the world
  in terms of employment (1995)
• ? 12
• or 670.000 full-time jobs in education,
  healthcare welfare
• Comparison
• ? United Kingdom 6,2
• ? Germany 4,9
• ? France 4

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How come?

• 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

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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

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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

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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

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Amsterdam City Center
Total population 79.919 inhabitants January 1,
2004
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Amsterdam within the Ring A10
Total population 439.847 inhabitants
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City of Amsterdam
Total population 738.763 inhabitants
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Deprived Areas of Amsterdam

• Parts of
• West - Parkstad
• Campus New West
• DOude Huygens
• Southeast
• Social venture competitions
• Arena
• Entrepreneurial houses
• North
• VEBAN, VMBO Business Schools, RABA,
• Bredero College, Shell area

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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

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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