Dina Rakin spoke on behalf of the Coalition for the Solidarity Economy Development, about social entrepreneurship which are in her opinion increasingly being seen as the main actors in sustainable development.
Coalition for the Solidarity Economy Development
Dina Rakin has extensive experience in supporting and cooperating with local initiatives, local municipalities and marginalized groups and she works on capacity building of national and local institutions and representatives of social enterprises. She has been engaged in the European Movement in Serbia for seven years and is currently Deputy Secretary General. At the very beginning, she answers the question – why is social entrepreneurship important?
“Socially-owned companies are increasingly perceived as the main actors of sustainable development, challenging the current classical approach to economic growth that cares only about profit, and not about resources and pledges for the future.
Today, it is not possible to do business in the long run without taking into account the consequences that our operations have on the environment. Social enterprises are the first companies in the field of economy, namely social economy, to put people and the planet in the foreground, and only then the profit “, explains Dina Rakin, and adds that we are increasingly talking about social responsibility of companies whose logic is reversed from social enterprises’s: first is the profit. Now the consequences of doing business are thought of more often.
“When you look at energy companies, their CSR is always directed towards the environment, meaning they try to eradicate the negative impact of their actions on the environment. Socially-owned enterprises first take care of the environment and resources, and then the profit. For them, profit maximization is a means to an end: to solve a certain problem in the community (social exclusion, inaccessible community services, pollution, unemployment), and to encourage sustainable local development with careful use of local resources. They do it by selling their products and services of the highest quality on the market.
They invest all the surplus in a wider coverage of the target group through their programs, improvement of production and work processes, in order to be in accordance with the highest environmental and labor standards, workers’ rights and the like. For that reason, we are talking about social entrepreneurship primarily as an important economic entity that promotes a new paradigm of development, and then as an important instrument of social inclusion and social cohesion. “
There are about 500 socially-owned companies in Serbia, and they operate in the form of associations, cooperatives, foundations, ltds and companies for professional rehabilitation.
What exactly does that mean and what is the real state of affairs when it comes to social entrepreneurship in Serbia?
– In general, this sector mobilizes a small number of able-bodied population, and the gross domestic product (GDP), which they achieved was 6,819.2 million dinars, which was 0.2% of the GDP of the Republic of Serbia in 2012. The economic impact of these companies is weak not only in relation to other sectors in Serbia, but also in comparison with the contribution that these companies have in other European countries. The contribution of the social economy to the total GDP of the EU is around 11%. The social enterprise sector employed 10,326 people, which accounted for 0.6% of the total number of employees in Serbia, meaning that this sector mobilizes a small working age population, compared to 6.5% of the EU workforce. In addition to those paid for their work, the social enterprise sector hired 23,836 volunteers.
This shows the conditions for the development of social enterprises are quite unfavorable, which is a consequence of a number of factors. First, our entire economy is weak, the conditions for the development of small and medium enterprises are harsh and strict, and social enterprises themselves are a new and fluid form of business that takes time to establish.
An important aspect of our political system, and the social policy system, is that it is state-run, which hardly creates trust in new providers of social (and any other) services. The concept of cooperatives has been compromised by the previous system.
So what needs to be changed in the system?
– What is important today, after more than 10 years since we have been systematically trying to encourage the development of the sector, is that it has survived, grown and further developed through social enterprises in Serbia. This means that on the one hand there was a need for them, and on the other, that they did a good job.
When we talk about the quality of social enterprises, there are few very important factors that encourage their development:
- the focus on the community and its problems forces them to respond to problems directly and thus, develop good relations and trust in the community;
- their inevitable partner are local institutions and as such they are either in the position of allies, so they especially helped solve a problem (they provided space, announced transparent public procurement, referred people to social enterprises, referred businessmen to cooperate with social enterprises );
- the corporate/profit sector is an extremely important partner for social enterprises for the development of their production and services and thus, for the joint development of the local environment associations and the civil sector have been extremely helpful in promoting social entrepreneurship.
Profit maximization is a means to an end: solve problems in the community, encourage sustainable local development with careful use of local resources…
“It is extremely important to continue promoting the contribution of social enterprises to the overall development of local communities, primarily to national institutions, in order to put the ecosystem, laws and institutions further in the function of its development.
Laws, while not restrictive, are not incentive. It is extremely important to recognize the special nature of social enterprises in the legal and strategic framework, in order to direct specific instruments for their development: from budget funds to the alignment of the tax system, to public procurement and all other relevant policies towards social enterprises. We, as a civil society, have offered a Draft Law on Social Entrepreneurship in which we recognize the current practice and give them a special status. The law has been sent to a Working Group of the Ministry of Labor and we are waiting for comments to see if it will go further in the procedure that would lead to its adoption.
The text of the Draft Law is available on the website of the Coalition for the Solidarity Economy Development and is open to the contribution of all interested parties in order to obtain the highest quality text. In addition to the law, we have proposed support measures, from promotion, through education to financial support, to social enterprises in various stages of development. We believe that this approach, which has largely met with the approval of institutions, can encourage the development of the sector, and thus the overall development of society “, concludes Dina Rakin from the Coalition for the Solidarity Economy Development.
Positive examples
– Social enterprises that I would single out include Caritas Šabac, Naša kuća, LiceUlice, Kafe 16. The reasons are primarily due to the quality and sustainability of the services they offer, products that are unique, and because their activities include citizens no one would ever see or hear about. We are talking about people who have mental difficulties, as well as children living on streets and others – our interlocutor believes. You can read more about one of those enterprises in the new issue of the Original magazine on sale now.
Official interview shared from the site of the Original magazine.
Author: Maša Milojković
Photo: European Movement in Serbia