The Regional Government follows the European strategy by supporting investments in social enterprises with the Entrepreneurship and Social Innovation Fund

Amaia Arrizabalaga – Analyst and Portfolio Manager of Seed Capital Bizkaia

At the moment, Europe faces major challenges, in terms of demographic changes and population aging, unemployment rates, poverty and social exclusion, and Social Economy companies may play a key role in raising expectations of society, and of the labour market.

The member countries of the EU consider the Social Economy as a fundamental sector for European construction, and a key part of the economic and social development of Europe.

All of them are betting on stimulating social entrepreneurship, as an innovative response to solving social problems. Understanding by social enterprise any entity whose activity is aimed at meeting a social need.

In this context, the European Commission and its member states are promoting the development of strategies, programs and regulatory rules, which help to promote and increase the visibility of the social economy, entrepreneurship and social innovation.

And, according to this, the Provincial Council of Bizkaia promotes the Entrepreneurship and Social Innovation Fund, managed by the venture capital company Seed Capital de Bizkaia.

With this, the Provincial Council of Bizkaia wants to demonstrate its commitment to this business sector, and take a step further in promoting the business sector in general, the development of innovation, and the creation of employment and wealth in its environment.

The viability of the entities

In addition, Seed Capital de Bizkaia, due to its experience as a Venture Capital company, sees necessary to emphasize two aspects that it considers relevant for the viability of this type of entities:

• On the one hand, it is necessary to work to facilitate access to financing for companies in the social economy. To do this, it will be necessary to analyse the financial instruments that are most suitable and strengthen them in order to promote the growth of companies in this sector.
• And on the other hand, it considers essential to establish parameters with which the social impact that these companies can generate can be measured. This social benefit should be considered as part of the total profitability of this type of projects and that can serve to make up for lower financial profitability, if that is the case. This would facilitate access to financing for this type of entities.

As a consequence of all this, it is necessary to support social innovation, because the combination of innovation and technology, with the detection and solution of social problems, allow to improve the quality of life of many people, launching projects that are sustainable over time.

Social innovations, which combine values, knowledge and technology, have the objective of solving problems and demands of the society, fostering interaction between people and organizations, promoting the cohesion of societies, in order to produce results and impacts that improve society.

Therefore, we must conclude that the Social Economy is positioned as a fundamental pillar in the European agenda and, in this line, both the Provincial Council of Bizkaia and Seed Capital of Bizkaia want to keep supporting the creation and consolidation of companies with social purposes through the new Entrepreneurship and Social Innovation Fund.