Social entrepreneurship and innovation in Lithuania

Achievements and challenges

Social entrepreneurship

Social enterpreneurship - refers to the practice of combining innovation, resourcefulness and opportunity to address critical social and environmental challenges

Social entrepreneurship - the recognition of a social problem and the uses of entrepreneurial principles to organize, create and manage a social venture to achieve a desired social change.

Many different definitions, however, still no consensus among different government agents, academia and social innovators

Social entrepreneurship in world

Social entrepreneurship in world

International programs

Social entrepreneurship initiatives examples

Social entrepreneurship in Universities

Social firms in Lithuania

Law on Social Firms launched in 2004, reform

20111st Social firm was established and launched in 2005Now there are 44 000 disabled employees of

which still only 6,8% are working in Social firms

137 Social firms in total, employing 5,4 00 employees out of which 3,900 are in the

target groups (i.e. disabled people, long – term unemployed, imprisoned people, lonely parents etc.)

18 611

8

34

42

1

53

Social firms in Lithuania137 Social firms in total

•Disabled Social firms - 78 •Social firms - 59 (people excl. from the workforce i.e. Lonely parents, imprisoned etc.)

firms operate in 9 territorial labour exchanges

2 associations: Lithuanian Social firm Association, Lithuanian Disabled Social firm Association. (In total around 14 firms each)

Since the Law on Social firms was put in place in 2004 the number of employed disabled people increased 4,5 times. In 2012 November, social firms employed 3934 employees that fall under various target groups categories.

Growth of Social firms in Lithuania

How they are subsidised?

Social firms are entitled to:•Corporate tax relief (15%)•Various Subsidies (incl. payroll, social insurance relief, transportations, employment, etc.)

In 2011 FYE, the subsidies reached 32,5 M. Lt., (NB – 20,5 M. Lt and ESF – 12,0 M. Lt)

Social firms received 8,5 M. Lt, disabled social firms 24 M. Lt.

On average 9.000 Lt. per 1 qualified employee/year

Subsidy for social firms is from Government budget, however, from 2008 and from European Structural Funds. ESF in 2009 – 6,1 M. Lt, 2010 – 17,5 M. Lt, 2011 – 11,9 M. Lt.75 per cent of government subsidies are for payroll expenses subsidies and social insurance subsidies

Subsidies growth in Lithuania

Social firm vs. Social enterpriseSocial firm does not fulfill commonly used social entrepreneurship definitions and criteria since:

It’s not required to reinvest profitsIt’s not required to solve social problems (apart from disabled employment)It’s not measured by source of revenues it generates

However it provides employment to the disabled and disadvantaged people

IS THAT ENOUGH?

How? Where? When?

What kind of Social entrepreneurship we want in Lithuania?

What abroad practice and models are adaptable?

Do we need new legal status for social enterprises?

Should we promote social enterprises via subsidies?

Which measures are the most effective? Is there enough absorption criteria? How to measure direct and indirect social

innovation? What are the long term goals? How to measure progress?

Problems?

Social firm status is too narrow

We need social innovation and entrepreneurial and novel ways of solving social problems

New ways to promote social entrepreneurs (other than subsidies and tax reliefs)

Communication and cooperation between private and public sectors

What’s the source of social enterprises

SOCIAL ENTERPRISE

StudentsNGOsSocial firmsFor profitsState owned companiesRural communitiesSocialinės įmonės

WE NEED DIVERSITY!

Social entrepreneurship strategic plan

Planned initiatives in place

Soc. Entrepreneurship in ME and Government priority list:In order to find new opportunities for entrepreneurship and promotion of private social services and good initiative, Social entrepreneurship and social innovation development strategy has to be prepared. (2013 3Q)Soc. Entrepreneurship in National Progress Programme 2014 – 2020promote and develop social innovation by NGO (Social entrepreneurship, social clusters). (2.2.2.6) promote social entrepreneurship, by establishing competency centers, good practice center, accelerators, co-working spaces increasing mobility and other developing other measures. (3.1.3.3)

IS THAT ENOUGH?

Further plans - 2013

Enterprise Lithuania as a coordinating body/insitution:Abroad practice adoption to LithuaniaTraining/awarenessCommunication/ promotion (Social entrepreneurship day)Community strengthening (Mentors network)Subsidized consultingEstablishment of competency centerSocial clusters opportunitiesSocial enterprise acceleratorsCo-working spaces for social enterprises (HUB Vilnius)Social enterprise business plan competitions

- 2014 and beyond

Broader definition (from social firm to Social enterprise)

Regulation? Social enterprise mark example Set of measures to evaluate social innovation

impact Social innovation as a horizontal priority Promote rise awareness about pilot projects

and successful stories of social entrepreneurship and innovation

Soft financial support (micro-credits) and financial engineering for new EU support period starting in 2014

We are looking for social entrepreneurs and innovators

Mindaugas DanysMinistry of the Economy

SME Department directorTel. 8 706 67922, mob. 868601247,

e-mail: mindaugas.danys@ukmin.lt

Rokas PečiulaitisMinistry of Economy

SME Department project managerJPP ‘Kurk Lietuvai‘ participantTel. 8 706 63022, mob. 861601791e-mail: rokas.peciulaitis@ukmin.lt Facebook: Kurk Lietuvai