The role of incubators for the social economy

Author: Paolo Montemurro, Consorzio Materahub (Italy)

Published on: 2022/02/14

In recent times, we are witnessing the emergence and spread of a new economic paradigm alongside the established one in which business exists merely to create profit. The pursuit of profit for its self-interest, characteristic of the extractive capitalist economy, which extracts value from the community and the environment in order to generate economic value, has proven to be harmful and has led to an increase in negative externalities, the most obvious of which are the exploitation of natural resources and the increase in social and economic inequalities.

Therefore, a new vision of entrepreneurship has increasingly taken shape and developed in the context of the growing importance of social innovation, which is able to put communities at the center and to improve business processes with a new awareness.

In fact, the number of companies that, in various forms, operate in what is commonly recognized as social entrepreneurship is increasing, both in terms of size and relevance, attracting considerable interest from a range of stakeholders as the high social value they generate in our communities is seen as a possible response to rapid economic, social and cultural change.

The European Commission also recognizes the important role that social enterprises can play in strengthening social cohesion and achieving the sustainable and inclusive development goals identified in the 2030 Agenda. These enterprises have the potential to transform our societies and are characterized by three dimensions, as defined by the European Commission:

• 1. social: social enterprise is designed to produce benefits for the community as a whole or for disadvantaged groups;
• 2. entrepreneurial: the social enterprise acquires the typical characteristics of any form of enterprise;
• 3. governance: the adoption of decision-making processes capable of involving all or almost all the groups involved in the activity.

Therefore, the emphasis on social value rather than individual profit is the main characteristic of all those players operating in the social economy macro-sector.

Like for-profit enterprises, social enterprises also need policies, economic support and structures to help them develop, both in the start-up and development phases of their activities, and social incubators can play an important role in this.

Among the tools proposed by the economic literature, the incubator is certainly innovative and relevant to this purpose, not only as an effective tool to support social enterprises at an economic level and/ or in logistical activities, but also due to the fact that the orientation of incubators are not yet fully defined, such as hybrid enterprises (B-Corp, Start-Up with a social vocation, Benefit Societies).

In addition, the social incubator is also important as a connection tool able to identify on the one hand the real territorial needs and on the other hand the actors able to respond to these needs, implementing and stimulating employment, development and community empowerment. The Italian experiences of incubators for social enterprises show that they represent a model for activating good practices and network actions, even if the list of ‘pure’ social incubators compared to other European countries is still short.