Why social enterprise is a modern day myth in Greece
The number of social enterprises in Greece has mushroomed, but their social impact is negligible. Over 2,000 social enterprises have sprung all over Greece since the crisis hit hard back in 2010, according to the Ministry of Employment Registry. Greece lost roughly 30 per cent of its national GDP; a sign of ultimate duress when compared to Syria which has seen its economy shrink by 25-30 per cent amidst a devastating civil war.
Yet, it’s now more than evident that this peculiar social business sector is nothing but words, with no social impact created or employment generated in a setting that is desperate for social innovation that delivers.
People have begun starting up social enterprises for the wrong reasons: because they are a cheap substitute for a regular enterprise with more elastic social insurance obligations, since their members are not liable as is the case for all other entrepreneurs.
There is also a better chance of subsidies and preferential treatment from the local public sector, since they enjoy many advantages provided by law when it comes to utilising public facilities for commercial use.
Very few high net worth individuals — if any — have participated as impact investors. No single social enterprise was set up by a socially responsible corporation or a charity-making foundation. The not-for profit incentive is not here.
Greek social businesses suffer a dramatic lack of committed capital, which is also widespread in the Greek SME sector. Capitalisation of the majority of social enterprises is in most cases virtual or evidently inadequate, usually a ceiling of a few hundred euro of committed capital.
Their business orientation is necessity-driven, in many cases resembling charitable, non-profit-making associations having no solid mid-term entrepreneurial vision or action plan and directly targeting grants in a very short-sighted manner.
All in all, the social business sector in Greece produces an annual turnover of some hundred thousand euro, as recently presented by ministry officials in a dedicated public event.
In 2011 the European Union encouraged Greece, via its Social Business Initiative, to pass a law dedicated to social economy and social entrepreneurship. But so far the regulatory context has just triggered the wrong responses.
Many former municipal public enterprises were shut down due to downsizing of the wider public sector in Greece and political pressure pushes towards substituting the former with new social enterprises bidding for local public contracts.