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José Manuel Durão Barroso

President of the European Commission

Europe leading social innovation

Social Innovation Europe initiative

Brussels, 17 March 2011

Ladies and Gentlemen,

It is a pleasure to be here and see all of you around this very important issue - how to pursue our dialogue on social innovation.

I would like to thank Geoff Mulgan and Diogo Vasconcelos for their kind invitation and also to congratulate them together with Louise Pulford for having won the call to set up the pilot initiative "Social innovation Europe". I also would like to thank DG enterprise for having organised this launch event today. As you know the Commission is fully involved. Lázsló Andor was with you yesterday. Máire Geoghegan-Quinn will be with you today, so this idea of innovation is indeed a major issue for the Commission I am proud to lead.

Europe has a long and strong tradition of social innovation: from the workplace to hospices, and from the cooperative movement to microfinance. We have always been a continent of creative social entrepreneurs who have designed systems to enhance education, health, social inclusion and the well-being of citizens.

By nature social innovation is an ever-evolving field to keep pace with fast-changing challenges in society. But what concretely do we mean by social innovation? I think it is important to recognise that this concept is not yet fully accepted in the political debate.

I think social innovation is about meeting the unmet social needs and improving social outcomes.

It is about tapping into the creativity of charities, associations and social entrepreneurs to find new ways of meeting pressing social needs, which are not adequately met by the market or the public sector and are directed towards vulnerable groups in society. This is for example the Projecto Geracao (the generation project) in Portugal or the second-chance schools in France.

At a broader level it is about addressing societal challenges in which the boundary between 'social' and 'economic' blurs and which are directed towards society as a whole. This is for example the Red Cross or the Open Society.

It is also about creating the behavioural changes, which are needed to tackle the major challenges of societies; and empowering citizens to become co-creators of innovative social relationships and models of collaboration. It is to promote changes of behaviour towards more responsibility of individuals as part of a community.

In a nutshell, social innovation is for the people and with the people. It is about solidarity and responsibility. It is good for society and it enhances society's capacity to act.

I strongly believe that today our strong European tradition of social innovation is more needed than ever.

The crisis has made it clear that most of the challenges we are facing have taken on an increasingly social dimension from poverty and social exclusion to demographic ageing and to the needs for better governance and more sustainable resource management. What I am telling is not just matter for nice papers. It is indeed the need for policies that have a direct impact and concrete consequences for the life of our citizens.

Just today, as it happens all the time before the Tripartite social summit, I was in my working breakfast with the social partners. We then met the European trade union confederation, John Monks and his collaborators and also Business Europe, Philippe de Boeck and his collaborators. And, together with Lázsló Andor, what I have asked them is precisely for some ideas on how they can address these challenges and ideas that they should work on between social partners. What contribution they can make for some of our instruments, instruments that we have already in the European Union and the European Commission, for instance the multi-financial framework? We are going to come with a proposal, on the 29th of June, on the financial perspectives for the next cycle. Can we or not innovate there?

I can tell you, sometimes the resistance to innovation comes from all organisations including, let's put it frankly, the European institutions. There is always a tendency to keep what exists and when there is a new idea the first reaction is "No" or "Yes but…", but of course the "but" is a problem.

So what I think we should have first of all is the attitude. It is a question of attitude. Why don't we think of an alternative? I think this idea of being creative in terms of not only to create new instruments, but to try to use all the instruments and to adapt them, I think it is a very promising start if we are committed at all levels and that is why an initiative like yours can raise awareness and put some pressure for these things to happen.

So this is the point I wanted to make. I think the Social Innovation Initiative should not be just a thing for respectable Think Tanks and very nice papers, but for concrete consequences in policy making and policy outcomes, because we really need this immediately.

The crisis has only confirmed the necessity for change in the way we approach our social and economic challenges.

Innovation in its broadest sense must be part of our response to today's challenges.

Social innovation in particular is an opportunity not to be missed to generate new solutions, to connect with the citizens and to promote a better quality of life. Social innovation should be at the core of our social market economy and also contribute to make our social market economy more competitive.

If we are prepared to adapt to our fast-changing world, if we address today's social and economic challenges in a smart way, it has the potential to unleash fresh waves of creativity and innovation and create new sources of sustainable growth and jobs.

That's why innovation is a cornerstone of our Europe 2020 strategy for growth and jobs.

Innovation is key for generating and consolidating the kind of growth we need and want: inclusive, smart, sustainable growth. An example: we are speaking about fiscal consolidation. It is indispensible in most, if not in all, Member state. It is obvious in terms of market evolution, in terms of confidence of the markets following the financial crisis and also the sovereign debt crisis - fiscal consolidation is indispensible. But by fiscal consolidation I mean smart fiscal consolidation. And, as I have said two or three days ago in Rome in a university, it is not smart to cut the expenditure in investment, in innovation, in research and in science. This is certainly not a smart thing and that is why we need to make real prioritisation of our investment.

Social innovation can also contribute to create jobs with a strong concern for the environment, social inclusion, education and training. They also contribute to open minds to change by fostering trust, confidence and economic and social dynamism.

Our Innovation Union flagship aims specifically at delivering a real change on how and how much we innovate in Europe from science and technology driven innovation to boost the competitiveness of our industries; to new business models but also social innovation, innovation on how life and work are organised. And this issue of innovation to market is very important. According to the latest statistics I have consulted in fact, in terms of science production the European Union leads the world. We have more output in terms of science, for instance scientific papers, than our American friends and much more than any other part of the world. But in fact, where we are behind is in the capacity to translate this science creativity to this innovation to market. That is why we have to focus more on innovation. And for example, the Innovation Union flagship initiative includes health-related initiatives notably on healthy ageing.

Ageing of the population, and its associated health and caring costs, is indeed one of the major issues faced by governments especially at a time of fiscal consolidation. It is both a challenge and an opportunity.

It is an opportunity because the most important sectors for growth in the next decades are linked to the development of human and social capital: for example, health already represents a large share of GDP in most countries. And in many EU countries, elder care alone is due to reach 5% of GDP in a few years. It is an area where we need to maintain and even increase public investment in research and innovation. This is to invest in the future. And it is by the way an area where we can create a lot of jobs. So it is indeed an area that can be very promising for the economy of Europe.

It is also a challenge because we need to bring public and private stakeholders together to identify and deploy innovative solutions to address such an issue that is shared throughout the European Union. Together, we need for example to make the most and the best of the potential of information and communication technologies (ICTs) for improving our ability to meet those social needs, such as e-Health in healthcare.

Active and healthy ageing is precisely our pilot Innovation Partnership. It will aim to give Europeans an average of two extra years of healthy life by 2020. So most of us will benefit from this innovation initiative.

When it comes to innovation, Europe starts from a position of strength. We have regions amongst the most innovative in the world. Our economies are supported by some of the world's most dynamic public services and strong traditions in social innovation.

Our strengths however must be better exploited. We must champion social innovation. We must develop a better understanding of public sector innovation, identify and give visibility to successful initiatives, and benchmark progress.

I believe we need to do more and better. A number of expert reports have concluded that social innovation in Europe is hampered by four main factors: the insufficient knowledge of users' needs, from NGOs and patients to public sector and social entrepreneurs; the fragmentation of efforts and resources – funding and skills -; the poor diffusion and little scale up of good practices; and the poor evaluation of actions and policies.

There is clearly a huge need to exchange know-how on these issues whether on local-regional-national or EU levels. The context may be different let's say in the city of Malmo than in the city of Krakow, but the approach of doing social innovation by community building and networking can be replicated effectively across borders.

The Social Innovation Europe Initiative we are launching today will precisely address these four main difficulties. It will also support the development of other policy areas, in particular social policy, health care and environment policies.

It is one of the actions included in our flagship on Innovation Union. And it is part of a more comprehensive effort to develop evidence for social innovation and support the social economy.

There is a huge untapped innovative potential of the social economy sector across Europe. Individuals or groups of people come up with creative solutions to major socio-economic problems often linked to social exclusion as well as to the ageing of the population. Their innovations contribute to generate economic growth and have a positive impact on all stakeholders. The social economy in Europe employs 11 million people, that is 6% of the active population of the EU; the non-profit sector in Europe is contributing to 5% of the GDP and about 40 millions employees, that is 20% more than the transportation industry for example. But this is structured around a variety of different type of legal status.

The Commission will contribute to optimise their functioning and facilitate their development within the Single Market. This will help to release the full potential of social entrepreneurship, in particular by proposing European status for organisations that serve the social economy, European foundations for example. Just yesterday we had a discussion in the College, an orientation debate about the Single Market Act that will come in the next months. We will present the Single Market Act. One of the likely first initiatives is precisely the issue regarding social entrepreneurship including the important role of foundations in Europe and the status of foundations. Some of you are very familiar with this problem. I hope that at European level we can also support the very important role of these foundations.

So a lot is going on in the field of social innovation. It is present in almost all our flagships related to the Europe 2020 objectives. I have mentioned Innovation Union but I could have mentioned as well the European platform against poverty and social exclusion, the Digital agenda, a major source for innovation, or the New skills and jobs strategy. It is also a key element of the re-launch of the Single Market Act that I just mentioned.

This clearly shows that social innovation is more important than ever to build a smart, sustainable and inclusive growth. You are agents of these changes and I count on your active participation in the Social Innovation Europe Initiative.

This initiative will offer a very promising platform for connecting, learning and networking for anyone interested in social innovation. Europe's social innovators will drive its success. I cannot be today all the day with you and listen to your very important contributions, but the Commission is present. We are, I promise you, very attentive to your work, to your conclusions, so I wish you a very fruitful debate and I thank you for your attention and for your commitment to this very important agenda of social innovation.

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