3.1. Social Innovation in the EU
Social innovation has taken on an increasingly relevant role in contemporary societies, which is also reflected in the European Union’s (EU) public policies and agendas. Since the early 2000s, the European Commission (EC) has sought to introduce the ideas underlying the concept of social innovation in its strategic documents. The Lisbon Strategy (2000) represented a milestone in the attempt to convert the European economy into growth based on cohesion. Subsequently, the Renewed Social Agenda (2008) sought to reconcile Europe’s productivity and economic recovery, with a focus on innovation, social and environmental renewal.
However, it was from the 2014–2020 programmatic framework that the notion of social innovation started to assume a central role in European strategic documents as a crucial dimension for social development and economic growth. This programming period was marked by the need to address the consequences of the economic crisis of 2008, mainly at the level of the social sector, due to the severe austerity policies that some member-states suffered (as was the case with Portugal). Thus, social innovation began to be seen as a tool for public policies and the Bureau of European Policy Advisors (BEPA) [47
] report contributed to give form to this vision. This importance was consolidated by the Europe 2020 Strategy, underlining a multidimensional and integrated growth that is simultaneously smart, sustainable, and inclusive [48
Among a set of key initiatives on this agenda, the Innovation Union stands out. This initiative, together with the Social Investment Package, has largely influenced the social innovation actions of the EC. The Innovation Union, with more than 30 actions, has as its main objective to redirect the research and development (R&D) and innovation policy to respond to Europe’s pressing challenges, namely, climate change, efficiency in energy consumption and resources use, health, and demographic aging. Horizon 2020 (H2020) is one of the most relevant instruments which emerges as a cornerstone of the Europe 2020 Strategy. This EU’s research and innovation program, in addition to the lines of scientific excellence and industrial leadership, is highly oriented towards overcoming social challenges, supporting innovation in its different stages of development, namely, modalities of innovation in the public sector, and social innovation [48
This trajectory shows that support instruments represent the key in the promotion, diffusion, and integration of social innovation. This turned out to be successful in several ways. On the one hand, these initiatives made it possible for new ideas, practices and projects to become achievable, contributing to the maximum objective of social innovation, (i.e., that of introducing social change), on the other hand, they contributed to an opening to new perspectives and the relevance of the subject.
3.2. The Portuguese Case
The evolution of social innovation in Portugal can be understood through one overarching trend in the Portuguese State and on key event in recent years. The first concerns Portugal joining the European Union in 1986 and, since then, concentrating efforts into modernizing public administration, the state apparatus and enacting specific policies to deal with the social issues that stemmed from nearly five decades of dictatorship that lasted until 1974 [50
One aspect of this process that has been the subject of interest over the last decade has been the growing trend of Europeanization of social policies adopted by Portugal [51
], which explains, in part, why Portugal was one of the first countries to heed the recommendations of the EU regarding social innovation. It also contributes to understanding the key event that triggered the implementation of social innovation in Portugal: the 2008 financial crisis and the ensuing bail-out program enacted by the International Monetary Fund, European Central Bank, and European Commission, the lasted between 2011 and 2014.
The bail-out deal included several austerity measures that severely crippled the country’s capacity to provide social assistance to the population struggling with the effects of the recession and record unemployment values. The social sector was also affected, as public financing lines and contracts suffered cuts [44
]. As the situation escalated, the sector began searching for alternative means of funding. Social innovation stood as the possible alternative and it is no coincidence that the Portugal Social Innovation program was launched in 2014, as the social problems caused by the recession and the bail-out deal were still felt [53
Since 2014, the Portuguese social sector rebounded and a new generation of social policies were enacted since then, relying heavily on social innovation as a necessary component for third sector organizations to obtain funding for their activities. Furthermore, while there were several cases of social innovations promoted before 2008, the crisis served as a catalyst for the social innovation paradigm of social policies and funding for social and third sector organizations, something also demonstrated by the Framework Law of the Social Economy enacted in 2013 [27
Being one of the countries most affected by the consequences of the 2008 economic crisis and by the ensuing austerity policies, it was important in Portugal to foster a social sector that was sustainable and that responded effectively to social needs. It was in this context that Portugal Social Innovation program (PIS) was created. The main objective of this initiative was to develop and stimulate the social investment market to support entrepreneurship and social innovation initiatives in Portugal, approaching the New Public Management Discourse model [40
One of the great assets of Portugal Social Innovation, in addition to financing, is to provide a partnership relationship between investors and social entrepreneurs, also enabling direct or indirect influence on public policies. Mobilizing around 150 million euros from the European Social Fund, within the scope of the Portugal 2020 Partnership Agreement. More specifically, the mission of Portugal Social Innovation is the promotion of entrepreneurship and social innovation to generate complementary responses to solve social problems; the animation of the social investment market, through the creation of financing instruments adapted to the specific needs of the sector of the social economy and projects of innovation and social entrepreneurship; and the training of actors in the innovation and social entrepreneurship system, contributing to its economic and financial sustainability.
To achieve these objectives, the PIS was organized into four financing instruments: capacity building for social investment (oriented towards the development of skills related to effective project management); partnerships for impact (intends to offer support through the partnership, in the form of co-financing with investors regarding the creation, implementation and growth of projects); social impact titles (for projects in priority areas of public policy, such as employment, social protection, education, health, justice and digital inclusion); and the fund for social innovation (allows easier access to credit and co-invests in organizations with projects undergoing consolidation or expansion).
Although still recent, this policy experimentation has shown interesting results. Data available from Portugal Social Innovation (https://inovacaosocial.Portugal2020.pt
) sums that there are currently 465 social innovation projects financed by Portugal Social Innovation, with a social investment of 21,713,177 EUR and a total of 59,061,972 EUR from Portugal 2020. These projects are distributed across the regions of Norte, Centro, Alentejo, Algarve, and multi-region, and fall into one of the following areas of intervention: citizenship and community, education, employment, social inclusion, social innovation incubators, and/or justice and health.
The Portuguese social innovation landscape has changed a great deal over the past few years. There is still a great potential to continue this process of change, mainly using this type of formal mechanisms. With the impacts of the crisis, there is a need to rethink the social sector arose and the debate on social innovation and the social economy grew in importance.
The Portuguese social and solidarity economy sector has become more significant to the national economy over the last few years as well and encompasses several types of organizations. These organizations have worked with the state in assuring the provision of welfare services, both during the late monarchy days in the 19th century and before the democratic revolution of 1974 [27
]. This is more so the case of older legal forms, such as mercy houses, charitable foundations, social cooperatives, and welfare associations, which assumed a more important role after 1974.
As usual, in times of crisis, the social sector tends to renew itself and gain relevance. This was the case after the 1974 revolution and again in the aftermath of the 2008 crisis. These organizations gained a renewed interest due to political attention devoted to the social economy and the cutbacks on public spending and social services in general dictated by the financial assistance program negotiated with the European Central Bank, International Monetary Fund and European Commission [30
Recent data provided by the Satellite Account of the Social Economy (INE/CASES, 2019) shows that the social economy sector, in 2016, represented 3% of the Portuguese Gross Value Added (GVA), 5.3% of remunerations and total jobs, and 6.1% of paid jobs. If we analyze the period between 2013 and 2016, this growth in importance becomes even clearer. The report highlights that there was an increase of 17.3% in the number of entities that comprise the social economy sector in relation to 2013, as well as increases in GVA (14.6%), total jobs (8.5%), and paid jobs (8.8%). These values grew above the national average during this period and show a clear positive evolution of the social economy sector in the country and its importance to the economy, despite the cries that the solidarity sector is in financial trouble. Health and social services were the largest contributors to these results, representing 48.89% of the sector’s GVA. Education follows as a distant third, representing 13.92%, as Table 1
The data show the evolution of the Portuguese context. Moments of crisis also represent moments of rethinking models and paradigms, as well as providing an opportunity for deeper transformations. Europe in general and Portugal in particular have been able to make this conversion. However, this has not happened without some tensions. In fact, new contexts, new models, and new opportunities, also represent a new role that different stakeholders are asked for. In crystallized structures, with a certain path dependence, taking on and developing these roles can be a challenge.