Employment and Social Innovation (WP5)

Background
There is quite a lot of information on social innovation in the labour market domain (macro-level), if compared to other policy areas. Less knowledge is available on what is going on within the structure of the companies themselves (micro-level). For example, it is not clear how organisational models such as Lean Production, Fordism, Flexicurity etc. are adopted by organisations. The room for manoeuvre on the shop-floor for being socially innovative within companies remains unclear. The challenge for companies is to deliver more and better innovation and to make better use of the innovative capacities on the shop-floor. The contradiction here is between managerial authority, standardization policies and the bottom-up action required for such innovative capacity. The new innovation models are not clear.

There is clearly room for learning about social innovation models at the European and global scale. The success of social entrepreneurial behaviour is different between countries, and even between continents. Countries use different models to support or to help encourage such entrepreneurial activity. The conflict with public initiatives is different within the different countries, within and between the different socio-economic regimes. The challenges for New Member States on the labour market seem even greater than in the northern parts of Europe. These differences need to be looked at in the project. The social problems at the macro- and micro-level are requiring more ‘(social) innovation’, now even more because of the economic crisis.

Pressing social problems of the labour market comprise the following:

• Work in Europe and the US is permeated by flexibility: flexible contracts, flexible teams, flexible life chances (Kalleberg 2009). The flexible approach is seen as needed for organisations and societies to adapt to the global competition that will continue into the future. However, as Richard Sennett (1998) has pointed out, this flexible approach corrodes the elements of personal character which binds people together. Our social self is under threat.
• Many EU-countries have high levels of youth unemployment. This has got dramatically worse since the beginning of the economic crisis. The youth unemployment rate stood at 22.7% in the third quarter of 2012 (COM (2012) 727 final). This not just a waste of assets and a massive cost to national economies, but also the young people risk entering into a vicious circle of unemployment, social exclusion, psychological difficulties and later even into age-related poverty.
• 
  Companies in many countries face the problem of large parts of workforce approaching retirement age, while at the same time the availability of skilled labour force to replace retirees is scarce.  Furthermore, many EU countries face flat or even declining birth rates, reducing the number of potential future employees. The combination of both developments is a particular challenge.
• Strong power of different interest groups: the behaviour of actors within organisations and on the labour markets is traditionally regulated by market forces and public policies. But both realms are also regulated by the constant struggle between the major stakeholders on the labour market, the employers and the trade union organisations. Sometimes, employers try to influence labour market policies without giving any room to trade unions, as was the case in The Netherlands between 2010 and 2013. But in most European countries, trade unions try to channel the new ideas and wishes of their members to the negotiation tables.
• Integration of disadvantaged groups in the labour market for achieving a socially inclusive society.

The current labour market Innovation model
The labour market and, to a lesser extent, the organization of work have been in the focus of European policy makers. The Lisbon Agenda (2000) was the stepping stone for the reforms of the German labour market policies (Hartz-reforms). Europe has tried to set clear goals for activating the labour markets (70% labour market participation, low unemployment, flexicurity policies etc.). European learning networks have been developed on several of these social problems to create learning between the different national policy makers: age management, empowerment and inclusion, gender mainstreaming, inclusive entrepreneurship, migrant and ethnic minorities, reintegration of ex-offenders, social economy, asylum seekers and victims of human trafficking, youth employment, etc. The European Commission has launched several policy initiatives to stimulate progress in these fields: Agenda for New Skills and Jobs; Active inclusion policy; Youth on the move; New European Agenda on Integration; Strategy on equality; European Disability Strategy etc.; Corporate Social Responsibility. The European Social Fund has been used to stimulate the different countries to experiment in just these fields (website: ESF\Transnational networking).

Furthermore, public policy makers try to account for the opinions of the various stakeholder interests. The discussion is institutionalised in the different social and economic councils at the different levels of the labour markets. But from time to time, public policy makers find they need to steer the labour market in directions in which their stakeholders are not prepared to make agreements. The Hartz-reforms in Germany, the new pension age in The Netherlands, Denmark and the UK, are examples of painful measures which trade unions contested. Public policies try to react to the challenges of unemployment, labour market participation, inequality and social exclusion by means of active labour market policies, flexibilisation of labour market regulations and all types of fiscal measures. But in general, certainly on the labour market, public policies react in somewhat general ways to the challenges, leaving little room for the actors and stakeholders to deal with their separate issues.

Social Innovation in employment
Company policies are strongly regulated by these rules, regulations and enforcement mechanisms (e.g. taxes, inspections). But even within this complexity, companies try to find their own solutions to deal with labour market or organisational issues. Certainly in the field of work organisation, the past twenty years have shown remarkable examples of self-regulation to prevent problems such as demotivation (Harter, 2003: the disengagement crisis), unwanted turnover and absenteeism from occurring. Examples are the possibility to work from home due to the establishment of home-offices, but also self-certification measures such as Great Place to Work, Investors-In-People, and Corporate Social Responsibility.

Social innovation sprouts from many initiatives. Bottom-up action is one that is clearly taken, just to be able to generate the necessary income to survive in the current societies. In the labour market, one example of such social innovation are the Work Integration Social Enterprises, better known as WISEs. WISEs have existed for over 50 years and were developed to cope with exclusion from disabilities or other grounds. “WISEs are autonomous economic entities whose main objective is the professional integration – within the WISE itself or in mainstream enterprises – of people experiencing serious difficulties in the labour market. This integration is achieved through productive activity and tailored follow-up, or through training to qualify the workers. WISEs are active in various sectors, but the most common in Europe are: manual labour (building, carpentry etc.), salvaging and recycling waste, maintaining public or green areas, and packaging products.” (Davister et al. 2004). Another more recent example shows that 97% of people surveyed in Barcelona have engaged in non-capitalist economic practices since 2008, a massive rise compared to the period before the crisis. Such practices include growing food, consumer cooperatives, exchange and social currency networks, free universities, hacklabs, etc. (Castells et al. 2012). Social entrepreneurship in general is a clear example of social innovations generating employment for people that would not achieve jobs through the traditional public employment bureaus or market-based temp-agencies. In the current age, social entrepreneurs account for 10% of all businesses and for 11 million paid employees (European Platform against Poverty and Social Exclusion 2010).