In the last thirty years, increasing attention has been paid in Europe to social entrepreneurship as a business model that can mitigate the consequences of globalization, technological progress and economic crises. The first social enterprises were created and introduced in Italy in 1991 by Law 381/1991, in cooperative legal form and called “social cooperatives”. Very quickly, they also appeared in other countries in the European environment.

When the number of people unable to compete in the free market becomes too large and the entire burden of the losers falls on the state budget, supporting entrepreneurial efforts under less tight market conditions, which is what social entrepreneurship is by definition, is a good tool to increase the number of citizens who contribute independently to society and consequently improve social inclusion.

Civil societies in European countries responded to the lack of social services and the inability of the welfare state to provide employment with the so-called “grassroots” initiatives to create organizations that are simultaneously socially oriented and increasingly involved in economic activities. Civic associations and foundations, traditionally focused on representation, became involved in economic activities with a more entrepreneurial orientation, while cooperatives (of farmers, consumers, producers), more focused on their interests and income, began to expand their functions to include broader social goals.

Social entrepreneurship contributes to the development of an economy of solidarity, helping Member States to achieve a number of key objectives of the European Union, such as job creation and preservation, social inclusion and innovation, rural and regional development, environmental protection, etc. This business model is increasingly spreading in Europe, gaining importance and can be considered as one of the foundations of the European integration project.

In most European countries, the need for the existence of different, non-classical forms of business, which are not based exclusively on the generation of profit, is accepted. Not all people are equally able to participate in market competition for various reasons – health, education, livelihood and others. The principles of a liberal economy are not universally applicable everywhere and in every place; there are significant segments of the community that are unique and often marginalized, yet need to be appropriately included in the normal course of life and business.

The situation still varies from country to country in terms of the existence of a legal framework, financial and other support measures, and to date no universally accepted definition of the social economy has been agreed upon and adopted. Nevertheless, it is estimated that currently about 2 million legal entities in the Member States of the European Union, representing about 10% of all legal entities, operate according to the principles of the social economy and employ more than 14 million workers, representing 6.5% of the workforce in the European Union.

The European Commission has defined several criteria in the document “Social Business Initiative” from 2011, which are mostly used today to describe this type of companies. In order for a legal entity to operate according to the principles of the social economy, it must meet the following conditions:

– to engage in an economic activity;

– to pursue an explicit and primary social objective;

– that there are restrictions on the distribution of profits and/or assets;

– they must be independent;

– have inclusive governance.

In its conclusions of December 7, 2015, the Employment, Social Policy, Health and Consumer Affairs Council of the Council of the European Union (EPSCO) called on Member States and the European Commission to “define, implement and further develop appropriate European, national, regional and/or local strategies and programmes to strengthen the social economy, social entrepreneurship and social innovation.” The same document encourages constructive dialogue between European, national, regional and/or local authorities and all other stakeholders, which, according to the Council, should focus on the following strategic areas: Awareness, Recognition and Education, Social Innovation, Legal Environment and Access to Finance.