Sustainability, Financing back

No airy-fairy anymore

No airy-fairy anymore
Photo: © Kristoffer Schwetje

Markus Sauerhammer is on the Berlin board of the Social Entrepreneurship Netzwerk Deutschland (SEND). Four years ago, we asked him: What has the government done about social entrepreneurship? Now we have a new coalition. Time to take stock and look to the future.
 

INTERVIEW JENS THOMAS
 


CCB Magazine: Hi Markus, we did an interview on the same topic exactly four years ago: How does the government support social enterprises? If you take stock: What has been achieved and what has not been achieved in terms of social entrepreneurship in recent years?

Markus Sauerhammer: German politics had so far slept through social innovations. In terms of the need for change, however, I would see the last legislative period as the creation of a common working basis as well as the launch of initial measures: All parliamentary groups, with the exception of the AfD, had introduced their own proposal in the Bundestag to strengthen social entrepreneurship in Germany. For the first time, the Ministry of Economics had launched a target-group-specific support program for social entrepreneurs. Nine ministries had also developed a cross-resort concept for social innovation, and together with the federal government and around 30,000 citizens, the sector unleashed solutions to social challenges posed by the Corona pandemic via the WirVsVirus hackathon.

CCB Magazine: For those who find the term social entrepreneurship too abstract - what exactly does it mean?

Markus Sauerhammer: Social enterprises focus on solving social challenges. These can be social, but also ecological problems. The financing or business model in social enterprises is a means to an end and not the purpose of the organization. So the focus is not on making money, but on solving a specific problem. This is the most important difference to a classic company. 

CCB Magazine: The topic of social entrepreneurship was explicitly mentioned for the first time in the coalition agreement at the time. There were also several references to "social innovations". You were, if I may say so, on fire. How impressed are you with the new coalition agreement?

Markus Sauerhammer: If you look at the new coalition agreement, you can see that policymakers have moved from vague descriptions to concrete measures. The current coalition agreement is much more concrete about supporting social enterprises than it was four years ago. We are finally getting down to action; it's no longer airy-fairy. This applies, for example, to new financing channels for social enterprises. But there is still a lack of nationwide innovation hubs for social challenges, similar to the existing digitization hubs.

CCB Magazine: You're getting carried away.

Markus Sauerhammer: A little bit yes, rather into hoping. The aforementioned activities and a number of other developments at the EU, federal and state levels are now the basis for a good and cross-party anchoring of social innovations and social entrepreneurship - here, too, the new coalition has the greatest overlaps, as can be read in the coalition agreement. If the new government acts consistently, this can be a real departure.

CCB Magazine: In the last coalition agreement, the social outweighed the ecological; now it's the other way around. Is that good or bad?

Markus Sauerhammer:Both. Whereas the focus at that time was on marketable, technological innovations, social and ecological innovations are now consistently taken into account. The understanding of innovation and the associated measures promote a more holistic approach overall. They provide the basis for a socio-ecological transformation in the economy and society. In my view, this is a good political foundation for shaping the current phase of change while preserving our social cohesion and taking account of our planetary boundaries. Of course, we would have liked more in some places, but I have since learned that political and social change processes take time.

CCB Magazine:It's striking that digitalization, innovations and sustainability are being cast into a new triangle - the ecology issue is being linked with a belief in progress and growth. Isn't that an aberration?

Markus Sauerhammer: Not necessarily. I'm convinced that we must finally support companies with a solution to ecological and social challenges on an equal footing. To this end, there are three powerful levers that have been anchored in the coalition agreement and have so far been little discussed by the general public. On the one hand, the economic report is to be expanded to include a prosperity report. In other words, as far as progress and growth are concerned, we are also including social and ecological criteria here for the first time. We are moving away from a purely growth-oriented approach to a new focus on prosperity that increasingly asks how people and the environment are doing and does not just look at the bare figures. Secondly, the new government wants to switch to impact-oriented budgeting and integrate ecological and social criteria more strongly into public procurement. So far, Hamburg is the only federal state to have an impact-oriented budget. Until now, when politicians take measures for integration, for example, they look at who makes the most favorable offer in order to allocate the funds. It does not pay attention to what would be the most effective measure. In the long run, the state saves by investing in more qualified measures that may be more expensive but more effective. And third, it must become easier for social enterprises to compete with large established companies for impact-oriented business models to succeed in the social-ecological transformation.

CCB Magazine: Many researchers assume that we can only solve the ecology issue in the long term with reduction and renunciation. Isn't it a mistake to believe that an entire economy can become more sustainable just like that?

Markus Sauerhammer: Yes and no. We need to save resources, but at the same time we should ask ourselves what we need to be happy, and this is where social and ecological innovations should come in: Do we want to continue to allow products that harm our planet to enter the market? Those who make their profits at the expense of the environment and people have an advantage under the current political framework compared to those who consistently take these aspects into account in their business model. We need to reverse this relationship. And to do that, we don't necessarily need to do without, but rather a shift in standards, a kind of new enlightenment under social and ecological auspices. Then we will quickly realize that it is not really about reduction or renunciation. It's about an increase in the quality of life, which we have to ensure under economic conditions.

In a good mood: The team of Social Entrepreneurship Netzwerk Deutschland e.V. Photo © Frederike Coring / Copyright Social Entrepreneurship Netzwerk Deutschland
 

CCB Magazine: At present, we have a development whereby large global corporations maximize profits on the one hand, which no national economy can compete with. On the other hand, all the small micro-enterprises are struggling to somehow become more sustainable. One focus in the coalition agreement is on creating a new legal form for responsibly owned businesses. The goal is for profits and assets to no longer be taken for individual purposes, but to be reinvested in the company so that it can continue to exist in the long term - and not, by necessity, speculate on profits in order to survive. How much do you welcome this move?

Markus Sauerhammer: I very much welcome this! In my view, the creation of a separate legal form in which the sense/purpose orientation can be firmly anchored in the corporate DNA is a central building block for shaping our current phase of change. In the long term, the proposal could lead to a new mix of limited liability company and foundation, which would ensure that companies continue to "own" themselves even after a change in management; after all, that has been the problem up to now: to a certain extent, one has to choose between non-profit and profitability. And a charitable foundation structure that ensures that the assets serve the company's purpose can often only be afforded by large companies, because the conversion can quickly cost a mid-five or even six-figure sum.

CCB Magazine: The CDU politician Diana Kinnert warns of new possible "abuse scenarios," according to which shenanigans are simply being carried out in other places, such as with inheritance tax. Nor, she says, is there any guarantee that real investment will be made in sustainable corporate governance.

Markus Sauerhammer: I do not see these problems as long as the proposal of the Responsible Ownership Foundation is not softened in the further process. After all, it's only an option, it's not a must. Of course, it must not stop at this proposal. We just as urgently need alternative legal form models, precisely because of the network and lock-in effects of digitalization and the associated market and power concentration of individual players, which are equally supported via startup and innovation funding. To date, policymakers have focused primarily on classic models with an orientation toward shareholder value maximization and the associated "the winner takes all" principle when it comes to regulation and funding. It has consistently ignored the potential of alternative models. The article "What if Facebook were owned by its users?" shows only too well how things are currently going. Incidentally, in addition to the model of the Responsible Ownership Foundation, the potential of digital-global cooperatives is also addressed here. We are also campaigning for this with the #GenoDigitalJetzt initiative. And we were of course pleased that the new government finally wants to address this point as well!

CCB Magazine: To put it bluntly, why do we need social enterprises at all to solve social problems? Isn't that the task of the state?

Markus Sauerhammer: The world is not black and white! The state must set the framework conditions. It must strengthen the economic forces that act in a socially responsible and ecological manner. It's not unusual for movements to emerge during periods of economic and social changes to address social problems. After the Industrial Revolution, for example, cooperatives, unions and welfare organizations formed to tame Manchester capitalism. Even the precursors to our social insurance systems were often nudged out of society via journeymen's clubs and later implemented and perpetuated systemically. These were all responses to the challenges of the Industrial Revolution and shaped the framework of our social market economy and welfare state. Today, we find ourselves again in such a period of transformation, with different, new challenges - and new actors to effectively solve them, and finally in need of the right support. That's why I co-founded SEND and why we need policies that set the right standards.

CCB Magazine: Markus, thank you for the interview.


Profil von Markus Sauerhammer auf Creative City Berlin 


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