Policy Tools that Governments Implement to Encourage Social Entrepreneurship

Many governments are recognizing the potential of social entrepreneurship to build more inclusive economic and social agendas. The Government of the United Kingdom, for instance, is praising innovative solutions of Social Enterprises (SEs) as a vehicle to close the wide gap in the provision of public services. Other countries such as Italy and the US are seeing in social enterprises the opportunity to improve the equity, affordability, and quality of service provision.
Governments around the world are implementing various policy tools to nurture the social enterprise ecosystem. The following are some of the policy tools that are used by governments to improve social entrepreneurship:
Legal reforms
Some governments have enacted laws that recognize social enterprises. For example, Social Enterprise in South Korea, the Community Interest Company in the UK, the Benefit Corporation in the US or Social Cooperatives and Social EX Ledge in Italy. Legal recognition of social enterprises facilitates the formulation of policies that support SEs.
Fiscal Incentives
Some countries such as the UK are implementing tax relief to benefit people who invest in social enterprises.
Public Procurement System
Public Procurement System is used by governments to demand and use products from social enterprises. For example, in the UK, The Social Value Act enacted in 2012 opened up opportunities for social enterprises to deliver public services.
Grants are used to strengthen the capacity and ability of actors in innovation ecosystems. The Big Lottery Fund in the UK, as well as and the Social Innovation Fund and Investing in Innovation Fund of the Department of Education in the US are undertaking such initiatives.


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