The Hague is the best fit for Social Enterprises

Introduction

When you think of the Netherlands and its administrative capital, The Hague, what comes to mind? The country is famous for historical landmarks, architectural masterpieces, and attraction sites. The typical Dutch highlights include the Canals of Leiden, St. Martin’s Tower, iconic windmills scattered across the country, Delftware pottery, wooden clogs, flower fields, and of course, cheese. The Hague in particular hosts the Dutch government and is home to the foremost international institutions such as the International Criminal Court (ICC), the International Court of Justice (ICJ), Europol, and about two hundred other international organisations.

Beyond being a tourist destination or a political and institutional hub, something else is putting The Hague on the world map, and it’s not the Dutch tulips. It’s social enterprises.

The Ecosystem of Social Enterprises in the Netherlands

According to the EU, a social enterprise is a business with a  primary objective to achieve social impact rather than generating profit for owners and shareholders. One which uses its surpluses mainly to achieve these social goals and one which is managed in an accountable, transparent, and innovative way. Particularly by involving workers, customers, and stakeholders affected by its business activity. To put it simply, the main objective of these businesses is social impact.

In the last few decades, the Netherlands has gained a reputation as one of the best countries to do business with and more specifically, The Hague becoming a premier location for social enterprises. According to Social Enterprise NL, a national membership body in the Netherlands founded in 2012 to create an ecosystem for these businesses, social enterprises are important because they are drivers for a new economy that caters to all kinds of people. This economy is inclusive, circular, and poverty free. Social enterprises operate by the watchword, “impact first”. In the Netherlands, enterprises are considered social enterprises by the Social Enterprise NL, when such a business can prove it is at least 50% financially autonomous.

The ecosystem of social enterprises in the country currently has a membership of over 400 social enterprises, active in around 16 industries and sectors such as renewable energy, manufacturing, IT solutions, catering, among others. The key features of this ecosystem include a national network created and maintained by Social Enterprise NL, government aid and support as exemplified by the Dutch Good Growth Fund (DGGF) offering financial assistance to Dutch companies, national awareness, corporate sector involvement, among other services.

Also, in a report, Social Enterprises as Influencers of the Broader Business Community, Social Enterprise NL found that social enterprises in the Netherlands play a pivotal role not only in the shift towards a new and viable economy but also contribute to the attainment of the UN Sustainable Development Goals (SDGs). In another study published in 2019 by McKinsey & Company, titled  Scaling the Impact of the Social Enterprise Sector, it was found that the annual turnover of social enterprises in the country increased by 70% equating to about €3.5 billion in just five years. Aside from significantly impacting the economy of the Netherlands, social enterprises are solving societal issues and making significant social impact.

Examining the Impact of Social Enterprises in Netherlands and The Hague

Social enterprises have been known for labour market participation in the Netherlands. According to the British Council, social entrepreneurship currently accounts for 15.9% of employment in the Netherlands, with about 30,000 disadvantaged or disabled individuals finding employment in social enterprises. Social enterprises such as Brewery de Prael and Emma Safety shoes offer part time and full-time employment to disadvantaged people with varying labour intensity.

Renewable energy is another sector in which social enterprises have gained prominence. Social enterprises produce more than 10% of the renewable energy in use in the country, playing an increasingly crucial role in waste management, recycling, and power generation from biomass and other renewable energies. Enterprise player, Van de Bron in particular provides over 200,000 households access to clean energy. Additionally, social enterprises in the Netherlands are also involved in refugee integration with enterprises such as Refugee company and TakecareBnB assisting thousands of refugees integrate into the Dutch society.

With its reputation as ImpactCity, the best destination city for entrepreneurs interested in making social impact, The Hague has attracted several social enterprises who are not only “doing business” but also “doing good”. For one, the New Farm is a social enterprise with its base in The Hague using vertical farming to address food-related challenges and to also help achieve food security. The New Farm leverages ground-breaking research and cutting-edge technical solutions to offer disruptive, vertical solutions in urban farming. Another Hague based innovator, Seepje is in the development of sustainable detergent as a move towards a cleaner and healthier world. The enterprise makes washing and cleaning products using the peels of the sapindus mukorossi fruit, also known as “soapberries”. I-did is another startup making acoustic interior products, clothing materials, bags, accessories and more recently, face masks from recycled materials, thus promoting a cleaner environment. With its workshops in Utrecht and The Hague, I-did is also empowering people by training and guiding individuals who have either never worked or have been out of employment for a long period of time.

The Netherlands has grown exponentially in the social enterprise sector and is currently the fastest developing impact economy in the world.

Government Investment

The Dutch government has invested significantly in making the Netherlands one of the best countries to do business, placing a premium on building a sustainable social enterprise ecosystem. What this has produced is hundreds of thousands of social enterprises, over 80,000 jobs created, and more than €3.5+ Billion generated in revenue in 2016 alone, contributing appreciably to the economy of the Netherlands.

The Hague particularly has shown great enthusiasm for social enterprise. The Hague has named itself the “Impact City”, attracting startups, creative entrepreneurs, and innovators to do business and make social impact. According to Gert-Willem van Mourik, programme manager for innovation and social entrepreneurship at The Hague Municipality, “The Hague is a playground for new initiatives”.