Social Enterprises in Germany

Abstract: The development of the German Social Enterprise sector has historically been linked to the country’s particular welfare state structures (‘conservative’ welfare regime) and shaped by the interplay of public-private cooperation and a comparatively stable and strong economy. In the last decades, weakening traditional state protection from market competition and the state’s initiative to foster social innovation has enhanced the bifurcation of the sector into Traditional Social Enterprises(SEs) adapting to the increasingly competitive environment and a ‘new generation’ of SEs with their own motives, leaders, origins, and a different organizational culture. In Germany, most SEs cover different areas of activity, with the majority related to rather traditional welfare fields such as integration into the labor market, societal inclusion, or social services. Although they have a long tradition, the new discourse on SEs reached Germany comparatively late in the mid-1990s. Even today no particular legal form or consistent definition exists, making an assessment of SEs and their ‘impact’ on society rather difficult. For the future, it is unclear how increasing privatization of the welfare state will shape and enhance the development of the ‘new generation’ and shuffle up the German SE sector.