1. No category

 Social Enterprise, Social Innovation and Social
Entrepreneurship in Albania: A National Report
Ardita Bonatti, Daniela Begu, Kastriot Sulka and Alma Lahe
NBS - Nxitja E Biznesit Social
November 2014
This project has received funding from the European Union's Seventh Fram ework
Program m e for research, technological developm ent and dem onstration under grant
agreem ent no 613179 Sommario Introduction ................................................................................................................................ 3 1. Current situation ................................................................................................................ 3 1.1 Initiatives to im prove the population’s life ..................................................... 6 1.2 The institutions responsible to draft and im plem ent policies in the field of
social enterprise ............................................................................................... 7 1.3 First m odels of the today Social Business/Enterprise ..................................... 26 2 – Origins of Social Enterprise in Albania – from the XIX Century to the end
of the Second World War ..................................................................................................... 29 3. The Political – Economic Situation under the Communist Regime (19451990) and the Destiny of Social Enterprise ................................................................... 33 4. The future of social enterprise in Albania ............................................................... 39 Referencies ................................................................................................................................ 46 2 Introduction
The main objective of this report is to give an historic and actual picture of the Albanian
conditions for building social enterprises and developing social innovations, and how this
field has been influenced by our circumstances and EU incentives.
For the purpose of this report, we did use our legislation and very recent research done by
different actors, mainly NGO, and some policy papers prepared by governmental
institutions. Because of our specific history, we focused on some legislation and policies
undertaken by communist regime in order to give some indications and influencies which still
dictate our ways of thinking especially when we have to deal with these forms of economic
organizations and management as cooperatives.
At the same time, we paid a special attention to the times of ottoman occupation because of
their influence in this sector.
We used the information gathered by different activities and interviews taken from different
key persons working in fields of most probable informed or might be informed such as
employers organizations, academic, bank system, NGO sector etc.
1. Current situation
Albania is one of the Western Balkan countries that during its history have been very close
(geographically) to Europe, as well as economically and politically away from it. This has
happened for many reasons, among which the most significant and that have greatly
influenced to this “separation” from Europe are the 500 years invasion of the Ottoman
3 Empire (from the 15th century to 1912 and the 50 years rule of the communist regime (19441990).
These political developments have significantly influenced the economic development of the
country, leaving it well behind its neighbors and all the other countries of the European
continent. Most important it is not that fact we were only behind of the other countries, but
we were in different tracks or road, that other countries were moving.
The small country of the Western Balkans, with a surface of 28 thousands km2 and a
population of 2.8 million people (residents), 23 years after the collapse of the communist
regime and the installation of democracy has entered an irreversible path towards socioeconomic development of the country and its alignment with the EU, through the
Stabilization and Association process.
Albania, as a country that aspires EU membership is making efforts to achieve standards,
comparable to the other European countries, at all fields, ranging from legislation, freedom
and economic development, and particularly, in the human rights field for achieving social
cohesion in the society.
In 2011, Albania was estimated at 31% of GDP per capita in PPS, compared to the average
of EU-271.
Regarding economic development, Albania is classified in the group of countries that are in
the second stage of competitiveness development (encouraging stage of the economy’
efficiency) when economies are transferred to the phase of efficiency, where competitiveness
is based not on low prizes, but on the quality of goods and services.
http://ec.europa.eu/eurostat/documents/2995521/5149034/2-20062012-AP-EN.PDF/e9c9f368-2d8f-49b1a226-651b9ebaddb1?version=1.0
1
4 Considering the three main dimensions of the index (basic requirements, increase of
efficiency, innovation and sophistication efforts), Albania has the highest result in the first
indicator, 4,2 points (the results range from 1 to 7, where 7 represents the highest), being
ranked to the 87th position. The best rankings of these pillars are “health and primary
education” (5,6 points), “efficiency of labor market” (4,4 points), “efficiency of goods’
market” (4,3 points), “macroeconomic environment” (4,3 points)2.
Albania's economy has experienced a difficult transition from the communist past to a more
open market economy. Albania has achieved a high economic growth and has enjoyed
macroeconomic stability for several years over the last decade, while it has increased the
average level of real Gross Domestic Product (GDP), by about six percent and continued
productivity improvements. Maintaining this performance in recent years has been much
more difficult, especially because of the crisis that affected the world economy.
Despite the high growth of GDP level per capita, reaching 3.358 Euro (2013, preliminary
estimation3), poverty, high unemployment, poor infrastructure and services, and major
regional differences remain strong challenges for any government in Albania.
According to the data of World Bank Programme for Poverty Assessment, 14.3% of the
population lived below the poverty line in 2012, marking a significant improvement
compared with 2002, when this percentage was 25.4% but increasment related to 2008
(12.4%)4.
The Global Competitiveness Report 2012-2013, p 14
http://www.instat.gov.al/al/themes/llogarit%C3%AB-kombetare/publications/books/2014/produkti-ibrendsh%C3%ABm-bruto,-paraprak-2013.aspx
4
http://www.instat.gov.al/media/206688/shqiperi-trendi_i_varferise_2012_.pdf 2
3
5 1.1 Initiatives to improve the population’s life
Institutional capacity, both at central and local level remains one of the fundamental
challenges.
Albania
has
begun
to
decentralize
government
functions
and
the
decentralization process poses the great promise for improving service delivery to the
poorest Albanians in health, social field, education and water supply.
The positive economic development of the country has increased the population welfare and
poverty reduction over the last decade. However, despite economic growth, macroeconomic
stability and policies undertaken and implemented by the Government, Albania continues to
face troubling problems of poverty, unemployment and inequality, especially in certain areas
of it.
Many areas of the country where poverty and unemployment levels are higher than the
national average (in particular in the Northeast Area of Albania), are estimated as very rich in
natural resources, which are not used by local residents and this is due to many reasons,
including poor and often absent infrastructure, lack of investment and migratory movements
of the inhabitants of these areas. Thus, whole areas in the Northeast of the country are rich
with hazelnut forests, chestnut forests, etc. Building social business focused on collecting,
processing and providing the market for the sale of organic products with high quality was
thought by the government, five years ago, as a solution for the poor residents of these
areas, to provide them sustainable employment and growing incomes for their families, by
economically empowering them.
This is the reason why in 2010 the Albanian government invited "Grameen Creative Lab",to
conduct a study in Albania, in order to assess the acute social problems and addressing
them through sustainable and self-financing mechanisms.
6 The method suggested by Grameen Creative Lab (GCL) to address the most urgent
challenges of Albania, was the creation of the Holistic Social Business Movement in Albania
(HSBMA) to lessen poverty and to create a stable framework of employment, education and
social development.
After this study, legislative initiatives were undertaken for the installation of the social
business movement in Albania. In 2011, Government established the Agency "Promoting
Social Business in Albania" entirely state-owned, the mission of which would be to help
improve social protection policies of the Government, accountability processes, and
improving cooperation between the public and non-public sector.
1.2 The institutions responsible to draft and implement policies in the
field of social enterprise
In Albania there are some central institutions which draft, execute and influence to the
innovation and social enterprise sector. The Ministry of Economy is one of the institutions
that have a policy document (draft) covering the period 2013 to 2020, which treats the
problems of creative economy and promotion of women entrepreneurship. A significant part
of the business and investment strategy treats the above issues in the framework of
promotion and development of Small and Medium Enterprises (SME).
Despite these policy documents, strategies or initiatives, there is a serious lack of legal
coverage and therefore also of the determination or definition of social enterprise, social
business and social entrepreneurship. In such conditions, even for people who have long
experience in running a Social Business, it is difficult to find a precise definition of activities
7 such as Business / Social Enterprise. YAPS leader, who has about 15 years of experience in
this business, when asked how he would define Social Enterprise says:
Even for us who deal with this work, given that Albania hasn’t had
any great culture of social enterprise and social entrepreneurship,
there’s a confusion about what is a social enterprise and what is a
social business. Social entrepreneurship arises as the desire of a
group of people to create social buffers to reduce poverty, to
intervene in those areas where the state and the population needs.
In Albania we considered it appropriate to employ orphans who
could not find work, who even when they had a job worked in black
in order to not lose the economic assistance, thus becoming a
social burden in the future. Foundations do a wonderful job, but
they’re not based on the market, because they have as target
group some groups that can’t be profitable, so there’s no business
for them and then there are social enterprises which intervene at
this point and there is no competition between them because,
having the same target, reducing poverty and illiteracy, there’s
space for collaboration. For example, YAPS has experience with
those teenagers who committed an act in violation of the law, who
come to YAPS to do social work in order to not be called convicts
and not become part of the prison. They find in us a hosting point
where they learn and have the opportunity to integrate in the
labour market. Thus, the field of intervention and the way it is
intervened is what makes the difference between social enterprise
and social business.
In Albania you can’t speak of a social enterprise sector, but you can mostly classify in this
field the economic activities of various non-profit associations. It is a very important and
priority task to define by law the area, the activities and forms of organization of social
enterprises and as a result of this even the relationship these activities will have with the
market and public or state institutions.
8 Until today we have only two legal initiatives that cover the specific activity of YAPS and the
Agency “Promoting Social Business”. All the other economic activities which mights pretend
that their activity is a social enterprise or social business are under the umbrella of various
non-profit organisations. Even when we asked those interviewed whether they noticed
anything specific that happens in our country and does not happen in other countries their
answers were about the functioning of these economic activities in the absence of law:
As far as I know it is because the social businesses are organised
under the umbrella of non-profit organisations. We have no real
social enterprises, as long as there is no proper legal basis yet, but
we have social activities successfully initiated by civil society
organizations. The development of social business, from which
benefits the community, should be realised with the stimulus of
some defined fiscal incentives, adopted pursuant to the law. In
Albania we have non-profit organisations that have freedom of
action, but they don’t benefit from fiscal incentives as they are
treated as real business activities (NGO representative)
However, in the people’s perception is almost always the Ministry of Social Welfare and
Youth that treats and covers the social enterprise sector and almost all those interviewed
attribute this to the fact that this institution covers social issues. It is also the Ministry of
Social Welfare and Youth, which has provided in its strategy for employment and skills for
the period 2014-2020, that one of its priorities will be the development and support of social
business in Albania. Only one of the persons interviewed has pointed out the role of the
Ministry of Finance, as well, in the development of Social Enterprises (Bank manager).
From the institutional point of view it results that the persons interviewed have mainly
considered those central institutions that have more affiliations. An academic has considered
the Ministry of Education an important actor, thus it is mostly his judgement, than the reality.
9 The representative of the NGO sector gives importance also to the Ministry of Health,
because of its efforts to adopt the law for Social Enterprises. It also supports the role of the
Ministry of Economy, which has a strategy and funds to this aim, but also for the social
innovation.
Unlike many countries, where the development of social enterprises or social
cooperatives, has had as a supporter and important driver various Unions, in Albania there is
no such an attitude. This is also mentioned by the persons interviewed, they all have
accepted that the role of trade unions is non-existent and even when NGO representatives
have tried to contact them, they didn’t respond.
Another representative of the non-profit sector believes that the most interested
public actors for the development of social enterprises up to now are the actors of civil
society:
The ones that have tried to create the respective legal framework are
organisations of civil society, including three different kinds of organisations,
associations, foundations and centres. Of course, they do this because their
mission is closely linked to the mission of social enterprises, thus, the interest for
the marginalised groups and the persons in need. Their aim is to offer this social
strata financial support, not only from doors, but also from the state, through fiscal
incentives. Here is included also the Forum of Social Enterprises, which is an
informal group with representatives of non-profit organisations and real business.
Besides various non-profit organisations, a major support in this area has given the different
donors such as the EU Delegation, Cooperazione Italiana, UNDP, Swiss Cooperation,
Austrian Devepolment Cooperation, etc.
10 Creative economy is regarded as a promising economic sector with the potential to
contribute to the local, regional and national, as well as to job creation.
According to a study by GIZ in 2011, the contribution of creative economy in Albania is
roughly about 0.5% - 1% of GDP. In most developed countries, handicraft economy
contributes by about 3% of the GDP. By this it is obvious the potential rate and what should
be improved in Albania.
The creative sector provides about 3,500 jobs, or 0.5% to 1% of the labor force. 56% of all
employees in this sector are women, with the greatest concentration in clothing (> 90%) and
handiwork (78%). A large part of the employees in this economy are in handicrafts sector
with 37%.
With regard to the creative economy: it is necessary to intervene with concrete policies for
this sector, which might be: i) regulatory measures aimed at removing administrative and
legal barriers; ii) improvement of the education and professional training system (for all the
design activities, advertisements and craftsmanship); iii) legal and financial promotional
measures to support this sector and iv) improvement of the organized capacities that
represent this sector.
The inclusion of social responsibility in increasing the competitiveness of businesses, CSR:
-
The social responsibility of the corporate is a key part of the new strategy “Europe
2020”, which requires an integrated approach for “a fast, sustainable and inclusive
growth”, within a general vision of a social market economy5.
5
The European Commission, Europe 2020, http://ec.europa.eu/europe2020/index_en.htm
11 -
The inclusion of social responsibility in business is a challenge for the increase of
business’ competitiveness. Thus, even though it is a new policy for Albania it should
be included in the agenda of stable business development.
Promoting female entrepreneurship
The enterprises managed or owned by females are at a low level, about 27% of all active
businesses for 2011. Over 90% of the businesses managed by women are part of the
services sector (retail trade, tourism, free professions, etc). About 30% of the self-employed
are females. The percentage of loans disbursement by businesses of women reached 25% in
2011. There’s a lack of policies to support women entrepreneurs and according to the "SME
Policy Index 2012" Albania is estimated at 2.5 points (out of the maxiamum of 5 points).
From the evaluation of the situation in this area it results that the reasons considered as a risk
for business development and their management by women stand behind gender
stereotypes and gender professional profiles at all education levels (especially in university
and professional education) which don’t lead to the optimal use of human resources and
limited employment opportunities, especially for women and girls. Thus, a small number of
women are in leadership positions, and yet there is a lack of models and representation in
official decision-making bodies and associations.
The Ministry of Social Welfare and Youth in the National Strategy for Emloyment and Skills
2014-2020 points out (pg 85) “…the promotion of social business, in the same line with EU
good practices will be another way in achieving a fast and all inclusive growth”6. Ranking the
priority of social business development as an important instrument, in the employment field,
for the implementation of Government’s goals and objectives, implies that thi sector will
6
http://www.sociale.gov.al/files/documents_files/Strategjia_per_Punesim_dhe_Aftesim_2014-­‐2020.pdf 12 have a stronger institutional and financial support. Since 2011, in the Ministry of Welfare and
Youth was created by a special law and still operates the state agency “Promotion of social
business in Albania” sh.a.. This agency functions as a state owned, joint stock company and
aims to improve the Government’s social protection policies, their implementation and the
improvement of cooperation in the public and non-public sector. This cooperation started as
a result of the direct request of former Prime Minister Berisha to the international and
national group of experts, who were focused to first soothe poverty in the remote rural areas.
To this aim it was created the project “Holistic Social Business Movement. “
These institutions serve outside the state institutions scheme, but taking into consideration
the government’s policies and priorities.
At the same time it was established “The Social Enterprises’ Forum” network, which have
organized several activities, among which the most important is the drafting of a draft law on
Socal Enterprises and it is expected to start proceedings to pass in Parliament. Even in this
regard, it is the Ministry of Welfare and Youth that promised to pass it in Parliament.
The Social Enterprises Forum has also drafted a Report, in March 2013, entitled “Social
Economy in Albania- a survey on social Enterprises”, which was sponsored by TACSO
(Technical Assistance for Civil Society Organizations). On 11-12 March 2014, TACSO, in
cooperation with the Social Enterprises Forum organized a regional conference with the
participation of 120 representatives of the Social Enterprises from the Western Balkans and
Turkey, the participation of the Minister of Social Welfare and Youth, Deputy Ministers,
Members of Parliament and representatives from the EU delegation. The aim of this activity
was to introduce the concepts and principles of social enterprises functioning, development
models, highlighting their benefits for the organizations of civil society, public institutions
13 and the community in general, as well as the exchange of experiences between Europe and
Western Balkans.
The conclusions of this conference were as follows:
1. The Albanian Government and civil society organizations in Albania, aware of the
difficulties and socio-economic problems facing the country and the region in general,
consider extremely important supporting and promoting social enterprises, as part of
the actions undertaken in the context of the reform of a single market and in line with
the Europe 2020 Strategy.
2. Entrepreneurship and social enterprises in Albania, although in the early stages of
development, are considered important forms in the fight against poverty, poverty
alleviation and labor market integration of disadvantaged groups and have
considerable development potentials.
3. In contrast to the rate of development of social entrepreneurship in Europe, the
concept of social enterprise in Albania remains relatively unknown, except for a
relatively small number of organizations that apply business practices to social
purposes during the performance of their mission. These organizations, which operate
mainly as non-profit organizations (NPOs), have been mainly partners of foreign
organizations operating in Albania, benefiting financial support and technical
assistance for a relatively long period of time for their non-profit activities. These
organizations (mainly Italian) have promoted the concept of social enterprises to their
partners as part of the exit strategy, in order to ensure financial stability in the future
after their withdrawal from Albania.
14 4. For the Albanian NPOs the primary motivating principle for the adoption of social
enterprise approach is to ensure long-term sustainability by diversifying the funding
base of income from economic activity, as long as the support from government with
grants and the support from philanthropic initiatives have been and remain
inadequate to meet the demands for the development of civil society.
5. In most cases, Albanian NPOs are in the early stages of adoption of their approach to
business, while another part of them are still in the planning stages of this approach.
The challenges they face are associated with the traditions and the still fragile
development of the third sector, the weakness of private sector development and
ongoing institutional reforms that are being carried out in Albania for years. A serious
difficulty for the Albanian NPOs domestic organizations that try to develop social
entrepreneurship is the lack of practical experience of their managers, executive
directors and members of governing bodies. Operating with the status of NPOs, they
remain dependant on grants from foreign donors, not disponing accumulated
financial resources and other capital assets. All organizations that aspire to develop as
social enterprises in Albania have to keep the scale and structure of the activities they
offer (especially with the cash flow), especially during the first phase of the
development of their business concept.
A considerable number of these organizations try and realize economic activity in the areas
of catering, crafts, cleaning, delivery of postal services, tourism, offering services to the
community they serve. In the absence of a clear governmental policy to recognize and
support social enterprises, their non-profit status is considered not suitable for generating
15 incomes from these activities. This is because NPOs, carrying out economic activity, are
subject to the same tax obligations as the business and any other productive and trade
enterprise. The main problem is the application of VAT to services provided, which is an
insignificant burden to the low incomes they generate.
6. With reference to the above and following the declarations approved by the
European institutions to support social entrepreneurship it is necessary that the
ministries responsible for the social enterprises activity, in partivular the Ministry of
Social Welfare and Youth, adopt partnership with NPOs and other actors, stimulating
the perspective activity of these enterprises with the necessary legal framework and
the supporting social policies. In this context, review and submission for adoption to
the Parliament of the draft law proposed by the Albanian Social Enterprise Forum
would constitute an important impetus to the development of this sector in Albania.
7. It is also very important the financial support from special instruments and the knowhow assistance by the responsible public institutions, through the operation of various
financial instruments, access to public procurement, etc. Attention should also be
made to the design and implementation of non-discriminatory market rules to
guarantee the normal operation of social enterprises, in relation to other traditional
business entities.
8. As in any other field, for the development of social entrepreneurship it is needed to
encourage the development of partnerships between public institutions at central and
local levels, civil society organizations, business organizations, universities and
16 educational institutions, and other interested stakeholders in order to strengthen
capacities,
identifying
and
developing
innovative
policies
that
enable
the
development and strengthening of social enterprises in Albania.
Another very influential and cooperative institution is the Ministry of Agriculture which, in the
context of the agricultural sector development, considers it as a very effective form to
achieve the administration and inclusion of different resources. Improvement of inclusion and
effective interaction among all actors in Albania, through an improved and effective
institutional network and through an effective communication strategy, including a virtual
research and extension network and improving the capacities of stakeholders, has been one
of the main objectives of this institution. One of the most successful elements is considered
the establishment of the Platform for innovation, research and counseling.
"The network for innovation, research and counseling" platform is an appropriate tool for
improving the involvement of all main stakeholders in the consultation process in agriculture.
This platform is considered as a very effective mean for the exchange of information
between the different actors of research and the agricultural counseling service (public and
private structures). It provides transparency and interaction for the involved actors, who can
give their contribution in improving different techniques and technologies introduced in this
platform. At the same time it increases the time efficiency, avoiding in most cases the need
to organize meetings with experts from different institutions, who will spend time and money
to realize these face to face meetings. "Reduces distances" between extensionists and
researchers and provides a "virtual" presence of the researchers, for those who are
interested. It significantly enhances the ability to provide diverse information from any
interested stakeholder, focusing this information into a single portal.
17 This Platform is considered a VERCON-like. VERCON (The network of extension and research
virtual communication) is a conceptual model which can be established and adjusted by
every country to improve the access for agricultural information and exchange of knowledge,
to strengthen relations among actors of rural development, using the information and
communication technologies. But, the functioning of a VERCON model, requires the
respective infrastructure.
Gaps in information technology have hampered the role of various actors, limiting the
contribution of research and extension in agricultural development. In our agricultural
extension system, this infrastructure has many shortcomings, especially in the agricultural
information centers. For this reason, we will gradually pass on the full model VERCON and
the first step is the establishment and operation of a VERCON-like. The pluralist systems for
the consulting services, where the multiple stakeholders from the public and non-public
sectors give their services are becoming increasingly present in rural areas, and in this
context, the smooth functioning of this platform takes a special importance.
"The
agricultural network for innovation, research and consultancy in agriculture" platforms
includes a research and extension network, to enable farmers and the rural areas population,
to market demands, revenue diversification, environmental protection and climate change
adaptation.
Another agency on the development of mountainous areas is MADA (Mountain Areas
Development Agency), which aims at improving the quality of life of people in mountainous
areas, within the framework of the vision of mountainous areas development and
encouraging the balanced and sustainable development, supporting participation based
18 development activities. The goal of the program is to increase the incomes of farm families in
the mountainous area of Albania, especially those of the poorer rural population.
The overall objective of the program is to achieve participatory programming and
implementation of the regional sustainable development program for the mountainous areas
of
Albania
that
accelerates
poverty
reduction.
The Program Area includes 21 mountainous districts (Bulqizë, Devoll, Dibër, Gjirokastër,
Gramsh, Has, Kolonjë, Korçë, Kukës, Librazhd, Përmet, Pogradec, Pukë, Malësi e Madhe,
Mat, Mirditë, Shkodër, Skrapar, Tepelenë, Tropojë and Vlorë). The program basic target
groups will be the rural unemployed, men and women, small and medium size farms and
rural enterprises. The investment potentials identified through regional planning and
programming instruments and through the development of SIP-s in the private sector, will be
ranked according to their potential in the transfer of technology, skills, and assets in the
region, as well as their capacity for job creation, especially for rural youth and women, who
guarantee that these potentials are applicable and sustainable.
The method that MADA implements in the SDRMA Program is characterized by: focus on the
impact of poverty reduction in the context of sustainable commercial viability in the private
market economy; beneficiary comprehensive participation in planning and implementing
investments to ensure connections, understanding and practicality; orientation to be able to
identify opportunities for strategic investments and therefore to ensure effective and efficient
use of limited resources; fund raising of financial and technical dimensions for the realization
of identified and feasible strategic investments; promoting capacity and competitiveness of
goods and services providers, in the mountainous area, to improve distribution and reduce
costs; and strengthening key institutions for approach mediation. Based on the vision of
19 Mountainous Areas development, this agency is addressing and implementing it in three
main directions:
(i)
be harmonized with government policy commitments to eradicate poverty in
mountainous areas, that achieve social and economic cohesion and focus on the
development and decentralization of the private sector;
(ii)
to harmonize with current regional, national and IFAD strategies; Convergence
with functional and financial evolutionary EU arrangements for the Regional
Development Agencies (RDAs).
(iii)
The activities of SDRMA Programme, being implemented by MADA are structured
in three technical components (except Program Management):
The aim is to strengthen the advocacy and participation of key stakeholders in mountainous
areas and build capacities of local government and local communities, especially in terms of
resource mobilization and utilization.
For this purpose, this agency has built Forums of Mountainous Areas Development. The
main duties of this component will be: (i) Strengthening of institutional commitments,
managing function and practices; (ii)Membership enlargement and improvement of members
representation by the poorest and limited target groups; (iii) Increase of recognition and
visibility within and outside the current territorial coverage; (iv) Support for Forum activities
to streamline key development issues related to poverty, economic opportunities of their
respective areas; (v) Improving the Communications of Forums with other development
initiatives and strengthen their partnerships with development institutions within and outside
their relevant coverage area. MADA is currently at the end of the existing strategy for the
forums process, however a limited support is needed to be given even this year, especially in
20 the context of LEADER projects and institutionalization of lobbying of Mountainous Area
Parliamentary Group.
The Ministry of Finance is a key actor in drafting and implementation of different state
policies, so it is indispensable to have close cooperation between every policy-making and
implementing institution, especially with regard to the area of social enterprise and social
innovation. A concrete example is the concrete cooperation between the Ministry of Labor,
Social Issues and Equal Opportunities (actually the Ministry of Social Welfare and Youth) with
the Ministry of Finance to realize the financing of the project Holistic Social Business
Movement which is being implemented by the Agency “Promoting Social Business” So we
have the experience and this cooperation should be further strengthened in order to support
different fiscal and budget incentives to develop the sector of social enterprises and social
innovation, as it was requested even in the Social Enterprise Forum Conference, organized in
March 2014.
It would be of interest to note to the education system that this sector has started to develop
in collaboration with universities, especially private ones, which have been the first that have
shown interest in developing curricula on Social Business.They are actually working to draft
programs on social business and some of the subjects of dissertation of post-graduate
students are on this topic, which can be considered as an important initiative in the
education field.
In spite of above mentioned efforts, it is noticed a much more concerted endeavors among
academic institutions because when the representatives of these later institutions were
interviewed, they stressed the idea of the lack of these initiatives in education system.
21 In the opinion of a deputy Dean, who was interviewed for the education system and its
contribution to social entrepreneurship sector.
So far it has no contribution. It is absolutely needed much more work and I don’t think it can
be introduced as a separate subject, but it can be a chapter of the actual subject on social
enterprise or social business. It should also be organised much more activities to keep the
initiative of universities to sensitise and inform on SB and SE.
This is generally the opinion of all representatives asked about the role of education system
in terms of social entrepreneurship and social innovation. And almost no one had an idea of
why these topics are not taught in schools.
The Albanian Investment Development Agency (AIDA) aims to attract foreign investments,
enhance the competitiveness of the Albanian economy by supporting small and medium
enterprises, and innovation as well7. In the framework of this agency it is also established the
Innovation Fund, which assists enterprises with subsidies, with experts to audit their needs
for innovation and technology and also to identify providers and partners of technology in
other countries. These actions make the enterprises to choose the optimum way of
development. The Grant Scheme on Cost-Sharing for Innovation has a significant impact on
the micro, small and medium business, aiming to increasingly promote the technological
development and innovation in these businesses, making them more competitive in the
regional, European and global markets.
From the persons interviewed it results that there’s a closer absorption to the social
innovation definition and a bank manager has this perception:
7
http://aida.gov.al/?page_id=20&lang=al
22 Social innovations are new strategies, concepts, ideas and organisations that meet the
social needs of different elements which can be from working conditions and
education to community development and health — they extend and strengthen civil
society. Social innovation includes the social processes of innovation, such as open
source methods and techniques and also the innovations which have a social purpose
— like microcredit or distance learning
Whereas, for the representative of the non-profit sector social innovation is:
It is “an innovative idea” that responds to social problem because it creates a
relationship between the persons that has the idea and the beneficiary. The social
inventor has a much wider impact precisely in a social community, precisely in a
special/specific social community.
Out of certain structures such as the Ministry of Economy and AIDA, there are no factors or
stakeholders who have knowledge of any relationship between policies and private initiatives
that have been inspired by social innovation.
The Social Enterprise has been increasingly supported by the international institutions as
well, which have assisted or have directly financed different projects. UNDP has organized a
contest called "One hundred innovative ideas for self-employment"8, presented on 30
January 2014. Adventure enterprises offered creative and non traditional ways for selfemployment. It should be pointed out that this initiative was addressed mainly to the youth
of Roma and Egyptian community. This event was the continuation of another activity that
was held earlier with the same community, titled "The future we want", and by asking 500
8
http://www.al.undp.org/content/albania/en/home/presscenter/articles/2014/01/30/-one-hundred-innovativeideas-for-self-employment-presented-in-berat-today-/
23 young people it resulted that their main priority was employment. The program, organized
by UNDP was part of the “Support to the social inclusion for Roma and Egyptian
community” project, which aimed to support, through these innovative ideas, the youth of
these communities in increasing their enterprise and self-employment skills.
Similarly, UNDP has sponsored the Corporate Social Responsibility Awards9.
In the last two decades, the private sector in Albania has experienced rapid growth. As
Albania continues on its path to membership in the European Union, the integration of
economic, environmental and social concerns is a major task of all sections of society,
including the business community. Existing CSR practices in Albania come mainly in the form
of philanthropy and are most developed in branches of multinational corporations. Selected
international companies have integrated CSR standards into their operations in the fields of
energy,
construction,
telecommunications
and
banking.
Despite
Corporate
Social
Responsibility being a relatively new concept among Albanian businesses, international
experience, both in developed and developing countries, has shown that companies (small,
medium and large) that have integrated these principles are more competitive and
sustainable. Rewarding good practices on CSR is an element of creating incentives as well as
knowledge sharing on best practices. In addition it contributes to raise awareness. The
Ministry of Economic Development, Trade and Entrepreneurship, UNDP and the CSR
Network (which has been recently established by 8 leading companies in the field of CSR),
have taken leadership in organizing the first CSR Awards in Albania.
9
http://www.al.undp.org/content/albania/en/home/presscenter/articles/2014/04/22/undp-launches-corporatesocial-responsibility-awards-/
24 What are the Award Categories?
1) Innovation Award - for those companies that demonstrate progress in resolving an issue in
the field of Corporate Social Responsibility (CSR);
2) Best Practice Award for SMEs – for those companies which through innovative practices
have achieved positive impact on their employees, the environment and / or community
where the company operates.
3) Best Practice Award for Large Companies – for those companies which through innovative
practices have achieved positive impact on their employees, the environment and / or
community where the company operates.
Despite these initiatives of various international or national organizations supported by
foreign institutions, according to the perceptions of the persons interviewed, the concrete
role of European Union for the development of internal policies in the sector of social
enterprises and social innovation is small:
’European Union policies don’t affect at all in Albania. As IPA instruments we do not
see any initiative by the government that has been made public yet "(NGO)
Whereas another person interviewed highlights:
"Referring to the Albanian policy initiatives I see efforts to ensure a maximum coherence with
EU policies. In my knowledge, there’s a group of organizations in the Balkans that have
25 prepared a draft proposal for EU decision making institutions, with concrete proposals to
stimulate the concept of social business in terms of the Western Balkans. "(NGO)
1.3 First models of the today Social Business/Enterprise
Several activities were organized in the context of public information, regarding the new
notions of Social Business/Enterprise, among which the most successful one was the
Competition of Ideas, which was recorded and broadcasted by the National KLAN
Television, for six weeks, in one of the programs with the highest visibility (in prime time)
"Albanian Sunday", broadcasted every Sunday. This competiton was organized by the
Agency ”Promoting Social Business”. At the end of the competition it was selected the
winning idea "Ejona" that envisioned the establishment of a coffee bar and social center,
with facilities adapted for people with disabilities, in the center of the capital (Tirana). The
coffee bar "Ejona" opened in early 2014, and all its employees are disabled people.
Some of the successful businesses that operate in the market have shown interest to
embrace the idea of social business or social enterprises development.
An interesting idea in the culinary field is Mrizi of Zanave, a restaurant that bases its business
on the idea of the Slow Food development, a project which is regarded as a philosophy of
pleasure and as a program of taste education, enogastronomic heritage preservation and
customer training. Slow Food supports the young generation to create the right relationship
with food; favors an attentive tourism that respects the environment; promotes solidarity
initiatives. On the other hand, this restaurant is a catalyst for the development of the
surrounding area, as everything that is cooked or sold in this restaurant is cultivated by and
26 gathered from the farmers around, what has prompted them to increase their productivity
and to preserve the traditions of the area. The owner of this restaurant aims to expand its
range of services: the chestnut fluid, which was considered by the locals as something wild,
not used or minimally used, with the establishment of a processing line it became a highly
requested product, not only in the local market, but also beyond.
Some associations, mainly those focused in the field of gender rights, have initiated some
economic activities with the aim to employ women in need, violated women or those of the
Roma community. “New York Tirana Bagels10” is one of the Social Businesses that
participated to the Conference, in March 2014, in Tirana and in its presentation it highlighted
the social role of this economic activity. We thus see that some small scale or covered
economic activities now require being part of the market, one should just support them and
you create the appropriate conditions for their growth.
Youth Albanian Postal Service (YAPS) – was established under the auspices of UNICEF, with
the participation of the Social Center “Don Bosco” and a group of companies (Vodafone,
INSIG, Coca-Cola, Bardha Group, ADA Group, Rogner, KPMG, Western Union). YAPS was
initiated in 2001 and initially it employed 40 young people coming from orphanages, young
disabled and those belonging to minorities. Its objectives is to hire and train young
marginalized and neglected people, in order for them to manage a Social Business, to create
self-esteem and confidence in young people and create the conditions to switch to a higher
level of education.
Big corporates as Coca Cola, KPMG, Vodafone Albania or the Embassy of the United States
of America are regular clients and some of them are also YAPS board directors.
The
10
http://newyorktiranabagels.com/
27 importance of this social business lies in several areas of influence, first, this business was
designed to hire and train people in need, mainly Roma children, but not only. Secondly, this
is a business that managed to cover the costs within 8 months of activity and today it has its
own profits and also helps the community. Third, many of the former YAPS employees run
their own businesses, making use of the experience and training they received in this
business. Fourth, and the most important, YAPS has increased the range of services offered
in the market, besides mail distribution it also offers cleaning and maintenance of offices.
Fifth, it has begun to develop its activity in other cities outside Tirana.
Ecovolis (Ecological Flight) - Tirana Community Bicycle promotes ecological transport by
bicycles, giving Tirana more clean air, adding a civic European practice which helps in the
economic, social and environmental development of the community. The focus of this
undertaking is the employment of the Roma community family heads, in providing ecological
transportation by bicycle.
Another very important element in the promotion of social enterprise is the AMT Center in
Kcire, close to Puka. The activity of this center is focused in the collection, processing and
packaging of herbs, raising poultry, pigs and providing natural products.
Its main
achievement is the use of those natural resources of the area, which were considered as wild
and without any effect for the market. Secondly, and in our view the most important, is the
fact that people have created the opinion that resources exist and that it is necessary to work
in order to activate them and to add value to these local products, which are required by an
elite market, as they are used by the Diplomatic Corps in Tirana or exported to Austria,
Germany and Italy. Now people address Church and the center nearby, not for charity, but
for work and often this work serves them as a training to exercise this kind of activity at their
homes. What is unique in this product is the dedication to the foreign public, written in the
28 product label which says that the product contains the commitment to restore dignity to
those who produced it and hope for a better future for their families.
Last year concrete initiatives have been undertaken to support the development of creative
economy, especially Albanian handicrafts, as one of the areas that enables the growth of
employment and income for women and girls, especially those who live in rural areas and the
poorest ones, with few opportunities to develop. "Promoting Social Business" Agency, with
the ILO support is implementing three projects in the area of Kukes (one project) and
Shkodra (two projects), focusing on the vocational training of young people in some crafts
and creating employment opportunities for them after training.
2 – Origins of Social Enterprise in Albania – from the XIX Century
to the end of the Second World War
Support, assistance and solidarity for the weak and vulnerable people have been one of the
prominent values of the Albanian society, in all stages of its development.
However, these values began to 'institutionalize' in primitive forms, only by the mid
nineteenth century. This is related to the political-economic situation of the Albanian
population.
Since the fifteenth century, until 1912, the year when Albania declared independence, the
Albanian lands were part of the Ottoman Empire. Under the Ottoman rule the Albanian
society was based on regional, tribal, family, professional identity and not the individual one,
which also affected the nature of expression and materialization of social sensitivity, limited
in the support and assistance within the group (which was determined by religious,
provincial, or social affiliation).
29 Albania entered the path of capitalist development later than the other states. Capitalist
relations appeared in the early nineteenth century. It is in this process that the first
manufactures were established.
In the second half of the nineteenth century are noticed the first signs of social changes and
of the Ottoman mentality, showing the first cases of aid and philanthropy out of the
'professional social group' to which the individual belonged, influenced by the social
-
political developments in the Albanian territories (movements for independence) and the
powerful impact of the developments in Western Europe11.
The second half of the XIX century to the end of the first quarter of the XX century is
characterized by the efforts of our people to declare Albania a free and independent state.
The need for independence from the decaying Ottoman Empire, the backward and
completely rural economy, extreme poverty, acute social problems – they all needed a
strong social enterprise movement, developed in the form of philanthropy and charity. The
aim of philanthropy in this period was a positive change of society, progress and, in
particular, to strengthen the movement for independence, to this end the activities were
focused on the development of education through the establishment of schools, but also on
aid for poor families (dowry for the ladies to be married), support to the families of 'crippled'
people (people with limited ability), donations to hospitals, religious institutions,
infrastructure.
Up to the years 20 of the twentieth century, philanthropic activity was carried out by the
Albanians living outside their native land, then this contribution began to fade and it was
then carried out by wealthy people living in Albania.
‘A Historic View to the Development of Philanthropy in Albania’, Partners Albania, Center for Change and
Conflict Management
11
30 Donations from individuals were mainly made with testamentary document12, but charity and
philanthropy in this period becomes the main activity of the organizations established
specifically for this purpose.
In the years '20-'30 it is noted the increasing role of women in philanthropic activities
through personal donations and their organization in philanthropic associations, focused on
economic support to women and girls and their families, as well as funding to support the
education of girls, at all levels.
In this period, women associations were very active and generated innovative ideas in the
field of charity and philanthropy. These associations were the first to apply the organization
of fund raising events such as lottery, balls, concerts, theatrical shows, etc.
Women associations were developed in urban areas and mainly in cities with traditions as
Korça, Vora, Berat and Tirana.
The religious institutions are also very active in this period, where because of the tradition
and connections with the European culture through Papacy, prevailed Catholic Church's
charitable activity. But also the Muslim, Bektashi and Orthodox communities are very active
(in Albania four religious communities live together in harmony: Catholic, Orthodox, Muslim
and Bektashi). The religious institutions are focused in charity activities for individuals and
communities in need and in extreme poverty.
The independence (28 November 1912) diminished the philanthropic contributions as the
Albanians thought that it was the duty of the state to respond to the community and
individual’s needs. The link between nationalism and philanthropy was also broken13.
Much of individual wills was blocked by testamentary heirs, or foreign banks, where assets and wills were
deposited, as the Albanian National Bank didn’t exist at that time, it was established in 1925
12
31 In the period between the two world wars the state promoted charity and philanthropic
activity.
In 1922 the Albanian Red Cross was established (an initiative of the Minister of Interior,
Ahmet Zogu, then King of the Albanians) – which became the nucleus of all philanthropic
institutions in the country, asylums, orphanages, etc. But, it was not much supported.
A Decree-Law of the Ministry of Interior (1936) obligated all the municipalities to send a
certain number of children to the Poor’s’ Shelter and to pay every year 2% of their incomes
to the Albanian Red Cross.
On 7 April 1939 Albania was invaded by the Fascist Italy. King Ahmet Zog and his
Government leave the country. The so called Constitutional Assembly declared the end of
the Kingdom of Zog and offered the crown to Victor Emanuel III. The Albanian State formally
remained a Constitutional Kingdom under the Italian domination. The effects of this invasion
impacted the whole Albanian economy.
One of the first decisions of Italy was taken on 20 April 1939, which was the adoption of
foreign customs and economic convention between the Albanian Government and the Italian
Government, which sanctioned the monetary and credit system reform in Albania,
transforming it into an appendix of the Italian monetary and credit system
The philanthropic activity after the war was paralyzed and it was noticed an increase of this
activity only by the middle of 1943, focusing in relieving the war consequences among the
civil population.
‘A Historic View to the Development of Philanthropy in Albania’, Partners Albania, Center for Change and
Conflict Management
13
32 3. The Political – Economic Situation under the Communist Regime
(1945-1990) and the Destiny of Social Enterprise
After the end of World War II, Albania was ranked in the winning coalition and the country
was leaded by the communist government that ranked the country in the Eastern Communist
Bloc. In December 1944, the Government headed by Enver Hoxha took complete control of
the economy and adopted laws that guaranteed state severe rules for all private industrial
and trade companies, as well as the domestic and foreign trade relations.
One of the first laws of the Communist Government was Law no. 37, dated 13.01.1945,
“Extraordinary taxation on the war profits” which allowed the confiscation of the property
that belonged to those called the “people’s enemy”.
This law and 3496 decisions for property sequestration issued by the Regime in the period
1945-194914 (these decisions accounted more than 2/3 of the decisions taken during this
period) gave a fatal blow to the still small middle class of the country, to the same class that
established the first elements of social enterprise in the country through charity and
philanthropy activities.
They passed as state property all the properties of the foreigners (invaders)15, confiscated the
properties of the opponents to the communist regime, the properties of those who escaped
Albania, etc..
The power of big land owners was reduced by Law no. 108, dated 29.08.1945, "On the
Agrarian Reform ', which stipulated the sequestration of the land owned by big and medium
14
Albanian Legislation 1945-1955, Alphabetical Bibliographic Indicator, Edition of the Albanian Parliament
15
Law no. 36, dated 13.01.1945, On the confiscation of the properties of the Italian and German states,
situated in Albania and taking control of their citizens properties – Official Journal, no. 3, Tuesday, 23 February
1945, pg. 4 33 land owners and it distribution to the landless peasants, based on the communist slogan 'the
land belongs to the farmers'.
The owners’ property was destroyed and fragmented into about 70.000 small farms. All
forests and pasture lands became state property and the landowners who had other sources
of income (non-land) were expropriated without compensation. Nationalization of property
was also spread on agricultural tools and work animals and it was banned to buy, sell or
transfer land. Nationalization of property also affected the properties of religious institutions,
which were allowed to keep only 20 acres of land. They have gone so far as to prohibit the
slaughter of animals without the permission of the Government (!?).
By means of propaganda and violence, immediately after the distribution of land to peasants
in implementation of the Agrarian Reform, the Government tried to persuade peasants to
join collective farms called agricultural cooperatives16. Agricultural cooperatives as a form of
ownership is recognized in developed democratic economies, but the principles of
organization in the socialist system were different and degrading to the economy. Despite
intensive propaganda of the regime and low taxes policy for members of cooperatives only
2,428 rural families were persuaded to join cooperatives until 1948. Collectivization was
completed in 1976.
For the creation of agricultural cooperatives land, trees and work tools were collectivized in
return of no payment, while cattle was collectivized in return of payment which would be
delivered within 10 years, with annual installments.
As a result of collectivization were created the following forms of ownership: personal
property or cooperative garden and the collective, cooperatives property. With the creation
Decree no. 46, dated 20.04.1946. On the implementation of creation of cooperatives – Official Journal no. 31,
Tuesday, 30 April 1946, pg 4.
16
34 of cooperatives private ownership on the production tools was transformed into collective
property of all its members.
Monetary reform was another shock to the middle class. In April 1947, The Commission if the
Economic Planning drafted the first economic plan of the country, a nine months plan, with
objectives defined for the production in mines, factories and agricultural sectors, expressed
in terms physical production and not in money.
During the period of Communist rule, it was established a centralized political, economic and
social system which controlled every sector of life, including art and culture which were used
for the interests of the regime. An example of the state policy that passed everything to its
property and to the function of its own propaganda was also the industry of photography,
which was significantly developed during the first half of the XX century. When the
communist regime came into power photography became a tool to the service of state, we
can say we had a state’s photography”. The private studios disappeared after they were
collectivized into handicraft cooperatives (1946-1957) and when they were transformed into
repair-services undertakings (1969)17.
The same destiny had all the handicraft organizations that had existed until 1969 in the form
of cooperatives (organizations of private craftsmen cooperation in cities and villages). In 1969
about 28.000 people were employed in the handicraft cooperatives.
Even before ‘de-jure’ being transferred to state enterprises18 the handicraft cooperatives
were considered 'as auxiliary state industry’ and their production, distribution and volume of
Albanian photography during the Stockmann-Sokoli expedition and after; Gilles de Rapper (CNRS), IDEMEC,
Aix-en-Provence; Echoes of the past – Voices of the future; International conference, 18-19 October 2013,
Tirana
18
Decision, no.33, dated 11.3.1969, On the transformation of handicraft cooperatives to massive economic
organizations and the transfer of their activity to the state sector
17
35 repair-services were included in the state’s economic plan; the prices of the produced goods
and the prices of most repair-services were approved by the state.
In 1981, the state declared “herd” of livestock from the personal yards, with the pretention
that they damaged the collective property and that the cooperatives could afford to supply
families with dairy products and meat.
The years under the communist regime were a long and dark period for the tax system as
well. From 1944 to the ‘60s, while the private property still existed a truncated tax system
was applied in Albania, which in fact aimed to lead private property towards massive
collectivization, which means its abolition. During the communist regime the tax and fee
system was not abolished, but it was kept in a camouflaged way. State enterprises,
agricultural cooperatives, agricultural farms and also the citizens, deposited the greatest part
of their profits or incomes from their work and salary to the state budget.
The state – party didn’t allow a single organization to function as independent. The same
was applied to the union organizations which were called Professional Unions and which
were nothing else than tools of the party in power and of the government. They applied the
party directives and the government’s decisions. The First Congress of Workers and
Employees Union, held on 28-30 September 1945 introduced many elements of the union
movement, which very quickly were disappeared. The communist party decided to hold
National Congresses of Professional Unions every 5 years and it was careful to introduce in
the leading structures of these Unions the most devoted persons of the communist system.
The state, during the communist regime guaranteed full and programmed employment (the
state was almost the only employer) and the working class was considered as the class in
power, which exercised the proletariat dictatorship and that it could not oppose “its own
state”.
36 But, the policies of state-owned economy and the elimination of the private initiative
degraded and destroyed the country’s economy. The ‘80s of the last century were
characterized by very law rhythms of economic development and by the end of this decade
the economy was in shock. Significant deficits were noticed in the production sector, exports
were increasingly reduced, payments’ balance deepened the chronic deficit, most of the
economic enterprises worked below their capacity due to the lack of the raw material. In this
period started the camouflaged dismissals of employees who didn’t work even though they
had a job and were paid 80% of the salary.
Agricultural production and supply drastically declined, food was rationed, agricultural
enterprises or cooperatives blocked each other because they could not pay, budgetary
deficit greatly increased. The above mentioned and other blockings were the cause of the
total collapse of the Albanian economy.
The period of communist rule, which lasted for half a century (1944-1990) was the darkest
period for the economy and the living standard of the population.
In such a regime, where the private sector disappears and the public sector rules everywhere
one can’t even think of philanthropy. Collectivization killed individualism, every charity and
philanthropy initiative. The system denied the values of charity, support and individual
humanism.
Of course, one could not even think of the existence of Legislation that could regulate this
field. The concepts supported by the propaganda of the state-party were volunteering and
solidarity of the society and of the individual, on behalf of the communist ideals and the
state-party.
37 During the communist rule philanthropic activity completely disappeared and the state-party
was committed to take care of everything. The state party issued a number of legal acts
which sanctioned the right to free education19 and health service20, guaranteed by the state.
The state was also committed to provide financial aid to the poor families21 and vulnerable
groups, which of course was minimal, as the country's economic situation was very bad, but
even the rest of the population lived in poverty living conditions of absolute.
The communist state killed the private property, the private property and the “private”
sensitiveness.
‘Mother Party’ became the Mother that cared for everybody and everything, for every single
person and guaranteed welfare.
19
Decision no. 532, dated 18.07.1950. On the supply by the State with maize to certain family
categories – Official Journal no. 50, 2 August 1950
Decree no. 1155, dated 10.10.1950. On the state aid to mothers with many children.- Official Journal
No. 75, 11 November 1950, p. 2-4
Decision no. 829, dated 02.10.1950. On recognition of the right to be sheltered in permanent
nursery for those women who have children born outside marriage – Official Journal No. 68, 13
October 1950
20
Decree no. 1010, dated 16.01.1950. Law on the adoption Decree-Law No. 742 dated 17.11.1949
as follows: Law no. 776 dated 16.1.1950 on the adoption of Decree-Law no.742 dated 17.11.1949 on
State medical aid – Official Journal no. 8, 23 February 1950, p.15
Decision no. 1096, dated 28.12.1950. On health protection of employees in the Work Center – Officil
Journal No. 22, 20 August 1951, p. 677-679
Law no. 3766, dated 17.12.1963 "On health service and provide free state health aid "
21
Decision no. 532, dated 18.07.1950. On the supply by the State with maize to some family
categories – Officil Journal No. 50, 2 August 1950
Decree no. 1155, dated 10.10.1950. On state aid to mothers with many children – Official Journal
No. 75, 11 November 1950, p. 2-4
Decision no. 829, dated 02.10.1950. Decision no. 829 daed 02.10.1950, On recognition of the right
to be sheltered in permanent shelters for those women who have children out of marriage – Official
Journal No. 68, 13 October 1950
38 4. The future of social enterprise in Albania
The main policies of the strategy for Business and Investment development, when
addressing the main directions for the development of SMEs for the period 2013-2020, aim
to focus, inter alia, on the "Social Business Promotion" and "Promotion of women in
business "(p 34). It also highlights that:
Promoting a culture of entrepreneurship and
entrepreneurship education should be an important direction of development. Human
resources and innovation are closely linked. The effective use of human potentials is essential
for the economic development of the country. Teaching entrepreneurship is one of the key
competencies at the European level and it should be included in all levels of education from
primary level, secondary, middle and high level. This is a long term reform. The process
involves not only the curriculum reform at all levels, but also a number of programs to
promote entrepreneurship culture through trainings.
The same Strategy contemplates that industry development policies will focus, among
others, in stimulating innovative activities to assist industry in increasing production.
To promote the development of creative entrepreneurship, with the purpose to increase
sustainable economic activity and job creation in the handicrafts sector, the government will
contribute by financially supporting these enterprises, having the support of donors as well.
The main purpose of this objective is to promote: product development; marketing; as well
as training and capacity building.
Grant Fund will be created to support 470 creative businesses, especially those in the field of
handicrafts.
39 This will be realized through: Creative economy development programs, especially the
Albanian handicraft; Programs to encourage entrepreneurship by women; Programs to
encourage entrepreneurship by youth, start ups, etc.
Another priority of the strategy for promoting business and investments is the Promotion of
Social Business (p 45), Having as a particular target vulnerable groups, especially ethnic
minorities and disabled individuals. A social business is not a profitable business, its main
objective is to solve a social problem. Establishing and strengthening these businesses will
bring development and employment, especially in the urban and semi-urban areas, but also
in the less developed areas of the country.
Moreover, it is necessary to undertake a special study on the characteristics and needs of
particular groups of men and women from ethnic minorities and disabled women and men.
To support these businesses will first be drafted a legal framework in line with EU directives
and then the schemes to support these businesses.
However, in Albania, as we noted above, there are interested stakeholders from the
Government, who do most of the roles required to make an innovation system functional,
among which are the following:
- Research, Technology and Innovation Agency (RTIA), it supports science and research and
aims o encourage interaction with businesses;
- Investment Development Agency (AIDA) supports businesses with regard to export
development and their internationalization;
40 - National Employment Service (NES) supports employment, training and self employment.
Still, there is no institution within the supporting subsystem to fully involve businesses in the
innovation dynamics, i.e. help them in the systematic adoption of innovations and in the
process of technological process absorption, as well as to provide complete interactions with
other interested stakeholders.
Based on this institutional gap, the Business Mediation and Innovation Center (BRIC) was
established and developed, as an inner sector of an existing governmental organization
(AIDA) in order to provide a wide range of services to technologically support the private
enterprises, based on knowledge.
Institutional Model of BRIC
BRIC manages programs and the supporting actions, proposed according to the innovation
strategy. BRIC works with the first proposed programs dealing with the financing of
innovation and increase of innovation services for businesses, as well as to raise awareness.
The main element in building a national innovation system is the inclusion of businesses
through activities that are suitable for them. Activities should enable businesses to initiate,
import, modify and spread new technologies. The system needs to be livened through
interactions between stakeholders. This will require the commitment of all stakeholders, as
well as an institution for the promotion and coordination of activities.
The development of infrastructure facilitates:
i)
The creation of incubators (both in terms of physical space and in terms of service
development for business support) in order to offer a suitable environment, to
41 favor possible success in the introduction of new innovative business initiatives by
creating new jobs, business opportunities and increase values, through the healthy
development of new innovative businesses.
ii)
The support of business Cluster in key sectors, offering support to the cooperative
platforms, which can facilitate and support the strategic collaboration between the
enterprises and the other organizations, in order to increase the dimension of
value chains, favoring internationalization, access to new markets and/or the
reaction to a more sophisticated demand.
Another supporting form will be the Program of business incubation, which is supported by
the Ministry of Innovation.
The goal of the business incubation program is the development of permanent
infrastructure, which will support the emergence of new innovative companies.
These include actions for locating and equipping of facilities, development and maintenance
of business supporting structures, providing an integrated set of specialized services, and
promoting the concept and content of business incubation for actors in Albania.
Business incubation program will initially consist of launching a pilot incubator in Tirana,
closely associated with the BRIC. Based on this experience, lessons learned and mobilization
of actors and additional resources will a call will be made to support the emergence of
business incubators initiatives in the country.
From a first analysis it results that business / social entrepreneurship will recognize new
developments in the coming years in Albania, based on the stage of political and economic
42 development of the country, increasing accountability of public institutions and the interest
of entrepreneurship and NGOs for the fulfillment of social responsibility in all areas.
Following we list a SWOT analysis
STRONG POINTS
•
Increase awareness of institutions, civil society and entrepreneurship for the need to
establish and empower social business enterprises;
•
High number of women that lead NGOs and enterprises;
•
Government’s Initiative for the Movement of Social Business Promotion.
•
Establishment of NBS, Promoting Social Business Agency, a special state structure for
the development of the social business movement;
•
Implementation of regulatory reform to help improve the business climate and
reducing the costs of doing business;
•
Continuous reduction of administrative barriers;
•
National Registration Center, NRC, as a one stop shop, where the registration of
business is done in one day and its cost is 100 ALL (less than 1 US$);
•
National Licensing Center, NLC, as a one stop shop, where most of licenses are given
within a period of 2-4 days, whereas the licenses issued by the other institutions are
issued in a period of 10-30 days (not including the construction permission);
•
Creation of AIDA & BRIC.
•
Stable macroeconomic growth.
43 WEAK POINTS:
•
Lack of legislation for social entrepreneurship
•
Lack of financial supporting schemes for the initiation of the social business;
•
Weak performance with regard to innovation;
•
Informality in economy;
•
Problems with the right of ownership;
OPPORTUNITIES:
•
The expressed commitment of the Government to improve business climate in
general and social business in particular;
•
The existence in Albania of the Movement for Social Business Promotion to
coordinate the creation of synergies in international cooperation;
•
Granting the status of EU candidate country;
•
Empowerment of NPO and Business and their sensitivity towards social responsibility
•
Increase cooperation between public and private sector
RISKS:
•
Limited experience/tradition;
•
The lack of a specific legislation for social entrepreneurship;
•
Continuous changes in tax legislation;
•
Global economic crisis and its consequences in the Albanian economy;
44 •
The lack of qualified human resources.
•
The Albanian “tradition” to adopt laws in compliance with the European legislation,
but problematic in implementation;
45 Referencies:
Albanian Investment Development Agency http://aida.gov.al/?page_id=20&lang=al
Albanian photography during the Stockmann-Sokoli expedition and after; Gilles de Rapper
(CNRS), IDEMEC, Aix-en-Provence; Echoes of the past – Voices of the future; International
conference, 18-19 October 2013, Tirana
Albanian Legislation 1945-1955, Alphabetical Bibliographic Indicator, Edition of the Albanian
Parliament
‘A Historic View to the Development of Philanthropy in Albania’, Partners Albania, Center for
Change and Conflict Management
Draft Strategy of Business Development and Investments for the period 2013-2020
Decision, no.33, dated 11.3.1969, On the transformation of handicraft cooperatives to
massive economic organizations and the transfer of their activity to the state sector
Decision no. 532, dated 18.07.1950. On the supply by the State with maize to certain family
categories – Official Journal no. 50, 2 August 1950
Decree no. 1155, dated 10.10.1950. On the state aid to mothers with many children.- Official
Journal No. 75, 11 November 1950,
46 Decision no. 829, dated 02.10.1950. On recognition of the right to be sheltered in
permanent nursery for those women who have children born outside marriage – Official
Decision no. 1096, dated 28.12.1950. On health protection of employees in the Work Center
– Officil Journal No. 22, 20 August 1951, p. 677-679
Law no. 3766, dated 17.12.1963 "On health service and provide free state health aid "
Decision no. 532, dated 18.07.1950. On the supply by the State with maize to some family
categories – Officil Journal No. 50, 2 August 1950
Decree no. 1155, dated 10.10.1950. On state aid to mothers with many children – Official
Journal No. 75, 11 November 1950, p. 2-4
Decision no. 829, dated 02.10.1950., On recognition of the right to be sheltered in
permanent shelters for those women who have children out of marriage – Official Journal
No. 68, 13 October 1950
Decree no. 1010, dated 16.01.1950. Law on the adoption Decree-Law No. 742 dated
17.11.1949 as follows: Law no. 776 dated 16.1.1950 on the adoption of Decree-Law no.742
dated 17.11.1949 on State medical aid – Official Journal no. 8, 23 February 1950,
Decree no. 46, dated 20.04.1946. On the implementation of creation of cooperatives –
Official Journal no. 31, Tuesday, 30 April 1946,
INSTAT http://www.instat.gov.al
47 Journal No. 68, 13 October 1950
Law no. 36, dated 13.01.1945, On the confiscation of the properties of the Italian and
German states, situated in Albania and taking control of their citizens properties – Official
Journal, no. 3, Tuesday, 23 February 1945,
Ministry of Social Welfare and Youth
http://www.sociale.gov.al/files/documents_files/Strategjia_per_Punesim_dhe_Aftesim_20142020.pdf
Much of individual wills was blocked by testamentary heirs, or foreign banks, where assets
and wills were deposited, as the Albanian National Bank didn’t exist at that time, it was
established in 1925
The Global Competitiveness Report 2012-2013,
The European Commission, Europe 2020, http://ec.europa.eu/europe2020/index_en.htm
UNDP http://www.al.undp.org/content/albania/en/home/presscenter/articles/2014/01/30/one-hundred-innovative-ideas-for-self-employment-presented-in-berat-today-/
http://www.al.undp.org/content/albania/en/home/presscenter/articles/2014/04/22/undplaunches-corporate-social-responsibility-awards-/
48 http://ec.europa.eu/eurostat/documents/2995521/5149034/2-20062012-APEN.PDF/e9c9f368-2d8f-49b1-a226-651b9ebaddb1?version=1.0
http://newyorktiranabagels.com/
49