Factoría de Empresas

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Promoting social enterprises in emerging environmental markets

The towns and villages in the mountains to the North-East of Madrid are growing, both with the arrival of people looking for a cheaper and easier life than in Madrid and with the construction of second residences for people looking to get out of the city at weekends. They can be attractive places to live for commuters and offer many business opportunities; however, some disadvantaged groups can find themselves excluded. Fifteen percent of the population in these municipalities are now immigrants, who can find it difficult to enter the labour market due to issues around skills and discrimination. Meanwhile, local unemployment is strongly feminine; more than 70% of minimum social benefits paid here are to women.

The lead partner in the Factoría de Empresas (Enterprise Factory) project, an association called Los Molinos, was created by a previous EQUAL partnership which brought together several NGOs working in the sector. Los Molinos saw that the city of Madrid is suffering from the pressure of urbanisation and producing more and more waste and that the growing localities had increasing needs. It established the project to tackle both issues in an overlapping way: firstly, self-employment could be facilitated in the targeted municipalities among those finding it hardest to enter the labour market; and secondly, the businesses created could contribute to environmental sustainability.

"Our strength lies in the fact that the project is based on the three principles of sustainable development," points out project director Ofelia Ricciardelli. "It combines social, economic and environment objectives." This fits with the conclusions of the 2006 European Spring Council which say that "over and above its importance in its own right, environmental policy can make an important contribution to jobs and growth and can impact positively on important sectors such as public health and health care costs, and social inclusion and cohesion".

A Factory for social enterprises in the environmental sector

The Enterprise Factory hit the headlines when the recycled bags produced by one of its enterprises were carried by Pau Gasol and other famous sportsmen during the City of Madrid's campaign to host the 2012 Olympic Games.

The Factory itself has two main innovatory departments. Firstly, there is the 'Runway to self-employment' (lanzadera de empresas) a department which provides business support to disadvantaged groups and concentrates on the growing environmental opportunities in the area. Secondly, there is Promociona, a department which has launched a series of experimental social enterprises in the environmental sector. The Runway team tries to prioritise and encourage projects related to the environmental sector, particularly in the fields of rural tourism, gardening and commerce. In El Escorial, one of the municipalities concerned, Runway has helped six 18-year-olds create a cooperative for the maintenance of public parks. Ofelia Riccairdelli points out: "One of our principles is that we do not support initiatives that may have a detrimental effect on sustainable development."

Runway and Promociona are supported by a series of common services: for investigating new market opportunities (Centro de I+D+E), for reaching out to new clients (Punto de Encuentro), for ensuring the gender perspective (Servicio de Igualdad de Oportunidades) and providing job placements (Intermedia). Intermedia deals primarily with personalised plans for labour market insertion and informs potential employers of the incentives available for hiring people from a disadvantaged group, such as immigrants and people with disabilities.

There is still a long way to go. Ofelia has been working for many years promoting the social economy and argues that it lacks both legal and financial support: "There is no national law in Spain," she says. "In Madrid there is a regulation dating from 2003, but it is not backed up by a budget to support the social economy."

A runway for business creation among disadvantaged groups

The Runway is an experimental programme which tries to match the needs of disadvantaged groups with environmental business opportunities in the area. It provides business management courses of 180 hours and personal tutorials to assist in business creation. Its manager, José-Luis, explains that its first step is to identify the needs of the individual and provide training. Some people are just looking for funding and this is not a good starting point. "Many do not have a business plan, so they cannot get access to funding. So the second thing we do is to make the business plan with them." The third step is actually looking for funds; the project has agreements with la Caixa and other financial entities and has its own experimental fund for "projects that we believe to be good, but that the bank is not going to fund."

The project has found that each disadvantaged group faces a series of specific obstacles to self-employment. For immigrants, trying to change their work permit to a self-employed status can be more complicated than obtaining the funding. Women often face difficulties with family support, like Lucía, who has just opened a publishing house for books aimed at minority groups, despite the reaction of her father who "told me that I was crazy."

The project also found that gender discrimination goes beyond women on low incomes. Many of their female participants find it increasingly difficult to obtain better jobs as they approach 35. For example, Carmen Fernandez is a director of a human resources consultancy who wants to open her own business to take advantage of all her knowledge, and in this way reconcile her professional and personal life. Although she had clear ideas of what she wanted to do, the Enterprise Factory was still able to help her at each step. "For example, I had already decided the name of the company, but Jose Luis suggested that I carry out a small opinion poll with 10 people. Now I think I will change the name," says Carmen.

The Runway has worked on 80 business ideas since the start of the project; most of the clients are women and 40% are immigrants.

Opening innovative markets through waste recycling

Ecolinea http://www.ecolinea.org is perhaps the most developed of the social enterprises being supported by Promociona. It has two branches of activity: Ecotextil, focusing on the recycling of publicity materials and Ecoaceite, dealing with used vegetable oil. Both label their products to show that they are environmentally friendly and provide employment for disadvantaged groups; this helps the products compete in the market against cheaper imports from developing countries.

Ecotextil is based around the fact that cities like Madrid produce a lot of plastic canvases for adverts and promotions. When the campaigns are over, companies would normally have to burn the materials at their own expense, generating a lot of pollution. As a result they are happy to give them to Ecotextil for free. The materials are cut, washed and transformed into trendy bags, small cases or purses. The main clients are public institutions or councils that hand over materials from their publicity campaigns and ask them to be made into bags for their congresses and events. A 3km-long flag extended during the Madrid candidacy was handed over to Ecotextil to be made into the official bags of the Spanish Olympic delegation, "After the Madrid 2012 candidacy we got many more orders," explains Lola, head of Ecotextil. "The Círculo de Bellas Artes has asked us for 500 bags! Never mind, we always comply with the deadlines."

Ecotextil pays for the women who work there to follow a 100-hour course in industrial confection with transport costs also covered. After the course, Ecotextil employs some of the women for periods up to a maximum of 3 years. In Ecotextil, the women learn not only industrial confection, but also abilities such as interacting with other people, meeting deadlines and arriving on time. These abilities will be essential in their professional lives.

There are currently six women working in Ecotextil, but many others have stayed for shorter periods and have been able to find employment elsewhere. Lourdes, 25 years old from Peru, has worked there for nearly three years: "I was a little bit lost when I started, I did not know what to do with my future. I have learnt a lot on a personal level, how to deal with and treat people. I had colleagues that were ex-drug addicts and others that were battered by their husbands. You don't see that in other jobs." She has now managed to buy a house and a car and already has another job for when she leaves Ecotextil.

A social enterprise in recycled oil

Ecoaceite is another experimental social enterprise supported by Promociona. It collects used vegetable oil from people's homes and work canteens and uses it to make soap or sells it directly for biodiesel. It started in the previous EQUAL period, and at the moment has 4 full-time employees, who can all follow training related to their work.

"Many of the people coming to the courses on soap and oil products become self-employed after. They learn an activity and create their own company," says Pablo, head of Ecoaceite. The division also runs awareness-raising campaigns on the environment and organises voluntary local workshops on the environment with young people of the area.

The big challenge now is to consolidate. Pablo admits: "We cannot survive only from the markets in soap or biodiesel. To consolidate we have to diversify our product range." In order to do this the project uses its Innovation Centre (Centro I+D+E) run by a major Madrid university (Universidad Autónoma) which identifies business opportunities in the environmental sector. They are currently investigating whether the paint industry could become clients of Ecoaceite based on their need for oil.

The Enterprise Factory supports two other experimental initiatives that are currently at an earlier stage of development. The Hierbabuena Garden Centre will become a social enterprise at the end of 2006 and the AFAP Farm School, aimed at people with mental disabilities, is scheduled to become a functioning social enterprise in the beginning of 2007.

Building a partnership around mutual benefit

One of the successes of the project has been to expand los Molinos, the original partnership which was created during the first phase of EQUAL, to create a new far broader partnership called Sierra Emprende. Los Molinos now sits on the general assembly of Sierra Emprende with the local municipalities giving them the opportunity to discuss their ideas and needs directly with the public authorities and achieving more political impact. This has led to results such as paid work from one municipality to collect cardboard from an industrial estate.

The engagement of the public sector is essential. "We cannot use the normal distribution networks because they are too expensive. Social enterprises do not have a private investor behind them; money has to come in through specific projects," explains Ofelia Ricciardelli, director of Los Molinos. The public sector is showing increasing interest in becoming involved because, "they want to achieve both social and environmental benefits for the benefit of the area," says Ofelia.

Universities are playing a vital role in the project by exploring the possibilities of economic activities in the environmental sector. The University of Madrid is helping to monitor the evolution of the businesses, investigate their possibilities in the sector and produce studies of potential clients or diversified products.

Learning from transnational and transregional pioneers

The Enterprise Factory is aware that it has a lot to learn from other initiatives. "Contrary to how it may seem, Madrid is steps behind many other places in the promotion of the social economy," says Ofelia Ricciardelli. To learn from ideas in other parts of Spain and Europe the Enterprise Factory has created an internal service called Creared that encourages co-operation and networking. "The Basque Country and Cataluña are the most advanced regions at national level," says Ofelia, "Both have regional laws that provide facilities for social enterprises." Networking with associations in these two regions of Spain has increased the capacity of Los Molinos to improve the situation of social enterprises in Madrid.

The Enterprise Factory also forms part of Creation Social Enterprises (CSC), a transnational project with Percorsi d'impresa e tecnologia sociale, from Turin. "Italy is a great model for us," says Ofelia. "They have a co-operative law which provides for budgetary support, exemptions and other facilities." The exchange of practices is providing the Enterprise Factory with inspiring examples of synergies between social economy initiatives.


DP name: FACTORIA DE EMPRESAS: Claves para el Empleo y el Desarrollo Local
DP ID: ES-ES20040524
Transnational Partners: Percorsi di Impresa e Tecnologie Sociali - IT-IT-G2-PIE-069, EQUAL-ΜΕΘΟΡΙΟΣ - GR-232194, IMPACT - UKgb-141
TCA id code: 4450; 4514
Contact DP: Ofelia Ricciardelli
Tel: +34 915 912 336
E-mail: direccion@admolinos.org
website: http://www.factoriaempresas.org