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The Development & Diffusion of Social Firms

 

The first social firm was set up in 1973 as a worker cooperative for previously hospitalized patients during the deinstitutionalization of San Giovanni Hospital in Trieste in northeastern Italy. Within ten years, the business, which employed workers to clean public buildings, was employing 130 workers. Over the next 20 years, a consortium of businesses was developed which included a café, a restaurant, a transportation business, a building renovation company and many others, with an annual income of $14 million. The family-style Hotel Tritone, one of the early businesses, proved to be particularly successful and has been franchised. All office- and street-cleaning contracts for the municipality of Trieste are currently awarded to social firms. Over 300 people with disabilities or disadvantages, half with mental illness, are currently employed in the Trieste cooperatives and earn a full market wage, and another 200 people diagnosed as having mental illness hold training positions reimbursed by governmental stipend.

The model has spread widely in Italy and interest in social firms has increased throughout Europe. By 2005, there were over 8,000 such enterprises in Europe with 80,000 workers, 30,000 of whom had psychiatric or other disabilities. In Germany, second only to Italy in number of social firms, there were over 500 such companies in 2005, with a combined workforce of over 16,000 employees, 50 percent of whom had disabilities. Before 1997, there were just six social firms in Britain. Since then, with the assistance of the support group Social Firms UK, the number has grown to more than 150, nearly half of which are considered “emerging” social firms, meaning that they still use some subsidy and are not yet financially self-sustaining. Catering and horticulture are the largest business sectors. Irish Social Firms, in Dublin, illustrates the importance of business viability. In the 1990s this consortium operated a restaurant, a lunch counter, a wool shop, and a furniture store, but these businesses have closed in recent years because of the subsidy required to sustain them.