This chapter analyses how governments across Europe leverage policy to create conducive environments for social innovation, from national frameworks to EU-level instruments. It highlights how Member States such as France, Germany, Italy, Portugal, and Luxembourg have integrated social innovation strategies into their national investment plans, sectoral reforms, and dedicated institutional structures. These efforts are complemented at the EU level through the European Social Fund (ESF) and its successor, ESF+, which allocate funding and provide incentives, such as co-financing priorities under Article 14—to scale promising initiatives in employment, social inclusion, digitalisation, and beyond. By integrating national and EU actions, policy makers have mobilised diverse actors—including public authorities, social enterprises, civil society, and the private sector—encouraging experimentation, collaboration, and scaling. This chapter maps these multi-level trends, offering insights into how structured policy frameworks can transform innovative approaches into sustainable solutions for complex societal challenges.
Starting, Scaling and Sustaining Social Innovation
Abstract
Social innovation has gained increasing prominence as a tool to address complex societal challenges across Europe, ranging from labour market integration to access to welfare services. Through targeted policymaking for social innovation, governments can cultivate supportive environments that empower social entrepreneurs to provide the necessary conditions to develop and implement their innovative solutions. These policy efforts are formed at multiple levels, with both Member States and European institutions playing fundamental roles in designing frameworks, strategies, and funding mechanisms that foster social innovation.
Social innovation is increasingly integrated into broader national strategies and plans in EU countries. In France, Germany, Italy and Portugal, for instance, national efforts complement those at the European level by addressing country-specific needs and combining national contexts and priorities with policymaking for social innovation.
France 2030 is a national investment plan that includes dedicated support for social innovation in strategic sectors. Announced in 2022, the initiative aims to support France’s economic transition by funding businesses, universities, and research organisations. Recognising the role of social economy enterprises in driving social innovation, France 2030 dedicates six funding calls specifically to these entities, focusing on critical areas such as training and integration. By aligning social innovation with broader economic and industrial objectives, France 2030 integrates social economy actors into the country’s innovation landscape (CRESS Pays de la Loire, 2023[1]).
Germany has developed a comprehensive National Strategy for Social Innovation and Social Enterprises to strengthen social innovation and support social enterprises. The Strategy introduces 70 measures to enhance the ecosystem for social enterprises, recognising their role in job creation, but also in promoting sustainability, social inclusion, and climate-friendly practices. To further improve collaboration and learning, it also includes the creation of a Platform for Social Innovation to act as a central hub for resources and networking (Federal Ministry for Economic Affairs and Climate Action (BMWK) and Federal Ministry of Education and Research (BMBF), 2023[2]).
Italy’s National Strategy for Inner Areas – municipalities characterised by significant distances from essential public service – is a targeted initiative to tackle depopulation and limited service access in rural regions. Launched during the 2014-20 ESF programming period, it addresses regional disparities by promoting economic recovery, job creation, and social inclusion in remote areas. By fostering social innovation projects in inner areas, the Strategy aims to reverse demographic decline and improve access to essential services, such as healthcare, education, and mobility (European Network for Rural Development (ENRD), n.d.[3]).
Luxembourg has long played a pioneering role in advancing social innovation, demonstrating a sustained policy commitment over the past decade. Since the establishment of a dedicated ministerial department for the social economy in 2009, Luxembourg has embedded social innovation as a core governmental mission (OECD, 2023[4]), further reinforced in 2024 through the creation of a unit for social and environmental issues within the Ministry of State. Most recently, in 2025, Luxembourg hosted the Global Government Summit, a high-level event convening international stakeholders to launch the Global Council for Social Innovation and adopt the Luxembourg Declaration (Gouvernement luxembourgeois, 2025[5]). These initiatives collectively position Luxembourg as a key actor in shaping global agendas for inclusive, sustainable, and innovation-driven economic development.
Finally, Portugal is a good example of a country that has successfully developed national policies for and as social innovation. The Portugal Social Innovation (PSI) initiative plays a key role in financing social innovation projects and fostering a sustainable social investment market. This entity centralises the coordination of social innovation funds in mainland Portugal, streamlining the processes and support to innovative projects. During the 2014-20 period, it launched 18 calls for proposals, approved 693 projects, and impacted approximately 1.4 million people in Portugal, mobilising public funding alongside private investment to support innovative solutions in areas like education, employment, health, and community development (Fi-Compass, n.d.[6]). The nation-wide Portugal Participatory Budget illustrates a policy that acts as social innovation. The Budget combines digital tools and face-to-face interactions to facilitate inclusiveness, particularly for marginalised groups such as rural communities, to shape policy decisions that directly address their needs. By enabling citizens to propose and vote on public investment, this bottom-up model democratises policymaking, fosters social cohesion, and builds trust in institutions. Its adaptable and transparent design makes it a scalable model for innovative governance (Administrative Modernisation Agency, 2018[7]).
At the European level, the ESF was the main tool for advancing social innovation across Member States in 2014-20. Its continuation under the ESF+ for the 2021-27 programming period reflects a reinforced commitment to tackling emerging issues such as digitalisation, skills development, and social inclusion. Alongside the ESF+, other EU measures complement these efforts to support social innovation in Europe, such as the European Social Innovation Competition, the Network of Social Entrepreneurs and Innovators and the Social Innovation Catalyst Fund.
The ESF commitment to social innovation in the programming periods 2014-20 to 2021-27
During the 2014-20 programming period, the ESF’s main priorities were to help people find employment or create businesses, improve education and make public services more efficient. Other priority areas included supporting self-employment, enhancing a healthy work-life balance and improving life-long learning. The main target groups were disadvantaged young people, particularly those without school or vocational qualifications, the long-term unemployed, women and workers, particularly low-skilled or low-income workers, and people with a migrant background, especially those facing difficult personal circumstances (e.g. refugees) (European Commission, 2020[8]).
A sample of 96 national evaluations selected by the European Commission shows that ESF-funded projects in 2014-20, some of which already had strong social innovation dimensions, covered a wide range of sectors and countries. As illustrated in Figure 2.1, Italy, Germany, Poland, France and Czechia were the countries from the sample with the most numerous projects, while other Member States had fewer supported initiatives. Of the 96 projects evaluated, almost half were related to employment, in particular labour market integration, followed by social inclusion, education and social innovation (see Figure 2.2).
Based on a sample of 96 project evaluations
Source: Authors’ own elaboration.
While the majority of the 96 selected projects were implemented at regional level, almost a third took place at national level. There were also local and transnational cases, with some projects spanning multiple levels of geographical coverage, which were categorised as “Other” in Figure 2.3. Geographical coverage of a sample of ESF-funded projects in the 2014-20 programming period based on a sample of 96 project evaluations.
Based on a sample of 96 project evaluations
Note: The category “Other” refers to sectors with 2 or less projects, namely: digitalisation (2), financing (2), R&D (1), demographic change (1), and tourism (1).
Source: Authors’ own elaboration.
Based on a sample of 96 project evaluations
Note: The category “Other” refers to projects that span multiple levels of coverage (e.g. both national and regional).
Source: Authors’ own elaboration.
Although the 2014-20 ESF did not specifically target social innovation in the majority of Member States, some projects were already forward-thinking in terms of socially innovative solutions to address unmet social needs. Some of them sought to leverage new approaches, collaborations, or technologies to achieve positive impacts, and went beyond traditional solutions by engaging communities and fostering inclusion. In particular, 16 of the 96 selected projects were identified as good practices in social innovation and are summarised in Table 2.1. These cases are further developed in Annex A together with organigrammes illustrating, for each country, who does what at national level and how ESF-funded projects are managed.
Note: This table summarises case studies from a sample of 96 projects selected by the European Commission to illustrate social innovation good practices implemented during the 2014-20 ESF programming period. These cases are presented in detail in Annex A.
Source: Authors’ own elaboration.
The 2014-20 ESF has been reformed as European Social Fund Plus (ESF+) for the 2021-27 programming period to address other emerging challenges such as digital transformation, skills development, and social inclusion. These updates have aligned the Fund more closely with the EU’s broader strategy for sustainable and inclusive growth, facilitating that resources are directed towards innovative projects that tackle contemporary social issues (European Commission, 2025[9]). By financing a wide diversity of initiatives ranging from community development programmes to advanced training schemes, the ESF+ plays a pivotal role in fostering social innovation in the EU (see Box 2.1).
The ESF+ groups previous instruments, including the European Social Fund (ESF), the Youth Employment Initiative (YEI), the Fund for European Aid to the Most Deprived (FEAD) and the Employment and Social Innovation Programme (EaSI). The ESF+ implements the European Pillar of Social Rights, focuses on high employment levels and equal opportunities, while the ESF 2014-20 focused on quality employment, vocational training and social inclusion. Social innovation is a key element in the 2021-27 programming period, supported under both shared management (e.g. programme priorities and increased co-financing rates) and direct/indirect management (e.g. the ESF+ Social Innovation Plus Initiative under the EaSI strand), aiming to foster synergies throughout the social innovation lifecycle.
The budget – including national co-funding – for the ESF+ 2021-27 is EUR 141.7 billion (in current prices) compared to EUR 84 billion (in 2011 prices) allocated for the 2014–20 period. Most ESF+ budget is implemented in shared management mode, where Member States manage the funds, and the European Commission plays a supervisory role. Additionally, the EaSI strand, with a budget of EUR 762 million, is directly managed by the Commission. A further EUR 132 million from the shared management strand is implemented under indirect management to support transnational cooperation through the ESF+ Social Innovation Plus Initiative. Subject to the Commission's approval, Member States determine spending priorities in the management domain. Countries may implement regional programmes, one or more national programmes, or a combination of both. They may also opt for multi-fund programmes that integrate ESF+ with other funds such as the ERDF.
The implementation of ESF+ shared management strand is supervised by Managing Authorities, which may be regional or national entities. These authorities are frequently EU Funds Managerial Departments of Member States’ ministries and regions. Their main duties include disseminating information about the programme, the selection of projects and enabling effective monitoring and evaluation.
Source: European Commission (2025[10]), Lecerf (2019[11]) and European Commission (2015[12]).
The ESF+ introduces a new requirement for Member States to allocate at least one priority to social innovation. Article 14.4 of the ESF+ Regulation acts as a strong financial incentive, allowing Member States to claim 95% of EU co-financing for socially innovative projects. Although this co-financing is limited to 5% of the total national ESF+ resources, social innovation can be promoted beyond this 5% ceiling with different co-financing rates. For example, Finland has chosen to focus on child welfare in the 2021-27 ESF+ programme, following a series of child protection failures (including child deaths) that were widely covered by its national media. With the implementation of a new National Child Strategy, ESF+ has been an opportunity for Finland to pursue social innovation in this field (European Commission, 2022[13]). Similarly, Czechia has focused on Housing First projects in the previous programming period (2014-20). During the ESF+ 2021-27 programming period, the Czech Managing Authority has opened two types of calls for Housing First projects under the ESF+ Employment Programme: incubation projects and multiplier projects. These new calls seek to scale up and improve the use of Housing First principles across the country (European Commission, 2022[13]). This requirement makes sure all EU Member States have at least one regional or national dedicated programme to social innovation to promote it across countries.
The ESF+ also creates a more favourable European ecosystem by increasing support for both social experimentation and social innovation. The new legal framework covers both the “ESF+ strand” (shared management with Member States and regions) and the “EaSI strand – Employment and Social Innovation” (direct and indirect management by the European Commission). This allows for greater complementarity between the two instruments and new mechanisms to better support the use and upscaling of social experimentations (European Commission and Ledan, 2022[14]). As shown in Figure 2.4, all phases of social innovation are therefore supported more consistently.
Source: European Commission and Ledan (2022[14]).
The Employment and Social Innovation (EaSI) strand specifically supports social experimentation through calls closely aligned with EU policy priorities on employment and skills, labour markets and labour mobility, social protection and active inclusion, and working conditions. Under Article 25 of the ESF+ Regulation, EaSI encompasses ten operational objectives. Two of these objectives – 25(c) on social experimentation and 25(i) on the acceleration of scaling up and transfer of social innovations – are directly pertinent to social innovation initiatives, such as those facilitated through the Social Innovation Plus scheme managed by the European Social Fund Agency (ESFA). For instance, Luxembourg actively participates in the European Social Innovation Alliance (under the call of the ESFA), a transnational initiative aimed at establishing National Competence Centres for Social Innovation across Member States. The remaining eight operational objectives support activities that promote evidence-based policymaking and mutual learning. Additionally, EaSI funds communication and dissemination efforts, including peer reviews, exchange of best practices, and benchmarking exercises, to foster mutual learning among stakeholders (European Commission, 2025[15]). For the 2021-27 programming period, the EaSI strand’s total envelope is EUR 762 million.
Within the ESF+/EaSI strand, the ESF Social Innovation Plus Initiative facilitates the transfer and upscaling of innovative solutions. With a total budget of EUR 142 million, partly transferred from the shared management strand and complemented with budget from the EaSI strand envelopes, it is implemented through various activities for ESF+ Managing Authorities and relevant stakeholders (mutual learning, capacity building, networking). These include transnational calls for proposals (five calls published in 2021-24), two networks (ALMA Network and EU ROMA Network), and five Communities of Practice (employment, education and skills; social inclusion; social innovation; migrant integration; and material support). The initiative also collects, assesses, develops, validates, and disseminates examples of social innovation to be included in the Social Innovation Match (a database developed to help social innovation stakeholders promote and find good practices as well as to identify organisations acting in the social innovation field).
The projects selected under the transnational calls are intended to facilitate the transfer and scaling up of social innovations. This work stream covers several types of actions, ranging from the design and validation of tested approaches to the roll-out of validated models across Europe, or the use of social innovation support to help organisations improve their capacities (European Commission, 2025[16]).
Created to manage the Social Innovation Plus Initiative, the European Competence Centre for Social Innovation provides mutual learning, capacity building and networking activities for ESF+ Managing Authorities and other relevant stakeholders. It is also responsible for collecting, assessing, developing, validating and disseminating suitable tools and methods for social innovation, such as the European Social Innovation Database. In addition to continuing the work of the Community of Practice on Social Innovation, the Centre facilitates five additional Communities of Practice covering key ESF+ policy themes: employment, education and skills, social inclusion, migrant integration, material support, and results-based management. This structure reflects the cross-cutting nature of social innovation and promotes the exchange of innovative approaches across various policy areas. The Centre collaborates closely with National Competence Centres for Social Innovation to strengthen the social innovation ecosystem across Europe. (European Commission, 2025[16]).
Competence Centres for Social Innovation at the national level cultivate networks, build capacities and synergies, spotlight efficiencies and develop tools to grow social innovation. Six consortia – covering 25 EU countries (see Figure 2.5) – investigate national ecosystems for social innovation to better understand the starting point in each country. This includes mapping key stakeholders, such as project promoters, funders and support organisations, their expertise and capacity building needs. Each consortium is asked to carry out a scale up or replication test of a promising social innovation (European Commission, 2025[17]).
Source: European Commission (2025[17]).
The Community of Practice on Social Innovation aims to strengthen Member States’ capacity to implement and deliver on social innovation under the ESF+. In addition to facilitating the exchange of best practice for programming the social innovation priority in ESF+ programmes, activities include promoting networking between National Competence Centres, ESF bodies and other relevant stakeholders, as well as building capacity to map social innovation ecosystems and design National Competence Centres (European Commission, 2025[18]). Community members are also involved in the following projects:
Peer Pioneers brings together Managing Authority officials, ESF stakeholders who worked on social innovation in the 2014-20 programming period and those who were at the forefront of designing ESF+ programmes. Members draw on lessons from top-performing Managing Authorities on social innovation and consider how they could apply these plans and indicators to their own challenges and opportunities (European Commission, 2025[18]);
Community-Led Local Development provides evidence of its successful use as an approach that captures social innovation at the local level. It focuses on pitfalls to avoid, challenges identified by Managing Authorities and capacity building needs, building on the experience of the ESF+ and other EU programmes (European Commission, 2025[18]);
Beyond Innovation develops a more systematic evidence-based approach in planning, implementing and assessing social innovation. By revising existing ESF social innovation projects, it identifies approaches and key elements to facilitate the scaling-up and transferability of promising social innovation projects (European Commission, 2025[18]); and
Competence Centres for Social Innovation (see above).
Other EU initiatives complementing the ESF+ in support of social innovation
The European Innovation Council (under the Horizon Europe) organises the annual European Social Innovation Competition to help innovators develop their ideas into working solutions and facilitate networking. It aims to raise awareness of social innovation among wider audiences and inspire the creation of new socially innovative ideas. It also encourages cross-sectoral cooperation by being open to non-profit and for-profit organisations (such as entrepreneurs and social enterprises), non-governmental organisations, civil society organisations, educational institutions and universities. In 2024, the theme of the Competition was dedicated to “Social Innovation in Digital Democracy” (European Innovation Council, 2025[19]).
The European Social Innovation Competition created a funding toolkit to help early-stage social innovators get their projects off the ground. It provides simple steps for social innovators and early-stage start-ups to follow and breaks down the different funding opportunities available to them. The toolkit differentiates itself from others by specifically focusing on early-stage social innovators and young start-ups, enabling those who are still formulating business models and plans to benefit from information and guidance (European Innovation Council, 2021[20]).
The European Innovation Council also launched the Network of Social Entrepreneurs and Innovators to directly connect social innovators with entrepreneurs. It supports learning and cooperation activities between its members and helps them bring their innovative solutions to the market, which in turn can lead to new funding opportunities. Each year, finalists of the European Social Innovation Competition are invited to become active members of the Network (European Innovation Council, 2025[21]).
Since 2022, the Social Innovation Catalyst Fund has been specifically dedicated to replicating and scaling successful social innovations. The initiative aims to capitalise on the under-utilised stock of existing successful social innovations, helping local or regional projects to achieve impact on a continental scale. It also seeks to empower citizens, local communities, social innovators and entrepreneurs by allowing them to become champions of the green transition (European Union, 2021[22]).
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