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Finland

Social economy at a glance

moderately developed*
Level of development
7.70%**
Estimated share of employment
182 105**
Estimated paid employment

In 2022, it was estimated that there are approximately 2488 active social enterprises in Finland.

  • Limited companies: 137
  • Cooperatives: 295
  • Foundations: 315
  • Associations: 1741

Source: The Centre of Expertise for Social Enterprises, 2022

In addition to these, the Research Institute of the Finnish Economy conducted a comprehensive survey to analyse the state of Finnish social enterprises. The study estimated that there are around 19,000 self-identified social enterprises that employ around 125,000 people. These self-identified social enterprises produce social value through their products and/or services. They are mostly engaged in the following fields of activity: delivery of social and welfare services, work integration, the promotion of initiatives that develop rural areas, arts and culture, and the start-up of companies promoting SDG that undertake socially-oriented business. 

Source: Social Enterprises and their ecosystems in Europe, Country Reports, Finland, 2020 

 

* For this website we included this overall assessment of the level of development, it is based on the data and information about the social economy ecosystem currently available and therefore has some limitations. However, we still considered it useful to include this overall assessment.
** Source: EESC/CIRIEC (2016) Recent evolutions of the Social Economy in the European Union, please note that this estimate is on the high end as it is based on organisation type and did not apply a more narrow check for all elements in the social economy definition.

For more details on the data quality see our note on social economy data.

Tradition and origins

Finland has a rich and established social economy and civil society sector. Its organisations include cooperatives, mutuals, associations and foundations. Although many fit within the social enterprise model, they are not considered social enterprises as the concept did not exist when they were established. In particular, these organisations have played an important role in delivering services for various disadvantage groups. Traditional forms of social economy organisations have counteracted prior inequalities and fostered Finland’s social and economic development. 

From the 1880s to the late 1950s, traditional forms of social economy organisations provided self-help and self-protection measures during the nation’s transition from agricultural to industrial work. Organisations emerged to cover a lack of basic services and resources. Consumer cooperatives were established throughout the country to facilitate social policy measures, aims and practices. A key role was played by volunteer associations that developed and organised services to further the interests of vulnerable groups in particular. Foundations also became an important means of funding and maintaining many welfare services that required specialist expertise. Sectors where foundations still play a major role include work integration and social housing. Mutual societies continue to have a significant impact on the provision of insurance. The role of civil society and social economy organisations changed when welfare state institutions were consolidated after World War II.  

From the 1940s to the 1980s, as Finland's welfare state developed, some of the social innovation that had been triggered by traditional social organisations was transferred to the public sector. Municipalities took fresh responsibility for organising and financing universal welfare service functions, which they achieved through relatively high levels of taxation. In addition to social and health care, widespread welfare policies were extended to cover education, employment, housing and leisure. Traditional social economy organisations, especially diverse social and welfare associations and foundations, acquired a new role in delivering services to vulnerable groups (e.g., those with hearing and speech difficulties, the visually impaired, disabled war veterans, people with respiratory problems and other disadvantaged groups).  

Since the early 1990s, Finland has witnessed a further significant change to its welfare and employment service provision. The country’s welfare model is being challenged by a changing operational environment, market developments, spending cuts, increased demand for a variety of services, cross-sectorial collaboration and political ideologies that foster the marketisation of public services. Over the past two decades, a progressive shift from public to private social service provision has become the predominant trend, which involves different types of social economy organisations and social enterprises. While still strongly rooted in social economy traditions, Finnish social enterprise has recently been influenced by international examples, especially from Italy, the United Kingdom and Spain. 

Framework conditions and social economy ecosystem

Policy and legal framework 

The Act on Social Enterprise (1351/2003 revised 924/2012) limits social enterprises to work integration initiatives. Although parliamentary discussions and two working groups came to the common conclusion that social enterprises do not require specialised legislation, the potential role for WISEs has raised interest and encouraged intermediate labour market developments. Finland’s WISE legislation aims to facilitate the employment of those who are in a weak labour market position and improve the effectiveness of labour market policy measures for this target group. In addition, it supports the employment impact of Finland’s third sector and sheltered workshops. WISEs were initially intended as alternatives to occupational therapy for the disabled; legislation stipulates that a WISE should be the final stage in subsidised employment before the disadvantaged find a regular job.

The Act on Social Enterprise is in effect until 30 June 2023.

Any type of enterprise, non-profit association, foundation, cooperative and limited liability company is eligible to register as a WISE if it meets the following social enterprise act’s criteria:  

  • it is listed in the trade register; 
  • it has a social goal;  
  • it is run as a business to produce commodities (services and goods);  
  • at least 30% of its employees are disabled and/or long-term unemployed (required percentage of subsidised employment);  
  • all of its employees are paid a collectively agreed wage that is considered appropriate for employees with full work ability within the given sector regardless of their productivity or if such a collective agreement does not exist, a normal and reasonable wage or salary. 

The act was implemented with the support of European Structural Fund programmes (2000-2006). This was soon followed by Finland’s implementation of its Social Enterprise Mark (SEM), a label which can be held by companies that have been set up to solve social and environmental problems and dedicate most of their profits to this purpose.  

Finland also adopted a Social Enterprise Strategy in 2022, which aims to ensure that the way social enterprises conduct business will be recognised, but no specific legal basis or special treatment will be provided for them. Instead, the operating conditions of social enterprises will be strengthened. A social enterprise database has been created to give an overview.

Policymakers in the field of the social economy 

The main ministries influencing Finnish social enterprise policies and developments: 

Additionally, the following actors implement and develop (socially responsible) public procurement practices and legislation and design and implement legislation, fiscal and regulatory frameworks: 

  • The Association of Finnish Local and Regional Authorities  
  • National Institute for Health and Welfare  
  • Municipalities and regional councils  
  • Finnish Consumer and Customer Authority 

 Networks, federation and representative entities 

How to get involved in the social economy in Finland?

You are looking for a first experience in social and solidarity economy? 

The Centre of Expertise for Social Entreprises (YYO) serves social enterprises nationwide in Finland. They offer advice and guidance to social enterprises and people planning to start a social enterprise, regardless of their type or sector.  

You manage or work for a social economy entity? 

The Centre of Expertise for Social Entreprises is familiar with the special characteristics of social enterprise, such as work integration, social innovation, impact-based business, and governance. They offer advise and guidance related to all these areas.  

The Centre of Expertise also serves teachers, instructors, and entrepreneurship education providers. 

Get support

Funding

Organisations providing funds and assistance to enhance the investment and contract readiness of social enterprises:  

Learn more about the social economy in Finland

GSGII National Advisory Boards on impact investing. The network of National Advisory Boards brings together experts in the fields of investment, public policy and social and environmental innovation. Their role is to promote and facilitate the development of impact investment in the countries in which they operate. Finland - GSG (gsgii.org)

Reports

Social Economy Voices

Social Economy Voices - Arvoliitto, Finland