国際セミナー報告書「各国のソーシャル・ファームに対する支援」

Interview with Mr. Gerold Schwarz

Development of Social Firms in Germany

January 29,2007

Interviewer: Misako Nomura
Japanese Society for Rehabilitation of Persons with Disabilities

Nomura ：How have the social firms been developed in your country ---- their activities in your country which might have given some impacts on other European countires. How did it go? And after that how did it get back to your country? Maybe you have a legislation and you have a supporting organization, FAF. Please explain a little bit about it. What is a relationship between such a supporting organization and the government or your state and what are the problems in your country in promoting further the social affairs? And lastly do you have any good idea to promote social firms in Japan?

Schwarz ：Just trying to focus on the interesting and relevant points, and starting very early in the social firm development in Germany, I think it is important to understand that social firms in Germany developed completely from the bottom up. So there was no program, government program or planned approach or anything. They are born completely from a concrete need on the ground which was identified by basically those organizations, quite small NGOs mainly in university cities, smaller places in Germany, and also in Berlin, who worked with people with mental health problems. This is related to the reform of the psychiatric system in Germany. Germany started to open up psychiatric hospitals and implement mental health services in the communities. So for the first time people with mental health problems were supported and helped to get out of the hospital. And with training and support, therapy, all kinds of activities, the idea was that they could live in the community. They do not have to be locked up in the hospital. This is a very important background. A lot of small organizations setting up these community based services around the needs of the people with mental health problems were quite successful in helping people to find housing in a supported apartments, organize training and day care, things like that. They were helping people to learn life skills, like everyday life skills. If you have spent a lot of time in hospitals it may be difficult to do basic things you were used to do by yourself. Also in a later stage, more occasional activities, training, work training, daily activities. One of the aims was, of course that people live in the community and also work, again go back to work. But this was the area where they encountered serious problems, it was basically not possible, or extremely difficult to find jobs for these people. So at that time you had a lot of people quite successfully integrated back into communities and their next step was to help them find a work, which was very very difficult. At the same time people in Germany learned from other countries, they heard about the psychiatric reform in Italy. Italy had the same problems when they opened up the psychiatric hospitals, even more problems of course to find jobs, find works, for ex-patients but also for workers from hospitals. They had started a little bit earlier with social cooperatives and Germans have learned from these experiences, they found it very interesting and then Germany started their own, at that time so called self-help firms, self-help companies. That is an important and interesting term and this term has been used until the early 90s. It was called self-help firms which was changed in 94/95 to "integration firms" (Integrationsfirmen).

Nomura ：Is it for the people with disabilities?

Schwarz ：The movement started for the people with serious mental health problems. This is how it started, because there was a need at that time, a big demand to help these people. It was an important issue to help especially these people find jobs. And they did not find jobs, so if there are no jobs then the idea was "OK then we create our own jobs if there are no jobs around". And these organizations started very small with very very little money in the beginning. Very very little money, no support, not really a model that they could use apart from influence from Italy. They have spend quite a lot of time experimenting different things. And started with very small activities where you did not need a lot of investment, or a lot of money, like opening a little store where they would buy or collect old bicycles, put them together, and sell them as bicycle repair shop, or furniture, or little cafes, little community cafes, or little cafes in a community health centre, things like that. Very small. As a next step, these organizations looked into possibilities to get real money to start with businesses, because the first ones were good and interesting, but it became clear that it can not meet the demand for jobs which was very high. And they managed relatively early to access government funding which was designed for private enterprises or private companies. This is probably standard in many countries that you have a specific set of funding opportunities for private employers who want to hire people with disabilities. You can get a certain amount of money for creating a job, for investment cost that you need for example to buy equipment, i.e. computer, desk, chair. In addition to investment cost, in Germany you can also have subsidies for salaries for the first three years. If you hire a person with disability, the idea is that you have funding in the first three years, that you need to spent more time and effort as a company to train the person.

Nomura ：All of the salaries amounts are paid?

Schwarz ：It depends on the situation and on the person’s need but at that time it was between 80% for the first year of the whole salary, 70 in the second and 60 in the third. This has changed now, and now it is a little bit less. But the idea is a decrease over the first three years. And then in Germany you have a possibility if you can show that the person with disability has a lower productivity than the average, you can get some government funding to compensate for that lower productivity. It is not a lot of money but it is ongoing after these first three years. It is an ongoing funding that you can get but you have to prove it. Every three years you have to have some kind of assessment, could be by a doctor, could be by the company itself and then you can get a few hundred Euros to compensate for the lower productivity of a person with disability. In addition to that in Germany if you have groups, employees, a few people with disabilities, and you can demonstrate that they need extra support in the workplace, you can get some funding for a person who supports people with disabilities in the workplace, a trainer or a supporter person.

Nomura ：Like a job coach?

Schwarz ：Coach? The idea behind is similar to the job coach model but it is much less money. Job coach models emerged in America, Boston, where you have a one on one support.

Nomura ：What about a trainer?

Schwarz ：In Germany this funding can be combined, per person per person with disabilities you could get 300-400 Euros at that time. If you add it up to one salary for one support staff, you would, have a ratio of 10 to 1, for 10 people with disabilities you can afford 1 trainer or supporter.

Nomura ：Does a company usually hire more than 10 people with disabilities?

Schwarz ：It depends on the size, this program here, these funding opportunities are designed for larger companies to encourage the companies to hire people with disabilities. That is the idea behind them and they were completely and only designed with the private sector in mind. They were looking at what the needs are for the private sectors and how they can encourage private sector to employ more people with disabilities. This is what German government decided what they would do.

Nomura ：So when did this program start?

Schwarz ：These funding programs started early. They developed from 50s or 60s, 70s, 80s, they developed over time. The German system for integrating people with disabilities started in 1918 basically after the WWI. Even in 1870 you had first little things in Germany where the government would support people with disabilities. After the WWI, Germany started to introduce sheltered workshops and a number of things to help people who were injured or disabled because of the war. Other countries in Europe had the same thing so this is a long history of integrating, helping people with disability to get work. But this funding program here, this funding opportunity here is after 60s, 70s. In principle, yes, because after WWII a lot of people came back injured and disabled. But I do not know much about the details what happened after WWII, these kind of programs, as far as I know, started a little bit later, because the country was much more destroyed than after WWI and the first priority was to get the economy and industry back on track. These integration policies for people with disabilities that we are looking into started later in 50s, 60s, 70s. The idea was, on the one hand, we had to set up the workshop system for people with very serious disabilities and on the other hand, as a government or a country we were trying to encourage the private sector to employ basically all other people with disabilities. At that time Germany had full employment in the 60s and 70s, there was basically no unemployment in Germany. Germany had a lot of migrant workers because there were not enough workers in Germany. So at that time the idea was working, to support or protect just a little bit, and you did not have really a huge problem with unemployment of people with disabilities. The point of discussion is, I had a lot of discussion with the colleagues from all over Europe, and this system here has helped the social firm development in Germany very much even if it was never meant to. When people implemented this funding system they had never had social firms in mind, because they were not existing. But even though, it helped a lot, because these NGOs as I talked about earlier, they started to make a little trick. Because in order to get access to these fundings, OK, first of all you have to create the job for persons with disabilities, then you have to prove that the person with disability has serious disability. In Germany we have a system where you have grades like a percentage system and you need an assessment by doctors and you get some kind of ID card stating your disability. And in order to get this funding you need to be an officially recognized person with disability, at least in our system 50%. So at that time these NGOs worked with people with mental health problems and they were trying to get them into the system to get accepted as people with disabilities (Schwerbehindert). At that time they were out of the system and there was also a big discussion within the mental health sector if a person with mental health problems should be considered or defined as a person with serious disability. This was also a political discussions, they would say "this is discrimination and we do not want to have this ID card" and things like that. There were lot of issues at that time but in conclusion they managed to do this, to argue that people with mental health problems are equal to people with serious disabilities. And in fact, official papers that these people with mental health problems got, they did not say persons with serious disabilities but they say this person is equal/ comparable to a person with a serious disability (Gleichstellungsbescheid). So these people, if you look at the history it is quite interesting how they managed working a little bit around the system to use this, and they got around all these little problems. It really started, the movement really started taking off, because this funding system is very useful for starting a business. It basically gives you, in terms of money, gives you quite a good start, really a good start. Because what they did was to combine the funding possibilities, for example you start a company with 10 people, let’s say 12 people, including 8 people with disabilities. And you count 8 times the money for investment which sometimes could be up to a hundred thousand Deutschemarcs (per person), 50 thousand Euros. You could have up to 200 000 or 300 000 Euros and let’s say you want to open a restaurant, this is probably about what you need. You get this either as a grant or as a loan, or combination of grant and loan, but even if it is a loan, you have a few years interest holiday so you do not have to pay interest for the first few years and then sometimes later no interest either, but you have to pay back over time.

Nomura ：So you have a loan with no interest?

Schwarz ：Yes, it can be. These investment costs are decided on a case by case. It could be a grant or it could be a loan. But it is an interest free loan. You do not pay interest. So we have the investment covered, most of it. Then you have coverage for salaries for the first three years, that is to say you get the maximum funding of 80 % of the salary cost for people with disability for the first year, which in the beginning was quite easy. So you have the 80% of the salary cost covered, then you use this other funding opportunity of the trainer to pay for your management staff. Then you have that covered, which means for the first years you are basically covered 70, 80% of your total cost for your business, which means let’s say you want to start a bakery, or you want to start a restaurant,, or you want to start a laundry service, as an NGO, you would need, apart from human resources, the people you would need money that you will have to raise or find within your organization. Lets say you want to start a business that costs you over three years 600 000-700 000 Euros, your risk may be 100 000 - 200 000 which is quite comfortable, quite a good situation. So once they have sorted these things out, it really started taking off very quickly so after that you had a very fast growth. In 85, we had about 100 social firms already, and in 95, we had 200-300 and now we have over 700 and have really fast growth. So this is in terms of the funding, the government funding now is less and it was more in the beginning but now organizations that start social firms are bigger and can find other opportunities to find money or get bank loans, but at that time for the small organizations it was extremely important to have these possibilities, nobody gave it to them, they had to fight for them, and they had to argue for them, once they overcame the problems. It was very useful.

OK, this is one thing, it is the money, and money is important if you start a business but other things are equally important. And in the beginning, the social firm movement, you had the people who were there for various reasons. They were extremely motivated, extremely interested to help, interested for philosophical, psychological, political reasons they said, it healthy to create jobs. It politically correct, it is important, they had a lot of reasons why these people started these firms, self-help firms. And business, as a business perspective was not so important at that time. It was more like a political movement. Also the way, people were discussing a lot about an alternative ways of production, alternative ways of working. So these first self-help firms were not only about creating a job, they were also creating alternatives to the mainstream work life. So these firms were a lot about working together as a group, working to create some sense in your life. They were looking very much at what work you do. Is it mentally OK? Or is it politically OK? I mean they would not do anything, I mean any business which would in any way harm anything. I don’t know I am not sure if I am explaining it right, but OK it was about creating a job but it was also creating a new way of working together. It was about inclusion, about a creative way of working together. It was about the environment and all these sorts of things.

Nomura ：At the beginning, you said not a social firm but a self-help firm. When did you change the term into social firm?

Schwarz ：It became (a social firm) in 93, 94, 95,96. There was a quite a long discussion, also a political discussion because the change from the term self-help firm to integration firm also meant to have a differentapproach. At that time people would say if you work in a factory in a business, of course you get sick, because there were the conditions where you got exploited in a such as that people get sick automatically. You get ill because it is exploitation. Nobody cares about your health, nobody cares about anything. It is a capitalist system and if you want to do something different, this was all part of the discussion at that time and it has gradually changed. The change of the name of the firms.was part of that change.

Nomura ：Who took the initiative in changing the term? You?

Schwarz ：No, no, no. Within the movement. The movement was growing up quickly, actually very quickly. And in 85 we had this very small self-help firms established by people with a very good ideas and were trying to do a lot of good to help people. But early the need for more business orientation came up, so from the finance of course, because they go to government agencies and ask for investment cost at the beginning. OK maybe it was easier because it was new but the Government agencies started asking for real business plans and real financial plans and all these sorts of things and people in small NGOs, they did not have this experience at all. No financial and management skills, absolutely nothing.　They also did not even want these skills, it was considered as capitalist stuff, we do not want to have anything to do with that. But it did become clear, I mean if you want to grow, you need these skills. And this is how this first social firm association, one of the reasons why this social firm association started. At the time it was called FAF association. FAF stands for "Fachberatung fuer Arbeitsinitiativen und Firmenprojekte" = Consultancy for work project and integration firms. In the German law you have the association with a non- profit status. This was set up first of all to bring people together, for people who did these self-help firms, so they can meet regularly and they can exchange and talk about experiences, which was always very important. They started this organization to promote the idea and organized the first conferences, and meetings. So you have this first association, and that was set up for various reasons, one is to exchange to help each other to work, to colleagues about how these firms work and exchange tips and experiences and thing like that. But also very early they started to organize that this association had a person who would be able to help them with the financial planning with the first sort of business plan. I think this is the other crucial factor in the social firm development in Germany. I think it is extremely important that they started very early with this type to organize for themselves. Within the movement this sort of support service, support system, their own support system. This is the system how it developed. I don’t think I have to go through all the historic steps but it is important to understand how it started. It started from a real need on the ground.

I will explain how it works now. For legal reasons and other reasons now you have an association which is a non- profit association, which is the national association of social firms in Germany. It is called "Bundesarbeitsgemeinschaft Integrationsfirmen" This is BAG. This is the national lobby organization for social firms. It is composed of 16 regional associations. In Germany we have a federal system. You have the national government and the state governments and the state governments are quite important and have a lot of influence. So it is important to have this regional state representation. We have 16 regional associations and they form the national association. It works very well and this association does a lot of lobby work with the national government and the state governments. They do annual conferences, they would be invited for example for all kinds of consultations with the government. This is the situation today. It took a very long time and took a lot of work but today this association is respected, accepted as a partner for government on all questions relating to employment of people with disabilities. They would speak to all parties. The political parties would have their own groups dealing with issues on disabilities and employment. If they have meetings, they would invite and consult with the social firm association. So they have a very important role to play in lobbying and working with government on policies on employment of people with disabilities. And the BAG owns, it is a 100% owner of a business consultancy, which is called FAF gGmbH, FAF offers the business support, helping people to do business plan, helping a social firm who has some kind of business crisis or risks, basically it is a normal business consultancy. Just like any standard business consultancy but targeted for social firms. FAF offers also research and evaluation in the area of social firms. This is another area of FAF work. The government did a number of, for example, pilot programs. Regional and also one national program. Pilot programs to start new social firms. These programs, I am not sure if it is all of them, but many of them were coordinated by FAF and also evaluated by FAF. EU programs, FAF did a lot of fund raising for social firms with the EU.

Nomura ：So you applied for a lot of EU fund?

Schwarz ：Yes, a lot of EU funding. The first one I did in 93, was a program for 100 social firms, across Europe, that was completely managed by FAF. And then we did a regional program in Northrhine Westphalia in Germany. EU funded 8 million Euros to start 16 social firms. This project was partner with 6 other programs in 6 other countries. But FAF did and still does always a lot of these larger projects and this is something where you need someone, an organization like this because as a one social firm, or even as a group, it is difficult to do. But if there is a dedicated company that only focuses or specializes on these things, it is very very useful. So you have the business consultancy covered, you have the research and evaluation; you have the fund raising and management and coordination of large programs. FAF also coordinated a pilot program that the German government started when they were discussing the law on social firms. They decided first we do a pilot program, a pilot project and we test one more time what really is this integration firm. This was the time when we changed the german term for social firms,.

Nomura ：You think three years are enough for social firms to go well?

Schwarz ：Not enough.

Nomura ：You did the pilot program and evaluated so you know how long it takes for social firm to go well?

Schwarz ：Maybe we need 5 years, 3 to 5 years. Usually it depends very much on the background but 3 to 5 years is what you need. But also after 3 years in Germany, you still have other funding opportunities. You can get ongoing support. It is less in the forth and fifth year, but it is not that you go down to zero. But this is actually why FAF was also important because in the business planning for the social firms, you have to pay attention towards funding. And in finding income for the business, you have to take this into consideration in your business plan, the cash flow plan and everything. And I remember we always did a lot of work with the groups who start social firms to go through all the stages of the funding and all this relates to the market income. They all manage, they are all able to do this. You can always ask for more money and funding and of course it is important. But on the other hand, it is my personal opinion, we should not overdo it. Because I think even more important than the funding is really the entrepreneurial approach. And this is a chance, an entrepreneurial chance. You have a certain amount of support but it is up to you. That’s it. If you are an entrepreneur then you will find your way to deal with the problems. If you are making enough money, OK, it is either your business is not good and you better to stop it any way, or you are good enough to change your business to come out of the problems. I think it is quite dangerous to always ask for money money money or blame it on the people with disabilities, I have seen it many times if things goes bad the management would say, "Oh, sorry but we did our best but because we employed all these disabled people, it is just impossible to do." And I would think in many cases this is not. It is a management problem. So the money is the one thing but I would be careful. Coming to the other area of the support system, the training of managers, training of social firm managers, is the area where we did, we still do a lot of work. So we have a business consultancy, we have research evaluation, we have this coordination, fund raising, management of big social firm development projects and training of management. And I would think this management training is also one of the key areas. I was sitting in so many seminars and we would have discussed "Oh, we have only three years money and what then?" They would say "Oh, we need more, we need 10 years. We need whatever. We need 100% money because we cannot earn enough all this and that." And I would tell "No, sorry. I mean if you want to be a manager for business you have to be with it, you have to earn your money."

Nomura ：So what kind of people are managers?

Schwarz ：In the beginning it was only people from these small NGOs. People who actually were, I mean you cannot have more incompetent managers.. This is a big challenge but they still made it, they still did it. But there was a process of learning by doing a lot of things. Today it is different. Today I mean one of the bigger projects, I remember it was in 95 and in that program some of the NGOs at that time, they were also bigger. There was an NGO that did many different things, social care, different things for a whole region, I mean a smaller region, and they get 500 000 Euros to start a new social firm and they decided to hire a professional person with a management background who came from a business school. At that time it was still a little bit unusual but it changed now. Today you have all kinds of, you have different, I mean it is more professional side you would have now. Also I mean today in business schools, I mean I have finished my MBA 2 years ago, you have a lot more discussion about social issues and things like that. I mean 20 years ago in business school it was not really a topic at all. But now you have a lot of, I mean MBA schools have social enterprise discussion, things like that. So today you would have people from various backgrounds and of course in the new social firms they would look at the people with business background or the background from a specific trade. In a hotel they would look for the person from hotel sector, they would in a restaurant or catering or whatever, they look for a person with that background. So it is a lot more, it is much more professional now, but still the training, the on going training, this is always, it is a really really important issue. Also FAF does a lot of seminars.　If you go on their website you see their seminar announcements and there are always full of seminars and they are always full, always people come. You have always managers from social firms, existing social firms, if people are interested, and even if you manage one of social firms you always need to continue with your training and they are very specialized seminars. It is the same as the consultancy. This training and consultancy offered here gives you the specific combination of the social aspects and the business aspects which are combined in the social firm. For example you would have seminars on different expressions of specific disabilities in the workplace. You could have a discussion about how you deal with the specific aspect of a disability in the workplace, things like that. And of course the other thing is, this is not to be underestimated, and today the support system works I think basically very similar to any other trade association. Specific industries have their own associations. They have their own specific issues and this is how our support system in Germany works now.

Nomura ：You mean a big company has its own association?

Schwarz ： I mean industry. Industry sector. They usually have their industry sector association.

Nomura ：Not the trade union?

Schwarz ：No. Businesses Associations for businesses within one industry sector. They all have their associations, like the hotel industry, they have the hotel industry association and within that association you have the representation part for government, you have the consultancy part, they do these things also, then you have the training part, and this is all specific to the hotel industry sector. The social firms in Germany now have a similar very professional model system implemented and this developed overtime. It took a very long time but now it is very professional and very effective. FAF now has 4 offices in different regions/ states. They are opening the 5th this year in Munich. I opened one in Cologne. First of all we had no office in Berlin and we had this big project in the state of Northrhine Westphalia and I remember, took my computer and went on a plane to Cologne and there was a very little office which was maybe the size of this room,. And then FAF developed very well, they were very good in working with all these state goverments and very soon after we opened an office in Saxonia, and in different parts of Germany.

Nomura ：So how do you spell Cologne?

Schwarz ：C-O-L-O-G-N-E.

Nomura ：Was it successful?

Schwarz ：Yes. When I worked for FAF I was the one in charge of all the European cooperation and programs and had a lot of discussions with colleagues from other countries about how can we work with other countries to help them to have similar growth of social firms. Because even also at that time Italians and Germany were the countries who had most of the social firms, the most developed situation.

Nomura ：I think it is fitted. It suits the situation in your country. Maybe because they are from the past, past years as you discussed the issues related to improvement for people with mental problems, it seems to me. Do you know the data of the people with mental problems? Because in Japan it is very difficult to find out how many people with mental problems are. Do you know the number of people having such problems?

Schwarz ： I do not know the numbers.

I think the management, I would say in most cases, is a problem if something goes wrong, and this is why the German system has evolved , it is an evolutional process over time, based on needs. It has been developed and we had to fight for a lot of things. We had to convince people that we exist for what we want to do. We had to fund raise everything, earn money through seminars and trainings,. Coming back to the strucure, I explained FAF is a company limted by guaruantee, owned by the social firm association (BAG). This is a link that societies to, let’s say arms of the support system, areas of the support system are linked. In the beginning it was the same, which means FAF, one organization, offers everything. It also means you have funding coming in for different things. After the separation, as FAF we had to earn our money basically on the market so we do seminars and we charge money I mean not that much but we charge money because we have to cover the cost. And of course this is a market situation. I mean if you offer social firm seminars and it is not useful, nobody comes, you do not make money you can close down. If you do business consultancy and it is not funded by some foundation or someone, you have to earn you have to charge 500 Euros per day. If it is not good forget about it and go home and look for another job. So even as FAF we had to learn and develop the company within the market. And this was sometimes really really difficult. But I think this helped a lot to develop a system which now is I think really useful and very successful.

I remember when they had this split, in the beginning we were funded by, in the beginning, the very first years, FAF had some funding from a private foundation. Then EU funding and things like that. We had some money and we would say "Oh, we need to do some consultancy. We need to do seminars." It was quite comfortable. Then we would do a seminar and there were only three people. It did not really, I mean it was not so great, but it did not really matter, but from the split, immediately it did matter. If you do a seminar on this topic, you have four people and we make a loss because we have to pay for things hotel and food and everything if we make a loss, OK we would not do this seminar any more. We do a business plan for some organization that cost 10,000 Deutschmarks. And they say, "No, it is not good. We have a problem because they will talk to other people and we would have a risk to lose reputations and immediately we have to do something about it. At these times we had a lot of discussion with other countries, so with Greece, UK, Spain, within our EU projects.

Lot of discussion how can we or what can we do to support social firms in other countries. There were always differences between countries but we worked a lot with UK for example. At that time in the UK maybe there were 4 or 5 social firms in the sense of a business, with real employment, and we had a lot of discussions with UK. We decided OK we have developed a FAF system we would raise money from EU to transfer or to implement a similar system in UK and it should work. With Greece we decided, let’s start to establish this national association and then take it from there." So in Greece I was at a meeting in Athens (like the one here in Tokyo) and we were talking about FAF, a national social firm association and they started this PEPSAFE organization, so Greece started their own national association. In UK we had this new project, in Spain we worked with the regional groups, in Holland we had a national association discussion. It was quite difficult. I think, unfortunately none of these were very very successful, these approaches. I think the reason is that it really has to come from within the country. The UK decided to change the approach, and they decided OK, we start with some kind of promotion campaign and they spent a lot of money organizing a lot of conferences all over the UK for 2 years. You could have hundreds of seminars to go and you have someone from the project talking about social firms Germany, Italy about the model and promoting it, this is a great thing let’s do it. It was basically completely useless, waste of time. And it does not really work. I mean it is important but if you do only that, I do not know, this is not much happening really, just the same.

On the other hand, they took a different approach to the consultancy. They decided that they use the consultancy budget to hire external consultants. So they would do this promotion events to promote the social firm idea, then of course there were a lot of people or charities. They would say, "Come on, it is great. Let’s try to do it," and they would tell "I would like to open a social firm in whatever, something area, and we need consultancy, support." And then this UK organization paid for some external person to do a business plan for this charity. So what happened is on the one hand, which I think this is not a good idea, they never had chance to develop their own knowledge base, while within FAF everything we kept, we developed all of the specific knowledge within the organization. And this is an incredible asset. This is a very valuable asset if you work over 20 years in consultancy in this specific area. Over the years, you accumulate knowledge which is incredibly useful. They did not do this, they outsourced all of that. And it was a bit casual, so for one project you use this consultant and for the other project that consultant, and there is always issues of quality because of course sometime you find a good consultant sometimes a bad consultant and never know really. And in addition sometimes this consultant, they become competitors, they start their own little promotion social firm association, because they can get funding for these things, so the situation can became very confusing and difficult. If you go to a seminar, and you have a program, let’s say Japan has a program, that provides all this support services, then you go and they would give you all the consultancy and everything and give it to you on a plate. I think it is useless. In Germany they had to pay for the business plan because we could not afford to doing it for them and nobody, we did not find anybody, to fund this. And OK if they really want to start a social firm they have to find 5000 Euros, we did not charge a lot of money. We cross subsidised (used other funding to bring the price down) it a little bit from EU projects so we did not charge 100% real cost but they had to find the money if they want to start a social firm and they want specific support. They have to make an effort to find some money to pay for the advice and I think this is really really important. Maybe they cannot pay the full market price but I think it is an important lesson from our cooperation with UK. This focus on promotion I think it did not work very well. Not building up the outsourcing of the knowledge-based consultancy was critical.

Nomura ：How did you accumulate the knowledge so far? Because you have been involved in the social firm work for around how many years?

Schwarz ：Myself, 13 years. But FAF is an organization of 25 years.

Nomura ：And they have a lot of knowledge base or data base? Otherwise it is difficult for them to provide the consultancy to the needy people.

Schwarz ：This is a technical question I think. I mean there are various ways you can use computers and things like that. But it is within the organization, I mean within people. How do you organize, this is computer based. But at that time they did not have this system or not even available. It is like if I would go back to work for FAF and I would do a project to work on a business planned for whatever charity in unique and they want to start these kind of industry sectors of business and I would speak to colleagues who worked in different similar projects they would tell me lot of things and I could look at the previous reports of the projects that they did. It is a combination of different things. But within any organization you collect, you accumulate knowledge. In our organizations it is the same. You know a lot of things from your work and you communicate it in different ways to your colleagues and it develops. FAF does not, I do not know but, I do not think they have a kind of computerized knowledge system. I mean the big consultancy firms they have of course their computerized systems and FAF growing further, they may introduce something like that, but if you have a 15 people, 5 offices, it is too small. There is not point. But it is there. It is within the organization. And when I compare that to the UK, this is not there. I mean you have, maybe on paper, you have something so you have a report that somebody did for catering operation or something else. And you have 10 pages of paper and if somebody comes to the office can read the 10 pages. But it does not help because if you did not go through the process of doing this report, it is only superficial knowledge. It does not really help and if have a meeting with a person and you would speak to a person or try to consult a person on the basis of reading a 10 page report they would sense that you do not really know. It is a superficial thing. In Greece they had a democratic, interesting approach to the social cooperative development. I think it was quite successful, the cooperation that we had with Greece. In Greece the problem was they did not have the funding we had in Germany. They do not have these opportunities. In England funding was also an issue because in England you do not have this kind of funding system that Germany has. In England you have a lot of grant funding. If you are a big charity and you are well-organized, basically I would say it is not a big problem to get a grant to start the firm. But I think the problem is you would get probably you maybe too much money because they would do these things. You know you have a plan, I want to create employment of 10 people with disabilities and if you are good enough you can get half a million pounds which covers everything. Then you have a very comfortable funding situation for 3 years and then after you do not basically have to care about anything. And after 3 years it happens often management notices "Oops, oh we have no more money. Oh what a bad luck." And then they close down the thing. So I think funding too much or too little, that is a big issue, a big problem. To develop this knowledge, specific social firm knowledge, this is a big issue. Training, this is a big issue. Also training needs to be linked to the specific knowledge. Sector knowledge, also big issue.

Nomura ：Why did you get involved in social firm? Do you have any specific reason to enter that field?

Schwarz ：I started in Berlin Psychology, master’s degree in psychology, and a MBA. At that time when I studied, when I went to university, there was a professor. One professor, he was specialized in self-help firms. He was specialized in vocational integration of people with mental health problems and he was one of the founders of FAF at that time and he changed from FAF to, actually he stayed within university. And he did two things. One, he was one of the first to do EU research on vocational integration of people with disabilities and he was very closely linked with self-help firms and he had projects in university where you do a seminar with this professor and a group of students. And the purpose of the seminar is to develop little social firms. And actually out of the seminars, I do not know how many, I would think at least 3 or 4 social firms in Berlin have developed out of this cooperation with the university. This is very interesting and I went to one of these seminars but this was the first one where no social firm was developed but I got into this research. He hired me as a student assistant for a research project so I worked 2 years with this professor as a student assistant in EU research on vocational integration. And I started traveling around Europe interviewing people, starting to learn about these things already in university, then I finished university and through my research work I knew a lot and FAF knew me a lot and they asked me if I was interested. They had just got their first large EU project and asked me if I wanted to work for them. But at that time for me as a psycology student my motivation was also that I thought this is a very good approach to help people with mental health problems because OK hospital and care is one thing but if you work in an area where you can actually change the life of, and the way in which people live. This is very useful and interesting. OK I would say just one more thing on this mental health issue because it started within the mental health area but they really opened up to the other disadvantaged people. Maybe the first 10 years focused on mental health but with the growth, they got a lot of interest from other people.

Nomura ：Do you mean that the first 10 years that you were involved in?

Schwarz ：No, at that time I was not. The first 10 years of the movement. 1980s. And when I started to work in 91, 92, 93 first as a student and then in 93 for FAF, I think in their very early 90s this issue of opening up the movement for other disadvantaged just became a big issue. And I remember there were quite emotional discussions about it. There was one group of the movement which would say if we open social firms to other disadvantaged people, the mental health people would be again discriminated. Because they would argue that the people with mental health problems among the people with disabilities are the most discriminated. They would say if we open up the self-help firms to other people, then again, they are more productive, they are better, they need less support, they would gradually, how do you say, take away the jobs that with very hard work we created for people with mental health problems. That was a very big issue, was a very emotional discussion. It was the same time when this self-help to integration firm change happened. There were very heated discussions but at the end the conclusion was OK we open it up. And we rather have more firms and we will deal with the problem, we will make sure that there is no discrimination within our systems. And my second job for FAF was to work on a national service for the ministry of labour and social affairs on social firms. And that was the first systematic national survey and already in 95 we found out that already at that time a lot of other disadvantaged people worked in social firms. So even without knowing really, it just happened. It just happened because organizations own social firms, if they hire people, the people come from different backgrounds and they would not say, if you have a job to offer for a baker or for a person to work in your laundry service, then you have a person there who overcame drug problem and the person would fit for the job, you would not say "Oh sorry, we do not take you. We will wait until a person with mental health problems comes." You know for practical reasons, of course, this automatically opened up. And today it is completely, it is disadvantaged people. The only limitation being within the funding frameworks, because in Germany, still today, of course, you have to, if you want this funding, you have to meet this criteria of being 50%, at least 50% disabled persons who have to have a serious disability. But within that system there is no more separation of disabilities or anything. But I think looking at Japan and from what we discussed yesterday, I think this kind of support system would be really useful. Very useful because if you ever focus, and I thought yesterday when I heard what different people said and from the audience and I was really impressed that already a lot of things happened. And I think one of the first steps could be to have some kind of place where, even if it is very simple thing, but where these people who already work in the direction, where they meet, let’s say once a year or every few months, just a start from a bottom up with a little support, that organizes to a meet and exchange and talk, it does not have to be complicated, you know, a complex sophisticated system but somehow, some kind of platform can be implemented as a base,. Maybe also very small place where you would start collecting information, collecting things and some kind of data bases. I am not talking about the technical terms but some kind of place where, if I work in Osaka and have social firms, and there is a place where you can go and find more out about it. I think that would be interesting, to start from the just the people who are interested, there is a place where they can meet and find out more and talk to other people of similar interest, things like that. And of course the funding. I do not know how the funding situation is in Japan but if you are able to set up some kind of fund which would help people with some basic financials. With all these big foundation that you have here I think there should not be a problem that could not be overcome, because this business orientation, should be quite attractive to private foundations. I mean from bigger companies, quite interesting model they do that you have all kind of investment risk, capital investment fund.

Nomura ：But actually the Japanese big companies started small companies for people with disabilities where 50 to 60 % of the employees are people with disabilities.

Schwarz ：Yes, that is a different approach.

Nomura ：Yes, a different approach but other people with disabilities may have good management and are professional and they may set up a social firm and work well and it might be a good model for a social firm rather than asking a big company to set up a social firm for people with disabilities.

Schwarz ：I think you can do both. I mean you have these companies, I think 200 or something, like Swan, which are basically set up by a big private company.

Nomura ：But actually Swan was started by Yamato Foundation.

Schwarz ：OK. East Germany had the same model or the socialist countries, they had exactly the same model. All the companies, I mean state owned, I mean everything was state owned but the East German approach to solving the problem of unemployment for disability was that all big companies had to have a department or subsidiary company where they employ people with disabilities. Same value, similar model. And I remember when OK then after 89 when the wall came down and all these things of course the whole industry collapsed in East Germany but I remember the discussion that we had in Germany with the government when we discussed about the law on social firms they were very keen on that model. They said this was the great model why should not private companies have these departments? And we said, "Yeah, it is good." But at that time we felt that it is not really an inclusion because they have the department where you have all disabled people in one department and this alrready is a kind of separation. But nevertheless I mean actually the law on social firms in Germany includes these things. In Germany according to law, you have both models. If you are a private company, if you want to establish a department, you can get the same funding that a social firm can get. And why not? Why cannot you have the both models at the same time? It does not really happen in Germany because the private sectors do not really believe in this model either. And in Japan I do not know you can have both. Why can’t you have both? You have these departments but at the same time you can have the NGO and social firms but it is a different direction and it maybe a bit more integrated and then you need some specific target at funding for these groups. And this exchange I think you take off, really good take off, and these company foundations, why should not they fund? They can fund both. You can have 2 approaches to the similar problems. Why not? There is never one solution for one problem. But really this combination, of specific funding combination that we had, I think without that we would not be where we are today. And this specific balanced funding and they do not get everything that you have to bring your own entrepreneurial ideas and creativity, I think this was also quite useful. You do not get everything. You would get just enough and the rest you have to bring, you have to use your own creativity. This balance is, it worked quite well in Germany.

Interviewer's note: My interview was mostly focused on how social firms have been developed in Germany. Gerold kindly answered any questions I made and suggested what we should do to promote it in Japan. I hope this interview will be helpful to disseminate the concept of social firm as well as to promote employment of persons with disabilities in Japan.