Definition
The term 'social economy’ refers to all business activities that are not only driven by a strong social mission but also intended to be economically viable. This includes cooperatives, mutual societies, non-profit associations, foundations and social enterprises, covering a wide range of activities. The aims of social economy organisations are generally to provide goods and services (including employment opportunities) to their members or community, and pursue general interest goals such as environmental protection. In this way, social economy organisations aim to make a profit for people other than investors or owners.
Background
First initiatives of the European commission
To ensure that social economy enterprises can compete effectively and fairly, without regulatory discrimination and taking into account their particular needs, the European Commission launched the Social Business Initiative. Another European Commission initiative launched in this field was Towards Social Investment for Growth and Cohesion, which promoted social innovation as a source of growth and jobs, supported innovative entrepreneurs, and mobilised investors and public organisations.
- European Commission:Social Business Initiative – Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation
- European Commission:Towards Social Investment for Growth and Cohesion – Including implementing the European Social Fund 2014–2020
Mapping study
In 2013, given both the lack of availability and the inconsistency of statistical information on social enterprises across Europe, the European commission launched a mapping study that provided a description of characteristics and trends to support future research and policymaking. The mapping study found that there was both a growing interest and convergence in views across Europe as regards the defining characteristics of a social enterprise; however, important differences remain, especially with regard to the interpretation and relevance of the ‘governance dimension’ of a social enterprise.
- European Commission:A map of social enterprises and their eco-systems in Europe (PDF)
According to a study funded by the European Economic and Social Committee, the social economy represented some 2.8 million entities (cooperatives, mutual benefit societies, associations, foundations and social enterprises) and accounted for 13,621,535 jobs across the EU from 2014 to 2015 (i.e. 6.3% of the workforce). The social economy includes between 0.6% and 9.9% of all jobs across Member States. However, the level of employment in social economy organisations varies among EU countries. In Belgium, France, Italy and the Netherlands, 9–10% of the working population work in social economy organisations, while in other countries the social economy is still emerging (e.g. under 2% of the working population in Croatia, Lithuania, Romania, Slovakia and Slovenia work in social economy organisations).
- European Economic and Social Committee:Recent evolutions of social economy
Current status
On 9 December 2021, the European Commission presented a communication seeking to support the social economy. This communication is supplemented by a Commission working document and another document on ‘scenarios’ to accompany the environmental and digital transition of the social economy, which it is submitting for consultation[RS1]by stakeholders.
- European Commission:Building an economy that works for people: An action plan for the social economy (PDF)
- European Commission:Commission staff working document accompanying the communication Building an economy that works for people: An action plan for the social economy (PDF)
- European Commission:Scenarios towards co-creation of a transition pathway for a more resilient, sustainable and digital Proximity and Social Economy industrial ecosystem (PDF)
Future initiatives
The Commission has also announced a Council recommendation on the definition of social economy framework conditions, which it will publish in 2023. It will also publish guidance for Member States on taxation frameworks for social economy organisations and facilitate easier access to guidance on state aid. In addition, the Commission’s Social Economy Action Plan aims to improve practices in socially responsible public procurement and promote the targeting of the social economy outside EU borders.
- European Commission:Social Economy Action Plan
Social partners’ reactions
The European Trade Union Confederation has given the initiative a positive but lukewarm reception. The organisation representing employers in the sector (Social Economy Europe) is much more enthusiastic, and sees it as a successful outcome of its 2014 initiative to promote the social economy.
- European Trade Union Confederation:Social Economy Action Plan modest but useful
- Social Economy Europe:The social economy action plan is out: A new chapter begins
Related dictionary terms
Entrepreneurship;social innovation
