The potential of social economy for a more democratic, just and fair future

On the 16th of December 2021, the European Commission launched its Social Economy Action Plan, the climax of a long process that repaid the commitment and engagement of the social economy entities and its hard work over the years.

This Action Plan is a collection of 38 actions with a nine-year horizon for implementation. These measures include state aid and the introduction of a social taxonomy, as well as the creation of legal and policy frameworks and the promotion of better access to markets. They also aim at promoting social economy at the local, regional and international levels through supporting businesses, encouraging reskilling and upskilling, and boosting youth entrepreneurship. The provisions contained in the Plan favor an easier access to funding and finance by providing new financial instruments and strengthening the recognition of the social economy across the EU and beyond its borders. In the current circumstances, with the European Union emerging from the COVID pandemic and the war between Russia and Ukraine, the urgency of making use of the social economy’s potential has become even more prominent.

What does ‘social economy’ mean?

In its Communication “Building an economy that works for the people: an action plan for the social economy”, the European Commission explains how social economy endorses four main types of entities that provide goods and services to the members or society at large: social economy enterprises, cooperatives, mutual benefit societies, associations (including charities) and foundations. These entities share its main common principles and features, namely “the primacy of people as well as social and/or environmental purpose over profit; the reinvestment of most of the profits and surpluses to carry out activities in the interest of members or users (“collective interest”) or society at large (“general interest”), and democratic and/or participatory governance”.

Social economy and its connection with circular economy

The social economy has the potential of being a catalyst for the green transition, given its interdependence with the circular economy. Some social economy organisations are, in fact, likely to support and involve green practices by applying the so-called R-framework (regenerate, reduce, reuse, recycle, recover), aimed at recycling products and goods in order to extend their lifespan and avoid excessive waste. They are also focused on maximizing the use of resources, particularly at the local level, thanks to eco-designs and collaborative economies. Furthermore, by engaging in circular value chains, social economy entities are attentive to engage workers in need, in particular those belonging to vulnerable groups, with the aim of equipping them with the necessary competences and knowledge to enter the labor market.

An example of a network of social economy enterprises that puts circular economy at the center of its activities is RREUSE (Reuse and Recycling European Union Social Enterprises). The members of this network are organisations engaged in the re-use, repair and recycle of unwanted items – including textile, furniture and books – in order to resell them second-hand. The positive social impact of these activities is twofold. On the one hand, they create quality jobs for people at risk of social exclusion as well as for those who face difficulties in finding employment, hence giving them a chance to become active members of society. On the other hand, they offer people a simple alternative to the purchase of new items. As a consequence, by buying second-hand or donating used goods, each individual is able to do its part in the path for a just and green transition.

Social economy driving towards the digital transition

Social Economy can contribute to the achievement of a digital transition through “Tech4good” digital technologies. The latter include new digital business models or digital platforms that are conceived to have a green or social impact, hence reducing the existing digital gaps and at the same time responding to societal challenges and needs.

The Social Good Accelerator (SOGA) proves to be a good example of this. SOGA is a network of associations, social entrepreneurs, innovators and foundations whose objective is to boost social innovation and its potential to be widely recognized by public authorities, companies and investors. By collaborating to the creation of innovative solutions across Europe, Tech and Social Good actors play a fundamental role in contributing to a just digital transition.

Social economy takes into account the needs of vulnerable people

As mentioned, social economy entities are likely to employ vulnerable people, including people with disabilities. In particular, a special type of entity, the Working Integration Social Enterprises (WISEs) provides training and support to facilitate the access of those disadvantaged people to the labor market. Therefore, the social economy sector paves the way for a better inclusion of disadvantaged people, including people with impairments, creating fair opportunities for all.

An interesting initiative in this field, founded by the Erasmus+, is the B-Wise project, whose partners are, among many others, the European networks ENSIE (European Network for Social Integration Enterprises) and EASPD (European Association of Service providers for Persons with Disabilities). This project intends to envisage a European strategy to address the need for skills, and particularly digital skills, in the WISEs sector. Among the foreseen activities there is the institution of training curricula to meet existing skills gaps in the integration of workers, the offer of certifications and ultimately the creation of awareness-raising programs on the importance of digital skills and the use of digital technologies to help people in need.

The potential of social economy for a fairer and more democratic society

In the words of Victor Meseguer, Director of ‘Social Economy Europe’, which is the umbrella organization that represents the voice of 2.8 million social economy enterprises and organisations in the EU, the Social Economy Action Plan “marked the beginning of a positive project for the future of Europe. As a matter of fact, the social economy potential will play a pioneering role in guaranteeing solutions to societal, environmental and economic challenges. Social economy has the capacity to offer a new perspective, as it builds an economy at the service of people and the planet, countering the traditional way of doing business”.

It is for this reason that this sector needs to be scaled up in order to co-create a fairer and more democratic society for the future. In this framework, the role of young people will be pivotal given their aim to find jobs that are game changers characterized by specific purposes and a positive impact on society. In short, they want what they do to ‘make sense’. It is for this reason, that through younger generations’ impactful and innovative entrepreneurial ideas to build a better future, it will be possible to pay strong attention to environmental issues as well as to provide fair and equal opportunities for all.

[This article was first published in the issue 36 of the magazine]