Many obstacles and challenges face social economy organizations. It is imperative to improve coordination between government agencies, reduce duplication, and increase the effectiveness of initiatives. For example, in Spain, many support programs were created in a short time span, which led to confusion for applicants. To address this problem, several and interterritorial commissions have been set up. These commissions have the goal of ensuring effective development of social economy policies.
Legal forms for social economy organizations
There are several legal forms that social economy organizations can take. In the EU, these organizations can be classified as a social enterprise, small and medium enterprises, cooperatives, or general or collective interest associations. Complementary provisions are available for taxation, social insurance contributions, donations, volunteer work, and public procurement. The legal forms can be tailored to meet the social missions and purposes of the organization.
According to a recent United Nations report, the social economy generates around seven per cent of the world’s GDP and contributes to increased employment. These organizations also assist in managing major transitions and strengthening communities. In fact, the 2008 financial crisis saw a rise in employment in social-economy organizations of between 12 and 20%.
Despite the increasing number of social-economy organizations, the concept is still not fully institutionalized. Many countries have adopted transversal and tailored legal forms to institutionalize the concept of social enterprises. We analyzed these various legal forms in the EU in country reports released by the European Commission between 2014 and 2016.
Social enterprises are businesses that include all employees, customers, and third parties. They have gained momentum following the global economic crisis of 2009. Social economy organizations have grown in number due to dissatisfaction with traditional economic systems and increased interest for pluralistic economic systems. In addition to their economic value creation, these organizations are responsible for their own well-being.
One of the most prominent legal forms of SE is the non-profit company. These legal forms give these organizations the added benefits such as public benefit status and prohibitive profit distribution. It is also important to note that these organizations are often pioneers of social innovation. They have paved the way for many innovations that have since become commonplace in the mainstream.
The UK considers social economy organizations to be part of the social sector. The role of the social sector in a country’s economy is different. The government plays a unique role in the development of social economy in Sweden and Lithuania. In the latter country, the government has imposed a new form of private enterprise aimed at the poor. It has restructured the economic landscape and promoted cooperatives and family businesses.
The EU also offers a variety of policy frameworks for social enterprises. The European Commission’s Social Economy Commissioner, Nicolas Schmit, is tasked with developing an Action Plan for the social economy. These policies are different in their scope, content, and coverage, but they support social enterprise development. It is therefore vital to create a strong framework for the social economy in these countries.
Social enterprises can contribute to structural change in the current economic model and enable a more sustainable and inclusive society. It is essential for governments to recognize and invest in social enterprises and regularly engage with social economy actors. In 2007, the Republic of Korea implemented its Social Enterprise Promotion Act, which is aimed at promoting social enterprises. Most recently, the European Commission has launched its 2021-2027 Social Economy Action Plan, investing EUR2.5 billion into the initiative.
Impact of COVID-19 crisis on social economy organizations
Social economy organizations played a crucial role in the recovery after the COVID-19 crisis. They provided innovative solutions and improved public services. They are well-positioned to support the rebuilding and sustainability of the economy after the crisis. They can also help foster social innovation and a sense of purpose among firms.
Many social economy organizations have established strong partnerships with local governments. This has enabled them to provide social services and local economic development and restructure their operations to meet the immediate needs of their communities. These organizations initially focused on survival and strengthening. However, in recent years they have turned their attention towards the development of the social economy in its transformative role.
Social economy organizations have pioneered new models of value creation. Many of them encourage participation by the public and use collaborative models. As a result, they inspire other economic actors to take similar measures. Organic and fair trade products are now more common in mainstream supermarkets.
Due to their local roots, social economy organizations have a unique ability to mobilize local stakeholders to meet urgent needs. They are a key player in local economic development, helping to reduce social and economic inequalities in rural and urban communities. They help local communities thrive and provide jobs for local residents.
Social economy organizations must be supported to become digitally-savvy and professionalized. For instance, it is essential to support these organizations to use open source and co-operative platforms. This will allow them to share data and track their progress. They will also be better equipped to evaluate their impact and redirect their efforts.
Moreover, social economy actors have an advantage when it comes to helping governments cope with the COVID-19 crisis. They are experts in grassroots issues and motivated by a strong desire for the improvement of the socio-economic system. As a result, many governments and social economy organizations have organized events that identify COVID-19-related challenges. For example, in Germany, the federal government and several organizations from the social economy organized the #WirVsVirus hackathon. This event brought together more than 40,000 people to solve 48 problems related to the COVID-19 crisis.
The Bundestag approved a proposal to define social enterprises and remove regulatory barriers to funding them in a recent decision. The proposal also includes the establishment of a social innovation program. While the state may be able to provide a public solution in some countries, the social economy is better suited to address market failures.
The COVID-19 crisis has a wide impact on society. However, it is particularly harmful to vulnerable groups. For instance, the homeless and displaced may have limited access to running water and shelter. If they are unable to move freely, migrants and refugees may also be affected. They may also face fewer employment opportunities and greater xenophobia.
Challenges in accessing government support measures for social economy organizations
The social economy plays an increasingly important role in the economic and social landscape. It has been an integral part of the recovery from the COVID-19 financial crises. As such, governments implemented a variety of support measures for all economic actors, including social economy organizations. Despite their relevance, social economy organizations have often fallen through the cracks when it comes to accessing government support measures.
Social economy organizations can access financial support from the government to help them meet their fixed costs. This support can be in the form grants or loans that are easily accessible. While many social economy actors are supported by general government support measures, others have devised special access schemes specifically for these organizations. The Basilicata fund in the Netherlands provides loans up to CAD 1,000,000 to small businesses and social economy organizations.
Social economy organizations are deeply embedded in the region they operate in. They can mobilize local stakeholders to address immediate needs. They can also play a key role in local economies, reducing social and economic disparities and revitalizing communities. Moreover, social economy organizations are often the ones that pioneer new ways of economic activity, such as the circular economy and inclusive governance.
Governments can facilitate access to information about support actions and assist social economy organizations in their implementation. Through information dissemination, governments can help people understand the criteria and benefits of different support measures. For example, in Korea, a government leaflet on the COVID-19 program was developed for social economy workers to better understand the government support measures available to them. It also contains an action plan for social economy organizations to follow if they want to receive government support measures.
Social economy organizations need the right mix of support measures to survive and flourish. In order to encourage social economy actors and create a common vision of the future, government support should be provided. These visions should then be turned into an action plan that will set a path for the success of social economy organizations.
As the COVID-19 crisis has revealed, social economy organizations should reconsider their objectives and focus on improving lives of people. The crisis should be used as a stimulus to social economy organizations and aid in the transition towards a resilient society. Social economy organizations can also be catalysts for mainstream economic actors.
Social economy actors can improve economic and social systems after a crisis by copying their business models, diversifying and taking part in social innovation. While the current economic system has improved living standards for certain segments of society, it has also had negative impacts on the environment, society, and economy. It has called for the rethinking of economic models and the social sphere.
