Social economy
The social economy is formed by a rich diversity of enterprises and organisations, such as cooperatives, mutuals, associations, foundations, social enterprises and paritarian institutions, sharing common values and features:
- Primacy of the individual and the social objective over capital
- Voluntary and open membership
- Democratic governance
- Combination of interests of members/users and/or the general interest
- Defence and application of the principles of solidarity and responsibility
- Autonomous management and independence from public authorities, though cross-sector collaboration is common
- Reinvestment of at least most of the profits to carry out sustainable development objectives, services of interest to members or of general interest
History
Third sector
As a field of study, social economy studies the relationship between economy and social behavior. It analyzes how consumer behavior is influenced by social morals, ethics and other humanitarian philosophies. It examines activity that is related to economics in the community and exposes the information to the community; this includes the social enterprise and voluntary sectors.A social economy develops because of a need for new solutions for issues and to satisfy needs which have been ignored by the private or public sectors. By using solutions to achieve not-for-profit aims, a social economy has a unique role in creating a strong, sustainable, prosperous and inclusive society.
Successful social-economy organisations play a role in fulfilling governmental policy objectives by:
- Contributing to socially-inclusive wealth creation
- Enabling individuals and communities to renew local neighbourhoods
- Demonstrating new ways to deliver public services
- Developing an inclusive society and active citizenship
- Embracing competitors, as competition may indicate greater overall market productivity in achieving social goals
Social enterprise compass
Organisations may be placed on the social enterprise compass, which measures enterprises and organisations on a continuum between the private and public sectors.;Horizontal axis:
On the horizontal axis, each enterprise or organisation is categorized by its ownership. On the left side ownership is by public authorities, and on the right side it is private industry. "Private industry" encompasses all economic activity with the capital of one private owners, with a view to making a profit for personal benefit. The owners supply financial capital and bear any risk. "Public authorities" encompass all economic activity in which public authorities possess the capital at the national, federal, regional or local level; this includes nationalised and public industries.
;Vertical axis:
On the vertical axis each enterprise or organisation is categorized by its primary objective, from "social purpose" at the top to "commercial purpose" at the bottom. Social purpose is the primary objective of the enterprise if it meets the following criteria:
- Ethical concept: Core definition
- Mission : The enterprise's primary objective is to improve the lives of disadvantaged people, provide support, advance social cohesion or improve the environment.
- Social economic creation of value and appropriation of earnings : Profits and/or resources are verifiably reinvested for the benefit of disadvantaged people.
One criterion is a descriptive feature:
- Intermediary function: Social economical enterprises and organisations have an intermediary function.
;Between social and commercial purposes:
If the above criteria are partially met, the enterprise is located along the vertical axis according to its self-definition.
International comparisons
Canada
The definition of Social Economy used by the Chantier de l'économie sociale in Quebec follows: The Social Economy is made up of association-based economic activities founded on values of:- Service to members or the community rather than only generating profits and seeking financial returns;
- Autonomous management ;
- Democratic decision making;
- Primacy of persons and work over capital;
- Based on principles of participation, empowerment and individual and collective responsibility.
- social assets of community organizations;
- social enterprises including co- operatives and revenue-generating programs of non profit groups;
- credit unions and social financing organizations like community loan funds;
- training and skills development enterprises; and
- sectoral and regional organizations e.g. renewal energy associations.
France
The term "social economy" derives from the French économie sociale, first recorded about 1900. The sector comprises four families of organisations: cooperatives, mutuals, associations and foundations. The social economy is a major sector, representing 10,3 percent of employment.Spain
The first Law of Social Economy in Europe was approved in Spain in early 2011. By 2013, the social economy in Spain represented 12% of the Gross Domestic Product, with more than 44,500 businesses, more than 2,215,000 employees, impacting more than 16,528,000 associated people, and producing €150.978 million in gross sales. Consequently, the concept of economía social is firmly embedded in the country's academic, political and economic institutions.The process of national political integration of the social economy in Spain started in 1990 with the creation of the National Institute for the Promotion of Social Economy through Law 31/1990 by Spain's Parliament on 27 December of that year. The INFES replaced the former Directorate General of Cooperatives and Worker-Owned Companies of the Spanish Ministry of Labour and Social Security. Among its purposes was the promotion of social economy organisations and, for that reason, it created the Institute from among its members. When the INFES ceased operating in the year 1997, its tasks were assumed by the General Directorate for the Promotion of Social Economy and the European Social Fund. Law 27/1999 on Cooperatives, of 16 July 1999, incorporated the Council for the Promotion of the Social Economy as the advisory and consultative body for activities related to the social economy, and its regulations were implemented by Royal Decree 219/2001, of 2 March, to authorize the organization and operation of the Council. Thus, this Council is set up as the institution that provides visibility to the various organizations in the social economy.
Furthermore, and due to the decentralization of powers that characterizes Spain's territorial system, there are different substantive rules regarding the various entities in the social economy whose regulation falls within the scope of the regional governments, giving rise to the existence of similar institutions within each autonomous community of industry participants. The different forms of cooperatives and, among them, the ones of associated workers, consumers, housing, agricultural, services, seafarers, credit, education, health, insurance and transport cooperatives, worker-owned societies and associations, foundations and mutual societies, insertion companies, special employment centers, agricultural processing companies and fishermen's associations share the guiding principles of the social economy. All these organizations are covered, directly or indirectly, by the aforementioned articles of the Spanish Constitution. Their principles confer on them a distinct and specific character with regard to other types of commercial companies and organizations in Spain.
A national confederation of social economy enterprises was established in 1992, CEPES, to represent the interests of its membership and provide a platform for institutional dialogues with public authorities and the organization has matured through the political integration. Today, CEPES is a confederation with national scope and cross-sector membership and is recognized as an institution of the highest level in Spain's economy. Each year, the organization collects data and publishes several reports on the state of the social economy sector in both Spain and the Mediterranean. Comparative data of the Spanish social economy relative to similar sectors in other parts of the world are also reported.