On April 27, the EESC approved its opinion on The role of social economy in the creation of jobs and in the implementation of the European Pillar of Social Rights, whose rapporteur is Giuseppe Guerini (President of CECOP) and the Committee of the Regions is working on an opinion on the Social Economy Action Plan, whose rapporteur is Mikel Irujo, Navarra’s Regional Minister for economic development.
The Opinion on the Social Economy
The Opinion describes the social economy in detail as an economy that puts social objectives before the role of capital, not least through democratic governance involving a range of stakeholders. They are not private for-profit companies and, even if they achieve “limited profitability” through business activities, the profits go towards the pursuit of their statutory objectives and the creation of jobs. These are legal forms which include cooperatives, associations, mutual societies and foundations, to which social enterprises have been added more recently. It continues that the function of social economy organisations and the economic value they generate appear to be very significant, both in terms of size (8% of European GDP) and in terms of the quality and persistence of this value, which, even during the years of the financial crisis, saw an increase in both the economic value produced and the number of workers employed, providing more than 13.6 million paid jobs in Europe, and accounting for around 6.3% of the EU-28 working population.
It emphasises that a significant feature of the social economy is the large number of female workers, who account for over 70% of the labour force in many cases, with the percentage generally above 50% elsewhere. Additionally, it highlights the role of promoting and implementing social innovations, which shows that these organisations can interpret and support societal changes, serving to mobilise human capital resources in the form of active and solidarity-based participation, with more than 82.8 million volunteers.
The Opinion states that In many cases, social economy enterprises are the main provider of essential services for the community – such as social, health and educational services, care or training and job integration services for disadvantaged people – and manage activities which, even if of a commercial or business nature, are always ones that have a strong community and local value and involve the profits being reinvested for their statutory objectives
Proposals for a European policy to support and promote the social economy
The Opinion provides necessary solutions to long standing barriers facing the social economy, for example, the issue that we have not yet been able to reach an agreement on a standard European legal definition of the social economy.
The Opinion has conclusions and recommendations on how to provide a more accommodating ecosystem for the social economy. It states that in their national recovery and resilience plans for emerging from the pandemic crisis, Member State authorities provide for a broad involvement of social economy bodies.
Regarding the the operational criteria adopted by the EU institutions to promote proper recognition of social economy organisations and enterprises, in their various legal forms. The Opinion states that these criteria require that social objectives of general interest take precedence, that democratic governance involving a range of stakeholders be adopted, and that even when “limited profitability” is achieved, this is used to help pursue their statutory objectives.
The Opinion highlights the need for proper statistical mapping to have suitable comparable and up-to-date data on the size and impact of the social economy.
It continues that supporting policies are needed in areas of taxation systems that recognise the general-interest role; public and private investment that fosters the development of social-impact finance – including by harnessing public procurement and concessions; supporting the stable employment and economic leadership of workers; and support the skills level of staff and technological innovation in social economy organisations.
The opinion mentions “Worker Buyouts” as a good practice not only for re-launching companies in crisis but also for transferring SMEs whose founders have no successors and the use of social-impact investments to lead to social economy enterprises becoming the key player in revitalising investment dedicated to social, environmental and solidarity-based objectives.
Moreover, the Opinion explains that social economy organisations and enterprises remain at the lower end of the income scale partly due to the undervaluing of care work, which too often is not given adequate economic recognition even in conventional forms of business. In this respect, it is important to strengthen the union rights of workers in the social and care sector.
New Forms of the Social Economy
The role of the social economy is mentioned in new kinds of digital-platform-based entrepreneurship and in particular for sharing-economy activities, given their propensity to actively involve the workers and the users of digital platforms. Additionally it gives the importance of putting in place policies to facilitate the transition from volunteering to stable forms of paid employment.
Finally, the Opinion explains how social economy enterprises are developing new employment and social innovation initiatives, including the green economy and sustainable development, the circular economy creating new jobs in the area of reuse and social farming. It mentions the new forms of digital-platform-based entrepreneurship more inclusive in order to make the participation of workers and users more sustainable and shared, so as to develop new forms of mutuality and solidarity by means of new digital technologies, which can facilitate wide participation. It ends by describing the delivery of services such as the provision of renewable energy or the organisation of services in decentralised areas and rural areas.
There is much more to learn by reading this valuable opinion and we encourage you to read the document here.
