The Social Economy in Europe: A Driver of Inclusive and Sustainable Transformation admin October 3, 2023
The Social Economy in Europe: A Driver of Inclusive and Sustainable Transformation

Europe’s economic and social is home to a variety of actors that is not well known. Approximately 2.8 million Social Economy entities offer, today, concrete and innovative solutions to social and environmental challenges. To this end, they not only generate quality employment, but also play a key role in social inclusion, promote equal opportunities and contribute to sustainable economic development and citizen participation. Their work ranges from revitalizing rural areas to leading the fight against the COVID-19 pandemic. When the economic space is diverse in terms of types of entities and dynamics, it is better prepared to provide new responses and withstand crises thanks to its flexibility and the different options it already has at the outset.

The Social Economy is not only an essential complement to social services, but also plays a key role in the integration of youth and marginalized groups into the labor market and society. It advocates gender equality and the fulfillment of the Sustainable Development Goals, encouraging a more sustainable and resilient future. It is no longer that it has success stories, but that it is a sector that has numerous examples of maturity. However, these models have not been replicated as desirable.

The foundations of ESG (environmental, social and governance) criteria are laid in international agreements such as the Paris Agreement and the European Green Pact, driving climate and sustainable action. The Social Economy is at the forefront of these transitions, providing sustainable goods and services, bridging the digital divide and adopting participatory business models to ensure a just transition.

The Social Economy encompasses diverse entities with different models and operations, from agriculture to education and beyond. It is not defined on the basis of its activity, but rather in terms of objectives, priorities and strategies. Their common basis lies in prioritizing social and environmental purpose over profit, reinvesting profits in activities for the benefit of members or society at large, and adopting democratic or participatory governance.

In this situation, cooperatives, mutuals, associations and foundations have traditionally led the way, but social enterprises are also considered an integral part of the Social Economy, contributing to the market in an entrepreneurial way and with social or environmental objectives.

We are faced with non-profit entities that have begun to behave in an entrepreneurial manner in order to execute their purposes and companies that have begun to allocate their objectives and profits to purposes that go beyond profit.

The Recovery and Resilience Mechanism offers a window of opportunity to foster the Social Economy and its inclusive models, which could drive economic, social and ecological transformation. However, the potential of the Social Economy is still underutilized. The lack of recognition and support hinders its expansion and the realization of a broader impact.

The proposed action plan for 2021-2030 seeks to foster social innovation, support the development of the Social Economy and unleash its transformative capacity. This action plan not only advocates the comprehensive development of the Social Economy, but also seeks to raise awareness and empower consumers, entities and public authorities. After all, the Social Economy is an agent of economic and social change, a bridge to a more inclusive, sustainable and resilient future for Europe and the world.

One of the challenges we face is the rapprochement of the agents involved: the third sector, social enterprises and the administration have gone their separate ways, which has meant and still means considerable losses for all of them. The other major challenge is to train the third sector in financial sustainability strategies and companies to include ESG principles in their strategy and not as a compensation or marketing policy.

The Social Economy is an essential tool for present problems and immediate challenges because as economist Mariana Mazzucato has stated:

“The social economy is not another part of the economy, but it is the way the economy should be done, so that there is collaboration between organizations and so that we do not think only of 10% of the population.”

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