Social economy and the COVID-19 crisis: current and future roles

Abstract

The “social economy” has played an important role in addressing and mitigating the short- and long-term impacts of the COVID-19 crisis on economy and society. In the short term, social economy actors have assisted the recovery from the crisis by providing innovative solutions that are aimed at strengthening public services to complement government action. In the long term, social economy organisations can help reshape the post-crisis economy by promoting inclusive and sustainable economic models. Relying on decades of experience, its specific features and underlying principles, the social economy can inspire models of social innovation and a sense of purpose to firms operating in the market economy.

Key facts and messages

• The social economy includes associations, co-operatives, foundations, mutual organisations and social enterprises. In the EU, there are 2.8 million social economy entities, accounting for 6.3% of EU employment, but their impact goes far beyond those numbers. Social economy actors are found in most sectors of the economy—from health and education to banking and utilities. Some are small non-profits, but others are large enterprises with international outreach.

• The distinctive feature of the social economy is its focus on economic practices that are sustainable and inclusive: (i) by addressing societal (i.e. social and/or environmental) needs; (ii) by organising economic activities building on local roots, as well as using participatory and democratic governance; and (iii) by working in close co-operation with other economic actors and relevant stakeholders.

• The demand for the social economy has never been greater. Social economy organisations have been a trusted partner, operating at the forefront of the crisis to address urgent sanitary and social needs. However, they are also facing the consequences of lockdown similar to other economic actors, including falling revenues. Certain social economy legal forms (such as associations or foundations) may represent an obstacle to accessing government support measures available to firms during the crisis.

• The COVID-19 crisis calls for a re-balancing of efficiency and resilience throughout the economy. Traditionally, the purpose of the social economy has been seen to “repair” social problems (such as homelessness, labour market exclusion and other forms of social exclusion experienced by vulnerable groups). However, the social economy can develop a much larger role in the post-COVID phase to inspire transformation to a more inclusive and sustainable economy and society.

• The social economy has proven to be a pioneer in identifying and implementing social innovations and alternative ways of organising economic activities. These innovations have often been subsequently mainstreamed and adopted by the rest of the economy (such as fair trade, organic food movements or ethical finance). These innovations contributed to social and economic transformation and will be much needed in a post-COVID world.

• Social economy organisations also have the potential to expand social innovation to address pressing environmental and societal challenges. They do so by focusing on social impact and working with local stakeholders (citizens, civil society, policymakers, entrepreneurs, researchers) in collaborative ways that promote the use of new practices. Concrete policy measures, in the form of legal frameworks and resources, are needed to support these new forms of social experimentation and collaboration, with impact then scaled up.

• Recommended policy actions by national and subnational governments include:

  • Define a shared vision about the future to “build back better” and ensure that social economy organisations actively contribute.

  • Develop an action plan to achieve a transition to a more sustainable and inclusive development model, with a clear role for the social economy

  • Promote social innovation practices and co-operation, including through funds to support experimentation and innovation as is done for technological innovation

  • Continue to diversify the financial resources available to social economy organisations, through updates to legal frameworks and public programmes

  • Create and share tools to provide data on social impact that are not onerous but can document progress and identify those with highest impact.

https://www.oecd.org/coronavirus/policy-responses/social-economy-and-the-covid-19-crisis-current-and-future-roles-f904b89f/?fbclid=IwAR3vZeIhNyygkMhmTvbfSrB8nz1kXK2XP3U48wgZEsXZd8vBaQJcwBVlKLI