The Social Economy of Today and Tomorrow: what challenges, what milestones?

2014 has been the year of the social economy and of social enterprises. It has been the culmination of sustained efforts to promote a new growth model of participation, equity and ambition. For the social economy represents 10% of the EU's GDP and currently employs 14.5 million individuals. Indeed, despite the economic crisis, one in every four new businesses set up each year is a social enterprise, rising to one in three in France, Finland and Belgium. Significantly, whereas traditional SMEs have been emaciated by the crisis, between 2003 and 2010 there was an increase of 3.5 million jobs in the social economy sector. Perhaps there is indeed a glimmer of hope in the general pessimistic and Eurosceptic mood leading up to the elections to the European Parliament. Perhaps the EU has succeeded in speaking the language of solidarity, entrepreneurship and cohesion!

The event which marked 2014 was the conference co-organised between the European Commission (EC) and the European Economic and Social Committee (EESC) on 16 and 17 January in Strasbourg: 'Social Entrepreneurs: have your say!'. Bringing together some 2200 individuals from 70 countries, the scale of the event reflected the explicit political support to social entrepreneurship by the EC and notably, by Commissioners Barnier, Andor and Tajani. The 'Strasbourg Declaration' argued that "Europe's economic and social model needs to reinvent itself. We need growth that is fairer, greener and anchored in local communities. A model that values social cohesion as a genuine source of collective wealth". The Strasbourg conference was clearly the flagship event of the Social Business Initiative, adopted by the EC in 2011 with the aim of creating a favourable and enabling environment to develop social enterprises in Europe. Parallel European initiatives to render the social economy a priority sector in the Structural Funds for 2014-20 and an EU Directive to allow the social economy to be taken into account in public procurement, have also strengthened the role of the sector.  

The ultimate challenge now to the social economy lies in its future. With a new European legislature and administration taking over in 2014, with a different composition and priorities, will the social economy be able to maintain its hard-earned and privileged position within the European political machine? What about the national level? How will it be possible to ensure a holistic approach to the sector involving European and national levels? What role could Italy, with its historically strong social economy sector, be able to play during its Presidency of the Council of the EU in forging and sustaining political support for the sector? And what will be the future of the social economy, once the crisis starts to abate in Europe?

In order to continue raising awareness and to ensure continuity in the agenda, the EESC has begun work on a social business project to be completed by November 2014. This will follow-up on some of the tangible actions of the Strasbourg declaration, define future policy directions and concrete measures to be forwarded to the new EC and European Parliament. In this sense, the project is a partial solution to the fear of losing momentum for the social economy. Other good news is that it is currently anticipated that the EC will adopt the Social Business Initiative II in 2015.

The second overriding challenge to the sector lies in its ability to define mutually recognisable social impact indicators. For if the sector is to be taken seriously by public and private bodies, if it is going to be able to access financing and to compete in public tenders, then it will be necessary to measure and compare the socio-economic gains and its impact on the community. At the European level, this is all the more important as the Programme for Employment and Social Innovation stipulates that investment will be made available to social enterprises that can demonstrate that they have 'measurable social impact'. However, whilst a quantitative assessment will be necessary, it is crucial that that qualitative evaluation is not overshadowed. Positive steps in this direction have been taken by GECES subgroup on social impact measurement, set up in 2012 by the EC in order for relevant stakeholders to agree upon a European methodology for increasing social impact, which could be applied across the European social economy. The subgroup reported back in November 2013 and recommended a five-stage process and characteristics that could be used to report measurement and impact in Europe. This is an excellent beginning, but a European-wide measurement process has yet to be developed and speedy progress is necessary.

The third challenge to European policy on the social economy relates to the total absence of the sector in the EU's international relations and development cooperation. For although the EU remains the world's largest donor of official development assistance (ODA) and although in continents such as Africa the social economy has a long historical tradition, this critical sector has been ignored, as seen once again at the April 2014 EU-Africa Summit. This is deeply regrettable and short-sighted, particularly as the social economy has the potential to transform large swathes of the informal sector into decent work and to significantly raise standards of well-being.

Alas, 2014 will be both a year of milestones for the social economy and a year of opportunities and challenges for the sector and for Europe's future.                   

 

This article by Luca Jahier is featured in the May 2014 issue of Vita magazine as part of its cover story, titled “Euro Babylon”, a survey by Vita journalists of European institutions in order to  understand which lobbies really rule  in Brussels.