Social Economy and Local Development: European Case Studies

Istituto Per Sviluppo Professionale dei Lavorati (ISFOL) or The Equal National Support Structure in Italy has painted a good picture of the contribution of the social economy in Europe in their 2006 paper entitled How Can Social Economy Contribute to the Local Development? The Paper documents various proceedings of Equal Development Partnership (EDP) countries workshops that brought practitioners from Italy, Poland, Finland, Sweden, UK GB, Germany and Belgium.

Social entrepreneurship is acknowledged in Europe as a priority in the national employment strategies and the promotion of sustainable growth. It is also acknowledged for innovation on issues of the social economy and linkages with local processes and policies. There are common problems calling for the development of the social economy in all the EDP countries include, improving the availability of services to the sections of the communities not accessing them easily, raising the potential of employment and job creation, encouraging policies on integration strategies, the development of areas affected by social, territorial or economic setbacks and which could benefit from new professional profiles and services.

The third sector (social entrepreneurship endeavours are also referred to as the third sector. Other players in the economy include the Government and the corporate sectors) organizations in Europe have a deep knowledge of the local needs in their areas of their operations and have thus contributed to innovations and modernization of the social welfare systems. This sector has become extremely pertinent in the integration of the disadvantaged people within the mainstream, and encouraging new models of social responsibility. Apart from service provision, local development, they also advocate for the disadvantaged populations and encourage new models of social responsibility.

The third sector also experiences great obstacles as follow:

Finance: The third sector organizations find it difficulty to access financial resources due to their nature of operation and the demand for collateral and concrete guarantees from the financial resource providers. This constrains their growth.

Markets: The main consumer of the SE’s among the EDP countries is the public sector. The demand of the public sector is politically rooted and its evolution is difficult to predict.

Human Resource: Conventional managers do not possess all the abilities required by a social enterprise. An inappropriate Human Resource may dampen the quality of the services provided.

Legislative environment: Lack of recognition of the contributions of the third sector in building of the overall economy. Proper legislative environment would provide a good environment that allows for innovations and hence the thriving of the sector.

So far from the third sector in Europe we could derive many lessons; some of them being:

Finance, demand, skills and the legal environment are partially the external obstacles to social enterprises. These sectors are seen as both political and organizational obstacles. The social enterprises could only solve problems associated with these obstacles by carrying out their services and solving the obstacles as they arise.

There is a great challenge on “becoming entrepreneurial but remaining social,” a caveat needs to be observed: social enterprises must never lose their distinguishing feature and that is their social nature. Social enterprises may utilise social accounting and auditing methods to measure and report their quality and impact.

The main aim of the social economy is to change people’s minds and to transfer values. Knowing why people are in a particular state is important than know how. Technical skills are important but they have to be complimented with trust, mutual respect, confidence and passion.

Failure is the starting point for the third sector. Failing to solve the needs of the local people, or discrimination of a particular group is the cause for the emergence of the social enterprise. Demand is expressed by the unsatisfied community. Designing new ways of supplying services is the innovative part.

The public authorities should ensure that their procurement practice includes social objectives (i.e. employment of disadvantaged people) which should be included as selection criteria and not as award criteria.

In concluding, the experiences shared in these workshops were shared in the light of social cooperatives in Italy, social foundations in Poland, Social enterprises in Sweden, development partnerships in Germany and social organizations in UK GB. These give practical examples of social enterprises that have done tremendous work to respond to the community needs such as social inclusion of the disadvantaged people, job creation and the development of areas affected by a set of setbacks.