The social economy encompasses a variety of businesses, organisations and different legal entities. They share the objective of systematically putting people first, producing a positive impact on local communities and pursuing a social cause.
Social economy organisations can include non-profit associations, cooperatives , mutual societies, associations and foundations and social enterprises.
The social economy business models aim at reinvesting most of the profits back into the organisation and/or a social cause, and having a participatory/democratic form of governance. Social economy is known to be anchored at local level and to foster socio-economic cohesion by promoting values such as solidarity, participation and cooperation. Social economy business models operate in a large variety of economic sectors and are therefore linked with other industrial ecosystems.
There are 2.8 million social economy enterprises, representing 10% of all businesses in the EU. Almost 13.6 million people – about 6.2% of the EU’s employees – work for social economy enterprises. On top of the paid workforce, social economy mobilises volunteers, equivalent to 5.5 million full-time workers.
Some characteristics of the social economy
- Membership - up to 160 million people in Europe are members of social economy enterprises (mostly retail, banking and agricultural cooperatives, as well as mutual societies offering services complementary to social security regimes)
- Objectives - social economy enterprises contribute to the EU’s employment, social cohesion, regional and rural development, environmental protection, consumer protection, agricultural, third countries development, and social security policies
- Size - social economy entities are mostly micro, small, and medium-sized enterprises (SMEs)
What we have achieved
The Commission aims for a level playing field in which social economy enterprises can compete effectively and fairly, without regulatory discrimination and taking into account their particular needs. To promote a highly competitive social market economy, the Commission has presented targeted initiatives:
- social business initiative (COM(2011) 682 final)
- social innovation policy making
- single market act 1 and 2
- small business act
- the flagship initiative, the Innovation Union
- the Communication, 'business in the social economy sector: Europe’s frontier-free market' (1989).
In 2003, the statute for a European cooperative was adopted.
What we implement today
Today, DG Internal Market, Industry, Entrepreneurship and SMEs is promoting, in particular, the development of social economy enterprises and organisations via the Single Market Programme. It is also particularly focused on supporting the development of social economy by implementing the European action plan on social economy (2021).
Main actions focus on
- Promoting access to markets with socially responsible public procurement: social procurement and boosting affordable housing in Europe
- Reinforcing business support via our European Enterprise Network, including social economy actors in our cluster policy and reinforcing their management experience through Erasmus for Young Entrepreneurs
- Developing networks and partnerships via our social innovation competition, our European social economy regions and our social economy missions
- Boosting skills and professionalisation: Pact for skills and skills alliances through Erasmus+