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Social Economy and Cities

Values and competitiveness
for an inclusive and sustainable
local development

October 1-3, 2018

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Social Economy and Cities

Values and Competitiveness
for an Inclusive and Sustainable Local Development.

3. CHALLENGES FOR THE GROWTH OF SE INSTITUTIONS

Social Economy institutions have important challenges related to their capacity for growth. This sub-theme focuses on discussing and sharing the factors that favour and inhibit growth, both internal and external factors. The European Commission has indicated that Social Economy enterprises show great potential for growth due to the increase in “the demand for social innovation and the increase in new technologies and collaboration platforms”. However, – the Commission highlights – that these enterprises still have difficulties in obtaining funding and support, especially due to the “lack of recognition and understanding of their economic potential and insufficient exploitation of new technologies” (Commission Communication: Leaders of tomorrow’s Europe: Initiative on emerging and expanding enterprises”. 22.11.2016). The Forum wishes to share this European view of the challenges for the growth of SE institutions, with other regional perspectives, so that the interaction between different realities provides a shared view of the common challenges that must be overcome in order to promote the growth of the Social Economy.

3.1. INTERNATIONAL VIEW IN SOCIAL ECONOMY INSTITUTIONS: FINANCING INSTRUMENTS, VISIBILITY AND REGULATORY FRAMEWORK

The internationalisation of Social Economy institutions can be said to be a recently included “subject” in the context of the growth of Social Economy institutions. In general, with some exceptions, the size of the enterprises in the Social Economy inhibits their competitiveness. The majority are micro-enterprises, with an average of 15 workers where the professionalisation of management must be improved and the activity does not have international perspective, for which it is necessary to have financing that guarantees the expansion and development of the initiatives.

On the other hand, and as well reflected in the reports written by the European institutions in their work on promoting the Social Economy, there is still a significant lack of external visibility, some ignorance of the impact generated by the activities of Social Economy institutions, as well as a lack of regulatory frameworks at state level that would promote greater and better development of these entities.

3.2. EXPERIENCES OF ALLIANCES BETWEEN SOCIAL ECONOMY INSTITUTIONS

Taking this report as a reference: “The Social Economy in the European Union”, prepared by CIRIEC for the European Economic and Social Committee in 2012, the plural and multiform nature of the Social Economy requires the presence of strong representative organisations of the different groups of enterprises and organisations that comprise it. However, the identity shared by all of them and the core of common interests that unite the SE raise the need and convenience of making unconditional efforts for associative structuring of the whole SE, both nationally and internationally. The more visible and powerful the collective image projected by the SE, the more possibilities for development and effective action each of the groups of agents that comprise it will have. In this sub-theme, the aim is to share experiences of alliances among Social Economy institutions that focus on consolidating activities and generating their greater visibility, both locally and at the level of interaction with policy makers.

3.3. GENERATION OF FUNDS AND OTHER TOOLS FOR THE CREATION AND SUPPORT OF SOCIAL ECONOMY INITIATIVES

The funding theme was included in the Montreal Forum as a key factor for the development of new Social Economy enterprises and to enable the growth of existing ones.

In this way, the Council of the European Union, in the conclusions document drawn up after the Council meeting on “Promotion of the Social Economy as a key driver of economic and social development in Europe” of December 2015, highlighted the need to analyse which financial instruments are the most appropriate and to promote their dissemination at all levels, in order to establish a global financial ecosystem and enable the development and growth of Social Economy enterprises. Also advocating to facilitate access to information on funding possibilities for Social Economy enterprises.

3.4. DEMOCRATISATION OF GOVERNANCE MODELS OF SE INSTITUTIONS

As indicated in the White Paper on Social Economy: “Social Economy enterprises are equipped with a democratic structure based on a participatory management model, and therefore democratic governance is one of the foundations of the Social Economy. In line with the “one person – one vote” principle, active participation in the decision-making is not dependent on capital ownership. This favours the involvement of all members and guarantees the independence and autonomy of Social Economy enterprises and organisations”

Elaborating on the democratisation mechanisms of governance models of Social Economy institutions requires backing the empowerment of the people who make up the organisations through training, information, transparency, strengthening of skills and abilities, etc. It is ultimately about sharing experiences and proposals regarding the governance models of the various expressions of the Social Economy.

3.5. MONETISATION OF THE SOCIAL VALUE OF ORGANISATIONS. AN INTEREST GROUP-BASED APPROACH

“Social Economy enterprises have capacity to generate wealth which is not confined to financial capital but embraces also and mainly social capital”, states the White Paper drawn up by Social Economy Europe, the reason why the European Commission wants to measure the impact of social enterprises and expects this measurement to yield positive results in terms of investment and access to funding.

However, the Social Economy, in addition to taking advantage of the fair wind provided by this desire of the European institutions, must also follow its path and tackle the measurement of its social value from an inclusive approach, such as taking into account its stakeholders. It is from the relationship and impact it generates with its interaction that an interesting field of work opens up to monetise the social value of Social Economy institutions and thus address, from the quantitative measurement perhaps, the social impact of the activities.