Social economy in a globalised world

Submitted by DPP on Thursday, September 3, 2015 - 15:25

Can developments in the social economy help address some of the contradictions in a globalised world? Can the social economy foster a new way of thinking about how we do business? What are the challenges for enterprises that have social goals rather than profit at their core?

These were just some of the questions being discussed at the 5th CIRIEC International Research Conference on Social Economy held in Lisbon from 15th-18th July 2015. CIRIEC International is the International Centre of Research and Information on the Public, Social and Co-operative Economy. The conference brought together more than 400 researchers with presentations from 35 countries across the world. Main themes were economic challenges, the relationship of the social economy with the state, the governance of social enterprises, and new concepts and trends in understanding the social economy. Of particular note was a speech given by the Prime Minister of Portugal, Pedro Passos Coelho, promising an increasing focus on the social economy to address poverty, inequality and social inclusion.

So what is the social economy? CIRIEC International states: ‘Social economy enterprises and organisations are economic and social actors present in all sectors of economy and society… [T]hey are characterised by their purpose: a different model of enterprise, which continuously associates the general interest, economic performance and democratic governance.  Social economy enterprises’ main purpose is to serve their members rather than maximise profits. The Social Economy includes co-operatives, mutual societies, associations, foundations, as well as new forms of social enterprises which share social economy’s values, defined in Social Economy Europe’s Charter of principles.’ (http://www.socialeconomy.eu.org/social-economy) Yet the concept of social economy is often debated and not uniformly recognized. In some countries there is a legislative framework for it, in others not. Sometimes the social economy exists in practice but does not come under this label. 

Researchers discussed the effects of economic crisis, the growth of inequality, challenges for making a living in current market conditions, and the need for attitude, value and behaviour as well as material changes towards a more socially oriented economy.  For example, there were fascinating contributions about how, in Ecuador and Bolivia, ideas for building a stronger social economy sit alongside national philosophies of Buen Vivir, individuals living and working in the context of collective needs and the importance of work in harmony with the environment. Such ideas also have strong links to what is now called the social and solidarity economy (SSE), about which there is also much debate (see for example: http://www.unrisd.org/sse and the Oxfam blog: http://oxfamblogs.org/fp2p/beyond-the-fringe-realizing-the-potential-of-social-and-solidarity-economy/).

However there are many challenges for the social (and solidarity) economy: how to build inclusive businesses in globalised market conditions; whether the social economy simply contains the worst effects of capitalism rather than leading to new models of economic organisation; the importance of combining a strategy for managing human resources within enterprises as well as a market strategy; why standard economic approaches are inadequate for analysing social enterprises; whether social enterprises set up during crisis can maintain their initial social and co-operative values and principles over the longer term; and the importance of the psychological change from ‘I’ to ‘we’, from individual to collective interests, in motivating participation in social enterprises.

Researcher Alexander Borda-Rodriguez and I presented a paper on whether co-operatives could provide a platform for fostering inclusive development. Inclusive development is increasingly used as a concept in co-operative as well as development literature, but there is a need for more debate about its meaning. We analysed the economic control and benefits, voice and agency of members that co-operatives can provide (as well the conditions that mitigate against them), looking at the experience of two co-operative unions in Malawi. We observe that it is important to see inclusive development as a long-term process of addressing unequal social relations, which will have many contradictions and conflicts along the way. The paper will be appearing as an Innovation, Knowledge and Development Working Paper.

Questions for reflection:

  1. What role do co-operatives, mutual societies, associations, foundations and social enterprises play in different parts of the world?
  2. Are they simply there to address market failure or do they provide alternative models for a more human-centred form of enterprise, which should permeate our economies more widely?
  3. Do they present possibilities for social transformation?

Hazel Johnson

Hazel Johnson is Professor of Development Policy and Practice. She is a founding member of the team that set up the MSc in Development Management, and she made the qualification globally available. She currently chairs the postgraduate module on Institutional Development. She has had a long-standing interest in collective organisation and livelihoods, and currently researches co-operatives. She is also a Trustee of the UK Co-operative College.

Alexander Borda-Rodriguez is Visiting Researcher in DPP, where he did his PhD. He has worked on several research projects in the areas of innovation (health and energy) and co-operatives in development. He currently has a fellowship from the Secretaría Nacional de Educación Superior, Ciencia, Tecnología e Innovación in Ecuador, where he is researching the social and solidary economy, based at the University of Cuenca.