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Is it possible to build an economy that works for people

7 February 2022

At the end of 2021, THE EUROPEAN COMMISSION adopted an Action Plan for the Social Economy. The objectives for the next 10 years are: increasing social innovation, supporting the development of the social economy and enhancing its capacity for social and economic transformation. The approach to drawing up the plan is also important – through an open and inclusive process that has lasted almost two years and aimed at achieving its employment and poverty reduction objectives.

The Commission's message is for Member States to adopt or update their social economy strategies and measures in cooperation with social economy stakeholders.


What is the Social Economy?

The social economy covers a number of entities with different business and organizational models. They operate in many different economic sectors: agriculture, forestry and fisheries, construction, reuse and repair, waste management, wholesale and retail trade, energy and climate, etc.

Participants in the social economy should share the following basic general principles and characteristics: prioritizing people as well as social and/or environmental objectives over profit (helping to achieve the five EU missions), reinvesting the majority of profits and surpluses in order to carry out activities in the interests of members/consumers ('collective interest') or society as a whole ('common interest') and democratic and/or participatory governance.

Traditionally, these are the most common: cooperatives, mutual societies, associations and foundations. These are private entities with specific legal forms independent of public authorities.

Social enterprises are considered to be the essential part on which the social economy is built. The activity of social enterprises consists in providing goods and services to the market in an entrepreneurial and often innovative way, their commercial activity being linked to social and/or environmental purposes.

The social economy can help to increase the employment rate and reduce the number of people at risk of poverty and social exclusion. It also complements countries' efforts to integrate young people and disadvantaged groups (e.g. people with disabilities, the elderly, the long-term unemployed, persons with a migrant background or minority groups in terms of race or ethnic origin (in particular Roma), single parents) into the labor market and society as a whole. The social economy plays a key role in the transition to more beautiful, sustainable and inclusive living spaces and lifestyles, as endorsed by the new European Bauhaus, by introducing new transdisciplinary approaches and solutions tailored to the needs and aspirations of local communities.

The Commission has a clear declaration – joint organizations and non-profit organizations are a key pillar of Europe's social and economic sustainability.


Key actions the Commission will take to implement the Plan:

Proposal for a Council Recommendation on the development of framework conditions for the social economy;

Launch of a new initiative under the Single Market Program to support the creation of local and regional partnerships between social economy actors and traditional businesses;

Improving access to finance for social entrepreneurs in the Western Balkan countries, the Eastern Partnership and the Southern Neighborhood by promoting initiatives aimed at developing products tailored to the needs of social economy actors;

Launching a new single EU social economy portal to provide stakeholders with information on EU funding, policies and initiatives;

Launch of a new Youth Entrepreneurship Policy Academy that will promote youth entrepreneurship, including female entrepreneurs and social entrepreneurs, working with policy makers at national level and youth entrepreneurship networks;

Launch of new InvestEU financial products in order to mobilize private funding addressing the needs of social enterprises;

Support for the development of means of measuring and managing social impact in order to support social economy actors in the EU;

Creating a transition path for the industrial ecosystem "Proximity economy and social economy" in order to make progress in working with public authorities and stakeholders on the implementation of the action plan;

Promoting social innovation through a new approach to transnational cooperation under the ESF+ and the creation of a new European Centre of Competence in the field of social innovation.

Organization of webinars and workshops for officials in different policy areas relevant to the social economy;

We are anticipating to see how the Bulgarian authorities will turn these recommendations into concrete measures to support social enterprises in Bulgaria, including through the projected resource under the Recovery and Development Plan.

The whole plan with its goals, tasks and measures can be seen here.