Social economy

Traditionally, the term social economy refers to the four main entities that provide goods and services to their members or society generally. They are

• cooperatives
• mutual benefit societies
• associations (including charities)
• foundations

The social economy operates in a large variety of economic sectors, including forestry, agriculture and fisheries, energy and climate, financial services and culture and media. In an EU context, the social economy covers entities that share common principles and features:

• the importance of social and/or environmental purpose over profit
• the reinvestment of profits and surpluses in activities benefitting the interest of members or users
• the reinvestment of profits and surpluses in activities benefitting the interest of society at large or participatory governance

EISMEA implements social economy projects under the former COSME programme and currently in the SME pillar of the single market programme (SMP).

The call for proposals "European Social Economy Missions" that opened on 5 October and will close on 7 December 2023, follows up two "Social Economy Missions" calls for proposals launched in 2020 and 2021 aiming at developing inter-regional cooperation to scale up social economy business models in regional context. The Commission released a Social Economy Action Plan in December 2021. With this plan, the Commission put forward concrete measures to help mobilise the full potential of the social economy sector, building on the results of the 2011 Social Business Initiative and the 2016 Start-up and Scale-up Initiative. 

The action, with an available budget of €1M, will fund up to 4 projects that aim at boosting the scale up of social economy businesses in rural areas focusing on the following topics (non-exhaustive list):

• Clusters of social and ecological innovation
• Green and digital transition
• Sustainable and circular agriculture and food systems
• Education, training and skills activities for unemployed people
• New European Bauhaus and quality of life

Call for proposals Greening social economy SMEs and entrepreneurs in the proximity and social economy ecosystem through transnational co-operation was published on 9 November 2022, with the submission date of 14 February 2023. The evaluation of eligible proposals happened in April 2023 and selected six best proposals for award. The successful projects’ implementation started in October 2023 with duration of 24 months. More details about these projects are available in Projects & Results section of Funding & tender portal when searching for SMP-COSME-2022-SEE-01 Topic.

The general objective of this call is to green the processes and activities of SMEs in the social economy by boosting the development of sustainable practices through capacity building, knowledge transfer and transnational cooperation. In doing so, this call aims at empowering social economy SMEs and entrepreneurs to deliver on the objectives set by the EU Green Deal by fostering their capacities and skills, improving their sustainable management and greening their operations.

Therefore, the call for proposals aims at:

• supporting transnational and cross-sectorial cooperation, and exchange of good practices to enable sustainable growth of social economy SMEs and entrepreneurs regarding the green transition;
• boosting the capacities and skills of staff and management within social economy SMEs to green their operations and develop sustainable products and services;
• encouraging the uptake of sustainable alternatives and innovative solutions through capacity building, incubation and acceleration, advisory services and coaching;
• fostering cooperation between social economy entities on the one hand, and mainstream businesses, academia and public authorities on the other.

Call for tenders Socially responsible public procurement was published on 10 October 2022. Successful Contractors were selected for both lots in the first half of 2023; they started the implementation of both tender’s lots in September 2023.

The main objective of lot 1 of the call is to carry out training and awareness-raising activities in socially responsible public procurement in 12 Member States that were not covered by the 2018 Buying for Social Impact project. The main objective of lot 2 is to achieve a better understanding of the existing frameworks and scope regarding measuring methodologies, policies and practices in regard to social impact in public procurement across EU Member States. More details on the call are described in the Call document.

Call for proposals Boosting awareness raising for mainstream enterprises to work with social enterprises (towards a ‘buy social’ business to business market) was published on 29 September 2022. The evaluation procedure resulted in selecting 5 projects that started between May and July 2023. All of them will last 18 months.

The main objective for this call for proposals is to enable local, regional or national “Buy Social: B2B markets” by building partnerships (local, regional or national) and facilitating trade relationships between SE entities and mainstream businesses (B2B). More details on the call are described in the Call document.

In September 2021, the call for proposals, Social economy and local green deals supporting SMEs to become more resilient was launched. The aim of the call is to boost resilient economic growth through the involvement of local businesses, authorities, people and social economy enterprises.

The call builds on the work of Intelligent Cities Challenge and European Social Economy Regions (ESER) as well as previous Social economy missions (SEM) projects. In particular, the call will contribute to building economic resilience and the social economy under 2 headings: local green deals and social economy missions for community resilience.

Projects’ implementation started in May 2022 with duration up to 24 months. More details about the projects are available under Projects & Results of Funding & tender portal by choosing the topics SMP-COSME-2021-RESILIENCE-SEM or SMP-COSME-2021-RESILIENCE-LGD.

In 2016, the report Social Enterprises and their Eco-systems: Developments in Europe highlighted that a growing number of European countries had adopted specific legal frameworks for social enterprises.

However, the legal frameworks had a weak understanding of the concept of social enterprises, a lack of stakeholder involvement and suitable incentives, and recognition of only part of the social enterprise sector.

In this context, the European Commission’s expert group on social economy and social enterprises, asked the Commission to help countries design adequate frameworks to support the expansion of social enterprises.

The overall objective of this project was to support the development of legal and regulatory frameworks in EU countries, which will allow social enterprises to thrive. The Organisation for Economic Co-operation and Development (OECD) implemented the project by analysing national legal and regulatory frameworks on social enterprises, and provided guidance for national governments to assess, design and improve laws and regulations.

Designing Legal Frameworks for Social Enterprises

The aim of the social economy missions (SEM) grant scheme was to build a European social economy community through regional collaboration, innovation partnerships, sustainable growth and quality job creation. 

The call was launched in spring 2020. It offered the chance for 3 different regions, cities or municipalities from at least 3 different COSME countries with similar social economy situations to share good practices, find solutions to existing challenges and develop inter-regional partnerships. A wide range of social economy participants joined the local and regional authorities.

The Call attracted more than 50 applicants. The evaluation phase resulted in the selection of 20 winning projects that implemented individual missions in 2021. In total, 78 regions, cities and municipalities from 27 COSME countries and various social economy umbrella organisations participated.

More details are available on the COSME data hub

The Buying for Social Impact (BSI) project took place from July 2018 to January 2020 by a consortium of European organisations that promoted local development and social economy enterprises. The project had two objectives:

• to encourage contracting authorities to use public procurement for social goals
• to increase participation of social economy enterprises in public procurement and access new markets

Actions were targeted at key audiences in 15 European countries. A selection of 23 good practice examples from 12 of the countries was published.

One of the key findings from the BSI project is that while the EU Directive is necessary to promote and implement socially responsible public procurement, it is not sufficient. Legal frameworks need to be coupled with initiatives to increase knowledge and capacity-building among public authorities and economic enterprises.

Buying for social impact: good practice from around the EU

The main outcome of the project is a study to identify, analyse and report on cross-border social economy activities as well as corresponding European and national policies.

The European Commission has conducted various studies to assess the effect of SME internationalisation on the economy. However, these did not always focus on social enterprises and the effect of internationalisation on the social economy. So, while some of the findings could be generalised, and extended to the social economy, often these businesses differ in their objectives.

The report identified multiple barriers to cross-border activities of social economy entities on the several analytical dimensions: legal, financial, and fiscal as well as linked with business-related, mindset and cultural challenges. The study developed several pathways on how social economy entities operate across borders, each identifying different goals and approaches. The report underlines also that relevance of international operations for the economy of SMEs is not limited to growth accounting indicators, but it involves other advantages such as introducing social innovations, new governance models, or more social and sustainable sector practices, for example sources by foreign expertise

The analysis also identified the diversity of the sector in relation to legal, spatial, business and sectoral aspects, and that cross-border activity is best understood by the fact that the social impact on communities is the main driver. The contractor identified 11 ways in which social enterprises engage in cross-border activity, with each way connecting a typical activity.