Social Economy

What are the Social Economy and What Does It Consist Of?

Societies have different ways of dealing with adverse economic situations or social inequalities. One of them is the implementation of a solidarity social economy model that really helps them overcome difficulties, achieve social and economic progress in such a way that they can distribute the wealth generated in a balanced way among all social agents.

Definition of Social Economy

Surely in recent years, you have heard the concept of the social economy many times, but what does it mean? To give a definition as narrow as possible, we are going to resort to the laws. The Law 5/2011 of 29 March, on Social Economy, called social economy in article 2 “to the overall economic and business activities in the private sector carry out those entities that, in accordance with the principles contained in Article 4, pursue the collective interest of its members, the general economics tuition or social interest, or both”.

Therefore, the main objective of the social economy would be to improve the quality of life of society as a whole.

Principles of the Social Economy

The principles of the entities of the social economy are qualified in the aforementioned law:

  • In the first place, the principle of putting people and the social purpose before capital is established. This would be carried out thanks to an autonomous, transparent, democratic and participatory management.
  • The second principle is associated with applying the results obtained as a result of the work contributed and the service or activity carried out by the members of said social entities.
  • The third point emphasizes the importance of “ promoting internal solidarity and with a society that favors commitment to local development, equal opportunities between men and women, social cohesion, the insertion of people at risk of social exclusion, the generation of stable and quality employment, the reconciliation of personal, family and work-life and sustainability ”.

In fact, Aude end Action has been working on this principle for some time, which advocates equal opportunities in Spain with the Aqua Also program.

The Social Economy Law also adds as a guiding principle that it is absolutely necessary that in any social economy there be independence from the public powers.

Therefore, in general terms, we could say that the social economy is based on the following principles and values: equality, democracy, justice, social responsibility, solidarity, sustainability, and peace.

Social Economy Companies

As you can imagine, the Social Economy is closely related to Corporate Social Responsibility that companies implement to achieve a fairer, more equitable, more stable, and sustainable system.

The business group of entities and societies that are part of the social economy range from cooperatives, labor societies, mutual societies, special employment centers, insertion companies that fight against poverty, to foundations and associations linked to fighting against social exclusion.

In Spain, the Spanish Business Confederation of the Social Economy (CEPES) is the organization that watches over the Social Economy in our country and that integrates 27 types of organizations. Therefore, local, regional, and state interests of specific business groups are represented in it.

In the CEPES report for 2017, it is highlighted that the Social Economy represents 10% of GDP in turnover and the interests of 43,435 companies. It is also highlighted that there are more than 21 million people linked to the Social Economy in Spain and it generates more than two million direct and indirect jobs.

At the international level, there is the GSEF (Global Social Economy Forum), which in Spanish translates as the Global Forum of the Social Economy. This year it held its IV Congress in early October in Bilbao, focusing on the Social Economy and cities and their relationship with values and competitiveness to achieve inclusive and sustainable local development.

The Future of the Social Economy

The Public Powers Are In Charge Of Promoting These Actions And The Development Of Social Economy Entities.

It is necessary to simplify the processes, promote professional training in the field of these social economy entities, bet on technological innovation, discover and be open to new entrepreneurship environments or promote the development of jobs.

Education is also key in enhancing this type of economy. From various spheres, the inclusion of the social economy as a key subject in education programs is being requested.

It is necessary to place and prioritize the establishment of a social development approach linked to human rights, ensuring the transparency of social economy business actions and establishing real mechanisms that measure poverty, inequality, and development.

Now more than ever, it is necessary to take the Social Economy seriously: it is essential to develop real social alternatives and emerging economic models that will in turn help meet the Sustainable Development Goals (SDGs).


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