Social economy

Defining the term social economy is made especially difficult by the ?moving sands? of the political and economic context. Consequently organisations may be ?part in, part out?, ?in this year, out the next? or moving within the social economy?s various sub-sectors.

Related Topics:
Political - Economic

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Ultimately there is no single right or wrong definition of the social economy. Many commentators and reports have consciously avoided trying to introduce a tight definition for fear of causing more problems than they solve. Consequently, this article endeavours to explain the social economy in a way that can be easily understood but without establishing an inflexible defining statement..

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The economy of the UK is often considered to have three sectors. The private sector, which is privately owned and profit motivated; the public sector which is owned by the state and provides services in the public interest; and a third sector that embraces a wide range of community, voluntary and not-for-profit activities. Sometimes there is also reference to the informal sector where informal exchanges take place between family and friends.

Related Topics:
UK - Private sector - Public sector - Informal sector

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The third sector can be broken down into three sub-sectors; the community sector, the voluntary sector and the social enterprise sector.

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The community sector includes those organisations active on a local or community level, usually small, modestly funded and largely dependent on voluntary, rather than paid, effort . Examples include neighbourhood watch, small community associations, civic societies, small support groups etc.

Related Topics:
Neighbourhood watch - Civic societies

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The UK's National Council for Voluntary Organisations describes the voluntary sector as including those organisations that are: formal (they have a constitution); independent of government and self-governing; not-for-profit and operate with a meaningful degree of volunteer involvement. Examples include housing associations, large charities, large community associations, national campaign organisations etc.

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The social enterprise sector includes organisations which ?are businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners? . Examples include co-operatives, building societies, development trusts and credit unions.

Related Topics:
Co-operatives - Building societies - Development trust - Credit union

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The social economy spans economic activity in the community, voluntary and social enterprise sectors. The economic activity, as with any other economic sector, includes: employment; financial transactions; the occupation of property; pensions; trading; etc.

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The social economy usually develops because of a need to find new and innovative solutions to issues (whether they be socially, economically or environmentally based) and to satisfy the needs of members and users which have been ignored or inadequately fulfilled by the private or public sectors.

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By using solutions to achieve not-for-profit aims, it is generally believed that the social economy has a distinct and valuable role to play in helping create a strong, sustainable, prosperous and inclusive society.

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Successful social economy organisations can play an important role in helping deliver many of the UK Government's key policy objectives by:

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helping to drive up productivity and competitiveness;

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contributing to socially inclusive wealth creation;

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enabling individuals and communities to work towards regenerating their local neighbourhoods;

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showing new ways to deliver public services; and

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helping to develop an inclusive society and active citizenship.

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