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What We Need to Know About the Social Economy a Guide for Policy Research

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What We Need to Know About the Social Economy a Guide for Policy Research Policy Research Projet de recherche Initiative sur les politiques What We Need to Know About the Social Economy A Guide for Policy Research July 2005 PRI Project New Approaches for Addressing Poverty and Exclusion What We Need to Know About the Social Economy A Guide for Policy Research July 2005 PRI Project New Approaches for Addressing Poverty and Exclusion ACKNOWLEDGMENTS The idea for a policy research guide on the social The guide benefited from extensive written com- economy was suggested by Jean-Pierre Voyer ments provided on a near-final draft by Marguerite following a joint PRI-SSHRC roundtable held in Mendell from Concordia University and Derek Hum September 2004. The guide is based on background from the University of Manitoba. Professor Hum also documents distributed before the roundtable, the prepared briefings for PRI that informed the identifi- presentations and discussions of the day, and subse- cation of observations concerning the role of govern- quent research carried out by Alan Painter, who also ment, as acknowledged in section 3. led the preparation of the guide. Management support and helpful comments were provided by Jeff Frank, Jean Kunz and Jean-Pierre Voyer throughout the drafting process. PH4-23/2005E-PDF ISBN 0-662-40886-1 Genomics, Health and Society Emerging Issues for Public Policy TABLE OF CONTENTS Preface . .I Highlights . .II 1. Introduction . .1 2. The Scope of the Social Economy . .2 3. The Role of Government in the Social Economy . .6 4. Recent Social Economy Initiatives by Governments and International Organizations . .10 5. Policy Research Needs and Resources . .13 6. Conclusion . .24 Appendix 1: Analysis of Data Reported Since 2004 . .25 Appendix 2: Policy Research Resources . .28 References . .30 Further Reading . .34 What We Need to Know About the Social Economy PREFACE For some time, stakeholders active in community Despite our progress to date, there is no room to economic development and the social economy be complacent since there is ample room to increase have proven that community driven and citizen-led our knowledge and build the networks and infra- initiatives such as social enterprises are successful structures to make the social economy an active mechanisms to address social issues at the local and sustainable sector of the Canadian economy. community level. Across Canada, social enterprises The benefits of doing so are obvious in Quebec, are proving to be flexible and sustainable tools that where there are an estimated 6,200 social economy help communities achieve social and economic enterprises which together employ 65,000 people objectives such as job creation and skill development, and generate annual sales in excess of $4 billion. social supports, sustainable environments, economic In 2004, I initiated the National Roundtable on the growth and neighbourhood revitalisation. Social Economy in order to engage in a dialogue As not-for-profit businesses emerging out of commu- with key stakeholders and federal representatives nity-based organisations, these enterprises reinvest about the issues and barriers challenging the growth surpluses from the sale of goods and services on of the social economy. Key barriers identified by the market back into the organisation to achieve the National Roundtable are a lack of research and a social purpose rather than generate a profit. This information, and of knowledge and learning sharing distinguishes them from the private and for profit between the regional and national networks. In sectors. It also places the social economy in a good order to be effective, policy makers will need to be position to complement traditional approaches to informed by research conducted within and outside building Canada's social landscape. In times of governments, as well as by the existing knowledge increased complexity and diversity, it is commu- available locally, regionally and nationally - thus nity innovation, creativity and the mobilisation enabling them to determine what is working well of resources at community levels that are acting and why, and what gaps still exist. as the key drivers of sustainable social change. I welcome this publication from the Policy Research In recognition of the social economy’s contribution Initiative. I have no doubt that it will offer added- to Canada’s communities, the Government of Canada value to the identification and development of poli- committed to making the social economy a key part cies and programs needed to support the social of Canada's social policy tool kit in Budget 2004. economy. I encourage the research community to Federal efforts to achieve this objective are explicit continue to apply its expertise and develop refer- in the social economy initiatives with new funding ences that will guide all stakeholders in harnessing allocated for capacity building, financing and civic and entrepreneurial knowledge and energy for research. A commitment was also made to improv- community benefit. ing the access of social enterprises to government The Honourable Eleni Bakopanos, P.C., M.P. programs and services for small and medium-sized Parliamentary Secretary to the enterprises (SMEs). Minister of Social Development with special emphasis on Social Economy I A Guide for Policy Research HIGHLIGHTS • This guide provides background on the social • Governments should facilitate the formation of economy, identifies research issues whose exami- organizations that advance shared common inter- nation would support the development of policies est and public service objectives. Whether govern- and programs, provides suggestions for how this ments should provide funding to any organization research might be conducted, and points to some depends on its public interest objectives and its useful information sources. ability to advance those objectives efficiently and • Social economy enterprises (SEEs) are organi- effectively. Before funding organizations, govern- zations democratically governed by their members ments should examine supporting intended benefi- or the stakeholders they serve that use a combi- ciaries directly as an alternative or complement. nation of market (sales revenue and paid labour) •To help governments to better support the social and non-market (government funding, private economy and SEEs to operate more effectively, philanthropy, and volunteer labour) resources researchers could usefully explore issues in each to produce and deliver goods and services in of five areas: the marketplace based on a combination of • descriptive research and data development; the common interests of members and concern • regulatory frameworks; about the well-being of others. They are citizen- • when and how governments should fund the led, community-based organizations that deliver social economy; goods and services locally, sometimes as part of • tools for measuring the impact of SEEs; and a network of similar organizations, sometimes • best practices for governments and SEEs. with the help of other organizations that provide • Researchers have a key role to play in informing financial, strategic, and technical support. the development of new policies and programs by • Social economy enterprises account for around governments, and in identifying and sharing effec- two and a half percent of Canadian gross domestic tive practices across the social economy. product (GDP). II What We Need to Know About the Social Economy 1. INTRODUCTION The social economy is a fairly new label for a diverse research. It provides background on the social econ- and evolving combination of non-governmental omy, identifies research issues whose examination organizations (NGOs) that have been producing and would support the development of policy; provides delivering goods and services in communities across some suggestions for how this research might be con- Canada and around the world for over a century. ducted, and points to helpful information sources. These organizations are different from for-profit Section 2 examines the scope of the social economy businesses in that they involve a diverse collection in Canada. It provides definitions and highlights from of stakeholders in decisions and reinvest any profits descriptive research carried out to date. to advance the mission of the organization, instead of disbursing them to owners/shareholders. Organi- It is apparent that views on whether and how to sup- zational missions are based on a combination of port the social economy depend to some extent on common interest and public service objectives. the perspective adopted concerning the role of gov- ernment. Section 3 applies welfare economics prin- The social economy has received considerable atten- ciples and research findings to identify some broad tion by governments over the past 10 to 15 years, observations regarding the contribution the social notably in Europe and Quebec. Interest has increased economy can make to well-being. in Ottawa more recently, as demonstrated, for exam- ple, in the 2004 federal budget, which announced Section 4 provides an overview of efforts made in that SEEs would be provided with access to existing many jurisdictions since the early 1990s to examine small business programs, along with new funding for and support the social economy. financing and strategic planning and capacity building While perspectives on the role of government vary, by community economic development organizations. there was considerable agreement at the PRI-SSHRC The budget also announced that the Social Sciences roundtable concerning
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