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What is the social economy?

In the project, social economy organisations/enterprises are considered to be those that:

  • give priority to people over capital. (Capital is a means and not an end) 
  • aim to serve their members or the community as a whole, instead of striving for financial profit alone
  • are catalytic organizations for employment creation and/or self-employment
  • are neither private businesses nor public agencies
  • are market and trading oriented
  • have democratic governance, where decision making process involves users, workers and beneficiaries
  • are based on principles such as: participatory governance, solidarity and caring for human resources, sustainability of natural resources, individual and collective responsibility and accountability for outcomes
  • use profits to further the social aims of the enterprise for sustainable development and for the common good.

It is sometimes known as the solidarity economy or the economy for common good. It includes the  parts of the not-for-profit sector which involve trading, such as social enterprises and co-operatives.

See examples at the bottom of the diagram below (Pearce 2003)

 Social economy diagram