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Grassroots response to the global crisis:


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Title: Grassroots response to the global crisis:

Grassroots response to the global crisis The
social economy Nancy Neamtan CERIUM Capitalism
in crisis July 2 2010
The social economy
  • Why?
  • What?
  • Where?
  • How?
  • Which way forward?- Enabling conditions
  • - The challenges

The social economy why?
  • A new development paradigm is emerging as the
    limits of traditional economic strategies become
  • Civil society is spearheading innovative
    approaches, combining market, state and voluntary
    resources to respond to needs of communities

The social economy why?
  • The models emerging are rooted in the need for
    sustainable development social and environmental
    concerns are embedded in the process of wealth
  • Governments are increasingly interested because
    of their growing incapacity to progress within
    traditional frameworks of market or direct
    government intervention

The social economy what?
  • A variety of terminologies to describe the new
    reality- social economy- solidarity economy-
    social enterprise- social innovation- community
    economic development- third sector- non-profit
    and cooperative sector- community enterprise-
    social entrepreneurship- collective
    entrepreneurship- sustainable development

The social economy what?
  • A variety of terminologies for a common
    realityCommunity-based enterprises (principally
    cooperatives, non-profits, mutuals) producing
    goods or services with a social and economic
  • Independent of the State
  • Democratic control and transparency
  • Primacy of people over capital
  • Distribution of surplus to members and/or the

The social economy what?
  • Quebec definition of the social economy
  • A collectively owner enterprise producing goods
    or services that has emerged from the community
    and has a social and economic mission.
    Independent of the State and democratically run,
    it depends both on individual and collective
    participation. Capital and money are viewed as
    tools to benefit the community or its members

The social economy what?
  • The social economy includes a wide variety of
    enterprises and organisations that produce goods
    and services with the expressed goal of
    maximising social, environmental or cultural
  • A broad definition of the social (solidarity)
    economy includes community economic development
    institutions, solidarity finance and other
    collectively owned economic instruments

The social economy what?
  • The social economy is used in some countries to
    describe the old or institutional cooperative,
    mutual and non-profit sector
  • The solidarity economy is used by the emerging
    social economy often in conflict with the
    established sector
  • A variety of relationships exist between the
    emerging and institutional components depending
    on the historical context (Latin America, Europe,
    North America, Africa)

The social economy what?
  • Some statistics
  • . Europe over 11 million paid employees in the
    social economy (6 of the working population)
  • Canada over 1 million paid employees in the
    non-profit sector

The social economy what?
  • The social economy as a plural economy
  • Our economy is not binary (public and private)
    it is plural
  • private public collective
  • A plural economy
  • . allows for choices between private, public or
    collective control of production and distribution
  • . avoids creating a hierarchy of forms
  • . recognises the specificity of each form of
  • . an economy with a market vs a market economy
  • .

The social economy where?
  • The social/solidarity economy is emerging as a
    global movement
  • National, regional, continental and
    inter-continental networks are building from the
    bottom up
  • Governments in many countries are developing
    policy initiatives
  • International institutions are tracking this
    growing phenomenon (OECD, ILO, PNUD)

The social economy where?
  • Europe
  • United Kingdom New Conservative government
    focuses on social enterprise to reduce the public
    sector, Social enterprise coalition, Social
    enterprise Unit within government, diverse
    policies (promotion,investment, procurement)
  • France social and solidarity economy embedded
    in regional structures, diverses policies
    (investment, procurement, networking, promotion)

The social economy where?
  • Europe
  • Belgium accent on social economy as a strategy
    for social inclusion
  • Italy (15,000 enterprises, 350,000 employees, 15
    billion in social cooperatives supported through
    positive procurement policies, accent on
    community services and social inclusion)
  • Spain strong historic presence in certain
    regions (Catalonia, Andalousia), strong networks,
    national and regional policy, Law on social
    economy (2010)

The social economy where?
  • Europe
  • Poland new movement of social co-operatives and
    non-profits supported by public policy (Act on
    Social Co-operatives 2006, Act on Public Benefit
    Activities and Voluntary Movement 2003,Act on
    social employment 2003)
  • Emerging interest in other eastern European

The social economy where?
  • Mondragon
  • A federation of worker cooperatives in the Basque
    region of Spain
  • First cooperative created in 1956 (paraffin
    factory,technical college)
  • 2008 93,000 member-workers, 256 cooperatives, 4
    sectors industry, finance. retail, knowledge
  • Innovative system that creates growth from within
    and responds to individual and collective needs

The social economy where?
  • Major breakthroughs in Latin America
  • Brazil strong civil society network, Solidarity
    Economy Secretariat, inter-ministerial support,
    involvement of a broad range of social movements,
    regional and municipal policies, new national
    policy initiatives (procurement, legal framework)
  • Bolivia, Venezuela emerging civil society
    networks and several major public policy
  • Argentina strong movement of worker owned
    factories (post-crisis), policy initiatives,
    emerging networks

The social economy where?
  • Latin America
  • Mexico national network, recognition by national
    government, legislative initiative in 2007
  • Ecuador new constitution adopted by referendum
    in 2008 establishes the primacy of the social and
    solidarity development model and recognizes the
    plurality of the economy (public, social,

The social economy where?
  • Brazil
  • Emerged from diverse social movements agrarian
    reform, factory takeovers, liberation theology,
    union movement
  • 22,000 solidarity economy enterprises (30
  • National Council on the solidarity economy
  • Brazilian Solidarity Economy Forum structured on
    a local, regional and national level
  • Networks within the Mercrosur for commercial
  • From fair trade controlled by the north to
    national fair trade standards concentrating on
    local or national markets

The social economy where?
  • Africa
  • Emergence of solidarity economy networks in
    several countries in west Africa and north Africa
  • New policy initiatives emerging in a few
    countries cooperative or broader social economy
  • Morocco major policy initiative to create
    employment and fight poverty
  • Increased support from NGOs and international
    bodies (PNUD)

The social economy where?
  • Africa
  • ILO conference in Johannesburg (October 2009)
  • Africas response to the global crisis The
    social economy
  • Action plan adopted by the ILO social economy as
    part of the decent work agenda, transition
    toward the formal economy

The social economy where?
  • Mali
  • 2800 functionning coops (82 agriculture), 118
    mutuals (health), 97 microfinance institutions,
    8200 associations
  • Social and solidarity economy identified as a
    development strategy by national government
  • A process of coproduction of new public policy
    with RENAPESS (National network for the promotion
    of the social and solidarity economy)

The social economy where?
  • Asia
  • Emerging practices with different vocabularies
  • Strong emphasis on micro-credit approaches
  • Social enterprise policy initiatives in South
  • Important cooperative initiatives in Japan
    (30,000 enterprises classified as social economy)

The social economy where?
  • Japan
  • Seikatsu Club started as a voluntary association
    in Tokyo in 1965 by 200 women who wanted to
    reform their lives and local communities as well
    as society
  • 2010 350,000 members, turnover 839 million US,
    accumulated funds 290 million US (
  • Original mission collective purchase of organic
  • Network of producers In return for asking
    farmers to use fewer chemicals, they purchase a
    contracted amount of produce and agree to
    overlook physical imperfections if they exist
    and to assist farmers in planting and
    harvesting when their labor is necessary
  • Created and owns a network of milk factories
  • Expanded to development of workers collectives,
    day service centers, and social welfare
    corporations (44869 users)

The social economy where?
  • United States
  • Long history of community economic development,
    community finance, worker ownership, non-profit
    sector involvement in community revitalisation
    (New Deal)
  • Long history of public policy to leverage private
    investment for social purpose (Community
    Reinvestment Act),
  • Creation of White House Office for social
    innovation, CDFI funding doubled, new legal
  • Historic agreement between US Steelworkers and
    Mondragon for the implantation of worker
    cooperatives in the manufacturing sector

The social economy in Quebec economic, social
and institutional perspectives
  • Social economy has been an integral part of the
    socioeconomic infrastructure for over a century
  • New impetus to its development in 1996 based on a
    new compromises between government, cooperative
    movement, labour movement, social movements at
    the Socio-Economic Summit

The Social Economy in QuebecMicro, Macro and
Meso (Institutional) Perspectives
  • Micro Perspective
  • The enterprises integration of social, economic,
    environmental objectiveswealth creation
    (production of goods and services) job creation,
    poverty reduction local/community development
    social profitability (social utility)
  • Macro Perspective
  • The social economy as a partner in social and
    economic developmentnot only as a sector based
    in civil society recognizes the social and
    economic value of citizen-based initiatives

Meso (Institutional) Perspective
  • Negotiation, collaboration and partnerships
  • Working across boundaries
  • Dialogue between stakeholders, including
  • Intermediary public space Chantier de léconomie
    sociale - horizontal, intersectoral network of
    networks - representation and development -
    democratic, distributed governance
    (inter-sectoral and multi-stakeholder board of
    directors regional poles)
  • Social innovation Co-design of innovative
    strategies for socio-economic transformation
    (plurality of market and non-market actors)

Social Economy in Québec
  • 7 822 enterprises (3 881 cooperatives and 3 941
    NPO)estimated in 2002 present in a variety of
    economic sectors
  • Services homecare services (7000 employees),
    parent-controlled daycare (35,000 employees),
    funeral cooperatives, health cooperatives,
    multiservice solidarity cooperatives,
  • Housing cooperative and non-prodit
  • Tourism and recreation fasting growing sector
  • Environment (waste management etc)
  • Alternative agriculture and forestry
  • Culture
  • Financial services 671 credit unions,
  • Worker cooperatives
  • Worker-shareholder cooperatives
  • Community real estate

Social Economy in Québec
  • Recognition as an integral part of the
    socio-economic infrastructure (1996)
  • Diverse sectoral and territorial policy
    initiatives or inclusion in broader policies
  • Government action plan for collective
    entrepeneurship 2008

Social Economy in Québec
  • Quebec government action plan (2008)
  • Response to the priorities defined at the Summit
    on the social and solidarity economy (November
  • an economic strategy based on a local and
    regional development perspective
  • 8 ministries engaged in specific actions in
    collaboration with social economy actors
  • Interministerial and intersectoral approaches
    coordinated by the Ministry of municipal affairs
    and regional development
  • The result of a process of co-construction

Social Economy in Québec
  • New financial instruments and products RISQ,
    Fiducie, Investissement Québec, FLI, Solides,
  • New alliances with municipal governments and
    social partners
  • Beginnings of push back from traditional private

Six series of measures were key to the
development of the social economy in Quebec,
particularly since 1996
  • Recognition of social economy actors as agents of
    socio-economic development and transformation
  • Networking of social economy actors
  • Chantier de léconomie sociale
  • Development of Collective Tools
  • Funding of the social economy- new financial
    architecture- Debt (RISQ) and equity
    (quasi-equity) instruments innovation -
    development of secondary markets (la Fiducie)
  • Training - CSMO (labour market) RISQ (finance)
  • Chantier (development of sectors and services to
    sectors communications strategies for sectors
    regions, etc.)
  • Multi-layered intersection of actors/development
    tools/ inter-sectoral innovation

Six series of measures were key to the
development of the social economy in Quebec,
particularly since 1996
  • Research - participatory and collaborative
  • ARUC en économie sociale - dissemination
    collective learning impact on public policy
    (federal, provincial and most recently,
  • Research networks (international) - CRISES,
    CIRIEC, EMES, ISTR, ARNOVA, ReCo, among others

Six series of measures were key to the
development of the social economy in Quebec,
particularly since 1996
  • Enabling institutional context
  • Fiscal
  • Legal
  • Institutional (regulatory)
  • Innovation in public policy shift from silo
    approach to horizontal policy making and
    co-construction of public policy including
    participation of stakeholders (codification of
    tacit knowledge)
  • Key moments - Quebec, 1996 Canada, 2004-
    Government of Quebec Action Plan for the Social
    Economy, 2008)
  • Recognition of the role of intermediaries
  • Reconfiguration of market, state and civil
    society relations
  • New social architecture debated at macro level
    based on realities of local initiatives
  • Citizen participation- new political spaces -

The Social Economy in QuebecAn Integrated System
of Social Innovation
The Social Economy Comparative advantages
  • Capacity to identify emerging needs (environment,
    personal services, culture, social services)
  • Capacity to respond to aspirations (youth,
    indigenous, social movements)
  • Durability higher survival rate than traditional
  • Financial and social return on investment
  • Wealth redistribution embedded in the process of
    wealth creation

The Social Economy Comparative advantages
  • Capacity to combine public, private and
    non-market (voluntary) resources
  • Builds social cohesion
  • Mobilizes untapped entrepreneurial capacities
    within social movements
  • Rooted in communities and contributes to local

The Social Economy Major contributions to
economic recovery
  • . Job creation
  • . Creation of new services
  • . Urban revitalisation
  • Rural development
  • Social integration
  • Sustainable development
  • Formalisation of the informal economy

The Social Economy Advantages for government
  • . Internalization of externalities a reduced
    commitment for government (but not the transfer
    of existing public services)
  • Multiplier effects of social economy activity
    (fiscal benefit)
  • Reduced transactions costs for policymakers

The Social Economy How to move forward
  • . The social economy is more than enterprise
    development it is a manifestation of new
    relations between the market, the public sector
    and civil society
  • . Requires new spaces for dialogue
    (intermediaries) and new forms of partnership
    between government and civil society

The Social Economy How to move forward
  • Enabling conditions
  • .Recognition and legitimacy social partners,
    public policy, not an economy for the poor but
    another form of economy
  • .New forms of governance within the enterprise,
    within networks, within relationships between
    civil society and government, within government
  • .

The Social Economy How to move forward
  • Access to capital
  • . Collective ownership and social mission creates
    barriers to access traditional capital markets
  • . New strategies are emerging to channel private
    captial for social purpose
  • . Encouraging results low loss rates. Reasonable
    financal returns, high social returns
  • . Regulatory environments can increase access to
    capital with positive impact on public finance
  • . Need for secondary markets

The Social Economy How to move forward
  • Research and development within new processes of
    knowledge creation (community-research
    partnerships, knowledge commons)
  • Need to better understand the dynamics of the
    emerging social economy
  • Investment in social innovation vs technological
  • Need for new tools of evaluation and measurement
  • New curricula in management, economics etc.

The Social Economy How to move forward
  • Policy innovation based on
  • . Recognition of social embeddedness of the
  • Economic activity with triple bottom line
  • Meets societal goals of well-being and
  • Contributes to a more responsible and responsive
  • Government engagement understood as investment in
    the social economy with high rates of social and
    economic return (vs. expenditure and/or subsidy

The Social Economy How to move forward
  • Policy innovation
  • . Vertical linkages between micro, meso and macro
    policy environments
  • . Horizontal linkages policy spaces for
    inter-sectoral dialogue and policy formulation
  • .Shift from output and target driven, short-term
  • Shift from needs-based (deficiency) to
    asset-based approach individuals/communities as
    sources of wealth generation

The Social Economy How to move forward
  • Policy innovation
  • . Shift from understanding social cohesion
    exclusively as a desirable output to its role as
    an input in socio-economic transformation
  • . Enabling legislation new legislation for
    NPOs, cooperatives, access to private capital,
  • . Knowledge mobilization including collaboration
    with international organizations

The Social Economy How to move forward
  • Policy innovation
  • . Shift from understanding social cohesion
    exclusively as a desirable output to its role as
    an input in socio-economic transformation
  • . Enabling legislation new legislation for
    NPOs, cooperatives, access to private capital,
  • . Knowledge mobilization including collaboration
    with international organizations

The Social Economy How to move forward
  • The key challenge
  • . The social economy as a component of economic
    and social transformation and as a contribution
    to a new model of development
  • OR
  • . The social economy as a strategy to reduce the
    negative impacts of (and thus reinforce) the
    existing model of development

The Social Economy How to move forward
  • To meet the challenge
  • . The role of civil society is fundamental
  • . The need to understand the social economy at a
    micro (enterprise), meso (policy and national
    environment) and macro (global transformative
    vision) level
  • .

The Social Economy How to move forward
  • In 2011, Quebec will host an important
    international event on the theme of public
    policy, partnerships and dialogue to support the
    social/solidarity economy
  • For more information
  • .

  • Thank you!