Business, Legal & Accounting Glossary
Social economy is a not-for-profit sector economy between government or public sector economy and business or private sector economy. The social economy includes organizations like charities, cooperatives, and non-governmental organizations.
Social economy can be broken into three sections: the social enterprise sector, the voluntary sector, and the community sector.
Social enterprise sector encompasses organizations that invest in fulfilling social objectives and do not engage in the activity of profit maximization for company owners and shareholders.
The voluntary sector includes self-governing organizations that are independent of any kind of government control. These organizations typically consist of volunteers and operate on a not-for-profit basis. Examples of voluntary sector involvement in the social economy include large community associations, housing associations, and large charities.
Community sector organizations are dependent on voluntary effort. People working in community sector organizations are generally not paid. Examples of community sector organizations include civic societies, neighbourhood watch, and small support groups.
All three sub-sectors of the social economy comprise of economic activities like pensions, financial transactions, trading, property occupation, and employment. A social economy develops because of a dire need to discover fresh answers to needs that were inadequately addressed by other private and public sectors.
Social economy organizations play a pivotal role in a country’s economy. These organizations assist the country’s government to accomplish policy objectives like socially inclusive wealth creation. Public services are made more efficient. Productivity and competitiveness can be increased. Social economy organizations help communities and individuals to improve their local neighbourhoods. An inclusive society is being created as a result.
Many countries officially recognize the need for a social economy. The governments of Latin American countries like Venezuela believe that policy of nationalizing large companies would help the poor. Wage labour is viewed as a generator of exploitation. The French government recognizes four families of social economy organizations: mutuals, foundations, associations, and cooperatives.
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This glossary post was last updated: 30th March, 2020 | 0 Views.