The role and significance of the Social Economy in

society
The report gives an account of research findings and
experiences, which serve to illustrate the importance to society
of Social Economy activities.

Owing to the lack of statistical data in this field it is difficult

to grasp the scope of the Social Economy in Sweden. In all
probability there are at least 200 0000 Swedish cooperatives,
mutual societies, associations, foundations and similar groups

active in a broad range of areas. Approximately 150 000 of
these are non-profit associations. These organisations employ
close to 200 000 people, and annual turnover amounts to at
least SEK 120 billion.

Associations, cooperatives, foundations and similar

organisations are increasingly in evidence in the care sector,
schools, social services and the recreational and cultural
communities. There seems to be growing interest in utilising
and emulating the organisational forms associated with the
Social Economy concept, both in the framework of various
employment and industrial policy measures and in the delivery
of services to the public.

The working group highlights the ongoing public debate

about the importance of local citizens’ groups for the
development of democracy.

It also notes that organisations in this sphere perhaps offer

special opportunities for persons who are unable to find
employment in other ways or who otherwise would not be
inclined to start their own company. Research into the
emergence of local development groups indicates that the
Social Economy could have great potential when it comes to
maintaining, strengthening or revitalising functioning local
communities, which in turn enhances opportunities for local
enterprise and jobs.

The Social Economy

– a third sector for prosperity,

democracy and growth?

In its report The Social Economy – a third sector
for prosperity, democracy and growth? the
working group proposes the following Swedish
definition: “The concept Social Economy refers
to organised activities which primarily aim at
serving the community, are being built on
democratic values, and are organisationally
independent of the public sector. These social
and economic activities are run mainly by
associations, cooperatives, foundations and
similar groups. The main driving force of the
Social Economy is the benefit of the public or
the members of a particular association, and not
the profit motive.”

Social Economy was adopted as an official

EU term 1989. Sweden has primarily used the
term with reference to the Community’s structural
funds. More recently it has been used in
connection with comprehensive employment and
regional policy measures.

In November 1997, the Swedish Government

decided to appoint the Working Group on the
Social Economy and its Development. This was
assigned the task of “reviewing the conditions
under which the Social Economy operates and
demonstrating its importance for society.” The
working group, which has been in operation
from March 1998 to December 1999, was made
up of public officials from five ministries, special
advisers and experts.

The working group was instructed to study

three areas.

•

The relationship between the Social Economy

and the public sector.

•

Financial support to the Social Economy from

the Swedish Government and the EU.

•

Legislation and economic conditions that may

have an impact on the Social Economy.

The working group was also instructed to

highlight such issues as employment, the deli-
very of services, education and research and rural
development.

The working group has submitted the

following reports (Published in Swedish only.
Titles translated here):

•

The Social Economy in the EU member state

Sweden – tradition and renewal in one

concept (Ministerial Communication
1998:48),

•

The Social Economy – a third sector for pros-

perity, democracy and growth? with a separate
appendix section. Can be ordered from Fakta

Info Direkt, telephone: [phone] or
accessed on www.kultur.regeringen.se

•

Social Economy in practice – 19 examples can

be ordered from the Ministry of Culture,
telephone: [phone].

What is Social Economy?

The Social Economy plays a vital role in the
development of society, and its significance is
likely to grow in the future. This is one of the
conclusions contained in the report The Social
Economy – a third sector for prosperity,
democracy and growth? published by a working
group at the Ministry of Culture. The report
describes activities run by associations,
cooperatives, mutual societies, foundations
and similar groups and their importance for the
Swedish community at large. It also contains a
survey of the conditions under which these
organisations operate.

F A C T S H E E T

Ministry of Culture, Sweden

April 2000

Of the 40 000 organisations in the Social Economy that are

registered as enterprises, more than half have no permanent
staff. This illustrates the fundamental importance of voluntary
work in the operations in question. The share of the popula-
tion involved in voluntary work for clubs and associations rose
during the 1990s, amounting to some three million people.

Research would indicate that so-called social capital is of

crucial importance for the workings of business, the political
community and public administration. According to research-
ers, the most important sources of social capital are clubs,
cooperatives, self-help organisations, small enterprise networks
and local political groups.

An interesting observation made by the working group is

that both the public and the private business sectors would
seem to be organising and running operations on the basis of
ideas that are very similar to the fundamental concepts of the
Social Economy. The point of departure is people’s need for
participation, intelligible and comprehensible contexts, a sense
of community, dialogue and empowerment.

The report contains a list of Swedish networks and other

groups of organisations with links to the Social Economy
which have been set up in the last few years.

Characteristics of Social Economy
The working group particularly emphasises a number of items
which are of fundamental importance when discussing the
characteristics of the Social Economy. These include the
prevailing division of society into a public and a private sphere,
attitudes to voluntary work as opposed to remunerated
employment, the concepts of profit and surplus, the view of
entrepreneurship, competition and competitive neutrality,
public benefit and favourable legislation. Other issues of
relevance include how to enhance the visibility of the Social
Economy and how to describe, examine and assess various
activities. An area of particular relevance is the relationship
between the Social Economy and the public sector with regard
to the granting of subsidies and procurement, as well as
organisational cultures and integrity.

The report’s proposals
An in-depth study of the conditions under which the Social
Economy operates should be undertaken and discussions of
the principles involved launched. It is important that these
questions should as far as possible be addressed in a single
context, bearing in mind that we are discussing a third sector
with its own unique characteristics. These include:

•

Regulatory framework and implementation within the
social insurance and social allowance systems.

•

The difficulties encountered by small associations,
cooperatives and similar organisations when they seek to
comply with labour legislation.

European conference in Sweden in 2001
On 7–9 June 2001 the Seventh European Conference on
Social Economy is due to take place in Gävle. The
conference is being arranged by the Swedish Government in
cooperation with Swedish and European Social Economy
organisations. The work and publications of the ministe-
rial working group will form one point of departure for the
conference.

•

Issues relating to the granting of subsidies and to
procurement procedures.

•

Organisations’ opportunities to fund operations
themselves.

•

The application of tax legislation in relation to voluntary
organisations.

•

The Social Economy in official statistics.

•

Demarcation of research connected to the Third Sector and
the Social Economy.

•

Opportunities for letting the Social Economy supplement
public services.

•

A Swedish EU strategy for the Social Economy.

The working group also proposes that the following initiatives
should be mounted with a view to improving conditions for
Social Economy and its development:

•

A special forum for Social Economy organisations popular
movements should be set up in order to facilitate a
continuous dialogue between the Government and the
relevant organisations.

•

A survey of the legal situation of voluntary associations.

•

Common principles for government subsidies to all
categories of popular movements and associations should
be drawn up. These should clarify the purpose of such
grants and make it easier to assess their impact.

•

Changes in five areas to facilitate for the Social Economy to
receive allocations from the EU structural funds:
participation in partnership arrangements, payment of
project funding, support at the pre-project stage, small-scale
grants and voluntary work as an element of national co-
financing.

•

Consider some form of official control mechanism and
supervision of fund-raising activities based on a review of
the problems caused by more dubious fund-raising
operations.

•

Cooperation between the relevant Swedish ministries with
regard to associations, cooperatives, foundations and
similar organisations in the context of Social Economy
through a permanent working group.

All inquiries about content should be directed to Desk officer Curt-Olof Mann, tel [phone]

• Additional copies of the fact sheet can be ordered

from the Ministry of Culture, tel [phone]

• The Government’s web site: www.regeringen.se • E-mail to the Government: [e-mail]

Fact sheet produced by the Ministry of Culture

• Printing by the Printing Works of the Government Offices, Stockholm, Sweden, April 2000 • Article no.

Ku 2000.009