The Social Economy
 a third sector for prosperity,
F ACT SHEET
democracy and growth? Ministry of Culture, Sweden
April 2000
The Social Economy plays a vital role in the active in a broad range of areas. Approximately 150 000 of
these are non-profit associations. These organisations employ
development of society, and its significance is
close to 200 000 people, and annual turnover amounts to at
likely to grow in the future. This is one of the
least SEK 120 billion.
conclusions contained in the report The Social
Associations, cooperatives, foundations and similar
Economy  a third sector for prosperity,
organisations are increasingly in evidence in the care sector,
democracy and growth? published by a working
schools, social services and the recreational and cultural
group at the Ministry of Culture. The report
communities. There seems to be growing interest in utilising
describes activities run by associations,
and emulating the organisational forms associated with the
cooperatives, mutual societies, foundations
Social Economy concept, both in the framework of various
and similar groups and their importance for the
employment and industrial policy measures and in the delivery
Swedish community at large. It also contains a
of services to the public.
survey of the conditions under which these
The working group highlights the ongoing public debate
organisations operate.
about the importance of local citizens groups for the
development of democracy.
The role and significance of the Social Economy in It also notes that organisations in this sphere perhaps offer
society
special opportunities for persons who are unable to find
The report gives an account of research findings and
employment in other ways or who otherwise would not be
experiences, which serve to illustrate the importance to society
inclined to start their own company. Research into the
of Social Economy activities.
emergence of local development groups indicates that the
Owing to the lack of statistical data in this field it is difficult
Social Economy could have great potential when it comes to
to grasp the scope of the Social Economy in Sweden. In all
maintaining, strengthening or revitalising functioning local
probability there are at least 200 0000 Swedish cooperatives,
communities, which in turn enhances opportunities for local
mutual societies, associations, foundations and similar groups
enterprise and jobs.
What is Social Economy?
In its report The Social Economy  a third sector In November 1997, the Swedish Government The working group was also instructed to
for prosperity, democracy and growth? the decided to appoint the Working Group on the highlight such issues as employment, the deli-
working group proposes the following Swedish Social Economy and its Development. This was very of services, education and research and rural
definition:  The concept Social Economy refers assigned the task of  reviewing the conditions development.
to organised activities which primarily aim at under which the Social Economy operates and The working group has submitted the
serving the community, are being built on demonstrating its importance for society. The following reports (Published in Swedish only.
democratic values, and are organisationally working group, which has been in operation Titles translated here):
independent of the public sector. These social from March 1998 to December 1999, was made
The Social Economy in the EU member state
and economic activities are run mainly by up of public officials from five ministries, special
Sweden  tradition and renewal in one
concept (Ministerial Communication
associations, cooperatives, foundations and advisers and experts.
1998:48),
similar groups. The main driving force of the The working group was instructed to study
The Social Economy  a third sector for pros-
Social Economy is the benefit of the public or three areas.
perity, democracy and growth? with a separate
the members of a particular association, and not
The relationship between the Social Economy
appendix section. Can be ordered from Fakta
the profit motive.
and the public sector.
Info Direkt, telephone: [phone] or
Social Economy was adopted as an official
Financial support to the Social Economy from
accessed on www.kultur.regeringen.se
EU term 1989. Sweden has primarily used the
the Swedish Government and the EU.
Social Economy in practice  19 examples can
term with reference to the Community s structural
Legislation and economic conditions that may
be ordered from the Ministry of Culture,
funds. More recently it has been used in
have an impact on the Social Economy. telephone: [phone].
connection with comprehensive employment and
regional policy measures.
" Issues relating to the granting of subsidies and to
Of the 40 000 organisations in the Social Economy that are procurement procedures.
registered as enterprises, more than half have no permanent
" Organisations opportunities to fund operations
staff. This illustrates the fundamental importance of voluntary
themselves.
work in the operations in question. The share of the popula-
" The application of tax legislation in relation to voluntary
tion involved in voluntary work for clubs and associations rose
organisations.
during the 1990s, amounting to some three million people.
Research would indicate that so-called social capital is of
" The Social Economy in official statistics.
crucial importance for the workings of business, the political
community and public administration. According to research- " Demarcation of research connected to the Third Sector and
the Social Economy.
ers, the most important sources of social capital are clubs,
cooperatives, self-help organisations, small enterprise networks
" Opportunities for letting the Social Economy supplement
and local political groups.
public services.
An interesting observation made by the working group is
" A Swedish EU strategy for the Social Economy.
that both the public and the private business sectors would
seem to be organising and running operations on the basis of
The working group also proposes that the following initiatives
ideas that are very similar to the fundamental concepts of the
should be mounted with a view to improving conditions for
Social Economy. The point of departure is people s need for
Social Economy and its development:
participation, intelligible and comprehensible contexts, a sense
of community, dialogue and empowerment.
The report contains a list of Swedish networks and other
" A special forum for Social Economy organisations popular
groups of organisations with links to the Social Economy
movements should be set up in order to facilitate a
which have been set up in the last few years.
continuous dialogue between the Government and the
relevant organisations.
Characteristics of Social Economy
The working group particularly emphasises a number of items
" A survey of the legal situation of voluntary associations.
which are of fundamental importance when discussing the
" Common principles for government subsidies to all
characteristics of the Social Economy. These include the
categories of popular movements and associations should
prevailing division of society into a public and a private sphere,
be drawn up. These should clarify the purpose of such
attitudes to voluntary work as opposed to remunerated
grants and make it easier to assess their impact.
employment, the concepts of profit and surplus, the view of
entrepreneurship, competition and competitive neutrality,
" Changes in five areas to facilitate for the Social Economy to
public benefit and favourable legislation. Other issues of
receive allocations from the EU structural funds:
relevance include how to enhance the visibility of the Social
participation in partnership arrangements, payment of
Economy and how to describe, examine and assess various
project funding, support at the pre-project stage, small-scale
activities. An area of particular relevance is the relationship
grants and voluntary work as an element of national co-
between the Social Economy and the public sector with regard
financing.
to the granting of subsidies and procurement, as well as
" Consider some form of official control mechanism and
organisational cultures and integrity.
supervision of fund-raising activities based on a review of
the problems caused by more dubious fund-raising
The report s proposals
operations.
An in-depth study of the conditions under which the Social
Economy operates should be undertaken and discussions of
" Cooperation between the relevant Swedish ministries with
the principles involved launched. It is important that these
regard to associations, cooperatives, foundations and
questions should as far as possible be addressed in a single
similar organisations in the context of Social Economy
context, bearing in mind that we are discussing a third sector
through a permanent working group.
with its own unique characteristics. These include:
European conference in Sweden in 2001
On 7 9 June 2001 the Seventh European Conference on
" Regulatory framework and implementation within the
Social Economy is due to take place in Gävle. The
social insurance and social allowance systems.
conference is being arranged by the Swedish Government in
" The difficulties encountered by small associations, cooperation with Swedish and European Social Economy
cooperatives and similar organisations when they seek to organisations. The work and publications of the ministe-
comply with labour legislation. rial working group will form one point of departure for the
conference.
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