“An economy that works for people…”

Thanks to capitalism’s approach to the economy, the last several decades have witnessed an increase in human trafficking for the purpose of labour exploitation, climate change, environmental degradation, and rising income inequalities; all in the pursuit of profit. Evidently, there has been a pressing need for a new approach to the economy, “an economy that works for the people”, and not against the people. With that in mind, the European Union’s Action Plan for the Social Economy has been widely welcomed and celebrated. Built upon the success of other EU initiatives such as the 2011 Social Business Initiative, and the 2016 Start-up and Scale-up Initiative, the new Action Plan triumphs a step in the right direction for the people and the planet. However, what exactly is the social economy and its entities, and how exactly can the Action Plan help boost it?

The social economy refers to a spectrum of organizations (including non-governmental organizations and charities), businesses, cooperatives, social enterprises, foundations, and mutual benefit societies. It makes up 6.3% of the workforce, supports 13 million jobs, and consists of 2.8 million organizations in Europe alone. The social economy bears incredible importance today as its entities share common values and outlooks. Firstly, a “people first, profit second” approach lies at its foundations. Secondly, profits are typically reinvested back into these organizations, or into the social and environmental challenges that they are striving to remedy. Sectors that these organizations and businesses operate in can range from social housing and healthcare to environmentalism and social justice. Thirdly, the social economy incorporates a form of democratic governance, built upon the concept of solidarity and participation. As such, ensuring that this economy is well supported is fundamental and beneficial for not only the entities themselves but for every individual and community in Europe today.

It is evident, however, that over the last several years the social economy has lacked access to markets and finances, and it has neither gained the recognition nor visibility that it deserves. This means that many of these organizations, including NGOs, have been limited in their ability to flourish and make a real societal impact. So, in saying that, how does the Action Plan aim to rectify this and support these entities? Ultimately, the Action Plan will seek to “enhance social investment, support social economy actors and social enterprises to start-up, scale-up, innovate and create jobs and this will be done through three main objectives:

  1. Creating the right conditions for the social economy to thrive
  2. Opening opportunities for social economy organizations to start-up and scale-up
  3. Making sure the social economy and its potential are recognized


The Action Plan with luck should hopefully lead to a great deal of change for social economy organizations, including NGOs across Europe. According to the European Commission, “social economy organizations create and retain quality jobs, and contribute to social and labour market inclusion”. If new job opportunity avenues within the sector can be established, it would lead to lower levels of poverty and higher levels of social inclusion, for all groups in European society. This will help aid poverty and development-focused NGOs in their mission to make the world a more fair, just, and equal place. Inclusion in these respects will particularly help disadvantaged groups such as migrants, refugees, Roma, and people with disabilities “become a productive member of the European society and local community”.

Moreover, greater recognition and understanding of the social economy should not only increase the reach and scope of the NGO sector but should also attract funding and donations from social investors and public authorities. This increase in funding is crucial for NGOs, as capital shortfalls regularly hinder their capacity to work. Not only this but recognizing the societal impact of the NGO sector, will further increase access to crucial resources needed to sustain their activities.

In conclusion, the European Union’s Action Plan for the Social Economy is a steppingstone for NGOs and the wider public, as it gives hope to millions that real societal and environmental progress can be made, particularly regarding the 2030 sustainable development goals (SDGs). By tapping into economic and employment opportunities, increasing recognition, and developing the right legal and policy frameworks, the social economy and NGOs will become more robust and unyielding in their operations. As such ensuring the coordination and implementation of the Action Plan should be a priority for both civil society and member states.