National concept for social economy

Experts in Bulgaria have developed a ‘national concept for social economy’, which they have submitted for adoption to the National Council for Tripartite Cooperation. The panel includes government representatives, social partners, NGO experts and academics and their goal is to meet the challenges of the Europe 2020 strategy. The document they have finalised contains a vision of what a social economy should look like and specific plans and mechanisms for achieving it.

Definition of a social economy

The social economy is seen both as part of the real economy and as part of civil society, in which individuals, volunteer associations or other organised entities conduct business in the public interest and reinvest profit to achieve social goals.

It occupies a specific space between the state, with its protection mechanisms, and the market, which is driven by economic efficiency and profit.

The social economy also serves as a tool for the development of social services, for integrating vulnerable groups into the labour market, for improving the way in which the social services system functions, for developing local economies and for combating poverty and social exclusion.

What the national concept hopes to achieve

The concept for social economy has the following specific objectives:

• to serve as a starting point for introducing criteria that can be used to identify companies and organisations in the social economy;

• to serve as the current ‘standard’, contributing to the development of the social economy and to stimulate its players and supporters to apply and spread the spirit of social solidarity;

• to serve as a basis for creating a favourable administrative and legal environment for the development of social economy enterprises by providing, for example, access to finance, social clauses in public procurement, and tax relief.

The concept envisages building a database of social companies in the Ministry of Labour and Social Policy. The state will avoid over-regulation and monitoring of those enterprises and organisations, so they can preserve their autonomy and some administrative and financial independence from government and the public sector.

In return, the state will require financial transparency from all social enterprises and organisations that have been awarded the brand ‘product of social enterprise’.

How financial support will be offered

Financial support to the social economy sector will be based on a variety of approaches, including:

• grant schemes for the creation and development of social enterprises and social platforms;

• tax relief – extending the existing provisions to social enterprises (more than 30 provisions exist for corporate businesses which could easily be implemented in this new sector)

• new tax relief provisions especially for social enterprises;

• state subsidies admissible under the so-called Block Exemption Regulations for State Aid;

• access to credit and social funds;

• defining additional specific criteria in favour of social economy enterprises when they participate in public procurement procedures;

• encouraging donations in favour of the social economy through tax relief for donors.

Significant opportunities for financial support of social enterprises also exist under the government’s operational programmes for ‘Human resource development’ and ‘Competitiveness’ for the periods 2007–2013 and 2014–2020.

Reaction of the social partners

The social partners participated actively in discussions on the national concept. They recognised the need to build up a sustainable social economy sector which, according to trade unions, will support the inclusion of disadvantaged groups into the labour market.

Trade unions expect a double effect; social, with a reduction in poverty and social exclusion, and economic, since the social economy will reduce the benefit burden and increase the quantity of goods produced and services provided.

According to employers, social enterprises will give a new face to small businesses, as the majority of these will be small and medium-sized enterprises that will occupy specific niches in the production of consumer goods and personal services.

Commentary

To make the most of the potential of social entrepreneurship, key factors in its success will be a favourable legislative and economic environment as well as well-trained, knowledgeable and skilled staff.

For now, specialised training is offered only at the St. Cyril and St. Methodius University in the town of Veliko Tarnovo, which in 2009 launched a bachelor’s degree on ‘Entrepreneurship in the social sphere’ and in 2010 approved a Master’s programme on social entrepreneurship.

To enhance the attractiveness of this type of training it is very important to update the list of professions and include that of ‘social entrepreneur’.

Lyuben Tomev, Institute for Social and Trade Union Research (ISTUR)