The Contribution of the Social and Solidarity Economy and Social Finance to the Future of Work

with Youssef Alaoui Solaimani, Eric Bidet, Huynsik Eum, Aminata Tooli Fall, Benjamin Quiñones and Mirta Vuotto

The world of work is nowadays characterized by changes beyond the direct control of workers and entrepreneurs but directly affecting them by modifying their positions and experiences (e.g. delocalization of activities, unpredictable decisions on investment patterns, workers and economic activities stuck in informality, lack of means and know-how to develop starting business into growth- oriented business, race to the bottom of product prices making quality products obsolete, vulnerable groups rendered obsolete by technology; isolation and fragmentation of workers’ groups, degradation of work in terms of meaningfulness, health and conditions).

This study aims to provide insights on how the Social and Solidarity Economy (SSE) is contributing to the future of work. Social and Solidarity Economy refers to enterprises and organizations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity. (ILO, 2009; Develtere & Defourny, 2008). The main research question is the following: “how do Social and Solidarity Economy Organizations (SSEOs) contribute in an innovative way to addressing the challenges of the changing world of work?”. This overall research question has been addressed through specific sub-questions related to the four major domains of changes in the world of work such as identified by the ILO (ILO, 2015): work and society ; decent jobs for all, organisation of work and production and governance of work.

This research is based on twelve original cases-studies on SSE organisations and social finance mechanisms (initiated between 1934 and 2014) carried out in nine countries (Argentina, Belgium, France, Morocco, Senegal, Switzerland, the Netherlands, the Philippines and the Republic of Korea). Case-studies are based on documentation reviews and on primary data collection. Data from case the studies have been complemented by a literature study on SSE addressing work-related issues.

This research does not claim to reflect all the dynamics, sectors and actors that are part of the SSE, nor the weaknesses and challenges the SSE is facing. The selected cases do reflect the diversity of SSEOs in terms of actors involved, sectors of activity and organizational forms as well as positioning and vision on economy, societal issues and power relations. The research shows how SSE organisations and enterprises respond to current global challenges, thereby contributing to a more inclusive world of work based on social justice, meaningfulness and sustainability.

The following paragraphs summarises the main findings of the study.

(Re)embedding economic activities in local social systems. The SSE is clearly an organizational form chosen by economic actors seeking to preserve and develop modes of production that people are attached to: family farming, proximity services, traditional and/or environment-friendly methods of production. The study shows that this choice is mainly driven by the will to stabilize and increase the income generated by these activities and to contribute to transcending issues, such as reversing the rural exodus, empowering women, and respecting the natural environment. The SSE allows economic actors to maintain and develop local economic activities in their own social context, making them less vulnerable and more able to contribute to regional development. This also contributes to the need and opportunity to (re)embed economic activities in local social systems, for example, through a complementary currency favouring local economic exchanges and sustainability of production chains.

Organizing economic actors and facilitating transition to a more formalized social status. The SSE offers opportunities to create stable institutional structures by or for informal/vulnerable workers or small-scale businesses. Cooperative platforms in particular make entrepreneurship more attractive,support economic development (through networking, joint marketing or commercialization services) and secure social status and access to social protection. By doing so, the SSE responds in a constructive way to changes in the labour market (e.g., functions formerly occupied by employees outsourced to external service providers) while meeting the needs of some workers or entrepreneurs wishing to network with others (mutualization services) and requiring support for the management of their businesses. In LICs and MICs, the SSE also clearly contributes to facilitating the transition from the informal to the formal economy both by offering opportunities to secure economic activities and social status (through collective forms of entrepreneurship) and by providing or facilitating access to social protection schemes.

Participatory governance and renewed social dialogue. Alternative decision-making models are currently challenging the classic governance and social dialogue models. As the SSE tends to be riding this wave, participatory governance comes as one of its core characteristics. Participatory governance in SSE can take diverse forms. While self-management may not be suitable to all enterprises or all workers’ aspirations, the study show that this governance form have been chosen by several SSE organisations to mark their ability to own and manage economic structures and to distance themselves from hierarchical modes perceived as counterproductive (generating stress and lack of motivation) and hindering the provision of quality services (lack of autonomy, disrupted information channels). Under certain conditions, participatory governance increases the efficacy and quality of services provided by enhancing cohesion and teamwork, or inducing more equity among workers (including in terms of wages and working conditions). However, participatory governance is not always sufficient to address all the issues related to the subordination of workers: the study also shows that participatory governance and self-management do not as such exclude social dialogue but rather force the stakeholders to look for innovative forms of social dialogue.

Searching for sustainable economic performance while focusing on social purposes. Several SSEOs studied show a development and an economic performance allowing them to be financially autonomous and presenting guarantees of durability. These results are often achieved by identifying the type of services or goods to be provided to members, the community and/or the clientele by making the right choices in line with SSE principles and the capacities of the actors involved. Other SSE enterprises have more difficulty in achieving performance levels that match their ambitions, particularly in terms of employment. Such situations are often explained by the history of the origin of these enterprises (as in the case of bought-out enterprises) and by the abilities present or absent among the workers (especially on marketing issues).

Finding meaningfulness in work. The study reveals a high degree of satisfaction related to working conditions and the feeling of working for meaningful purposes, particularly in comparison with similar functions they used to occupy in conventional private or public structures. This meaningfulness can take on many forms: reinforcing the solidarity of society by facilitating access to health services for all (including the most vulnerable, such as elderly people), self-determination and concertation, better balance between work and private life, support for vulnerable groups focusing on self-reliance, personal aspirations and dreams, environmental sustainability. From an managerial perspective, this meaningfulness it is the fruit of efforts in terms of making financial models possible and sustainable, finding the right balance between societal engagement and working conditions, but also through the implementation of practical tools allowing the SSE to be effective and efficient at individual and collective levels.

Foreshadowing the network society. SSEOs do not operate on isolated islands. They have market relations with private (conventional) for-profit enterprises and they act according to public policy frameworks. The increasing number of partnerships among diverse types of organizations allows for de-compartmentalization and interaction (and possibly convergence) among actors with different logics of action and organizational cultures. In HICs in particular, the SSE shows that tailor-made support services and a favourable environment (created through partnerships between public and private actors) can make the difference, for example, in allowing vulnerable groups to make own vocational choices and start a career, or in facilitating crowdfunding of initiatives in the Global South through online platforms, as a way of making individual philanthropy more sustainable. In doing so, the SSE also continues a long tradition of being a laboratory of practices and ideas often percolating into both the public and the private for-profit sectors.

A policy instrument and a policy partner. The study also shows how a policy framework recognizing the added value of the SSE to employment and social welfare can create favourable conditions for the SSE to contribute to societal issues. In almost all countries covered by the study, public policies including SSE are closely linked to employment opportunities, particularly for vulnerable groups: long- term unemployed people, people with disabilities, low-skilled workers, women, etc. In addition, specific forms of enterprises (worker cooperatives and social enterprises in particular) are encouraged by public policies to launch business initiatives where workers and other stakeholders (communities, beneficiaries) are involved in decision-making processes. When SSE enterprises are supported by government funding, this covers different situations: general utility services, support for the development of the SSE or difficulties faced by SSEOs, etc. Public policies are particularly effective when they are designed to allow the SSE to play effective and useful roles towards general interests while being recognized and supported in its particularities and its own logics. When, however, the SSE is reduced to a service provider function, it runs the risk of attracting a category of free riders (actors not operating according to the principles of the SSE but aiming to capture public markets) and of seeing SSE actors lose their particular character through having to balance their economic survival with their social objectives.

Common bonds through new finance models. Through crowdfunding, complementary currency, Social Impact Bonds, original financial models (like flat rates in health care) or even subsidies, the SSE is a major source of innovation as regards the financing of social policies. Besides providing core funding or additional resources to SSE businesses or individual entrepreneurs, such innovative financial models have in common that they bring together actors from diverse backgrounds, such as the SSE, social security systems, sectoral ministries, the banking sector and (individual or institutional) private investors. Here too, from the design to the evaluation of the mechanisms applied, these multi- actor configurations provide the opportunity to enter into dialogue around key societal issues: the causes and answers to societal problems, assessment of progress, levels and share of responsibilities and risks (individual and/or collective), the notion of benefits and return on investment, performance, profitability, ownership and governance. In periods of crisis and uncertainty, such multi-actor dialogue could provide benefit in finding new horizons for the fast-changing work landscape, as well as coping with the backlashes of these changes.

The study concludes that the SSE could both positively anticipate and react in a more protective way to the changing world of work. The SSE may in particular trigger economic and social actors to widen the range of approaches to wealth creation and innovation in order to respond to trends that are affecting the rights of entrepreneurs and workers and the sustainable development of societies. In environments both favourable and challenging, SSE proves to be a significant factor for the fast- changing world of work, either directly through their stakeholders, or indirectly through their impact on the societies in which people will work in the future. The study is concluded by some recommendations towards the ILO, the national governments and the SSE to strengthen the contribution of the SSE to the future of work.

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