The social economy: a tool for transformation

The social economy is made up of organisations whose economic and business activity puts people and purpose before capital. This system materialises as democratic, transparent, participatory management where decisions are made according to contribution to the work, service or activity carried out, rather than contribution of capital.

Social economy businesses measure their results in terms of the work done, in accordance with the organisation’s purpose. This type of structure carries with it a series of inherent values – equal opportunities, social cohesion, integration of people at risk of exclusion, stable employment, work-life balance, sustainability – which put the common good ahead of individual good, or on the same level, which is crucial for this business model to flourish.

Many care services currently present in the offering of social services originate from charities, many of which were originally religious; from initiatives led by society itself (parents’ groups, neighbourhood groups, groups resulting from associations); and from entities born from situations of vulnerability that come together to respond to certain unresolved circumstances in a neighbourhood, village, or a specific area. The social economy has always strived to provide solutions to needs, by designing projects and seeking resources of all kinds to fulfil them. It has also called upon the public administration to act, to provide subsidies, and to involve the social economy in social policies.

But in 2006, a significant change took place in the care service sector: laws that universalised care services were introduced. This was a turning point, where profit-seeking private operations burst onto the scene, seeing a huge business and growth opportunity. Companies that traditionally worked in sectors like construction made the move to care services. This presence of private companies has pushed out many of the organisations that provided the services added to the offering of social services in the nineties, which are now put out to tender by the various administrations through public procurement. We have seen many of the cooperatives that emerged with the assistance and support of councils be left behind in bidding processes and lose public tenders. And a lot of them have ended up disappearing. This phenomenon has been starkest for cooperatives that offer home care services.

Innovation: the key to transformation

The tender system, which entails contracts with a rather limited duration, has a negative impact in various ways, including on the training of workers, the incorporation of change, and above all, innovation. Disruptive innovation – which aims to help a product or service take a significant leap forward and go further, with transformative, non-incremental change – takes time. The design phase, creation of a minimum viable product (MVP), tests, result validation, adjustment and improvement of the MVP, and market launch are time-consuming, and the more disruptive the innovation, the more time is needed. Innovation is the key to transformation, and it must be accompanied by political and social action that drives it, supports it and does not create any obstacles.

We have arrived at a moment where changes must be made to our care model. There are needs that will only grow and become more urgent over the next few years, in terms of elderly people, children in a vulnerable situation, the migrant population, homeless people, etc. The transformation challenges we face are significant. For instance, an increasing number of elderly people will need assistance, and we will require more and more public and private resources to fulfil this need. More public money will be needed to maintain our current welfare level and families will have to spend more to deal with the needs currently neglected that are unlikely to be covered fully by the public administration in the future. We are living for longer, and we want to keep living at home, so domiciliary care services (DCS) will require more financial resources.

This is our first big challenge, the first big transformation that must take place: we must adapt the services we provide with the technology currently available and that to come in the future in order to reach more people, and reach them better. The social economy has a long tradition of transformation, and one of its main characteristics is that it is not for profit; instead, it reinvests any surplus money it makes. This is why social economy organisations are different from other companies, which, as well as providing a service, aim to pay shareholders and owners. By reinvesting profits, cooperatives allocate financial resources to training. Investment in learning is one of the key elements of innovation and, therefore, transformation. Managing care services through the social economy gives public policies consistency, as they must always ensure the maximum social return on every public euro invested.

The conditions in which many of these organisations emerged as social economy businesses, with very little initial investment, mean that the people involved have always been highly creative. They have had to be, to provide an optimal solution with very few resources. And they have done so with creation and thought processes and constant innovation, in order to find solutions to problems. They have creativity in their DNA.

Participating to be able to decide

Another key element is participation in decision-making, both day to day in the workplace, and regarding broader strategy for the entity. When you participate, you become part of the organisation, and your involvement and responsibility increase. Participation is inextricably linked with decision-making. There is no point consulting people or getting them to participate if someone else then makes the final decisions. To participate is to have the power to decide. In the social economy, the people who take part play a key role in making decisions.

On another note, it is also highly important to empower the people affected by the services, and to provide information and tools so that decisions can be made as close to them as possible. Everything they can decide, they must decide; we professionals must therefore take care never to remove the power to decide from the people we serve in any circumstances, even for protocol, practicality or efficiency reasons. As professionals, we must never forget this ability to empower people. To put people in the centre of things, the dynamics that allow this must be implemented.

Social cooperatives, among other organisations, bear these characteristics, and that makes them an element for transformation. In fact, many of their articles of association name social transformation as a purpose, which means this is why they were created and constituted.

The major challenge for the future is to find new paths for collaboration between the public sector and the social economy so that progress can be made along the lines we have described here, probably with new legal formulas. Other sectors have already seen interesting experiences of service provider cooperatives made up of three parties: the people receiving the services, the public administration and a managing body. This is the kind of model we professionals would like to promote.

So, how about it? Shall we transform things?

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