TAD Activities
Proceedings of Transnational Meetings
|
TAD ActivitiesProceedings of Transnational Meetings
|
Presented by Carmen Viorreta: at the Transnational Meeting in Cagliari, Sardegna 29th September 1998
Before presenting the topic of interest, it is necessary to define the concept of Social Economy since in spite of its growing importance in society today, it is a rather confusing it not unknown term.
By Social Economy we mean all economic activity of a private nature, based on the association of people in democratic and participative entities, where personal contributions are of greater importance than capital. The charter of Social Economy, dated 22 May 1982, defines enterprises of social economy as "those entities that do not belong to the public sector, are run and managed in a democratic way, whose members have equal rights, and that adhere to a special regime of property and distribution of profits whereby any surplus is reinvested in the growth of the entity and the improvement of services offered to its members and society at large". In summary, these are enterprises that arise on the market as a result of the protagonism of certain social groups with an aim to create wealth, generate work or offer solutions to social problems that the exclusive action of public enterprises or the public sector have been unable to solve.
This sector is composed of the following models of enterprises:
Consumers, workers, agricultural farmers, professionals join together to produce, distribute and provide services, in better conditions, under their own direct organisation and control, sharing the profits among the members while at the same time strengthening the wealth and growth of the societies to guarantee their independence and well-being. Democracy and participation are the essence of such societies. Joining forces to create wealth in order to distribute it in a solidary way and develop new projects or meet new needs is the great strength and driving force behind Social Economy. The key to success of these entities lies in their capability to match the values of participation, responsibility and solidarity that are proper of our societies with those of profitability and managerial efficiency.
Now that the meaning of Social Economy has been analysed it is necessary to analyse the needs which society demands should be met in the current situation.
There exists today a great concern among all the social and economic players about social exclusion, a problem which is considered an important crux of all social and political action. Social exclusion cannot and should not be identified with poverty, rather with the impossibility or incapability of fully exerting civil and social rights, the most significant being the right to work. In order to tackle this subject it is necessary to bear in mind all the changes that the model of a Western State is currently undergoing in order to satisfy social demands. Thus, rather than consider the crisis of the Welfare State it is a question of defining the kind of Welfare State that is possible.
Following this premise, the various professional bodies of social workers consider that, with the current model of social assistance in Spain, the following changes are necessary:
Integrating the disabled in the labour market is a very complex and multidimensional subject that affects all social services as well as social entities and players in general, depending on the degree of disability of the person concerned and on the need for training programmes prior to full integration in the open job market. In this first section we are focusing on the capability of Social Economy in contributing appropriate services without overlooking the fact that, in general, all Social Economy enterprises, without being specialised in this field, are or should be specially suited to the integration of the disabled in the labour market due to the principles to which they adhere mainly the commitment with society and involvement in the environment.
Without doubt the contribution of social services falls under the responsibility of the Government Agencies that should ensure fulfilment of the principles of effectiveness, hierarchy, decentralisation, dispersion and co-ordination (Article 103.1 of the Spanish Constitutional Laws) but this unquestionable responsibility of the Public Powers is not a barrier to co-operating with private initiatives, with the pertinent limitations and controls, in order to provide the citizens with a service of better quality and effectiveness.
The objective of the Legislator and the Government when proposing that public social services be privately managed, is to obtain maximum effectiveness in providing the service at the best price. The progressive application of managerial criteria to the running of the public sector should be understood as an effort to reach full accomplishment of the principles of the Constitutional Laws, in particular the principle of effectiveness, always taking into account the interest of the general public over and above any other consideration.
The new approach of social services questions both the profit oriented private initiatives, due to incompatibility with its objectives, and exclusively public initiatives due to their rigid structure and consequent communication problems with the citizens that are common to State bureaucracy.
Social services have two main ingredients: a product in the form of a conventional contribution, as well as having an interpersonal and human significance as an intangible value.
The answers to the needs of society should guide the actions of the enterprises of Social Economy. At a time when the Welfare State reduces its contributions, in an attempt to maintain at least some of them, the co-operative societies, mutual societies and associations should be capable of providing new services and tackling new needs from the criteria of efficient management and a high degree of participation.
The success of Social Economy is linked to community development, to self-organisation, to proximity, to the search for solutions, with a bottom-up approach, integrated in the territory. The community tradition that sustains Social Economy is determined to perpetuate a mode of production and lifestyle based on solidarity, equality of rights and collective participation.
Providing effective and top quality social services depends not so much on economic resources than on the human factor: the work of the individual, the sense of commitment, of motivation and interest, and the willingness to provide a service and being capable of doing so.
The factor that differentiates an entity as an enterprise of social economy, that is predominance of labour over capital, puts it at an advantage when providing these kinds of services in a very satisfactory way. The originality of the co-operative managerial model, for example, lies in the fact that of the two basic elements that constitute all enterprises, capital and labour, the latter is the most important. This option, as we well know, has serious inconveniences in the production sectors that require considerable capital resources, yet is an advantage when it is a question of solving human matters.
Starting from these essential characteristics of the co-operative model, the co-operative enterprise eliminates this duality by unifying capital labour in the member, eliminating the cut between decision-making and execution of the activity by means of a democratic economic organisation that involves the participation of all the workers in the management of the organisation and in strategic decision-making.
This kind of enterprise is, in principle, an appropriate tool to establish not only a professional but also human relationship due to the fact that no strange elements, such as the impersonal interest of capital, intervene in the personal relationship between the professional and the end user.
The greater capability to provide personal, high quality services also lies in the fact that the commitment of the labour force with the objectives of the enterprise is guaranteed since they participate in a democratic way in running the enterprise and defining its objectives.
Thus, the role of Social Economic entities in providing social services, an important one being the integration of the disabled in the labour market, as well as complementary activities such as training, psychotherapeutic support, or guaranteeing future resources by way of mutual societies, is becoming more and more important not only in Spain but also in Europe at large.
The already mentioned importance of the Social Economy in providing social services was revealed at the V European Conference of Social Economy (Sevilla, October 1995). The first of the conclusions of the said conference responds to this phenomenon: "The Social Economy is a fundamental tool to consolidate social well-being. The entities and enterprises that constitute the Social Economy have shown for some time that they can provide basic social services, depending on the country in question, or services that complement those offered by the Government and that some of the services which are provided by the State can be run effectively by co-operative societies, mutual societies, associations and foundations. The democratic and active participation of the beneficiaries in the decision making of such entities is the most outstanding element of the legal characteristics of Social Economy".
The organisation that represents Social Economy in Spain is the Confederación Empresarial Española de la Economía Social - CEPES (Spanish Business Confederation of Social Economy). CEPES is an independent, professional organisation of national scope, that is inter-sectorial and confederative in nature, constituted to co-ordinate, represent, manage, foster and defend the interests of its members. CEPES is made up of 16 outstanding confederations and entities of the Social Economy that adhere to the three already mentioned models in which such entities are traditionally classified: employment co-operative societies, mutual societies and associations and foundations. The fact that the Organización Nacional de Ciegos de España - ONCE (Spanish National Association for the Blind) and FUNDOSA Grupo, S.A., an instrumental enterprise of the Fundacion ONCE whose objective is to develop the management of employment, is proof of the concern for Social Economy and the predominating role it plays, and should play, in the integration of the disabled in the labour market.
The study of the phenomenon of the reactivation of employment of the disabled in Spain and, more particularly, from the strict point of view of Social Economy is a difficult task to undertake. The situation in each country is entirely different and there are a great deal of enterprises that carry out this activity. Likewise, it is difficult to separate the integration of the disabled in the labour market from other groups with special needs, or even from the provision of social services in general. It is important to stress that although the co-operative enterprise can assume the legal form that most clearly identifies with the Social Economic sector we should not overlook the fact that the world of associations is very diverse and that a large part of associations, foundations and integration enterprises, due to their special characteristics, are equally considered entities of Social Economy.
Recent research on social co-operation in Europe has emphasised the extent to which the use of the co-operative enterprise as a form of producing social services and organising the integration of the disabled and other groups with special needs in the labour market is spreading throughout Europe. In spite of the differences with regard to legal systems and the diverse co-operative traditions, every European country has developed experiences in order to carry out activities with specific social objectives.
The evolution of non-profit organisations in Europe is closely linked to the process followed by the welfare system. These experiences have, on occasions, been sustained by Government Agencies who have supported them financially and established contracts with them. This fact has lead to private initiatives with social objectives depending on the Government for their financing, particularly at local level. This is often considered a negative situation when, in fact, it should be interpreted as a consequence of the model of welfare that is still predominantly State dependent. However, there is a slow but clear trend to non-profit organisations becoming more autonomous.
The concept of economic initiative with social aims is referred to in the following terms "social integration enterprises", "social enterprise" or "economic integration". Nonetheless due to the newness of such enterprises and their growing expansion it is necessary to establish a conceptual framework for these initiatives.
"The full incorporation of people with special needs in the labour market, in regular employment as opposed to sheltered employment, can be achieved by joining a traditional company after receiving the necessary training or by way of integration enterprises or social enterprises, that is to say enterprises that while competing on the market in equal conditions to other companies fulfil a series of characteristics that make them particularly suitable to fight against social exclusion" (Faura y García de Cárdenas, 1998).
Although the social enterprise competes on the market with the traditional company, when we talk about "social enterprises" we refer to managerial initiatives whose objective is to incorporate people, who have been systematically excluded, into the labour market by their participation in a mercantile activity organised in the form of an enterprise.
The main aim of social enterprises is the integration in productive employment, that is, in an activity that generates goods or services, and for which suitable payment is received. In generic terms, the main objective of a social enterprise is to provide paid employment (with a labour contract and social security) as a framework in which to develop the real process of social integration of the group to which it is oriented.
It is worth pointing out, however, that for a large part of the beneficiary group such employment may merely constitute a transitory stage towards the ordinary labour market, whereas for others it may mean long-lasting integration in social employment.
We should now ask ourselves, which are the groups that are systematically excluded from the labour market and are the potential beneficiaries of insertion enterprises. It is possible to differentiate in a generic way two large subgroups. On the one hand, we have "the disabled" whether this be a physical, mental or psychical disability. On the other, we can take in a very heterogeneous group of people that are at a disadvantage from a social point of view, "the socially handicapped".
At this point in time, when we refer to the collection of enterprises that function in the area of labour integration we can observe a trend to disregard the differences between the two above mentioned groups. In Spain the former of the two has gained a considerable niche on the labour market and a more consolidated managerial trajectory - mainly the physically handicapped - as well as a broader legal framework.
As Isabel Vidal points out (1998): "The network of EMES researchers at a meeting in December 1997 in Sitges centred their attention on the meaning of the concept of the social enterprise. It was agreed that in order for an initiative to be referred to as a social enterprise it should meet two series of characteristics with regard to its economic and social aspects.
1. Continuing economic activity of production of goods and/or services.
Social enterprises are directly involved in the production of goods and/or services on a continuing basis and as one of the main reasons for their existence.
2. Large degree of autonomy
Social enterprises are created voluntarily by a group of people and are run by the same according to an autonomous project. Consequently, these are enterprises that may depend on government grants but are not managed, either directly or indirectly, by State institutions or other institutions (federations, private enterprises, …) and have the right to vote and to exit.
3. Considerable degree of risk
The group that promotes and constitutes a social enterprise assumes, either totally or partially, the risk of such an initiative. The financial viability depends on the efforts of its members and employees to guarantee sufficient resources.
4. A minimum degree of paid employment
Just like the majority of non-profit entities, social enterprises also combine their monetary resources with non-monetary resources, voluntary workers and employees who receive a salary. However, the activity developed by social enterprises requires a minimum number of employees.
5. Market oriented
This means that an important and increasing part of the income of the enterprise comes from the market (from the direct sale of goods or services to the end user) or from managerial contracts with Government Agencies.
From the social aspect, five indicators have been selected:
1. An initiative promoted by a group of citizens
Social enterprises are the result of dynamic groups of people that belong to a community, or people that are aware of certain needs or pursue certain objectives that they have to maintain one way or the other.
2. Power is not based on the property of capital
In general, this adheres to the principle "one man, one vote" or at least that the right to vote does not depend on the participation in the social capital of the enterprise. Property of capital is obviously important, but all the groups of interest that make up the enterprise: shareholders, users, consumers, customers, etc., participate in the decision-making process.
3. Participation in a way that involves the people affected by the activity
The representation and participation of the clients/consumers on the Board of Directors and democratic management are important features of social enterprises. In most cases one of the objectives of social enterprises is to further local democracy by way of economic activity.
4. Limited distribution of profits
Social enterprises not only include organisations with characteristics such as the limitation and non-distribution of profits, but also organisations that can distribute profits to a certain degree, or those whose bylaws prevent them from maximising their profits.
5. An explicit objective of benefiting the Community
One of the main objectives of social enterprises is serving the community or a specific group of people. Thus, one of the characteristics of social enterprises is the desire to promote a sense of social responsibility at local level.
In summary, and according to this viewpoint, the term social enterprise suggests that organisations of this kind have elements of ‘mix market’ (as for example, a managerial orientation and a certain degree of financing from sales), that they combine with social tasks and orientations. A social enterprise may also be defined as the central core of the Social Economy (or the Tertiary Sector, or as it is sometimes defined in the European Union, the Tertiary System)".
At present, there is no legislative framework in Spain within which, from a strictly legal point of view, to regulate and support social integration structures and enterprises.
However, there is a certain degree of concern on behalf of various parliamentary bodies about this matter as has been revealed by the fact that during the last three years several propositions have been presented. At the same time, we are aware that a draft proposition has been drawn up by the Spanish Government, although the content has not been made public, to regulate social enterprises.
In relation to social co-operatives, the General Law 3/87 for Co-operative enterprises, 2 April, which applies to all those co-operative enterprises located in the Autonomous Communities that do not have their own legal framework, as well as to those co-operative enterprises whose scope goes beyond the Autonomous Community, and neither specifies nor mentions the possibility of co-operative enterprises within the different classes that are covered in Article116.
Nonetheless, the Project for a Law for Co-operative enterprises, presented in September 1998 and which is currently in the process of being approved makes specific mention in Article 106 to co-operative enterprises of social initiative in the following terms:
Those Co-operative Enterprises that are non-profit organisations and regardless of their nature pursue a social objective, either by providing social support services by way of carrying out healthcare, educational, cultural activities or any other of a social nature, or by developing any economic activity whose aim is to integrate people who suffer some form of social exclusion in the labour market, may be qualified as Social Initiative Enterprises.
At present only the Law for Co-operative Enterprises in Cataluña is contemplated in Article 106.2 within the scope of mixed co-operative enterprises. Nonetheless, this article only mentions social co-operative enterprises dedicated to the disabled, and not to other excluded groups, and yet, it not only contemplates integration in the labour market but also the fact that such enterprises can carry out social support activities in the same way as Italian social co-operative enterprises.
In order to portray the situation of social enterprises in Spain it is necessary to highlight, in the first place, the current lack of equilibrium between the legislation in force and the activity of new non-profit and dynamic organisations. In spite of this lack of explicit legislation there has been a quick upsurge of social enterprises in Spain with an aim to respond to a social demand for employment, education, healthcare and quality of life, and defence of disadvantaged social groups.
It is also important to stress that as a consequence of this legal vacuum a single legal model recognised by social enterprises does not exist. In a generic way they are considered enterprises that form part of the social economy even though they adopt, on occasions, the legal formula of association of capital of non-profit promoting institutions.
Integration enterprises usually come under the protection of a non-profit social organisation (foundation or association) that constitutes the main pattern of legal form (co-operative, employment society, limited-liability company, or joint-stock company) that carries out a productive and trading activity. On other occasions the social enterprise and the promoting social organisation constitute a single entity, and therefore, have a single legal form.
It would thus appear logical that when referring to the concept "social enterprises" or "social integration enterprises" we overlook the legal-mercantile meaning of the concept of enterprise since the said term covers several typologies in the Spanish context: activity workshops, integration centres or integration enterprises, with different legal modalities.
Nonetheless, in order to give an idea of the typology of social integration initiatives that predominate in Spain we can consider two large subgroups: "Labour Specialisation Workshops" and "Social Co-operatives".
1. "Activity Workshops", "Labour Specialisation Workshops" or "Integration Workshops"
Initiatives of Sheltered Employment began to spring up in the mid seventies, as a bridge by which people with either physical or mental disabilities could gain access to the labour market. Later, the labour integration activity of these workshops was extended to take in other socially excluded groups.
In spite of the great diversity of forms, these workshops are characterised by the fact that they work in several areas: apprenticeship training for a trade or professional speciality, development of social skills and working habits, and the carrying out of a lucrative labour activity that can compete on the market even though in many cases in a marginal way.
Those workshops promoted by the Ministry of Education and Culture ("Social Guarantee Programmes") have a fundamentally educational nature, although the ones supported by the INEM (National Institute for Employment) ("Trade Shops" and Apprenticeship Workshops") focus more on the employment sphere.
2. Social co-operative societies
Parallel to the experience of these workshops the idea of integration by way of economy is taken up by Associate Work Co-operatives that promote the carrying out of a fully economic activity by people with special needs by way of a co-operative formula:
2.1 Support service co-operative societies
These are co-operatives that provide social services, or on a more general level, that provide services of collective interest in benefit of their members or the community or groups of citizens with specific needs.
These co-operatives put emphasis on their social aims limiting their objective of creating employment to socially excluded groups. The fact that in order to meet their objectives they produce goods and services for the market means that they need a managerial structure. The co-operative society is a logical choice for these kinds of entities since this is the only managerial formula with social aims.
2.2 Labour integration co-operative societies
These are co-operatives that organise the production of different activities with an aim to create employment and resources for people with special needs.
There is a current trend in Spain for initiatives, whose aim is to integrate socially excluded groups in the labour market, to be characterised by a marked element of productivity that leads them to adopt an organisation formula that is more managerial oriented and an orientation to produce services.
In this respect the report drawn up by CEPES (Faura and García de Cárdenas, 1998) points out:
"(...) The growth of integration co-operatives, that took place mainly from 1980 onwards, is mainly due to the difficulty in reintegrating workers with some form of disability in the labour market. With the economic crisis and the enormous problems of creating employment for the population in general, companies were not put under pressure to hire people with disabilities to such an extent that the proportion of sheltered employment, which was then converted to regular employment, fell considerably. As a consequence, the structures of sheltered employment lost their original meaning and ran the risk of being converted into isolated ghettos instead of helping to socially reintegrate the disabled. Production companies, specially at local level, directed to guaranteeing reintegration into stable employment arose as a consequence. By combining people both with and without disabilities they achieved sufficient levels of production to ensure adequate wages for their employees and thus avoid any risk of isolation. The co-operative formula, generally of associated work, was their natural choice.
These experiences have extended in two directions:
- Some initiatives have substituted the original intention of finding safe employment in the co-operative for temporary integration directed to recovering their work capacity and preparing workers for a new job in the standard labour market.
- The objective group has been extended from exclusively handicapped people to other groups with special needs.
(...) Concrete actions are currently being undertaken based on four fundamental points of reference:
- Permanence of foundations and societies that promote the creation of workshops and other experiences destined specifically to the disabled (some of them even by way of the co-operative formula).
Another important characteristic of these initiatives of "economic insertion" is that they are formed by society in order to cover a social demand that is met neither by employment policies nor by the conventional private sector, and that different groups (volunteers, workers, users, government agencies and private organisations) live together in a complex way, and whose participation is guaranteed not only by the composition of the social base, but also by their democratic management.
Finally, it is important to stress the lack of a inter-enterprise co-operation culture among the social enterprises, according to Isabel Vidal (1998):
"(...) The potential to create and maintain social enterprises largely depends on the local environment where the following aspects have to be taken into consideration: the attitudes of the various groups, of the citizens concerned, as well as of the civil organisations, the business sector and the government institutions.
(...) Case studies show that a social enterprise may be considered a unique manifestation of a lack in the environment, that is kept alive by its direct members with a few government support channels or grants. Its protagonists work alone. They are unaware of those entities that have opted for a similar managerial strategy.
(...) These enterprises could better develop their potential in an environment with a rich variety of interrelated supports. Borzaga and Mittone and Pestoff refer to these supports and interrelations as a multiple partnership. Vidal (1996 and 1997) refers to co-responsibility. They develop key and complementary functions. It is a partnership with conventional enterprises and the creation of informal, local support networks for the creation and consolidation of social enterprises. It is obvious that the balance between managerial tasks and tasks to mobilise "solidary" resources make the social enterprise a fragile enterprise that is more complicated to manage than a conventional one".
The newness and the scarce consolidation of the integration enterprises, together with the dispersion and lack of trustworthy data makes it impossible to quantify and identify in a precise way the phenomenon of the social enterprises in Spain. However, several studies are available on the subject, namely:
We will highlight below the main results of these studies.
Caritas study (1995) of a sample of 176 enterprises
The social enterprises analysed in this study refer to "Sheltered Employment" and to social integration enterprises, in the correct sense of the word, that carry out a productive activity.
Nevertheless, certain differences in their aims can be observed depending on the promoting entity. Unlike enterprises that arise from a planned social and employment integration process, those initiatives promoted by Government Agencies are lacking in objectives oriented to profitability and productivity that ensure a means of self-financing.
Parallel to this, we can find intermediate entities (such as Associations) that pursue social integration and whose activity is directed to acting as "middlemen" between the groups that are the subject of reintegration and the companies in their immediate environment.
Furthermore, this study reveals that these kind of managerial initiatives for social integration develop other series of activities complementary to specifically productive activities, the most part focusing on the local environment, be they sport, cultural, or leisure activities, adult education, or healthcare improvement activities, etc.
As can be seen in Figure 1, in first place we find the Foundations and Associations (37%), followed by the Associate Work Co-operative Societies with 19%, then the Limited Companies with 15%. Finally, 29% of the experiences analysed stand out due to the fact that they lack economic and human resources, have been unable to acquire legal identity and remain on the black market.
Figure 1. Characteristics of the promoting entities (Source: Caritas 1995)
2,000 integration workers represent 62% of the sample, as opposed to 21% of standard employees (670 hired professionals and educators) with a professional profile of "pedagogical support" and lacking in managerial training and experience.
Likewise, the number of voluntary workers stands out (530) representing 17% of the human resources available in these initiatives.
Figure 2. Human resources of the 176 enterprises analysed (Source: Caritas 1995)
These are very heterogeneous groups, although they all share the same characteristics of having accumulated a series of difficulties in gaining access to the standard labour market, having used up all the available social security grants and assistance benefits, as well as having to face deficits in their personal structure: unemployed youth over 25 years of age, women with unshared family charges, long-term unemployed, groups specially excluded from social protection, or people with physical or mental handicaps, as well as the socially excluded such a ex-drug addicts, or ex-prisoners.
In relation to the level of studies and age groups the fact that 6% are illiterate, and only 1,5% have university degrees stands out, as opposed to 85% who have studied up to the age of 14 to obtain their GSC (General School Leaving Certificate). 64% are under the age of 30, 5% fall in the 30 to 40 age group, and only 11% are over the age of 40.
In general, these are enterprises that concentrate on human resources with a minimum capital investment, that develop their activities in sectors where there is "no competition" and that do not require staff with high professional qualifications.
Figure 3. Production activities of the enterprises analysed (Source: Caritas 1995)
Study on social co-operative societies in Cataluña (1995)
In spite of the already mentioned difficulty in quantifying the initiatives oriented to integration in the labour market in Spain, the report drawn up by CEPES (Faura and García, 1998), points out the estimation that there are around one thousand co-operative societies spread all over Spain, of which the most numerous, without doubt, are those initiatives promoted by associations, foundations or Government Agencies.
With regard to geographical distribution, the most outstanding experiences, according to the said estimates, can be found in Cataluña (200), Andalucía (150), Madrid (100), Castilla-La Mancha and Castilla-León (60), País Vasco (50), Valencia (50) and Galicia (50).
In the said report CEPES also points out that in Cataluña the origin of social co-operative initiatives can be found in the assistance of disabled people, since it is due to the progress made in this field that a managerial formula has been reached. These initiatives are usually started by the people directly affected, parents of disabled persons who join forces to improve the quality of life of their family members. Thus in the sixties, several co-operative societies were formed by parents of the disabled who were later joined by professionals to work with them. More recently, in the nineties, new initiatives have appeared based on the French experience of Social Enterprises.
The study carried out in 1995 on social co-operative societies in the Autonomous Community of Cataluña reveals the following characteristics:
Figure 4. Social activity of co-operative societies in Cataluña (Source: 1995)
Back to Proceedings of Meetings
| Home | Telematics | Social Enterprise | Partners | Projects | Activities | Contact | Sitemap |
Last updated: 6 August 1999
© 1999 TAD
webmaster@on-line.org.uk