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Improving Social
Inclusion at the Local
Economy Level through
the Social Economy
Report for Slovenia
Antonella Noya
Senior Policy Analyst
OECD /LEED
Overview
• Mission and Methodology
• Context and Evolution of the Social Economy
• Contribution of the Social Economy to Social
Exclusion
• Current Policy Environment and Supporting
Strategies for the Social Economy
• Key Issues and Policy Requirements to Support the
Social Economy
• Recommendations
Mission and Methodology
Mission
• Examine the role, real and potential, of the social
economy in Slovenia
• Examine the support required for the social economy in
Slovenia to realise its potential
Methodology
• Study visit by OECD LEED Secretariat members and
external experts in Jan 2010 and Apr 2010
• Available statistics and research conducted prior to and
after study visit
Slovenian Context: Evolution of the
Social Economy #1
Broad Context
• Economic and political transition
• Dominant state role in provision of public goods and
services persists (impact on social economy
development)
• High level of social and employment security but with
some gaps in provision
• State of welfare dependency, growing social exclusion
and labour market divisions (reforms undertaken to
tackle these issues)
• Despite anti-crisis measures, employment and economic
activity have declined sharply during the economic crisis
Slovenian Context: Evolution of the
Social Economy # 2
History
• Rich tradition of civil society organisations dating back to
13th century
• First law on cooperatives introduced in 1873
• By WW1 extensive network of associations, co-operatives,
charities, and trade unions throughout Slovenia
• End of WW2 introduction of communist socialism broke
tradition of strong social economy
• For 50 years, socialist welfare system largely replaced
functions of the social economy
Slovenian Context: Evolution of the
Social Economy # 3
Current Landscape
• 22,000 civil society organisations
• 1.02 civil society organisations per 1000 inhabitants – one
of the highest in the world
Inherited
Recently
established
Organisations
Detail
Co-operatives
437 organisations (2008)
Companies for the
Disabled
168 organisations, 13,704 employees (2008)
Zavods (Institutes)
Largest number of employees and most
entrepreneurial approach
Associations
94% of all civil society organisations, 1 million
members
Other non-profit
organisations
e.g. Foundations, church organisations, e.t.c.
Slovenian Context: Evolution of the
Social Economy # 4
However…
• Contribution of social economy to GDP is x4 below the EU
average
• Contribution of social economy to employment creation is
even less significant
Why?
• Concept of “Social Economy” not widely accepted in
Slovenia
• Social economy initiatives lack visibility, are fragmented and
sometimes over-looked
• lack of understanding of their role and potential, but
increasing political interest and will…
Contribution of the Social Economy to
Social Exclusion # 1
Current Contribution
• Mixed in composition and impact but examples of good
practice
• Typical roles include service provision, work force
integration, advocacy and self-help groups
Social Exclusion Themes Addressed
•
•
•
•
•
Disability
Disadvantage
Urban socio-economic decline
Rural socio-economic decline
Community cohesion
Contribution of the Social Economy to
Social Exclusion # 2
Social Exclusion Role(s) of Social Economy
Theme
Constraints / Opportunities
Disability
• Provision of system of work
integration
• Well developed funded but
relatively closed system
Disadvantage
• Develop relationships with
SWCs and tenders via public
works programme
• Lacks coherent and consistent
policy framework
• Delivery of projects financed
by temporary funding
streams
• Social enterprises have funding
access but may have cash flow
or financial sustainability issues
• Integration through sport
and cultural initiatives
• Municipal youth culture and
sports centres are quasi forms
of social enterprise
• Advocacy with government
policy-makers about public
interests
• Enhanced role for social
enterprises
Community
cohesion
Contribution of the Social Economy to
Social Exclusion # 3
Social
Exclusion
Theme
Role(s) of Social Economy
Urban socio- • Provision of services to
support local economic
economic
regeneration strategies
decline
• Reconstructing failed
capitalist businesses
Constraints / Opportunities
• Effective esp with environmental
services, small Work Funds,
business incubators and
employment centres
• Restricted revenue and diverse
set of small municipalities
Rural socioeconomic
decline
• Service provision to reduce
under-employment and
stimulate regeneration
• Employment generation through
effective training. Products sold
to increase sustainability
Social
exclusion
• Service provision
• State major provider, few
elements of mixed economy, no
consistent capacity to develop
service provision
Current Policy Environment # 1
Labour market policy
• Employment Service (ESS) e.g. Local and regional offices
deliver counselling, training and support
• Social protection benefit system e.g. Unemployment
insurance benefit
• Simplification of the business registration process
• Liberalisation of fixed-term contracts to support
temporary working
• Growing emphasis on active labour market programmes
e.g. “Public Works”
Current Policy Environment # 2
Labour market policy
• Minimum wage increase e.g. From EUR 597.43 to EUR
734.15 per month in 2010
• System of tax allowance for students in particular jobs
• Youth worker reintegration e.g. Second Chance Education
Programme
• Disability support e.g. Vocational, Rehabilitation and
Employment of Disabled Persons Act and associated fund
• Employment Centres
Current Policy Environment # 3
Welfare service policies
• Social Work Centres e.g. Administer welfare benefits
• Elderly and Disability support e.g. Homecare and Personal
Services Programme, EUR 8.4 million (2010)
• Child and family benefits well designed
• New Legislation e.g. Draft law on Long-Term Care and
Long-Term Care Insurance ( possible market for SE)
• Voucher system e.g. Voucher system for home care under
development
Current Policy Environment # 4
Social inclusion policies
• Ministry of Labour, Family and Social Affairs support e.g.
Co-finances social protection programmes for vulnerable
groups often delivered by social economy organisations
• Specific Directorate of Social Affairs support e.g. National
Action Plan for Social Protection and Social Inclusion
• The Government office for Development and European
Affairs plays a key role in development policy
• Need of policy coordination among Ministries
Current Supporting Strategies and
Policy Environment # 1
Supporting Constraints / Opportunities
strategy
Examples
Umbrella
bodies
• Some established channels for • Chamber of Commerce, Corepresentation
operative Union, Trade Unions,
• Generally underdeveloped
Council for the Disabled
and lack recognition
• Lack of networking among the
social economy “families”
Fiscal and
Financial
• Special funds and finance
initiatives underdeveloped
• Lack of tax breaks
• Strict fiscal rules limit
philanthropic activity
• Some promising new activities
• Companies for disabled can make
profit but must reinvest 60%
• National Lottery Funding
• New gift-aid system (0.5% for
contributions)
• Established culture of fundraising
Current Supporting Strategies and
Policy Environment # 2
Supporting
strategy
Constraints / Opportunities
Examples
Business
support
• Orientated to medium and larger
rather than small business
• Focus on conventional not social
entrepreneurship
• Potential to refocus traditional
mechanisms to social economy
• JAPTI agency – one-stop
shop for conventional
entrepreneurs
Legislative
frameworks
• Not major issues with legal
structures
• Possible developments
• Co-operatives,
associations, etc
• Law on soc entrship
Volunteering • Underdeveloped, but law now
prepared for approval
Capacity
building
• Significant issue in Slovenia
• Strong potential to transfer
international experience
• 7,000 volunteers per year
as a result of public tender
system
• EUR 2 million project for
social enterprise work
integration activities
Key Issues and Policy Requirements
Opportunity
• New interest and political will could reinvigorate the social
economy
• Potential to deliver public services more efficiently in light
on budget constraints and rising costs
• Examples of excellent practice on which to build
Imperative
• the social economy:
– and its value-added are not well-understood
– sometimes has a negative image due to its socialist past
– and its drivers are not well focussed and coherently supported
• Requires reform, development and co-ordination of existing
structures as well as capacity building and leadership
Recommendations # 1
Broad Recommendations
• Ensure legal and fiscal frameworks are not overcomplicated or burdensome
• Better recognise and measure the costs of activities
undertaken by social enterprises and the positive
externalities they generate
• Ensure the institutional framework provides access to
markets, particularly public procurement markets
• Draft legislation specific to social enterprises
• Implement a set of entrepreneurial policies consistent
with distinctive features of social enterprise
Recommendations # 2
Broad Recommendations
• Develop a strategy to support the social economy sector
in similar ways to the SME sector
• Allow the social economy to create its own representative
structure
• Develop a system of partnerships and co-governance to
support the design and delivery of policies
• Consider the introduction of a temporary quota for social
economy organisations in the tender system
Recommendations # 3
Co-operatives
• Deliver modernisation measures to build capacity, assist in
independence and strengthen trust
• Develop programme to promote new work integration cooperatives and user-based welfare services
• Improve information about and access to tenders and
support structures
Not-for-profit organisations
• Address lack of seed capital and cash flow support
• Develop a programme to support NGOs to become social
enterprises and encourage NGO and non-profit mergers
• Support the development of an asset transfer system
Recommendations # 4
• Support the development of philanthropic foundations,
such as with US-type tax breaks, etc., with an
appropriate regulatory system;
• Develop programmes for strengthening volunteer
involvement, and facilitate this as a transitional
arrangement for work integration, ensuring that such
activities are compatible with the benefits system.
• Equalise the status of public and private institutes
(zavods) in procurement systems such as tenders.
Recommendations # 5
Social enterprises
• Improve sustainability within the tender regime
• Ensure that any proposed law is well-communicated and
“owned” by the social economy
• Use EU funding to develop a social enterprise strategy
• Develop a supporting environment through seed money,
incubators, loan funds and new networks
• Develop a new WISE strategy for transitional employment
• Promote the development and adoption of measurement
systems to show the added value of social enterprises (such
as “Social Return on Investment” – or simpler tools
Recommendations # 6
Business partnership, CSR and other bodies
• New incentives for philanthropy and CSR
Policy Process
• Pursue processes of co-governance and co-construction
• Thanks!
• [email protected]
• www.oecd.org/cfe/leed