When economists and policymakers talk about competitiveness, industrial strategy or economic resilience, the social economy is rarely part of the conversation. Yet it should be.
Across countries, social economy organisations create jobs, deliver essential services and strengthen local economies. But to reach their full potential, they need the right conditions: access to finance and markets, adapted business support, clear legal and institutional frameworks, and policies that help organisations innovate, scale and compete.
A far-reaching footprint
The social economy is far from a niche part of the economy. Across Europe, social economy organisations employ millions of people, deliver essential services and often prove more resilient during crises than traditional businesses.
In Europe, the social economy accounts for more than 6% of total employment – or around 13 million jobs. In countries such as France and Belgium, it represents more than one in ten workers. Globally, it contributes close to 7% of GDP, reaching around 9% in Canada. In the United Kingdom and Portugal, its economic weight is comparable to sectors such as agriculture or construction.
Some of its individual actors are also far larger than many people realise. Crédit Agricole in France, one of the world’s largest co-operative banking groups, serves tens of millions of customers worldwide. Mondragon in Spain employs around 70 000 people across industry, retail and finance.
Across OECD members and beyond, co-operatives, mutual insurers, social enterprises and non-profits are operating at scale across strategic sectors such as housing, care, renewable energy and digital innovation.
Our recent report shows that investing in the social economy is not only a social policy choice, but an economic one.
A source of resilience
During both the 2008 financial crisis and the COVID-19 pandemic, social economy organisations generally preserved jobs better than many traditional firms. In France, employment in the social economy continued to grow between 2008 and 2009, while overall private sector employment fell.
During the pandemic, many co-operatives and social enterprises also proved more likely to maintain employment and continue service provision despite economic disruption. Social economy organisations’ governance models often bring longer-term decision making and greater economic stability.
In today’s context of geopolitical tensions, demographic shifts, climate challenges and rising inequalities, resilience means building economies that are adaptable, locally rooted and capable of maintaining social cohesion. This is where the social economy can play a bigger role.
Supporting sectors that matter
The social economy is emerging as a driver across key sectors.
Take housing. Across OECD countries, house prices have risen roughly twice as fast as incomes over recent decades. Europe’s housing crisis is not only a social issue, it is also a competitiveness issue, affecting labour mobility and access to talent in productive cities.
Housing associations and co-operatives manage around one-third of housing stock in the Netherlands and one-quarter in Austria. By reinvesting locally and operating with cost-based rents, they often provide more affordable and stable housing options.
Long-term care is another example. Europe’s population aged 65 and over is growing almost three times faster than the working-age population, while demand for care services is expected to rise sharply in the coming decades.
Non-profit and co-operative providers already employ millions and deliver nearly a quarter of elderly care services in Europe, almost half in countries such as Germany and Austria. Their community-based models can improve continuity of care and help older people remain at home longer.
The social economy is also contributing to the green and digital transitions. Across Europe, more than 8 000 energy communities enable citizens and local actors to invest directly in renewable energy projects. Nearly 500 platform co-operatives worldwide are also experimenting with fairer digital business models.
The social economy changing the game for competitiveness
Across Europe, policymakers are recognising this potential. Already, 21 EU Member States have adopted or are developing national strategies or action plans for the social economy, but ambition must be turned into impact by creating the right ecosystems for social economy organisations to innovate, scale and compete.
Public procurement is one important lever. In Italy, social co-operatives have long benefited from reserved contracts and social clauses that helped them scale service delivery in sectors such as long-term care and labour market integration. Yet in many countries, smaller social economy organisations still struggle to access public markets despite their strong local impact.
Business support systems also need to adapt. Traditional incubators and advisory services are often designed for conventional business models, while social enterprises may require support that combines commercial sustainability with social objectives prompting countries such as France and Canada to develop more tailored approaches.
Access to finance remains a third major challenge as many social economy organisations operate hybrid models that do not fit within traditional lending or investment frameworks. In response, countries are increasingly experimenting with tailored financial instruments.
In Poland, the National Fund for Social Entrepreneurship provides preferential loans to social enterprises, NGOs and socially oriented businesses. In the Slovak Republic, a dedicated guarantee instrument helps reduce lending risks for social economy entities that are often excluded from traditional banking systems due to limited collateral or non-profit status. Portugal’s Social Innovation Fund combines guarantees and equity instruments to support social innovation initiatives and help established organisations scale their activities.
Finally, skills and governance matter. As the social economy expands into sectors linked to the green and digital transitions, organisations increasingly need stronger capacities in management, digitalisation and impact measurement.
From recognition to delivery
The social economy is not simply filling gaps left by markets and governments. It is helping redefine how sustainable and competitive growth can be achieved.
But governments must move beyond declarations to concrete actions that allow social economy organisations to innovate, scale and compete through adapted finance, smarter procurement, tailored business support, stronger skills, and coherent policy frameworks across levels of government.
Countries that succeed in doing so will not simply strengthen the social economy itself. They will be better equipped to deliver sustainable growth, support strategic sectors and build economies that are more inclusive, competitive and resilient.
To learn more about the OECD’s work on related topics, see OECD-EC report “Social Economy in Europe: Contributing to Competitiveness and Prosperity” and Policy highlights of the report.
Melis Aslan is a Policy Analyst and Economist at the OECD team working on social economy and innovation. She specialises in data on social economy, social impact measurement, internationalisation of social economy entities and social enterprise policy. Prior to joining the OECD, Melis worked at UNDP on impact investing and private sector contribution to international development.