The New Social and Impact Economy: A Conceptual Framework and a Comparative Perspective

by Benjamin Gidron and Anna Domaradzka*

Our book was conceived and written against the background of first one and then a second major global crisis, which shook the world economic and social order. We refer of course to the 2008/2009 subprime mortgage collapse, which at the time led to a major international economic crisis, but was also a prelude for a renewed, creative thinking about the relationship between economy and society, as well as the more recent Covid-19 pandemic, which undoubtedly calls for further thinking and action along these lines.
The book was entitled The New Social and Impact Economy: International Perspectives to stress the focus on the social aspects of the economy, reflected in new organizational strategies, ways of generating social impact, and innovative financial tools. This new ecosystem needs a common conceptual framework to catch/depict its core values and characteristics to inform potential policies or consulting efforts. It was christened new social and impact economy to underline its rootedness in social economy logic, but to also underline its new forms, guiding values and interactions.
The last phase of this book was written during the Covid-19 pandemic which is leading to a major global economic crisis where industries suffered a blow and will need to reinvent themselves. However, this book focuses on the aftermath of the previous global crisis. Crises are not only phenomena that break certain patterns and structures creating havoc and suffering, but also opportunities to rethink predominant truisms and build new structures.
The key argument of this book is that the economic crisis of 2008 was a trigger for significant changes in the thinking about the relationship between economy and society. The crisis emphasized the negative impact of the neoliberal economy on the society and the environment, and gave rise to a change in conception regarding the relationships between these two domains: from a conceptual (and institutional) separation between society and economy to the idea of hybridity, which suggests that it is possible to pursue both social and economic objectives within the same organizational structure.
This realization created in effect the new field that is termed the “New Social and Impact Economy.” That depiction links this development to the existing and known concept of “social economy,” which has certain ideological underpinnings. Those who are reluctant to paint the same development in such ideological colors prefer to call it the “Impact Economy.” This distinction is particularly relevant between countries where the concept of “social economy” is well known and clearly institutionalized and others where it is not.
In the introduction and in the country chapters the focus is on the “social economy” concept, which has a long history that “impact economy” does not. The question is whether the “New Social Economy” is actually a continuation of the “old” one or it represents a different phenomenon. Another focus is the underlying value base and the forces behind these developments. The international perspective gives us an opportunity to present the diverse approaches to social economy, particularly highlighting the new processes or forms that have developed in recent years. The starting point is to reflect on these novel forms, in relation to economic crises, specifically the economic crisis of 2008/2009, that seem to stimulate new phases of growth within the social economy spectrum. The conclusions link the findings with the more recent Covid-19 crisis to stipulate about new challenges and directions of social economy worldwide.
The chapters cover different geographical regions and welfare regimes and as such offer a wide comparative perspective. Importantly, in many countries the social economy concept, developed in the European context, cannot be applied, which forces the writers to go beyond a traditional approach to the idea of a social economy. This is in line with this book aim, which is to offer reflections on the novel and nontraditional processes within this domain. It is proposed that we can now observe the initial stage of new social and impact economy emergence, shaped by the development of information and communication technologies, new modes of funding, and a general crisis of traditional approaches to generating social impact through business activities.
The use the concept of new social and impact economy is meant to depict the recent parallel developments in the arenas of social enterprises on the one hand and of impact investment on the other. This is predicated by a dual rationale: first, to develop a concept that will be able to include these two phenomena within a single framework, and second to link it to previous eras, where these two dimensions—the substantive and the financial—are linked in one general concept that enables the view of both sides of the same coin.
In the analysis there is an attempt to position both traditional and new forms of the social economy in relation to a wider civil society field. The logic of the third sector, represented by civil society organizations like associations and foundations, remains basic for developing a social economy in its traditional European form. However, the main characteristics of the social economy actors nowadays are their hybridity and the tendency to exist in between the market, the public sphere, and the civil society. This may be one of the reasons why the social economy is not recognized as a sector, and it spurs diverse forms of socioeconomic activities.
The country chapters provide a base to reflect on the diversity of new social and impact economy placement within state-market spectrum, depending on the national context, type of economic environment, and presence of welfare state. The focus is on the challenges and opportunities arising from the current position of social entrepreneurs, who play the role of challengers at the crossroads of three main sectors—the state, the market, and the third sector.
The current situation favors ICT-based social innovations, thus creating an opportunity for social start-ups, digital cooperatives, and social tech ventures. In the meantime, the crisis pushed various countries toward technological solutions, to control the spread of virus as well as provide services with minimal risk of person-to-person transmission. In various countries, chatbots, drones, contact tracing apps, and fifth-generation wireless networks are being adopted. While COVID-19 has helped to accelerate the automation and digitalization of services it has also enabled the widespread invigilation of citizens.
Some citizens-led technical solutions are therefore severely needed to create more acceptable and trustworthy alternatives. With the threat of pandemic due to shape the future economic and political strategies, social economy role as a field of ethical innovations and ground-up resilience should be more widely recognized.
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(Emphases added by the editor)
* Benjamin Gidron is a Professor of Social Enterprises and the Head of the Research Authority at the College of Management, Israel. Among his books are Social Enterprises: An Organizational Perspective (2012) and Policy Initiatives towards the Third sector in International Perspective (2010).
* Anna Domaradzka is a sociologist, Assistant Professor and Associate Director for Research at Robert Zajonc Institute for Social Studies, University of Warsaw.