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EU Social Economy Gateway

Social economy definitions and glossary

Common principles and some nuances

The definitions used in recent policy documents generally align on core elements, although there may be slight variations in nuances. Below are some examples for you to compare and explore further.

Definition in the social economy action plan

"The social economy covers entities sharing the following main common principles and features: the primacy of people as well as social and/or environmental purpose over profit, the reinvestment of most of the profits and surpluses to carry out activities in the interest of members/users (“collective interest”) or society at large (“general interest”) and democratic and/or participatory governance.

Traditionally, the term social economy refers to four main types of entities providing goods and services to their members or society at large: cooperatives, mutual benefit societies, associations (including charities), and foundations. They are private entities, independent of public authorities and with specific legal forms. Social enterprises are now generally understood as part of the social economy.

Social enterprises operate by providing goods and services for the market in an entrepreneurial and often innovative fashion, having social and/or environmental objectives as the reason for their commercial activity. Profits are mainly reinvested with a view to achieving their societal objective. Their method of organisation and ownership also follow democratic or participatory principles or focus on social progress. Social enterprises adopt a variety of legal forms depending on the national context."

Source: Communication from the Commission ‘Building an economy that works for people: an action plan for the social economy’, COM(2021) 778 final, page 5

ILO definition

"The SSE encompasses enterprises, organizations and other entities that are engaged in
economic, social, and environmental activities to serve the collective and/or general interest,
which are based on the principles of voluntary cooperation and mutual aid, democratic and/or
participatory governance, autonomy and independence
, and the primacy of people and social purpose over capital in the distribution and use of surpluses and/or profits as well as assets.

SSE entities aspire to long-term viability and sustainability, and to the transition from the
informal to the formal economy and operate in all sectors of the economy. They put into
practice a set of values which are intrinsic to their functioning and consistent with care for
people and planet, equality and fairness, interdependence, self-governance, transparency and
accountability, and the attainment of decent work and livelihoods. According to national
circumstances, the SSE includes cooperatives, associations, mutual societies, foundations,
social enterprises, self-help groups and other entities operating in accordance with the values
and principles of the SSE."

Source: ILO, Resolution concerning decent work and the social and solidarity economy, June 2022

OECD definition

"Social economy, also referred to in some countries as solidarity economy and/or social and solidarity economy, is made up of a set of organisations such as associations, cooperatives, mutual organisations, foundations, and, more recently, social enterprises. In some cases, community-based, grassroots and spontaneous initiatives are part of the social economy in addition to non-profit organisations, the latter group often being referred to as the solidarity economy. The activity of these entities is typically driven by societal objectives, values of solidarity, the primacy of people over capital and, in most cases, by democratic and participative governance."

Source: OECD, Recommendation on Social and Solidarity Economy and Social Innovation, 10 June 2022


organisations infographics

The following glossary provides some explanations for key concepts and expressions related to the social economy.