A new hope for the local development in Greece: The emergence of Social Economy

• Author: Konstantinos Kougias
• Position: Democritus University of Thrace (Greece)
• Pages: 7-25

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Vol. 4 No. 1

January, 2020

ISSN 2519-1284

Acces online at www.iipccl.org

7

A new hope for the local development in Greece: The emergence of Social

Economy

Dr. Konstnatinos Kougias

Democritus University of Thrace (Greece)

Abstract

This paper addresses the rise of Social Economy and its importance for the local development

and social cohesion in Greece. The recent economic crisis has contributed to the emergence

of social solidarity networks and groups resulting in a growing interest in the role of social

enterprise in tackling the vast social and economic challenges facing Greece. Local development

is intrinsically associated with the functioning of social enterprises bringing together economic,

social, cultural and environmental dimensions. Documentary research shall be used as a

method in order to assess the added value of the SE for local development and social cohesion.

We argue that social economy is a young sector with li le sense of collective identity resulting

in limited capacities in mobilizing local resources, stimulating the creation of social capital

at the level of the community, and ensuring the welfare of the members of the community.

Administrative irregularities, weak local government structures, lack of access to fi nance,

poor conducive environment, and the fragmented reality of SE initiatives are identifi ed as key

barriers which are preventing social enterprises from scaling their operations and impact to

local development. Finally, recommendations for future actions are discussed.

Keywords: Greece, Greek Social and Solidarity Economy, Local development, Social

Cooperative Enterprises.

Introduction

From the 1980s onwards, the idea that local communities can serve their own needs

through Social Economy Organisations (SEOs) has gained momentum globally, as

it has become clear that economic and social development cannot arise solely from

the growth of investor-owned enterprises (Borzaga and Galera 2014). Furthermore,

the origin of local development can be traced back to the ine ciencies of centrally

organized policy approaches that in the past proved to be unable to solve social and

economic problems like unemployment (Gre e 2007). In order to promote sustainable

local economic development macroeconomic policies for economic growth and

redistributive policies aimed at poverty alleviation are not su ce. These interventions,

even when successful, cannot guarantee sustainability over time nor a homogeneous

distribution of development, as a ested by the wide imbalances that can be found

in many instances even within the same country (Boldini et al. 2017). For example,

the growing budget defi cits and the progress inglobalization make it increasingly

di cult to adopt thekind of job creationmeasures that were once implemented,the

top-down approach in drawing up andimplementing policies also has problems.

Nationally uniform measures are ine ectivebecause factors inhibiting expansion

in employment di er from region to region. Measures are needed that suit local

Vol. 4 No. 1

January, 2020

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

ISSN 2519-1284

Acces online at www.iipccl.org

8

needs. In some regions, it may be the lack of employment opportunities that prevents

expansion of employment. In others, there may be employment opportunities but a

lack of workers with the skills that fi rms need. An e ective use of limited fi nancial

resources calls for measures that suit local conditions, which in turn require bo om-

up decision-making rather than the top-down approach (Giguère and Higuchi 2005).

These limitations have two main consequences: the fi rst is the relationship between

economic development and the cultural and social components of local contexts, as

each place is characterized by important stocks of cultural and relational capital and

cannot be considered the mere recipient of economic development initiatives. Local

development is intrinsically associated with a multidimensional concept of change

bringing together economic, social, cultural and environmental dimensions; with

innovation across and in the spaces between these dimensions (European Commission

2010). For the past two decades, tools and methodology have been developed, but the

success of local development remains the product of a unique combination of human

and material factors, which intersect in a particular place.

The second consequence is the increasing role as drivers of economic development of

those organizational forms that incorporate social and solidarity elements (Boldini et

al. 2017:2). This alternative approach conceives development as a social process driven

by various factors (including economic, social, historical, and cultural ones). In this

context, the Social Economy (SE) can provide local communities with the institutional

tools to organize and harness their assets and resources and deploy them for their

own social and economic development. In Europe, they have mainly developed to

produce welfare services and integratedisadvantaged people to work; in developing

countries they have emerged in various fi elds such as the delivery of micro-credit

schemes, the construction of infrastructure, and the supply of community services

thanks to the mobilization of local communities or the support of external actors

(Borzaga and Galera 2014).

In the new sustainable development scenario, in which the nature of the process

concerns relational, as well asmaterial goods, two elements are particularly important:

coordination among agents and mutualistic and solidarity networks that are needed

in order to face uncertainty. Both are connected to the role played in this context

by social and solidarity economy organizations. SE o ers an approach to local

development that provides potential for a new vision and added value compared to

traditional approaches. It widens the structure of a local economy and labor market

by addressing unmet needs and producing new or di erent goods and services, and

by broadening the focus of the local development process by taking into consideration

the variety of its dimension and building the required level of trust (Boldini et al.

2017).

Greece has experienced a sudden economic shock in terms of bankruptcies and decrease

in demand, leading to drops in GDP growth rates and increase in the unemployment

rate due to the crisis (Kougias 2018). Against this backdrop, the discussion on ways

to recover from the economic crisis has also generated some interest in the role of

social enterprise. It is expected that social cooperatives could be a vehicle for: (a) job

creation and (b) o ering support to people belonging to vulnerable social groups

(people with disabilities, unskilled persons, etc.). As the SE is a relatively new concept