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

AuthorKonstantinos Kougias
PositionDemocritus University of Thrace (Greece)
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
A new hope for the local development in Greece: The emergence of Social
Dr. Konstnatinos Kougias
Democritus University of Thrace (Greece)
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 nance,
poor conducive environment, and the fragmented reality of SE initiatives are identi 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.
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 de 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
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 rms need. An e ective use of limited 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 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 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.
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

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