A MONITOR FOR THE SOCIAL ECONOMY IN FLANDERS
Author(s): Caroline Gijselinckx, Wim Van Opstal, Eva Deraedt and Gert Van den Broeck
1.
Abstract
Although ‘social economy’ is not a new concept or phenomenon, it has enjoyed considerable renewed interest in recent years, both from international sources (see for instance Defourny et al., 2009 and Defourny et al., 1999) and in Flanders, and both among academics, among practitioners and among public authorities. Several initiatives were developed in the search for solutions for old and new social and societal problems: problems concerning employment and environment, honest trade, care and welfare, sustainable mobility, sustainable energy, sustainable production and consumption, etc. The renewed interest for the social economy since the 70s of the 20th century also gave rise to new legal statutes for social economic organisations. The conceptualisation and method of defining the social economy formed the preparatory activities for the development of a monitor of the social economy in Flanders (Gijselinckx & Van den Broeck, 2008; Deraedt & Van Opstal, 2009a and b). This led to a pragmatic and dynamic delimitation of the social economy, with work integration enterprises at its core, encircled by other companies with social finality - in terms of goals and values. The next step was the development of a monitoring instrument (Deraedt & Van Opstal, 2009a and b), which was then made operational for the social integration economy. This monitoring instrument outlines the profiles of the enterprises, the (target) employees, i.e. the employees belong to the target groups of the social integration economy, which means that they have at least one of the following characteristics: age 50+, immigrant, low-skilled and/or an occupationally disabled) and the potential target group employees, i.e. the unemployed jobseekers who meet the criteria for employment in work integration enterprises. This paper gives a brief presentation of the conceptualisation and definition of the social economy and outlines the results of the monitor for the social integration economy. It draws up policy recommendations that aim at making the wealth of information available in the numerous administrative databases, accessible for a monitor for the social economy that periodically and in an improved format, can be used by the Government of Flanders.
Key words: Social economy, monitor, employee profile, social enterprise profile
2.
Objectives
The following questions were answered in view of the development of a monitor of the social economy in Flanders: ‘What is social economy?’ ‘How can this field be empirically defined and observed?’ ‘Which companies, entrepreneurs and business methods can be included in the social economy?’ ‘Which databases can be used and linked in order to generate data on this field?’ ‘Which indicators can be created and used to monitor this field?’ ‘What is the size and the nature of the social (integration) economy in Flanders in terms of numbers and profiles of companies and in terms of numbers and profiles of (target) employees?' ‘To what extent is the potential target group being reached?’
Clarification of key concepts OCMW: Openbaar Centrum voor Maatschappelijk Welzijn (Public Social Welfare Centre): Social Service Department (of a town) VDAB: the Flemish Service for Employment and Vocational Training, i.e. the Public Employment Service Sheltered workshops: - offer employment for people with disabilities who are not able to integrate in the regular labour market. Sheltered workshops receive subsidies for employees with disabilities (their target group) as well as for the coaches accompanying them. 1
Social workshops: - are oriented towards jobseekers that face serious difficulties in finding employment in the regular labour market due to physical, social or psychological problems. Like the sheltered workshops, social workshops receive subsidies to support the employment of the target group as well as the persons accompanying them. There is some overlap between the activity domains of social workshops and sheltered workshops. Local service economy: provides sustainable employment for long-term unemployed persons while at the same time offering quality services to the local community and households. This way, labour market policy objectives are bundled with other social policy objectives. The subsidies for local service economy initiatives are organized in a model of cloverleaf financing: the Federal, Flemish and local authorities all contribute to the financing. Insertion companies: - are enterprises that are willing to provide low-skilled and long term unemployed jobseekers an opportunity for sustainable employment with a particular focus on on-the-job-training. Work integration enterprises receive digressive subsidies for their target employees; subsidies diminish every year and stop after the second year. When talking about work integration enterprises, we make a distinction between regular work integration enterprises and work integration enterprises working with service vouchers. With the latter we refer to enterprises that provide household services (cleaning, ironing, shopping and gardening) where the client pays with a service voucher. These service vouchers are subsidized and services are made very cheap to its customers so as curtail informal employment in these sectors. Work integration enterprises that use service vouchers need to have at least 30 percent of their personnel belonging to the target group. work experience enterprises: - Somewhat similar to work integration enterprises, but active in the nonprofit or in the public sector who offer a work experience for 12 months (which might be extended up to 18 months) to long-term unemployed jobseekers. Work experience enterprises focus both on providing work experience as well as on providing the skills aimed at successful integration in the regular labour market. These enterprises receive subsidies for the target group as well as for coaching these employees.
3.
Methods and data
Literature research was used for the conceptualisation and definition of the social economy. The study refers to the earlier developed conceptualisation in the report ‘Inventaris van databanken ter voorbereiding van een meetpost meerwaardeneconomie’ (Inventory of databases for the preparation of an added value economy benchmark) (Marée et al., 2007), which was prepared by order of the State Secretariat for Sustainable Development and Social Economy. It also builds on earlier and current studies in the area of social economy that are conducted by the research groups involved, such as the 'Onderzoeksinstituut voor Arbeid en Samenleving’ (Research Institute for Labour and Society) (HIVA) of the de K.U.Leuven (Catholic University of Louvain) and the Centre d’Economie Sociale (Centre for Social Economy), located at the Liege University, and is in line with the developments and the international literature (see, e.g., Borzaga & Defourny , 2000; Defourny, et al., 2001; Defourny et al., 2009; Defourny et al., 1999; Develtere, 2006; Lauwereys & Nicaise, 1999; Levesque, 2001; Marée & Mertens, 2002; Mertens, 2002; Van den Broeck, Vanhoren & Nicaise, 2006). For the construction of the monitor for the social inclusion economy, numerous administrative databases and additional statistical data were linked and reduced to three sub-databases. The first contains all the enterprises that are active in the social inclusion economy, including financial-economic and legal indicators. The second focuses on the profile of the target group employees within these enterprises and includes indicators such as age, nationality, gender and income position. The third and last sub-database contains information about the entire target group of the social inclusion economy. The methodology used enabled the creation of a profile of the enterprises, the target group employees and the potential target group employees within the social inclusion economy. The results relate to the sheltered and social workshops, the insertion companies with and without service cheques and the work experience promoters (WEP+). 2007 was the reference year for the data.
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4.
Findings
4.1 The social economy: theoretical basic elements for a finality approach In first instance, ‘social economy’ refers to a domain within the economy, to a specific way of performing economic activities. The social character of the economic performance is the main criterion in the distinction between the social economy and the rest of the economy. The social aspect has two dimensions: the social nature of the activities on the one hand and the social purpose pursued with the economic activities on the other, referred to as the finality of the economic activities. In this respect a distinction is made between so that reasons and because reasons. So that reasons refer to the objectives pursued with the economic activities – what one aims to realise, i.e. the need(s) one seeks to cover with the economic activity. In correspondence therewith, they refer to the actor(s) for and by whom the need(s) is/are being described, i.e. to the beneficiary category/categories of the economic activities (Defourny et al., 2001). The start of an economic enterprise is often based on a combination of so that reasons or objectives, and likewise, multiple economic actors will be involved in the realisation of these objectives and benefit from performing the economic activities (Gijselinckx & Van den Broeck, 2008). Because reasons have to do with the primary motives of the actions according to the primary or fundamental values of the person performing the action. In a social economy, the because reasons are specific, explicitly formulated ‘social’ values that primarily drive the economic actions. Although economic performance and efficiency are important, they are inferior to service provision to the beneficiaries. Making a profit serves to enable improvement and continuity of the services. The objectives (so that reasons) and primary motives (because reasons) are the base elements of a description that theoretically allows to determine the specificity of the social economy within the whole of the economy (and, for instance, as opposed to the capitalist profit-driven economy). For empirical monitoring of the field of the social economy, the study subsequently searched for empirical definition criteria. 4.2 Towards a delimitation of the social economy in Flanders. The researchers developed a pragmatic and dynamic selection of enterprises which allowed them to find and systemise the companies and the data involved. The point of departure here is the social enterprise: organisations that primarily pursue social and societal objectives and added value; that reinvest any profit made into their social objective or into society in a broader sense and that limit financial interests of investors, but whose operation is still driven by entrepreneurial logic. The enterprises included in the monitor were subsequently selected on the basis of their ‘recognition’ as a social economy enterprise and/or their self reported belonging tothe social economy (Gijselinckx & Van den Broeck, 2008). The latter aspect is sub-categorised into (1) the membership of an umbrella organisation or a federation associated with the Flemish Consultative Platform for Social Economy (VOSEC) and (2) self-conversion to the social economy via registration as a social economy enterprise on the list of the social economy portal site kept by VOSEC. This assumes the enterprise’s endorsement of VOSEC’s definition of the social economy as well as its active pursuit to concretise social objectives and primary social motives into its company structure and daily operation. There is no empirical data to substantiate the extent to which the companies involved effectively manage to achieve this. Enterprises within the social economy can be subdivided into three categories: the first category, the social inclusion economy, primarily satisfies the need for social-professional integration of vulnerable groups that have a hard time finding a job elsewhere on the labour market. The second category contains enterprises whose primary aim is to (financially and professionally) support the social economy. The third and last category comprises companies whose economic activities are driven by other social objectives, such as fair trade, environmentally-friendly production of food, goods and energy, sustainable reuse of goods and raw materials (solidarity with future generations), social service provision, services in the care or welfare area, participative entrepreneurship, etc. This last category can be further defined more strictly or broadly (Gijselinckx & Van den Broeck, 2008). A first run of the monitor involved the first category: the recognised social inclusion enterprises, and more notably the sheltered and social workshops, the insertion companies with and without service cheque recognition and the work experience promoters (WEP+). In the strictest sense, the latter does not belong in the social economy. It was included in the monitor upon request from the Department and Subsidy Agency for Work and Social Economy, all the more because in practice, the social economy is a hybrid reality in which several programmes are often combined into one and the same enterprise. A large number of social economy enterprises also operate as work experience promoters. 4.3 Results of the monitor: an insight into the social inclusion economy in Flanders. The profile sketch of the companies involves more than 600 enterprises or organisations. The work experience promoters (WEP+) constitute the vast majority, followed by the social workshops and insertion companies. As for employment of target group employees, however, the sheltered workshops are in the lead with more than 15,000 target group employees on a total of approximately 25,000 in the social inclusion economy. Also, more than 80% of employment in the sheltered workshops involves some type of target group employment against only 4% for the insertion companies. In all, target group employment in the social integration economy counts for about 1.2% of all employment in Flanders. Of all employees in Flanders, 6.8% works at a company or organisation that falls in the scope of the social integration economy (Deraedt & Van Opstal, 2009b).
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Most social workshops and insertion companies are relatively small enterprises. By contrast, most sheltered workshops operate at a larger scale – three of them even employ more than 1,000 staff. Sheltered workshops also play a bigger role in the social integration economy in terms of turnover and gross added value. However, insertion companies carry more economic weight than other employment types, mainly due to the presence of a number of large companies that have acquired the insertion company label. The average and median of the insertion companies (with and without service cheque recognition) and the work experience promoters are, however, biased upward because the necessary financial information from smaller units in this employment type was unavailable. On the other hand, thanks to additional data collection by the Screening and Support Service of the Flemish Subsidy Agency for Work and Social Economy (VSAWSE), the information from sheltered and social workshops is indeed almost complete. It indicates that the sheltered and social workshops represented a combined volume of 0.12% of Flanders’ Gross Domestic Product in 2007. An economic analysis shows a relatively large risk of cash problems in one third of the investigated insertion companies, whereas sheltered and social workshops generally have a good or very good cash position. By comparison, a recent study conducted by the Federal Planning Agency into the financial structure among more than 275,000 companies from the industrial and non-financial sectors (Spinnewyn, 2010) showed that as many as 39% of the enterprises investigated ran a risk of cash problems. Solvability (share of equity in balance sheet total) of the sheltered and social workshops can be described as high or very high. For comparison: the above-mentioned study of the Federal Planning Agency showed a median of 0.31 for enterprises in the industrial sector and certain non-financial services. For sheltered workshops, the first quartile is more than twice as high (Van Opstal, W., 2010). 9% of the sheltered workshops reported a generally negative result for the 2007 fiscal year, whereas 26% of the sheltered workshops showed an operational loss. The work experience projects display a similar discrepancy. As regards the legal status, the data exhibit an npo-status for the majority of the sheltered and social workshops, whereas insertion companies are all trading companies. In 2007, two thirds of WEP+ promoters were situated in the private sector; the remainder consisted of local administrations (municipalities, public centres for social welfare, etc.). The status of ‘social purpose company’, which was created in 1995 for activities such as those performed in the social economy and which can be linked to a trading company, is virtually unused by the sector (Dujardin, Mertens & Van Opstal, 2008). These conclusions are hardly surprising. After all, the recognition rule within the social economy often imposes certain legal forms in order to qualify for recognition and subsidies. As such, sheltered workshops (under private law) can only qualify for recognition as an NPO, and trading companies must have the status of insertion company in order to obtain recognition. Remarkably enough, most of the social workshops have opted for NPO status. They seem to have completely ignored the status of ‘social purpose company’, even though this also ensures qualification for recognition (see also De Coates & Van Opstal, 2010). Contrary to many other countries in Europe, the Flemish social integration economy is mainly populated by male target group employees. The WEP+ programme and most certainly the insertion companies with service cheque recognition are an exception in this respect. Furthermore, the eldest population of target group employees can be found in social workshops; the youngest in insertion companies. The sheltered and social workshops seem to employ the lowest-skilled target group employees, but the VSAWSE data about the sheltered workshops are incomplete in this respect. The average level of education is highest in the work experience programme. Insertion companies employ the highest percentage of immigrants. Full-time jobs for target group employees are most common in the sheltered workshops, followed first by insertion companies and then by social workshops. The work experience projects offered full-time employment to no more than 35% of the target group, and this figure is a mere 3% at insertion companies with service cheque recognition. Based on the data from the VDAB, the research team was able to outline the profile of the potential target group for the social integration economy. This potential target group was selected according to the criteria included in the Acts regulating the recognition of the employment types discussed in this paper. However, the VDAB data did not allow for a meaningful definition with respect to the sheltered workshops. Social workshops and insertion companies employ a significantly higher proportion of male workers, whilst insertion companies with service cheque recognition as well as work experience promoters offer jobs to a significantly higher amount of female workers than are present in the potential reserve. Both the social workshops, insertion companies and work experience promoters employ significantly fewer elder employees than are present in the potential reserve, but this says more about the age of the people in the potential reserve than about the efforts of the social integration economy to offer elder workers a chance of employment. Social workshops, insertion companies and work experience promoters employ a significantly higher proportion of younger employees than are present in the potential reserve, but this observation, too, is associated with the large relative proportion of elder jobseekers in the potential reserve. All three work forms also employ a lower percentage of low-skilled workers than are present in the potential reserve. However, for the social workshops this is related with a definition issue: after all, it is impossible to provide a perfect definition of the potential target group for the social workshops on the basis of the parameters included in the VDAB database. From all the employment forms within the social integration economy, the insertion companies employ the largest number of immigrants, but they also provide work to a larger proportion of this target group than is present in the potential reserve.
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5.
Conclusions and policy implications
In order to define the social economy in the monitor, social enterprises are selected on the basis of their ‘recognition’ as a social economy enterprise and/or their self reported belonging to the social economy (Gijselinckx & Van den Broeck, 2008). These criteria assume that enterprises that present themselves as social economy companies actually pursue social objectives and that they do so in accordance with the principles of the social economy. Further research in the field of development and application of a suitable measuring instrument allowing for determination of the extent to which companies manage to actually realise this could lead to a verified list of social economy companies. Each concrete use of a monitor involves clear choices as regards its scope and hence of the demarcated part of the social economy. Reports on numeric data must always include a clear description of the categories of the social economy to which they refer, in order to avoid any form of reductionism of broader theoretical concepts to limited and pragmatically perceivable subcategories (Gijselinckx & Van den Broeck, 2008). Although the 2007 output of the monitor offers an interesting profile sketch of the enterprises and the target group of and for the social integration economy, to this day it was a one-off exercise and it did not cover the entire social economy. A first point of improvement would be to expand the monitor so as to include the full scope of the social economy. After all, the output presented here only involves initiatives from the social integration economy. It does not take consideration of the activity cooperatives, solidarity financers, consultancy agencies, incubation centres, recognised cooperatives and the majority of the companies with a primary social objective and thus excludes more than 1,000 companies from the scope of the monitor. The added value of the monitor can only be proven to its full extent by continuing it in the coming years. After all: apart from being a cross-sectional (and hence inter- and intra-sector) benchmark, this monitor is mainly interesting as an inter-temporal benchmark for the distinct work forms within the social economy. As such it would not be an unnecessary luxury to use it for monitoring the effects of the 2008-2010 financial-economic crisis. In addition, the setup of a panel database would allow for formulation of critical success factors and more specifically, for monitoring the position of starters in the social economy (Van Opstal, Deraedt & Gijselinckx, 2009). Furthermore, the structure of the social economy is constantly subject to change, which leads to the formation of new work forms and the reform of existing ones. Consequently, it proved impossible to determine an accurate profile sketch for the local services economy on the basis of the 2007 data. Another example is the work experience programme that as from 2009, applies a distinction between internal promoters who are united in learn&work companies and external promoters (De Cuyper, Jacobs & Van Opstal, 2010). As far as monitoring is concerned, the field of data collection and management also offers room for improvement at a substantive level. At present, for instance, it is impossible to form an accurate image of the activity profile of the social integration economy on the basis of the available administrative databases. The databases of the National Office for Social Security (RSZ) and the Crossroads Bank for Enterprises (KBO) maintain the NACE-BEL code, an activity nomenclature. Although the existence of a ‘sheltered and social workshops’ NACE-BEL code may be interesting for the sector from statistical point of view, it does not tell us anything about the activities carried out within these work forms. For instance: contrary to many companies in the regular economy, sheltered workshops can be active in more than five different activity domains (Van Opstal & Pacolet, 2007). VOSEC currently holds the most complete activity database, but it is set up at a branch level and links with the other data in the monitor are often impossible for lack of the KBO enterprise number. One last point of potential improvement as regards the current monitoring instrument concerns better measurement of the potential target group of all the work forms within the social integration economy. This would enable an exact calculation of the extent to which the integration economy manages to reach its target group. This could include an investigation into inter-regional differences and a check to which extent and where certain work forms are or are not in each other’s way. And finally, besides expansion of the monitor beyond the social integration economy and besides optimisation of the current measurements, it would also be interesting to measure the other social added values – in other areas than (social) employment – that are being realised by the social economy. At present the monitor contains indicators in the field of profiles and economic performance of the enterprises, the number and profiles of the target group employees and the extent to which the potential target group is being reached. In order to measure social added values other than social integration of target group employees, the monitor should also include completely different indicators and data.
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Full reference of study report(s) and or paper(s) and other key publications of the study summarised here Deraedt, E., & Van Opstal, W. (2009a). Een monitor voor de sociale inschakelingseconomie in Vlaanderen. Resultatenrapport. WSE Report 2009. Deraedt, E., & Van Opstal, W. (2009b). Een monitor voor de sociale inschakelingseconomie in Vlaanderen. Methodologierapport. Leuven: HIVA-KULeuven /Policy Research Centre Work and Social Economy. Gijselinckx, C., & Van den Broeck, G. (2008). Monitoringinstrument voor de sociale economie in Vlaanderen. Technisch voorrapport. WSE Report 2008. Borzaga, C., & Defourny, J. (2000). The emergence of social enterprise. London: Routledge. Brandsen, T., Pestoff, V. (2006). Co-production, the third sector and the delivery of public services: an introduction. Public Management Review, 8(4), pp. 493-501. Coates, A., & Van Opstal, W. (2010). Een rechtseconomische doorlichting van juridische kaders in de sociale economie. Over.Werk, 3, pp. 51-65. De Cuyper, P., Jacobs, L., & Van Opstal, W. (2010). Evaluatie van het nieuwe werkervaringsprogramma. Een analyse van de organisatie en financiële positie van de leerwerkbedrijven. Leuven: HIVA-KULeuven. Defourny, J., Develtere, P., & Fonteneau, B. (1999). Sociale economie in noord en zuid. Leuven-Apeldoorn: Garant. Defourny, J., Nicaise, I., Bajoit, G., et al. (2001). Sociale Economie: conceptualisering, sociale tewerkstelling en buurtdiensten. Antwerp: Standaard Uitgeverij. Defourny, J. (2004). L’émergende du concept d’entreprise sociale. Reflets et Perspectives, XLIII, 2004/3. Defourny, J., Develtere, P., Fonteneau, B., & Nyssens, M. (Eds.) (2009). The worldwide making of the social economy. Innovations and changes. Leuven: ACCO.
Dujardin, A., Mertens, S., & Van Opstal, W. (2008). De vennootschap met sociaal oogmerk. In: W. Van Opstal, C. Gijselinckx, & P. Develtere (Eds.) Coöperatief ondernemen in België: theorie en praktijk (pp. 121-154). Leuven: ACCO. Eme, B. (1991). Les services de proximité. Informations sociales, 13, pp. 34-42. Evers, A. (2001). The significance of social capital in the multiple goal and resource structure of social enterprises. In: C. Borzaga, J. Defourny (Eds.) The emergence of social enterprise. London and New York: Routledge. Evers, A., & Laville, J.-L. (Eds.) (2004). The Third Sector in Europe. Cheltenham and Northampton: Edward Elgar. Evers, A, & Laville, J.-L. (2004). Defining the Third Sector in Europe. In: A. Evers, & Laville, J.-L. (Eds) The Third Sector in Europe. Cheltenham, UK, & Northampton, USA: Edward Elgar. Evers, A. (1990). Im intermediaren Bereich. Soziale Trager und Projekte swischen Hanshalt, Staat und Markt. Journal fur Sozialforschung, 2(30), pp. 189-210. Evers, A. (1995). Part of the welfare mix: The third sector as an intermediate area. Voluntas, 6(2), pp. 119-39. Gijselinckx, C. (2010). Sociale economie in Vlaanderen: een proeve van conceptualisering en afbakening. Over.Werk, 3, pp.825. Lauwereys, L., & Nicaise, I. (1999). Morfologie van de sociale tewerkstelling in België. Leuven: HIVA-KULeuven. Laville, J.-L. (1992). Les services de proximite en Europe. Paris: Desclee de Brower. Laville, J.-L. (Ed.) (1994). L’économie solidaire. Paris: Desclee de Brower. Lévesque, B., Bourque, G., & Forgues, E. (2001). La nouvelle sociologie économique: originalité et diversité des approches. Sociologie économique. Paris: Desclée de Brouwer. Marée M., Gijselinckx, C., Van den Broeck, G., & Dujardin, A. (2007). Inventaris van databanken ter voorbereiding van een meetpost meerwaardeneconomie. Liege/Leuven: Centre d’Economie Sociale / HIVA-KULeuven. Marée, M., & Mertens, S. (2002). Contours et statistiques du non-marchand en Belgique. Liege: Editions de l’Université de Liège. Mertens, S., & Marée, M. (2007). De definitie van de sociale economie in België. E-note nr.2 van het Cera Steunpunt Coöperatief Ondernemen. Leuven: HIVA-KULeuven. Pestoff, V. (1991). Between the Market & Politics: Cooperatives in Sweden. Frankfurt am Main and Boulder, CO: Campus Verlag & Westview Press. Pestoff, V. (1995). Local Economic Democracy and Multi-Stakeholder Co-operatives. Journal of Rural Co-operation, 23(2), pp. 151-167. Spinnewyn, H. (2010). Fragiliteit van de financiële structuur van de industrie en bepaalde niet-financiële diensten in België anno 2007. Working Paper 05-10, Federal Planning Agency. Van Opstal, W. (2010), Organisatie en financieel beheer van ondernemingen in de sociale inschakelingseconomie. In: Verso, Social Profit Jaarboek Vlaanderen 2010-2011 (pp. 50-55). Antwerp: Standaard Uitgeverij. Van Opstal, W. & Deraedt, E. (2010). Naar een monitor voor de sociale inschakelingseconomie in Vlaanderen. Over.Werk, 3, pp. 37-50. Van Opstal, W., Deraedt, E., & Gijselinckx, C. (2009). Monitoring Profile Shifts and Differences among WISEs in Flanders. Social Enterprise Journal, 5(3), pp. 229-258. Van Opstal, W., & Pacolet, J. (2007). Een markt voor beschutte werkplaatsen in Vlaanderen. Leuven/Tienen: HIVAKULeuven/VLAB.
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