In periods of recession, private sector of economy does not develop entrepreneurial action, due to limited demand which implies limited profits. This results in reduction in employment and increase in unemployment. Public sector of economy should proceed to public investments and enhance development. However, in the present economic crisis, public sector does not develop initiatives, due to budget deficit; to the contrary public sector is confined and contributes to the maintenance of recession. Social sector of economy does not aim at profit making but at job creation, mainly for the vulnerable groups of population. It intervenes by taking actions of mild economic growth and contributes to economic recovery. For this reason, national legislations in Europe provide the establishment of social economy enterprises. Local government, which, in a sense, belongs to the social sector of economy, has the possibilities to reinforce both social economy enterprises and actions of social entrepreneurship aiming for the enhancement of local economy.
Keywords: Social entrepreneurship, Social economy, Local government, Social economy enterprises, Social sector of economy, Third sector of economy, Economic recession
Social economy is an arena of business activity including the public and the private sector. The economic entities that are activated within the context of social economy carry out actions which cover social needs and/ or are related to vulnerable social groups.
In general, social entrepreneurship constitutes a field of action between the public sector of economy and the sector of private initiative.
- The public sector includes both the state, in a rather narrow sense (government- public administration), and the broader public sector (public law legal entities, private law organizations controlled by the state - public enterprises).
- The sector of "private initiative" (enterprises or actions in general, organized under the framework and the rules of market economy).
- The collective action sector includes activities developed by collective entities, such as cooperatives, professional chambers, local unions and associations, nonprofit civil companies or other forms of collective socially-oriented initiatives.
The main goal of "private initiative" enterprises is to satisfy self-interest. On the contrary, the goal of public sector enterprises is to satisfy public interest.
The form and the structure of enterprises established by the state or by public organizations are defined by the objectives, the conditions of business activities and the needs that have to be met by any such enterprise. The establishment of the said enterprises and their basic operation rules are defined, per each category, by a special legislative framework, providing for their specific regulatory arrangements; other relevant issues are governed by the rules of private economy and any related legislative regulations.
The collective action sector, the character, extent and organization of which are affected both by public sector rationale and market rationale, includes entities and activities that enable the participation and collective efforts of citizens with respectively common interests and benefits. They do not - primarily - aim at profit-making, even in cases when they also plan and seek for profit, but at the fulfillment of specific social needs, although they frequently make use of organizational schemes of business functions; or - in parallel to their social goals, they still head to revenue gains or to ensuring financial self-sufficiency by being paid for the products and services they provide. Any intended "profit", or -to be more accurate- "revenue", which forms an index for their rational business functioning, is not allocated to a specific entrepreneur or even to a specific social group, but it is either re-invested or used in order to meet the needs of the society as a whole. …