What Australia Can Learn from the EU’s Social Economy Report

As the EU releases its groundbreaking report on the social economy, Associate Professor Melissa Edwards from CSI UNSW, shares her thoughts on its significance and what Australia can learn. In this interview, she highlights the need for coordinated efforts and data collection to better understand and grow the sector, and the potential for an Australian first research on the social economy being conducted by the Centre for Social Impact to close this gap in knowledge.

The European Union has recently released a report called Benchmarking the socio-economic performance of the EU social economy. What's the significance of this report?
The significance of the report is it shows a comprehensive overview of the size and reach of the social economy in the member countries of the EU which includes 27 countries and 4.3million entities. The scale of this study is really impressive and demonstrates a coordinated or combined way of thinking about the sector. Traditionally we’ve been thinking of organisations like not-for-profits, cooperatives and mutuals, social enterprises, philanthropic organisations and trusts, as being separate sectors. But the social economy brings all of them together. It gives us a cohesive picture of all of these types of organisations that are working towards addressing critical social issues, and that’s particularly important when we're facing mega social problems.

In fact, the idea of the social economy really started to take hold during the COVID-19 pandemic when there was a need for people to come together to solve large social issues. And what it really identified was the scale and scope of those organisations and their effectiveness when they work together. So it provided an opportunity to think about how these for-purpose organisations can have greater impact working in sync, and that it's really important these organisations can share resources in order to scale.

The EU has a very different operating environment to Australia, so what is the significance of this report to the social economy in Australia?
It shows us what is possible regardless of your operating environment. The main differences are in terms of legislation and legalities of what organisations can and can't do. Yes, the context in Australia is different, but at the same time, we do have similar entities across those different areas of the social economy.

What we don't have is that kind of coordinated way of seeing them as a sector to direct resources towards addressing these social issues and where they’re needed most. Currently in Australia, we're somewhat limited in understanding the scale of the potential for these organisations to make change. We don't have these kinds of frameworks and indicators of understanding. So it limits our ability to understand the resourcing that's required or the potential for investment and where it can best be channelled.

What can Australia learn from the EU social economy report?
The first step is establishing the view of the social economy, we don't have that in Australia yet. In the EU they have a strategy that's been in place for a number of years now, which has been coordinating planning around the definition of the social economy. In 2021 the European Commission established the Social Economy Action Plan (SEAP). The aim of the action plan is to enhance social investment, support social economy actors to start-up, scale-up, innovate and create jobs. It’s about bringing people together across the social economy, identifying what they have in common, and building opportunities for collaboration for greater impact.

Once again it highlights that currently we don’t have a good picture of Australia’s social economy, it’s not well defined. We don’t have that kind of centralised, coordinated way of thinking about it. So historically we haven’t been able to effectively gather the data to show the size and scale of it. It’s a significant gap in our knowledge that hinders our ability to create change at scale. There’s no doubt Australia needs to take a similar approach to the EU. And that’s why the Centre for Social Impact initiated the CSI Social Economy Report , which launched in early 2024.

What is the Centre for Social Impact doing to close this gap?
At the Centre for Social Impact we are conducting Australian first research on the social economy to close this gap in knowledge of the sector. Australia’s social economy continues to expand in both size and relevance, yet a lack of data impedes policymakers, researchers and advocates from fully understanding and supporting its function and growth.

Over three years, CSI is collecting data and information from people within the sector in order to create that starting place, that picture of what the sector looks like and to understand what type of issues the sector is facing. Through an annual survey, we seek to empower sector stakeholders, providing valuable insights for policymakers, researchers, and advocates, attracting investment and positioning Australia’s social economy as a dynamic contributor to national development. The insights gained will equip leaders and policymakers with the data and knowledge needed to make informed decisions, implement targeted strategies, and foster sustainable growth within the social economy.

This is Australia’s first attempt at gathering data of this kind. However, achieving the same scale as the EU report requires strong participation from those in the sector. To do that, we need to mobilise large-scale data collection efforts and ensure high survey response rates.

How urgent do you think is it that we get this research done?
I think it's extremely urgent because we know resourcing for large scale social issues like we're confronting right now, is immense. Without coordinated efforts across the sector we're not going to get there. If we don't have an understanding of how we can do that and how people in the social economy can work together then it’s a lost opportunity.

The way that we currently think about the contribution of the social economy sector is very limited because we don't look at those social impact indicators in a comprehensive, consolidated way. Australia needs to get to a position where we can demonstrate the immense impacts that are happening through the sector. It’s vital to measure beyond pure financial numbers or jobs created, and things that inform traditional measures of GDP.

Find out more about the CSI Social Economy Report and how to participate in this Australian first research here .

Interview with Associate Professor Melissa Edwards , Research and Innovation Director at CSI UNSW .