What is Australia doing to unlock and build the potential of its social economy?

Social economy organisations are making a significant contribution to social and economic development across the world. The social economy includes a diverse array of organisations but these organisations share a common feature: they put social and environmental concerns at the centre of their business model.

With growing global interest in the social economy , in 2023 the Australian Government indicated a major shift towards supporting and enhancing the social economy through several initiatives.

These include:

  • The Measuring What Matters Statement: While traditional economic indicators, such as GDP, successfully measure economic strength they do not provide a full picture of national progress. By providing a broader set of measures of economic wellbeing, that include social and environmental indicators, the Federal Government argues the statement can yield better insights into Australia’s social cohesion and long-term prosperity.
  • The Wellbeing Budget: The inaugural Wellbeing Budget is designed to measure ‘what matters’ to Australians. Five themes on how wellbeing could be measured have emerged from the government’s preliminary public consultations. These include:
    • Prosperous: A growing, productive and resilient economy
    • Inclusive: A society that shares opportunities and enables people to fully participate
    • Sustainable: A natural environment that is valued and sustainably managed in the face of a changing climate for current and future generations.
    • Cohesive: A safe and cohesive society that celebrates culture and encourages participation
    • Healthy: A society in which people feel well and are in good physical and mental health now and into the future
CSI is uniquely positioned to lead research into Australia’s social economy as more governments globally seek to shift towards a more values-driven economy to address growing societal inequities.” – Professor Danielle Logue, Director of CSI UNSW

In addition, the Federal Government in its Employment White Paper has proposed ways of leveraging jobs growth by bolstering the country’s social enterprises sector.

Harnessing investment

In December 2023, the Treasurer’s Investor Roundtable brought together leaders from across the investment community to identify and unlock investment opportunities that deliver both good returns for the nation and good outcomes for investors and members. There were some promising outcomes for social economy organisations from the social impact investment roundtable:

  • Participants signalled an ambition to grow their impact investing portfolios, with the Paul Ramsay Foundation announcing $60 million for its own evergreen concessional impact investing fund and committing 10 per cent of its liquid balance sheet to impact investments with market returns.
  • Westpac, Macquarie, the Minderoo Foundation and the Paul Ramsay Foundation agreed in‑principle to invest alongside government in social impact initiatives that deliver outcomes for communities and tackle disadvantage.
  • Westpac, CBA, Macquarie, ANZ, NAB, Rest and HESTA agreed to contribute expertise to support the social enterprise sector.
  • Roundtable participants and sector stakeholders will also be contributing to the co‑design of the government’s $100 million Outcomes Fund announced in the 2023‑24 Budget.

The CSI research agenda: building the evidence base on the Australian social economy

This growing emphasis on the importance of the social economy to sustainable economic development has prompted calls for more information about social economy organisations and how they operate. A clear understanding of what the social economy “is and is not” will provide the basis for better policy support and can contribute to the development of strong ecosystems.

In Australia, some data is available on the size of the social economy. For example:

Beyond the numbers: CSI Social Economy Survey

However, this data is not enough to understand the dynamics of the sector.

The OECD has observed that social economy organisations tend to prioritise mutual support and collaboration within the field but are also engaging in cross-sector partnerships with for-profit businesses. These collaborations are enabling social economy organisations to scale but also involve some risks. There are also international debates occurring around the best way to measure the non-market outputs of social economy organisations, to demonstrate their social and environmental impacts.

The Centre for Social Impact (CSI) is leading research into the social economy with a three-year long annual survey of Australia’s social economy organisations. This research will expand our understanding of the Australian social economy and contribute to global discussions on the social economy more broadly. ‘The Social Economy Survey’ aims to recruit 200 social economy organisations to participate in the survey each year.

"CSI has a long history of working to support organisations in the social economy to plan and measure their impact in driving positive change. Generating evidence is important to understand the drivers of change and ingredients of best practice.” – Professor Erin Wilson, Uniting Chair in Community Services Innovation, CSI Swinburne