Financial mechanisms for innovative social economy ecosystems

Earlier this year, I contributed to a project funded by the International Labor Organization on the social economy and financial mechanisms to support innovative SSE ecosystems. The report is available online now. I undertook the Quebec case study, analyzing the way that the social economy ecosystem has developed over the last 20 years and the innovative methods of social investment that have enabled it to flourish. Country case studies were also undertaken in Cape Verde, Colombia, Ecuador, Italy, Luxembourg, Morocco and South Korea.

Among the key themes emerging from the work is the observation that SSE organizations routinely access many different sources of finance, but also have specificities in terms of aims, sectors of activity, governance and ownership structures that require careful tailoring of financial sources and mechanisms in order to avoid distortions and mission drift. Without taking for granted that SSE organizations have greater difficulties than traditional companies of similar size, and without assuming that the most innovative financial instruments are also the most effective and best suited to the needs of SSE organizations, the project results call into question some of the most widespread (though often unsubstantiated) tenets on access to finance for SSE organizations and highlight the importance of a blended approach that can successfully mix internal and external, public and private, market and non-market financial sources. The aim is to support the growth of SSE ecosystems that can continue to address social problems and provide viable alternatives to their root causes.

Financial mechanisms for innovative Social and Solidarity Economy ecosystems