Companies in the social and solidarity economy are more resilient in the face of the health crisis and economic instability.

Published on December 01, 2021

The numbers are unanimous. The structures of the social and solidarity economy, against all odds, are more resilient to the economic shocks associated with the health crisis. Sustainability, the reasons for which can be found in their economic model, which for a very long time tried to combine profitability, social and environmental benefits.

Impact, but more stable. Social and solidarity economy (ESS) structures counter the health crisis and prevailing economic instability. With its 2.4 million employees in 220,000 “employer institutions” (associations, cooperatives, stock companies, foundations, social enterprises, etc.), the SSE ecosystem today covers 14% of jobs in France and 10% of GDP.

According to the latest policy brief from the ESS Observatory, ESS gained 84,843 jobs in the decade 2009-2019. The economic dynamism was welcomed by many observers, but slowed down greatly by the health crisis, with 52,500 job losses (-2.5%) in 2020, according to the Observatory. But thanks to strong growth in France (6.75% according to the latest data from the Banque de France), ESS created 4.7% more jobs in June 2021. So much so that its employment rate exceeds pre-health crisis levels with 54,000 jobs created. In particular, for the most economically affected sectors such as sports, recreation and culture (+17.5%), as well as the tourist complex for accommodation, food and solidarity (+7%).

Reasons for sustainability

“SSE structures lost fewer jobs and recovered faster than the rest of the economy. This resilience to crises has always been one of the strengths of the social and solidarity economy”, a comment Jérôme Saddieu, President of ESS France and Crédit coopératif.

This ability to resist is not new. This was especially evident during the 2008 global financial crisis. Non-financial and not very globalized SWF structures were less affected. “They are developing patient capital that is much less dependent on financial markets”adds Jean Moreau, co-president of the Impact France Movement, which brings together 1,500 “social and environmental impact companies”, many of which originate from SSE.

Their statutory governance model, which brings managers, employees and shareholders together in the decision-making process, also remains a hedge against economic instability. By law, their profits must also be reinvested in the maintenance or development of activities. “As a result, as soon as they can, they are hiring, which is great for the economy. Profitability is not their main goal, they make different strategic choices than traditional companies. Even if they care about staying profitable and aiming for growth.”explains the president of ESS France.

More engaged employees

For Jean Moreau, this resilience is also linked to the employee profile: “These are more goal-oriented talents, with a strong determination to stand up for the goals that their employer defends. When a storm hits, teams are more united to get through it. I see a lot in startups.”

Another reason related to the recent health context: the significant support of the French state in terms of helping businesses during the crisis. Partial unemployment, state-guaranteed loans (PGE), a 100 billion euro recovery plan (including 1.3 billion for the social economy and the solidarity economy) – these measures have provided exceptional support to French companies in general, including ESS.

Today, this economic vitality is driving more and more voices from the SSE to advocate for a paradigm shift in French economic policy. “A business model that puts social and environmental impact at the center is viable. The state must maintain this momentum to further pollinate the real economy. Giants of impact should also appear. slide off”concludes the co-chairman of the Impact France movement.

Mathieu Viviani @MathieuViviani

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