2024-07-30 14:20:36
The Social and Solidarity Economy Law (ESS), adopted on July 31, 2014, provides legal recognition to organizational models based on the following fundamental principles: democratic (or participatory) governance, non-profit or supervised for-profit, social utility. The ESS thus brings together associations, cooperatives, mutual aid societies, foundations and commercial companies that respect its principles. Ten years later, what is the impact of this law?
Pioneering actionSocio-Economic Data Development Association (ADDES) has contributed to improving quantitative knowledge on ESS and today INSEE, the National Institute for Youth and Popular Education (Injep), the Observatory of ESS (especially through ESS Commentary Gallery and the work of the ESS movement and scholars on the topic.
These different complementary contributions provide a fairly comprehensive statistical picture of the ESS contribution, but should be considered with caution. The fact that these data do not always cover the same scope reminds us that statistical measurements are based on different visions of the economic and entrepreneurial world, which, as we have pointed out, are not always clear or collectively debated. in the text.
Mixed Development
Statistics show that the law on ESS has not been accompanied by the expected development of the sector in a very particular environment, as it is characterized by strong instabilities related to the international context, inflationary tensions or the impact of the COVID-19 pandemic.
The data highlight the slowdown in job creation in the ESS both in absolute terms and relative to the rest of the private sector. Between 2000 and 2014, employment in the ESS grew 24 percent, while employment in the private sector excluding the ESS grew less than 5 percent. Conversely, the data show that traditional businesses have created more jobs than the ESS since 2016. Paid employment in the ESS, measured in full-time equivalents (FTEs), has made little progress since the law was enacted, representing only 9.4 percent of total employment, compared to 9.9 percent before the law was passed.
In associations we see employment stagnation, which can be explained especially by public reforms. Their financing weight is very largeIn mutual associations, the number of FTEs increased slightly, while in cooperatives, the number of FTEs decreased slightly, with a large difference, as SCOP and SCIC developed strongly, continuing the growth started in 2012. Within ESS, the number of FTEs in foundations increased sharply. Workforce.
Public support is uncertain and insufficient
All public aid to companies is estimated at around 160 billion euros. It is difficult to measure the share of ESS companies because the financing channels are so diverse. But we can be sure that this share does not correspond to the share of ESS in employment. ESS High Committee’s Assessment of the ESS Act stressed that “the main issue left by the 2014 law is the means assigned to the ESS agencies to ensure their legislative and regulatory mission”.
In general, the ESS hardly benefits from tax deductions, tax credits and exemptions, which are mainly used to finance the traditional economy. The ESS benefits more from budgetary expenditures in the form of subsidies (just like the rest of the economic structure, which provide numerous aids to companies – investments, installations, etc.), tax exemptions for donations to associations or foundations, SCOPs related to employment and public policies, especially in the field of inclusion through employment, where it plays a structural role. Apart from this, the ESS is often forgotten by public policies…
Therefore, a project should be initiated to measure and assess public aid to the profits of ESS companies compared to other companies. This would make it possible to question the dominance of ESS (and especially associations) as subsidy economies, since the sparse data currently available seem to show a deficit in public aid for ESS companies compared to traditional companies.
Challenges in measuring ESS contribution to GDP
Contrary to a fairly widely held view, 10% is not the contribution of ESS to GDP; ESS employment as a percentage of total employmentAccording to estimates from about fifteen years ago, ESS will ensure 5% to 7% of GDPWe lack more up-to-date references. The 2014 law did not establish, as hoped, the ESS satellite accounts, which would allow the ESS contribution to GDP to be shown. The approach initiated in 2019 by INSEE in this direction as part of Eurostat’s European funding has not yet produced results.
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Of course, many works have stressed the limitations of the GDP indicator in assessing all wealth created, especially that generated by the ESS, whose purpose is both economic and social, financial and non-financial. However, this indicator will allow a rigorous assessment of the economic and accounting contribution of the ESS and the added value created. By being able to count itself, the ESS can show its importance in the French economy and support its legitimacy.
There is more work to do
The growing recognition of SSE by major international organizations such as the International Labor Office (ILO), the United Nations (UN) or the Organization for Economic Cooperation and Development (OECD) helps to affirm the future of ESS as a model to face the necessary transformation. However, based on the available data, we observe that the impact of French law in terms of changes in scale and transformation of the business world is far from the set goals.
The debate on corporate reform and the introduction of mission-driven companies in the framework of the Pacte law in 2019 also rarely takes into account the guarantees provided by the ESS entrepreneurial model in terms of: Democratic shared governance,distribution more Newly created wealthof Contribution to transformation More broadly Social InnovationWe measure the work that remains to be done in order to see ESS as a business model in its own right, as well as another relationship of cooperation between people and society. Promoted as tomorrow’s standard.
These ideas will be presented in RECMA No. 372-373, which will be published in Les 10 ans de loi in September.
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