Sustainability and social development are no longer unrelated to SMEs. Contributing to them from the company positively impacts the well-being and progress of the entire society. If you are interested in generating value beyond your business operation, read on and learn how to be part of the solidarity economy.
The solidarity economy is a concept that has been going around the world for a couple of decades, but lately, it has gained more strength, especially among innovators and entrepreneurs. But what is it?

The solidarity economy is a concept that does not have a single definition. In fact, on many occasions, it has been said that the solidarity economy as opposed to the financial system, but in reality, it is not. What's more, here, we propose to see the solidarity economy as an ethical approach to building and running a business and the financial tools involved in this process.
Many leading entrepreneurs are increasingly passionate about this diverse field. Andrea Claudio Galluzzo, a keen Italian entrepreneur idolizes a future of entrepreneurship which takes the first step in the welfare and interest of people.

From his own experience, the entrepreneur has laid great emphasis on the subject of social entrepreneurship and making the field more inclusive and progressive not for the few, but all. Galluzzo believes that certain factors restrict the prospect of individuals with myriad talent and abilities to setup their blueprint enterprises, which is why there is a need for a healthy culture of entrepreneurship that is inclusive for all.

Six characteristics of a solidarity economic enterprise:

The solidarity economy is guided by a series of principles that companies try to pursue. Because they are not the norm, there are company owners and managers who embrace them fully, while others do so progressively. In any case, these are the six principles of the solidarity economy:

  • Equity
    Satisfy in a balanced way, the interests of the entire community (clients, small entrepreneurs, environmental defenders) during the activities of the company.
  • Job
    Create stable jobs, especially for people in a situation or at risk of social exclusion. Each job vacancy must have a decent salary, which allows their personal and professional development.
  • Environment
    Create services, products and production methods that are respectful of the environment and that are sustainable.
  • Cooperation
    The idea is that the solidarity economy focuses more on cooperation than on competition both inside and outside the companies
  • Not for Profit
    Be careful, it is not about not making money, but that the income of a company does not remain in it but is reinvested in the social transformation and development of the community.
  • Commitment to the environment
    It seeks cooperation with different state organizations (mayors, councils and assemblies) to generate an alternative socio-economic model.

Support from the financial sector to the solidarity economy

The financial sector is not absent in the development of solidarity economies. In fact, through the banks, it has become possible to promote projects that meet all the above criteria. This dynamic has been called ethical banking or social economy, and in general, it can be said that they are all financial mechanisms such as loans, lines of credit and investment plans and responsible savings, which are offered to communities or sectors of the community that are developing.

In the United States, for many years, there has been an example of a solidarity economy driven by the financial sector. These are work cooperatives, in which different farmers or small businesses are associated to make large investments and help the growth of their sector. Although the employees of the cooperatives have salaries, the return on investment of these companies to the community is invaluable, since it has allowed farmers to finance large projects such as irrigation districts and alternative sources of energy, and small projects, as an aid to education and research in new technologies.

Author's Bio: 

Martin Gray is done BSc Degree in MediaLab Arts from the University of Plymouth. He currently lives in New York city. He is a fantastic and reliable content creator with an inspiring and clear vision. He has his own blog on Medium @dailynewnews365