The chances and conditions of establishing social economy in the region of North Hungary

Abstract

Social economy is a well-known concept and widely implemented practice all over Europe. In this field exact distinctions and definitions vary according to different theoretical and practical approaches. Considering the most accepted definition, social economy is the part of the third sector, and has three characteristic features: it meets defined needs for products and services by
providing them, creates new jobs, thus improves the employability of those disadvantaged in the labour market, and builds social capital. The typical organizations of the sector are the social enterprises, which follow business and social aims at the same time. Since the middle of the 90s, the European Union has been operating official programmes and initiatives to tackle the problem
of unemployment, especially that of the disadvantaged. Social economy thus became a crucial approach in these programmes, and also the part of the European Employment Strategy. The Hungarian nonprofit sector has gone across a great improvement process and strengthened considerably since the end of the 80s, but the subsector of organizations dealing with
employment projects is in its early childhood. There are still many conditions missing, especially the legal and financial hurdles, the lack of management experience hinder the development of the Hungarian social economy. The regional disparities, which can be percieved in all fields of the social and economic life in Hungary, also exist in the grade of the establisment of this sector, though the difference is significant between the capital and the other parts of the country in particular. In Northern Hungary the demand for the services of the social economy is obvious in activity like community and personal services, settlement renewal and development, the protection of rural and natural heritage, forestry, touristical, information and cultural services, social retail and transport services, and agricultural production. Northern Hungarian social enterprises are not developed enough yet to fulfill their role in the labour market and community development. Their business aims are often unclear, usually lack market
approach, and the structure of their activity is not elaborated properly. The survey indicated sharp differences between organizations in the number of employees and volunteers, and in the size of budgets. As for the future, working out the methods and framework of financial support, approximately 100 social enterprises with 25-80 employees each could be founded in the region, which would cost less than current public employment programmes for the unemployed.
Developing social economy in Northern Hungary requires the creation of conditions for organization development, and the provision of professional experts, market background and financial support.
Conclusion: The establishment of the social economy in the Northern Hungarian region is a real, achievable goal. Besides its advantages expected in improving employment situation, meeting needs and building social capital, opportunity is created for the region to protect and keep playing its innovator role in the national development process.