Risk-oriented approach to managing the social market economy

Abstract

PurposeThe purpose of the paper is to develop a risk-oriented approach to managing the social market economy.Design/methodology/approachThe first task is to determine the differences in susceptibility to the risk of the social market economy as compared to “pure” market economy. The authors use comparative analysis, variation analysis and correlation analysis for determining the dependence between quality of life in 2020 and variation of quality of life in 2012–2020, as well as variation of gross domestic product per capita in 2012–2020. The second task is to determine the perspectives of risk management of the social market economy in view of the specifics of the risk component of its functioning and development. Regression analysis is used for determining the dependence of quality of life in top ten countries with the social market economy in 2020 in the key risk factors that are peculiar for market economy and that lead to its destabilization: globalization, innovations and digitization.FindingsIt is substantiated that the unique economic and social environment predetermines the specific influence of the factors that are peculiar for the modern market economy. It is proved – by the example of top ten social market economies in 2020 – that social factors are more important for provision of stability of the social market economy than economic factors.Originality/valueA risk-oriented approach to managing the social market economy is developed; it takes into account the specifics of the risk component of its functioning and development. The offered approach showed that the social market economy requires indirect regulation of risks through correction of institutions.