Abstract
This study aims to present an integrated theoretical framework of sustainable local and regional development with an emphasis on social economy theory. The theoretical literature on social economy and sustainable local and regional development are reviewed and integrated focusing on the obstacles of sustainability and the function of social economy in local and regional development. Conflict and competition among sustainability values necessitates agreement and cooperation among those who embrace such values. Social enterprises are the core components of a social economy that reflects local and regional needs and pursues complex goals. In the social innovation process, social enterprises collaborate with various stakeholders regarding their business and social goals. Social enterprises have positive effects that influence local and regional development by satisfying local and regional needs, creating jobs in the community, developing relational assets in business processes, and restoring community solidarity. In social economy theory, social enterprises can facilitate sustainable local and regional development by including relational assets which embody social capital in social innovation processes. In the context of local and regional development, relational assets are important reinforcements of institutional capabilities, networks, and community or regional cooperation. Although social enterprises are not the dominant resources in traditional local and regional development, they can solve problems related to collective actions by networking and applying social norms to the situation.
Highlights
For a long time, the meaning of local and regional development (LRD) has focused on local and regional economic growth, with market-driven strategies aimed at improving economic efficiency
This study aims to present a theoretical discussion on sustainability in LRD, with an emphasis on social economy theory
Building on social economy theory, social enterprise provides an alternative to the defects of the market-centered development model and can contribute to sustainable LRD through the production and promotion of social capital embedded within communities, groups, and the wider society
Summary
The meaning of local and regional development (LRD) has focused on local and regional economic growth, with market-driven strategies aimed at improving economic efficiency. A variety of stakeholders participate in the LRD process and represent a relational asset of social capital in the problem-solving process In this new approach, community obstacles are considered within the framework of social economy activities, which are often associated with attempts to foster democratic engagement, collaborative governance, and participation within local communities as a means to generate self-help, counter social exclusion, and build grassroots empowerment [10]. Building on social economy theory, social enterprise provides an alternative to the defects of the market-centered development model and can contribute to sustainable LRD through the production and promotion of social capital embedded within communities, groups, and the wider society. The present paper highlights the link of the functions of social enterprise to the problems of LRD, especially in relation to social capital and sustainability, and how this might expand our understanding of social enterprise as a catalyst of sustainable LRD
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