Local Development and Social Economy
|CONCEPT OF LOCAL DEVELOPMENT||4|
|CONCEPT OF SOCIAL ECONOMY||6|
|LOCAL DEVELOPMENT AND SOCIAL ECONOMY IN LATVIA||9|
Local development brings a significant added value in understanding new patterns of development, addressing sub regional development problems, improving governance, territorial integration and promoting inter-territorial cooperation etc. Local development programs include a wide range of initiatives, from programs designed to improve the human capital of individuals, to financial and in-kind subsidies, to enterprise zones, and on and on. Social inclusion is important for local development to allow local populations to take an active part in the economic and social life of their community.
Successful local social economy organisations can play an important role in helping deliver many key governmental policy objectives and they can improve the quality of personal and community life. Social economy helps individuals and local communities to identify and meet their own social and economic needs.
Latvia has significant development differences between territories. In regions outside capital city Riga, economical activities increase in much slower pace than the capital and its surroundings. The role of local social economy’s actors is getting more and more essential for local development. Local governments increasingly delegate functions to local non-governmental organizations and thereby involve them in development of the territory.
Latvia has medium level of acceptance of the concept of the social economy. Concept of the social economy coexists alongside other concepts, such as the Non-Profit sector, the Voluntary sector and that of Social Enterprises. The concept of social entrepreneurship is still very new. As in Latvia is not common understanding about social entrepreneurship, mostly those are NGOs which operates in third sector. 40% of NGOs operate in sector of economic, social and community development sector, and represents social enterprises.
Riga region is considered to be the impeller of Latvia’s economy. Most of the rural territories of this region subordinate their development to the development of capital city Riga. Almost half of all NGOs (46%) are registered in Riga, as well as 53% of social enterprises are registered in Riga. Local territories of other regions (Kurzeme, Vidzeme, Latgale, Kurzeme) are subordinated to economic activities and development of regional district centres. The worst situation is observed in Latgale, where economic and demographic trends create threats for sustainable long-term development of the region. Latgale has lowest density of NGOs, and only 6% of social enterprises are registered in Latgale. There is relevance observed – the more social economy is developed and more NGOs involved in third sector, the higher is possibility for local territories to have positive development tendencies.