Economic Growth

Here's how we harness the social economy for an inclusive green and digital future

There are about 10 million social enterprises globally spearheading innovations to combat climate change and foster digital inclusion.

There are about 10 million social enterprises globally spearheading innovations to combat climate change and foster digital inclusion. Image: Unsplash/Surface

Jeroo Billimoria
Founder, One Family Foundation
Jonathan Wong
Chief of Innovation, Enterprise and Investment, United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)
Veerle Klijn
Policy Lead, Schwab Foundation for Social Entrepreneurship
This article is part of: World Economic Forum Annual Meeting
  • The green and digital transitions present economic opportunities but also risk exacerbating existing inequalities and creating new ones.
  • There are about 10 million social enterprises globally spearheading innovations to combat climate change and foster digital inclusion.
  • The newly released report Unlocking the Social Economy: Towards Equity in the Green and Digital Transitions provides key policy recommendations to advance this economic model.

Our ever-changing world is shaped by the green and digital transitions, which radically transform how we live and work. They have the potential to unlock new economic opportunities, reduce environmental harm and create more inclusive societies.

For example, mobile technology has enabled millions to participate in the financial system, reducing the world's unbanked population.

Yet, they also risk deepening existing inequalities and introducing new ones. In a global economy that digital skills will increasingly define, 2.6 billion people lack reliable internet access and 760 million still lack electricity.

The transition towards a green economy could also significantly impact the labour market. By 2030, 78 million workers will be exposed to job loss. The loss of work will be concentrated among a subset of mostly low-wage, low-skilled, informal, ageing and rural workers who already feel left behind.

Combating climate change and digital inclusion

A new report – Unlocking the Social Economy: Towards Equity in the Green and Digital Transitions – by the Schwab Foundation for Social Entrepreneurship in partnership with the World Economic Forum highlights the role of the social economy in promoting equity in these transitions.

It showcases that social enterprises are often at the forefront of combating climate change and fostering digital inclusion.

The award-winning social enterprise MapBiomas, for example, is a collaborative network of more than 100 organizations, including universities, NGOs, technology institutes, and startups, that monitors transformations in land cover, land use, and natural resources in biomes in Brazil, South America, and Indonesia.

The data helps in the fight against deforestation and fires, the protection of conservation units and indigenous lands, and the monitoring of water resources.

And Thaki, another award-winning social enterprise, empowers refugee and vulnerable children to learn and thrive through self-paced, motivational electronic educational tools. These tools are the key to accessing 21st-century skills.

Promoting equity in the transitions

Collectively, the social economy spans around 10 million social enterprises employing 200 million people worldwide. It also includes associations, co-operatives, foundations, not-for-profit organizations and voluntary groups. It has proven its potential to promote equity in multiple ways.

Building on the economic equity framework (Figure 1) published by the World Economic Forum in 2024, this report demonstrates that the social economy is driving economic equity by:

  • Employment: 50% of social enterprises are led by women, compared to just 20% of traditional enterprises. Social enterprises are also more likely to hire marginalized groups. In Sub-Saharan Africa, 73% of social enterprises deliberately employ people from poor communities, compared to 56% of conventional businesses.
  • Access and affordability: Social enterprises produce affordable and accessible products and services for underserved populations, such as clean energy solutions and digital education platforms. E.g. Aravind Eye Care uses tiered pricing models, charging wealthier patients more to subsidize free or reduced-cost care for lower-income patients, making essential services accessible.
  • Finance and investment: The sector mobilizes close to $1.5 trillion in finance and investment through impact investing and related mechanisms, creating pathways for marginalized communities to participate in and benefit from economic growth.
  • Capacity building: Social enterprises build the skills and capacities of disadvantaged groups to produce and sell goods and services, fostering self-sufficiency and resilience. For example, Education for Employment offers vocational training and job placement services to youth, thereby enhancing their employment prospects and promoting economic development.
Figure 1: Economic equity framework
Figure 1: Economic equity framework Image: World Economic Forum

Driving economic equity

Governments have a pivotal role in ensuring that the green and digital transitions (the “twin transitions”) foster inclusive growth. Best practice policies that efficiently address climate change and digital transformation are designed with equity at their core.

Governments worldwide are recognizing the power of the social economy in relation to the twin transitions and implementing supportive policies. Examples include:

  • Dedicated action plans: The European Commission's Transition Pathway for the Proximity and Social Economy aims to enable actors in the ecosystem to deliver on the twin transition. The pathway identifies 14 action areas and 30 specific actions, including the creation of financial incentives and supportive regulation for green and circular social economy business models and the support of digital social innovation and “tech for good” entrepreneurship.
  • Procurement and investment criteria: Several countries incorporate social and environmental criteria into public procurement and investment decisions, ensuring public funds prioritize inclusive and sustainable initiatives.
  • Tax incentives: In Italy, social enterprises are exempted from paying national insurance contributions for the disadvantaged workers they have integrated.

These policy innovations demonstrate that governments can create an enabling environment for the social economy, allowing it to thrive and drive more equitable outcomes.

The path forward

The twin transitions present an opportunity to reshape the global economy into one that is not only greener and more digital but fairer and more inclusive. Achieving this vision requires a multi-stakeholder approach involving governments, businesses and civil society.

As governments integrate equity into climate and digital policies and businesses adopt inclusive practices, the social economy can continue to innovate and expand its impact while creating sustainable growth.

The stakes could not be higher. This decade is decisive for climate action, and the rapid pace of digital transformation will only accelerate. By ensuring that the benefits of these transitions are shared equitably, we can unlock their full potential to create a more sustainable and inclusive future for all.

As we navigate these transformative shifts, the question is not whether we will transition to a green and digital future but whether we will do so in a way that leaves no one behind.

Rudayna Abdo, Founder and CEO of Thaki also contributed to this article.

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Related topics:
Economic GrowthSocial InnovationEquity, Diversity and Inclusion
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