The concept of social economy and its challenges in Latvia

The social economy is a significant component of any economy, which generates economic and social benefits. In Latvia, however, there is no common understanding of the concept of a social economy and the economic actors. The aim is to examine the nature and challenges of the social economy concept in Latvia by giving insight into the historical evolution and nature of a social economy, challenges of defining a social economy and description of the actors of the social economy in Latvia. The study used monographic and descriptive methods, synthesis and deduction for information gathering, logical systematization and classification, as well as statistical analysis to describe the actors of social economy in Latvia. To obtain in-depth information about concept of social economy in Latvia, expert interviews were conducted. The research specifies social economy actors in Latvia context: associations, foundations, cooperatives and social enterprises. Social economy is an important part of economy, yet it is not fully assessed. In 2023 in Latvia, 27305 organizations operated in the social economy, and their number tended to increase in recent years. Most of the social economy actors (88%) represented associations. The social economy actors operate in different fields, yet the main ones were arts, entertainment and recreation (5144), real estate operations (3593) and agriculture, forestry and fishing (1108). However, the classification of associations and foundations by kind of activity does not provide accurate information, as many organizations have not indicated their field of activity or have specified “other services”.