Social Entrepreneurship and Social Innovation

Ecosystems for Inclusion in Europe

Mario Biggeri, Enrico Testi, Marco Bellucci, Roel During, H. Thomas R. Persson

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351239004
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book provides comprehensive and advanced analysis of the characteristics of social entrepreneurship in Europe. It offers innovative, up-todate research on the ecosystems of social entrepreneurship, the behavior of social entrepreneurs, their ability to produce social innovation, social capital and social inclusion, and the role of stakeholders in fostering socially oriented businesses. Moreover, it addresses the diversity of the European social enterprise sector from an evolutionary perspective, with particular reference to the rise of social entrepreneurship and the role of new-generation social entrepreneurs throughout Europe. Multidisciplinary contributions authored by experts from business and accounting, economics, and sociology serve the purpose of delivering a holistic study of social entrepreneurship, also providing the necessary data for delivering policy implications on the features of the most effective enabling social and institutional ecosystems.

The broad approach, based on different theoretical frameworks and methodologies across numerous disciplines, enables the authors to tackle all of the complex research issues connected to social entrepreneurship in the region. The book builds on the results of the European Union 7FP (European Union's Research and Innovation funding program for 2007–013)-funded "EFESEIIS – Enabling the flourishing and evolution of social entrepreneurship for innovative and inclusive societies" research project.

The central theme of the book is an evolutionary perspective on the dynamics and the rise of the social enterprise in Europe. This evolutionary perspective can be used in an economic as well as a social longitudinal analysis of changing contexts and entrepreneurial practices. The evolutionary perspective will be used as a tool to account for the specificity of developmental pathways in different contexts and countries.

1

An introduction to social entrepreneurship in Europe

Enrico Testi, Mario Biggeri, Marco Bellucci, Roel During, and H. Thomas R. Persson

A worldwide phenomenon

In recent years, the search for alternative and more sustainable models of economic and human development has increased significantly (Anand & Sen, 1994; Stiglitz et al., 2009; Crane & Matten, 2016). The traditional idea of enterprises as mere profit-maximizing organizations, as well as the notion that entrepreneurs are interested only in maximizing their personal gains, has also been questioned (Freeman, 1984; Elkington, 1998; Bagnoli, 2004; Bellucci & Manetti, 2018). Enterprises set up for social purposes rather than profit maximization or personal gain have a long history in Europe, especially in Italy and the United Kingdom (Bellucci et al., 2012; Testi et al., 2017). However, the advocacy activities of Nobel Peace Prize winner Prof. Muhammad Yunus, the founder of the Grameen Bank, have had the greatest impact in changing the perception of enterprises among the general public. According to Muhammad Yunus (2003), “Personal gains is not the only possible fuel for free enterprise. Social goals can replace greed as a powerful motivational force. Social-consciousness-driven enterprises can be formidable competitors for the greed-based enterprises” (p. 149).

The 2008 economic crisis, in tandem with growing concern for sustainability issues, has resulted in a widespread awakening of consciousness (Becattini, 2015). For this reason, social entrepreneurship, social innovation, and social enterprises (SEs) have received a great deal of attention. The exact meanings of these concepts and how they relate to one another has, at various times, been the subject of intense debate, particularly as their relevance and popularity in policy circles has ebbed and flowed. All three concepts are capable of facilitating positive social change, including tackling problems associated with aging populations, widening access to education, and promoting a gender-balanced and just society. These concepts are also seen as measures to foster policy innovation by engaging both policy makers and citizens.

SEs are often perceived as being able to satisfy the growing need for social services in a context of decreased public spending while also creating greater employment opportunities, especially for people who have been excluded from the labor market (Defourny & Nyssen, 2006; Borzaga et al., 2008). In Europe, for instance, SEs started to assume greater importance after the Social Business Initiative (SBI) was launched by the EU Commission in 2011. The SBI aimed to create a favorable financial, administrative, and legal environment for SEs, thereby allowing them to operate on equal footing with other types of enterprises.

The SBI drew attention to the relationship between SEs and the larger economic environment in which they are set while also emphasizing how various features of the system influence the overall development and performance of SEs. Since SEs are often seen as having a positive impact on society and contributing to human and economic development (Scarlato, 2012), many countries have tried to pinpoint the best methods to promote their establishment and success. This strategy had already been emphasized in academic circles for several years, but policy makers lagged behind. In her seminal paper on creating a workable research agenda for SEs, Helen Haugh (2005) claimed that the environmental context in which SEs operate deserved further research, an argument that has also been put forth by Peattie and Morley (2008). Moreover, given the increasingly relevant role of SEs across much of Europe, many research strands require new scientific contributions, including how to assess the impact generated by these organizations and/or the best way to promote accountability and sustainability reporting from a triple bottom line perspective (Elkington, 1998; Manetti et al., 2015; Bellucci et al., 2012; Bellucci & Manetti, 2018; Manetti & Bellucci, 2016).

European policy has also focused on the related concept of social innovation (Ilie & During, 2012). For instance, in 2010, the European Commission published a set of recommendations (EU, 2010) on how member states can achieve innovation in all policy fields. The Commission expressed the need to foster innovation by adopting a more strategic approach. “Innovation,” it argued,

is the overarching policy objective where we take a medium – to longer – term perspective, where all policy instruments measures and funding are designed to contribute to innovation, where EU and national/regional policies are closely aligned and mutually reinforcing, and last but not least, where the highest political level sets a strategic agenda, regularly monitors progress and tackles delays.

(EU, 2010)

Social innovation is, of course, a pivotal part of this strategy, and specific recommendations have been devoted to it. For example, social innovation policies (Biggeri et al., 2017) have been drawn up to help member states modernize their education systems; deal with the challenge of aging populations; and “develop a better understanding of public sector innovation, identify and give visibility to successful initiatives, and benchmark progress” (EU, 2010).

SEs are often regarded as vectors of social innovation. Looking at how SEs and the concept of social innovation have developed in several different countries allows us to discuss the differences that have emerged in national, regional, and urban contexts. A multitude of practices have been highlighted in our study, some of which are embedded in local economies, while others are embedded in social and cultural initiatives. Different approaches to value creation, competition, and revenues can be found all across Europe and will be presented in this volume. And yet, despite these differences, a few common “coordination” mechanisms can also be detected. For instance, when an SE and/or social innovation complements/operationalizes a specific policy, affects change in social relationships, or empowers vulnerable groups, a “coordination” mechanism has been employed. This, in turn, allows the government, private groups, and individuals (e.g. social entrepreneurs and social innovators) to come together, often with positive results.

Coordination mechanisms are products of various types of interactions, including exchanges of information, ideas, and commitment. Studying them requires a bottom-up evolutionary perspective, one that goes beyond the scope of recently developed governance models—most notably multilevel and multi-stakeholder governance. In fact, these two models overestimate the role of governmental actors and underestimate other sources of innovation (Van Assche et al., 2013). Moreover, understanding what actually constitutes an enabling ecosystem for SEs (and assessing its influence) requires new analytical frameworks that take into account dynamic developmental processes that shape both ecosystems and the SEs that operate in those ecosystems (Biggeri et al., 2017).

Enabling the Flourishing and Evolution of Social Entrepreneurship for Innovative and Inclusive Societies (EFESEIIS project)

The various chapters in this edited volume discuss the main results of the EFESEIIS project, an initiative that had four main objectives. The first objective was to construct an evolutionary theory that can explain how social entrepreneurship developed differently in various European countries. The researchers examined the history and evolution of social entrepreneurship; its operational and organizational forms; and how social entrepreneurship was often shaped by communities, cultures, traditions, social innovation, and dialogue between the state and its citizens.

The second objective involved identifying the various features of an enabling ecosystem for social entrepreneurship. This objective is especially important to policy makers who want to better understand how to promote social entrepreneurship in their particular countries. The project partners agreed that social entrepreneurship is a mainly local phenomenon, meaning that its activities are usually performed at the local level and focus on local problems. Social entrepreneurship is thus expressed through relationships with consumers and producers, the financial sector, support services, and policy makers operating at the local level. Of course, it is also influenced by the broader context in which it takes place, including the dominant discourses and ideologies that often define any given historical moment and the various cultural, legal, and institutional features of the jurisdiction itself. As a result, our research had to consider all of these components when building a framework capable of analyzing ecosystems and how they may or may not support SEs.

The third objective was to identify the New Generation of Social Entrepreneurs (NGSEs). Social entrepreneurs have faced unique conditions in the past decade or so. On the one hand, the 2008 economic crisis precipitated drastic welfare cuts in the name of austerity, which reduced the incomes of some social entrepreneurs, created new social problems that had to be addressed, and spurred innovative approaches. On the other hand, significant attention has been placed on social entrepreneurship by citizens, governments, and financial institutions, which has had a profound impact on NGSEs. Likewise, the EFESEIIS project made an effort to examine the various features, needs, constraints, and contributions to social innovation that often characterize NGSEs, which will, in turn, help policy makers, financial institutions, and support organizations harness their potential.

The final objective of this study was to provide advice to stakeholders on how to draft policies and services that will foster social entrepreneurship and social innovation. All in all, this volume hopes to provide new theoretical and empirical contributions that can address all four research objectives.

In order to meet these research objectives, a large European consortium was formed. The group was led by PIN S.c.r.l. Servizi didattici e scientifici per l’Università di Firenze (Italy); its research center ARCO (Action Research for CO-development); and research institutions from several different European countries, including Glasgow Caledonian University (Scotland), Fondacija Za Razvoj Ekonomske Nauke (Serbia), Impact Hub Vienna (Austria), Nxitja e Biznesit Social Sha (Albania), Science Po – Fondation Nationale des Sciences Politiques Paris (France), Stichting Dienst Landbou wkundig Onderzoek – Alterra (the Netherlands), and Syddansk Universitet (Denmark). Our researchers examined SEs in 11 countries—Albania, Austria, England, France, Germany, Italy, Poland, Serbia, Scotland, Sweden, and the Netherlands—and received funding from the European Union’s Seventh Framework Programme.

The researchers implemented a complex research design that was built on both qualitative and quantitative methodologies. The findings were used to determine how social entrepreneurship and SEs emerged in various countries, placing special emphasis on their coevolution with major institutions, their reciprocal relationship with their ecosystems, and how people who have recently founded SEs differ from older generations of social entrepreneurs. All of the project partners created in-depth case studies on NGSEs. They also surveyed representatives from several SEs and presided over focus groups and one-on-one interviews with stakeholders. All in all, more than 1,500 social entrepreneurs and stakeholders were involved in the three-year project.

Data analysis has been done at a micro, meso, and macro level. Our micro-level analysis focuses on the internal features of social entrepreneurship, such as the background of entrepreneurs, behavioral issues, management techniques, business design, social value creation, sustainability, market orientation, and innovation. Our meso-level analysis, meanwhile, focuses on how social entrepreneurs and SEs interact with their surrounding environments—most notably customers, policy makers, financial institutions, support services, other social entrepreneurs/enterprises, and citizens—and the extent to which they rely on social capital. Lastly, our macro-level analysis focuses on national and international trends, paying special attention to various legal, historical, and cultural contexts. Thanks to the passion, knowledge, and experience of social entrepreneurs and their stakeholders, the EFESEIIS project was able to examine and assess many of the issues related to SEs in several European countries.

The “glossary controversy”: basic definitions of social entrepreneurship and social innovation

The scholarly literature has not been able to reach a consensus in terms of how SEs ought to be defined or classified (Nicholls, 2006; Hockerts, 2006; Jones & Keogh, 2006). Some of the difficulties in defining SEs stem from the interchangeable use of terms such as social business (Yunus & Weber 2008) and social entrepreneurship. According to Borzaga and his colleagues (2012), the terms social entrepreneurship, social business, and SE tend to overlap because all of them refer

to initiatives which have the explicit aim to generate social value through the private use and management of human and financial resources that are partially generated by market and quasi-market exchanges. As such, these initiatives are not designed to pursue the maximization of profits, but rather to use market mechanisms to underwrite the provision of goods and services that have a social impact.

(p. 400)

The EMES network defines SEs as

not-for-profit private organizations providing goods or services directly related to their explicit aim to benefit the community. They rely on collective dynamics involving various types of stakeholders in their governing bodies, they place a high value on their autonomy and they bear economic risks linked to their activity.

(Defourny & Nyssen, 2008, p. 204)

Using ideas that were initially formulated by both Borzaga and Defourny (2001) and Defourny and Nyssens (2010, 2012), the EMES envisioned an ideal type of SE that is based on a set of indicators covering economic/entrepreneurial and social/participatory governance dimensions. The economic/entrepreneurial dimension includes the following indicators: a continuous activity producing goods and/or selling services, a significant level of economic risk, and a minimum amount of paid work. The social dimension includes an explicit aim to benefit the community, an initiative launched by a group of citizens or civil society organizations, and limited profit distribution. The participatory governance dimension includes a high degree of autonomy, decision-making power that is not based on capital ownership, and a participatory approach to governance that involves various parties affected by the activity (Defourny & Nyssens, 2012).

Social entrepreneurship is a broad term that has many different meanings (Zahra et al., 2009). It encompasses not only entrepreneurial activities but also activities that create social value, such as entrepreneurial attitudes in public entities and NGOs. Social entrepreneurship is therefore an umbrella concept that also includes social business. According to Mair and Martí (2006), “definitions of social entrepreneurship typically refer to a process or behavior; definitions of social entrepreneurs focus instead on the founder of the initiative; and definitions of social enterprises refer to the tangible outcome of social entrepreneurship” (p. 37).

The growing use of the term social innovation has only made ma...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication Page
• Table of Contents
• List of figures
• List of tables
• Contributors
• 1 An introduction to social entrepreneurship in Europe
• 2 Research background, theoretical frameworks, and methodologies for social entrepreneurship
• 3 The rise of social enterprises and social entrepreneurship in Western Europe
• 4 The diversity of European social enterprises: an evolutionary perspective
• 5 Emerging managerial aspects of social entrepreneurship in Europe
• 6 Are decision makers in Social Enterprises more pro-social than their peers? An analysis of production and consumption choices
• 7 Social capital in social enterprises
• 8 The role of stakeholder networks in shaping the development of social enterprise ecosystems
• 9 Understanding the innovative behavior of social enterprises
• 10 Social innovation in niches
• 11 The in-between space of new generation social enterprises
• 12 A framework to understand enabling ecosystems for social enterprises
• 13 Concluding remarks on social entrepreneurship in Europe
• Index