Social Entrepreneurship

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Social Entrepreneurship

• Caroline Parkinson

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The study of social entrepreneurship

• Main literature emerged through 90s though
  activity has been around for centuries- 19th
  century philanthropists, cooperative movement, US
  community development politics
• First thinking specifically on SE in UK dating
  back to late 70s eg New Sector journal stemming
  from the community business movement
• Unlike entrepreneurship theory, did not emerge
  from the field of economics? Located within wider
  ideological discourses (social democracy, third
  way, modernising government, new right etc)
• In line with mainstream entrepreneurship theories
  since 60s (economic psychological - behavioural
  perspectives)

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Some perspectives

• Two highly politicised and contested models (see
  Lloyd 2002)
• European Social Democracy model
• - Social Economy and Third Sector (self-help
  local development)
• - employment, social inclusion, social and civic
  capital see Evers 2002, Laville 2000 vs
• US Anglo-Saxon neo-liberal model (dominant)
• - Not for profit, functionalist perspective
• - Community Economic Development

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Source Bridge to the Social Economy Project
Report CBS Network 2003
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Source Birkhoelzer et.al., 1999, in Smallbone et
al 2001
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Who are social entrepreneurs?

• Like business entrepreneurs? - realising a vision
  or idea, spotting unmet opportunity, driven,
  determined, charismatic, mission-oriented,
  innovative, creative, networkers, making a point
• Some differences
• motivations social mission, political, ethical,
  agenda setting, conviction rather than
  self-belief?
• processes success (difficulty of value),
  failure, more partnership and collaboration,
  greater stake to overcome obstacles
• environment complex ownership and control,
  multiple stakeholders and objectives, funding,
  location, legal challenges, accountability

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What do social entrepreneurs do?

• spot gaps in our social fabric and create new
  social institutions and instruments to fill that
  gap(SSE 2000)
• their aim is to build social capital and social
  profit to improve the quality of life in some of
  the most difficult and excluded communities,
  identifying unmet social need and generating
  solutions based on a close reading of the views
  of those directly affected (Neighbourhood
  Initiatives Foundation 2000)
• Work in range of contexts, not just social
  enterprises
• Create value in 3 ways (Leadbetter 1997)
  measurable benefits to wider economy through job
  creation etc models for reform of the welfare
  state create and invest social capital (virtuous
  circle of social capital)

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Social enterprise

• businesses that combine the entrepreneurial
  skills of the private sector with a strong social
  mission that is characteristic of the social
  economy in general (Allan 2001 in Westall 2001)
• Operate in spaces between conventional boundaries
  of voluntary, public and private sectors
• Defining characteristics
• social purpose hold assets in trust
• trading for social aim democratic
• non profit distributing accountable

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Social enterprise functions

• Redistribute wealth and opportunity
• Often address intractable problems
• Encourage active citizenship
• Cost-effective supply side (welfare etc)
• Create jobs and support excluded groups into the
  labour market
• Address local need (market failure)
• Create community assets
• Create and invest social capital
• Deliver social innovations

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Social enterprise - legal forms

• Employee owned businesses, credit unions,
  cooperatives, development trusts, community
  businesses, social firms, ILMs, CDFIs, RSLs,
  charity trading arms (LETS).
• Range of legal forms company limited by
  guarantee, by shares, cooperative or industrial
  and provident society.
• New legal form under consultation by DTI
  Community Interest Company, able to issue shares
  with a cap on dividends payable.

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Social enterprise the search for typologies

• On-going attempts to categorise social
  enterprise
• Social Enterprise London
• - trading
• - bottom up and economic inclusion
• - democratic management
• Lloyd Associates
• - social businesses (trading and delivery)
• - community enterprises (social and civic
  capital, grassroots)
• - mixed format enterprises (multi-functional
  form and activities)
• Stanford Business School
• - for profit with social mission- non-profit
  organisations- non-profit ventures

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What is driving this interest in social
entrepreneurship?

• Promotional rhetoric, research and journalism
• New community finance tools/initiatives
• Onus on the voluntary sector to become more
  entrepreneurial (see for example Dees 1998, NCVO
  2000)
• More effective delivery of local and welfare
  services General move to balance business with
  social and environmental sustainability
• Resurgence of mutuals and cooperatives
• Active citizenship agenda particularly care
  arenas
• Community regeneration experience
• Government agendas

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Behind the rhetoric however

• many complexities in the concept
• The problem with entrepreneurship
• Local reality behind the global rhetoric
• Conceptual challenges, eg social capital
• Measuring intangibles
• The problem with community

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Some well documented examples

• Day Chocolate Company (fair trade)www.divinechoco
  late.com
• Greenwich Leisure (local government)www.gll.org
• Furniture Resource Centre (recycling, training)
  www.the-cats-pyjamas.com/frc
• Coin Street Community Builders (community
  ownership) www.coinstreet.org

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Some interesting local examples

• Whitehaven Community Trust
• Piccadilly Gardens, Lancaster
• Lowick New School, Ulverston
• Community Action Furness

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What could this mean to you?

• SIFE (students in free enterprise)
• Student cooperative
• Your career

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Reading

• Dees G (1998). Enterprising Non-Profits in
  Harvard Business Review Jan-Feb, Vol76(1)
• Handy C (1999). The New Alchemists. Hutchinson.
• Leadbetter C (1997) The Rise of the Social
  Entrepreneur. Demos, London.
• Paton R (2003). Managing and Measuring Social
  Enterprises. Sage.
• Pearce J (2003). Social Enterprise in Anytown.
  Calouste Gulbenkian Foundation.
• Pearce J (1993). At the Heart of the Community
  Economy. Calouste Gulbenkian Foundation
• Shaw E, Shaw J, Wilson M (2002). Unsung
  Entrepreneurs Entrepreneurship for Social Gain.
  University of Durham.
• Smallbone D, Evans M, Ekanem I, Butters S (2001).
  Researching Social Enterprise, Report to the
  Small Business Service. CEEDR, Middlesex.
• Waddock S, Post J (1991). Social entrepreneurs
  and catalytic change. Public Administration
  review, Washington, 51, 5 pp 393 -
• Westall A (2001) Value-led, Market Driven. IPPR,
  London.