Some Models of Social
Entrepreneurship
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Roger Spear
Chair Co-ops Research Unit & ICA RC 6yrs
Founder member of EMES network
Joint Coordinator of Third System in Europe
Project
• EMES Network Projects and Book
• See www.emes.net
• Social entrepreneurship projects
• EMES: Work Integration - PERSE Project
• EMES: Childcare project
Outline of Presentation
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Entrepreneurship fields of study
New fields of entrepreneurship
Social enterprise/entrepreneurship
USA and Europe
EMES European, and UK perspectives
Some models of entrepreneurship from
social enterprise and social economy
• Institutional context (entrepreneurship)
Entrepreneurship: fields of study
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Entrepreneurship Theory
Methodological Issues
Entrepreneurial Opportunity Recognition + Information Search
Finance for Entrepreneurs (Venture Capital)
Entrepreneurial Careers
Types of Entrepreneurs
Environments for Venture Creation and Development
Venture Growth and Performance
Organization Closure (survival/failure)
Internationalization
Corporate Venturing
Family Firms
Technology-Based Firms
Franchising
ref. Advances in Entrepreneurship 2000 Westhead & Wright
New fields of entrepreneurship
• The political entrepreneur
– Schneider and Teske, Am.Pol.Sci.Rev 1992)
• The moral entrepreneur
– Hunter and Fessenden, 1994
• The civic entrepreneur
– e.g. U Penn course
• The social entrepreneur
– Numerous refs.
Differing perspectives on social
entrepreneurship
Social entrepreneurship as creating social
enterprise
• “USA perspective” now developing in
many parts of Europe
• “European perspective” linked to social
economy traditions
Social enterprise “US
perspective”
• Social purposes through commercial
activity
• Venture philanthropy
• Third world NGOs
• Embracing business practices
• Unconcerned about business form
PCDO Framework (Austin et al)
Opportunity
Context
People
Deal
“US perspective”
• People
– internal/external stakeholders: skills/expertise
• Context
– diverse markets (incl philanthropic)
• Deals
– Resources mobilising, legitimacy, rights
• Opportunities
– opportunity structures for socio-econ returns
– Ref. Austin, Stevenson, Wei-skillern, 2003.
Informed by conventional entrep approaches
US Social Entrepreneurship
• Social entrepreneurship creates innovative solutions to
immediate social problems and mobilizes the ideas,
capacities, resources, and social arrangements required
for sustainable social transformations.
• Social entrepreneurship focuses on solutions that are not
only effective but also sustainable, and ideally, replicable
in a variety of contexts around the world.
• Social entrepreneurs share characteristics and
techniques with traditional business entrepreneurs, such
as utilizing time-tested business theories and practices,
and their focus on innovation.
• However their work and impact spans across the private,
non-profit and governmental sectors.
(Harvard University Website)
The concept of social enterprise as a bridge
between traditional approaches ?
NPO's
transformed into
social enterprises
Production
Oriented
NPO's
Advocacy
Oriented
NPO's
=> social enterprise is both :
 Social enterprises are new organisations
 And existing organisations refashioned by
new dynamics
INSIDE THE THIRD SECTOR
The term social enterprise
• Different definitions - SEL, DTI, USA
• EMES – third sector organisations:
• with enterprise characteristics
– (trading in the market or contracting,
employing people – 25%/50% income)
• But with social goals
– (participation, user involvement, community
benefit).
Social enterprises in the UK
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15,000 social enterprises in the UK.
Total turnover £18bn
Workforce of 775,000 people including
300,000 volunteers.
– Ref. Small Business Service Survey 2005
What is social entrepreneurship in
this European perspective?
What models of entrepreneurship can we find leading to
social enterprises?
• Individual vs collective dimensions?
• Institutions role?
• Civil society actions (advocacy vs enterprise: opportunity
structures have changed – but elements of both?)
• Social movements as source of new social enterprise?
• NGOs (sponsoring entrepreneurship - contradictions?
Smothering indigenous civil action?)
• Political dimensions: e.g. Worker buyouts
“The Take”
[Theories of emergence of social economy]
• RESPONSE TO MARKET FAILURES
• RESPONSE TO STATE CRISES (e.g. Multi-ethnic inner cities, social
exclusion)
• EXCESSIVE MARKET POWER, ASYMMETRIC INFORMATION
AND OPPORTUNISTIC BEHAVIOUR
• TRUST THEORIES (RELATIONAL CONTRACTS), LOW
TRANSACTION COSTS
• TERRITORIAL RELATIONS, SOCIAL CAPITAL, COMMUNITY
SOLIDARITY AND CIVIL SOCIETY
• SOCIAL ORIGINS THEORY (good/services + political/social coord)
• HISTORICAL DYNAMIC APPROACH
Models of social entrepreneurship
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2 studies
Collective dimensions
Religious dimension
Civic action & social movement
Institutional perspective
Initial ideas on social
entrepreneurship
• Entrepreneurship problem? Niche growth
• Institutions as focus of entrepreneurship
– Mondragon, CDAs
– Institutional configurations compensate for
entrepreneurial deficiencies
• Collective dimensions underplayed
a study of 6 co-operative
organisations
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FT - small co-op merger
VS - asian video services
CS -EO buyout from public sector
TR south american translation services
LS - EO buyout public leisure services
• CC - closure LA childcare services
Findings of study
• entrepreneurship not “heroic individualistic”
• but collectivist: joint, leader + supporters, or team
based; different model for social economy?
• circles of entrepreneurial activity, wider group of
external stakeholders (sometimes distributed across
public/private boundaries);
• in wider circle - social capital utilised, (subsequently
reciprocated)
• rationale for institutional choice: mediated through
professionals, advisers, or support organisations;
• (transitional dimension in all cases: involuntary ones
from public to private)
Social Entrepreneurship: 17 case studies
• EMES Project : WISE
• 5 countries: Belgium, Denmark, Germany, Italy, UK
• three models of entrepreneurship predominated:
– organisational entrepreneurship in 9 cases
• organisations leading/sponsoring; incl partnership
– citizens entrepreneurship in 6 cases
• Groups of citizens (incl disadvantaged)
– joint entrepreneurs in 2 cases
• (individual-led merger, 3 managers)
Institutional context
• 3 types of institutional contexts that shape
entrepreneurship:
– New legal forms within structured public frameworks
(Italy social co-ops)
– Self/labelling forms and networks - isomorphism
– Ad hoc constructed contexts (with new types of social
enterprise)
• Different levels of recognition, identity, public
policy frameworks, support structures,
professional advisers
• Institutionalisation and evolution: German case
Religious dimension?
• Mondragon: Father Arizmendiarrieta
• Irish CUs: Church support
• Bromley by Bow
• Godfathers/midwives?
Entrepreneurship: social movement
perspective
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19th C. Co-ops in Europe
Co-ops/social economy elsewhere
70s WCs in UK
Irish credit unions
Carribean credit unions (from state
sponsored nationalist populist movements
to social/co-op movements)
Institutional context: informal/formal
networks
• Civic action and social movements
• Institutions: more formal networks
• CDAs and LKOs (mainstreaming: issue of
specialist advice)
• Mondragon bank CLP
• TU led EO bus companies in 80/90s
• Inst role of state: contracts/development
• Entrepreneurship at institutional level
Summary: themes of social
entrepreneurship
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Collective dimensions
Religion
Institutions
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Social movement
formal networks
legislation/policy
inst. entrepreneurship
Social entrepreneurship vs
entrepreneurship?
• Is entrepreneurship more
collective/organisational? (cf Cisco,
Fairchild, Intel)
• Religious dimension? (post-weberian)
• Movement perspective?
(ethical/ecological markets)
Questions?
Dimensions of Social Enterprise
• The EMES criteria are:
• Four factors have been applied to define
the economic and entrepreneurial
nature of the initiatives.
• Five factors have been selected for the
social dimensions of the initiatives:
Dimensions of Social Enterprise
• Four factors have been applied to define
the economic and entrepreneurial
nature of the initiatives.
• a) A continuous activity producing goods
and/or selling services
• b) A high degree of autonomy
(vs
dependency)
• c) A significant level of economic risk
• d) A minimum amount of paid work
Dimensions of Social Enterprise
• Five indicators for the social dimensions of the
initiatives:
• i) An initiative launched by a group of citizens
• ii) A decision-making power not based on capital
ownership
• iii) A participatory nature, which involves the
persons affected by the activity
• iv) Limited profit distribution
• v) An explicit aim to benefit the community