What is a Social Entrepreneurship?

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What is a Social Entrepreneurship?

What is a Social Entrepreneurship?

There are many definitions, together with many organizational models and legal forms, which discuss and try to define social entrepreneurship and yet, for the moment no uniform language exists to describe this phenomenon. 

We can recognize the main aspects of social entrepreneurship, by taking the definition of the European Commission, which has described a social enterprise as being “an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities.”

The key information here is that a social enterprise combines entrepreneurial activity with a social purpose and the main aim is to have a social impact, rather than maximize profit.

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This innovative form of entrepreneurship is spread across all of Europe, but no single unified definition for all the EU countries is in place.
This is mostly due to the fact that social entrepreneurship is influenced by the socio-economic conditions in the country and its national traditions, history and civic society activities. These factors also result in a wide variety of organizational forms that are being adopted by social enterprises around the world.

Legal form

Social enterprises can take various legal forms in different countries, including solidarity enterprises, co-operatives or limited liability social co-operatives, collective interest co-operatives, as have been adopted in Italy, France, Spain, Portugal and Greece, social purpose or collective interest companies in Belgium and community interest companies in the United Kingdom.

Business model

As social enterprises operate in the market as any other business, in order to be viable social enterprises do need to make profits. The entrepreneur in this context combines his/her entrepreneurial behavior with a desire to use the market as a tool for meeting social needs for the benefit of the community.

Social entrepreneurs operate in almost every sector and are an everyday part of our lives – they might provide services, produce and sell everyday products, offer consulting etc. 

In the same way as regular entrepreneurs, they aim to have a profit, but the difference is in a way how they deal with it.

In order to fulfil their goal of contributing to the positive social change, they reinvest the profit back to their activities – they do not attempt to accumulate the profit, as it is the case for regular entrepreneurship, where the profit is usually its main goal and is split between its owners / stakeholders.

In the case of social entrepreneurship, its priority remains its social mission, while the profit remains secondary.

Why do we need social entrepreneurship?

Following the evolution and changes of our society, its problems evolve as well. We are currently facing problems that are very complex – like climate change, aging population, growing inequalities, loss of biodiversity etc.; and the solutions to those problems require systemic and innovative approaches, which is why social innovations are much needed.

Social innovations bringing new and sustainable solutions to social problems, especially if they tackle the UN’ Sustainable Development Goals, are the shapers of the country’s positive future.

Working with social enterprises and promoting their development can result in short and long-term gains for public budgets through reduced public expenditures and increased tax revenues compared with other methods of addressing social needs. Social enterprises can also often be more effective in meeting public goals than either purely private or purely public sector actors because of their local roots and knowledge and their explicit social missions.

Social enterprises play an important role in addressing social, economic and environmental challenges, in fostering inclusive growth and in increasing social inclusion because they aim to pursue the general interest and to benefit communities.

Besides that, they are important not only for their capacity to create jobs but also for their role as central players in fighting social exclusion, enhancing local social capital and supporting democratic participation, delivering good quality welfare services and furthering more inclusive economic development.

Which fields are typical for social enterprises and what type of social issues are they fighting? 

In general, social enterprises are active in a wide spectrum of activities and in many different fields, ranging from social services, education, housing, environment, culture and arts, and tourism, to recently supported activities such as renewable energies, fair trade and transport. 

The goals of the social enterprises can be for example:

  • fighting the unemployment – work-integration, diversity initiatives, on-the-job-training, sheltered workshops,
  • sustainable development – recycling initiatives, waste management, bioproduction, protection of protected sites, fair trade,
  • integration of immigrants – education facilities, youth clubs, cultural and sport establishments, social help establishments,
  • tackling the aging population – home care, medical services, social services for seniors,
  • mitigation of social disparities /inequalities – humanitarian help, development programs, regional development, buy local initiatives
  • social services – assistance services to handicapped population, disadvantaged families, addicts etc.

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