construct (that is, entrepreneurship, innovation and social issues), as well as to avoid misunderstandings when assigning a typical nonprofit nomenclature (such as ‘social enterprise’) to organizations consistent with the SE paradigm.
Starting from these premises, the present contribution aims at an assessment of how SEVs are actually responding to this tension over entrepreneurial involvement in filling wider social gaps. In so doing, we first identify the drivers of SE affirmation and emergence. Second, we reframe current SE literature in order to answer three main ques- tions: (i) what does SE mean?; (ii) how do SEVs work and how are they managed?; and (iii) who are these socially innovative entrepreneurs?
Third, we shift from theory to practice and analyze the behavior of 35 acknowledged SEVs in order to uncover consistency in their aptitude towards social change and wealth creation. In this section, we focus on four areas: (I) mission, vision and organizational values; (II) entrepre- neurial opportunities and innovation; (III) entrepreneurial model; and (IV) social welfare impact. Fourth, we conclude with brief reflections on the correspondence between theory and practice in order to obtain a preliminary descriptive framework of the SE process. Ultimately, we draw attention to some empirical questions and implications for future research.
Before going on a clarification is due: the number of SEVs analyzed is not to be considered as comprehensive or perfectly proportionate to the current range of social entrepreneurial initiatives around the world. Organizations were at first chosen with reference to the avail- ability of structured data and information on their explicitly socially entrepreneurial nature and later with reference to their own awareness of being part of the SE movement. In so doing we have attempted an assessment of behavioral descriptions starting from well-established experiences and recognized best practices.
neurship’ was coined only in the late 1990s in the US, emerging from business practice and then being translated in the academic debate (Johnson, 2000).
As a consequence of the extreme newness that characterizes this research field, a palpable lack of common frameworks at each level of analysis is noticeable – from theoretical explanation to current prac- tices. This situation makes it difficult to establish a shared reading grid and to clearly distinguish distinctive boundaries. For example, can nonprofit organizations be defined as SEVs if they engage in for-profit activities in order to sustain their social mission? On the other hand, what is the link between SE and corporate social responsibility? Can active socially responsible enterprises be included in the field of SE if they publish a social or sustainability report or have a social or envi- ronmental certification? Referring to what school of thought can
‘social entrepreneurialism’ be conceptualized? And so on.
Notwithstanding the many uncertainties and unsettled research questions, a preliminary attempt, aimed to at least discern those entre- preneurial behaviors consistent with SE, can be made by starting with the entrepreneurial quality and leaving aside sectorial considerations and judgments about organizations’ formal legal status. In this sense, even if it is surely praiseworthy that more and more companies assign growing resources to philanthropy and social giving, this activity can be conducted in an entrepreneurial way but it is certainly not entrepre- neurial per se (Mair and Martí, 2004). Similarly, the adoption of man- agerial techniques on the part of nonprofits is not enough to call them social entrepreneurial actors.
As a result, it can at first be assumed that SE emerges as anything but a ‘one-way phenomenon’ exclusive to the nonprofit sector, rather it implies an intersectorial dynamic: SE initiatives ideally break up boundary lines among organizational clusters, configuring them- selves as hybrid organizational forms (Mair and Noboa, 2003b). These are characterized by altered and mixed behavior, a strong entrepre- neurial orientation and above all, an unquestionable accent on social innovation.
Although sharing the entrepreneurial soul with business entrepreneur- ship theories, these new social players differentiate themselves from their business counterparts in terms of the final objective toward which the entrepreneurial process is addressed. This is an explicit social objective – for example, the creation of social welfare, the enhancement of social inclusion and cohesion, wide access to knowledge and information, community development, and so on – to which wealth creation becomes Francesco Perrini and Clodia Vurro 59
subordinated. Profit maximization and wealth creation – the two gener- alized company final objectives in classical economic theory – become the means through which socially entrepreneurial innovators pursue their social mission.
Most existing academic contributions to this field agree to recognize two main macrodynamics as decisive in the emergence of SEVs: the crisis of the traditional welfare state (Johnson, 2000; Cook, Dodds and Mitchell, 2001; Borzaga and Defourny, 2004), and the increase in com- petitive pressure within the nonprofit sector (Dees, 1998b; Reis, 1999).
With the generalized slowdown of national economic growth rates and increases in unemployment, the first phenomenon has been accompanied by a deep rethink of social strategies at every level with specific regard to the supply of social services. Those waves of privatiza- tions and decentralizations so common in the public policies of the 1980s are the main effect of this trend. As a result, a progressively increasing number of social needs has been left unsatisfied thus giving rise to a growing demand for private providers of social services able to match socially relevant goals with efficient and effective management practices (Dees, 1998b).
Partially linked to the first dynamic, cuts in the number and value of public grants addressed to nonprofits, have caused an unprecedented and increased rivalry in the field of social services supply in conjunction with a global demand which is certainly not in decline (Reis, 1999). In such a situation, nonprofits have been compelled to ‘reinvent’ them- selves and their traditional modus vivendi. As a consequence of ‘rising costs, more competition for fewer donations and grants, and increased rivalry from for-profit companies entering the social sector’ (Reis, 1999:
5), nonprofit organizations have been enlarging their range of possibil- ity, experimenting with management practices, for-profit sector tools and, more evidently, new funding strategies. In other words, nonprofits are now shifting from a traditional philanthropic dependency, in which profits are considered mere gifts devoted to a good cause, to a focus on the measurability of results and the identification of all potential commercial sources of revenue.
With specific reference to the European case, an empirical research work (Borzaga and Defourny, 2004) promoted by EMES – European Network Research and aimed at analyzing the current state of the industry in the third sector, has demonstrated the existence of a pro- portional relationship between national economic and social develop- ment, and the emergence of SEVs and social enterprises. In those countries characterized by a relatively low development level, the per- 60 Social Entrepreneurship
ceived need for social services is modest and social needs satisfaction is generally ‘delegated’ to the informal, family-based system. In these cases, SE is mainly confined to the field of work-integration. In the meantime, competing in the same action field with public sector and traditional nonprofit organizations but as latecomers, the strength of SEVs is strictly related to the strength of the other competitors. For example, in Northern European countries characterized by a well- developed welfare state and an orientation towards the minimization of the population’s social risks, SEVs are confined to underserved market niches, benefiting largely from public subsidies. On the con- trary, in those countries with a well-developed welfare state but without direct provision for public services (Germany and Belgium, for example), SEVs will strongly compete with traditional nonprofits and will succeed with regard to a reciprocal development level. Finally, Borzaga and Defourny identify the existence of a strong relationship between the emergence of SEVs and the characteristics of the legal system. The degree of autonomy and the relative ease to carry out pro- ductive activities are positively related to the emergence of innovative social-purpose business enterprises.
This description of the drivers at the bottom of SE phenomenon allows us to think about the functions that SEVs will cover in the short term. First of all, they will support state action: an innovative way to obtain a distribution of resources nearer to the real needs of communi- ties. SEVs will reintegrate the overall social services supply and con- tribute to the public expense cutting process. The link between SEVs’
innovative power and the possibility to enhance or maintain the qual- itative level of social services cannot be underestimated.
However SE cannot solely be considered a mere public sector surro- gate which has emerged as a result of the failure of the welfare state and as a consequence of low efficiency in the third sector.
SE goes further, proactively contributing to social change and inno- vation within several action fields (Walsh, Weber and Margolis, 2003):
from social inclusiveness to work creation; and development and poverty reduction, both locally and with a global-oriented perspective.