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1 Social Entrepreneurship and Social Enterprises in the Nordics
Narratives Emerging From Social Movements and Welfare Dynamics
Linda Lundgaard Andersen, Malin Gawell and Roger Spear
Migrant women gradually stepping into their new society and the labour market in their new countries via ethnic catering in the form of a social enterprise; homeless men employed to take care of bees producing honey for sale to the public; young people on the edge getting microcredit funding to start social businesses; men and women with long-term sickness/incapacity gradually developing labour market skills via co-operatives in gardening; or former criminals joining forces to create social and economic structures for an honest lifestyle.
These initiatives capture the transformative power of social entrepreneurship and might indicate how social enterprises have the potential to make a difference for people and societies. Social entrepreneurship has emerged strongly on the international scene and often serves as a vehicle for the provision of welfare services involving powerful and often-conflicting values of public utility, participation and volunteerism. We might picture social entrepreneurship as a generic term for initiatives that are innovative, cross cutting and often targeted at socially disadvantaged people. However, social entrepreneurship is also a phenomenon that contains considerable ambivalence stretched around the powerful dynamics of individualisation and collectivisation, between the social and the market, between marginality and mainstream and between neoliberalism and the solidarity economy.
The interest in social entrepreneurship and social enterprises has spread around the world like a driving wind during the last decades. There are several variations in the discourseâmostly focusing on ventures âdoing goodâ and/or acting as hybrid mediators of social, political and economic dimensions in society. The discourse is still, however, rather fragmented. The phenomena are furthermore to a great extent intertwined with local, regional and national as well as international characteristics. In this anthology, we try to capture these influences and ground them in empirically based explorations to reveal the role of social entrepreneurship and social enterprises in everyday life and in innovative transformationsâand we do that in the setting of the Nordic countriesâor âthe Nordicsâ as we used to frame it ourselves.
The Nordic countries represent an interesting case of the history and development of social entrepreneurship and social enterprises. In the early days of the welfare state, civil society and more specifically, so-called popular mass movements such as the labour movement and co-operatives played a significant part in paving the way for the Nordic solidaristic welfare state. As the welfare state grew, civil society organizations and co-operatives lost ground, to a certain extent. And during the recent decades, the welfare state has been re-assessed and restructuredâand at the same time the concepts of social entrepreneurship and social enterprises have gained attention.
The Nordic context, with extensive public welfare structures and a high degree of citizensâ participation in public affairs, might affect the emergence of social entrepreneurship and social enterprises slightly differently than countries with other types of social contracts. It further seems that the leading narratives and discourses that have shaped the Nordic societies also shape the narratives of social entrepreneurship and social enterprises in combination with the institutional structures and the ecosystem. Before we explore this hypothesis in this book comprising fifteen contributions (including this overview) from Denmark, Finland, Norway and Sweden, let us say a few more things about the global social entrepreneurship interest and âthe Nordicsâ.
A Global Interest in Social Entrepreneurship and Social Enterprises Meets âthe Nordicsâ
The meanings of social entrepreneurship and social enterprises are far from obvious and easy to specify. Conceptual discussions primarily stem from the 1980s and 1990sâeven if the term social entrepreneurship was in writing already in the 1970s. These discussions have partly been held in parallel forums. Alex Nicholls (2010) argues that paradigm building actors such as the Ashoka Foundation (founded in 1980 by Bill Drayton), the Schwab Foundation (founded in 1998 by Klaus and Hilde Schwab) and the Skoll Foundation (founded in 1999 by Jeff Skoll) have, together with governments, particularly in the United Kingdom, played a vital role and in many ways influenced the development of the field of social entrepreneurship on a global scale. The early writings of Charles Leadbeater (1997) and Gregory Dees (1998) highlighted and promoted similar messages to an increasingly interested audience of politicians, businesspeople and in other spheres where âsocial aimsâ were on the agenda. This âstreamâ has influenced the emerging field of social entrepreneurshipâbut it is not the only influence.
During the same time, another âstreamâ emerged with strong influences from the co-operative movement and particularly ideas about social co-operatives (Borzaga & Defourny, 2001; Defourny & Nyssens, 2012). This approach was grounded in European third-sector traditions, at times referred to as the social economy, which included co-operatives, associations, mutuals and foundations (Evers & Laville, 2004). The terms social co-operatives and later on, social enterprises (which included trading non-profits) were to dominate discussions. In 1996, the EMES international research network was founded and has been the node for the development of the influential EMES approach to social enterprises which highlight both economic dimensions defined as a continuous activity producing goods and/or services, a significant level of economic risk and a minimum amount of paid work (not only volunteers); social dimensions as an explicit aim to benefit the community, an initiative launched by a group of citizens and a decision-making power not based on capital ownership; and finally, participatory governance dimensions like a high degree of autonomy, a participatory nature, which involves the persons affected by the activity and limited profit distribution (Borzaga & Defourny, 2001; Defourny & Nyssens, 2012). Since then, the definitional criteria have been debated in the international research community and for instance, the question of the rigor by which these criteria have been applied has been discussed (Nyssen & Defourny, 2014; Pestoff & HulgĂ„rd, 2015).
There were also other alternative approaches already in the 1980s and 1990s. One particular concept that has had an influence on the development of the field in the Nordic countries is societal entrepreneurship, which originally was based on the interest in small business development in local communities (Johannisson & Nilsson, 1989; Johannisson, 1990). Societal entrepreneurship was at that time translated as community entrepreneurship, but later on referred to as societal entrepreneurship (Gawell, Johannisson & Lundqvist, 2009; Berglund, Johannisson & Schwartz, 2013). Even if the concept has another origin, there are large overlaps with both the social economy approach, especially through a rather collective approach, and also the interplay between economic and social/community/societal aims. Later on, societal entrepreneurship has partly also been used as an âumbrellaâ term for entrepreneurship with community, social, cultural or ecological aims (Gawell, 2014a).
Nowadays, there is a wide variety of approaches related to social entrepreneurship and social enterprises as well as social innovation. As the chapters in this anthology reveal, there are strong similarities between the current international approaches and those found in the Nordic countries; thus, different versions co-exist but sometimes take slightly different forms depending on national contexts (Andersen, Bager & HulgĂ„rd, 2010; HulgĂ„rd, 2012; Gawell, 2014a, The Nordic Council of Ministers, 2015; Andersen, 2015b). But before we elaborate further on the characteristics of social entrepreneurship and social enterprises in the Nordic countries, let us elaborate a bit on âthe Nordicsâ, which are sometimes referred to as âthe Scandinaviansâ.
One obvious feature is their shared geographical location on or close to the Scandinavian Peninsula in northern Europeâa location that without the warm Gulf Stream in the Atlantic Ocean would be very inhospitable especially during the long winters. There, approximately 27 million people live in the five main countries of Denmark, Finland, Iceland, Norway and Sweden (including also the self-governed Greenland, Faroe Islands and Ă
land). The population is concentrated in Denmark, the southern quarter of Sweden, and the capital regions of Finland and Norway. The majority of areas are, however, sparsely populated.
There is also a historical and cultural affinity. They share Viking and old Norse mythology (before year 1000 AD), similar languages (except for Finish), the Christianisation to Christianity and later, during the sixteenth century, the Protestant Reformation, all of which have been combined with different forms of collaboration as well as rivalry. They have endured several wars during seventeenth and eighteenth centuries that have contributed to different state constellations such as a Danish-Norwegian union and a Swedish-Finnish union in the sixteenth up to the eighteenth century, when Finland was engaged in war with Russia. During the nineteenth century, there was a Swedish-Norwegian union before the national states as we know them today took shape, and two countries (Denmark and Norway) shared the experience of German occupation during the Second World War.
Despite, or perhaps because of this somewhat turbulent history, the twentieth century has been characterized by a close collaboration manifested in the foundation of a Nordic Council in 1952, a Nordic passport union and labour market (1954) and a Nordic Council of Ministers (founded in 1971). All Nordic countries are members of the Schengen agreement but have taken different approach to the European Union (Denmark, Finland and Sweden are members). Norway, Denmark and Iceland are members of NATO. Only Finland uses the euro.
Last, but not least, there is yet another common feature for the Nordic countries: the transformation from countries in which the majority of the population was rather poor and governed by legislation restricting social and political freedom to the extent that one million people emigrated from Sweden to America between 1850â1910 (Statistics Sweden, 2015), to modern societies based on individual rights and a high standard of living with developed public welfare services. This transformation has permeated socio-economic development during the last century. In many ways, it resembles the patterns of industrialization and democratization in other Western countries. However, the development of mixed economies with a relatively high degree of international trade has been combined with the development of a tax-based public system of provision for, among other things, education, health care and social care. There have been variations of timing and detail implementation between the Nordic countries, but the strong pattern of similarities has been referred to as âthe Nordic wayâ or as âsocial democratic welfare regimesâ in Esping-Andersenâs typology.
A Social and Entrepreneurial Welfare State
There were several forces driving the development of the welfare state. Equality, democracy, social development and industryâs economic interest in good support for the workforce are often mentioned. The development was influenced strongly by social democracy as well as social liberal ideas. Co-operatives and other membership-based associations were common in the creation of the welfare states even though these social democratic welfare regimes (Esping-Andersen, 1990) came to be dominated by public service provision.
Salamon and Anheier (1998) adopted a similar approach in their social origins theory of the development of the non-profit sector in different types of countries. They argued that in the social democratic model:
State-sponsored and state-delivered social welfare protections are quite extensive and the room left for service-providing non-profit organizations quite constrained. This type of model is most likely where working class elements are able to exert effective political power, albeit typically in alliance with other social classes. While the upshot is a limited service-providing non-profit sector, however, it is not necessarily a limited non-profit sector overall, as some accounts would suggest. To the contrary, given the political battles likely to be involved in the extension of state-provided welfare protections, we can expect non-profit organizations to still be quite active in such societies, but with a significantly different role, a role not as service providers but as vehicles for the expression of political, social, or even recreational interests. (p. 229)
The welfare state in the Nordic countries has played, and continues to play, a significant role in framing and undergirding the development of not only the non-profit sector, but also social entrepreneurship and social enterprises through funding and infrastructure, educational support, knowledge sharing and researchâeven though this has also been the pushed forward by individual entrepreneurial agents as well as more collective entrepreneurial activities. Mariana Mazzucato has argued that the entrepreneurial state as a more general phenomenon largely is underestimated in international literature on social entrepreneurship and social enterprises. She accentuates the three factors that arose from her analysis: the necessity of building and paying attention to how institutions and organizations in government are able to create long-run growth strategies, the ability to engage in the world of uncertainty, winning and losing and developing a better understanding of the different roles played in the âecosystemâ of innovation (Mazzucato, 2013, p. 198ff). This approach is largely consistent with Nordic scholars conceptualising the contemporary welfare state on the one hand as being transformed into the âcompetition stateâ (Pedersen, 2013) supported by the âsocial-economic conceptionâ of reforming welfare institutions and governance by regulation, neoliberal individualism and persuasion of the value of flexible labour markets. This position is well aligned to the critics of social entrepreneurship and social enterprises claiming this to be driven by market forces and the individual neoliberal entrepreneurial approach to social problems (HulgĂ„rd, 2011). On the other hand, an opposing conceptualisation makes a case for the âsocial and innovative welfare stateâ still guided by equality, solidarity and inclusion but simultaneously strongly focused on the creation of a strong and innovative state economy that actively invests in welfare and modifies imbalances and insufficiencies generated by the free market (SirovĂĄtka & Greve, 2014; Greve, 2015). This approach likewise mirrors well the notion that social entrepreneurship and social enterprises might be forming a new solidarity economy and a people-centred development (HulgĂ„rd & Shajahan, 2012).
Structural Changes Challenge the Nordic Welfare Model
The strong structures supporting a market-based economy as well as a tax-funded (social) public sector have been exposed to challenges during the latter part of twentieth century. Traditional industry has had to cope with increased global competition. New businesses have benefited from growing global markets. The Nordic countries have all been through economic reforms, including the de- or re-regulation of former public domains. Again, the timing has varied between countries. So has the severity of these challenges as well as the political approach used to cope with them. Still, we can talk about a common development that partly is shared with many other countries; however, with the Nordic welfare model as a point of departure and not radically questioned as such, the situation in the Nordic countries still is characterized by varieties of capitalism with relatively strong labour market unions and tax-funded public welfare servicesâa co-ordinated market economy in the âvarieties of capitalismâ typology (Hall & Soskice, 2001).
The last decadesâ transformations have provided the context for the emergence of discussions on social entrepreneurship and social enterprises. On the one hand, these discussions have many similarities to international discourses and the same types of social entrepreneurship and social enterprises can be seen as in other parts of the world. On the other hand, there are differences. There is already public support for services that often are provided by third-sector organizations including social enterprisesâeven though policy for such services is currently under reconstruction. There is also a strong tradition of rights to equal and democratic influence both in terms of advocacy as well as in the distribution of tax-funded activities.
Social Entrepreneurship and Social Enterprises in the Nordic Countries
A Nordic perspective on social entrepreneurship and social enterprises is based on an...
