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SOCIAL ENTREPRENEURSHIP AND SOCIAL ENTERPRISES: THE CASE OF SLOVAKIA
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- 262.Introduction
- 263.1 Theoretical background
- 264.2 Material and Methods
- 265.3 Results and Discussion
- 266.Conclusion
- 267.Acknowledgment
- 268.References
SOCIAL ENTREPRENEURSHIP AND SOCIAL ENTERPRISES: THE CASE OF SLOVAKIA261.Ladislav Mura – Monika OrlíkováAbstract Social entrepreneurship is a new area of economic activity, which is characterized by linking economic and social objectives. It is such a new dimension of unconventional entrepreneurial dynamism that it is also the bearer of social innovation and social development, as well as a new impetus for economic growth. Social entrepreneurship is a response to the ongoing social and economic changes, incentives and challenges of social development. Experts perceive this type of business as an innovative form of business activity with added social value. So it is also a business, the primary goal is not profit, but a wider social mission with a permanent solution of social problems. Such business can be classified as a possible instrument of employment policy especially in relation to specific segments of the labour market. Social enterprises create an area for the realization of the disabled and marginalized groups. This paper focuses on the evaluation of social entrepreneurship and assesses the current situation in the field of social entrepreneurship and social enterprises in Slovakia with emphasis on comparative analysis at the international level and critical analysis of legislative definition. In solving the research problems, we use logical and cognitive methods with various procedures and critical analysis. Finally, the contribution results in suggestions and recommendations for further development of social entrepreneurship in Slovakia. Key words: social entrepreneurship, social enterprises, social development JEL Code: L26, L31, L32 262.IntroductionIn market-oriented economy, entrepreneurship represents a basic and extraordinarily important element of the development of society and economy. In the current economy where economy is significantly formed by both globalization and internalization, especially the ongoing integration processes determine entrepreneurship. Mainly economic and managerial aspects of entrepreneurship are in the foreground of interest of many experts (Ubrežiová et al., 2015; Šimo – Mura, 2015). However, a new form of entrepreneurship comes to the foreground at present where it is possible to identify both social and commercial constituents (Rey-Martí – Ribeiro-Soriano – Palacios-Marqués, 2016). Social entrepreneurship is a reaction to the ongoing social and economic changes, stimuli and challenges of the social development. In this way, social enterprises come into existence and their main role is not to perform commercial activities and make profit, but to satisfy the owner and employees´ social needs. In professional circles, such a type of entrepreneurship is perceived as an innovative form of business activities with added social value. Owing to social enterprises, social entrepreneurship connected with social economy is developed. The pillars of social economy are anchored first of all in the social policy of a state, aiming especially at the social well-being of its citizens. According to Korimová (2008) and Lubelcová (2012), the inception of social economy is determined by several factors, such as interdisciplinary inputs of social and economic character; different acceptation and interpretation of public policy, economic policy, social policy and systems of re-distribution of public resources; different views of the state function; unacceptable growth of the global social stratification – the growth of poverty, modern slavery and social exclusion; and methodological problem – social economy still has not been accepted as cross-section (interdisciplinary) part of economic and social sciences. Within the European Union, the concept of social entrepreneurship has been dated since 1980, while this type of entrepreneurship really started to gain ground only after 1990. Therefore, social entrepreneurship represents a new dimension of unconventional entrepreneurial dynamics, which, at the same time, bears social innovations and social development, as well as a new impulse of economic growth. 263.1 Theoretical backgroundSocial entrepreneurship proceeds from social economy where entrepreneurship is understood as one of the ways of solutions of social problems of regions, municipalities and individuals (Bočáková – Kubíčková, 2015). In the past years, many initiatives of establishing and operating of social enterprises have come into existence, but the practise has shown that an adequate legislative definition of social entrepreneurship absents in Slovakia. In this context, it would be required to extend the effect of legal norms in the sphere of social services and consulting (Mura, 2015), and generally of social work (Slovák, 2016), where there arises a more effective possibility of carrying out such types of enterprises in the environment of helping professions (Dudžáková, 2015) than in the commercial sphere of entrepreneurship. Social entrepreneurship still represents a relatively new sphere of entrepreneurial activities characterized by connecting economic and social goals. The priority of social entrepreneurship is not focused on making profit, but on a wider social mission with a permanent solution of social problems of entrepreneurs and their employees. Such entrepreneurship can be classified as one of the possible instruments of employment policy, especially in connection with special segments of labour market (Bencsik – Juhász – Machová, 2014). Social enterprises create an area for handicapped and marginalized groups of inhabitants where they can make use of their skills. According to Dudžáková and Slovák (2015), this is a distinct area for a wider use of helping professions. A legislative definition of social entrepreneurship can be found in the Act on Employment Services No 5/2004 Coll. as amended, where social entrepreneurship is described as such where entrepreneurs employ so-called persons disadvantaged in the labour market. Such persons are given support and professional assistance and the means obtained by their activities are used to create of new jobs and improve labour conditions of employees in social enterprises. According to Korimová (2012), social entrepreneurship is an innovative process within regional development, since marginalized groups of inhabitants leave the labour inter-market in a social enterprise and enter the classical labour market, and this can be considered one of the prerequisites of not only the economy growth, but of the growth of life quality of citizens as well. From the point of view of an international definition of social entrepreneurship, Defourny and Nyssens (2008) can be mentioned as an example. According to them, the basic criteria are as follows:
In connection with social entrepreneurship, it is necessary to also characterize the term “social entrepreneur”. There are several views regarding the characteristics of this term. The basic typology deals with the Anglo-Saxon and European models of comprehending its content. While in Anglo-Saxon countries individual dynamics prevails, in European countries it is collective dynamics. In European Union countries, the social enterprise is comprehended as an organizational player of social entrepreneurship and it is characteristic for the third sector. In Anglo-Saxon countries, social entrepreneurship is comprehended as an added value of the social dimension of entrepreneurship. In our view, the roots of differences in the comprehending and meaning of social entrepreneurship can be found in the historically different development of society and economic system, as well as in different conditions for entrepreneurship. 264.2 Material and MethodsThe submitted paper is focused on the evaluation of social entrepreneurship and social enterprises in the conditions of Slovakia. The aim of this paper is to evaluate the current situation in the sphere of social entrepreneurship and social enterprises in Slovakia with the emphasis on a comparative analysis of the international level and on a critical analysis of the legislative definition. For the purpose of this paper, it was necessary to concentrate the required factual material from both primary and secondary sources. As for the secondary sources, we used mainly scientific literature, special publications, scientific papers of renowned authors registered in scientific databases, and the valid legislation. The primary sources are represented by the field data obtained within institutional research and solution of the cultural and educational project of KEGA 001UCM-4/2016. In the solution of the studied problem, we used logical and cognitive methods with individual procedures and critical analysis. In the paper conclusion, we tried to formulate subjects and recommendations, which could help further development of social entrepreneurship in Slovakia. 265.3 Results and DiscussionIn the following part hereof, we turn our attention to revealing the present state of social entrepreneurship by means of logical and cognitive methods and critical analysis. In our study of social entrepreneurship, we ran into some theoretical, methodological and practical problems. The basic problem lies in its insufficient anchoring in legal norms, starting with the definition of the position of social entrepreneurship in a country´s economy through a definition of its functions and supporting means to a definition of control mechanisms. In our view, the cardinal problem lies in the absence of a coherent (administrative) body, which would define, coordinate and control social entrepreneurship in its overall width. However, from the point of view of the Act on Employment Services No 5/2004 Coll. as amended, or from the point of view of employment of disadvantaged citizens, the Ministry of Labour, Social Affairs and Family of the Slovak Republic seems to be the professional administrator, the problem is much more complex. It is a type of entrepreneurship and therefore the Act on Sole Trading No 455/1991 Coll. as amended or the Commercial Code No 513/1991 Coll. as amended can be applied. However, they are not under the auspices of the Ministry of Labour, Social Affairs and Family of the Slovak Republic, but under those of the Ministry of Interior and the Ministry of Economy of the Slovak Republic. From the above reasons, it would be very necessary to unify the definition of social entrepreneurship and to appoint one complexly managing body of state administration. Fig. 1: The integration character of social entrepreneurship Social entrepreneurship Services in public interests Health services Social services Educational services Employment services Source: Korimová, edited by authors In Figure 1, the integration character of social entrepreneurship can be seen. As comes clear from the Figure, such a type of entrepreneurship contains several elements concentrated in one place. Social entrepreneurship gives its citizens integrating services because it connects some services: employment services, social and health services, services in public interests, and educational services. Social entrepreneurship represents an integrating element not only in economy, but also in society as such. Social entrepreneurship deals not only with the performance of business activity and with satisfying mainly the social needs of participating parties. This form of entrepreneurship brings many side- and favourable effects, such as employment of disadvantaged citizens in the labour market, a contribution to the regional development in the form of maintaining of traditional values, habits and products, the development of social services in municipalities and regions, the strengthening of social inclusion and social assistance or concrete people, and the adoption and performance of decentralized competencies of local bodies on the local level. To compare the situation in social entrepreneurship in the territory of the European Union, we present alphabetical examples from its most developed countries that can inspire also Slovakia. In Austria, social entrepreneurship has a comparatively significant position and due tradition. The main difference between Austrian and Slovak social enterprises consists in their financing. Austrian enterprises are financed by the state as a prevention from long-term unemployment and social exclusion and due to self-realization of disadvantaged citizens. It is estimated that only in the capital of Vienna there have been created approximately 700 jobs in this way. On the other hand, Slovak social enterprises had mostly been financed from EU structural funds, or with aid of charities and donors. However, with some exceptions, they were all dissolved after the time of their support passed. The direct participation of the state absents here. Until recently, social entrepreneurship in Denmark had had no tradition and social enterprises had not been developed. Their development was helped by the development of innovative forms of entrepreneurship. There are no special limitations, with some exceptions where this type of entrepreneurship comes under a special consent. The most frequent legal form is a limited liability company. The assistance given to social enterprises is important in this country because of their integrating function and distinct social function in economy. Denmark is an example of convergence of universal institutional elements such as partnerships in the commercial, public and civil spheres of life. Germany is a copybook example of how social entrepreneurship should function. Through connecting the state coordination of social-entrepreneurial activities and the development of the individual regions, the German economy managed to absorb socially and medically disadvantaged citizens, who were thus given an area for work and subsistence. We have to mention in this connection that the European Commission started to change the standards for social enterprises in 2014. If they want to receive supporting means, they have to sustain a measurability of their social importance. By way of defining a firm position of social enterprises in the Programme for Employment and Social Innovations, there arises a possibility of applying for European funds to support social entrepreneurship. In Great Britain, there is a typical form of the institutionalized context of social entrepreneurship. Public administration in this country is decentralised, which makes supporting the local or regional specific types of entrepreneurship easier. The long-term liberal tradition has created an area for various forms of self-supporting organizations established by municipal social enterprises on the local level. The following activities could be positive stimuli for the development of social entrepreneurship in Slovakia:
266.ConclusionSocial entrepreneurship represents a part of the social sphere of our life with applying the entrepreneurial spirit and satisfying the basic social needs (job, steady income, social contacts, social communication, self-realization, etc.). Social entrepreneurship is characterized by innovative search for new jobs and realization of entrepreneurial ideas, with an active interconnection of several levels of different sectors, mainly those social and economic. Just like any other entrepreneurial activity, social entrepreneurship is carried out, besides other goals, with the purpose of being economically self-sufficient for its own reproduction. Social enterprises prefer to employ medically, socially or otherwise disadvantaged citizens in the labour market, what brings, on the other hand, much lower labour productivity as in commercial businesses. Therefore, social enterprises need to be supported from public and private sources to be able to ensure their sustainable development and existence. Based on the comparison of the present situation in Slovakia and in the chosen European Union countries, as well as on the critical analysis of the current legislative specification of social entrepreneurship, we have formulated the following suggestions and recommendations regarding its further development:
267.AcknowledgmentThe submitted paper is a partial output of the KEGA grant 001UCM-4/2016 "Creating Innovative Study Materials for the Newly Accredited Programme Management in Public Administration" financed by the Ministry of Education, Science, Research and Sports of the Slovak Republic. 268.ReferencesAustin, J., Stevenson, H., Wei-Skillern, J., 2006. Social and commercial entrepreneurship: Same, different, or both? In Entrepreneurship: Theory and Practice, Vol. 30, Issue 1, pp. 1-22. ISSN 1042-2587 Bencsik, A., Juhász, T., Machová, R., 2014. Mentoring practice on behalf of knowledge sharing in the light of education. In Acta Polytechnica Hungarica. Vol. 11, Issue 9, pp. 95-114. ISSN 1785-8860 Bočáková, O., Kubíčková, D., 2015. Satisfaction of the inhabitants with selected aspects of social policy in the region. In 18th International Colloquium on Regional Sciences, pp. 391-397. ISBN 978-80-210-7861-1 Defourny, J., Nyssens, M., 2008. Social Enterprise in Europe: Recent Trends and Developments. In: Working Paper , No.2008/01, EMES 2008 [online] [cit. 2016-02-29] Dostupné na https://orbi.ulg.ac.be/bitstream/2268/11568/1/WP_08_01_SE_WEB.pdf Dudžáková, A., 2015. Theoretical aspects of the preparation of helping professions in satisfying needs. In Ežemesačnyj naučnyj žurnal, Vol. 15, Issue 10, pp. 158 – 159. ISSN 2413-5291. Dudžáková, A., Slovák, P., 2015. Importance of the concept of education in first aid in helping professions. In: SGEM 2015 2nd International multidisiplinary scientific conference on social sciences & arts. Albena Bulgaria. : Psychology & psychiatry, sociology & healthcare, education. Book 1, Vol. II. Sofia: STEF92 Technology Ltd., pp. 493-500. ISBN 978-619-7105-45-2 Korimová, G., 2008. Teoretické a metodologické východiská sociálnej ekonomiky. In Ekonomický časopis, Vol. 56, Issue 3, pp. 311-325 ISSN 0013-3035 Korimová, G., 2012. Social economics and social entrepreneurship as the innovative factor of regional development. In 15th International Colloquium on Regional Sciences, pp. 486-494. ISBN 978-80-210-5875-0 Lubelcová, G., 2012. Social Economy: Concepts, Opportunities, Risks. In Sociológia, Vol. 44, Issue 1, pp. 83-108. ISSN 0049-1225 Mura, L., 2015. Etika pre pomáhajúce profesie. Brno: Tribun EU, 133 p. ISBN 978-80-263-0812-6 Rey-Martí, A., Ribeiro-Soriano, D., Palacios-Marqués, D. 2016. A bibliometric analysis of social entrepreneurship. In Journal of Business Research, Vol. 69, Issue 5, pp. 1651-1655. ISSN 0148-2963 Slovák, P., 2016. Metódy, prístupy a stratégie uplatňované v sociálnych službách a poradenstve. Trnava: FSV UCM, 148 p. ISBN 978-80-8105-774-8 Šimo, D., Mura, L., 2015. Manažment organizácií. Bratislava: Wolters Kluwer, 264 p. ISBN ISBN 978-80-8168-242-1 Ubrežiová, I., Malejčíková, A., Moravčíková, K., Ubrežiová, A., 2015. Spoločenská zodpovedosť podnikov SR v kontexte internacionalizácie podnikania. Nitra: SPU, 121 p., ISBN 978-80-552-1440-5 Zákon č. 5/2004 Z. z. o službách zamestnanosti a o zmene a doplnení niektorých zákonov Contact Ladislav Mura, doc. Mgr. Ing. PhD. University of Ss. Cyril and Methodius, Faculty of Social Sciences Nám. J. Herdu 2, 917 01 Trnava, Slovakia Mail: ladislav.mura@gmail.com
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