Entrepreneurial society - can it safeguard welfare services?

Welfare state has withdrawn from providing many welfare services for several reasons. Major reasons are budget constraints, complaints about lack of efficiency and innovations, standardized services that do not meet the more... [ view full abstract ]

Welfare state has withdrawn from providing many welfare services for several reasons. Major reasons are budget constraints, complaints about lack of efficiency and innovations, standardized services that do not meet the more and more diversified individual needs of people and concers of quality and outcomes of services.

Instead of welfare states we have started talking about pluralistic welfare societies with multiple types of actors taking care of welfare tasks (Koskiaho 2014) or welfare-mix (e.g. Evers 2006) and quasi-market approaches delivering multiple services (e.g. Rose 2002). However the role of the these diverse actors are not very clearly defined as the market of welfare services has gained increasing significance in determining the playing field and its development.

Social enterprises have been seen as a means to fulfill the gap left by shrinking public services. In many traditional welfare states social enterprises have tried to creep in the the welfare market in order to complement or replace the former public services. Especially the increased use of public procurement and the common trend to outsource services has opened the market of welfare services for private competition. Social enterprises are supposed to provide a wider variety of services with all the positive attributes of private actors without loosing the social or societal objectives inherent in the welfare sector.

In this article we examine social enterprises as private actors or entrepreneurial organizations trying to encompass a double role: safeguarding the general or public interest while being independent private actors in a competitive market of welfare services. We take as a starting point the Nordic welfare model and the aims of the Nordic welfare system. We will discuss the possible advantages and shortcomings of social enterprises in achieving those aims and objectives set by the public sector. Social enterprises encounters many challenges and business model is backed up with many dilemmas (e.g. Hudson 1995; Paton 2003; Doherty et al. 2009; Kostilainen & Pättiniemi 2015). In many cases the social enterprises encounter the same shortcomings as other business entities driving by market forces when addressing the challenge of reconciliation between private and public interest. As Mazzucato (2013) argue we need understand better the role of the (welfare)state and its role. We will discuss the role of public authorities in guiding the development of social enterprises in a way that would enable public interest to be given a proper role in the way of functioning of the social enterprises.

The research methods include content analysis of recent research and other relevant literature, official reports and programme documents, but also longitudial statistics on social service delivery and spendings demonstaring the dramatic change in service delivery in Finland.