Third sector organizations have been key entrepreneurial actors in providing welfare services in Iceland both in the past and present (Hrafnsdóttir and Kristmundsson, 2012). The importance of the third sector in providing public and quasi public goods in a market economy has been well documented. It´s existence has been explained by its ability to respond to „demand heterogeneity“, an unmet need for goods not provided by the government (Weisbrod, 1977), being trustworthy agents as their incentive is not distributing profit to owners („nondistribution constraint“, Hansman, 1980) and having an important entrepreneurial role for promoting social value and innovation (Anheier, 2005, Hulgaard, 2011).
In recent years there has been a growing focus on social innovation in welfare services due to challanges and pressures on the welfare system such as new social needs(poverty, exclusion, unemployment etc.) lack of financial resources rising from the economical crisis and demographical changes of societies (Social Service Europe, 2012). The European Union and The Nordic council of Ministers (NMR) have put emphasis on social innovation and social entrepreneurship in addressing these challanges especially with regard to inclusion of vulnerable groups into society.
In Iceland the concepts social innovation and social entreprenurship are relatively unknown, however these concepts have recently been put on the agenda in relation to new challanges in the Icelandic welfare system (Nordisk Ministerrad, 2015).
In the paper the entrepreunerial role of third sector organizations in providing welfare services in Iceland both in the past and present will be analyzed from the theoretical viewpoint of social innovation and social entrepreneurship. Historical data, policy documents and official statistics are used to explain the pioneer role of non-profit organizations providing welfare services in Iceland, especially in light of their entrepreneurial role in the economic crisis. This will be done by an analysis of the Welfare watch in Iceland, where government and third sector organizations joined forces in an innovative approach in solving new social problems after the economic crisis.
References
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Hansman, H.B. (1980). The Role of Nonprofit Enterprise. The Yale Law Journal 89 (5): 835-901.
Hrafnsdóttir, S. And Kristmundsson, Ó. (2012).The Role of nonprofit organizations in the development and provision of welfare services in Iceland. Moving the Social. Journal of Social History and the History of Social Movements, 48, 179-192.
Hulgaard, L. (2011). Social Economy and Social Enterprise: An emerging alternative to Mainstream economy. China Journal of Social Work, 4,3, 201-215.
Nordisk Ministeraad (2015). Socialt entrepenörskap og sosial innovasjon. Kartleggning avinnsatser for socialt entreprenörskap og social innovasjon i Norden.TemaNord. Nordisk Ministeraad.
Social Service Europe (2012). Social Innovation. The Role of Social Service Providers.
Weisbrod, B.A. (1977). The Voluntary Nonprofit Sector: An economic analysis. Lexington Mass: Lexington books.
