THE CHALLENGES OF SOCIAL ENTREPRENEURSHIP IN SLOVENIA

The paper deals with development and characteristics of social entrepreneurship (SE) and its supportive environment in Slovenia. In the last years, SE has become subject of wider interest in Slovenia. This fact can be... [ view full abstract ]

The paper deals with development and characteristics of social entrepreneurship (SE) and its supportive environment in Slovenia.

In the last years, SE has become subject of wider interest in Slovenia. This fact can be assigned to economic crisis and consequent search for new, socially and environmentally sustainable, economic/developmental models.

According to growing importance of SE, the need for research and measuring of its organisational culture and socioeconomic impact on local as well on national level is gaining importance. Our research on existing practices of social entrepreneurship in Slovenia is methodologically based on secondary data sources and qualitative research in form of interviews and focus groups with representatives of social enterprises, institutions of supportive environment in experts working in the field.

In the wider context of SE in Slovenia, we can classify different types of organizations: NGOs, cooperatives, work integration (social) enterprises, registered social enterprises and so called enterprises with social impact, but all cannot be automatically equated with social entrepreneurship. We have focused mainly on registered social enterprises. Among those a large proportion has been established only recently. The significant regional disparities are recorded, with the strong concentration in the regions of Pomurje and Podravje (Maribor). Data show considerable dependence on public funds, which can be linked to the fact that the majority of social enterprises are originating from non-governmental sector.

We have identified three key levels of supportive environment for SE in Slovenia: State, municipalities and organisations (mostly from NGO sector) working in the area of advocacy and promotion of social entrepreneurship.

State has started with active involvement in the sector in 2011, when Social Entrepreneurship Act has been adopted. Main focus of supportive measures on the state level was aimed at assuring employment for people from vulnerable social groups while support for entrepreneurial development of the sector was neglected. Consequence of that are problems concerning economic sustainability of new social enterprises.

Municipalities are playing important role in development of SE and can support the sector in many ways.

There is also relatively big number of supportive non-governmental organisations, which have started to work in SE in spontaneous way, answering to local needs. They are strongly connected with local initiatives and in this way able to recognize their needs in effective ways. That is how they differ from mainstream institutions of supportive environment. But on the other hand they do not have enough of human capital, especially in areas of entrepreneurship, marketing and finance, which are areas where social enterprises would need most of the support. In this aspect we can talk about crucial gap between offer of supportive environment and needs of the social enterprises in Slovenia.

SE in Slovenia is still in an initial phase; its share in employment or in revenues (GDP) is very small even compared to the EU average. SE is local embedded, so it is necessary to invest in social capital and development of ecosystem at the local level and motivation of especially educated young people, since they are key agents for its development.

Although SE will remain a hybrid phenomenon, it will have to more clearly define its relationship to other commercial enterprises as well as its appearance on the market. SE will also have to free itself of excessive governmental paternalism (that is, of its links to the first sector - the state, politics). In Slovenia, this will be a little harder, since here a type of state capitalism is predominant, and state interventions are common also into the private economy respectively at the level of market companies.

One the key point is whether social enterprises and cooperatives will begin connecting with each other (for now only weak attempts at so called co-working are being carried out) into business clusters. Of even greater importance is that they being establishing business connections with other companies (especially high-tech companies) and start to occupy market niches in the context of the green (circular) economy, re-use and industrial symbiosis. The emergence of new companies and the growth of the successful ones are moreover conditioned with the infrastructure in the form of financial mechanisms and investors. We do however believe that shifts in this direction will begin with internationalization and with graduates, experts and inventors of various backgrounds entering social enterprises or cooperatives. This could lead to an economic breakthrough in the regional context. It would create innovative cores and creative potential.

References:

·       Frane Adam (editor): On status and perspectives of Social Entrepreneurship in Slovenia and Croatia. IRSA, Ljubljana, 2015.

·       Defourny, J. in Nyssens, M. 2012: The EMES Approach of Social Enterprise in a Comparative Perspective", EMES Working Paper, no 12-03.

·       Social Entrepreneurship Act, Public gazette of  RS No. 20\2011. Ljubljana.

·       Darja Piciga, Alexander Schieffer and Ronnie Lessem (eds.), Integral Green Slovenia