OVERVIEW OF SOCIAL ENTREPRENEURSHIP DEVELOPMENT IN SLOVENIA.

• Jurisdiction: Rumania
• Date: 01 June 2020
• Author: Hojnik, Barbara Bradac

1. Introduction

   Over the last decades, social entrepreneurship has become a globally accepted and developed phenomenon. The concept of social entrepreneurship has attracted attention as a significant field that shows how critical societal issues can be addressed through the innovations, persistence and sustainable outcomes associated with entrepreneurship (Nadim and Singh, 2011; Hosu, 2012; Martin and Osberg, 2007; Zajko and Bradac Hojnik, 2018). The phenomenon of social entrepreneurship is specific because it is based on the fulfilment of social objectives rather than profitable objectives. As such, it contributes to the social wealth of different stakeholders in society. Consequently, the European Commission described the characteristics of social enterprises and it was explicitly stated that they are an integral part of the social economy, defining a social enterprise as an actor in the social economy whose main objective is to have a social impact rather than to make a profit for its owners or shareholders. Social enterprises provide goods and services to the market in an entrepreneurial and innovative way and use their profits primarily to achieve social goals. They are managed in an open and responsible manner and involve above all employees, consumers and other stakeholders (European Commission, 2011). With the focus on the European Union (EU) context, Member States are allowed to regulate their national framework conditions for social entrepreneurship individually. Consequently, some countries have developed some kind of legislation on this issue, while other countries have no specific legislation or even a specific policy framework for social entrepreneurship.

   Our article focuses on the case of Slovenia, where social entrepreneurship gained attention for several years. In Slovenia, social entrepreneurship is a part of the social economy concept, which consists of private non-profit organizations (social enterprises, cooperatives, disability-employment companies, employment centers, non-governmental organizations - associations, institutions, foundations), which produce marketable and non-marketable products and services but are established with a social objective and rely on participatory decision-making processes (Official Gazette of the Republic of Slovenia, 2018). From Slovenian national independence, the concept of social entrepreneurship developed in several phases, the most important milestone being the adoption of legislation on social enterprises in 2011/2012, which regulated the field, but, at the same time, created confusion about different organizations operating according to the concept of social economy. Consequently, the legislation was adopted in 2018, but with some shortcomings, such as the exclusion of certain types of social economy organizations.

   Although it is explicitly recognized that the business ecosystem enables the creation of new enterprises, there is a gap in the literature on the influence of different public policies on the presence and development of social entrepreneurship at the national level. In this article, we focus on the case of an EU Member State, namely Slovenia, and its development of the field of social entrepreneurship. The goal of the article is to examine the development of the field of social entrepreneurship at the national level, to analyze business organizations in the social economy and to examine how social enterprises evaluate public policy and the environment for social entrepreneurship in Slovenia. Several methodological approaches have been used for this purpose, as the subject is difficult to grasp and reliable data are difficult to collect. Following the main goal, our research questions are:

   --What are the public policies, aimed at promoting social entrepreneurship and public policies aimed at creating a supportive environment for social entrepreneurship at the national level, and what has been its development in Slovenia?

   --What are the characteristics of social economy organizations in Slovenia?

   --How do social enterprises in Slovenia assess the quality of public measures to promote social entrepreneurship and public measures aimed at creating a supportive environment for social entrepreneurship?

   Our contribution is the advancement of social entrepreneurship literature by pointing out that the public policy can act as a hindering or facilitating factor for the development of social entrepreneurship, with the focus on national level in Slovenia. The empirical analysis consists of quantitative and qualitative approaches. The first was carried out using several sources, namely legislation, official statistics and different empirical reports. The second uses the case study approach, using the interviews. The article is structured as follows. First, in the theoretical framework, social entrepreneurship is analyzed from the perspective of the supportive environment and the ecosystem, followed by an analysis of the framework conditions for social entrepreneurship at EU level and in Slovenia. Second, the development of the domain of social entrepreneurship in Slovenia is analyzed, proposing its characteristic developmental stages. Third, the empirical analysis of social enterprises and other organizations within the social economy in Slovenia is carried out. Fourth, the case studies of social enterprises are examined and an analysis of their assessment of public policies and a supportive environment for social entrepreneurship is carried out. Finally, conclusions and directions for future research are presented.

2. Theoretical framework of social entrepreneurship

   Defourny and Nyssens (2010) pointed out that there are three key dimensions of social enterprises. First, the entrepreneurial dimension is expressed through involvement in the economic activities of social enterprises. Second, the social dimension is seen through a primary and explicit social purpose of social enterprises. Third, the governance dimension is expressed through management that includes various stakeholders. Social enterprises need a suitable supportive environment to achieve these key dimensions.

   Today, social enterprises operate as a dynamic, diverse and entrepreneurial movement that embodies new business models that combine economic activity with a social mission and the promotion of inclusive growth (Bent-Goodley, 2002; Certo and Miller, 2008). Several elements of the ecosystem are important for the existence and sustainable development of social enterprises (see Figure 1): the networks, support mechanisms and assistance for their sustainable development; labels, marks and certification systems that identify social enterprises and distinguish them from for-profit enterprises; the impact measurement that social enterprises use to measure their social objectives and the implementation of their mission; and the legal framework within which they must operate.

   As the whole ecosystem is a broad concept and all its elements are interrelated, we focus on the legal and policy aspects of social entrepreneurship, as they influence all other elements by determining and defining conditions, measures and outcomes for all.

   In order to evaluate public policies, they must first be categorized. In the literature, two main areas of public activities in support of business are identified: first, the business environment or ecosystems and, second, entrepreneurial competitiveness (Chaves and Demoustier, 2013). The creation and development of companies require favorable external conditions, a supportive environmental, institutional and cultural framework (Oncer and Yildiz, 2010). When these elements work together and integrate public and private stakeholders, an environment suitable for entrepreneurial dynamism is created. This framework has been transferred to the social economy by Chaves (2008) and Chaves and Demoustier (2013). They consider two broad groups of policies to promote the social economy (Chaves and Demoustier, 2013); first, soft policies aimed at creating a favorable environment (ecosystem) in which social enterprises are created, operate and develop. These include institutional measures (e.g., legal forms, social entrepreneurship organizations, public organizations for promotion, etc.) and cognitive measures (dissemination of knowledge, training, etc.). Second, hard policies, which target social enterprises for their sustainable development and which are divided into supply-side (e.g., national and regional plans, budget policies) and demand-side measures (e.g., public procurement).

   2.1. The social entrepreneurship framework at EU level

   The importance of social entrepreneurship has been increasing in the EU in recent years. For several years, the European Commission aims to create an encouraging financial, administrative and legal environment for social enterprises so that they can be on an equal position with other types of enterprises in the same sector, which are largely considered social economy organizations. At EU level, social economy organizations are economic actors which can be found in all sectors. They are characterized by their goals and unique business models. The social economy includes organizations such as cooperatives, associations, mutual societies and foundations. These social enterprises are particularly active in areas such as social protection, social services, health care, banking, insurance, manufacturing activities, a wide range of consumer services, brokerage, various crafts, housing services, supplying services to the local environment, education and training in the field of culture, sport and leisure activities (Campos and Avila, 2012). The social economy combines profit with solidarity by creating quality jobs, strengthening social, economic and regional cohesion, generating social capital, promoting active citizenship, solidarity and an economy where people come first (European Commission, 2016). Social enterprises have common...