Category Archives: Social Policy

Social Entrepreneurship or Social Economy: Does it Make a Difference?

By Gabriel Salathé-Beaulieu


Social Entrepreneurship

Social entrepreneurship is increasingly popular among Canadian youth. Its popularity stems from a variety of reasons, including changes in youth’s values and career aspirations, as well as an increase in the availability of infrastructure supporting this trend. Perhaps the best example of this last point is the McConnell Foundation’s multimillion dollar strategy, under the RECODE program, to fund dozens of universities and colleges across Canada (including Carleton University) in an attempt to “redesign public institutions from the inside out; to disrupt business as usual; to found and grow new social enterprises […] in order to achieve a more just, sustainable and beautiful world.” [1]

Social entrepreneurship has multiple, sometimes conflicting, definitions, but at its core is the idea of ‘doing business for good.’ Hence, a social enterprise is different from a regular business because it does not only seek profit. Yet, it is also different from the non-profit, charity and voluntary sectors because it needs to achieve its social mission through economic activities that do generate profit. In short, as Social Enterprise Canada puts it, the goal of the social enterprise “is the simultaneous achievement of both economic and social values.” [2]

Social Economy

However, this idea of doing good through economic activities is quite similar to another concept that has been around for a while, namely social economy. Although the concept has a rich history deeply linked to the cooperative and mutual movement, it arose more prominently in Canada and especially in Quebec in the mid-1990s with the creation of the Chantier de l’économie sociale. A Quebec law passed in 2013 outlines the characteristics that social economy organizations must possess in order to qualify as such:

  • “They are businesses with the legal status of cooperative, non-profit organization or mutual;
  • Their main activity is the sale or trade of goods or services;
  • They pursue a social mission benefiting their members and/or the community;
  • They are autonomous form the state or another private business;
  • Their governance is democratic.” [3]

Does it Make a Difference?

With shared missions and seemingly similar economic models, it would be easy for the inattentive reader to conclude that both concepts—social entrepreneurship and social economy—describe the same reality. Yet, there is at least one obvious difference: social economy requires collective democratic governance while social entrepreneurship appears somewhat agnostic on the issue.

French sociologist Jean-Louis Laville argues that the difference is even more fundamental, because the two movements would be linked to different ideal types of solidarity [4].

On one side, “democratic solidarity,” rooted in the values of quality and mutual assistance, would be concerned with a holistic transformation of economic models through public deliberation. This vision corresponds to the social economy movement.

On the other side, “philanthropic solidarity” would be motivated by the idea of benevolence. More individualistic, it is less reluctant to embrace market mechanisms as long as they make the achievement of social good possible. This perspective is linked to social entrepreneurship.

Finally, both visions differ on the role of a third key concept: social innovation. Although social innovation also has multiple and contested definitions, it basically refers to any “new solution to social issues.” [5] While social economy believes these solutions can only be brought about through collective action and institutional changes, social entrepreneurship usually supports the idea that great individuals—the entrepreneurs—act as the spark that can provide solutions to social issues. This perspective reminds us of the American myth of the self-made man, with legendary philantrocapitalists such as Ford and Rockefeller. Nowadays too, semi-gods from the tech industry, such as Gates or Zuckerberg, are seen as the individuals who have the required resources, willpower and ingenuity to finally find solutions and to get things done.

But neither of these perspectives is perfect. The following table, although a caricature, helps us understand how the two movements differ and attract different types of supporters, by outlining some of the possible criticisms of the other:

Social entrepreneurship on social economy Social economy on social entrepreneurship
Collective decision-making is burdensome Sacrifices democratic governance for the benefit of an enlightened elite and risks the social mission being hijacked by individual interest
Incapable of scaling up impact Solidarity is reduced to markets and social inclusion is reduced to accessing markets
Too reliant on the state Proposed solutions stems from the same ideas that caused the problems
Too much importance is given to the legal framework while the real purpose, the social mission, risks being forgotten Does not bring about a new development model
Legal status does not guarantee a positive social impact Social entrepreneurship pretends to put forward new ideas but doesn’t

Source: Matthieu Roy et al. 2016. Synthèse de connaissance: L’entrepreneuriat social et l’entreprise sociale, p. 38.

Conclusion

In conclusion, the momentum that the social entrepreneurship movement is currently gaining raises many questions, especially for the social economy sector in Quebec, but also for anyone who cares about tackling social issues. To mention only a few of these issues:

  • Who should be addressing social issues: the state, private foundations, civil society, businesses, entrepreneurs?
  • What is the desired social transformation? Is it at the level of the whole economic system or the margin? Is it more about how wealth is created, or distributed?
  • Is the involvement of workers and users in these transformations truly central? Does ownership in itself matter or is the service received at the end of the line the real priority?

Bonus: For the federal public service geeks who constitute the likely readership of this blog post, there is also a much more current issue to consider. Back in the days of Paul Martin’s Liberal government, the social economy benefited from a huge federal boost (traces of this initiative can be found, for instance, on the social economy hub. But as Arsenault points out, at the time the social economy sector in Quebec appeared to be the only one organized enough to seize these opportunities [6].

A decade later, ears that are sensitive to social needs are back and the ministers responsible for Employment and Social Development have the mandate to implement a social innovation and social finance strategy. These investments are quite likely to be branded under the social entrepreneurship umbrella. But will it be for the best?

References

Main reference: Roy, M. et al. 2016. Synthèse de connaissance: L’entrepreneuriat social et l’entreprise sociale. TIESS. http://www.tiess.ca/entrepreneuriat-social-et-lentreprise-sociale-une-nouvelle-publication/

[1] RECODE. 2016. About Recode. http://www.re-code.ca/en/about

[2] Social Enterprise Canada. 2016. What is Social Enterprise? http://www.socialenterprisecanada.ca/en/learn/nav/whatisasocialenterprise.html

[3] Gouvernement du Québec. 2013. Loi sur l’économie sociale. http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=2&file=/E_1_1_1/E1_1_1.html

[4] Laville, J.-L. 2014. Innovation sociale, économie sociale et solidaire, entrepreneuriat social. Une mise en perspective historique. In J.-L. Klein, J.-L. Laville, & F. Moulaert (Eds.), L’innovation sociale (pp. 45-80). Toulouse: ÉRÈS.

[5] Cloutier, Julie. 2003. Qu’est-ce que l’innovation sociale ? CRISES.

[6] Arsenault, G. 2016. L’économie sociale du Québec: victime du fédéralisme canadien. https://ricochet.media/fr/863/leconomie-sociale-du-quebec-victime-du-federalisme-canadien

Additional reading, especially critical of the social entrepreneurship movement (in French): http://www.revue-ballast.fr/associations-face-a-loffensive-des-entrepreneurs-sociaux/