SEFORÏS paper puts forward a positive view of how Welfare States and Solidarity enable Social Entrepreneurship and wins Best Paper award at the leading Entrepreneurship conference (BCERC).
The paper is entitled “The welfare state and social entrepreneurship: insights from a multi-level study of European Regions”. Authors are Aston University academics Emma Folmer, Anna Rebmann and Ute Stephan.
Emma, Anna and Ute investigate the relationship between solidarity attitudes and social entrepreneurship. National welfare states are an expression of solidarity. They aim to redistribute income and life chances. In turn, how extensive and ‘compassionate’ national welfare systems are depends in part on citizen’s attitudes toward solidarity including redistribution. Indeed in many countries the welfare state has increasingly come under pressure and has been downsized or ‘rolled back’ considerably (even before the 2008 financial crisis). Governments especially in developed economies increasingly see social businesses as complementing or even replacing welfare state interventions. They thus seem to expect that social enterprises will ‘fill the gap’ left by government welfare programmes.
However, we do not know much about how social entrepreneurship is related to support for and the configuration of the welfare state. Does solidarity, the foundation of the welfare state, also drive social entrepreneurship? If people support the welfare state, and thus the idea of redistribution, does that make them more likely to engage in social entrepreneurship? And if the welfare state works well, are people still inclined to start social businesses? Is it the case that large welfare states lead to complacency – if welfare states ‘take care’ of social needs then social enterprises are not needed –; or may there be spillover effects such that more expansive welfare state signal to their citizens that ‘it is good to care’ and stimulate social entrepreneurship?
The team analysed data from the European Social Survey and the Flash Euro Barometer on entrepreneurship to answer these questions. They focussed on a subset of social entrepreneurs, those that form as businesses but with a clear goal to create social or environmental benefits. As there is evidence for growing regional socioeconomic inequalities within Europe, the research took a regional perspective (while controlling for country differences).
Emma, Anna and Ute find that there are more social entrepreneurs in regions where people have more positive attitudes toward welfare state redistribution. They also observe more social entrepreneurs in regions where the welfare state is performing well. Thus, individuals are more likely to become social entrepreneurs in areas where social problems are seen as collective problems, as something that all members of society bear some responsibility for. This is in contrast with views that argue for trade-offs and suggest that welfare states may crowd out individual’s social initiative. Rather, the positive relationship between welfare state performance and the regional share of social entrepreneurship that the current study finds, means that a ‘rolling back of the state’ by itself will not result in alternative social service provision by social enterprises. A well-functioning welfare state allows social entrepreneurs to thrive.