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Article

Social Entrepreneurship: Dissection of a Phenomenon through a German Lens

by
Karina Cagarman
1,*,
Jan Kratzer
1 and
Katharina Osbelt
2
1
Entrepreneurship and Innovation Management, Technische Universität Berlin, 10623 Berlin, Germany
2
Social Entrepreneurship Netzwerk Deutschland e. V. c/o Bundesverband Deutsche Startups e. V. im Haus der Bundespressekonferenz, 10117 Berlin, Germany
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(18), 7764; https://doi.org/10.3390/su12187764
Submission received: 14 August 2020 / Revised: 10 September 2020 / Accepted: 16 September 2020 / Published: 20 September 2020
(This article belongs to the Special Issue Social Entrepreneurship, Hybrid Organizations and Sustainability)
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Abstract

:
The occurrence and scientific investigation of the phenomenon of social entrepreneurship are rather new. The term is very popular among politicians and is reflected in a lot of the political demands and willingness that they express. However, a review of the literature about it shows that there is no common ground or frame, and the historical developments are different in different countries and economies. Based on a study of the literature, a two-phase survey following the ‘Policy Delphi’ approach was conducted in Germany in order to enlighten this frameless picture of social entrepreneurship. Our results indicate five dimensions that extend the core term: ‘social’, namely ‘Societal–Visionary’, ‘Ecological’, ‘Societal–Entrepreneurial’, ‘Economic’, and ‘Innovative–Entrepreneurial’. The degree of intercorrelation among the five dimensions shows that four factors, namely ‘Societal–Visionary’, ‘Societal–Entrepreneurial’, ‘Economic’, and ‘Innovative–Entrepreneurial’, have low to medium-high correlations. The fifth factor, ‘Ecological’, has the weakest correlation with all other factors.

1. Introduction

“Social entrepreneurship plays an increasingly important role in solving current societal and social challenges”
[1]
This statement, amongst others, conveys the impression that social entrepreneurship and its importance for the systemic solutions to current social challenges have been understood. So far, however, these and similar declarations of intent have hardly been reflected in the actions of states, alliances, or politicians. Initiatives such as the High-Tech Strategy 2025 launched by the European Union show that the importance of innovations and digitization is emphasized, but without any references or tendencies towards social entrepreneurship.
The 21st century is loaded with social challenges for which innovative solutions are urgently needed. To this end, the United Nations adopted the 17 Sustainable Development Goals in 2015 as part of the 2030 Agenda [2]. It could be assumed that the states’ commitment to achieving these essential projects for humanity represents the greatest and most important thing to do right now. However, recent studies show that neither national governments nor the United Nations itself have the power to implement these goals. In addition to non-governmental organizations (NGOs), social entrepreneurs are, in fact, the driving force when it comes to achieving the 17 goals for sustainable development [3]. Without solving the social challenges, purely environmental solutions are meaningless [4]. Apart from having a positive impact on the global society as such, social entrepreneurship can enfold its benefits in many smaller observable developments. For example, institutions of social entrepreneurship have significantly more female founders than traditional companies (e.g., SDG 5—gender equality), and the generation over 50 is also comparatively strongly represented (e.g., SDG 3—good health) [2,5,6]). Although many other factors might add to SDGs 3 and 5 (gender equality and good health), social entrepreneurship is certainly a driver for reaching them. Therefore, the question arises: Why has social entrepreneurship received so little attention in policy actions and government institutions despite its recognized vital importance for the human future?
One reason might be that there is currently no uniformly recognized view, comprehension, vision, or definition of social entrepreneurship. Among scientists, entrepreneurs, and politicians, among others, there are seemingly very different pictures about what social entrepreneurship means and addresses. However, without having that, creating, establishing, supporting, and measuring the impact of social entrepreneurship activities are fuzzy and largely meaningless. The present paper aims to investigate the very nature of social entrepreneurship in order to make it less fuzzy and to make it easier to find common ground in defining it. First, a literature review explains the classic concept of entrepreneurship, followed by insights about social entrepreneurship. Second, we look at the history of social entrepreneurship and explain the development in the United States and Europe, and consider special features in Germany. Third, we describe a two-phase survey following the ‘Policy Delphi’ approach that was conducted in Germany, followed by a factor analysis as well as intercorrelation between the identified factors. Finally, the results are presented. The novelty of this article lies in the focus on Germany and the application of the ‘Policy Delphi’.

2. Literature Review

2.1. Entrepreneurship

Since ‘social entrepreneurship’ represents a subcategory of ‘entrepreneurship’, a major part of it refers back to the classical term of entrepreneurship [7,8]. Richard Cantillion [9,10] was the first to introduce the conceptual framework of ‘entrepreneurship’, based on the French word ‘entreprendre’, in the 18th century. The entrepreneurs of that time—especially traders, artisans, and farmers—were characterized by their striving for a ‘big business adventure’. In contrast to professions where a fixed salary was to be expected, entrepreneurs had to take the risk associated with the nature of the markets [11]. Later, Schumpeter [12] introduced his idea of the entrepreneur as the change agent in the creative destruction of an equilibrium. Drucker [13], on the other hand, argued that entrepreneurs can also be found in existing organizations and governmental institutions.
The approach proposed by Shane and Venkataramans [14] is often used as a basis for describing entrepreneurship research as ‘the scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited.’ For this study, we will use a definition according to which entrepreneurship is ‘the process of identifying new entrepreneurial opportunities and converting them into marketable products and services’ [15].

2.2. Social Entrepreneurship

The phenomenon of social entrepreneurship was always around, but it was not labeled as such [16]. Nevertheless, the introduction of this concept is essential in order to come closer to a more specific understanding of the concept. Social entrepreneurship is a rather young research area that is a subcategory of classic entrepreneurship research [7,8]. Researchers on social entrepreneurship come from a variety of disciplines, such as management, entrepreneurship, political science, economics, marketing, sociology, and education [17]. This plethora of perspectives makes it difficult to find a common ground. Although the term has been used in scientific discourse for several decades and the number of published papers has increased tremendously, there is, as yet, no generally applicable definition [7,18]. This is due to the fact that researchers as well as practitioners understand the concept in different ways; ‘it means different things to different people’ ([16], p. 1). Consequently, it has not yet been possible to agree on a definition of the term [19].
Previous research can be roughly divided into two areas. On the one hand, there are researchers who focus on the character traits of social entrepreneurs, as discussed before. On the other hand, there are a large number of publications that define the discipline itself (see Table 1). The most comprehensive attempt to analyze the existing literature and work out commonalities can be found in the article written by Aliaga-Isla and Huybrechts [20].
As Table 1 demonstrates, there is a variety of social entrepreneurship definitions. Furthermore, the degree of specification of the definitions varies [21].
The study by Wilkinson, Medhurst, Henry, Wihlborg, and Braithwaite [22] splits social entrepreneurship into three dimensions, namely the social, entrepreneurial, and governance dimensions. We use this scheme to systematically cluster the current literature. However, this view very obviously contradicts the realities of business life. Firstly, the limitation to the three entrepreneurial dimensions, which neglects the need to achieve financial surpluses as an endeavor towards investments into future innovations and as the primary source of income, as well as the need for innovation as a driving factor for social impact [23]. Having a primary source of income represents a basic function of social businesses, according to Wilkinson et al. [22]. Thus, social entrepreneurship might likewise be very much directed towards economic profitability, investments in innovative problem solutions, and creating and finding innovative solutions for itself. Weber and Kratzer [24] present a model of social entrepreneurship in which economic activities reach from charities to profit-driven enterprises.
Table 1 shows a relative consensus between researchers on the social and entrepreneurial dimensions. On the one hand, there is agreement that social entrepreneurship includes entrepreneurial action [25,26]. We remember that we defined entrepreneurship as ‘the process of identifying new business opportunities and transforming them into marketable products and services’ [15]. However, this is not used for the purpose of maximizing profits for shareholders [8,27], but as a means for the purpose of an overarching mission. Social entrepreneurship always means primarily creating social or societal added value [9,28,29] or providing a solution to social problems [30,31,32]. The elementary part of the entrepreneurial dimension is the discovery and exploitation of opportunities [9]. Opportunities may arise due to failure of existing actors, both from conventional companies [21] and from established organizations in the welfare sector [33]. This market failure results in a variety of opportunities, which Austin et al. [21] define as follows: ‘Opportunity is defined as the desired future state that is different from the present and the belief that the achievement of that state is possible’ [21]. These opportunities must be recognized and exploited [34]; the challenge of acquiring the resources required for implementation is much greater [21,33]. Mair, Bal Battilana, and Cardenas [35] provide a detailed consideration of the identification of fields of action and implementation options.
It becomes clear that the agreement on social or societal added value and entrepreneurial action as core elements of social entrepreneurship leads to special challenges in practice. While the needs of shareholders are primarily taken into account in classic companies, social enterprises have to serve other stakeholder interests [9]. Since they often have to weigh financial or operational goals against their social mission, they are often referred to as hybrid organizations [36].
From Table 1, we also see that the components that should be assigned to the governance dimension are particularly controversial, which could be due to a lack of research in this area [37]. This describes how the organization formally defines its social goals. ‘Good governance’ together with well-thought-out control mechanisms can thus help prevent a mission drift, since the motivation to create added value is not only borne ideologically, but can also be found in formal rules and structures [38]. These relate to, among others, the opportunities for participation, the participation rights of employees, and the question of how profits are used [22]. The latter is often discussed in research, and contains approaches that require the full reinvestment of all profits, but also the opinion that their distribution is a necessary personal incentive [36,39]. Closely related to this is also the question of the legal form, which arises in view of the fact that there is no separate legal form for organizations operating with social entrepreneurship [27,40].
The triad of the social, entrepreneurial, and governance dimensions can also be found in the article by Aliaga-Isla and Huybrechts [20] published in ‘Cleaner Production’. Aliaga-Isl and Hybrechts [20] carry out a mimetic analysis of all 45 definitions found, among which they check for commonalities. There are three main categories: (1) intent or promise, (2) the entrepreneurial opportunity, and (3) the type of organization. In terms of intent or promise (1), almost all definitions include goals that address people, social aspects, financial goals, or contextual problems. However, according to the authors, the social aspect in particular should be researched even more, since its content has so far been vague. From the direct help of disadvantaged people to the view that all organizations are social through the employment of employees or the payment of taxes, there are many different views on this point. This category is similar to the social dimension. The entrepreneurial opportunity (2) is adopted from entrepreneurship research, whereby the actions based on it in social entrepreneurship should solve social challenges. Here, we find the entrepreneurial dimension again. The type of organization (3), according to the definitions examined, is only of importance insofar as it allows the organization concerned to carry out its actions [20]. The question of the legal form is an essential part of the governance dimension, although it also includes other aspects.
The article from Aliaga-Isla and Huybrechts [20] was not coincidentally published in an academic journal mainly addressing the term sustainable entrepreneurship. According to much research, ‘social entrepreneurship’ is part of ‘sustainable entrepreneurship’ [41]. As Shepherd and Patzeld ([42], p. 151) put it, ‘Sustainable entrepreneurship is focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products, processes, and services for gain.’ This definition indicates that ‘social entrepreneurship’ is inevitably part of ‘sustainable entrepreneurship’, or, in other words, the preservation of nature is as much ‘social entrepreneurship’ as the focus on ‘social issues’ serves the preservation of nature. The interlink between the solution of environmental protection issues and social issues also becomes obvious when looking at the different typologies of entrepreneurs, as sketched above. The link between ‘social entrepreneurship’ and ‘sustainable entrepreneurship’ widely neglected in research until now.

2.3. The Historical Development and Recognition of Social Entrepreneurship in Different Economies

2.3.1. USA

In the United States, nonprofit organizations (NPOs) receive far less government support than in most European countries, and consequently have to rely on their own economic activities. This tradition, deeply rooted in US history, became increasingly important in the 1970s against the backdrop of an economy weakening due to the oil crisis [43]. With further cuts in the charitable sector, many NPOs were forced to expand their economic activities, and began to sell products and services that were often not linked to their charitable work [40]. This development laid the foundation for the emergence of two different social entrepreneurship streams. On the one hand, there is the ‘Social Enterprise School of Thought’, which, as the name suggests, focuses on the executive organization. One of the most famous examples is the Grameen Bank founded by Muhammad Yunus, which is based on the principle that investors provide their money free of interest and without a dividend in return [44]. The NPO Ashoka represents the second stream. In this approach, the legal form of the organization concerned is of secondary importance; the focus is much more on the individuals who create social innovations [45]. This school also refers to both Peter Drucker’s concept of an innovator and the reformation or revolution of the social value chain demanded by Schumpeter [46]. To this day, Ashoka supports suitable candidates within the framework of its Fellowship Programs.

2.3.2. Europe

After the end of World War II, Europe faced acute problems, such as poverty and housing shortages. In the 1970s and 1980s, challenges such as persistently high unemployment and an urgently needed reduction in public debt were added. At the same time, it became clear that the existing government instruments were insufficient to develop functioning solutions for the society [47]. Against this background, the third sector gained great importance, which includes organizational forms such as non-profits and cooperatives that do not belong to either the public or the private sector [48]. These began to deal with former government tasks [49]. The nature and form of the involvement of organizations in this sector varied widely in Europe, which was mainly due to the different welfare state models in the individual countries [50]. In the following, we briefly summarize the underlying theoretical approaches.
A common approach is to differentiate between the systems of Bismarck and Beveridge. The model based on Otto von Bismarck aims at income-dependent and social-security-financed coverage for employees. This concept enjoyed great popularity in many European countries until the 1980s. The contrasting approach by William Beveridge focuses on basic security for everyone, including women and children, which is financed by tax revenues [51]. Due to the challenges of the 1980s, this approach was frequently seen as a solution for the state [52].
Esping-Andersen [53] schematized the European countries in the 1990s and developed the theory of the welfare regime. The distinguishing feature is the relationship between the state and the market with regard to the provision of social benefits. In the following, the quality and impact of social policy on society, such as redistribution issues, are examined. For a closer look, the following classification based on Esping-Anderson [53] can be made: (1) Nordic countries, (2) United Kingdom, (3) countries that are closest to the Bismarckian model, i.e., Belgium, France, Germany, and Ireland, and (4) southern countries [54].
(1) The Nordic countries are characterized by the fact that, until the 1980s, all social expenditure was state-owned, and they had some of the highest in the world [55]. It was only because of the weak economic performance in the 1990s, which many attributed to the cost-intensive welfare system, that the limits of the strict division of tasks began to dissolve [56]. This also encouraged the emergence of new third-sector cooperatives [47].
(2) In contrast to that, the situation looked different in the United Kingdom, where government social spending was very low and the social sector was made up of a relatively large voluntary sector financed by private resources. Only after the end of World War II, a basic security system based on the Beveridge model was established. The third sector began to benefit from this in the 1980s when the state opened the possibility of social benefit offerings for a variety of organizational forms [57,58].
(3) In the Bismarck countries, mediating organizations have always played a major role, especially with regard to social services and social security. In the 1980s, associations (Verbände) were increasingly used to support the collaboration of public institutions and non-profit organizations (NPOs) [49]. This type of economy became very popular in France and Belgium, and continues to this day under the terms social economy (économie sociale) or solidarity economy (économie solidaire) [59].
(4) In the southern countries of Europe, government spending on welfare and social benefits has always been significantly lower than in other European countries. Characteristic was the particularly important role of the family and, at least until the state restricted it in the 20th century, the charity of the Christian Church [60]. Accordingly, there were few NPOs in the region, but a strong cooperative movement. When the existing social security network threatened to fail in the 1980s against the background of an aging population and changing family structures, new cooperatives were created in Italy. Unlike before, these focused on the interests of society as a whole and involved a number of stakeholders. Against this background, the article ‘Impresa Sociale’ was published in 1990, which concretized the concept of the ‘Social Enterprise’ for the first time and tried to formally capture the movement described above [47]. Italy’s parliament responded by drafting the legal form of the social cooperative (Law No. 381) within one year, which is now considered the origin of the social entrepreneurship movement in Europe [61].
The aforementioned problems of the 1980s and the emergence of various new forms of organization in the third sector, which previously took on government tasks, led many governments to follow the Italian model and to begin to create their own legal forms for social entrepreneurs. Later, the ‘social purpose company’ was created in Belgium, and in the United Kingdom, the ‘community interest company’ was created [22,50].

2.3.3. Germany

The generally very young research area of social entrepreneurship has received little attention in Germany for a long time. Although there were first movements already at the end of the 19th century that could be assigned to the sector from today’s perspective, such as the cooperative Raiffeisenbank, until recently, the term was hardly represented in theory and practice. This is due to a number of framework conditions in Germany that have led to very special challenges [62].
First, there are a variety of organizations associated with social entrepreneurship. Vincze, Birkhölzer, Kaepplinger, Gollan, and Richter summarized them as social enterprise families that are divided into cooperatives, welfare organizations, operational foundations, traditional associations, volunteer agencies, socio-cultural centers, self-help enterprises, self-managed alternative enterprises, neighborhood and community enterprises, integration enterprises, work integration enterprises, and new-style social enterprises [63].
Secondly, there is a language barrier with the difficulties in transferring and translating the term ‘social entrepreneurship’ into the German language. Firstly, terms such as ‘soziales Unternehmertum’ have an almost negative connotation, since they are associated with traditional companies that often generated their profits at the expense of disadvantaged people [62]. Second, the translation of ‘social’ as ‘sozial’ is not complete, since the Anglo-American term ‘social’ is more comprehensive and includes ecological aspects. It is therefore suggested that ‘gesellschaftlich’ would be a more appropriate expression [64].
In addition to the translation problems described above, there are also a number of practical challenges that social enterprises in Germany have to face. The study ‘Fostering Social Entrepreneurship’ by Linklaters [65] compares the structures of opportunities for social entrepreneurship in different countries, and the author comes to the conclusion that the traditionally strong welfare state and its interdependencies with the (church) welfare organizations are a hindrance. This is due to the fact that they suggest the superfluousness of social entrepreneurship at different social levels [65,66]. In fact, the classic players seem to see social enterprises as competition [22].
Another challenge is the poor ability to raise capital to set up social enterprises; this is closely linked to the lack of a legal form. Organizations that choose to be a non-profit are not allowed to make a profit and are excluded from start-up funding options, such as the EXIST grants from the Federal Ministry for Economic Affairs and Energy 2016. At the same time, a lack of a charitable purpose leads to the exclusion of funding from foundations (Stiftungen). These challenges are also typical for social enterprises outside of Germany, which is why they are also referred to as hybrid organizations [9].
Since the beginning of the 21st century, however, the scene has also started to gain importance. Ashoka opened its headquarters in Germany in 2003 [67] and, at the latest, when Muhammad Yunus was awarded the Nobel Peace Prize in 2006, the topic finally reached the center of society [68]. This can also be seen in the number of start-ups of social enterprises: According to a study by Kreditanstalt für Wirtschaft (KfW), there were 154,000 young entrepreneurs in 2017 who described themselves as social entrepreneurs, which corresponds to a share of 9% [5]. The area is also gaining relevance in research and teaching, which is reflected in an increase of programs and courses on social entrepreneurship. Furthermore, the Social Entrepreneurship Netzwerk Germany e.V. (SEND e.V.) founded in 2017 tries to represent the interests of social enterprises in politics in order to create better framework conditions [6]. These efforts seem to pay off, since the topic is not only taken up in the current coalition agreement of the federal government [1], but can also be found at the level of state policy [69]. The Center for Social Innovations and Investments, for example, also predicts improvement in the competitive situation with welfare, as they are interested in innovative approaches due to the large amount of competition in the market [70]. Joint publications like ‘Social Progress Needs Social Innovation’, a position paper of all major charities (Wohlfahrtverbände), as well as the Federal Association of German Startups and SEND, indicate an increasing willingness to cooperate in solving social challenges [71].
This development is supported by the establishment of organizations that focus on demonstrating the effectiveness of solutions through impact measurement and, thereby, making them more tangible for business, welfare, and politics [72]. To show that social entrepreneurs also have enormous economic potential in which they not only fight symptoms, but also work on systemic change, Ashoka Germany published a study together with McKinsey [73] in which the financial effect was measured. Four Ashoka Fellows, organizations whose work Ashoka considers particularly worthy of funding, were examined for their financial potential. The researchers come to the conclusion that the 72 German Ashoka Fellows alone save the state 18 billion EUR in costs through their work in health, care, or education [73].
However, there are large differences in the development of social and entrepreneurial activities in the USA, Europe, and, particularly, Germany, as our short synthesis shows. These differences stay next to large differences in views on entrepreneurship among and between academics, politicians, and entrepreneurs. In order to lighten this tension at least in parts, we conducted a survey following the ‘Policy Delphi’ approach in Germany based on our literature study addressing this multifaceted issue.

3. Method

In order to address the aforementioned issues about the nature of social entrepreneurship, a stepwise research approach was chosen. In the first phase, an extensive literature review was conducted in order to identify attributes used by researchers to define social entrepreneurship. In the second phase, the Policy Delphi method was carried out to determine themes used by researchers and practitioners.

3.1. Literature Review

For the structured literature review, the following keywords with the OR function are used: ‘Social Entrepreneurship’, ‘Social Enterprise’, ‘Social Entrepreneur’, ‘Social Start-up’, ‘Sozialunternehmen’, ‘soziales Unternehmen’, and ‘Social Business’. In order to ensure high academic relevance, only available full texts that were published in peer-reviewed academic journals were taken into account. Furthermore, only articles in English were considered in the first step. The keyword search in the database Business Source Complete resulted in 1120 articles; of these, 90 articles were identified as relevant. All articles that discussed social entrepreneurship as a phenomenon or deal with the origin or definition of social entrepreneurship were considered relevant. In addition to peer-reviewed journal articles, other publications with a special focus on Germany were included in the literature review. The definitions of the articles and publications were analyzed and key attributes were filtered out.

3.2. Policy Delphi

This approach, developed by Helmer and Dalkey for the Rand Corporation in the 1960s, is intended to enable a group of experts to find consensus and uses both qualitative and quantitative elements [74]. This method is particularly suitable for our research project because it gives us the opportunity to question the multidisciplinary views of as many stakeholders as possible regarding their views of social entrepreneurship and helps us to find consensus. In addition, this approach supports the filtering out of less important subtopics, and is very suitable for newly emergent patterns and structures. In this way, the Policy Delphi is particularly suited in the current context. Furthermore, aspects specific to Germany would be lost due to the lack of necessary scientific publications from which we would derive the survey have so far been missing. The combination of qualitative and quantitative methodology is the most comprehensive and deepest approach, and contributes to a high validity of the results.
Following Gartner and his article on the definition of entrepreneurship [75], the Policy Delphi method was used. The versatility of the Policy Delphi [76] allowed the researchers to start with a qualitative approach in the first questionnaire in order to ensure objectivity when identifying attributes. The qualitative approach is enriched by the quantitative nature of the second questionnaire. A purely quantitative approach would require the previous selection and weighting of all the different sub-aspects of current research on this topic and, thus, influence the objectivity of the survey.
The respondents were asked to fill in their age, gender, nationality, job sector (politics, social entrepreneurship, private industry, research, science, welfare), and e-mail address for the second round. The questionnaire was sent to the network members of the Social Entrepreneurship Netzwerk Deutschland eingetragener Verein (SEND e.V.). SEND is the German Association for Social Entrepreneurship. All applicants for SEND membership are checked by the association before becoming a member. In order to become a member of SEND, the company needs to create social added value, provide information on the usage of their profit, and have a secure financing. Apart from that cooperation partners from the sectors of welfare, politics, science and other organizations are welcome if they can proof that they are, in some way, connected to the goals of SEND and its work. At the time of the survey’s distribution, most of the members were social entrepreneurs or had worked for social enterprises. Consequently, only people who were familiar with the topic of social entrepreneurship were included in the survey. In addition to reaching the network members, the survey was spread through the social media channels of SEND e.V. (newsletter, Facebook, Twitter). By choosing these particular channels, the communication was directed toward people that are informed and knowledgeable in the field. Furthermore, the open question style asks for a high cognitive and temporal investment of the participants, making sure that only people with background knowledge are participating [77].
The first round resulted in 122 responses. A total of 70.49% of the responses came from SEND members, and 29.51% from non-members. As expected, most of the responses from SEND members came from social entrepreneurs or people who worked for social enterprises. The most common occupational groups to which the participants were assigned were social entrepreneurship (62.21%), science (9.84%), and the private sector (9.02). A total of 53.28% stated that they were male, 45.08% stated that they were female, and 1.64% did not disclose their gender identity.
Two coders coded the definitions from the first questionnaire independently. The coding procedure resulted in 620 codes including duplicates. An example of the coding procedure is demonstrated with the following definition. ‘To work with entrepreneurial means on positive social change’ resulted in two codes, namely ‘Entrepreneurial means’ and ‘Positive social change’.
In a next step, the coders clustered the initial 620 codes, which resulted in 158 codes. All codes that are mentioned more than one time (72) were included in the second survey. The comparison with the attributes found in the first phase of this research resulted in nine additional attributes from the literature review that are included in the main survey. Codes that were mentioned one time fell into two categories: (1) important enough to include in the questionnaire or (2) not important and shortlisted. Finally, two additional questions with each of the 16 attributes were added to the end of the questionnaire.
The second questionnaire of the Policy Delphi was sent to the participants of the first round; four emails came back due to mistakes in the email address, leaving 118 participants. Following Gartner’s approach [75] the questionnaire asked the 122 participants to rate the identified attributes from the first questionnaire and the literature review on a Likert scale from 1 to 4 in terms of their importance for the definition of social entrepreneurship.
[4] Very important:A most relevant point. First-order priority. Has direct bearing on major issues.
[3] Important:Relevant to the issue. Second-order priority. Significant impact, but not until other items are treated.
[2] Slightly important: Insignificantly relevant. Third-order priority. Has little impact.
[1] Unimportant:No relevance. No priority. No measurable effect. Should be dropped as an item to consider.
The response rate for the second round of the Policy Delphi was 63.56% (75 out of 118 respondents). A total of 69.33% wee SEND members, leaving 30.67% for non-members. More than half of those involved identified with the male gender (52.00%), 45.33% said they were female, and 2.67% did not want to give any information. When asked about the professional group, which allowed multiple answers, most of the participants stated that they worked in the fields of social entrepreneurship (74.67%), the private sector (26.67%), and science (14.67%).

3.3. Analysis

For our analyses, we used the data of the second survey of the Policy Delphi. In the first step, the importance of the identified attributes (from the first survey of the Policy Delphi) were ranked. In the second step, the importance of the identified attributes was analyzed by applying a factor analysis. For the factor analyses, only attributes that fulfill the Kaiser–Meyer–Olkin criteria and that subsequently show moderate or low correlations with other attributes were entered. The factor analysis used principal component analyses as an extraction method and a varimax rotation with Kaiser normalization. The factor analysis resulted in a five-factor solution, which explains 55% of variance. In the third step, these five factors were correlated using a Spearman correlation.

4. Results

Table 1 provides an overview of some of the best-known attempts to define the expression. Only definitions that focus on social entrepreneurship, but not the character traits of social entrepreneurs, were taken into account. Furthermore, definitions specific to Germany are included in the table.
According to the second questionnaire, the ten most important attributes for the definition of social entrepreneurship are shown in Table 2, and the least important ones are presented in Table 3.
The conducted factor analysis resulted in a five-factor solution, as illustrated in Figure 1. The common ground of all factors is the reference to ‘social’. From this common ground, the attributes branch out into factor A: ‘Societal–Visionary’, factor B: ‘Ecological’, factor C: ‘Societal–Entrepreneurial’, factor D: ‘Economic’, and factor E: ‘Innovative–Entrepreneurial’. The five factors were named after thoroughly considering all attributes belonging to each factor. For factor A, the majority of attributes refer to societal changes, societal values, cooperation, human demands, human wishes, visions, new structures, and future opportunities. For factor B, all attributes refer to ecological changes and improvements. Behind factor C, there are attributes referring to societal impact, changes, and improvements, as well as business models and start-ups. Factor D is backed up with attributes such as enterprises, resources, economic sustainability, products, services, and business means. Finally, factor E consists of attributes such as innovative methods, creativity, systematic change, and inclusion of stakeholders and means.
After identifying the five dimensions of ‘social entrepreneurship’ based on the Policy Delphi, we looked at the degree of intercorrelation among these dimensions. As Figure 2 shows, four out of the five factors have low to medium-high correlations on a statistically significant level. One dimension appears to be more weakly linked to the other attributional factors, that is, the dimension ‘Ecological’ has the weakest correlations with all other factors. Seemingly, attributes referring to societal, economic, entrepreneurial, and innovation issues are considered as close together, whereas ecological attributes of ‘social entrepreneurship’ exist mainly unconnected. This finding is surprising, as the ecological, economic, and social concepts are thought of as a basis for such terms as ‘sustainable entrepreneurship’.

5. Discussion and Conclusions

In addition, as our historical flashback shows, the development of a public or private business sector that is nowadays labeled as ‘social’ has been very different in the leading economies of the USA and Europe. These differences are backed up in the scientific literature (i.e. [78]), particularly when including the geographical context as a dimension [46,47]. Even within Europe, there are still differences. In Great Britain, the concept of social enterprises that mix social purposes with market methods is the usual case, whereas this conceptualization is less prominent in other parts of Europe. However, this mixed nature of social enterprises has gained increasing prominence in a number of European countries, such as France and Germany [79]. In order to create a bit more clarity on what ‘social entrepreneurship’ might be in the view of experts, we conducted a Policy Delphi survey in Germany. The choice of one European country was made in order to contrast it with other countries and regions. An entire comparison is less useful in this case, since the conceptualizations are significantly different, and an enterprise considered in one country as social would be not in another country. After a structured literature analysis, German experts were asked to define the term ‘social entrepreneurship’ and, in a second step, the same experts were asked to rank the attributes according to their importance.
The results partly support current interpretations and conceptualizations, but also contradict parts of them, as expected in this special German case. This result can be explained by the diverse set of legal constructions for charitable organizations in Germany, which could profit from allowing legal forms of organizations to be characterized as ‘social’. In addition, independently of the legal form, the ways and processes of organizing and governing social entrepreneurship activities are also very diverse and heavily depend on concrete action. This might make it almost impossible to set legal or governmental issues as being generally important for social entrepreneurship. The situation in Germany is not very different compared to other countries, so it might be that conceptualizing the legal status or governance of social enterprises as a major framing condition for ‘social entrepreneurship’ might be exaggerated. This finding could also be a result of the dynamically changing consideration and conceptualization of social enterprises as the focus globally shifts more toward hybrid forms. This should at least be a central point of future research.
Second, our analyses illustrate that there are five dimensions that add to the term ‘social’ in characterizing social entrepreneurship, namely ‘Societal–Visionary’, ‘Ecological’, ‘Societal–Entrepreneurial’, ‘Economic’, and ‘Innovative–Entrepreneurial’. The entrepreneurial dimension is obvious, but the ecological, societal, and economic dimensions are partly included and partly neglected in existing conceptualizations; in addition, other dimensions are added. As discussed earlier, the need to achieve financial surpluses as an endeavor toward investments in future innovations and the need for innovation as a driving factor for social impact are clearly indicated as important by experts. Moreover, the ecological dimension also turns out to be one important addition to the social dimension, as discussed earlier. In sum, social entrepreneurship might be framed as being ‘social’ in its core, and expands into the ‘societal’, ‘entrepreneurial’, ‘economic’, and ‘ecological’ dimensions. The popular phenomenon of social entrepreneurship is rather a multi-dimensional construct, which probably has various patterns and has the concept of ‘social’ at its ‘core’.
The last finding of this study is the position of the ‘ecological’ dimension within the multi-dimensional frame of social entrepreneurship. Although four of the dimensions seem to have something in common, the ecological dimension is isolated by mainly staying apart from the other dimensions. This finding questions the state-of-the-art framing of sustainable entrepreneurship, which is supposed to represent the overlap of economic, social, and ecological entrepreneurship. However, the presented study only gives a weak indication, and this result should not be overinterpreted. Another fact is that the study took place in Germany. Whereas in the Anglo-American culture, the term ‘social’ includes ecological aspects, that is not the case in Germany. This would be another explanation for why the core term ‘social’ has an isolated ecological dimension in this study.
This also refers to the limitations of this contribution. First, the bulk of the reviewed literature already indicates the variety of views, perspectives, definitions, and historical developments. Certainly, there are publications that we have missed. Second, the focus was (for a large part) on Germany as an example. The results found cannot be transferred to other countries or economies. The idea behind taking Germany was to at least focus on a largely homogenous population of experts as a sample who act and live with common legal regulations, a common history, and common cultural norms. Future research might take this study as a starting point to investigate the frameworks of social entrepreneurship in other countries and economies. When investigating ‘social entrepreneurship’, the very nature of the core term ‘social’ should be even more of a focus, as suggested by others as well. In our view, it is necessary to dissolve the confusion about the very nature of social entrepreneurship (and also terms such as sustainable entrepreneurship) in academia as soon as possible to go forward in researching this phenomenon. Only when we act on a common ground in research can future policy be supported and made towards an increasing share of social entrepreneurship activities in societies and economies. We think that our study makes a contribution in getting to a better overall picture of social entrepreneurship as a discipline [80] and as an important inquiry [30].

Author Contributions

Conceptualization, K.C. and K.O.; data curation, K.C., J.K., and K.O.; formal analysis, K.C., J.K., and K.O.; investigation, K.C. and K.O.; methodology, K.C. and J.K.; project administration, K.C.; resources, K.O.; supervision, J.K.; validation, K.C., J.K., and K.O.; visualization, K.O. and J.K.; writing—original draft, K.C., J.K., and K.O.; writing—review and editing, K.C., J.K., and K.O. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Acknowledgments

The authors want to thank SEND e.V. for their cooperation in the data collection.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. The five dimensions around ‘social entrepreneurship’.
Figure 1. The five dimensions around ‘social entrepreneurship’.
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Figure 2. The degree of intercorrelation among the five dimensions around ‘social’ (** < 0.01; * < 0.05).
Figure 2. The degree of intercorrelation among the five dimensions around ‘social’ (** < 0.01; * < 0.05).
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Table
Table 1. Definitions of the term ‘social entrepreneurship’.
Table 1. Definitions of the term ‘social entrepreneurship’.
AuthorsYearDefinition#Citations
Austin, J.; Stevenson, H.; Wei-Skillern, J.2006We define social entrepreneurship as an innovative, social-value-creating activity that can occur within or across the non-profit, business, or government sectors.3187
Abu-Saifan, S.2012The social entrepreneur is a mission-driven individual who uses a set of entrepreneurial behaviors to deliver a social value to the less privileged, all through an entrepreneurially oriented entity that is financially independent, self-sufficient, or sustainable.338
Certo, S. T.; Miller, T.2008Social entrepreneurship involves the recognition, evaluation, and exploitation of opportunities that result in social value—the basic and long-standing needs of society—as opposed to personal or shareholder wealth.489
Cho, A. H.2006(…) a set of institutional practices combining the pursuit of financial objectives with the pursuit and promotion of substantive and terminal values.231
Dacin, P.A.; Dacin, M.T.; Matear, M.2010(...) we believe the definition that holds the most potential for building a unique understanding of social entrepreneurship and developing actionable implications is one that focuses on the social value creation mission and outcomes, both positive and negative, of undertakings aimed at creating social value.1095
Harding, R.2004(…) they are orthodox businesses with social objectives ‘whose surpluses are principally re-invested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners.’332
Korosec, R. L.; Berman, E. M.2006Social entrepreneurs are defined as individuals or private organizations that take the initiative to identify and address important social problems in their communities.235
Lasprogata, G. A.; Cotten, M. N.2003For the purposes of this paper, social entrepreneurship means non-profit organizations that apply entrepreneurial strategies to sustain themselves financially while having a greater impact on their social mission (i.e., the ‘double bottom line’).215
Mair, J.; Martí, I.2006a (…) a process involving the innovative use and combination of resources to pursue opportunities to catalyze social change and/or address social needs.3010
Martin, R. J.; Osberg, S.2007We define social entrepreneurship as having the following
three components: (1) identifying a stable but inherently unjust
equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means
or political clout to achieve any transformative benefit on its own;
(2) identifying an opportunity in this unjust equilibrium, developing a social value proposition, and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state’s hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and the creation of a stable ecosystem around the new equilibrium, ensuring a better future for the targeted group and even society at large.		1729
Massetti, B. L.2008Based on whether a business has a more market- or socially driven mission and whether or not it requires profits, the Social Entrepreneurship Matrix combines those factors that most clearly differentiate social entrepreneurism from traditional entrepreneurism.160
Roberts, D.; Woods, C.2005Social entrepreneurship is the construction, evaluation, and pursuit of opportunities for transformative social change carried out by visionary, passionately dedicated individuals.403
Robinson, J. 2006I define social entrepreneurship (SE) as a process (...) that includes: the identification of a specific social problem and a specific solution (or set of solutions) to address it; the evaluation of the social impact, the business model, and the sustainability of the venture; and the creation of a social mission-oriented for-profit or a business-oriented non-profit entity that pursues the double (or triple) bottom line.248
Schneiders, K.2017(…). mainly includes those companies (start-ups) that claim to solve ecological and social problems with the help of economic instruments.1
Schwab StiftungStand 2019Whether for-profit or non-profit, whether working in education, healthcare, or employment, social enterprises all share certain characteristics. The rest is innovation. The innovation can take the form of new products and services, new production and distribution methods, or new organizational models. (...) Creating the greatest impact requires leveraging market forces and business practices wherever possible. That means generating income from the sale of your products or services, yes, but it also means driving a relentless results-based focus throughout the organization, just as any commercial enterprise would.-
Seelos, C.; Mair, J.2005Social entrepreneurship combines the resourcefulness of traditional entrepreneurship with a mission to change society.940
Skoll StiftungStand 2019(…) society’s change agent: a pioneer of innovation that benefits humanity.-
Tan, W. L.; Williams, J., and Tan, T. M.2005A legal person is a social entrepreneur from t1 to t2 just in case that person attempts, from t1 to t2, to make profits for society or a segment of it by innovation in the face of risk, in a way that involves that society or a segment of it.356
Thompson, J., & Doherty, B.2006Social enterprises—defined simply—are organizations seeking business solutions to social problems. They need to be distinguished from other socially oriented organizations and initiatives that bring (sometimes significant) benefits to communities but which are not wanting or seeking to be ‘businesses’.392
Thompson, J.; Alvy, G., Lees, A.2000(...) social entrepreneurs, people who realize where there is an opportunity to satisfy some unmet need that the state welfare system will not or cannot meet, and who gather together the necessary resources (generally people, often volunteers, money, and premises) and use these to ‘make a difference’.776
Tracey, P.; Jarvis, O.2007[T]he notion of trading for a social purpose is at the core of social entrepreneurship, requiring that social entrepreneurs identify and exploit market opportunities, and assemble the necessary resources, in order to develop products and/or services that allow them to generate “entrepreneurial profit” for a given social project.291
Zahra, S. E.; Gedajlovic, E.; Neubaum, D. O.; Shulman, J. M.2009Social entrepreneurship encompasses the activities and processes undertaken to discover, define, and exploit opportunities in order to enhance social wealth by creating new ventures or managing existing organizations in an innovative manner.1739
Table
Table 2. Elements that are most important.
Table 2. Elements that are most important.
VariableMean
Positive influence on the society 3.96
Solution to a problem3.65
Meaning 3.65
Impact as a goal 3.60
Social impact 3.60
Oriented to the common good 3.59
Social added value 3.59
Social and ecological impact 3.51
Social improvement 3.51
Social improvement 3.49
Table
Table 3. Elements that are the least important.
Table 3. Elements that are the least important.
VariableMean
Entrepreneurial legal form2.15
Public funding and donations2.13
No specified legal form2.13
Institutional practices2.13
Management of an existing company2.13
Focus on shareholder1.84
Non-profit legal form1.75
No public funding and donations1.72
Profit orientation in the foreground1.63
No orientation on the market1.56

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Cagarman, K.; Kratzer, J.; Osbelt, K. Social Entrepreneurship: Dissection of a Phenomenon through a German Lens. Sustainability 2020, 12, 7764. https://doi.org/10.3390/su12187764

AMA Style

Cagarman K, Kratzer J, Osbelt K. Social Entrepreneurship: Dissection of a Phenomenon through a German Lens. Sustainability. 2020; 12(18):7764. https://doi.org/10.3390/su12187764

Chicago/Turabian Style

Cagarman, Karina, Jan Kratzer, and Katharina Osbelt. 2020. "Social Entrepreneurship: Dissection of a Phenomenon through a German Lens" Sustainability 12, no. 18: 7764. https://doi.org/10.3390/su12187764

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