Master thesis in Sustainable Development 233
Examensarbete i Hållbar utveckling
Support Structures in Social Entrepreneurship Ecosystems:
Comparing the Swedish and the French Environments
Alexis Bouges
DEPARTMENT OF
Master thesis in Sustainable Development 233
Examensarbete i Hållbar utveckling
Support Structures in Social Entrepreneurship Ecosystems:
Comparing the Swedish and the French Environments
Alexis Bouges
Supervisor: Mozhgan Zachrison
Evaluator: Peter Söderbaum
Copyright © Alexis Bouges and the Department of Earth Sciences, Uppsala University
Content
1. Introduction ... 1
1.1. Background ... 1
1.1.1. Social entrepreneurship in the sustainable development context ... 1
1.1.2. Definitions of the concepts used ... 1
1.1.3. Business environment and entrepreneurial activity in France and in Sweden ... 2
1.1.4. Social entrepreneurship ecosystems ... 3
1.2. Aims and research questions ... 5
1.3. Delimitations ... 6
2. Literary review ... 6
2.1. Social entrepreneurship ... 6
2.2. Social entrepreneurs ... 7
2.3. Entrepreneurship ecosystem and contexts ... 8
3. Theoretical framework ... 9
3.1. Social capital theory ... 9
3.2. Social network theory ... 10
4. Methods ... 11
4.1. Design of interviews ... 11
4.1.1. Semi-structured interview as the chosen research approach ... 11
4.1.2. Potential biases and limitations to the approach ... 12
4.2. Conduction of interviews ... 13
4.3. Methodology of analysis ... 14
5. The French and the Swedish social entrepreneurship contexts ... 15
5.1. France ... 15
5.1.1. Definitions and concepts of social enterprises ... 15
5.1.2. Policy and legal framework ... 16
5.1.3. Support structures in the Paris area ... 16
5.2. Sweden ... 19
5.2.1. Definition and concepts of social enterprises ... 19
5.2.2. Policy and legal framework ... 20
5.2.3. Support structures in Stockholm ... 21
5.3. Social entrepreneurship activity in France and in Sweden ... 23
6. Empirical findings from interviews ... 24
6.1. Findings from the Paris group ... 24
6.1.1. Evaluation of the support provided and suggested improvements ... 24
6.1.2. Social entrepreneurs’ needs for support and availability of support structures in Paris ... 25
6.2. Findings from the Stockholm group ... 26
6.2.1. Evaluation of the support provided and suggested improvements ... 26
6.2.2. Social entrepreneurs’ needs for support and availability of support structures in Stockholm ... 28
7. Discussion ... 28
7.1. Definitions of social enterprises and its legal framework, in France and in Sweden ... 28
7.2. Comparison of social entrepreneurship activity ... 29
7.3. Comparison of the support structures in Paris and in Stockholm ... 30
7.4. Comparative analysis between the Paris and the Stockholm groups ... 31
7.5. Limitations ... 32
7.6. Further research ... 32
8. Summary ... 33
9. Acknowledgment ... 34
10. References ... 35
Support structures in social entrepreneurship
ecosystems: comparing the Swedish and the French environments.
ALEXIS BOUGES
Bouges, A., 2015: Support structures in social entrepreneurship ecosystems:
comparing the Swedish and the French environments. Master thesis in Sustainable Development at Uppsala University, No. 233, 42pp, 30 ECTS/hp.
Abstract:
This thesis compares the Swedish and the French social entrepreneurship ecosystems.
After an examination of the definitions and current legal frameworks around social enterprises in each country, their levels of social entrepreneurship activity are compared. The existing support structures providing non-financial help to social entrepreneurs (i.e. incubators, accelerators, co-working spaces and networks) are identified in Paris and in Stockholm, while perceptions from social entrepreneurs benefiting from such support were gathered through interviews. Findings show that the concept of social enterprise is more recognized and legally defined in France than in Sweden. Social entrepreneurship activity seems to be hard to quantify and compare, due to a lack of data available. Support structures appear to be well developed both in Paris and in Stockholm, while the support provided is overall quite appreciated by social entrepreneurs. Furthermore, many of them perceive their support needs as rather different from those of traditional entrepreneurs. Results tend to show that although developing in practice, social entrepreneurship remains a young academic field. Stakeholders from the field have much to gain from extended research on the topic.
Keywords: sustainable development, social entrepreneurship ecosystem, support structures, France, Sweden
Alexis Bouges, Department of Earth Sciences, Uppsala University, Villavägen 16,
SE- 752 36 Uppsala, Sweden
Support structures in social entrepreneurship
ecosystems: comparing the Swedish and the French environments.
ALEXIS BOUGES
Bouges, A., 2015: Support structures in social entrepreneurship ecosystems:
comparing the Swedish and the French environments. Master thesis in Sustainable Development at Uppsala University, No. 233, 42pp, 30 ECTS/hp.
Summary:
Currently gaining momentum, social entrepreneurship refers to alternative ways of starting and conducting businesses, by pursuing social objectives before economical ones. This thesis compares the context in which social entrepreneurs operate, in Sweden and in France. The definitions of the concept of social enterprise and legal frameworks are examined in both countries, as well as the recent evolution and current state of social entrepreneurship activity. Support structures, such as incubators, accelerators, co-working space and networks offering some types of non- financial support to social entrepreneurs are studied in Paris and Stockholm.
Interviews were conducted with social entrepreneurs from each city to assess their perceptions of the support they receive. Findings show that the concept of social enterprise is more recognized and legally defined in France than in Sweden. However, the lack of data regarding social entrepreneurship level of activity does not allow for much comparison. Support structures for social entrepreneurs appear to be well developed in Paris and in Stockholm, and their support is overall quite appreciated by social entrepreneurs, who often consider they have different needs than traditional entrepreneurs. Although social entrepreneurship develops in the practice, there is a need for more attention on the topic from academia, as many actors would benefit from further research, including policy-makers, investors or social entrepreneurs themselves.
Keywords: sustainable development, social entrepreneurship ecosystem, support structures, France, Sweden
Alexis Bouges, Department of Earth Sciences, Uppsala University, Villavägen 16,
SE- 752 36 Uppsala, Sweden
1. Introduction 1.1. Background
1.1.1. Social entrepreneurship in the sustainable development context
Defined by the much-cited United Nations report Our Common Future as a
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (United Nations 1987), the concept of sustainable development has since then drawn growing attention within civil society, academia, politics and business around the world. From the business perspective, the idea of triple bottom line, coined in 1994 by John Elkington (Kessler 2013),
“encompasses the financial, social, and environmental outcomes of business activity, conceived as equally legitimate dimensions of business performance.” (Heery & Noon 2008). The related term of “people, planet, profit” also designates the idea of reconciling business practices with sustainable development goals, while corporate social responsibility stresses the responsibility of companies in achieving positive outcomes, not only for their shareholders, but also for society and the environment, among other stakeholders (Pop et al. 2011). In the context of a decreasing businesses’
legitimacy (Porter & Kramer 2011), society has increasing ethical expectations from firms (Pater & Van Gils 2003). In an attempt to address the various critics it faces, the business world shows a growing interest for corporate social responsibility and the triple bottom line concepts, and changes within business practices and business models are emerging.
Beyond simply adapting existing models, entrepreneurs’ goal is often to create new business models. Social entrepreneurs form an original and interesting part of the entrepreneurs’ community, as they can show a “a remarkable ability to use new forms of organizing and innovative business models that make their ventures an effective means of creating wealth and improving social value.” (Zahra & Wright 2011, p.80).
Although a young field of research, social entrepreneurship can thus be seen as a promising way to redirect business practices towards sustainable development goals.
Expressing the growing interest around these news ways of doing business, the European Union launched in 2011 the Social Business Initiative, which contains a series of measures directed to support entrepreneurship and responsible business (European Commission 2011) .
1.1.2. Definitions of the concepts used
While the past decades have seen an increasing interest in social entrepreneurship within business, society and academia, it remains a young academic field. Since there is no clear consensus about how to define it (Noya et al. 2013; Dacin et al. 2011;
Gawell 2013; Lumpkin et al. 2013; Pless 2012; Bielefeld 2009; Thompson et al. 2011;
Austin et al. 2006), the different perspectives on it will be subject to investigation later in this study. However, due to the variety of definitions both within the academic literature and among actors of the related fields, it seems necessary to define how certain key concepts are understood for the purpose of this study.
Social entrepreneurship is considered here as encompassing all types of
entrepreneurial activities, through which the social entrepreneur primarily pursue a
societal goal, either through a direct social aspect such as health care or education,
among others, or indirectly through addressing environmental issues for instance. Our
understanding of social entrepreneurship does not include innovativeness as a necessary criterion, yet a focus on societal goals must prime over the pursuit of profit.
The ventures set up by these social entrepreneurs we will refer to as social enterprises, while the social economy will designate the sector of the economy to which social entrepreneurship belongs. The concept of social innovation is also often found in the discourse of various stakeholders within these fields, and must therefore be mentioned here. The European Commission defines social innovation as
“developing new ideas, services and models to better address social issues. It invites input from public and private actors, including civil society, to improve social services.” (European Commission 2015).
1.1.3. Business environment and entrepreneurial activity in France and in Sweden
In order to introduce the reader to the general business climate and entrepreneurial activity in the two countries that make the object of this study, the table below compiles different indicators from various sources. The data provided gives an overview of how France is commonly considered as being less “business-friendly”
than some of its European counterparts, including Sweden. Statistics from the Global Entrepreneurship Monitor, which defines itself as the “the largest ongoing study of entrepreneurial dynamics in the world” (Global Entrepreneurship Monitor 2015), shows that early-stage entrepreneurial activity is significantly less dynamic in France than in Sweden, with a prevalence rate among the Swedish working population being almost the double of its French equivalent in 2013. Yet the need for caution when analysing the data from Table 1 below must be highlighted.
Metric France Sweden
Early-stage entrepreneurial activity1,
as a prevalence rate among the country’s working age population.
Source: Global Entrepreneurship Monitor 2013 Global Report (Amorós & Bosma 2013)
4,6% 8,2%
Ranking in National Systems of Entrepreneurship from the GEDI Index 20122.
Source: (Ács et al. 2014)
12th 3rd
Business Environment Ratings (BER), 2014-183
Source: (The Economist Intelligence Unit 2014) 24th 6th
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!
1
!
”An economy’s Total Early-stage Entrepreneurial Activity (TEA) rate is defined as the prevalence rate of individuals in the working age population who are actively involved in business start-ups, either in the phase in advance of the birth of the firm (nascent entrepreneurs), or the phase spanning 42 months after the birth of the firm (owner- managers of new firms” (Amorós & Bosma 2013, p.32)!
2 Acs et al. (2014) define a national system of entrepreneurship as ”the dynamic, institutionally embedded interaction between entrepreneurial attitudes, ability, and aspirations, by individuals, which drives the allocation of resources through the creation and operation of new ventures.” (p.479). Panel of 88 countries. Yet this ranking is to take with caution, due to the various limitations of the index, as pointed out by the authors themselves.
3 Panel of 82 countries.
‘Barriers to Entrepreneurship’ indicator4, 2013.
Scale from 0 to 6 from least to most restrictive Source: (OECD 2014)
1,66/6 1,71/6
Barriers in the services sector5, 2013.
Scale from 0 to 6 from least to most restrictive Source: (OECD 2014)
3,89/6 1,94/6
Table 1. Comparison of the general business environment and entrepreneurial activity in France and in Sweden.
While statistics regarding countries’ general business climate and entrepreneurial activity is more or less easily available, it does not necessarily reflect the case of social entrepreneurship, for which such data is often lacking. This thesis attempts to fill some of this gap, by looking at social entrepreneurship ecosystems in France and in Sweden.
1.1.4. Social entrepreneurship ecosystems
This section aims at giving the reader a preliminary idea of how the concept of ‘social entrepreneurship ecosystem’ is understood for the purpose of this study. Yet another section is devoted to a more thorough analysis of the concept of ‘entrepreneurial ecosystems’ or ‘contexts’, within the literary review.
The ‘entrepreneurship ecosystem’ concept commonly refers to various contextual elements considered to foster entrepreneurship, from an individual’s decision to start his own project to the support he/she can receive once it is launched. The World Economic Forum, in a report published in 2013 on entrepreneurial ecosystems around the world, describes the entrepreneurial ecosystem as containing the following elements: Accessible Markets; Human Capital Workforce; Funding and Finance;
Mentors, Advisors and Support Systems; Regulatory Framework and Infrastructure;
Education and Training; Major Universities as Catalysts; and Cultural Support (Foster et al. 2013). As of social enterprises ecosystems in particular, a report published by the European Commission in 2014 noted that in the European context, those are emerging but are mostly still under-developed, as well as the national legal frameworks around it (Wilkinson et al. 2014). The representation of social enterprises eco-systems given by this report is reproduced below.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!
4 Defined as ”a composite indicator that measures different administrative regulations in the domain of entrepreneurship and is composed of three sub-indicators weighted equally: Administrative burdens on start-ups; Regulatory and administrative opacity; and Barriers to competition.” (OECD 2014, p.86)5 Retail distribution, professional services