Placing Irish Social Enterprise Ecosystem within the wider European Landscape
Article Category: Research Article
Pubblicato online: 16 ago 2023
Pagine: 3 - 15
DOI: https://doi.org/10.2478/ijm-2023-0007
Parole chiave
© 2023 Mary O’Shaughnessy et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
In spite of not being a new phenomenon, social enterprises have been increasingly recognised by academics, practitioners and policymakers as actors with great potential to contribute to tackling some of the current challenges that face Irish and European societies such as an ageing population, climate change, unemployment, migration, digitalisation and the depopulation of some rural areas (European Commission, 2020a, 2020b).
The lack of official and comprehensive data bases makes it difficult to know the actual number of social enterprises operating across Ireland1 and Europe (Hynes, 2016; European Commission, 2020a, 2020b). However, for the case of Ireland examples of social enterprises can be found within a wide range of fields such as eldercare services, agriculture, employment, children with special educational needs, community development, gender equality/ empowerment, ethnic minorities migrants, physical and mental well-being, rural development and recycling. Irish social enterprises are also diverse in their stage of development, from initiatives at early-start up stages to those that have been scaled nation-wide. Furthermore, social enterprises can be found across the whole country, from Dublin city to the coasts of Donegal (Cooke, 2021).
Social enterprises do not develop and operate in a vacuum. The relevance of situating social enterprises within their broader geo-political, cultural, institutional and socio-economic context, and in relation to other stakeholders with whom they interact e.g. public bodies, financial institutions, other third sector actors, for-profit businesses, has brought to the fore the notion of social enterprises ecosystems as multidimensional spaces that can enable and/ or hinder the development of social entrepreneurial activity (European Commission, 2020b; Diaz Gonzalez and Dentchev, 2021).
This paper explores the different elements that make up the ecosystem for social enterprises in Ireland, e.g. policy context; definition; legal form; private recognition through marks and certifications; the development of support and advocacy networks and organisations, academia and research, and funding/financing mechanisms. These elements, in turn, are contrasted with information from social enterprise ecosystems developed in different European countries (European Commission, 2020b). Hence, the main goal of the article is to explore some of the key elements of the Irish social enterprise ecosystem and place them within the wider European landscape. Besides its informative aim, this comprehensive picture can be valuable in terms of suggesting specific areas of the Irish social enterprise ecosystems which are of special interest for future research and for informing Irish policymaking as providing evidence from Ireland but also from other European countries.
The article is structured as follows: after this introduction, section 2 presents some indicators that set out the (macro) context of Ireland’s social enterprise ecosystem. Section 3 explores the features of Ireland’s social enterprises ecosystem within the European landscape, including policy context, operational definition, legal forms, private marks/certifications, support and advocacy networks and organisations, research and education, and funding/financing for social enterprises in Ireland and Europe. Finally, section 4, presents some conclusions and further research directions.
Ireland’s social enterprise ecosystem is not detached from the wider social, economic and political context in which social entrepreneurial activity develops. National level (macro) statistical indicators, from formal and informal institutions, such as government, economy, civil society and culture, are relevant to describe the context in which Ireland’s social enterprise sector develops and operates. For the purpose of this paper, indicators related to type of culture, welfare state, governance, economy and civil society, as suggested by the Macro Institutional Social Enterprise (MISE) framework (Kerlin, 2013, 2017; Coskun et al., 2019), have been adapted to the Irish context2 (see Table 13).
Macro-indicators shaping the social enterprise ecosystem in Ireland.
| Institutional collectivism (values) | 4,59 | |
| In-group collectivism (values) | 5,74 | |
| Uncertainty avoidance (practices) | 4,3 | |
| Public Spending Health (2018) (% GDP) | 6,9 (EU 9,9) | |
| Public Spending Education (2019) (% GDP) | 3,1 (EU 4,7) | |
| Regulatory quality (2020) | 91,8 | |
| Rule of law (2020) | 90,4 | |
| Control of corruption (2020) | 91,3 | |
| Economic Development Stage (2019) (GCI Ranking) | Innovation (24th) | |
| GDP/per capita (2019) | 2nd European countries | |
| GNI*/AIC (2019) | 12th European countries | |
| Workforce (third sector) (2018) | 7,3% total workforce | |
| Volunteers | Significant levels of volunteers | |
| Funding | Government main funding support | |
| Sector Model | Liberal/Welfare partnership |
Authors’ work. Based on Kerlin (2013), p. 96
With regards to culture, institutional collectivism (degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action); in-group collectivism (degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families) and uncertainty avoidance (extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate unpredictability of future events) have been the indicators selected. These refer to two functions of entrepreneurship, i.e., networked resources and innovation (Tiessen, 1997 in Kerlin, 2013).
Drawing on data from the GLOBE project4, Ireland scores (within a 1 to 7 scale), 4,59 in “institutional collectivism (values)” and 5,74 for in “in-group collectivism (values)”. This gap between in-group and institutional collectivism place Irish society with an intense pride, loyalty and cohesiveness to their own groups and communities but much lower regarding the encouragment of collectivism at institutional level (Brodbeck et al., 2000). Moreover, Ireland has relatively low rates (4,3) of “uncertainty avoidance (practices)”, lower than England, Italy or Australia, thus indicating tendency towards innovative practices.
In terms of some welfare state indicators, Irish public expenditure represents 3,1% of GDP (2019) in education, and 6,9% of GDP (2018) in the field of health. Thus, the total public expenditure in these areas represent 11% of Irish GDP. These figures denote a low level of public expenditure in these areas when compared to the EU average which accounts for 4,7% of GDP for education (2019) and 9,9% of GDP for health (2018). On the other hand, in terms of governance indicators that refer to the quality of functioning of public institutions, i.e. regulatory quality (perceptions of the ability of the government to formulate and implement sound policies, and regulations that permit and promote private sector development), rule of law (perceptions of confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence) and, control of corruption (perceptions of the extent to which public power is exercised for private gain, as well as capture of the state by elites and private interests), Ireland scores above the 90th percentile in every indicator (World Bank, 2020). These figures denote the presence of high quality and mature public institutions in Ireland.
Economic indicators place Ireland as a high-income country according to its GDP per capita (62.980€) – 2nd within European countries, which is clearly above the EU average (26.370€). However, Ireland’s GDP figures are distorted by large profits reported by global multinational corporations which have flattered Irish GDP growth rates for years (Honohan, 2021, p. 2). Indicators that exclude the distorting factors of multinational such as GNI and actual individual consumption (AIC) pictures Ireland as a prosperous country but with an economic activity behind the U.K., the Nordic countries, Austria, Belgium, France, Germany, Italy, the Netherlands, and Luxembourg (Honohan, 2021). Ireland’s economy is also characterized by its innovation driven economic development stage, as Ireland is placed in 24th position in the ranking of most innovative countries according to the Global Competitiveness Index (2019). Civil society indicators show that Ireland presents a large workforce within the third sector, representing about 7.3% of the total Irish workforce, significant levels of volunteers and diverse and heterogeneous organizations operating within the sector (Benefacts, 2018). However, government support5 to the sector is relatively higher than in other countries characterized by a liberal civil society structure such as Australia or the USA, and philanthropy funds represent a very small proportion of its funding (Benefacts, 2018). Hence, Irish civil society can be classified between the liberal and welfare partnership/corporatist models (Hicks and Kenworthy 2003 in Defourny and Nyssens 2010; Salamon and Sokolowski, 2010).
Based on these (macro) indicators, the context in which Ireland’s social enterprise ecosystem is currently embedded is characterized by a high in-group collectivism rather than institutional collectivism and a tendency towards innovative practices; low expenditure in public services; mature and high-quality public institutions; a prosperous and innovation driven economy and a strong and diversified civil society with a significant economic dependence from government/public support. The implications of this is a tendency for social enterprises to be community based, partially resourced (directly and indirectly) by the state, often operating in the context of market and public failure, and tasked with tackling a range of localised social and economic problems, most notably (and historically) unemployment and service provision to disadvantaged communities (O’Shaughnessy and O’Hara, 2016). The next section presents the main features of Ireland’s social enterprise ecosystem and places them within the wider European social enterprise landscape.
This section discusses the features of Ireland’s social enterprise ecosystem in terms of policy, definition, legal form, private certifications/marks, support and advocacy networks and organizations, research and education, and funding/financing; comparing these elements with other European countries and within the wider European landscape (see Table 2).
Features of Ireland’s social enterprises ecosystem within the European landscape
| Features of Social Enterprise Ecosystem | Europe | Ireland |
|---|---|---|
| Policy | Social Business Initiative (2011); Action Plan for Social Economy (2021) National policy frameworks (15 EU countries – E.g. Denmark, Sweden, Latvia) |
Irish National Social Enterprise Policy 2019 – 2022 Other policies and strategies that include social enterprises measures, e.g. Working to Change: Social Enterprise and Employment Strategy 2021-2023; Rural Development Policy 2021 – 2025 |
| Working definition | European Commission (SBI) definition: Social impact rather than profit maximization (profit primarily reinvested) Continuous economic trading activity Managed involving different stakeholders |
National Social Enterprise Policy definition: Social, societal, environmental impact rather than profit maximization (reinvesting surpluses in social objectives) Trading on ongoing basis Governed in transparent and accountable manner, independent from public sector Asset lock |
| Legal form | Stand-alone legal form/status (e.g. Finland) Adjusting cooperative (e.g. Portugal) or company law (e.g. UK) Other legal forms/status (across Europe) |
Lack of specific/stand-alone legal form CLG usual legal form for Irish social enterprises |
| Private certification/marks | Social Enterprise Mark (e.g. Finland, UK. B Corps Other sectoral certifications (e.g. Fairtrade) |
Social Enterprise Mark (early stages) |
| Intermediary support and advocacy networks and organizations | National and regional support networks (23 EU countries – e.g. Estonia, Croatia, Denmark, Netherlands) | E.g. ISEN, ILDN, SERI, Social Entrepreneurs Ireland, Rethink Ireland, Waterford Social Enterprise Network, Inishowen Social Enterprise Network |
| Academia, education and research | Increasing: modules and programmes on social enterprises (social entrepreneurship) national and international research projects research networks scientific publications | |
| Funding/financing | Revenue mix (varies from sector of activity) Multiple funding mechanisms and financial intermediaries from public, for-profit, non-profit and community sectors |
|
Social enterprises have been incorporated within Irish and European policy as part of the wider social economy (O’Hara and O’Shaughnessy, 2021). The first attempts to include social enterprises within Irish and European policy discourse date from the 1990’s with a clear focus on social enterprises as actors that can facilitate labor market integration of disadvantaged people and communities (European Commission, 1993, 1995; National Economic and Social Forum, 1995). Within Irish policy, this trend continues in the first decade of the 21st Century with the launch of the Social Economy Programme (SEP), later renamed as Community Services Programme (CSP), which stimulates the development of social enterprises focused on work integration of those in disadvantage circumstances, e.g., long-term unemployed, and on the local and community development of disadvantaged communities (O’Hara and O’Shaughnessy, 2021).
In 2011, the European Commission launched the Social Business Initiative (SBI), a key policy document for the institutionalization of social enterprises within Europe. The SBI provided an operational definition for social enterprises at an EU level6 and was a significant milestone in bringing social enterprises to the forefront of European policy discourse (European Commission, 2014, 2021). More recent EU policies related to social enterprises, e.g. EU Action Plan for the Social Economy, stress the role of social enterprises in fields such as the renewable energy and circular economy (European Commission, 2021). Within European countries, some pioneers had developed policy on social enterprises before the publication of the SBI, e.g. Italy and the UK. However, national (and regional) policies and strategies on social enterprises, or that include social enterprises, have been flourishing in Europe since the launch of the SBI, with up to 16 European countries having developed social enterprises policies to date, e.g., Croatia, Denmark, Estonia, Sweden, Lithuania, Greece, Ireland (European Commission, 2020b).
For the case of Ireland, the Action Plan for Jobs of the Irish Government, published in 2012, included a working definition of social enterprises as business models set up to tackle social, economic, or environmental issues and engaged in trading or commercial activities to produce social and community gain (Government of Ireland, 2012, p. 67). In 2019, the Department of Rural and Community Development (DRCD) of the Irish Government published Ireland’s first National Social Enterprise Policy (2019 – 2022), representing a significant landmark for the institutionalization of social enterprises in Ireland. This policy acknowledges the contribution of social enterprises to the Irish economy and society and to government policy goals through the goods and services delivered in areas such as labor market activation, health care, climate action, social cohesion and rural development (Government of Ireland, 2019). This reinforces findings from reports on Irish social enterprises (European Commission, 2015; Hynes, 2016; DRCD and SFF, 2018). The political acknowledgement of the potential positive impacts of social enterprises is also reiterated in other national policies and strategies such as ‘Our Rural Future’. National Rural Development Policy 2021 – 2025’ developed by the DRCD and ‘Working to Change: Social Enterprise and Employment Strategy 2021-2023’ (Department of Justice with the Irish Prison Service and The Probation Service).
Another important aspect of the National Social Enterprise Policy is that is has established, for the first time, an official working definition for social enterprises in Ireland as:
“an enterprise whose objective is to achieve a social, societal or environmental impact, rather than maximising profit for its owners or shareholders. It pursues its objectives by trading on an ongoing basis through the provision of goods and/or services, and by reinvesting surpluses into achieving social objectives. It is governed in a fully accountable and transparent manner and is independent of the public sector. If dissolved, it should transfer its assets to another organisation with a similar mission” (Government of Ireland, 2019a, p. 8).
This working definition of social enterprises aims to reduce the ambiguity about what constitutes a social enterprise, an ambiguity which reflects a variety of conceptualizations of the term that draws upon different academic traditions (O’Hara and O’Shaughnessy, 2021). Moreover, this definition concurs in many aspects with the abovementioned working definition proposed by the European Commission, e.g. it stresses that the main aim of social enterprises cannot be profit maximization, it also highlights the need for social enterprises to provide goods and/or services to the market or their need to reinvest profits/surpluses in their social objectives. However, some differences are also present between these definitions, as for example the Irish definition includes a reference to the asset lock of social enterprises not included in the European Commission’s working definition. On the other hand, the European Commission definition pays greater attention to the multi-stakeholder governance of social enterprises, which is not explicitly emphasized within the Irish definition. Despite these similarities and differences both definitions encompass a wide range of organizations/actors that partially operate in the market but whose aims are not oriented to profit maximization but to tackle social, economic and/or environmental issues through entrepreneurial means (Olmedo et al., 2021).
In relation to the legal forms of social enterprises, the situation varies across Europe. Since the launch in the early 1990’s of the pioneer Italian ‘Law on Social Cooperatives’ there has been an increasing recognition of social enterprises from a legal perspective. This recognition aligns with the rising of policy interest and development in the field of social enterprise at European level. However, according to a comparative report of social enterprises ecosystems within Europe published by the European Commission (2020b), this recognition is not universal across Europe because of the lack of a common framework that accommodates social enterprises within national European legal systems. In this regard, some countries, such as Denmark, Finland or Lithuania, have developed specific stand-alone legal forms for social enterprises, while other European countries have adjusted existing cooperative law (e.g. Portugal, Spain) or company law (e.g. U.K., Latvia) to incorporate social enterprises. Furthermore, it is still usual that, even in countries where specific legislation for social enterprises has been passed,
In the case of Ireland, the legal framework does not provide a specific legal form for social enterprises, with the Company Limited by Guarantee (CLG) emerging as the most typical legal form adopted by social enterprises (European Commission, 2020a; Lalor and Doyle, 2021). In a recent study, Lalor and Doyle (2021) address whether a dedicated social enterprise legal form would benefit, and be necessary for, the sector. The study includes 179 surveys from Irish social enterprises and 32 semi-structured interviews with different stakeholders. Results from the study shows that “two-thirds of survey respondents (66.9%) believe that a distinct legal form was required for the social enterprise sector” (Lalor and Doyle, 2021, p. 29). According to the study, a dedicated form could increase the recognition of social enterprises, providing clear boundaries; offer an alternative to charitable status; facilitate the scaling of social enterprises through enabling some private shareholding; support the development of the sector through limiting compliance requirements for voluntary directors, and facilitate management staff to participate in decision-making and governance structures. However, the study shows divergent views from stakeholders about including the possibility of private shareholding, concerns on the potential displacement, and lack of recognition, of those social enterprises that would not adopt the social enterprise legal form, and a lack of consensus between stakeholders about what the social enterprise legal form should facilitate. Hence, Lalor and Doyle (2021, p. 48) conclude that “the argument for a dedicated legal form (at this point in time) is not sufficiently compelling for two reasons: 1) the establishment of a dedicated legal form is not necessary to address the barriers identified, and 2) there is a significant divergence of opinion as to what form a dedicated legal form would take.”
Besides the recognition from public institutions and policies, private certifications and marks for social enterprises have been developed and applied in different European countries, e.g. in Austria, Finland, Germany, Poland and the UK. These private certifications and marks represent a way of making social enterprises distinctive from other type of organizations and businesses, thus signaling their specificity in the absence of legal forms that allow for social enterprises to register as such. Examples of these certifications include the Social Enterprise Mark introduced in 2010 in the UK and the Social Enterprise Mark introduced in Finland in 2012, developed by the Association for Finnish Work for businesses that aim to address social or ecological problems and promote social aims (European Commission, 2020b). Furthermore, the B Corp certification, originated in the USA, is gaining traction in Europe through B Lab Europe. Social enterprises operating in certain sectors also benefit from certification schemes that do not refer explicitly to social enterprises but are aimed at gathering mission-driven and socially oriented enterprises, for example the Fairtrade certification.
In the case of Ireland, Social Impact Ireland have partnered with Social Enterprise Mark CIC (UK) to develop the Social Enterprise Mark in Ireland. The accreditation has been piloted with 5 Irish social enterprises operating in different fields such as the circular economy, craft and design, food poverty, rehabilitation services, community engagement and active life.7
The increasing recognition of social enterprises across Europe has also been manifested through the development of national and/or regional social enterprise intermediary support and advocacy networks, and organizations, which are currently present in 23 EU Member States (European Commission, 2020b). These informal and formal networks provide a support mechanism for the growth of social enterprises, improving societal recognition and awareness of social enterprises. Of note is the emergence of second-level organisations, consortia and umbrella organisations across Europe. These provide a range of business advice and support services for social enterprises and are prominent in countries such as Belgium, Finland, France, Italy, Latvia, Lithuania and Spain (European Commission, 2020). These networks also advocate and lobby on behalf of the social enterprises, in turn contributing to fostering mutual learning and exchange, informing policy making and contributing to new legislation. Across Europe these networks operate, most commonly, at national, federal, and regional levels including for example the Lithuanian Association of WISEs, National Federation of Social Integration Enterprises (FADEI, Spain) and Vlaamsinvoegplaform (Flanders, Belgium) (Lithuanian Innovation Centre and Knowledge Economy Forum, 2017; European Commission, 2020).8
Within Ireland, these networks and intermediary organizations, such as the Irish Social Enterprise Network, Social Enterprise Republic of Ireland, Waterford Social Enterprise Network, Social Entrepreneurs Ireland, Social Impact Ireland, Rethink Ireland, The Wheel or Social Economy/Enterprise within Local Development Companies linked through the Irish Local Development Network, provide a suite of supports to the work of social enterprises. These third sector actors offer support to Irish social enterprises especially in terms of mentoring and business support, networking, training, signposting to calls for funding, providing funding and play an advocacy role/lobbying for social enterprises. Despite these networks and intermediary organizations playing a significant role within the Irish social enterprise ecosystem providing a suite of supports, this support is piecemeal and lacks a coherent and strategic integration (European Commission, 2020a).
The presence of social enterprises has also been increasing within the academic and (higher) education sectors reflected in the growth of specific social enterprises (and social entrepreneurship) related modules and/or programmes across European Higher Education Institutes (European Commission, 2020b). In relation to research, the first pan-European research project on social enterprises (EMES9) was established back in the mid-90’s. However, the field has also been gaining momentum more recently, evident in the growth of national and cross-national funded research projects10 and academic publications about social enterprises, especially since 2010 (Granados et al., 2011; Littlewood and Khan, 2018; Dionisio, 2019; van Twuijver et al., 2020; Diaz Gonzalez and Dentchev, 2021). This consolidation of these well-established European research networks, and more recent national (Irish) networks of researchers such as SERNI11 also emphasises the increasing institutionalization of social enterprises within the academic and research sector (European Commission, 2020a).
Within the Irish context research on social enterprises has been carried out by individual researchers and research groups but Irish academic institutions have also participated in research projects consortiums with other national and international partners including stakeholders from academia, policy and practice. Examples of multistakeholder research projects focused on social enterprises with participation of Irish institutions include ‘EMwoSE - Women From Ethnic Minorities in Social Enterprise’, with the participation of Technological University of the Shannon: Midlands, Midwest. (including formerly Limerick Institute of Technology), which aims to foster gender equality and economic integration of ethnic minorities through social enterprises; ‘RurAction - Social Entrepreneurship in Structurally Weak Rural Regions: Analysing Innovative Troubleshooters in Action’ with the participation of University College Cork and Ballyhoura Development CLG, which studies the role of social enterprises in rural areas or; ‘Financing Social Enterprise in Ireland - Models of Impact Investing & Readiness’ with the participation of Rethink Ireland, Dublin City University and Community Finance Ireland and the support of the Irish Social Enterprise Network, which aims to contribute to the development of the social finance sector in Ireland. Research on social enterprises has also contributed to evidence-based policymaking, including the development of Ireland’s National Social Enterprise Policy (DRCD and SFF, 2018). Several Irish academic institutions such as Dublin City University, University College Cork, University of Limerick, University College Dublin, Trinity College Dublin, Technological University Dublin and South East Technological University offer a variety of courses to university students on social enterprises/social entrepreneurship, usually at postgraduate level.12
In terms of funding/financing, social enterprises are characterized by mixing market and non-market resources that proceed from both public and/or private sources (Nyssens, 2006). The nature of this mix, and the sectors in which social enterprises operate, varies significantly across Europe. In broad terms, within European countries, three general types of (revenue) resource mix can be identified in social enterprises, depending on their field of activity. First, those social enterprises that mainly deliver social, health and educational services are mainly funded through public subsidies and/or contracts. Second, Work Integration Social Enterprises (WISEs) report a more balanced mix between private revenues from the selling of goods and/or services and from public subsidies and/or contracts. Third, social enterprises that operate in other fields such as sport, recreational activities, organic agriculture, community shops, and other sectors not directly recognised by the public welfare systems as basic services, are, usually, mainly funded through private sources such as the selling of goods and/or services and membership fees (Defourny and Nyssens, 2010; European Commission, 2020b).
Comprehensive data on Irish social enterprises revenue mix is scarce (O’Shaughnessy and O’ Hara, 2016). A recent study on Irish rural social enterprises reflects the mix of funding revenues demonstrated by pan-European studies (Olmedo et al., 2021). Drawing from a sample of 258 social enterprises operating in rural Ireland, Olmedo et al. (2021) explain how rural social enterprises operating as community social businesses and developing mainly infrastructures and enterprise/financial services for their communities have greater reliance on trade income; Irish rural social enterprises providing care services are mainly reliant on grants, whereas Irish rural WISES present a greater mix of resources coming from grants and trading income. Finally, rural social enterprises focused on sports and community/local development present some mix of resources, but are mainly reliant on fundraising (Olmedo et al., 2021).
Funding bodies and financial intermediaries and grants from Government through different programmes, e.g., CSP, SICAP, and also from EU programmes, e.g. LEADER, play a significant role for social enterprises (Forfas, 2013). Support organisations, such as Rethink Ireland, have also developed (usually through the match of philanthropy and public funding) different funding calls for social enterprises, e.g. Social Enterprise Development Fund. In addition to loans from commercial banks and credit unions, Irish social enterprises tend to apply to social finance lenders such as Microfinance Ireland, Community Finance Ireland and Clann Creedo (OECD/European Union, 2017). Although (strategic) philanthropy is still rather underdeveloped in Ireland, this still represents a (significant) form of financing for some social enterprises (Indecon, 2021). New mechanisms such as impact investment and community and/or (digital) crowdfunding are increasingly used by Irish social enterprises.
The features of Ireland’s social enterprises ecosystem discussed within this section show how Irish policy and the definition of social enterprise are influenced by, and closely aligned with, the development of social enterprises and the wider social economy in Europe. However, in terms of legal form, Ireland presents its own specificities, as many other European countries do, with the CLG as the particular legal form typically adopted by most of the
Social enterprises are increasingly recognized as significant actors contributing to the tackling some of the diverse challenges that Irish and European societies are currently facing. The launch in 2019 of the first ever Ireland National Social Enterprise Policy 2019-2022 represents a milestone in the institutionalization of social enterprises in Ireland. However, to better understand this institutionalization, and the current situation of the Irish social enterprise ecosystem, this paper has explored different elements of this ecosystem and compared them with the situation in other European countries, thus providing a contextualization of the Irish social enterprise landscape.
The paper shows, using some elements of the MISE framework (Kerlin, 2013), that the macro-context in which the Irish social enterprise ecosystem is embedded is characterized by a higher level of pride and cohesiveness towards own groups and communities (in-group collectivism) than towards institutional collectivism and a tendency towards innovative practices; low expenditure in public services when compared to EU average; mature and high-quality public institutions; a prosperous and innovation driven economy and; a strong and diversified civil society with a significant economic dependence from government/public support.
Our paper also explains how Irish policy discourse on social enterprises correlates with EU policy. These policies have placed social enterprises within the wider social economy and, historically, have focused mainly on employment and work integration of groups at risk of social and economic exclusion and the development of services for disadvantaged communities. However, more recently policy documents stress the role of social enterprises in other fields such as rural and regional development, renewable energy and the circular economy. The working definitions of social enterprises at Irish and EU level also present significant similarities and encompass a broad range of entrepreneurial organizations which partially trade in the market, but whose main aim is not profit maximization but rather tackling social, societal and/or environmental issues. In terms of legal forms, the paper shows a great diversity across Europe compared with the specificity of Ireland with the CLG as the main legal form adopted by Irish social enterprises.
In this paper we have described how, both in Ireland and Europe, there has been an increasing development of private certifications and marks for social enterprises, intermediary support and advocacy networks and organizations, academic modules in higher education institutions, research projects, networks and publications related to social enterprises. These developments and increased recognition are contributing to the spread and institutionalization of social enterprises in sectors such as the civil society, business and academia. Moreover, our paper explains how social enterprises, both in Europe and Ireland, rely on a mix of revenue and other resources for achieving their financial sustainability, with this resource mix varying greatly in social enterprises operating in different fields. Finally, our paper describes how Irish social enterprises have used several funding supports and financial intermediaries (from the public, for-profit private and non-profit sectors but also from their own communities) to fund their activities.
We conclude that the elements of the Irish social enterprise ecosystem broadly follow, and are aligned with, the development and features of social enterprises ecosystems across Europe (European Commission, 2020a, 2020b). In general terms, there is an increasing public and private recognition of the role of social enterprises within our societies – however, different commentators have questioned if the increasing relevance of social enterprises is related to an increasing awareness of the need of a more inclusive, sustainable and integrated development that respects the natural resources of the planet and aligns with principles of economic democracy or; on the contrary this increasing relevance of social enterprises is aligned with practices of ‘green-washing’ and with the privatization of public services that enhance a universal access to basic services to the whole population, thus to the devolution of responsibilities from public to private actors and the retrenchment of the welfare state (Hudson, 2009; Teasdale, 2012; Barth et al., 2015; Bock, 2019). This is a significant and complex issue for social enterprises which we believe represents an important avenue for further research on Irish (and European) social enterprises. The social enterprise sector and their ecosystems are far from being monolithic but on the contrary, they show great internal heterogeneity within a country (European Commission, 2020a; Lalor and Doyle, 2021; Olmedo et al., 2021) and also between European countries (European Commission, 2020b). Despite its general alignment with the European landscape, the Irish social enterprise ecosystem presents some specificities such as the CLG as distinctive legal form, the influence of Anglo-Saxon academic discourse and the (historic) predominance of the WISE model (O’Hara and O’Shaughnessy, 2021).
The forthcoming publication of the first comprehensive and nationwide baseline data collection of social enterprises in Ireland can open up important avenues for the future direction of research and policy in Irish social enterprises, for example in terms of developing a more realistic and comprehensive picture about the number of social enterprises, their distribution, size and fields of activity, but also in terms of their actual impact towards sustainable development (Olmedo et al. 2019). Moreover, the increasing recognition of the role of social enterprises in fields such as renewable energy, circular economy or rural and regional development also represent relevant avenues for the future direction of social enterprises (Lekan et al., 2021; Olmedo et al., 2021). In addition, the heterogeneous and contested nature of the social enterprise sector and the interrelation of social enterprises with public policies and the public sphere (Nyssens, 2006) also points towards the need to include political dimensions in the study of social enterprises and broader discussions of the relation of social enterprises with economic democracy and the public/common good (Coraggio et al. 2015; Hulgard et al., 2019). Finally, a significant future direction of social enterprise research and policy points towards more in-depth studies of how the interactions between social enterprise ecosystem institutions and actors, such as practitioners, policymakers, academics, funders/financial intermediaries, civil society networks, can contribute to vibrant ecosystems for the future development of social enterprises.
Dr. Mary O’Shaughnessy is Head of the Department of Food Business and Development, University College Cork. She is a former director at Micro Finance Ireland and director of EMES (International research network, comparative research, social enterprise, social entrepreneurship, social and solidarity economy and social innovation). She contributes to national and Europe policy on social enterprise, social innovation and rural development.
Dr. Lucas Olmedo is a postdoctoral and lecturer at the Department of Food Business and Development, University College Cork, Ireland. Lucas conducted his PhD on ‘Exploring Irish Rural Social Enterprises as Neo-endogenous Development Actors’ with a H2020-MarieCurie research fellowship (EU funded project RurAction). His expertise and research interests include local, rural and regional development, social enterprises, community social entrepreneurship, social economy, social innovation, and migration.