Keywords

1 Introduction

There is no generation free from an economic crisis, and in this century, we could say that we have already suffered two. After the 2008 economic crack, that was reaching the various regions of Spain at different years, and the second is the one that we are living—or starting to live—derived from the COVID-19 pandemic whose effects we will probably begin—to notice with great force from the present year 2021.

All the problems are joined by the great challenges that already exist—and which we seem to have forgotten—such as climate change, economic inequality, depopulation of territories or sustainable growth, which have been sought to mitigate using the United Nations Sustainable Development Goals (SDGs) or the various economic and environmental agendas. We want to highlight that the COVID-19 pandemic is impacting all institutions and organizations around the world. Its scope and economic dimensions also mean that it poses a major threat towards achieving the SDGs (Leal Filho et al., 2020).

There has been much talk of the bankruptcy of the welfare system and, following the economic crisis of 2008 (Chowdhury & Żuk, 2018), of the re-foundation of capitalism (Figueroa, 2019), but to date this re-foundation seems not to have occurred as such, or it could be that the economic structure, understood as economic sectors, has substantially varied. In recent years, different economic models have appeared focused on generating economic benefits but, at the same time, bringing to the same level the generation of other kinds of benefits such as environmental, social, cultural, etc. Currently, many of the initiatives that arise in the socio-economic arena often contain aspects or elements where social and environmental issues are key in their business models. Concretely, companies and new ventures are starting to be focused on the social economy (Asiminei & Şoitu, 2014) and the circular economy paradigms (Geissdoerfer et al., 2017).

These economic models emerge, as we have mentioned before, after making themselves known the injustices of the previous models, with a citizenship eager to reform and fully enter into the great problems of the world using solutions that already existed, or modifying them according to the need and the time. Let us take into account the existence of the movement of Corporate Social Responsibility (CSR) in the European policy (Eberhard-Harribey, 2006), to give a strong example.

In line with the social and circular paradigms, in 1998, the Fourth Sector Network (FSN) was born in the United States to develop this new sector. It was as a multisectoral and multidisciplinary initiative, maintained as a network of networks, co-founded by Heerad Sabeti in collaboration with the Aspen Institute (Sabeti, 2011). In 2009, the foundations of the Fourth Sector were established, thanks to the publication of the report “The Emerging Fourth Sector” (FSN, 2009) linking different classic economic sectors in “hybrid” systems that fit better together and allow to face the challenges of the future safer than the three classic economic sectors (the first sector, the private enterprise; the second sector, the public or government entities; and the Third Sector, the social and non-profit).

The formation of integrated networks, such as public-private collaboration and progress in sustainable development require synergistic grouping of all sectors, so this motivation for values, economic sustainability, social responsibility, transparency, innovation, efficiency and organization lead to the Fourth Sector. Nowadays, the reduction of the welfare state must be covered precisely by this fledgling Fourth Sector, considering that betting on the neoliberal path could lead to more inequalities and more social than, given the current social, labour, economic and health circumstances, would not be the most desirable. All this falls within the various alternatives that arise in response to our economic system—already indicated—such as the economy of the common good, circular, collaborative and solidarity, among others.

With all that has been mentioned so far, some authors are analysing whether the Fourth Sector will be the solution to the problems we face such as rural depopulation or environmental problems between others (Rubio-Mozos et al., 2019). To contribute to this emerging field of research, we wonder in this chapter whether the Fourth Sector is well known and legitimized for doing its work. After this introduction, we offer a theoretical background to put the attention later in the region of Extremadura in the south-west of Spain.

2 Background

The Third Sector could be considered as the sector joining different realities, mainly the social economy and the non-profit approach. According to Borzaga and Defourny (2001) in “The Emergence of Social Enterprise”, the increase of this sector is somewhat widespread in almost all industrialized countries.

According to some authors such as Evers and Laville (2004) or Quarter et al. (2017), the Third Sector has two main aspects that must be considered: the charitable one, coming from the non-profit entities of the Anglo-Saxon world, and the cooperative tradition of the French-speaking School of Social Economy, which without being something new (this type of economic system has existed since humans have written records) experiences an uptick at the end of the nineteenth century due to the various social inequalities.

Considering what we have indicated previously, we must consider that the social economy believes in solidarity that is about generating an economic democracy that responds, jointly to the State, to market failures and where the State itself cannot reach. However, in the late 1970s of the last century, with the growth of neoliberalism and the consequent increase in inequalities and the deterioration of the welfare state, a new scenario is observed in which a progressive rapprochement between the cooperative and the non-profit world is reached, as Chaves and Monzón (2001) claim. In addition, and following Borzaga and Defourny (2001), the new scenario is characterized by the emergence of social enterprises.

2.1 Not-for-Profit Sector and Social Enterprises

The non-profit sector has its epicentre in the Anglo-Saxon world where it is not surprising, since it completes public action that is always minimal. These organizations are private, independent of the public sector under the principle of non-benefit-sharing (which is essential in non-profit entities) and with exclusively voluntary participation. At this point, we could say that both the non-profit sector and the social economy serve its members, but, in the case of non-profit sectors, the focus is on non-profit-sharing. In addition, democratic management is also essential in the social economy, while in the non-profit sector, the level of organization is very broad.

Over the past decade, following economic crises and loss of social ties, the Third Sector—in the West—is evolving and tends to merge the non-profit sector and social enterprises. It is the hybrid concept of where social enterprises start.

The Research Network for Social Enterprise (EMES) defines social enterprises as those organizations created with the explicit goal of benefiting the community, initiated by a collective of citizens and in which the material interest of capital investors will be subject to limits. Social enterprises also place special value on their autonomy and economic risk resulting from their continued socio-economic activity (Defourny & Nissens, 2012). Social enterprises take from the social economy their democratic and collective character of capital, as well as the principle of free accession and collectivism, while the non-profit sector includes independence from the public sector and volunteering. Importantly, such companies show a more active political profile, perhaps due to their own hybrid nature. We have to underscore: some of the social enterprises show a more active political profile—are therefore more combative—leads them to configure and be part of various social networks, generating more diverse and heterogeneous groups to form, in short, entities of a hybrid nature (Evers & Laville, 2004).

To sum up, it seems that social enterprises are set up at a crossroads and have their own characteristics that generate and break the traditional dynamics of the Third Sector opening the door to the emergence of the Fourth Sector.

2.2 CSR and Social Entrepreneurship in Extremadura (Spain): Towards the Fourth Sector

CSR has evolved throughout the twentieth century to be, in one way or another, present in largest companies in the twenty-first century. The United Nations Global Compact, presented in 2001 by the Commission of the European Union, defines CSR as the voluntary integration by companies of social and environmental concerns in their business operations and their relations with their partners, are points of origin for companies to start taking over CSR and to be somewhat adopted in companies in a more or less widespread and widespread way.

CSR can remain as a cosmetic issue, in some cases. About this, Porter and Kramer (2006) have stated that this scheme differs from the traditional CSR that is usually built around compliance with social and environmental regulations, improvement of the reputation of the company and unfocused donations to a variety of causes often unrelated to the business, understanding CSR as mere compliance with regulations, a search for reputation or philanthropy. The first law on Corporate Social Responsibility (Law 15/2010) was drafted, in Extremadura, to lay the foundations in the region on this idea of supporting and enhancing through regulations, promoting social responsibility in companies, providing them with their own seal or certification, of regional scope, with value to tenders and public contracts, and tax advantages. We wonder, could this be a revulsive for the adoption and momentum of CSR in Extremadura? The clearest answer would be no. According to the Business Directory of Extremadura and Guide to Entities of the Social Economy, fewer than 20 companies have been able to meet the regional standard requirements of the 67,687 active in 2019 (less than <0.01%).

On the other hand, social entrepreneurship is for some people a new way of doing business, while for others, it represents the reconciliation of economic and social objectives, which advocates the Fourth Sector, according to Nicholls and Cho’s own consideration (Nicholls & Cho, 2006) which establish the three fundamental elements of social entrepreneurship: innovation, market orientation and social purpose. Thus, if we define the limits of social entrepreneurship (Peredo & McLean, 2006), we might consider that entrepreneurship is not so much an organizational model but that its emphasis is social entrepreneurship, including:

  • Emphasis on visionary people.

  • Search for innovative social solutions.

  • Large-scale impact generation, from replicability.

  • The birth of social entrepreneurship can come from any sector, public or private, as long as they are launched to contribute to the well-being of the community.

Let us focus on Spain. The social economy is a sector capable of channelling wealth and employment-generating initiatives, capable of integrating partners and users, with democratic governance, in management and benefits. Regardless of the sector of activity, or the selected social form, the current regulation of the social economy at the state level is based on Law 5/2011, of March 29, on social economy. And now, let us focus on Extremadura, the region under study. Will the social economy be truly thriving? At the end of 2019, Extremadura has more than 4900 social economy entities, including cooperative (2190) and labour (1666) companies, in addition to foundations or employment centres, nearly 5000 entities.Footnote 1 Taking as reference of the 67,687 companies active at the end of 2019, it is practically 8% of the productive fabric of the region.

3 Circular Economy and the 2030 Agenda: Boosting the Social Economy and the Fourth Sector

As it is well known, in 2000, the United Nations (UN) agreed to achieve the so-called Millennium Development Goals by 2015. After 2015, the UN sought to generate a new global agreement on another of society’s most pressing problems such as climate change. A total of 193 member states agreed to the development of the 2030 Agenda, which addresses the development of the 17 Sustainable Development Goals, divided into a total of 169 targets to be achieved.

Until 2030, this Agenda is an action movement in which different nations pledged to mobilize to meet the most pressing needs. Either way, the Sustainable Development Goals represent the path to achieve sustainable development as they manage to cover the economic, social and environmental sphere (the triple balance sheet or triple bottom line) that had always been separate. In addition, they have shown the way to generate innovative solutions to common challenges in addressing the challenges that arise, effectively bringing new players, within the private sector and civil society, to be effectively joined.

In the circular economy context, which focuses in any case on having no waste or that these are minimal and serve as raw material for other production cycles, the Fourth Sector in Extremadura and other regions has found a place to settle and grow. Extremadura was one of the first Spanish regions to have a clear strategy in terms of circular economy (Extremadura 2030 StrategyFootnote 2), aligning itself in four main axes of action:

  1. 1.

    Citizen mass participation programme, social concertation and political agreement

  2. 2.

    Citizen training programme in green leadership for employment and entrepreneurship and accompaniment in the transition from the business fabric to a green and circular economy

  3. 3.

    Research programme in green economy, bio-economy and circular economy

  4. 4.

    Programme to identify and value the full potential of Extremadura’s green economy and circular economy

Not for nothing, analysed as a whole, the public administration itself in Extremadura has been and is driving the Fourth Sector because in recent years, it has been creating and generating strategies aimed at enduring the social economy—as a central point of the Fourth Sector—by binding them with other economies or models already known, but always leaving the social economy at the centre. We have to keep in mind that social enterprises were the ones that best endured the economic crises (Chaves & Monzón, 2012).

Knowing also depopulation, that is existing in many areas of Spain, and especially in Extremadura, where the population density is 25.65 people/km2—of the lowest in the European Union—launching hybridized social initiatives in this Fourth Sector could help to settle population. The Spanish strategy to face demographic challenge raises the idea of settling populations in the most depopulated rural territories through tax and labour aid and incentives. Mentality change and COVID-19 disease, produced by the SARS-CoV-2 coronavirus, seems to accelerate the process of returning the city to rural areas, by the empowerment of telework, among other facilities.

As follows, Fig. 1 shows a representation of the environment that maintains the social economy and the Fourth Sector in Extremadura. The next section is devoted to analyse perceptions about the Fourth Sector in the region.

Fig. 1
figure 1

Representation of the ecosystem to support social economy in Extremadura. Source: Own elaboration

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4 Method

4.1 Research Design

To approach the Fourth Sector in Extremadura, a mixed, quantitative-qualitative research method has been used, based on the work of Ugalde and Balbastre (2013). First of all, of a qualitative nature, we focused on the analysis of the primary sources of information and the review of the existing legal framework. Afterwards, organizations or companies that really fit into the existing legal framework and that could be considered as the Fourth Sector were sought. In addition, we consulted experts who work or have a relationship with the Fourth Sector, whether they were external consultants or technical personnel from public administrations who were really involved with programmes that promoted initiatives related to the Fourth Sector, with the circular economy or the social economy. In this part of the work, we focused on the implementation, through the Delphi method, of a qualitative investigation made up of a panel of experts. To finish, a complementary quantitative study was launched to discover what society knows about the Fourth Sector.

4.2 Techniques

The survey technique is widely used as a research procedure since it allows obtaining and processing data quickly and efficiently, but it suffers from the problem of abandonment by respondents. That is, many people start the questionnaire but do not finish it. For this reason, we proposed a simple and quick questionnaire for citizens to answer. The questionnaire was prepared taking advantage of new technologies, through its application in Google Forms, published online, accessible through a link published on social networks, distributed on said networks and forwarded via WhatsApp among heterogeneous groups of residents in Extremadura, being accessible during 2 months.

It is remarkable that we also used the popular technique of the Delphi method, based on the opinions of experts and considered very useful in decision-making, which has been in existence for over half a century (Landeta, 2006). The Delphi method has been used in various areas of scientific research, which serves as an endorsement to maintain its methodological validity. Based on the work of López-Gómez (2018), the methodological design of the Delphi method must take into account parameters such as the conformation and number of experts, the quality of the panel itself or the iterative process in rounds, together with the specification of the criteria for ending the process.

The selection of the people who make up a panel should not be done at random. However, there is no consensus on who is or is not an expert. In this study, an expert person was considered to be one who is directly related to entrepreneurship in the region, in its various aspects, including both members of the public administration itself and expert consultants in companies. The present work used the expert competence index (K), which has been used in numerous research contexts (Averch, 2004). This coefficient is useful in the expert selection who participate in empirical research, mainly in the field of social sciences. In this work, all coefficients were above 0.5. Regarding the number of panel members, a number of five was agreed upon as it was an approximation study and analysis of the situation. All interactions were carried out electronically.

An important point is the number of rounds to perform in a Delphi-based research process. There is an established consensus that two rounds are necessary, although rarely more than three (Peris-Ortiz et al., 2016). Therefore, for this introductory study, it is understood that two rounds should be sufficient. The Delphi study was carried out electronically, sending and answering a questionnaire by email. Once the responses had been reviewed, a report was made that integrated the responses and was sent to the respondents to find common ground on the areas analysed:

  • Study of the economic and social changes that society demands

  • Changes in economic developments in the region

  • Evolution of the Fourth Sector and its possibilities related to the social economy

  • Short-, medium- and long-term ways to grow the Fourth Sector

  • Support measures needed to implement the Fourth Sector in the region

4.3 Samples

For the detection of companies likely to be part of the Fourth Sector in Extremadura, the information was extracted from the Extremadura Companies Directory, updated as of December 2019, together with reports from the Extremadura Statistics Institute.

For approaching the citizens’ knowledge about the Fourth Sector, a representative sample of 413 people was obtained and analysed.

Five experts were consulted for the Delphi method:

  • Expert A: Consultant in technology and in companies and enterprises with a technological and social base, with more than 10 years of professional experience in his sector

  • Expert B: Lawyer, technical expert in social and circular entrepreneurship, employed in a large entity in the Third Sector, with more than 10 years of experience in her professional field

  • Expert C: Technician in public administration entrepreneurship in rural areas, with more than 15 years of experience in advising and supporting entrepreneurs with special emphasis on circular economy

  • Expert D: Technician in public administration entrepreneurship in rural areas, with more than 8 years of experience in advising and supporting entrepreneurs and companies with an emphasis on social and circular economy

  • Expert E: Consultant expert on quality and environmental issues, graduate in economics and business, with more than 15 years of professional experience in supporting entrepreneurs, with high knowledge of the regional entrepreneurship ecosystem

5 Results

5.1 Results from the Analysis of Secondary Data

Unfortunately, there is no data to the Fourth Sector as a whole. There were 66,879 companies that exist at the end of 2019; 718 are included in the social economy according to their legal form. This represents less than 1% of companies (net sales about 1,674,929 thousand Euros, 14% of the total region), with only 5% of the total number of workers. Table 1 shows the economic structure of the region.

Table 1 Extremadura economic structure
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It is very interesting to note that effectively, with a labour weight of only 5%, cooperatives generate 14% of sales in the region. In any case, it is the province of Badajoz that brings together almost 75% of the cooperatives of the community. This is a statistically significant data, which corresponds to two-thirds of the number of employees. As follows, Table 2 shows the most common activities of cooperatives in the region. As can be seen, it is the primary sector that undoubtedly prevails. At the end of the day, this region still has a very important primary sector.

Table 2 Most common economic activities in cooperatives
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5.2 Results from Citizens: What Society Knows About the Fourth Sector

A very basic questionnaire was launched to detect whether citizens are knowledgeable about this Fourth Sector and, above all, whether they would be able to identify in their environment ventures focused on this new fledgling Fourth Sector. Considering the regional population as a whole of 1.06 million people, with a margin of error of 5% and a confidence level of 95%, the size of the selected sample should be more than 384 people. The questionnaire was open for answers along 2 months, and 413 people answered. In this sample, 65% of the responses were for women. In addition, 66% of the responses corresponded to respondents with university degrees, with the age range of 30–44 years being the most common, bringing together 69% of respondents.

The main question of the questionnaire was: What is the Fourth Sector for you? Overall, 32% of citizens responded by not knowing what the Fourth Sector is; 29% of the responses associated the Fourth Sector with the component of “social enterprise” or “company seeking social benefit”. We have to highlight that within that 29% of responses, 39% also associated the Fourth Sector with companies working in green and circular economy. However, and unfortunately, there is a percentage of responses, less than 5%, that associated the Fourth Sector with the “quaternary sector” of consulting and knowledge.

Asked if they knew of any company that could be included in the Fourth Sector, 69% of respondents responded that “no” knows companies of this type and, more, 31% who responded “yes” associated the Third Sector (the non-profit one) as if it were the Fourth Sector.

5.3 Results from the Expert Panel (Delphi)

With the pandemic situation generated by the disease caused by the SARS-CoV-2 virus, the information collection procedure consisted of sending two semi-structured questionnaires by email, which were completed and returned by each of the participants—five in total—by the same route. This process was autonomous and individual; panel members were not noticing who the other members were to ensure anonymity and, above all, to avoid influence among them. Knowing this methodology, experts have participated in the Fourth Sector, circular economy, social economy, with links to entrepreneurship and aware of the regional socio-economic structure.

Two rounds of consultations were carried out, with the first panel focusing on characterizing and showing the sector at present and the second panel focusing on the analysis of the future related to the Fourth Sector (especially the economic possibilities that could be generated). Taking into consideration the initial views, a second questionnaire was prepared to investigate the degree of agreement and disagreement generated by each of the responses among the panel members. It is in this second round that panel members are aware of the opinions of the rest and can motivate changes of opinion that previously, individually, had not been considered. The contributions that recorded the highest degree of agreement were selected, organizing them by probability of occurrence and influence.

  • About the study of the economic and social changes that society demands.

    Experts agree that the current situation—aggravated by COVID-19—requires the redesign and restructuring of economic models. Past ten years experiencies with companies focused on social economy and the momentum given to clean and renewable energies, coupled with Extremadura’s RIS3 smart specialization strategy promises to be a revulsive for the region’s economy. However, there is a bunch of ideas about the need to industrialize the region, since industry is associated with increased pollution of all kinds, but in the same way this need to industrialize is appreciated as the unemployment rate is high and although society demands that not only is economic benefit the most important, marrying economic growth and environmental well-being do not go hand in hand.

  • About changes in economic developments in the region.

    Although the unemployment rate has been decreasing in recent years, it remains very high and exists in the same way, a high rate of emigration of talent to other regions and other countries. However, there is no substantial economic growth in the private sector, while the public sector has fluctuated. Panellists also consider public sector dependence to be undoubtedly very high, which poses serious economic risk. However, thanks to exports, the regional economy remains with a very important primary, agro-industrial sector that generates much of exports. Soon we're going to see how COVID-19 will affect the regional economy as many of the aid to be technologically improved and innovate the different economic sectors will continue to maintain the basic structure so that competitiveness is likely to be lost.

  • About the evolution of the Fourth Sector and its possibilities related to the social economy.

    It is unknown in the society in general and even in the companies themselves that are or could be encompassed in this Fourth Sector. Social enterprises consider themselves “social”, and in many cases, they confuse people with reduced mobility, the elderly, the sick, etc., with “assistance”. More information about Fourth Sector should be done so that it knows them and, above all, supports them, but, moreover, it is in the political class that without a doubt, more work must be known in order to improve the regulatory framework to enhance such enterprises, especially if they also relate to the green and circular economy.

  • About potential ways for the Fourth Sector growing.

    In a region like Extremadura, panellists indicate that mixing with initiatives that have to do with environmental sustainability in its various aspects would be especially interesting, where such ventures could grow. In addition, another interesting way of business for this Fourth Sector would be those related to technology that solves social problems especially. There is some consensus, three of the five panellists, that consideration should be given to detecting and analysing different initiatives from other regions equivalent to Extremadura and analysing their possibility of replication to encourage and enhance this Fourth Sector with new ideas.

  • About the required support to implement the Fourth Sector in the region.

    Panellists considered that there are already different programmes and/or incentive lines and/or aids that enhance such ventures but should review their approach. In particular, they reflect (four of the five panellists consulted) the idea of providing more funding from public enterprises to those undertakings of this type that arise or are implemented in rural areas but that, for this, the infrastructures (physical terrestrial communications and speed of Internet access) existing in these areas should be boosted. The organization of fairs, networking, events of exchanges of ideas and experiences would be very useful to attract possible, on the one hand, investors and encourage new ventures that are more dynamic and attractive.

6 Conclusions

Although the Fourth Sector has been analysed in academic literature, and many organizations around the world have already launched initiatives of this kind, in Extremadura, it is not yet a very well-known sector. Extremadura could be considered an example of a developing region of the European Union, with a high unemployment rate, a high depopulation rate as well as its rurality rate. Fourth Sector is something existing and increasingly frequent, but neither companies nor, above all, the population itself have a clear knowledge of what this Fourth Sector is, although it does recognize its existence and seems to place and define it correctly.

Fourth Sector has been clearly committed on the part of the public administrations, for the implementation of creative initiatives focused on the social economy and the green and circular economy. At the regional level, the companies that are usually analysed according to the current normative as social enterprises are companies whose social figure is that of the cooperative. But we cann't forget limited liability societies or the independent self-employed. Thus, the limitation or linkage of the social economy to this type of social figure is a clear disadvantage for fostering the Fourth Sector since there is no official register of companies focused on this sector.

Likewise, the green and circular economy has become an interesting economic engine for the region, but its administrative supports focuses itself on primary sector leaving out other initiatives that should be supported. In the same way, it is difficult to localize such ventures that, in many cases, tend to be linked and imbricated, a type of hybridization typical of the Fourth Sector.

Certainly, society knows, at least at the highest levels of education, what the Fourth Sector is and its hybridizations with other elements, sectors and economic models, but it tends to think of Fourth Sector as if it were the Third Sector or as a spin-off of it, when it is really the evolution and organized mixing of all of them. In any case, the authors suggest delving deeper into how the Fourth Sector and the social, green and circular economy could help the economic recovery following the situation generated by the COVID-19 pandemic that has devastated both health and the economy with difficult effects of quantifying.

If the trend is met, following the 2008 crisis, the implementation and transformation of companies into models focused on the Fourth Sector will be an unstoppable trend because society itself demands it: it is not just a matter of job creation and economic benefits, it is the triple balance sheet, environmental, social and economic, which will determine the profitability of a company and the perception or acceptance that society has of it.