Keywords

1 Introduction

The situation in labor market is rather complicated in the European Union (EU) these days. Various solutions how to decrease rising to enormous heights unemployment rates in Spain, Greece and other countries, how to stabilize markets are proposed by economists and analysts. For example, United Kingdom market suffers from immigrating people and the government took some strict actions to regulate benefits for not working. In Lithuania about 10 % of working age people suffers unemployment. Entrepreneurship is kept as the first aid in this situation because entrepreneurs by self-employment could maintain the situation in constant level or not going worse. Especially, the role of entrepreneurship becomes more and more important; the way of acting becomes broader, connects more social groups, and solves more social problems in society. The role of social entrepreneurship is growing. The latest research works in entrepreneurship theme concentrates on social entrepreneurship as well. Studies are analyzing various important aspects of social entrepreneurship connected with concept, importance, features, results of the phenomena: Dees (1998), Dees et al. (2004), researching opportunities of social entrepreneurs; Drayton (2002), emphasizing the strong ethical fiber of entrepreneur; Vasiljeviene (2002, 2006), analyzing enterprise ethics as precondition for social entrepreneurship; Mort et al. (2003), solving definition problems; Austin et al. (2006), distinguishing two types of entrepreneurship (commercial and social); Krisciunas and Greblikaite (2006), researching social dimension of entrepreneurship; Korosec and Berman (2006), analyzing important definition questions, Mair and Marti (2006), analyzing social entrepreneurship as a process of creating value by combining resources; Peredo and McLean (2006), analyzing and joining the role of commercial exchange by social entrepreneur; Weerawardena and Mort (2006), analyzing multidimensional model of social entrepreneurship; Certo and Miller (2008), Smith-Hunter (2008), solving definition problems and peculiarities; Brock and Steiner (2009), researching concepts mostly related to definition of social entrepreneurship; Zahra et al. (2009), defining social entrepreneurship; Hulgard (2010), disclosing difference between USA and Europe regarding major social entrepreneurship discourses; Noruzi et al. (2010), researching sources, goals, and strategies of social entrepreneurs; Greblikaite (2011, 2012), analyzing features of entrepreneurship’s expression and social entrepreneurship in Lithuania; Hoogendoorn et al. (2011), discussing the assets and resources of social entrepreneurs are analyzing various important aspects of social entrepreneurship connected with concept, importance, features, results of the phenomena.

The subject of the paper is social entrepreneurship. The research question raised in the research paper is how social entrepreneurship is developing in Lithuanian enterprises in changing and dynamic business environment. The research aim is to analyze the importance and development of social entrepreneurship in Lithuania, researching enterprises and their activity. The research tasks are: to analyze the features and importance of social entrepreneurship; to analyze the situation and policy of social entrepreneurship in EU; to present the empirical research results of social entrepreneurship in Lithuanian enterprises; to propose how social entrepreneurship could be fostered and supported in Lithuania. Research methods are scientific literature analysis, document analysis, and interview of experts.

2 The Importance and Features of Social Entrepreneurship

Social entrepreneurship might be defined sometimes a little bit differently by various authors. Schwab (2006) defined a social entrepreneur as “someone who has created and led an organization whether for profit or not, that is aimed at catalyzing systematic social change through new ideas, products, services, methodologies and changes in attitude, with the bottom line being social value creation” (Schwab 2006 cited in Smith-Hunter 2008, p. 94). Schwab Ch. also established foundation for social entrepreneurs (Schwab 2014). Korosec and Berman (2006) define social entrepreneurs as individuals or private organizations that take the initiative to identify and address important social problem in their communities. According Thompson (2002), social entrepreneurs are also said to have the qualities and behaviors generally associated with business entrepreneurs, but they operate in communities and are more concerned with caring and helping, than with making money.

Zahra et al. (2009) summing various assumptions on social entrepreneurship state that social 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. Social entrepreneur simply be someone who organizes and/or operates a venture or corporation, which features social goals (Peredo and McLean 2006). According Noruzi et al. (2010) social entrepreneur is an individual, group, network, organization, or alliance of organizations that seeks sustainable, large-scale change through pattern-breaking ideas in what and/or how governments, nonprofits, and businesses do to address significant social problems.

Mort et al. (2003) provide a definition of a social entrepreneur composed of four dimensions such that (1) the virtuousness of their mission to create better social value; (2) unity of purpose and action in the fact of complexity; (3) an ability to recognize opportunities to create better social value for their clients; and (4) their propensity for risk-taking, pro-activeness and innovativeness in decision making.

Austin et al. (2006) distinguished between two types of entrepreneurship. Commercial entrepreneurship represents the identification, evaluation and exploitation of opportunities that result in profits. In contrast, social entrepreneurship refers to the identification, evaluation, and exploitation opportunities that result in social value (Austin et al. 2006; Certo and Miller 2008). While commercial entrepreneurs are primarily concerned with private gains, social entrepreneurs are more concerned with creating social value. Being not sure of potential returns, social entrepreneurs may face more difficulties in mobilizing financial resources.

Social entrepreneurs are often driven by their passion to meet the needs of a population or by their personal values, charisma, and leadership skills (Certo and Miller 2008). Noruzi et al. (2010) emphasize eight basic assumptions about sources, goals, and strategies of social entrepreneurs. Firstly, social entrepreneurs do not have to be individuals. They can also be small groups, teams of individuals, organizations, networks, or even communities. Secondly, social entrepreneurs seek sustainable, large-scale change. Thirdly, social entrepreneurship can involve pattern-breaking ideas how to solve significant social problems. Fourthly, social entrepreneurs exist in and between all sectors. More, social entrepreneurs need not engage in social enterprises or use market-based tools to be successful. The quantity of social entrepreneurship can vary greatly across individuals and entities. The intensity of social entrepreneurship changes under circumstances and time. Here economic, political, social, and organizational circumstances and conditions are important. And, social entrepreneurs sometimes fail as serial entrepreneurs because they are taking serious risk.

The entrepreneurial aspect of social entrepreneurship express as including (1) the recognition and “relentless” pursuit of new opportunities to further the mission of creating social value, (2) continuous engagement in innovation and modification, and (3) bold action undertaken without acceptance of existing resource limitation (Dees 1998; Peredo and McLean 2006). Peredo and McLean (2006) are analyzing and joining the goals and role of commercial exchange by social entrepreneur. Sociality of enterprise could be not only primary object, but it could be successfully incorporated among other goals (see Table 1).

Table 1 The range of social entrepreneurship
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Mair and Marti (2006) see social entrepreneurship as a process of creating value by combining resources in new ways. Secondly, these resource combinations are intended primarily to explore and exploit opportunities to create social value by stimulating social change or meeting social needs. Third, researchers viewing to social entrepreneurship as a process emphasize that it involves the offering of services and products but can also refer to the creation of new organizations. Authors argue that profit motive of entrepreneurship can be a partial motive for social entrepreneurship as it might be presumed that the motives for social entrepreneurship can be, for example, personal satisfaction or fulfilment. Some authors discuss that entrepreneurship in business sector also has a social aspect. Drayton (2002) emphasizes the strong ethical fiber of entrepreneur. Many authors have emphasized the non-profit nature of social entrepreneurial activities as a distinctive feature of social entrepreneurship. Mair and Marti (2006) argue this and make suggestions that social entrepreneurship can take place equally well on a for-profit basis. The main difference is based on if social entrepreneurship creates social or economic wealth. In social entrepreneurship, social wealth creation has a primary task. Economic value creation ensures the fulfilment of social wealth creation.

One of the most controversial issues are about is social entrepreneurship an independent field of research (Mair and Marti 2006). Weerawardena and Mort (2006) suggest that social entrepreneurship can be conceptualizes as a multidimensional model involving the three dimensions: innovativeness, proactiveness, and risk management. These dimensions are encountering in other three dimensions: environment, social mission, sustainability. In Table 2 the difference between USA and Europe social entrepreneurship can be seen (Hulgard 2010). The mostly cited concepts related to social entrepreneurship definitions are: outcomes based, not limited by resources, sustainable, opportunity recognition, scalable, innovation, social problems/mission based (Brock and Steiner 2009).

Table 2 Difference between USA and Europe regarding major social entrepreneurship discourses
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When the others see problems, social entrepreneurs see opportunities (Dees 1998). Social entrepreneurship focuses on overall societal needs and problems, on how to maximize social change and improve social conditions. Social entrepreneurs are visionaries who seek to transform society through creating social ventures that can be scaled and replicated in multiple settings through dissemination, affiliation and/or branching (Dees et al. 2004).

Employees feel good about their work in social enterprises and this reflects on their surroundings as well. The management and administration costs are lower and wages are more moderate than in other types of business. This gives a competitive advantage for social business in the market. And the profit made by the business is reinvested into the business, which makes social enterprises viable long-term investment opportunities (EC 2011). Social enterprises are able to take resources that are unavailable to for-profit enterprises. These assets are such as volunteers and assets received by donation (Hoogendoorn et al. 2011).

Social entrepreneurship is defined as the practice of responding to market failures with transformative and financially sustainable innovations aimed at solving social problems. According Noruzi et al. (2010) it has three essential components: response to market failures; transformative innovation; and, financial sustainability.

Above the important aspects were discussed analyzing foreign research works. Research in entrepreneurship is rather new in Lithuania. But there are some works analyzing important questions of social entrepreneurship as well (Greblikaite 2012). There are some scientific works on social responsibility of business. Vasiljeviene (2002) researched enterprise ethics analyzing problematic spheres of ethics implementation in enterprises, enterprise culture, and moral dimension in enterprise ethics, social market conception, social contract conception, and social development of ethics concerning the basics of social entrepreneurship. Later, Vasiljeviene (2006) analyses the ethical practice of enterprises in corporate social responsibility context.

Greblikaite (2011) analyzed the features of entrepreneurship’s expression in enterprises. There were features of entrepreneurship’s expression in social activity of an enterprise identified. They reflect social dimension of entrepreneurial enterprises and entrepreneurship. The features were researched in small and medium-sized Lithuanian enterprises. The research supposed the conclusion that social activity and its features are important and inseparable from entrepreneurship. Social dimension and responsibility of entrepreneurship were analyzed in Krisciunas and Greblikaite (2006).

Social entrepreneurship is almost not researched and is developing in Lithuania. Theoretical and practical research are important, interesting and needed to be developed in the future, because Lithuanian entrepreneurial enterprises need support from scientists as well as from government constructing common understanding of the phenomena. However, EU policy remains very important for development of social entrepreneurship in the country.

3 Fostering Social Entrepreneurship in EU

The most significant attention to social entrepreneurship in EU was devoted after Lisbon European Summit after year 2000 and adoption of Lisbon Strategy. The attention was paid to social responsibility of business as connecting part to economic and social targets of enterprises. Enterprises with social activity were encouraged to bring their significant share to job creation, improvement of employees’ conditions, and development of social innovation.

One of the EU-level target goals in Horizon 2020 is set and declares that 75 % of the population aged 20–64 should be employed (EC, Directorate General for Employment, Social Affairs and Inclusion 2013). The employment situation is rather difficult in EU. Unemployment rate is the highest ever in EU history. Youth unemployment is of special concern. 5.7 million EU citizens aged less than 25 were jobless in January 2013, according for 23.6 % of the active young people in the EU-27. Aging problems are concerning politicians as well. In Europe 46 % of older workers (age 55–64) are employed compared to over 62 % in the US and Japan.

The European Commission gives the term “social enterprise” the following meaning “an operator in the social economy whose main objective is to have social impact rather than make a profit for their owners or stakeholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner, and, in particular, involves employees, consumers and stakeholders affected by its commercial activities” (EC 2011, p. 3).

There are significant differences across countries in terms of the social sector and business sector areas social enterprises are active in. For example, in Romania and Hungary social enterprise activity dominates in the sectors of health, social work, and education. In Sweden and UK social enterprises provide services to community, and other social and related services. The sources of capital also differ in various countries. For example, in Sweden, UK, and Spain sales and/or fees were clearly the most important source of capital. In Romania, for example, the most significant share of liquidity originates from grant finance.

92 % of organizations’ types in the social economy are associations, foundations and other similar accepted forms in EU. 7 % are cooperatives and other similar accepted forms, 1 %—mutual companies and other similar accepted forms. Social economy including both, paid and voluntary work, consists about 65 % of the employment in Europe’s social economy (EC, Directorate General for Employment, Social Affairs and Inclusion 2013). In EU one out of four new enterprises is set up as social, and up to one of three in Finland, France and Belgium.

The European Commission proposes three sets of priority measures: measures to improve the access to funding for social businesses; measures to improve the visibility of social businesses; measures to improve the legal environment of social businesses (EC 2011). For example, the European Enterprise Promotion Awards aim to recognize innovation and reward the success of public bodies and public-private partnerships in promoting enterprise and entrepreneurship at a national, regional and local level. The best practices are awarded in EU level and serves as stimulating and promoting social entrepreneurship as well.

Noruzi et al. (2010) provide five objectives of entrepreneurship education agreed by European Expert Group in 2004: (1) Promoting the development of personal qualities that are relevant to entrepreneurship, such as creativity, spirit of initiative, risk-taking and responsibility; (2) Offering early knowledge of and contact with the world of business, and some understanding of the role of entrepreneurs in the community; (3) Raising students’ awareness of self-employment as a career option; (4) Organizing activities based on learning by doing; (5) Providing specific training on how to start a business.

One of the newest documents concerning fostering entrepreneurship in EU is “Entrepreneurship 2020 Action Plan” (EC 2013). It is clearly stated that “to bring Europe back to growth and higher levels of employment, Europe needs more entrepreneurs” (p. 3). The most difficult things for entrepreneurs in EU are: education is not adopted to acquaintance appropriate skills needed for entrepreneurs; the financial resources are difficult to obtain; difficulties in transferring business still exist; the fear of failure and sanctions after that; administrative procedures are still heavy burden for entrepreneurs.

First course of social entrepreneurship was offered at Harvard University in the middle of 1990s by Greg Dees. Later Stanford, Columbia, and Berkley proposed the courses of social entrepreneurship. The first documented European course was co-taught by Maximilian Martin from the University of Geneva in Switzerland and Pamela Hartigan from the Schwab foundation in 2003 (Brock and Steiner 2009). Now the courses on entrepreneurship are almost in every university, but the quality and content of them is not sufficient.

“Entrepreneurship 2020 Action Plan” states that “<..being an entrepreneur is an attractive prospect for Europeans, this also includes social entrepreneurs whose potential is often underestimated..>” (EC 2013, p. 5). The immediate actions are based on action pillars. Action pillar 1 is emphasizing entrepreneurial education and training to support growth and business creation. Education should be brought to learning by practical experience learning models and true stories of real entrepreneurs. Action pillar 2 is based on creating an environment where entrepreneurs can flourish and grow. And here appropriate aspects should be taken to account: (1) Access to finance; (2) Support for entrepreneurs in the crucial phases of the business lifecycle and their growth; (3) Unleashing new business opportunities in the digital age; (4) Transfers of businesses; (5) Bankruptcy procedures and second chance for honest entrepreneurs; (6) Regulatory burden reductions.

Very important document was adopted in December 2011 by the European Commission: Action Plan to improve access to finance for SMEs and proposals on venture capital funds and social entrepreneurship funds (European Parliament and Council 2011a, b). The stress was put on the funds needed to commercialize research and development and test innovative business models. Future concerns are related with social economy development and social innovation.

Action Pillar 3 takes into account role models and reaching out to specific groups. It is proposed a change in the perception of entrepreneurs through practical and positive communication about the achievements of entrepreneurs, their value to society and the opportunities of new business creation or acquisition as a career destination. These specific groups are women, migrants, people with disabilities, young, and retired people. Special attention is paid to new and young enterprises representing a key ingredient in creating a job-rich recovery in Europe (EC 2013).

Scientific studies reveal that social entrepreneurial activities become more frequent than commercial entrepreneurial activities. Hulgard (2010) emphasizes that there are two lessons from which it is useful to learn. The first lesson is that linking to social entrepreneurship and social enterprises is some historical European tradition to the issues of democracy and participation. The second lesson is based on social entrepreneurship connecting three different sectors—public, traditional private for-profit and the civil society sectors in EU.

Government policy and its effectiveness is one of the most important elements promoting entrepreneurship in Lithuania. The main factors supporting entrepreneurship remain enterprise and estate registration conditions, permission for building, electricity supply, credit conditions, investment protection, cross-border trade, tax wages, insolvency problem solutions, fulfilment of agreements. All the factors are regulated by state. State provides public services for business and the quality of those services should be improved for development of social entrepreneurship in Lithuanian enterprises.

4 Development of Social Entrepreneurship in Lithuanian Enterprises

The aim of empirical research is to evaluate the situation of social entrepreneurship in Lithuanian enterprises and to foresee further development (The empirical research (experts’ interview) was made in Lithuanian enterprises by Lina Gegeckaite in 2013 February–April.). The actuality of fulfilled empirical research was based on such assumptions: a lot of enterprises are declaring that they are socially responsible (including banks, consortiums of enterprises, and etc.); often “socially responsible” is just a claim for public opinion, gaining added value, good reputation, more clients. Such enterprises fulfil some socially responsible actions such as charity, some solitary actions, but the solution of social problems becomes forgotten. The questionnaire of experts’ interview was based on three main questions:

  1. 1.

    Is it possible (and how) to reconcile the principal of profit gaining with solution of social problems?

  2. 2.

    What tendencies of social entrepreneurship do the experts see in Lithuanian enterprises now?

  3. 3.

    What future tendencies and perspectives are seen in social entrepreneurship in Lithuania?

The object of empirical research was the development possibilities of social entrepreneurship in Lithuanian enterprises. Experts’ interview was selected as a research method. The target group of empirical research was six selected experts. Experts’ number can be defined starting from 5 (The number of experts is considered confident if the number of experts is not less than 5 (Kardelis 2002). The experts were general managers and specialists, who had competence and experience to describe the analyzed object and gave grounded opinion on research questions. The experts are selected so that their opinions could cover all the spectrum of knowledge about situation of social entrepreneurship in Lithuania.

As the experts’ interview results reveal the understanding of social entrepreneurship is common as from theoretical as to practical viewpoints. The opinion states that social entrepreneurship develops creativity of employees, integrates innovative, risky decisions and social initiatives: finds social problems, generates ideas, solves social problems, and gains social value.

Evaluating the situation of social entrepreneurship in Lithuanian enterprises different opinions were expressed. Some of experts emphasized that a lot of social initiatives in Lithuania were taken rather late or not in time as it was done in other EU countries. Another expert states that social entrepreneurship is just a vision in Lithuania because society is not mature enough to accept such kind of business. There was such an opinion expressed that some of social initiatives in Lithuania are taken just in order to maintain competitive or do some “show elements” for publicity. Some positive opinions were spoken up as well. One of the experts said that the number of socially involved enterprises is growing in Lithuania, and the reason for such behavior is modern approach of customers. The way of social acting is affordable and honorable. The progress of social entrepreneurship is based on more and more various external environment and different international partners. The main force initiating such activity is EU funding for enterprises. The most important is the sincerity and continuum of actions in enterprises supported by different EU funds.

The opinion of experts about concrete solutions of social problems was asked. The experts declare that for real social actions and decisions enterprises should have experience, knowledge, and financial funds. Single enterprises take just a small part of big problem existing in society. Project activity supported by EU can show good examples for other enterprises how to reach the common wealth. Middle and long-term perspective is needed for enterprises involved in social activities and social entrepreneurship. The social activity fulfilled by enterprises is valued by employees, competitors, clients, and society. In long-term period it becomes affordable (all experts agreed).

Experts discussed the instruments for fostering social entrepreneurship in Lithuanian enterprises. At first, conferences, seminars, educational events, where educational institutions would participate, should be helpful. The research and various studies about enterprises implementing social entrepreneurship would be helpful to others as practice of good examples. The implementation of EU funded projects is a possibility which should be used for promoting social entrepreneurship in Lithuania.

By various theoretical works the principal of gaining profit by social activity is a balance (or can be balanced). The experts agreed with such an opinion. They based it by thoughts that the main role should play top managers and leaders in the enterprises. Their consciousness, maturity and values could ensure appropriate attitude to solving social problems and gaining good financial results. Experts were mentioning the size of enterprise and financial possibilities to help solving common societal problems. The balance between profit and social goals of enterprises remains the one of the most important challenges for enterprises.

According the experts, the further development of social entrepreneurship depends state support, involvement of educational institutions and youth in social activity and Individual consciousness helping to solve problems rising in society. Establishment of science and technological parks, business incubators is one of the conditions for successful development of social entrepreneurship in Lithuania. According experts the number of social enterprises will be growing, but state support in this period is crucial for fostering such kind of activity. The overall tendencies for development of social entrepreneurship remain positive in Lithuania. For now, sometimes creation of enterprises based on social activity remains in ideas level and lacks initiative and self-awareness to act for society purposes.

5 Conclusions and Suggestions

Social entrepreneurship is kept as a life-preserver for EU. Financial crisis passed, but a lot of economic consequences are left. One of the best solutions to solve those problems remains entrepreneurship. Moreover, more and more attention is paid to social entrepreneurship in overall EU policy as well as in theoretical research works in this field. The positive effect of social entrepreneurship is not arguable and its importance is growing in economy overall. Social economy consists more than a half of overall EU economy. In the EU-27, associations employed 8.6 million people in 2010; they account for over 4 % of GDP and their membership comprises 50 % of EU citizens (International Centre of Research and Information on the Public and Social and Cooperative Economy 2012). The EU has a lot of policy documents, measures and instruments for promoting and fostering social entrepreneurship as future engine of economy. Many instruments and actions are foreseen for fostering entrepreneurship in EU countries, promoting small and medium-sized business. The most important question remains successful implementation of these instruments.

The research revealed that there are some problems with integrating social entrepreneurship in practical activity in Lithuania: the lack of good practice examples and initiatives, poor public and government support, lack of cooperation between business and science, etc. However, such trends do not mean that the current situation cannot change to better one. The experts are deeply convinced that the sociability in business will grow and over time the opinion about such area of business will change in a positive way.

Europe needs a through, far-reaching cultural change (EC 2013). Investments in changing the public perception of entrepreneurs, in entrepreneurship education and in the support of groups that are underrepresented among entrepreneurs are necessary. According results of empirical research the main factors, influencing and supporting development of social entrepreneurship in Lithuania, could be revealed.

Improvement of State Policy

The risk is rather high for creating social enterprises, so the support of state is very needed, especially providing financial funds, making easier administrative and tax burden for starting business;

Active Dialogue and Partnership Between Business and Educational and Training Institutions

The courses should be integrated not only in theoretical, but in practical level (for example, taking real action of solving some social problems). Mentoring of young entrepreneurs is one of the positive options fostering social entrepreneurship’s development. Educational training should be based on spread of entrepreneurial ideas among society members;

Fostering of Research in Social Entrepreneurship Area

Sharing of experience and good-practice example analysis is needed for revelation of actual situation in sector. For now, the biggest part of research is based on some statistical data and their analysis;

Involvement of Youth in Social Activity Developing Social Responsibility in Business

Young people should be involved in acting social enterprises, practice, discussions, methodical instruments and trainings. Investment in skills of young people affords. In this way attitude to business is formed, creativity and risk become comprehended. Involvement of youth to social activity forms positive business culture and raises possibilities to implement ideas in reality;

Fostering of Citizens Consciousness

It could be started from the initiative of enterprises themselves. They can organize training, events, and learning and information instruments for directing attention of citizens. As citizens often do not trust business, so spread of information about good-practice examples of social entrepreneurship could be very useful for reputation improvement and further development.

It is important to understand that complex approach and action are needed for successful development of social entrepreneurship in Lithuania. The value of findings is based on their use in theoretical and practical level. Findings are important for the research and education institutions for further research and development of co-operation between business and science. The results are valuable for enterprises getting acquainted with the situation of social entrepreneurship in Lithuania as well as the main findings should be interesting for governmental and public institutions fostering the development of social entrepreneurship in Lithuania.