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Welfare State and Social Enterprise in Transition: Evidence from Serbia

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Abstract

This paper analyses welfare regime changes in Serbia and their impact on social enterprise development in the last two decades. We cover the period of significant transition-related reforms within the welfare state, with important implications on the position of these enterprises. Using data gathered from the qualitative field research, our study shows that there are two broad groups of factors that are important for development of the new generation of social enterprises, those that emerged in the last decade with an idea to foster entrepreneurial spirit and expanded into new domains other than those providing assistance to the marginalized groups. First, their decision to enter the social economy sector still depends on the environment created by the state. Secondly, their sustainability is affected by the factors typically found in any other enterprise of comparable scale like business skills, capacity to form networks and partner with relevant stakeholders.

Résumé

Le présent article analyse les changements survenus dans le régime de protection sociale de la Serbie et leurs incidences sur le développement des entreprises sociales au cours des deux dernières décennies. Nous traitons des réformes associées à l’importante transition de l’État providence et de ses implications majeures sur le positionnement desdites entreprises. À l’aide de données recueillies dans le cadre de recherches quantitatives sur le terrain, notre étude démontre que deux vastes groupes de facteurs sont essentiels au développement de la nouvelle génération d’entreprises sociales, soit celles ayant vu le jour durant la dernière décennie dans le but de favoriser l’esprit entrepreneurial et ayant pris de l’expansion dans des domaines autres que celui de la prestation d’aide aux groupes marginalisés. En premier lieu, leur décision de percer le secteur de l’économie sociale dépend toujours de l’environnement créé par l’État. En second lieu, leur durabilité est influencée par les facteurs typiquement présents dans toute autre entreprise d’échelle comparable, dont les compétences commerciales et la capacité de créer des réseaux et d’établir des partenariats avec des intervenants pertinents.

Zusammenfassung

Diese Arbeit untersucht die Änderungen am serbischen Wohlfahrtssystem und ihre Auswirkungen auf die Entwicklung sozialer Unternehmen in den vergangenen zwei Jahrzehnten. Man betrachtet den Zeitraum bedeutender wandelsbezogener Reformen innerhalb des Sozialstaates mit wichtigen Folgen für die Stellung dieser Unternehmen. Unter Verwendung von Daten aus der qualitativen Feldforschung zeigt unsere Studie, dass es zwei umfangreiche Faktorengruppen gibt, die für die Entwicklung der neuen Generation sozialer Unternehmen wichtig ist, d. h. die Unternehmen, die in den vergangenen zehn Jahren mit der Idee entstanden sind, den Unternehmergeist zu fördern, und die in neue Bereiche vorgedrungen sind, welche nicht die Unterstützung von Randgruppen beinhalten. Erstens ist ihre Entscheidung, in den Sozialwirtschaftssektor einzudringen, noch immer von dem staatlich bestimmten Umfeld abhängig. Zweitens wird ihre Nachhaltigkeit von den Faktoren beeinflusst, die typischerweise auch in anderen Unternehmen vorzufinden sind, die bezüglich ihrer Fertigkeiten und ihrer Kapazität zur Netzwerkentwicklung und zum Aufbau von Partnerschaften mit relevanten Stakeholdern vergleichbar sind.

Resumen

El presente documento analiza los cambios del régimen de bienestar en Serbia y su impacto sobre el desarrollo de la empresa social en las dos últimas décadas. Cubrimos el período de reformas significativas relacionadas con la transición dentro del estado de bienestar, con implicaciones importantes sobre la posición de estas empresas. Utilizando datos recopilados a partir de la investigación de campo cualitativa, nuestro estudio muestra que existen dos amplios grupos de factores que son importantes para el desarrollo de la nueva generación de empresas sociales, aquellos que surgieron en la última década con la idea de fomentar el espíritu empresarial, y se expandieron en nuevos campos diferentes a aquellos que proporcionan asistencia a los grupos marginados. En primer lugar, su decisión de entrar en el sector de la economía social sigue dependiendo del entorno creado por el estado. En segundo lugar, su sostenibilidad se ve afectada por los factores que se encuentran normalmente en cualquier otra empresa de escala comparable como las habilidades empresariales, la capacidad para formar redes y asociarse a partes interesadas relevantes.

摘要

本文分析了塞尔维亚的福利制度变化及其对过去二十年对社会企业发展的影响。我们涵盖了福利国家内与过渡相关的重大改革时期,以及对这些企业的地位的重要影响。使用从定性实地研究收集的数据,我们的研究表明,对于新一代社会企业的发展有两组广泛的因素是重要的,在过去十年出现的因素有促进企业精神的理念,并转变为向边缘化群体提供援助之外的新领域。首先,它们进入社会经济领域的决定仍然取决于国家创造的环境。其次,它们的可持续性受到任何类似规模的其他企业中常见因素的影响,例如,商业技能、形成网络的能力以及与利益相关者的合作。

ملخص

يقوم هذا البحث بتحليل تغييرات نظام الرعاية الإجتماعية في صربيا وتأثيره على تنمية المشاريع الإجتماعية في العقدين الماضيين.نحن نغطي الفترة الإنتقالية الهامة ذات الصلة بالإصلاحات الهامة داخل حالة الرفاهية، مع إتأثيرات هامة على موقف هذه المؤسسات. بإستخدام البيانات التي تم جمعها من البحث الميداني النوعي، تبين دراستنا أن هناك نوعان من مجموعات واسعة من العوامل التي تعتبر مهمة لتطوير جيل جديد من المؤسسات الإجتماعية، تلك التي ظهرت في العقد الماضي مع فكرة لتعزيز روح المبادرة، و وسعت إلى مجالات جديدة غير تلك التي تقدم المساعدة للفئات المهمشة. أولا”، قرارهم لدخول قطاع الإقتصاد الإجتماعي لا يزال يعتمد على البيئة التي تم إنشاؤها عن طريق الدولة. ثانيا”، إستدامتها يتأثر بالعوامل التي توجد عادة في أي مؤسسة أخرى ذات حجم مماثل مثل مهارات العمل، القدرة على تشكيل شبكات وشراكات مع أصحاب المصلحة ذوي الصلة.

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Notes

  1. These were the unique selection criteria for organizations to be accounted as NGSE as defined by the cross-country research whose title is omitted for the anonymity sake.

  2. The data were collected as part of the project whose title is omitted for anonymity sake.

  3. Esping-Andersen (1990: 32) similarly argues that political coalitions and historical experiences contribute to welfare regime differences and evolutions. Our discussion of the pension reforms confirms this.

  4. The first Minister for Social Policy after the democratic changes in 2000, Gordana Matkovic, was in office in the 2001–2004 period when a number of important laws in the social policy sphere were enacted.

  5. http://ec.europa.eu/eurostat/statistics-explained/index.php/Social_protection_statistics_-_net_expenditure_on_benefits.

  6. At least not as radical as in the former Yugoslav republics, Croatia and Macedonia (Bartlett 2013).

  7. Austerity measures programme includes also cuts in the public wages and workforce downsizing in the public sector.

  8. Indexing eligibility thresholds with the cost-of-living instead of wages also tended to reduce the number of beneficiaries, especially at a time when wages were rising faster than inflation (World Bank 2009).

  9. This is so according to the decree on social inclusion measures for monetary social assistance beneficiaries adopted in 2014.

  10. In order to be classified as social entreprise, organisation had to meet the following conditions: obtain income from the sale of products, goods or services; have high degree of autonomy; take risk in business operations; have tendency towards paid work; have benefit of the community or a certain group of people as a clearly defined goal, power of the decision-making is not based on the ownership of the capital.

  11. The same mapping exercise done in 2013 has been performed in 2007.

  12. Additional criteria for the definition of NGSE included that they are founded not before 2006, at the time when their founders were younger than 35 (born not before 1971; they have diversified sources of income: at least 2/3 from non-public sources or at least 1/3 directly paid by final users), rely on different use of information and communication tools (ICT) or operate in the ICT sector.

  13. Explanation of the reasons for which each of the cases was selected in a corpus of NGSEs:

    1. 1.

      Strawberry energy: young Serbian company is motivated by a vision to make renewable energy sources more accessible to all people. They believe that one day the whole world will be powered by clean energy and, therefore, they want to contribute to making the world a better place for everyone to live in. They invented the world’s first public solar charger for portable devices called Strawberry Tree. It was created by the innovative inspiration of its founder, out of a high-school experimental student company.

    2. 2.

      Our House and Kitchen on Wheels: they have innovated the old style of provision of social services in the area of their functioning, they have generated a spin-off with a social innovation created by their young male associate who had special software designed for them, making it possible for people delivering food for the Kitchen on Wheels to make financial transaction regarding food delivery as well.

    3. 3.

      Liceulice (LUL): the core activity is issuing of the street-magazine Liceulice and magazine distribution through the vendor network. Its network of vendors is consisted of people belonging to marginalized groups such as homeless, persons with special needs or vulnerable in any other sense who earn their pay as 50% of every sold issue goes directly to the vendor. Liceulice is growing steadily into a media-platform.

    4. 4.

      EkoBeG: a civil association founded in Belgrade in 2010, with a main objective to hire women who have been unemployed for a long time, through organizing of the production of bags of recyclable materials.

    5. 5.

      Bioidea Homemade Soaps implements its social mission through free of charge training workshops for the production of handmade soaps for people who, due to their age, gender, or lack of experience, belong to marginalized groups. Each year Bioidea grants one social franchise.

  14. An alternative way would be to give additional points at procurements for a social mission. For instance, additional points could be granted to enterprises employing marginalised groups, for democratic decision-making or for reinvestment of the profit in the enterprise.

  15. In 2014 there was an incident with the results of one of these competitions because the civil sector claimed that the results of the competition favoured those NGOs which had links with the politicians. As a result, the whole competition was cancelled and the funds were diverted to other purposes.

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Acknowledgements

We are grateful to Simone Baglioni and Mihail Arandarenko for helpful comments on the paper.

Funding

This research is supported by the “Enabling the Flourishing and Evolution of Social Entrepreneurship for Innovative and Inclusive Societies” (EFESEIIS) project. This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under Grant Agreement No. 613179.

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Correspondence to Jelena Žarković Rakić.

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Rakić, J.Ž., Mirić, A.A., Lebedinski, L. et al. Welfare State and Social Enterprise in Transition: Evidence from Serbia. Voluntas 28, 2423–2448 (2017). https://doi.org/10.1007/s11266-017-9844-2

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