Keywords

1 Introduction

Work Integration Social Enterprises (WISEs) promote the integration of socioeconomically excluded individuals through a productive activity. They are autonomous economic entities that focus on the professional integration of people originating to vulnerable and/or special social groups, who experience serious difficulties in the labour market [1, 2]. Monetary Resources of European WISEs are divided into three main categories: 1. Market Resources, 2. Non-market resources (derived from various public policies in the form of subsidies or indirect support) and 3. Donations [3]. Market Resources come from the sale of goods and/or the provision of services in the open market or under contract to public authorities i.e. public procurements. Our research explores the relationship between the analogy of those categories and the performance of the WISE against poverty.

2 WISEs and Public Procurements

The use of public procurements to promote social purposes is a reality in a number of countries worldwide. There are several cases where public procurements were used to enable access to public contracts of economic operators in the social economy [4]. The European Commission plays a significant role by regulating contracts for the provision of products and services to the local public authorities. Although the association between each European welfare state and the organizations of the third sector varies a lot, a traditional relationship does exist [5]. Public authorities are able to privilege social enterprises in order to help them promote their social mission. Although specific rules must be respected there is the possibility of taking into account the social dimensions of social enterprises when conducting public procurements [6].

Encouraging the participation of social enterprises in the public procurement process is an important part of the effort to modernize the EU social policy [7]. Public procurement practice can promote the accomplishment of wider social goals through the engagement of Social Enterprises [8]. Public procurements are a vital resource for social enterprises [9]. Contracts with the public sector often are an attractive suggestion for Social Enterprises. Through those contracts, they can obtain reliable business collaborations and important references [10]. Moreover, public sector contracts offer them a form of business stability, liable product demand, and payment guarantee [11]. The fact that Social Enterprises are by default motivated by a social purpose, helps them in being perceived as a trustworthy provider of public services [12]. Public procurements are used as an instrument to stimulate the increase of Social Enterprises and develop significantly the activities of already established Social Enterprises [7].

Reserved contracts for work integration in countries such as France, Italy, Spain, and Belgium are common. On the other hand, while there are becoming more common in Eastern European countries and in Greece, the estimate of these contracts tends to be below the levels set by the EU Directive [13]. Although the European public procurement law promotes special provisions for Social Enterprises, their participation in the public procurement practice is low [7], which is closely related to institutional arrangements and policy interventions [14, 15]. The development of support mechanisms for the encouragement of the effective participation of Social Enterprises in public sector supply chains is widely recognized as a need [16, 17]. In Greece measures are introduced by the Greek government to provide social enterprises with better access to public service contracts through a tailor-made law, namely the Social Economy and Social Entrepreneurship Law of 2011 and its amendment in 2016 [18, 19] Greek government specified that municipalities and public law entities can directly develop public contracts with Social Enterprises [20].

The efficiency of governments in developing and implementing suitable support measures is debatable [21, 22]. Public schemes often frame their aims in a very narrow way that tends to turn social enterprises into instruments for achieving given goals based on the political agenda [23]. Through unsuccessfully outlined policies or unsuccessful implementation, governments may actually hinder behaviors that are beneficial to social welfare (24). Social Enterprises have also been criticized for posing severe risks to the public sector both financially and culturally, but no systematic evidence has been collected to support these assertions [25]. The contribution of Social Enterprises in the promotion of important socioeconomic community goals has been supported by several studies [26, 27]. It seems to be a systemic impact on economic sustainability, regional development, and innovations, but there is a lack of empirical studies, exploring the conditions in which social enterprises progress [28]. The concept of the hybridity of Social Enterprises needs further exploration through quantitative studies [29]. Urbano et al., call for research that detects how entrepreneurial activity is positively or negatively affected by the relevant institutional policies [30]. In this study, we raise the following question: how does the analogy of Public Procurements on the total monetary resources of the WISE, affects the social performance of the WISE and specifically the performance of the WISE against poverty.

We argue that a high Analogy of Public Procurements on the total monetary resources of the WISE, will have a negative effect on the WISE’s performance against Poverty through several different paths. Monetary resources that come from sales under contract to public authorities i.e. public procurements: 1. Have little to do with the recognition of the quality of the products and/or the services provided by the WISE, 2. Are far less flexible and not at all transferable, 3. Originate from a narrow range of customers and are therefore more vulnerable to subjective criteria, 4. Are easily affected by changes in State Policies, 5. Have a strict time plan and a specific deadline and 6. Commit a lot of the WISE’s resources to bureaucratic procedures. We hypothesize that:

Hypothesis 1. The Analogy of Public Procurements on the total monetary resources of the WISE, is negatively associated with the WISE’s Social Performance against Monetary Poverty.

Hypothesis 2. The Analogy of Public Procurements on the total monetary resources of the WISE, is negatively associated with the WISE’s Social Performance against Low Work Intensity.

3 Materials and Methods

3.1 Method

Using a semi-structured questionnaire data were collected for the financial years 2018, 2019 and 2020 from WISEs in Greece. Ordinal Regression Analysis was used to develop two models. One in order to test the hypothesis concerning Monetary Poverty and one in order to test the hypothesis concerning Low Work Intensity.

In the European Union, Monetary Poverty is measured by the indicator ‘people at risk of poverty after social transfers’. The indicator measures the share of people with an equivalised disposable income below the at-risk-of-poverty threshold. This is set at 60% of the national median equivalised disposable income after monetary social transfers [31]. In Greece the poverty line is €4917.00 per year for a single-person household [32]. Very low Work Intensity describes the number of people aged 0 to 59 living in households where the adults worked no more than 20% of their potential during the previous year. A full-time employee works 8 h a day for 5 days a week, so something between 2080 and 2120 h per year. Therefore, 20% of a full-time job lies somewhere between 416 and 424 working hours per year. We set the final limit to 422 working hours per year.

Population and Sample. The population of this study is the total of WISEs in Greece i.e. the sum of Limited Liability Social Cooperatives (LLSCs) and Social Cooperative Integration Enterprises (SCIEs). According to General Register on 19.01.2021 the population of WISEs in Greece was 68, i.e. 30 LLSCs and 38 SCIEs. The response rate of the total of the WISEs was 62.50%. Therefore, our study included data from 51.47% of the population of WISEs in Greece.

Variables. We measure a WISE’s social performance against poverty in two ways: 1. As the percentage of the total number of employees working in the WISE whose total annual income derived from the WISE is high enough to keep them above the monetary poverty line and 2. The percentage of the total number of employees working in the WISE whose total annual level of employment derived from their connection with the WISE is high enough to keep them above the concept of low work intensity.

Dependent Variable 1: Level of Social Performance Against Monetary Poverty

The variable ‘Social Performance against Monetary Poverty’ is the percentage of the total number of people who worked in the WISE (for a specific year) whose total annual income derived solely from the WISE, in that specific year, is sufficient to keep them above the poverty line as defined for a single-person household, i.e. over €4917.00 [32].

From the variable ‘Social Performance against Monetary Poverty’, the ordinal variable ‘Level of Social Performance against Monetary Poverty’ was computed and entered in the analysis of Ordinal Regression. The variable ‘Level of Social Performance against Monetary Poverty’ is assigned value ‘1’ when the variable ‘Social Performance against Monetary Poverty’ ranges between 0.00 and 0.33 (low performance), value ‘2’ when performance ranges between 0.34 and 0.66 (moderate performance), and value ‘3’ when performance ranges from 0.67 to 1.00 (high performance).

Dependent Variable 2: Level of Social Performance Against Low Work Intensity

The variable ‘Social Performance against Low Work Intensity’ is the percentage of people who worked in the WISE (for a specific year) whose annual work intensity, derived solely from their being employed by the WISE, is sufficient to keep them above the concept of low work intensity for a single person household, i.e. over 20% of the concept of full-time employment, that is over 422 working hours per year.

From the variable ‘Social Performance against Low Work Intensity’, the ordinal variable ‘Level of Social Performance against Low Work Intensity’ was computed and entered in the analysis of Ordinal Regression. The variable ‘Level of Social Performance against Low Work Intensity’ is assigned value ‘1’ when ‘Social Performance against Low Work Intensity’ ranges between 0.00 and 0.33 (low performance), value ‘2’ when performance ranges between 0.34 and 0.66 (moderate performance), and value ‘3’ when performance ranges from 0.67 to 1.00 (high performance).

Independent Variable: Analogy of Public Procurements.

This is the ratio of the annual monetary resources of the WISE derived from the sales under contract to public authorities, to the total annual monetary resources of the WISE. An observation that has an Analogy of Public Procurements of 0.00 comes from a WISE that had no sales under contract to public authorities in that specific year. An observation that has an Analogy of Public Procurements of 1.00 comes from a WISE that had all its sales derived from contracts to public authorities in that specific year.

4 Results

4.1 Monetary Poverty

Ordinal regression was applied on the dependent variable Level of Social Performance against Monetary Poverty (Table 1). The model included the Analogy of Public Procurements as the predictor variable. Fitting information shows a high level of significance (p = 0.036). The assumption of proportional odds was tested by the test of Parallel Lines. The P value is greater than 0.05 (p = 0.410), so the main assumption of ordinal regression is checked. Since there is only one predictor variable multicollinearity is not a problem in the regression model. In order to test the independence of observations we used the Durbin-Watson test that produces a test statistic, ranging from 0 to 4, where 2 indicates no autocorrelation. A general guideline is that test statistic values between 1.5 and 2.5 are relatively normal. Values outside this range might be a cause for concern. Values below 1 or above 3 should definitely raise concerns. Our value was 1.128 relatively close to the normal range. Analogy of Public Procurements showed a significant negative effect on Level of Social Performance against Monetary Poverty. Therefore, H1 is supported.

Table 1 Ordinal regression (PLUM) on the dependent variable level of social performance against monetary poverty (N = 75)
Full size table

The ordered log-odds estimate for a 1.00% increase in the Analogy of Public Procurements is −1.481. The odds ratio is 0.227. A 1.00% increase in the Analogy of Public Procurements, will decrease the odds of the WISE resulting in a higher level of Social Performance against Monetary Poverty by 0.227 while the other variables in the model are held constant.

4.2 Low Work Intensity

Ordinal regression was applied on the dependent variable Level of Social Performance against Low Work Intensity (Table 2). The model included the Analogy of Public Procurements as the predictor variable. Fitting information shows a high level of significance (p = 0.016). The assumption of proportional odds was tested by the test of Parallel Lines. The P value is greater than 0.05 (p = 0.469), so the main assumption of ordinal regression is checked. Since there is only one predictor variable multicollinearity is not a problem in the regression model. Durbin-Watson test statistic was 1.332 relatively close to the normal range. Analogy of Public Procurements showed a significant negative effect on Level of Social Performance against Low Work Intensity. Therefore, H2 is supported.

Table 2 Ordinal regression (PLUM) on the dependent variable level of social performance against low work intensity (N = 72)
Full size table

The ordered log-odds estimate for a 1.00% increase in the Analogy of Public Procurements is –1.440. The odds ratio is 0.237. A 1.00% increase in the Analogy of Public Procurements, will decrease the odds of a WISE resulting in a higher level of Social Performance against Low Work Intensity by 0.237 while the other variables in the model are held constant.

5 Discussion and Conclusion

A high analogy of public procurements on the total of the monetary resources of Greek WISEs, seems to relate to a low performance of the WISE against poverty. WISEs that over-rely on public procurements develop job positions that are not well paid and are far away from the concept of a full-time job. The Greek authorities should evaluate the connection between the amount of public procurements that a wise acquires to the amount of income that the WISE obtains from the open market. Greek Work Integration Social Enterprises should consider reinventing their entrepreneurial nature and act more as innovative challengers and less as adjustable followers. The amount of public procurements that a WISE acquires probably should be related to the open market share of the WISE, at least after the initial state of the WISE’s development.