The Development of Social Enterprises within the Public Sector in Israel

• In Event: Social Enterprises in Changing Welfare States

Abstract

Research goals and methodology

Social enterprise (SE) are social-economic organizations that have a twofold mission.
to combine an entrepreneurial dynamics to provide services or goods with a primacy of social aims. Combining an economic paradigm with a social one has great implications on the way SE operate.

The mapping of the social enterprise models has identified that such entities incorporated within the public sector (national and municipal) in addition to the more commonly known entities incorporated as businesses, NPOs and cooperatives (Gidron, et al., 2014; Gordon, 2015). The goal of the study is to inquire into the characteristics of public sector SEs in Israel and the meaning of these characteristics for the participants that are involved in such entities. This study examines 5 legally incorporated SEs within the public sector utilizing questionnaires from the ICSEM (international comparative social enterprise models) Project, and open interviews.

Preliminary results: two types of public sector SE

Preliminary results identified two types of social enterprises within the public sector: The first type are enterprises that were initially established as social services, and were later transformed through innovative strategies (Luke, et al., 2010) into social enterprises. The second type includes enterprises that were created to address a specific social problem, and selected the social-enterprise concept as the most suitable strategy to reach their goals (Lawson & Samson, 2001). This type is often set-up by an individual or group of entrepreneurs' initiative from inside or outside the public sector, in a similar way to SEs that are formed by NGOs.

Our findings so far indicate that the SEs deal in differently with the twofold paradigm of SE, the social paradigm v. the business paradigm. The first type was not bothered much by it and just developed its own blend of both paradigms on the fly. The second type of SEs, discussed and struggled with the issue of how to best combine the paradigms. It seems that these different ways of dealing with the twofold paradigm also affect the governance of the SEs, i.e., different ways of sharing with constituencies and accountability to stakeholders.

Wider implications

In a wider context, the development of SEs within the public sector (often in collaboration with NPOs) can be seen as a result of the pressures social services are facing: (A) The competition with the private and other NGO based services, (B) the need to maintain relevance as professional bodies and (C) economic and managerial efficiency (Hefetz & Warner, 2011; Forrest & Murie, 2014). These pressures created the need for innovation that maybe best implemented by the creation of SEs.
Research into public sector SEs, has implications on the study of new trends in the public sector. It may be seen on the one hand as a form of privatization and on the other as a way of introducing entrepreneurship and innovative approaches in the public services.

References
Defourny, J. & Nyssens, M. (2010) Conceptions of Social Enterprise and Social Entrepreneurship in Europe and the United States: Convergences and Divergences. Journal of social entrepreneurship, 1(1), 32-53.
Forrest, R., & Murie, A. (2014). Selling the Welfare State: the privatisation of public housing. Routledge.‏
Gidron, B., Abbou, I., Buber-Ben David, N., Navon, A. and Greenberg, Y. (2015) “Social Enterprise in Israel: The Swinging Pendulum between Collectivism and Individualism”, ICSEM Working Papers, No. 20 (forthcoming).
Gordon, M. (2015) “A Typology of Social Enterprise ‘Traditions’”, ICSEM Working Papers, No.18(forthcoming).
Hefetz, A., & Warner, M. E. (2011). Contracting or public delivery? The importance of service, market and management characteristics. Journal of Public Administration Research and Theory, mur006.‏
Luke, B., Verreynne, M. L., & Kearins, K. (2010). Innovative and entrepreneurial activity in the public sector: The changing face of public sector institutions. Innovation, 12(2), 138-153.‏
Lawson, B., & Samson, D. (2001). Developing innovation capability in organisations: a dynamic capabilities approach. International journal of innovation management, 5(03), 377-400.‏
Nyssens, M., & Defourny, J. (2012). The EMES approach of social enterprise in a comparative perspective (No. 12/03). EMES, Working Papers.‏

Author

• Yisca Monnickendam-Givon, The Hebrew University and The College of Management Academic Studies