The Emergence of Social Enterprise

The Emergence of Social Enterprise

The Emergence of Social Enterprise

The Emergence of Social Enterprise


This study traces the most significant developments in social entrepreneurship emerging in Europe. The work also examines the more traditional non-profit or third sector organisations.


From third sector to social enterprise

Jacques Defourny

In almost all industrialised countries, we are witnessing today a remarkable growth in the 'third sector', i.e. in socio-economic initiatives which belong neither to the traditional private for-profit sector nor to the public sector. These initiatives generally derive their impetus from voluntary organisations, and operate under a wide variety of legal structures. in many ways they represent the new or renewed expression of civil society against a background of economic crisis, the weakening of social bonds and difficulties of the welfare state.

The importance of the third sector, which is often called the 'non-profit sector' or the 'social economy', is now such that it is broadly associated with the major economic roles of public authorities. the third sector is involved in the allocation of resources through production of quasi-public goods and services. It has a redistributive role through the provision of a wide range of (free or virtually free) services to deprived people via the voluntary contributions (in money or through voluntary work) which many associations can mobilise. This sector is also involved in the regulation of economic life when, for example, associations or social co-operatives are the partners of public authorities in the task of helping back into work poorly qualified unemployed people, who are at risk of permanent exclusion from the labour market.

The persistence of structural unemployment in many countries, the need to reduce state budget deficits and to keep them at a low level, the difficulties of traditional social policies and the need for more active integration policies have naturally raised the question of how far the third sector can help to meet these challenges and perhaps take over from public authorities in some areas. of course there is no simple answer to this question, and the debate is still wide open. Some commentators regard associations as made-to-measure partners for new transfers of responsibility and parallel reductions in public costs. the qualities usually attributed to private enterprise (flexibility, rapidity, creativity, a willingness to take on responsibility, etc.) are expected to lead to improvements in the services provided. Others fear that the third sector will become an instrument for privatisation policies, leading to social deregulation and the gradual unravelling of acquired social rights. Yet others stress the fact that advanced industrial

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