Academic journal article New Zealand Sociology

Growing Pains: The Fourth Sector as a Progressive Alternative in New Zealand

Academic journal article New Zealand Sociology

Growing Pains: The Fourth Sector as a Progressive Alternative in New Zealand

Article excerpt


Social enterprise in New Zealand is immature by comparison with global counterparts. Although there is growing awareness of its potential locally, the structural environment continues to pose challenges. While such enterprises can be viewed as adopting neoliberal market and state logics, they also offer opportunities for social and environmental advocacy towards systemic change. Retaining this capacity will depend on how social enterprise negotiates its emergent identity. By reflecting on some of the 'growing pains' experienced thus far, we can begin to explore the potential for the development of a sustainable and politically autonomous social enterprise sector in New Zealand as a promising form of progressive alternative.

The shifting organisational landscape

Recent decades have witnessed a blurring of the boundaries between government, private business and social sectors, and the emergence of new organisational forms that aim to blend social and environmental aims with business practices (Forth Sector Network, n.d.). Expressions of this trend can be observed in programmes of corporate social responsibility, ethical trading, microfinance, social venture capital, privatisation of social service provision and social assets, public private partnerships, community development, and a preoccupation with sustainability in best practice business models. As this collection of activities has matured it has formalised into what has been termed the 'fourth sector'1 of the economy, after the state (the 'first sector'), the market economy (the 'second sector') and the residual category of the 'third sector' which usually denotes not-for-profit organisations. While capital has arguably become more sensitised to pursuing a 'triple bottom line' that redefines profit by incorporating social and environmental objectives with economic ones (Cordes, 2014), welfare states have at the same time busied themselves with retracting many of their previous functions, leaving the third sector to pick up these up via what Harvey (2005, p.177) describes as "privatization by NGO". In sum, public, private and social organisations can all be seen to have adopted more pragmatic, efficient and business-like modes of operation under the mantle of neoliberalism, new managerialism and third way ideologies, and in so doing so have become increasingly hybridised in their functions and organisational forms (Forth Sector Network, n.d.). While many aspects of the state and the third sector have come to look and function more like businesses, a new and distinctive sector that concerns itself with fulfilling roles that were previously considered the domains of social policy (via the first sector) and charity (via the third) has evolved. Although social enterprise looks and operates like business, it is clearly discernible from the traditional second (or private enterprise) sector in which the motive for material profits and accumulation of capital are central. In its mature form, social enterprise is also independent from the reliance on the combination of philanthropy, volunteerism and state outsourcing of social services that characterises contemporary third sector activities (Tennant, 2007).

Defining Social Enterprise

A social enterprise is a special thing. It is state-changing, maybe even alchemical ...Can you imagine if the expertise and ingenuity focused on making money in the world of business was applied to social and environmental concerns? Things would certainly change (Arnott, 2012, n.p).

Social enterprises apply business concepts to solve social problems. While there are already a myriad of organisations that have adopted the concept across the globe, the language used to describe and explain this phenomena is relatively new (Defourny & Nyssens, 2010). There is no consensus among either academics or policymakers on how social enterprise is best conceptualised and Teasdale (2012) observes that the concept is politically contested by different actors around competing discourses, with the only things common to all attempts at definition being the primacy of generating social benefits and the centrality of trading. …

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