INTERNATIONAL SCIENTIFIC CONFERENCE

29 September 2016, PLOVDIV, BULGARIA

ПОТРЕБНОСТИ И ПРЕДИЗВИКАТЕЛСТВА ПРЕД СОЦИАЛНИТЕ

ПРЕДПРИЕМАЧИ

Венелин Терзиев
Русенски университет „Ангел Кънчев“ – Русе, България
Национален военен университет „Васил Левски“ – Велико Търново, България

Екатерина Арабска
Висше училище по агробизнес и развитие на регионите – Пловдив, България

NEEDS AND CHALLENGES OF SOCIAL ENTREPRENEURS

Venelin Terziev
Angel Kanchev University of Ruse – Ruse, Bulgaria
Vasil Levski National Military University – Veliko Tarnovo, Bulgaria

Ekaterina Arabska
University of Agribusiness and Rural Development - Plovdiv, Bulgaria

Abstract
Social entrepreneurship is one of the most innovative ways to achieve a better quality of life, independence and
inclusion in society of persons from vulnerable groups. The paper discusses an analysis made under the SESBA project
on what extent the concept of social entrepreneurship and the role of social enterprises for socio-economic development
of Bulgaria is developed and adopted by exploring opportunities to promote social entrepreneurship in the country
through government policy, NGOs, business initiative, training and counseling. The study presented provides important
implications on the state of the social entrepreneurship and ways of its encouragement putting a special accent on the
needed support and the role of training and advisory organizations in building capacity.

Keywords: social entrepreneurship, social entrepreneur, social enterprise, social economy.

INTRODUCTION Social enterprises and social

Social economy and social entrepreneurship entrepreneurship are central to the agenda of
are subject to special attention from the the European Commission. They are a key
European Commission (EC), particularly in element of the European social model and
recent years. This is due to their potential to contribute to the implementation of socially
find solutions to society's problems related to significant goals of the strategy. Their growing
the creation of sustainable jobs, facilitating importance - especially in the context of the
social and occupational integration, provision economic and financial crisis is primarily the
of social services and improving the quality of result of the need for Europeans from ethical
life, including the fight against poverty and and social dimension of their work,
social exclusion [7]. consumption, savings and investment. In
recent years, the European Commission began
setting a policy framework for the social
Международна научна конференция по социално предприемачество – Аграрен университет, Пловдив
economy and social entrepreneurship, which or marginalized persons. These services
found expression in a number of policy include access to housing, healthcare,
documents outlining the limits and assistance for elderly or disabled persons,
opportunities for their development [4]. child care, access to employment and training
Among the specific objectives set by the as well as dependency management. Social
Europe 2020 2010-2020 are providing 75% undertakings also include undertakings that
employment for groups of 20-60 years, employ a method of production of goods or
reducing school drop-out by 10% and services with a social objective, but whose
providing at least 20 mil. less people who get activities may be outside the sphere of
in a situation of risk of poverty or social provision of social goods or services. Those
exclusion. Social entrepreneurship is activities include social and professional
recognized as a measure to achieve those integration by means of access to employment
objectives as „a tool to achieve sustainable for people disadvantaged in particular by
development” [1]. The analysis of social insufficient qualifications or social or
policies shows that reducing direct support professional problems leading to exclusion
decreased and effectiveness, and sustainability and marginalization.
of the "successful" models remains reciprocal The strategic objectives in support of the
of inputs. This trend can be stopped only by Commission's reply of unemployment and low
promoting innovative social models that levels of participation in the labor market in
overcome unemployment, poverty and social the EU with advanced and innovative policy
exclusion permanently. Social benefits and ideas are:
services, promoting education, training and • giving „new impetus to the
skills in various fields, improving access to combination of flexibility and security”,
public services such as measures of influence involving all stakeholders in strengthening the
should be complemented by targeted efforts elements of this combination and reinforce
and resources to maintain the forms of socially controls on national agreements combination
vulnerable groups would serve as a bridge to of flexibility and security;
primary labor market. It successfully solution • self-employment.
to achieve effective long-term results has Despite the rapid development of the social
recognized the role of social entrepreneurship. economy sector in the European Union and the
Support and promotion of social enterprises growing role of social enterprises to combat
can make the most of their growth potential poverty and social exclusion, social
and capacity to create social value added entrepreneurship is almost imperceptible in
expressed through job creation, creative Bulgaria. Although still modest in scale social
approaches to small business, new enterprises in Bulgaria wear charge of
opportunities for social inclusion, and revenue changing attitudes towards so-called „welfare
for development activities of civic state” and allow for the mobilization of
organizations [3]. The social economy plays additional resources in the social sector
no important role in the European Union, its through development of entrepreneurial
contribution can be illustrated as follows: potential and innovation.
• Over 2 million operating social
enterprises in member states of the European SOCIAL ECONOMY AND SOCIAL
Union; ENTERPRISES
• Employer of 11 million people, or The social economy is a collective concept,
nearly 6% of all employees; which focuses on the direct social impact of
• Accelerated growth creating new social the activities of companies and/or
enterprises - 1 in 4 new companies are social organizations that have been established with a
enterprises). social purpose and deliberately organize their
Тhe following formulation is stressed: activities to achieve such a result. The social
Social enterprises covering a wide range of economy is both part of the real economy and
businesses with different legal forms that of civil society in which individuals and / or
provide social services or goods to vulnerable legal persons, associations of volunteers or

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other organized entities doing business in the The social economy includes all types of
public interest and reinvest profits to achieve businesses, regardless of their legal form and
social goals [2]. implemented mainly to achieve social goals.
Building components of the functional These may include cooperatives, local self-
structure of the social economy are: help groups or businesses, associations, mutual
1 / economic function for own resources; societies, foundations, associations and others.
2 / social function, realized through the Social economy occupies a specific space
expenditure profile; between the state (with its defense
3 / public policy function of generating mechanisms) and the market (with its
public attitudes to social solidarity. economic efficiency and focus on profits based
In its functional structure, the social on capital). The larger is this space, the greater
economy support the process of social is the need for the social economy to meet
inclusion and is different from corporate needs that can not be met by existing
capitalism. institutional practices.
Within the social economy creates a Social economy and serve as a tool for
sustainable business model that does not development of social services; inclusion in
qualify in size and areas of activity, but by its the labor market of disadvantaged groups; to
respect for common values, such as: the rule of improve the functionality of the system of
democracy, stronger involvement of civil social services; development of local
society to achieve social progress, human economies and combat poverty and social
personality; protection and enforcement of the exclusion.
principles of solidarity and responsibility, Through the development of the social
combining the interests of its user members economy sector to expand options for
with the general interest; democratic control increasing economic growth and contribution
by members; voluntary and open membership; to GDP, employment and creating conditions
management autonomy and independence in and an environment for innovative, socially
relation to public authorities; use of surplus significant business decisions.
revenue service members in conjunction with The institutional resources for maintenance
the general interest in achieving the objectives and development of the social economy is a
of sustainable development. bipolar system of public institutions that
The development of social economy is develop and implement legislative base and
based on cooperative, private, collective socio- maintenance (resp. Stimulant) funding on the
economic initiatives based on cooperation and one hand and generating social product
mobilization of resources, trust and mutual aid. cooperatives, enterprises and organizations on
Voluntary participation, democratic and the other.
transparent economic management and To keep autonomy in the field of
collective choice based on "one person - one application, the relationship between the two
vote" decision-making are leading principles. countries the process is not exercised directly
Relying on labor intensive technologies, puts and can be carried out by diverse status and
public benefit ago profit offers lower prices for capacity mediating institutions.
socially important products, the social Principle of institutional interaction is
economy increases life chances and leads to a seamless forward and reverse link (between
more even distribution of national income. the State to enterprises and organizations with
These socioeconomic initiatives were social work).
implemented with the participation and The direct connection provides:
empowerment of vulnerable groups. • law resource;
Social economy enterprises are run like • targeted stimulating state resources.
businesses, producing goods and services for The feedback between the institutions of the
the market economy and focus of its resources social economy provides statistics from the
in the pursuit of social and environmental scope of the competent state institutions.
goals [2]. It should enhance the role of local
authorities to develop the social economy. At

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present there is a deficit in the theory and entrepreneur is constantly looking for change
practice of their role and should be underlined and is an adequate response, maximizing
that they examine and define the needs of local opportunities through innovation.
communities initiate and support local policies The social entrepreneur creates social good,
and informal platforms for the development of not through charity but through action
the various manifestations of the social combining economic and social objectives,
economy in local communities. Expected to provides support for socially vulnerable
participate in the creation of social enterprises groups of society, promotes social positive
through public-private partnerships and change satisfies social needs. He optimal use
municipal forms. The choice of mechanisms of available resources and apply innovative
for implementing public-private partnership approaches to the development of social
will depend on the capabilities, needs and economy.
preferences of local government. Social enterprise developed in specific,
Currently in Bulgaria there is a variety of local context and represents the primary
businesses and organizations falling within the economic unit of the social economy.
social economy sector: specialized companies, Social enterprises position themselves
cooperatives of people with disabilities, between the traditional private and public
sheltered workshops; types of cooperatives sectors. The key distinguishing characteristics
registered under the Cooperatives Act and are social goals, combined with the
corresponding indicators for social enterprises; entrepreneurial potential of the private sector.
social enterprises to corporate and non-profit Social enterprises focus their activities and
organizations (foundations and associations). reinvest profits to achieve social, respectively
Role in the development of the sector have public purpose, in the interests of its members
informal structures - networks and platforms and the wider range of people.
working on the development of social Social enterprises, regardless of the legal
economy. organizational form, covered by a European
There is presence of institutional and legal Commission policy to encourage enterprises,
freedom of action, and a wide possibility of in particular small and medium-sized
the creation and development of social enterprises (SMEs). The main objective of this
enterprises and informal networks under policy is to create a legal and administrative
current legislation. environment at European level and in each
Social business is business entirely focused Member State in which social enterprises of
on the creation, operation and development of any shape and size can meet the challenges
social enterprises. It is a relatively new posed by globalization, rapid technological
concept in Bulgaria, although a number of change and the global economic crisis. Since
organizations carry out such activities in the most social enterprises are SMEs, they fall
country. under the Act for small and medium
There are four main ideas for social businesses in Europe and all EU programs
entrepreneurship: aimed at small businesses.
The first idea focuses on risk. The social In the field of employment social
entrepreneur is a person who acts, decide and enterprises providing services related to:
satisfy their needs in terms of uncertainties and • Promote employment opportunities and
risks. career development for long-term
The second idea focuses on innovative, unemployed, people with disabilities and
creative, exploratory nature of social others in the labor market, as well as providing
entrepreneurship. assistance in targeting workplace, providing
The third idea emphasizes the dynamic role employment and return to work;
of social entrepreneur development of social • Promote opportunities for self-
economy and efficient use of limited social employment, entrepreneurship and
resources. development of cooperatives and starting one's
The fourth concept is associated with the own business.
social management. According to her, the

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 By providing employment to vulnerable market access and the absence of consultants
groups in society the social economy helps to also solidified their place among the major
unite economic and social resources to problems. The additions made focused on the
overcome social exclusion and reduces the risk heavy bureaucratic environment, the lack of
of poverty and social exclusion, sustainability desire for social entrepreneurship, lack of
measures in the field of social policy. public interest and a lack of entrepreneurial
The impact of the social economy in two culture (Fig. 1).
directions - economic and social. The social
benefits are measured by integration and
employment of disadvantaged people, with the
contribution to the process of social inclusion
and the creation of social capital. The most
serious economic indicator of the benefits of
the social economy are saved public funds for
social welfare, on the one hand, and the
additional funds offset the social costs of long-
term unemployment. Simultaneously, the
newly created value in the social economy also
represents a significant economic benefit [5].
Additional economic impact of these Fig. 1. Barriers to social entrepreneurship
development
organizations is their flexibility and ability to
mobilize resources from different
Among the needs and opportunities to
backgrounds - market and non-market
support social enterprises the survey
resources, voluntary work and public support.
emphasizes on training, funding, legal
framework, consulting and entrepreneurial
NEEDS OF SOCIAL ENTERPRISES
orientation (Fig. 2). Good results are also
Needs of social enterprises in Bulgaria are acquired in terms of promoting access to
examined in a study implemented under the public procurement and inspiration. Among
SESBA Project (Social enterprise skills for the additions made possible options are those
business advisors) as part of the report of the associated with public interest and support,
status of social entrepreneurship in Europe and public awareness and change of thinking.
how it could be encouraged [6].
Respondents are representatives of 104
different types of organisations from the South
Central region, with the largest shares are
those defined in the category of businesses
(59%). the representatives of regional
authorities were well represented, providing
support to companies or consulting services
(13%), as well as representatives of
educational organizations (8%).
The assessments are made in the scale from
1 to 5 (1 – the lowest, 5 0 the highest). The
average of assessments is presented on the Fig. 2. Need of support by social enterprises
figures too.
Consideration of the most significant Regarding the type of required consultancy
barriers to the development of social services respondents strongly emphasize those
entrepreneurship focuses on funding in management, financing and participation in
opportunities and the lack of government financing programs, fundraising, strategic
policies pursued by the lack of knowledge and management, legal services and access to
lack of legal structure. Local business markets. Consulting services in the areas of
environment, credit access, public perceptions, business planning, technology, marketing

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analysis and participatory leadership also get a Assessing the need for training in different
good score (Fig. 3). areas the respondents’ answers emphasize
management, strategic management, business
planning, participation in funding programs,
finances, fundraising, legal services and access
to markets (Fig. 6). The need for training in
the field of marketing analysis, technology and
participatory leadership is valued lower by
respondents. The additions are oriented
towards the need of training on the very
essence of social entrepreneurship, social
services, soft skills, ICT and communication
skills, psychological trainings.
Fig. 3. Need of advisory services

Among the additions are highlighted the

role of counselors in training of staff in social
enterprises, establishment of contacts and
lasting relationships with social partners,
opportunities to develop social activities and
communications. A very interesting opinion
expressed by the representative of the
municipal structure that consulting services
should be periodic rather than constant, which
draws attention to the need to build capacity Fig. 5. Training and education needed by social
and achieve self-sufficiency in various entrepreneurs
aspects - economic and governance.
Among respondents there is a consensus
that specialized training is needed in the field
of social entrepreneurship (Fig. 4). Vocational
training is proving the most appropriate
according to the average estimates given by
respondents, followed by formal and informal
learning. In terms of higher and secondary
education fluctuations are larger (Fig. 5). The
additions made point to the dual education,
individual training programs, primary school
education.
Fig. 6. Fields of training

On the type of institutions that should

provide specialized training in the field of
social entrepreneurship the focus in assessing
by the respondents falls on organizations
offering specialized consulting services and
vocational training centers. Higher schools,
vocational schools and colleges and secondary
schools receive less support, which is in line
with the answers to the previous question
about the type of education / training (Fig. 7).
Fig. 4. Need of specialized training Specific addition to which there are serious
grounds are NGOs, primary schools (as

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already noted in some of the previous issues) outside / with main activities outside the
and training within the organizations formal education system (in particular
themselves. consultancies) and training in the workplace.
The importance of informal learning
stressed in the answers to the above questions
is confirmed and given the highest average
score for the workshop and seminars, followed
by long-term courses, short courses and
regular subjects / disciplines part of the
curricula of formal education. In additions it is
again underlined the dual education and
training in the workplace (Fig. 8).
Estimates of the form of training are again
oriented towards training in the workplace, as
well as blended learning, e-learning, which
Fig. 7. Institutions providing education and
training replace traditional full-time and part-time,
providing high availability and flexibility
(Fig. 9). The additional remarks referred to the
compulsory subjects in social entrepreneurship
in formal education, but also to self-learning,
stressing once again the importance of
activities to increase motivation for developing
social entrepreneurship and personal
motivation for training and development.
Answers to questions about the skills
required of social entrepreneurs, showed very
good and good grades all listed in the
following descending gradation: management;
Fig. 8. Type of courses teamwork; initiative; communication skills;
openness to change; innovativeness;
organizational structure and culture;
independent decision-making; identify new
business opportunities; proactivity; volunteer
management; assessment and risk
management; understanding of the motivations
and views of the stakeholders; connection with
local communities; cooperation with local
authorities and institutions; networking;
adaptability; creative thinking in vague
problems; defining the problems, opportunities
and solutions to create value; participatory
Fig. 9. Forms of training leadership; resistance and learning through
mistakes; action after analysis; democratic
The above estimates made by respondents governance; obtaining legitimacy; pursuit of
give reason to make an important point about personal fulfillment as a member of a
the importance of vocational training, formal profession that creates value (Table 1).
and informal learning, incl. by organizations

Table 1. Entrepreneurial skills needed by social entrepreneurs

Which entrepreneurial
Strongly Neither agree Strongly
skills do social Disagree Agree Average
disagree nor disagree agree
entrepreneurs need?
Governance 0 0 2 30 72 4,67

Международна научна конференция по социално предприемачество – Аграрен университет, Пловдив

Which entrepreneurial
Strongly Neither agree Strongly
skills do social Disagree Agree Average
disagree nor disagree agree
entrepreneurs need?
Collaborate in team
0 0 6 23 75 4,66
settings
Initiative 0 0 8 26 70 4,60
Communication skills 0 0 2 40 62 4,58
Openness to change 0 0 9 30 65 4,54
Innovation 0 0 11 28 65 4,52
Organizational structure
0 0 9 34 61 4,50
and culture
Autonomous decision
0 0 11 31 62 4,49
making
Identify new business
0 0 14 30 60 4,44
opportunities
Proactiveness 0 0 13 32 59 4,44
Volunteer management 0 0 13 34 57 4,42
Assess and manage risk 0 0 17 28 59 4,40
Understand the
motivations and
0 0 17 30 57 4,38
perspectives of
stakeholders
Relation with local
0 0 11 42 51 4,38
communities
Cooperations with local
0 0 11 44 49 4,37
authorities- institutions
Networking 0 0 14 39 51 4,36
Adaptability 0 0 20 28 56 4,35
Apply creative thinking to
0 0 20 30 54 4,33
ambiguous problems
Define problems,
opportunities, and
0 0 20 36 48 4,27
solutions in terms of value
creation
Participatory leadership 0 0 26 27 51 4,24
Persist through and learn
0 0 23 36 45 4,21
from failure
Act upon analysis 0 1 23 34 46 4,20
Democratic governance 0 0 23 38 43 4,19
Legitimacy gain 0 0 29 35 40 4,11
Pursue personal fulfillment
as a member of a
0 0 31 35 38 4,07
profession that creates
value

CONCLUSION and humanitarian activities say more strongly

In the modern European context, the social the need for legal and institutional
economy is an established and integral part of differentiation in the real economy to be able
social protection and social safety nets, which to fulfill their potential and interact on an
produces and successfully combines economic equal basis for achieving synergistic social
profitability and social solidarity. The social effect among themselves and in cooperation
economy is a carrier of the democratic values with state and corporate economy.
that put people first, creating jobs and The development and promotion of
promoting active citizenship. Development sustainable social economy sector will be
potential of the social economy is dependent achieved by implementing the guiding
on the adequacy of the established political, principles of good governance and the specific
legislative and operational conditions. principles relating to the implementation of
Actually existing entities with social economic best practices and models of social enterprises.

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 Specific principles on which the build best [3] Platforma za razvitie na sotsialnata ikonomika
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enterprises are related to ensuring unity http://pgf.osi.bg/data/file/Documents/Platform
between economic efficiency and the specific %20Social%20Economy%20BG%20MERI
%20EUROCITIES.pdf/.
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[4] Report on Social Business Initiative – Creating
terms of public transparency and implement a favourable climate for social enterprises, key
solidarity principles of internal management stakeholders in the social economy and
and decision-making. innovation (2012/2004(INI))
[5] Research Report about the status and
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Международна научна конференция по социално предприемачество – Аграрен университет, Пловдив