Understanding Social Enterprise: Theory And Practice

Thursday, June 5, 2008

This introductory article attempts to answer questions for:

1. Those in the private sector wondering if social enterprises are a threat or an opportunity for them (and how they might alter their own practice to remain competitive).

2. Those in the voluntary sector trying to work out their medium/long-term future (whether they should engage or resist the notion of social enterprise).

3. Those in the public sector being asked to develop, support or commission work from social enterprises.

4. Those who self-define as part of the social enterprise sector, wondering how to understand themselves and describe the value of their approach to others.

In recent years, a new term – social enterprise – has been promoted throughout the world (Borzaga and Defourny, 2001). The problems surrounding its meaning can be explored by reviewing the contexts in which the term is now achieving recognition. A national economy can been conceptualised as having three sectors (Billis, 1993; Pearce, 2003). Firstly, there is an economy that supports the state, a public / state sector comprising state institutions as well as publicly owned and funded organisations. Secondly, there is a private economy that co-exists and competes with the state: it is comprised of businesses that enable people to earn money and make a living. Thirdly, there is a sector with organisations established by people on a voluntary basis to pursue social, charitable and community goals.

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