Social Entrepreneurship in the Western Balkans: State of Play

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Social enterprises (SEs) are businesses that combine the sale of products and/or services with achieving wider social, environmental, and community objectives. SE models are typically hybrid business forms – using a modification of commercial operations, such as sharing financial profits with co-owners, staff or other social ventures, paying above-market prices to suppliers or wages to staff, cross-subsidising core businesses to achieve social aims, or seeking long-term partial subsidy (Smith and Darko, 2014; in British Council 2015). In Europe, SEs typically operate in the fields of:

  • Work integration – training and integration of people with disabilities and unemployed people.
  • Personal social services – health, well-being and medical care, professional training, education, health services, childcare services, services for elderly people, or aid for disadvantaged people.
  • Local development of disadvantaged areas – remote rural areas, neighborhood development/rehabilitation schemes in urban areas, development aid and development cooperation with third countries.
  • Other – including recycling, environmental protection, sports, arts, culture or historical preservation, science, research and innovation, consumer protection and amateur sports.
    (European Commission, DG Growth)

As such, SEs have a potentially significant role to play in sustainable and inclusive socio-economic growth at local, national, and international scales, and SEs have been the subject of growing interest in the field of social finance (also referred to as social investment or impact investing) around the world (e.g. Rockefeller Foundation; Yunus Social Business).

The European Commission’s (EC) ‘Map of Social Enterprises and their Eco-systems in Europe’ estimates that SEs represent a very small portion of the EU business landscape, below 1% of the total in most EU countries (ICF BWB 2015). However, SEs are growing at a very fast rate and becoming increasingly sustainable, especially in the UK and some central and southern European countries. Working to support these SEs through financial and non-financial support, investment readiness, and capacity building is key to advancing the SE agenda towards its potential positive social, economic, and environmental impacts.

balkansThis also applies to the countries of the Western Balkans – Albania, Bosnia and Herzegovina, Croatia, Kosovo, the former Yugoslav Republic of Macedonia (FYROM), Montenegro, and Serbia, the focus of this study. In these countries where SEs could have positive impacts, yet where the concept of SE and social investment is not widely known, often lacking a legal framework and support structures for SEs to develop and flourish.

This paper seeks to outline the SE landscape in the Western Balkans i.e. the state of play, addressing a lack of consolidated and up-to-date empirical information on the SE sector in the region. It is not within the scope of this paper to focus on the theoretical or socio-political dimensions of SE in the Western Balkans. Instead, the aim is to contribute state-of-the-art empirical data and analysis that can be used by all stakeholders – including entrepreneurs, financial intermediaries, support organisations, policymakers, and researchers – to help advance our understanding of the SE sector in the Western Balkans, with the long-term goal of achieving positive societal impacts for people and their environments through social entrepreneurship.

Full article here (pdf).