The Likely Determinants of Social Entrepreneurship and Policy Implications

The aim of this chapter is to provide a modest insight into the determinants of social entrepreneurship. To that end, the chapter summarizes the results of the little research that has been done to date on the determinants of social entrepreneurship. Due

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14

Habib M. Kachlami

Abstract

The aim of this chapter is to provide a modest insight into the determinants of social entrepreneurship. To that end, the chapter summarizes the results of the little research that has been done to date on the determinants of social entrepreneurship. Due to the limited number of determinants that have been investigated, they are simply categorized as individual and environmental determinants. The main criterion for selecting the determinants of this chapter has been the existence of at least one empirically based argument as to the effect of each determinant. This study demonstrates the inapplicability of conventional entrepreneurship policies if the aim is to stimulate social entrepreneurship, for its principal finding is that for the same determinants, the effect on social entrepreneurship might be different or even the opposite to the effect they might have on commercial entrepreneurship.

14.1

Introduction

During the last half century, the role of entrepreneurship in the economy has significantly changed. The move from managerial capitalism towards entrepreneurial capitalism has been one of the most important changes in the global economic structure in recent decades (Acs 1984), and entrepreneurship has become the engine of economic and social development throughout the world (Audretsch and Thurik 2004). According to different measures of entrepreneurship, there is

H. M. Kachlami (&) Mid Sweden University, Östersund, Sweden e-mail: [email protected]

A. Lundström et al. (eds.), Social Entrepreneurship, International Studies in Entrepreneurship, DOI: 10.1007/978-3-319-01396-1_14,  Springer International Publishing Switzerland 2014

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some empirical evidence for the link between the level of entrepreneurship and economic development within societies. According to GEM, differences in the level of entrepreneurial activity can account for 30 % of difference in GDP growth (Stevenson and Lundström 2001). According to Audretsch et al. (2002), those OECD countries that have experienced higher increases in entrepreneurship have also showed higher rates of economic growth and lower level of unemployment. This link between entrepreneurship and economic growth has had implications for governments throughout the world, and they have tried to have a constant supply of entrepreneurs to create jobs and maintain economic growth. In the UK alone each year around £8 billion is spent on entrepreneurship and SME policy— approximately the same as the amount spent on the police and more than that spent on universities (Storey 2008). Similar relative results have been estimated for Sweden, where the spend in 2009 was estimated to 46 billion Swedish kronor or roughly 5 billion Euros (Lundström et al. 2013). These figures are examples of the large amount of money being spent on entrepreneurship and SME policy by governments around the world. This emphasis on the role of entrepreneurship in economic growth had framed entrepreneurship mainly within economic theory, presum