∘ Anna Chechel ∘ Svetlana Verytelnyk ∘ Hanna Reshetova ∘
SOCIAL ENTREPRENEURSHIP AS AN ECONOMIC TOOL FOR PROMOTING SOCIAL VALUES IN PUBLIC ADMINISTRATION

Abstract. The purpose of this work is to consider social entrepreneurship as a tool to promote social values in public administration, as well as the basis for the functioning of social entrepreneurship, its role in ensuring social stability and sustainable development of society.

The main objective is to draw attention to the importance of social entrepreneurship in public administration and show its potential as a tool to promote social values and achieve sustainable development of society.

Keywords: social entrepreneurship, public administration, social values, social problems. 

In today's world, social entrepreneurship is one of the fastest growing sectors of the economy. As the experience of many countries shows, social entrepreneurship can be an effective tool for solving social problems and promoting social values.

In the context of public administration, social entrepreneurship can be seen as a tool for promoting social values and solving social problems, since the state can use social entrepreneurs to achieve its goals, such as improving the quality of life of citizens, fighting poverty, increasing equality, etc.

However, despite numerous studies on social entrepreneurship, questions remain about the effectiveness of using this tool in public administration, as well as about what conditions are necessary for its successful use.

Social entrepreneurship is a business model aimed at achieving social goals and solving social problems within the framework of market mechanisms. Social entrepreneurs create and develop organizations that work in the social sphere, such as philanthropy, assisting low-income people, protecting the environment, etc.

Social entrepreneurship has significant potential to improve the quality of life of citizens and achieve social goals. It can play an important role in public administration, solving problems that the government cannot solve on its own, and increasing the effectiveness of achieving public policy goals.

According to a report by the International Telecommunications Union (ITU), about 5.3 billion of the world's 8 billion people, or about 66 percent of the world's population, will use the Internet in 2022. And three-quarters of the population age 10 and older own a cell phone. On average, in almost all regions, the percentage of individuals with a cell phone is higher than the percentage of Internet users, but the gap is narrowing, allowing social entrepreneurs to reach more people through various digital channels [1].

In addition, according to the European Commission, social entrepreneurs create more than 11 million jobs in Europe and contribute more than 500 billion euros to the economy [2].

Social entrepreneurship is now becoming increasingly popular around the world because it allows us to overcome social problems in a more efficient and innovative way. It is a new type of business that combines commercial goals with social goals. It aims to solve social problems and improve people's lives rather than to maximize profits. Most social entrepreneurs try to solve problems such as poverty, unemployment, health care, education and the environment.

The peculiarity of social entrepreneurship is that it uses business principles to solve social problems, and this makes it a unique and effective tool for government management.

The state can support social entrepreneurs through various forms of financing, such as grants, loans, and tax breaks. This helps create a favorable environment for social entrepreneurship to develop and improve people's lives.

In the end, social entrepreneurship is an important tool for the government to help solve social problems and improve people's lives. It combines commercial and social goals, which makes it a unique and effective way of managing the state as a whole.

Thus, social entrepreneurship is an important tool of public administration, which can help to solve social problems and achieve social goals.

Social entrepreneurship is a form of economic activity that aims to solve social problems rather than maximizing profits. The main goal of social entrepreneurs is to improve the quality of life of people and solve social problems in society.

Social entrepreneurs use innovative and effective methods to achieve social goals. This can include creating new jobs for people with disabilities, supporting education and culture, helping those in need, etc. Social entrepreneurs are also engaged in social innovation, that is, the creation of new approaches to solving social problems.

Social entrepreneurship is a powerful tool in the fight against poverty and social inequality. It helps to create new jobs and increase people's income, which, in turn, reduces poverty in society. In addition, social entrepreneurs contribute to the development of social infrastructure and improve people's quality of life.

Social entrepreneurship is an increasingly popular and widespread phenomenon in world practice. It has received widespread support from governments and international organizations, which recognize its importance in combating social problems (Table 1.). 

Table 1. - Dynamics of the number of social enterprises in different countries over 5 years 

One example of a successful implementation of social entrepreneurship is the British company The Big Issue [3], which prints and sells street newspapers for the homeless and low-income people. The company gives them the opportunity to earn money by selling newspapers and receive social support. Another example is India's Aravind Eye Care System [4], which is dedicated to providing health care for people with disabilities in a developing country like India, where the government alone cannot meet everyone's health needs due to a number of problems such as population growth, inadequate infrastructure, low per capita income, aging population, epidemic disease and illiteracy. What began as an 11-bed hospital has now evolved into a true medical conglomerate. Today, Aravind operates a growing network of ophthalmology facilities, a postgraduate education institute, a management training and consulting institute, an ophthalmic manufacturing division, a research institute and eye banks. Aravind's eye care facilities include 14 eye hospitals, 6 outpatient eye centers and 108 primary eye care facilities in South India.

In Ukraine this direction is also actively developing and becoming more and more popular. Only in 2019 about 5 thousand social enterprises were registered in Ukraine, as well as more than 500 non-profit organizations engaged in social entrepreneurship. This proves the growing interest in social entrepreneurship in the country. Let's look at some of the most successful and well-known projects:

Poltava charity organization "Svitlo nadiyi", which is engaged in rehabilitation and socialization of people released from prisons, drug addicts, people with HIV status, displaced people, victims of human trafficking and homeless people. She created several adaptation centers, as well as a sewing shop and a carpentry workshop that employs ex-convicts, IDPs, and other social categories. In addition to funneling money from the sale of clothing and furniture into enterprise development and expansion, the sewing shop.

Green Bean Bag company from Lviv, which manufactures and sells chair-bags, using recycled foam as an environmentally friendly filler. This approach allows for the recycling of Styrofoam, which in turn reduces the amount of waste that goes to landfill. Because of this, Green Bean Bag is a socially responsible company that supports public sorting stations and promotes carbon-neutral production. Green Bean Bag chairs are not only a comfortable and environmentally friendly place to relax, but also an important step towards reducing the ecological burden on our planet.

In addition, there are a number of organizations in Ukraine that support and develop social entrepreneurship. For example, there is a program "Social Business", which provides financial and consulting support for the creation and development of social enterprises. Another example is the project "Center for Social Innovations", which helps young social entrepreneurs to implement their ideas and create social enterprises.

In Ukraine, the social bakery "Nut House" operates in Lviv [5]. The company makes cookies and baked goods according to old recipes and without dyes or other additives, and the proceeds go to the Integration Center for Women in Crisis Situations, as well as to support the "Social Taxi" for people with disabilities. The company trains women with various problems, and if they want, they can also work in the bakery and help professional bakers with household chores.

Another example of social entrepreneurship in Ukraine is the Urban Space 100 [6] restaurant in Ivano-Frankivsk, which is one of the most famous examples of social entrepreneurship in Ukraine. This restaurant was created as part of the project "Teplе Misto" and is still functioning successfully, becoming a landmark symbol of social entrepreneurship in the country. To open the restaurant, 100 different people - from retirees and students to entrepreneurs and MPs - added up $1,000 each. The business idea is that only 20 percent of the profits were left to develop the restaurant and maintain the business, while the remaining 80 percent went to fund city projects. Each quarter, the co-founders met in a general meeting to determine which project would receive funding. With equal contributions, all founders have equal rights. During the three years of operation, the restaurant has supported 59 projects related to the development of modern education, art, new economy, urbanism, bicycle infrastructure, energy efficiency, ecology and sports.

Social entrepreneurship in Ukraine has great potential for development and makes it possible to create not only profitable businesses, but also to solve social problems in the country [7].

After the end of the war, Ukraine could face huge economic problems. Many regions of the country suffered, industry was destroyed, businesses ceased their activities and as a result many people were left without jobs and means of livelihood.

Social entrepreneurship is one of the directions of development that can help to restore the economy of Ukraine. The main advantage of using this particular business model is the fact that it is based on solving social problems and not only on making a profit as in classical entrepreneurship. Using the model of social entrepreneurship allows primarily to solve social problems such as unemployment, poverty, environmental problems, social and economic inequalities. The choice in favor of this direction of development of the country can become a serious driver for the recovery of both the affected regions, and the economy of Ukraine as a whole![8]

This table shows several social enterprise projects that have been launched in different EU countries over the years and shows how the number of homeless people has decreased thanks to these projects. For each project the name of the project, the description of the project, the country in which it was launched and the number of homeless people that was reduced due to the project are given . 

Table 2. - Projects of social entrepreneurs working within the European Union 

Year	Project name	Project description	Country	Number of homeless people reduced thanks to the project
2011	Tiny Homes	Creating mini homes for homeless people	France	150
2014	Bikes for Change	Providing free bikes for homeless people to help them get around	Germany	200
2017	Coffee With a Cause	Opening cafes that hire only formerly homeless people	Spain	50
2019	Green Streets	Creating a program where homeless people can work in public green spaces	Italy	100
2021	Mobile Showers	Providing mobile showers for homeless people	Netherlands	75

Social entrepreneurship has a number of economic and social foundations that distinguish it from traditional entrepreneurship. One of the foundations is the social mission. A social entrepreneur must have a clear vision of his social mission and be willing to work not only for profit, but also to fulfill it. 

 

Fig.1. - Transition from classic business to social entrepreneurship 

In public administration, social entrepreneurship is an area in which various tools are used to promote social values in society.

Below is a list of such tools:

1. Creation and support of social programs - which help to solve social problems in society. For example, a program to help the homeless, programs to support low-income families, programs to support education and health care.

2. Regulation and management of public funds - social insurance funds, health funds and others, can be used to finance social programs and invest in social projects.

3. Awareness campaigns and activities - government agencies can conduct campaigns to raise public awareness of social issues such as women's rights, unemployment problems, anti-drugs, etc.

4. Development and implementation of new technologies - digital platforms, can be used to improve the effectiveness of social programs and increase access to them. The state can also support and fund research and development aimed at creating new technologies that will contribute to solving social problems.

5. Collaboration with the private sector - The government can work in partnership with the private sector to create social projects and programs. For example, companies can finance social programs and projects, and the state can provide tax incentives and other preferences.

6. Infrastructure development - the state can invest in the development of infrastructure, which will contribute to the solution of social problems. For example, the construction of new schools and hospitals, improving roads and other forms of transport.

7. Formation of social partnerships - the state can work with non-profit organisations and civil society organisations to form social partnerships. This can help coordinate actions to solve social problems and improve the effectiveness of social programs and projects.

8. Support for social entrepreneurs - the state can support social entrepreneurs who are engaged in solving social problems. For example, the state can provide grants and funding, advise entrepreneurs on business development, help with documentation, etc.

9. Development of social media - the government can use social media to disseminate information about social programs, actions and events. This can help to attract more people to participate in social projects and increase the effectiveness of social entrepreneurship.

10. Regulation of Social Processes - The government can regulate social processes to improve social conditions in society. For example, the state can establish laws and regulations to protect the rights of minorities, combat discrimination, etc.

These tools can be effective in promoting social values in public administration. However, in order to achieve its goals, the state must interact with other stakeholders and form broad social partnerships.

In addition, innovativeness is an important criterion for the successful implementation of social entrepreneurship. Social entrepreneurs often use new approaches and technologies to solve complex social problems in society. Their goal is to create innovative solutions that maximize social impact.

Social entrepreneurship is also based on sustainability. It aims to create economically sustainable business models that can continue to function over time, rather than just solving one-time problems.

Research shows that social entrepreneurship has great social and economic potential. According to a UNESCO study [9], up to 70% of small and medium-sized enterprises in developing countries engage in social entrepreneurship. In addition, social enterprises can stimulate innovation, increase employment, and reduce poverty.

Despite all the advantages of social entrepreneurship, it faces a number of challenges, such as limited access to funding and resources, a lack of expertise, and limited scalability [10].

Social entrepreneurship is a relatively new phenomenon, and its role in public administration is not yet fully understood. Let us consider the pros and cons.

Pros of social entrepreneurship:

1. Solving social problems: social enterprises help to solve various social problems such as poverty, unemployment, health and ecology.

2. innovation: social entrepreneurs often develop new and innovative approaches to solve social problems, which can lead to improvements in people's lives.

3. Social Responsibility: social enterprises can demonstrate their social responsibility and appeal to customers, investors, and society at large.

4. Diversification of income: social enterprises can have several sources of income, including the sale of products or services, grants and investments.

Minuses of social entrepreneurship:

1. Financial sustainability: social enterprises may find it difficult to obtain funding, especially in the initial stage when they have not yet established their reputation and have not yet received support from investors and foundations.

2. Low profitability: social enterprises may find it difficult to achieve high profitability because they may focus more on social mission than financial profit.

3. Difficulties in measuring the effect: Social enterprises may find it difficult to measure the social results of their actions, which can make it difficult to make decisions about the direction of their activities.

4. High start-up costs: Social enterprises can require high start-up costs, especially when they develop innovative approaches to solving social problems or create new products and services.

5. Limited access to resources: social enterprises may face constraints in accessing resources, such as qualified personnel, technology, and financing.

6. Competition with other organizations: Social enterprises may face competition with other organizations, including other social enterprises, regular businesses, and nonprofit organizations.

Overall, social entrepreneurship has many pros and cons, and its effectiveness depends on various factors such as the right business model, strategy and management. It is also important to keep in mind that social entrepreneurship is not a panacea for all social problems and must work together with government and non-profit organizations in a broad social partnership.

If we take another step toward social, we will move already to social business. Not all the vital needs of people can be met by the state. This is how entrepreneurs emerge, who are active participants in social change. They create services and services that are not yet on the market, and the state cannot provide them financially or professionally.

Social entrepreneurs can play an important role in the development of local economies and in creating new opportunities for socially vulnerable groups. However, while social entrepreneurship has many potential benefits, it is not without risks. Minimizing these risks is possible if social entrepreneurs manage their projects more effectively, as well as the need to ensure their financial sustainability. 

 

Fig.2. - The formula that describes social entrepreneurship:

planned social change + business = social entrepreneurship [8]

In general, social entrepreneurship has great potential in public management and can contribute to the achievement of various social and economic goals.

According to the "Social Entrepreneurship, Empowerment and Cohesion Project" developed by the World Bank [11], social enterprises play an important role by presenting innovative socioeconomic opportunities that can lead to the double benefit of jobs for refugees and members of the host community, with a focus on local social needs and benefits. While social enterprise models recognize the need for sustainable profits in a competitive market environment, they differ from mainstream entrepreneurship in their goal of creating positive social and cultural solutions. This makes social enterprises an important alternative to the traditional model of corporate social responsibility.

Based on the above, we can conclude that social entrepreneurship can be an effective tool for promoting social values in public administration, according to the following results:

1. Social entrepreneurship is now a global phenomenon and is actively developing in many countries around the world.

2. The main areas of activity of social entrepreneurs are health care, education, poverty reduction, ecology and other socially important areas.

3. Social entrepreneurs use innovative methods and approaches to solve social problems, which allows them to achieve more effective results.

4. Social entrepreneurship has a positive contribution to economic growth and development by creating jobs and stimulating innovation.

5. Social entrepreneurship is also an important tool of public administration, allowing the state to achieve social goals in cooperation with the private sector.

Based on this data, we can conclude that social entrepreneurship is an important tool for promoting social values in public administration and can bring significant benefits to society as a whole.

However, social entrepreneurship cannot completely replace the state system of social service delivery. It can serve as a complement to government programs and policies, but it cannot replace them.

Based on the above, a number of conclusions can be drawn regarding the role of social entrepreneurship in promoting social values in public administration.

First, social entrepreneurship plays an important role in solving social problems and creating new jobs.

Second, it strengthens social ties and develops network relationships between various actors, including the state, business, and social organizations.

Third, social entrepreneurs have significant potential to innovate and develop new products and services that can meet the needs of underrepresented social groups.

However, despite all the advantages of social entrepreneurship, it also has its limitations and obstacles. One major limitation is access to financing since social entrepreneurs often do not have access to traditional sources of financing. Problems arise from the need to balance social goals and commercial benefits. Questions also remain about the extent to which social entrepreneurship influences public policy and its effectiveness.

It is important that public administration should cooperate with social entrepreneurs and create favourable conditions for their activities. For this purpose, it is necessary to improve the legislative framework, provide access to financial resources, create conditions for the development of infrastructure and strengthen organisational structures.

In general, we are convinced that social entrepreneurship can become an important tool for promoting social values in public administration if the necessary conditions for its development are created. 

References

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