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Social Enterprise in Sweden:
Intertextual Consensus and Hidden Paradoxes
Malin GAWELL
Malin GAWELLMalin GAWELL
Malin GAWELL
Södertörn University, Sweden
ICSEM Working Papers
No. 08
2
ICSEM Project c/o Centre d’Economie Sociale HEC Management School, University of Liege
Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
PREFACE AND ACKNOWLEDGEMENTS
This paper is part of a series of Working Papers produced under the International
Comparative Social Enterprise Models (ICSEM) Project.
Launched in July 2013, the ICSEM Project (www.iap-socent.be/icsem-project) is the result of a
partnership between an Interuniversity Attraction Pole on Social Enterprise (IAP-SOCENT)
funded by the Belgian Science Policy and the EMES International Research Network. It gathers
around 200 researchers—ICSEM Research Partners—from some 50 countries across the world
to document and analyze the diversity of social enterprise models and their eco-systems.
As intermediary products, ICSEM Working Papers provide a vehicle for a first dissemination of
the Project’s results to stimulate scholarly discussion and inform policy debates. A list of these
papers is provided at the end of this document.
First and foremost, the production of these Working Papers relies on the efforts and
commitment of Local ICSEM Research Partners. They are also enriched through discussion in
the framework of Local ICSEM Talks in various countries, Regional ICSEM Symposiums and
Global Meetings held alongside EMES International Conferences on Social Enterprise. We are
grateful to all those who contribute in a way or another to these various events and
achievements of the Project.
ICSEM Working Papers also owe much to the editorial work of Sophie Adam, Coordination
Assistant, to whom we express special thanks. Finally, we gratefully acknowledge the role of
our Supporting Partners, who are listed at the end of this document and presented on the
Project’s website.
Jacques Defourny
HEC – University of Liege
Marthe Nyssens
Catholic University of Louvain
ICSEM Project Scientific Coordinators
3
ICSEM Project c/o Centre d’Economie Sociale HEC Management School, University of Liege
Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
Table of contents
Abstract
AbstractAbstract
Abstract
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Introduction
IntroductionIntroduction
Introduction
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Conce
ConceConce
Concepts in (Swedish) c
pts in (Swedish) cpts in (Swedish) c
pts in (Swedish) context
ontextontext
ontext
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Historical trajectory..................................................................................................... 6
Current context and state-of-the-art of social enterprises in Sweden ................................. 8
Identification of s
Identification of sIdentification of s
Identification of soc
ococ
ocial enterprise m
ial enterprise mial enterprise m
ial enterprise models
odelsodels
odels
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Work integration social enterprises (WISE) .................................................................. 10
Non-profit social enterprises ...................................................................................... 11
Social purpose businesses ......................................................................................... 12
Societal entrepreneurship .......................................................................................... 12
Institutional t
Institutional tInstitutional t
Institutional trajectories
rajectories rajectories
rajectories of social e
of social eof social e
of social enterprises in Sweden
nterprises in Swedennterprises in Sweden
nterprises in Sweden
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Current explicit policy measures ................................................................................. 13
Social enterprises in the welfare triangle ..................................................................... 15
Social enterprises in Sweden - intertextual consensus and hidden paradoxes .................. 16
Refe
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References
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© Gawell 2015. Suggested form of citation:
Gawell, M. (2015) “Social Enterprise in Sweden: Intertextual Consensus and Hidden
Paradoxes”, ICSEM Working Papers, No. 08, Liege: The International Comparative Social
Enterprise Models (ICSEM) Project.
4
ICSEM Project c/o Centre d’Economie Sociale HEC Management School, University of Liege
Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
ABSTRACT
There are currently no specific legal structures or exclusive regulations for social enterprises in
Sweden. But there are different “versions” and the phenomenon attracts attention both in the
general debate and among policy makers, in spite of different and at times vague definitions.
The Swedish setting highlights social enterprises in a welfare society in transition. The public
sector that has dominated the provision of social services is now partly replaced by
competition-based models for procurements, in which different types of actors are to compete
for contracts. The different types of social enterprise that can currently be identified in Sweden
take slightly different roles in relation to the state as well as to other actors in society.
Key words
Key words Key words
Key words Social enterprise, social entrepreneurship, societal entrepreneurship, social
economy, civil society, welfare state, welfare society, Sweden.
5
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Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
INTRODUCTION
The interest in social enterprises seems to be global. This is not surprising, since social
challenges and some kind of response to these challenges are universal. But the common and
“universal” terminology, in spite of certain variations, also raises questions about the
“phenomenon” of social enterprises. In this paper social enterprise will be elaborated on and
related to the Swedish context, which includes their role(s) in relation to the organization and
reconsideration of a welfare state.
The concept of social enterprise, as well as that of social entrepreneurship, were introduced in
Sweden in the 1990s and have since then become increasingly common in practice, policy
and academy. They are often used together with—and sometimes as synonymous with—
societal entrepreneurship (which will also be elaborated on later in this paper). The debates in
which these concepts are used are also often related to discussions on the role of the public
sector, civil society and (ordinary) enterprises in the organization of the commons as well as to
the issue of meeting and coping with current and future challenges. This means that these
concepts relate, on the one hand, to a debate of society at large. On the other hand, they
relate to specific discussions on conditions for and form of initiatives dealing with social
activities.
But the “phenomenon” or “phenomena” as such have a much longer history. Without going
back to the “dawn of time”, the current practice of and debate on social enterprises is based
on and palpably influenced by the extensive and strong welfare state that emerged during the
early twentieth century and has since then characterized the Swedish (and Nordic) society.
Methodologically, this paper is based on many years of research on social enterprises, social
entrepreneurship and civil society as well as on work on “mainstream” entrepreneurship,
where business “logics” dominate the field. In total, these studies have covered approximately
150 cases/initiatives and studies of the policy development related to these phenomena. These
studies have included some quantitative analysis, but first and foremost they have been
conducted using a qualitative approach. Documents in the form of both official and informal
reports have been complemented over time with a large number of interviews, observations of
everyday operations and meetings. A more developed methodological account is found in
Gawell (2014a, 2014b).
In the first part of this paper, the historical trajectory and the different concepts used in the
Swedish context will be elaborated on. In the second part, the main social enterprise models in
Sweden will be presented. In the third part of the paper, the institutional trajectories of these
social enterprise models in Sweden will be described; a concluding discussion will follow.
CONCEPTS IN (SWEDISH) CONTEXT
In this section the Swedish historical trajectory is first described and then followed by an
account of the current context and debate related to social enterprises. This account includes
also other concepts than social enterprise, which in different way portrait both historical
trajectory and the current context. They all, however, relate to an understanding of social
enterprises in Sweden.
6
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Historical trajectory
During the nineteenth century poor people’s protests were partly hearkened by an emerging
middle class that was influenced by an international humanistic movement. There were several
initiatives to reach out to poor people and others in need during this time. Some of those
initiatives became the basis for today’s large organizations. In Sweden, the labour movement,
the temperance movement and the religious revivalist movement played an important role in
the transformation towards a democratic welfare society during the latter part of the
nineteenth century and early part of the twentieth century. In this transformation, highly
influenced by the social democratic movement, the state was ascribed an active role in
creating a welfare society as a good home for all citizens based on consensus and equality. It
was called Folkhemmet (“people’s home”) and it was an explicit vision from the 1930s and at
least into the 1970s (Larsson 2008). The “spirit” of Folkhemmet influenced policies in such
areas as housing, education, health care, child care, elderly care and taxation (Larsson 2008).
The Swedish welfare model described above fits into the “socio-democratic welfare regime” in
Esping-Andersen’s typology of the different ways to organize welfare in societies (Esping-
Andersen 1990); this type of welfare regime is characterized by the existence of a general
public social security system and a high level of social services provided by the public sector.
Social security and social services are primarily funded by a tax system based on individuals’
income and contain redistributive features to facilitate equality between citizens (Esping-
Andersen 1990).
In the “Swedish model”, which dominated the Swedish society during a large part of twentieth
century, hospitals, schools, child care, etc. were only to a limited extent operated by third
sector organizations (Pestoff 1998; Stryjan 2001). Different types of non-profit organizations
did exist, however. The most typical organization type was what has been named “popular
mass movement organizations” (Folkrörelse). These organizations were, and still are,
membership-based non-profit associations with a broad and open membership base and
democratic governance structures. Leisure associations, alternative educational organisations
with roots in adult education and other sectors made up (both in terms of number of
associations and in terms of financial turnover) for the relatively small size of the third sector in
the fields of health and social services, thus providing Sweden with a non-profit sector
comparable to that of many other Western countries—but with special characteristics
(Lundström and Wijkström 1997). These organizations were supported by the state based on
arguments that they fostered democracy and mobilised social values such as solidarity,
humanity and public health (SOU 2007, p. 66). The co-operative movement was also
integrated in the development of Folkhemmet, and the co-operative principles are to a large
extent consistent with the principles of Folkrörelser, even though there are some differences,
relating primarily to members’ economic interest (Pestoff 1998; Stryjan 2001). It can be
argued that co-operatives were a kind of “Folkrörelse-businesses” in which people mobilized
collective economic interests.
The relationship between the (local, regional and national) state and civil society was however
paradoxical (Trägårdh 2007). On the one hand, this relationship was centralized and
corporatist; but on the other hand, Sweden was a democratic society in which citizens had
access to politicians both through formal channels and informal networks (Trägårdh 2007).
The paradox has partly been governed through formal control. But even more often, a strong
emphasis on finding collaborative solutions has facilitated a “consensus spirit” with corporatist
tendencies. The Swedish labour market treaty from 1938 can be seen as an example hereof. It
7
ICSEM Project c/o Centre d’Economie Sociale HEC Management School, University of Liege
Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
was preceded by conflicts on the labour market and a parliamentary defeat to politically
regulate working conditions. The Swedish Trade Union Confederation and the Swedish
Employers Association then agreed on a negotiating model that has dominated the labour
market for decades and is still part of the Swedish labour market’s characteristics.
In the 1980s, and even more explicitly during the 1990s, shifts in debate and policy could be
noticed. Deregulations were carried out in the financial sector, rail transport and electricity
distribution, and public procurements were introduced. In 1992 a school reform facilitated the
access of private schools to public funding. The same year, a more general law on public
procurement was passed as a part of the adjustments implemented to prepare membership in
the European Union (Sweden joined the EU in 1995). Since then health care, elder care and
other related types of welfare services have to a large extent became subject to competition
through procurements or different types of client-choice models. As a result, the number of
private for-profit and non-profit service providers has increased. These changes were made
both under social democratic-led governments (1982-1991 and 1994-2006) and
liberal/conservative-led governments (1991-1994 and 2006-2014).
During these decades, economic, industrial and enterprise policies dominated the political
debate (Gawell 2014a). The focus on economic growth almost displaced the third sector from
public policies. Competitiveness and commercialisation were highlighted. The third sector, and
discussions related to it, did still exist, however—even though they were slightly “put aside”
until rather recently, when there was a renewed interest in civil society. This time the interest
was first and foremost for civil society as “putty” in society—a creator of social capital,
facilitating financial growth, and important for the advancement of innovations (Swedish
Government 2008, 2012a).
Partly aside of the economic-growth-oriented policies, there has also been other changes
related to the third sector. Some of the changes were primarily shifts in terminology.
Folkrörelse (popular mass movement organization) was to a large extent replaced by the term
ideell organisation (non-profit organization), which is more “neutral” in terms of specific
characteristics or structures. Through the use of this term, other types of organizations, such as
foundations, were recognized in the Swedish organizational landscape. It also allowed
international comparisons (for example within the John Hopkins project on non-profit
organizations) and through that highlighted some of the specific characteristics that Sweden to
a large extent shares with the other Nordic countries (Lundström and Wijkström 1997).
With EU membership (1995), the term social economy was also introduced in Sweden
(Swedish Ministry of Interior 1998; Swedish Ministry of Culture 1999). In Sweden, the
discourse on the social economy was largely influenced by cooperative principles and the
traditional Folkrörelse model, which share many similarities. By contrast, some other types of
non-profit organizations, such as charities, had little influence; the term charity was even
taboo in Sweden for decades, since it was associated with inequality and unfair dependency.
The term “civil society” (civilsamhälle) has become increasingly common since the turn of the
millennium in general discussions, politics and research (Amnå 2005). The government used
the concept of civil society when it launched a policy bill in this field in 2009 (Prop
2009/10:55). Even if the bill refers to all of the above mentioned concepts (as well as to social
enterprises and social and societal entrepreneurship), this bill also introduces a policy
approach to these types of organization that differs from the former focus on
Folkhem/Folkrörelse relationship by a more abstract reference to a sphere of initiatives without
specification of specific characteristics (Gawell 2014a).
8
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Sart-Tilman, building B33, box 4 B-4000 Liege BELGIUM
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This briefly sketched historical trajectory of the Swedish setting constitutes the background
against which the current debate on social enterprises takes place. There is, on the one hand,
an approach explicitly highlighting the aspiration for equality, (democratic) participation and
bottom-up processes in which people (such as beneficiaries) have a right to represent
themselves. This approach has a strong position both among representatives of traditional
organizations and in public policies related to so-called disability- or user-organizations. On
the other hand, there is an approach in which the identification of the needs to be met relies
on civil servants and/or individuals that do not necessarily “belong” to the beneficiaries nor
allow beneficiaries to formally participate in decision making. The way in which the
interventions are initiated and governed is in this case more “top-down”, or “from-the-side”,
and beneficiaries’ possibilities to influence are arbitrary (Gawell 2011, 2013).
Grounded in the historical trajectory described above, the competitive bidding within spheres
of public and social services has facilitated the promotion of their ventures by private for- and
non-profit actors. Policy-makers have explicitly argued that the competitive bidding and
different types of client-choice models should be neutral and not favour specific types of actors
(Gawell 2014a). This means that private actors have entered the welfare scene without having
to declare or relate to the traditional principles of the Swedish public sector, such as shared
responsibility, citizens’ influences, equality and democracy (Ringqvist 1996), and with the
language and practices of businesses (Lundström and Sundin 2008).
Current context and state-of-the-art of social enterprises in Sweden
The concept of social enterprise started to be used in Sweden in the mid-1990s. It was then
first and foremost used by groups within the co-operative movement, who started to call social
co-operatives social enterprises. References were often made to the Italian model(s) (Nutek
2007). This version of social enterprises has since developed, partly through support from the
European Social Fund (ESF). One specific project funded by ESF’s Equal program 2004-2007
had a focus on national development of social enterprises in Sweden. Within this project,
criteria for the initiatives that later came to be referred to as “work integration social
enterprises” (WISEs) were defined. These criteria are to a large extent in line with the EMES
criteria for social enterprises (www.emes.net). Later on, the thematic group’s criteria were
adopted by the Swedish Agency for Economic and Regional Growth as well as by the Ministry
of Enterprise (Nutek 2007). These criteria define WISEs as “enterprises conducting business
activities” that “have an overarching aim to integrate, into working life and society, people
who experience great difficulties getting or keeping a job”. These enterprises are furthermore
to create participation through ownership, agreement or any other documented method. They
are also to reinvest profits in their own or similar activities, and to be organizationally
independent from the public sector.1 Based on these criteria, the Swedish Agency for Economic
and Regional Growth has developed a list of social enterprises. There are approximately 300
social enterprises on this list.2 There is however no legal basis for the identification of these
particular social enterprises, so the list is based on qualitative research and review (see
discussions below).
But this is not the only type of social enterprises in Sweden. There are (partly parallel)
discussions among field practitioners, policy-makers and researchers. Apart from the above-
1 See http://www.sofisam.se/vad-ar-sociala-foretag/definition.html; author’s translation.
2 http://www.sofisam.se/hitta-sociala-foretag.html.
9
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mentioned version, three other versions—or rather sets of versions—of the social enterprise
concept have been identified (Gawell 2014b): one can be named non-profit social enterprises;
another is that of social purpose businesses; and there are references to the concept of societal
entrepreneurship. These different versions will be further elaborated on in the next section. In
addition to these rather distinct versions, if it is possible at all to refer to them as distinct, there
are also other initiatives that mix characteristics of the various sets; it is not possible, or not
meaningful, to categorize them according to similar criteria (Gawell 2014b).
IDENTIFICATION OF SOCIAL ENTERPRISE MODELS
Even though there are no specific legal structures for social enterprises, such initiatives do
exist, to the extent that some ventures combine a social mission with running some kind of
enterprise. As just mentioned, four major versions3 of social enterprise have been identified in
Sweden (Gawell 2014b). The version with the strongest policy framework is the work
integration social enterprise (WISE), which is strongly influenced by European co-operative
traditions. The second version is referred to here as non-profit social enterprise; it is closely
connected to discussions in and about the non-profit sector. The third version, namely the
social purpose business, is influenced by the so-called business school approach to social
entrepreneurship. There is furthermore a fourth version that is highlighted in this paper. It
relates to discussions on societal entrepreneurship, which is sometimes used as synonymous
with social entrepreneurship, but with slightly different application (see below).
Figure 1 illustrates the different versions of social enterprise that emerge through
entrepreneurial processes in which different types of characteristics are set. The choices from
which these various versions result are sometimes well thought through, but in other cases,
they rather seem to be based on former experiences, taught skills or what comes handy (for
further discussions, see Gawell 2014b). The illustration draws on practice, but has been
further developed based on analysis of a large number of social enterprises. The three first
versions referred to above can be found in the bottom part of the figure.
Figur
FigurFigur
Figure 1: Different versions of social entrepreneurship and social enterprises
e 1: Different versions of social entrepreneurship and social enterprisese 1: Different versions of social entrepreneurship and social enterprises
e 1: Different versions of social entrepreneurship and social enterprises
Socialt
entreprenörskap
Businesses
Co-
operatives
Nonprofit
organizations
Public sector Friends, family
Entrepreneurial
initiatives
Civil
Society
Social Economy
Industry
Source: Based on Gawell (2014b).
3 Due to the lack of formal regulations, there are overlaps between the different major types of
initiatives; this is why they are referred to as “versions” rather than as “categories”.
10
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Work integration social enterprises (WISE)
In the work integration social enterprise (WISE) version, Nordic traditional well-known aspects
(such as a participatory approach) are combined with (southern) European traditions to
organize social services. This version is furthermore highly influenced by the EMES approach
to social enterprises. In the beginning (in this case, in the mid-1990s), general social aims,
such as empowerment for personal wellbeing, were highlighted in discussions on WISEs, and
work was presented as a tool to reach those social aims. Many of these social enterprises
stated that they wanted to work with “the ones that need it the most” (Gawell 2011, 2013).
Gradually, a strong focus on long-time unemployed people emerged, partly due to a policy
interest to use these types of social enterprises as labour market tools for work training and as
a way to offer adjusted work opportunities to people with employment problems. Many of
these social enterprises still express a broader social aim when interviewed, but they rather
stress the “work line” when they position themselves towards public actors (Gawell 2013).
As far as their income mix is concerned, most WISEs combine revenue from sale of work
rehabilitation services to local or national authorities, public subsidies compensating for
individuals’ reduced working capacity (connected to individuals and channelled through
employers, be they non-profit/or profit organizations and private or public employers), and
income from sale of products or services such as carpentry, art work, cafés or hotel
accommodation. There are no specific subsidies for work integration social enterprises. This
means that any type of organization or enterprise can sell the same types of services and
benefit from public subsidies compensating for individuals’ reduced working capacity. In
practice, however, few for-profit enterprises employ people with great needs for adjustments
or support.
Swedish work-integration enterprises such as they are defined by the criteria that have been
adopted by public authorities (see above) constitute a rather clear ideal-type of WISE.
Figur
FigurFigur
Figure 2: Pillars of work integration
e 2: Pillars of work integratione 2: Pillars of work integration
e 2: Pillars of work integration
social enterprises (WISE
social enterprises (WISEsocial enterprises (WISE
social enterprises (WISEs
ss
s)
))
)
Source: Swedish Agency for Economic and Regional Growth
(Tillväxtverket. www.sofisam.se) [author’s translation].
Market needs for
products/
services
Demand for
rehab
& jobs
Individual’s need for work
WORK INTEGRATING
WORK INTEGRATING WORK INTEGRATING
WORK INTEGRATING
SOCIAL ENTERPRISE
SOCIAL ENTERPRISESOCIAL ENTERPRISE
SOCIAL ENTERPRISE
(WISE)
(WISE)(WISE)
(WISE)
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Among the “long-time unemployed”, there are many people with disabilities, mental illness,
drug problems, etc. Some WISEs target specific groups, but many of them do not. Generally,
they do not want to raise discussion on the beneficiaries’ diagnoses, and stress the importance
of building on everyone’s abilities and right to work at “100 % of one’s capacity”—even
though this is only, in some cases, a few hours a week (www.sofisam.se).
According to the ideal-type criteria, these social enterprises support individuals’ possibilities on
the labour market in general but also the possibility to become co-owner in the enterprise.
There is however a great variation of how this is being implemented. In some enterprises,
most participants only take part in limited training programs, while other enterprises have
systematic on-the-job training and schemes for co-ownership.
The government has commissioned the National Agencies working with enterprises, labour
market and social insurances to collaborate to improve the conditions in which work
integration social enterprises operate. These National Agencies work together with a number
of actors that have identified themselves as advocates for work integration social enterprises.
The European Social Fund has funded the development of several work integration social
enterprises with a focus on the long-time unemployed.
In 2013 there were almost 300 WISEs identified by the Swedish Agency for Economic and
Regional Growth. Almost 9,000 people participated in their activities. 2,500 of these were
employed (www.sofisam.se).
Non-profit social enterprises
The interest in non-profit social enterprises has also increased; this trend is particularly linked
to the increased interest in private social service providers in welfare policy areas. Non-profit
organizations have to compete with each other as well as with private for-profit enterprises as
public authorities manage competitive bidding or different kinds of client-choice models in
health care, child/elderly care, education and psychiatry. These services are still basically
publically funded. Non-profit organizations operating in these fields have to adjust to market-
like conditions, and can thus be referred to as non-profit social enterprises. There are also
several non-profit organizations promoting themselves as (social) enterprises based on non-
profit principles (Gawell 2014b); they are also referred to here as non-profit social enterprises,
even though not all of them use this specific term. Among these ventures there is a great
variety of organization/business models (Wijkström and Lundström 2002; SCB 2014). Without
going into details, some highlights will be addressed here.
A first type of non-profit social enterprises of interest to current studies of social enterprise are
the so-called user-based organizations (brukarorganisationer), in which for example people
with disabilities organize both service provision and interest-based advocacy. Typical of these
organizations is the fact that, as already discussed in the first part of this paper, the target
people themselves (for example people who are affected by disabilities, or former drug
abusers) represent themselves and have the power to influence decision making. In this sense,
these organizations are the opposite of charity organizations, in which resourceful people
articulate other peoples’ needs and control how those needs are addressed. These
organizations are primarily structured according to the traditional popular mass movement’s
principles, with membership and democratic decision-making structures.
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Social service delivery organizations constitute a second type of non-profit social enterprises.
An example is provided by faith-based organizations, which have, for a long time, provided
social services at the periphery of the strong public sector. They are now operating on a
competitive market for public contracts in health, social care, education, etc. They compete
with both other non-profit organizations, other types of social enterprises, and for-profit
enterprises. Activities funded through public contracts are also, of course, regulated by public
authorities. Some of these non-profit social enterprises have governance structures according
to democratic principles; others do not.
Other non-profit organizations relate to what can be conceptually referred to as social
enterprises. Many non-profit organizations, at least among the largest ones, are registered to
run business activities to fund their social activities.
Social purpose businesses
There is currently a “trend” among (ordinary) enterprises to relate to the social enterprise
discourse in their presentations. Some present themselves as entrepreneurs committed to and
engaged in social services, for example in elderly care or education, and therefore state that
they run social enterprises. Some argue that the economic priorities (including making a profit
and distributing profit to owners) are just a practical means to reach social aims. Some even
argue that profit-making and profit-distribution to owners/investors represent an important
drive that benefits social aims. Such types of social enterprises cannot be identified in statistics,
and cases have to be identified through qualitative means.
There are an unknown number of smaller and especially new enterprises using the social
enterprise terminology. Some present themselves as social entrepreneurs or social enterprises
with double or triple bottom lines—that is, combining economic, ecologic and/or social aims
in their business model. They often present a variety of arguments to support these statements.
These arguments are sometimes related to the social outcome of their commercial businesses,
or to the entrepreneurs’ intentions. Others relate to alternative business models, different from
those commonly used in commercial enterprises. Sources allowing to determine exact
numbers are not available, but the emergence of people (and especially young people)
adopting the Anglo-American business-based approach to social entrepreneurship and social
enterprises is undeniable.
As yet, there are no public policies for these types of social enterprise. They rely on the same
legal structures and are submitted to the same taxes as other businesses.
Societal entrepreneurship
In the discussions related to social enterprises, another concept is also discussed in Sweden:
that of societal entrepreneurship (samhällsentreprenörskap). The term was first used in the mid-
1980s, when Johannisson (1985) and Alänge (1987) used it with reference to entrepreneurial
initiatives focusing on local community development. The authors of these articles then
translated samhällsentreprenörskap to community entrepreneurship in English. The term was
not commonly used until the early 2000s; from then on, it started to be used with the basic
definition of “innovative initiatives with public benefits” (Holmberg et al. 2007; Gawell et al.
2009).
13
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Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
Societal entrepreneurship has primarily been used as an umbrella concept including what
would be referred to, at the international level, as social entrepreneurship, community
entrepreneurship, cross-sectorial initiatives or social enterprises, but also for-profit businesses
engaging in public activities, such as cultural entrepreneurs (Gawell et al. 2009). Societal
entrepreneurship, and specific ventures belonging to this sphere, are often presented as
responsible, with high-profile aims to contribute to the societal/community development and
not only to their own performances. Even though individual entrepreneurs are also elaborated
on, this “sub-field” is dominated by collective processes, which often stretch across sectorial
boundaries (Gawell et al. 2009; Berglund et al. 2012; von Friedrichs et al. 2014).
There are no statistical accounts or other systematic investigations of this version of social
enterprises either. There are however studies including several different cases of societal
entrepreneurship (Johannisson 1985; Alänge 1987; Holmberg et al. 2007; Gawell et al.
2009; Berglund et al. 2013; von Friedrichs et al. 2014).
INSTITUTIONAL TRAJECTORIES OF SOCIAL ENTERPRISES IN SWEDEN
As already mentioned earlier in this paper, there are no specific legal structures or regulations
addressing social enterprises. People running social enterprises rely on “ordinary” regulations
for different forms of business and/or non-profit associations or foundations. Some, but not
all, argue that there is a need for an institutional recognition to facilitate the development of
social enterprise in the country.
As a result of this lack of a specific legal form for social enterprises, it is difficult to analyse
social enterprise’s institutional trajectories in terms of legal structures; however, the social
enterprise models identified in the earlier section relate to overarching discussions of private
actors in the welfare society and the “division of labour” between the state, social enterprises
and other types of actors/institutions, and evolutions in this regard constitute interesting
elements when it comes to analysing the institutional trajectories of social enterprises in
Sweden. Policy decisions leading to competition for public contracts during the last two or
three decades have had a strong influence on the development of social enterprises and other
actors in many—not to say most—social branches.
In this section, we will first discuss current explicit policy measures related to social enterprises.
These measures provide a framework for social enterprises, even though they are not fortified
through legal structures. Secondly, the observed shifts in the Swedish welfare mix will be
related to the “welfare triangle” that has been developed to understand the interplay in
welfare societies. Finally, this paper ends with a concluding discussion on the state of social
enterprise discussions in Sweden.
Current explicit policy measures
Work integration social enterprises (WISEs) relate primarily to labour market policies and
enterprise policies at the national level. These two policy fields are also relevant at the regional
or local (municipality) level. But at the regional/local level, the way in which social matters are
handled vary. Indeed, the extent of and routines for procurements/client-choice models vary;
this impacts on social enterprises as well as on other actors. At the national level, public
agencies for enterprises, labour market policies and social security have been commissioned
to cooperate to improve information and possibilities for social enterprises to operate—within
14
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ordinary regulations. The collaboration between actors at the regional and local levels is also
improving.
WISEs are influenced by the conditions and terms under which compensations for people with
reduced working capacity (lönebidrag) are granted, rehabilitation assignments and other
services that they might offer public authorities. The level of public funding in social
enterprises, primarily through sales, is high—as in any for- or non-profit
enterprise/organization providing social services in Sweden. WISEs are therefore dependent
on the emerging social enterprise market, whose terms are dictated by public policies and
public authorities. And WISEs struggle to survive—especially if they target those that need it the
most (Gawell 2013). Many WISEs have been granted project support from the European
Social Fund (ESF) or the Swedish Heritage Fund (Arvsfonden) (Gawell 2013).
The non-profit social enterprises are also affected by the shifts in welfare structure and the
introduction of public procurements, but also through reconsiderations of and sometimes
reductions in the grants that funded their activities before. Some of the well-established
organizations had built their (non-profit) business models according to earlier policy structures
and to the resources that were channelled through these structures for many years. Depending
on how well these ventures match public authority decisions and/or other sources of income,
the shift means increased opportunities or increased struggle. For some, this has primarily
been a shift in routines rather than in actual resources.
An Agreement (Överenskommelsen, www.overenskommelsen.se) was launched in 2008 to
support non-profit organizations and other “idea-based” organizations such as cooperatives
with a social aim and asset lock (whether they relate to the term social enterprise or not) to
operate in the new welfare structures. This Agreement brings together the Swedish
government, approximately 70 organizations, and the Association for Local Governments and
Regions; it was limited to the fields of health and social care. In this Agreement, the
organizations’ rights to independence, sustainability, dialogue, transparency, quality and
diversity were recognized.
The social purpose businesses are primarily affected by the general business climate but also
by the conditions of procurements, depending on their venture/services. Examples indicate
that these social enterprises are more market dependent and attract private investments
through owners as well as philanthropic donations, but since there are no formal criteria for
these types of social purpose business, it is difficult and even close to impossible to give
account of the effects of current policy measures on this version of social enterprises.
The societal entrepreneurship version can be affected by all the above structures and
institutions, depending on the types of activities the venture engage in. In addition, regional
development policies, including the European Structural Funds policies, are important for the
development of societal entrepreneurship, as both policy measures as well as societal
entrepreneurship often highlight cross-sector collaboration in rural areas.
In the latest national innovation strategy, civil society has furthermore been highlighted as a
driving force for innovations that can “meet future challenges” (Swedish Government 2012b).
Social enterprises and social and societal entrepreneurship were also highlighted in this
strategy, but not to the same extent as the concept of civil society, which highlighted—apart
from businesses—academia and public actors. None of these concepts were clearly defined,
but this was nevertheless a change compared to former innovation strategies, which did not
pay attention to any of the third sector concepts (Gawell 2014b). There is however a common
15
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innovation-narrative related to the established Folkrörelse-organisations and the emergence of
the welfare state. In the historical Swedish grand narrative on popular mass movement their
innovative and entrepreneurial role has been highlighted as they initially provided social
services. The Red Cross, for example, provided school lunches and dental care for children
since there was a need for better nourishment and health during the first part of the twentieth
century. Other organizations, like the Temperance movement, initiated at the same time
reading groups, alternative education programs and what later became libraries. These
services were then passed over to the public agenda and the public sector as it developed
during the twentieth century (Gawell 2014a).
Social enterprises in the welfare triangle
The transition of the Swedish welfare state and reconsideration of roles can be related to the
welfare triangle, which elaborates on the position of the third sector in relation to the state,
market and community.
Figure 3: The third sector and the welfare mix
Figure 3: The third sector and the welfare mixFigure 3: The third sector and the welfare mix
Figure 3: The third sector and the welfare mix
Source: Pestoff (1998).
There has been a palpable shift towards more market-like conditions for the increased
number of service distributors in Sweden during the last three decades, due to policy shifts.
Many of these new service distributors are private for-profit enterprises, but social enterprises
also operate to a large extent in the market sphere of the welfare triangle. Labour market
policies are the most apparent policy for work integration social enterprises (WISEs), while
health- and social care policies are the most frequent policy partner for other non-profit social
enterprises. Since these services are still publicly funded, shifts in policies mean renewed
partnerships between the state and private actors.
State
StateState
State
Community
CommunityCommunity
Community
Market
MarketMarket
Market
Informal Formal
Public
Private
Profit
Nonprofit
Third
sector
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There are still non-profit-oriented social enterprises, which primarily rely on (public) grants and
therefore ought to be positioned as third sector organizations with close connections to the
state in the welfare triangle. There are however indicators that the number of organizations
and the extent of this type of funding have decreased during the last decade. On the other
hand, social enterprises that rely more on private funding and thereby can be positioned
closer to the community/market-based part of the welfare triangle have at least attracted
attention even if it is difficult to find actual figures on amounts.
Even if there is a move towards more market-like conditions for the third sector, social
enterprises and other types of organizations remain highly dependent on public authorities;
paradoxically, the extent to which public authorities control these organizations (through
funding conditions) has even increased, and the possibility to propose and try out new and/or
alternative activities has decreased in some areas—in spite of policy rhetoric that highlights
freedom of choice and diversity. The arrows added to the welfare triangle below illustrate
shifts of the last decades’ policies affecting the current situation of social enterprises.
Figure 4: The third sector and the welfare mix
Figure 4: The third sector and the welfare mixFigure 4: The third sector and the welfare mix
Figure 4: The third sector and the welfare mix:
: :
: i
ii
illustration of current paradoxes i
llustration of current paradoxes illustration of current paradoxes i
llustration of current paradoxes in Sweden
n Swedenn Sweden
n Sweden
Based on Pestoff (1998). Modification: Arrows added to illustrate shifts in the early 2000s
(Gawell).
Social enterprises in Sweden - intertextual consensus and hidden
paradoxes
The discourse on social enterprises has a very positive connotation. Liberal- and right-wing-
oriented politicians argue that they represent free enterprising individuals providing diverse
welfare services. Socio-democratic and left-wing politicians argue that social enterprises
provide participation and co-owned services. There is an altogether common intertextual
State
Community
CommunityCommunity
Community
Market
MarketMarket
Market
Informal
Formal
Public
Private
Profit
N
onprofit
Third
sector
17
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vision of social enterprises as a part of a “good development”—even if the phenomenon is
ascribed slightly different roles.4
Between 2006 and 2014 Sweden had what, in Swedish terms, is called a right-wing
government. This government argued that the policy shift, which led to an increase in the
number of private service providers, also benefited the development of social enterprises.
There is however a paradox: the same government also prioritized restraints and even
cutbacks in public spending. This economic pressure, combined with competition also from
private for-profit enterprises, has led to opportunities to act, but it has also led to a financially
difficult situation, especially for those ventures working with social problems that demand
great resources over time.
There is yet another paradox behind the positive rhetoric on social enterprises. Behind the
promotion of client-choice models and choices of service distributors is a funding system that
is influenced to a large extent by so-called New Public Management (NPM), which controls in
detail what should be done and how this should to be accounted for. NPM has influenced the
organization of the public sector for approximately three decades (Jakobsson et al. 2015) and
has spread to social enterprises and other types of private actors through the different types of
reimbursement systems during the last decade or two, depending on the branch of activity.
Behind the expressed positive intertextual consensus and hidden paradoxes are many
initiatives, in a society with relatively high living conditions and an engagement in social
aspects. Still, not everyone shares a sense of wellbeing and many social enterprises struggle to
mobilize resources in their search to find solutions to what they perceive necessary to act upon.
4 See also the discussion in Gawell et al. (2014) on societal entrepreneurship in local and regional
development discussions.
18
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Website: http://www.iap-socent.be/icsem-project e-mail: icsem-socent@emes.net
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