In Search of Social Entrepreneurs

Alexandra Moskovskaya, Director of the HSE Center for Social Entrepreneurship and Social Innovation Studies, has won the first annual award for ‘Impulse for Good’ in the category ‘For Leadership in the Advancement of Social Entrepreneurship’. She told the HSE portal about her research and how new subjects in science and social entrepreneurship are perceived in Russia.

— Alexandra, congratulations on your award. This is one of those cases when the name of the category completely reflects the merits of the winner, as you are the first researcher who has undertaken serious scientific exploration into the practices of social entrepreneurship in Russia.

—Actually, until recently in Russia there were no major works on social entrepreneurship. Our book "Social entrepreneurship in Russia and in the world: practices and researches", which came out in 2011, via the HSE Publishing house, was the first such paper in Russian. The publication of the book probably played some role in helping me win the award, but the creation, in 2011, of the HSE Center for Social Entrepreneurship and Social Innovation Studies was also important. I can't say that the result of jury was absolutely unexpected but at the same time I understood that it was a competition, that the organizer of the award, the ‘Our Future’ fund for regional social programs, actively works in areas where there are projects equally deserving of attention. There are, in fact, people and enterprises acting as social entrepreneurs but often having no idea about it.

— How can you explain this paradox? During the last 10-15 years, almost everybody has come to the conclusion that business has to be socially responsible.

— First, it is necessary to distinguish socially responsible business and social entrepreneurship. A social product or effect is a by-product of socially responsible business, whereas for the social entrepreneur, it is the main product. This is the fundamental difference. As to your question, the reason is another matter. Russian society is extremely atomized; among measured values, everything connected with the benefit of other person is far from a priority. For a long time, to say that you care about someone else was almost a sign of weakness.

The fact that companies and organizations have begun to mention social responsibility is connected with two things. Firstly, the entry of some large companies into the international market, where social responsibility and social reports on accepted standards are a sign of success and an indication of the respectability of business. Secondly, there was a need among businesses to react to certain initiatives of our political management, which at the beginning of this century, as the economy started to revive, began to shift some social functions that previously were the responsibility of the state onto businesses.

If we look at initial discussions about social responsibility of business, we see that opinions in the business community on this matter were strongly divided. At the start of the 2000s, after the chaos of the 1990s, merely to pay taxes was enough to be socially responsible, it already was a big step towards to being part of society. Business realized that it was necessary to work legally, to follow the law. And most business people preferred to stop at that, they didn't want to be saddled with social programs and projects. Attempts to limit claims in this direction were made, but at the same time, both federal and the regional authorities wanted to shift part of their responsibility and social costs to business. It’s also important to note that such "partnerships" can hide abuses, specifically the various “bonuses” for officials.

— How was the balance of interests protected in this situation?

— It is important to understand that the assumption of social obligations is a limiting measure for business not only here but also in the Western world. However, for the latter it was a result not of state pressure but of a long evolution of public relations, and the strengthening of civil society as presented by different organizations – from consumer organizations to the development of judicial measures to protect people from corporate abuse.

It was not the same in Russia, the timeframe for the natural evolution of business and public institutes has not been long enough. The state requested social responsibility from business, and so, business made some concessions, some began to participate in charity, and so corporate programs appeared in regions, private foundations of business owners, and other. But it became clear to the majority that social responsibility can be faked – to comprise of 10% action and 90% PR. Businesses involved in international markets might be exceptions but, as I’ve already mentioned, these are compelled to play by other rules.

The pretence of social responsibility in modern Russia has its roots in our history when there was an imitation of socialist ideology. But even at that time, throughout the duplicity of the late Soviet period, the concept of assistance and cooperation at a private, personal level remained, although had nothing in common with declarations of official ideology. For example, it seems strange for us to hear about volunteering as a relatively new system which came from the West. In the Soviet period, excluding work at collective farms and at vegetable stores, and the "social load" in enterprises and public organizations, there was also free assistance as normal and morally approved practice. This did not mean not only community work days but various volunteer services, in wider forms, to neighbours, colleagues, to people facing difficult situations.

In the 1990s, we became free not only from ideological pressure, but also from many ethical obligations. They seemed to be somewhat anachronistic. There is a market, there is supply and demand, there is freedom within the limits of law (very soon it became clear, however, the law can also be flexible). A new, not socialist but market, mythology appeared. According to it, the market will regulate everything, including social justice. This supposedly occurs in all "civilized society", and so what else is necessary? This change in thinking, along with an extended economic crisis meant that the question of survival became relevant not only for enterprises but also for families, the guiding principle was "everyone for themselves". In these conditions there was no place for a large number of socially responsible entrepreneurs.

— It seems that traditions of assistance are strong in Russia, and even in hard times people didn't stop being people, they continued trying to help each other…

— Indeed. Therefore as soon as the situation of ‘dog eat dog’ ends, people come back to needing mutual aid, support, ability and the necessity to share and do something useful to another. It is especially obvious in those spheres where people have professional interests and knowledge. Successful social entrepreneurship merely the result of deep knowledge of a specific problem which a person might face as a "victim" (for example, in regard to the problems of disabled people), or as an expert (if the person worked in the social sphere — medicine, education, culture). Such people understand that it is impossible to solve problems through government-funded organizations, with their regulations and restrictions, and so begin their own businesses. The same goes on both in the West and in Russia. However, in Russia people often don't realize they are social entrepreneurs.

At the same time, a lack of knowledge of this situation (that some people succeed at something, that you can be guided by their experience, and choose options) is one of barriers to the development of  social entrepreneurship. To have some examples is very important. Actually, when I conceived the book, I just wanted to focus on these successful examples, there are a lot of case studies of social enterprises both in Russia and abroad.

— If we go back to the beginning, how did you come up with this theme? Why did it interest you?

— At the beginning of the 2000s, there was a study into social responsibility, and with my colleagues from HSE Institute for Social Development Studies, where I used to work, I was engaged in consulting. We helped companies develop relationships with workers and trade-unions. It was the first step towards the present research. The second step was the project that created an internet platform for dialogue between noncommercial organizations working in the social sphere and experts on social policy (the project of Civil Society Support Program "Dialogue", IREX). This project was not related to business but rather to NPOs. However, social entrepreneurship is organizationally a business/NPO hybrid. This project lasted three and a half years and allowed us to study NGOs working in the social sphere. The field of social policy began to seem to me as multi-dimensional subject, although social entrepreneurship was not even mentioned.

The third step was a project directly devoted to social entrepreneurship. In 2007, the newly created Fund of regional social programs "Our Future" (The Vagit Alekperov fund) asked us to conduct preliminary research into the social entrepreneurship experience, primarily in Western countries. Following this work, and through some iterations, there was a report at the HSE’s April conference 2008, and then a pre-print "The review of practice and theory of social entrepreneurship…". This was then discussed at Andrey Yakovlev's seminar, in the summer of 2008. Also at the seminar was Mikhail Mamuta, the director of the Russian microfinance center, who took a great interest in this subject, as he was already acquainted with Muhammad Yunus's experience and his Grameen foundation (Yunus is seen as the founder of microfinance and social entrepreneurship practice). Mikhail and I began to think about a joint project; and consequently our "Research into social entrepreneurship models in Russia" was conceived where we, with support of the British charity Oxfam, analyzed a number of regional social enterprises. This project involved 10 case studies, but it was very difficult to find examples from a range of activities and regions.

— These cases are also part of the published book, aren’t they?

— It became clear during our research that not all of them were examples of social entrepreneurship in its strict definition; but it was a great experience for us, since we conducted in-depth interviews not only with the founders of the organizations but also with all possible "stakeholders". We selected four very different cases for the book and attempted to give as detailed a description as possible, how the person in each case came to social entrepreneurship; his organizational and professional opportunities and how he realized them; the barriers he faced; the chosen business model, and the innovation of its organizational model or a product. We talked to social entrepreneurs, workers and volunteers within social enterprises, customers of the services, partners, and those people who, by the nature of their activity, communicate with social entrepreneurs (for example, heads of regional and local state departments who supported or not the initiative of social entrepreneurs). Put simply, when studying each case we undertook many research tasks and we also produced an  analysis of the social and economic environment, social networks, ways of interaction with clients and partners — the social capital, sociologically speaking. We weren't limited to a framework of one scientific specialization, it was literally interdisciplinary research; therefore, for each chapter we selected subjects which we considered the most important from the received empirical material.

Simultaneously, we had the idea of researching foreign social enterprises, we wanted to show practices existing in different countries, and to introduce the Russian reader to these practices. Along with students who had become interested in the subject of social entrepreneurship, we even submitted an application for the competition "Teacher-Students", for research into the international cases. Although we weren’t successful, we didn't abandon our idea and decided to describe independently those foreign cases which we were able to find. We focused on projects supported by "Ashoka", a global organization supporting social entrepreneurs, one of the first international funds working in this sphere. So the book’s concept was formed of two parts; one devoted to the Western experience of social entrepreneurship, including theoretical approaches, and the other to the Russian experience.

— When we talk about the cases you studied, is it possible to create a portrait of the typical social entrepreneur? What are his features?

— The social entrepreneur works in a niche which is filled neither by the state nor by business, and in which there is a lack of resources. These circumstances make it difficult to paint "an average portrait". The social enterprise has a model which brings together everything available, including the professional and human experience of the organizer. At the initial stage, it is often something hand-made; for this purpose in English-speaking literature the French word "bricolage" is used (creation of a work from a diverse range of things which are readily available). If the person knows how to solve a social problem and how to commercialize it (at least to make it sustainable), his social enterprise can succeed. Therefore, social enterprises often are not alike, and this can create a problem if you try to explain the phenomenon of social entrepreneurship to scientific audience. You say something and your colleagues reply: "it is simply a small enterprise", "it is simply the social responsibility of business", "it is simply charity"… Though in fact, it is not any of these things.

What was particularly interesting about Russian social entrepreneurs? Firstly, they are every bit the equal of Western entrepreneurs in respect of innovation, forcefulness, flexibility of mind and professionalism in offering a new product or service, although the phenomenon of social entrepreneurship is an unusual thing for us and is still little known, while it is fashionable and popular in the West. Secondly, there is a basic difference in the degree of institutional framework available. In Russia, there is almost no financial and organizational infrastructure for supporting new enterprise initiatives, including social entrepreneurship. In the USA, if you have an idea came to your mind, you are likely to find a non-profit organization or foundation which provides financial assistance in this field, provides sponsorship and helps to find backers. Such organizations may be big and well-established, or may be small and limited in resources, its employees may be professionals or amateur enthusiasts, but you have somebody to turn to for support at the beginning.

In Russia, the nonprofit sector is weak, and the thought of commercializing any social or humanitarian initiative is perceived as something vicious. I faced this hurdle when I delivered a report to an audience consisting of non-profit sector researchers and representatives of NPOs. The audience was divided into those who see social entrepreneurship as a prospect for NPO sustainable development, and those who took offense at the idea of commercializing the nonprofit sector.. For example, Western NPO experts understand that the non-profit sector is facing some sort of crisis, and needs to move towards the greater efficiency and professionalism associated with business. Social entrepreneurship has nothing in common with seeking to profit from social problems.

As for comparison with non-profit organizations, the main difference of social enterprises is their greater economic stability. Social enterprises don’t depend on grants and charity, although they may have them as additional, if not main, sources of income. Misunderstanding of the dual, "hybrid" nature of social enterprises is one more obstacle that impedes the development of social entrepreneurship in Russia. Institutionally, support for small business and support for socially oriented NPOs are rigidly divided, these are different fields, different state curators and have different sources of financial assistance. However, to achieve social aims, it is possible and necessary to combine non-profit and for-profit systems. Social enterprises choose an organizational and legal form, based on their specific conditions. And as a result, they choose their fate, because after they’ve made their decision, some doors of communication with the state are closed. And it is extremely difficult to work without such dialogue in the social sphere in Russia.

— And finally, what are your research plans?

— We are starting a broad international research into social entrepreneurs, with the support of the “Our Future” fund. I hope everything will turn out well; I’m keeping my fingers crossed because it is an online-survey, and it is impossible to force social entrepreneurs to answer our questionnaire. We wrote the questionnaire in two languages, English and Spanish. The second was a deliberate choice since there are many social entrepreneurs active in Latin America. We have to hope that social entrepreneurs are not apathetic people, especially to the social results of others!