Anzelika Krastina, MBA, MEd., Senior Lecturer, Lapland University of Applied Sciences
Introduction
At a time where traditional economics is struggling to address unprecedented social, environmental and economic issues, there is a search for innovative and inclusive business models and it fuels an ongoing discussion among policy makers, practitioners, and academia about whether social entrepreneurship could become the foundation of a new business model for the future (Rivna & Gress, 2022; Scuotto et al., 2023; WEF, 2024). According to research published by World Economic Forum (WEF) in 2024, there are about 10 Million social enterprises (SEs) worldwide, in total are generating about 2 trillion USD yearly, at the same time securing nearly 200 million jobs globally. There is also a finding regarding the gender gap, stating that half of these SEs are led by women (WEF,2024). However, social entrepreneurship is not just a passing trend; it represents the natural evolution of business in the 21st century, where economic success aligns with achieving the United Nations’ Sustainable Development Goals (SDGs) (UN, 2024).
Developing a social start-up is not yet widely practiced in Lapland region and Lapland UAS. Recognising and understanding the importance and the future role of social entrepreneurship, we have initiated the project “Support structures for social entrepreneurship in Lapland – RYHTI“ funded by European Social Fund and project lasts from 1.10.2023–30.4.2026. During the project initiation phase, it was identified that Lapland region in Finland lacks sufficient support and training for social entrepreneurship development, and therefore Lapland misses out on the positive impact that social entrepreneurship could have on the challenges faced by the region (RYHTI, 2024). Project actions include region wide networking, sharing of knowledge and best practices regarding social entrepreneurship, but most importantly developing and implementing social entrepreneurship training and education materials. During fall 2024 several pilot training initiatives took place in order to develop and test the training methodology on social entrepreneurship. The target groups of the pilot activities were students and teachers.
Definition of social entrepreneurship
Entrepreneurship, in general, involves creating, developing, and running a new business or venture to address market needs or opportunities. This process requires risk-taking, innovation, and effective use of resources to achieve growth or generate profit (Drucker, 1998). However, entrepreneurship is not merely about starting businesses; it also entails the pursuit of opportunities through systematic innovation. As Drucker highlighted, it involves purposeful search for opportunities, creative approaches to solutions, and the creation of sustainable value.
Comparing to traditional understanding of an entrepreneurship, social entrepreneurship focuses on addressing societal and environmental challenges through innovative and sustainable business models. Unlike traditional businesses, it prioritizes social impact over profit maximization while ensuring financial sustainability (Kummitha & Majumdar, 2015). Social enterprises differ from traditional non-profits as well as they engage in market exchanges and generate income while addressing their objectives. The mission of social entrepreneurship is to foster social change, transformation, and significant impact, which is achieved by identifying societal problems and developing long-term solutions. Social enterprises combine societal goals with entrepreneurial practices. These organizations focus on achieving wider social, environmental, or community impact, reinvesting profits to further their mission, and often employing participatory principles to enhance social justice (European Commission, 2020). While profit is considered, it is secondary to their primary objective of catalyzing social and sustainable transformations. Social entrepreneurs operate in diverse forms, including cooperatives, foundations, associations, and NGOs, and are funded through a mix of earned income, grants, and donations (European Commission, 2020). These enterprises span a variety of industries, such as healthcare, education, environmental conservation, and the circular economy. They frequently promote the inclusion of individuals with diverse abilities, ensuring broad societal participation.
As mentioned earlier, the rise of social entrepreneurship is driven by the need to address global challenges like poverty, inequality, and environmental degradation. The increasing demand for sustainable and ethical practices among consumers, investors, and governments has further supported this movement, as highlighted in the Circularity Gap Report (2023). Moreover, young people are particularly keen in social entrepreneurship due to their interest in ecological and societal effectiveness, making them essential contributors to its growth (ARVO, 2023).
Social entrepreneurship is increasingly seen as a scalable and sustainable approach to solving global issues. It bridges the gap between traditional business and charity by integrating social and environmental goals into core strategies, reflecting a paradigm shift in business practices. This shift aligns with the triple bottom line approach, which measures success based on social (people), environmental (planet), and economic (profit) outcomes, thereby emphasizing the interconnectedness of these dimensions (Krastina et al., 2023). In Europe, social enterprises play a significant role in the economy, creating approximately 13.6 million jobs. However, there remains no unified definition across EU nations, as conceptions vary according to national legislation and strategies (European Commission, 2020).
Piloting the training on social entrepreneurship for sustainable solutions
During one-week workshop in November 2024, with the students from Lapland UAS, we tested and applied previously developed methodology called “Sustainable Entrepreneurship for Climate Action” (Krastina et al., 2023) that incorporates problem-solution tree-based ideation process, design thinking-based value creation approach and circular business model method. This methodology was adjusted to the social entrepreneurship context and the task of the participants was to create social business ideas that solve sustainability and climate change related challenges. In practice we tested a structured process that includes ideation, crafting sustainable value propositions, and adopting sustainable business models for a social enterprise. The aim was to help students to understand how social entrepreneurship unlocks the potential to drive systemic innovation and sustainable transformation, contributing to the future that balances societal and environmental well-being with economic viability.
Image 1: Problem-Solution tree ideation solving climate change challenges. Picture by A.Krastina
The pilot one-week workshop and training showed that young people need an encouragement to change the paradigm on how we view the challenges, where the problem becomes an opportunity through the solutions, and these solutions can become viable business ideas. All together twelve different social business ideas were presented at the end of the workshop and each group did pitch the best business ideas in a format of short video. However, it is not only about good idea development, but each of the business proposals have to go through so called “sustainability screening” and it has to be aligned with the ESGs principles. The following image represents an example of the template used to conduct the assessment of the business idea against economic, social and environmental principles.
Image 2: Example of the assessment of the business idea against economic, social and environmental principles. Picture by A.Krastina
Innovating with AI assistance
The innovative component integrated in the learning process was the application of various AI tools. The aim was to test how AI can help in identifying the root-causes of specific climate change problems and to create in-depth analysis of these root causes creating detailed mind-map. It helped to break down existing problems into smaller components and through this approach it was easier identify set of alternative solutions to given problems. The use of AI was approached with a critical view, selecting only those options that were feasible to realize at the grass-root level with limited funding. Also various design AI apps were applied for the completion of video pitch to test how different AI tools can help in creating video script, images and voice over. It was however concluded, that the videos, that were created by more traditional means, were more engaging and inviting, compared to those created with the AI assistance.
Student feedback – better understanding of social business model
20 students from business and tourism studies, from six different countries, participated in the workshop. The outcome of the workshop according to the feedback by the students (Student Survey, 2024) was that the workshop helped them to better understand how to create sustainable business ideas that have a positive social impact. More than half of the participants felt that they could start a social business in the future. One participant acknowledged that the workshop and methodology used in the process helped to understand “how to develop business ideas for social entrepreneurship”. Other students shared their feedback about remarkable progress in the learning: “I really learned a lot about social entrepreneurship and it was interesting to do this through this exercise because it was definitely more memorable than a “normal lecture“; “I believe that the specific steps for creating a business model have given me a basic understanding of business model creation”. Several students referred to the significant increase in their understanding on social business models and the “social impacts of the climate change”.
The outcomes of this pilot training will help in the future further development of the ten-credit study modules comprised of ten 1 ECTS micro-modules that will be offered to any learner in open access mode during the implementation of the project.
References
ARVO. 2023. The Finnish Association of Social Enterprises. Retrieved from https://arvoliitto.fi
Biggeri, M., Testi, E. and Bellucci, M., 2018. Social entrepreneurship and social innovation. London, UK: Routledge. doi, 10, p.9781351239028.
Circularity Gap Report. 2023. Retrieved from https://www.circularity-gap.world/
Drucker, P.F. 1998. The discipline of innovation. Harvard Business Review, 76(6), 149–157.
European Commission (EC). 2020. Social Economy in Europe. Retrieved from https://social-economy-gateway.ec.europa.eu/index_en
Krastina, A., Nawrath, L., & Bruksle, I. 2023. Sustainable Entrepreneurship for Climate Action: Digital Handbook on How to Innovate Sustainable Start-Ups and Businesses for Climate Action.
Kummitha, R. K. R., & Majumdar, S. 2015. Dynamic curriculum development on social entrepreneurship–A case study of TISS. The International Journal of Management Education, 13(3), 260-267.
Rivna, A., & Gress, M. 2023. Social entrepreneurship as a new business model. The case of refugee integration. Economic research-Ekonomska istraživanja, 36(1).
RYHTI. 2024. Support structures for social entrepreneurship in Lapland – RYHTI. https://www.vaikuttavalappi.fi/rakenteet-yhteiskunnalliselle-yrittajyydelle-lappiin-ryhti-english/
Scuotto, A., Cicellin, M., & Consiglio, S. 2023. Social bricolage and business model innovation: a framework for social entrepreneurship organizations. Journal of Small Business and Enterprise Development, 30(2), 234-267.
Student Survey. 2024. Webropol.
UN. 2024. Sustainable Development Goals. https://sdgs.un.org/goals
WEF. 2024. The State of Social Enterprise: A Review of Global Data 2013–2023. Insight Report. The Schwab Foundation for Social Entrepreneurship and the World Economic Forum publication.
Key words: sustainable, social entrepreneurship, entrepreneurship education, SDGs