Name: Nikodimos Geberetsadik

“Social Entrepreneurship is about rolling back the welfare state”

The rise and existence of the welfare state is necessitated by the failure of markets to avail, at
least minimum acceptable standards of social and economic wellbeing to all citizens of a
country. A welfare state is a state in which organizational power is deliberately used in an effort
to modify the play of market forces in at least 3 directions – first, by guaranteeing individuals
and families a minimum income irrespective of the market value of their work or property;
second, by narrowing the extent of insecurity by enabling individuals and families to meet
certain social contingencies (for example sickness, old age and unemployment) which lead
otherwise to individual and family crisis; and third, by ensuring all citizens without distinction of
status are offered best standards available in relation to a certain agreed range of social services1.
Social entrepreneurship or social enterprise (its manifestation) is also created and continues to
exist because of the failure of market forces to meet social needs. Their creation and existence is
also induced by the failure of the welfare state to cope with the diversified and multi-faceted
social and environmental problems facing contemporary society, which call for innovative
approaches that cross the boundaries of the welfare state. To see whether social entrepreneurship
is about rolling back of the welfare state or a creation of a different concept in the endeavor
against social problems, we need to examine the different attributes of each.
Resource
Social entrepreneurship depends on a mix of resources, from government and private grants to
own business, discarded resources and voluntary labor. Resources possessed by social
entrepreneurs are usually meager relative to their ambition and problems they are trying to
address, making them highly reliant on their creativity and relationship with the community they
are serving to make the best out of what they have got. In contrast the welfare state as its
ownership or administration presupposes is financed by tax from the private sector. It is
preoccupied with the transferring of resources from where it is abundant to where it lacks based
on the principles of equality of opportunity and public responsibility for the deprived.

Participatory Approach
Social entrepreneurs embrace a participatory culture where by beneficiaries and contributors to
overlap. They merely create conducive platform that attract and motivate targets to participate
and become change agents in their own lives. Targets are encouraged to become part of the
solution rather than being a passive recipient of wellbeing as in the traditional welfare state2.

Outcome
Empowerment as opposed to relief. Social entrepreneurship raises the social and economic
strength of individuals and communities through developing their confidence to depend on their
own capacity. It makes participants/targets to think positively about their ability to make change
in their lives and have more control over it, usually through focusing on giving individuals and
/or communities the necessary skills and abilities to embark on opportunities that could bring
sustainable desirable outcomes on their lives. In contrast the welfare state is only concerned with

1 Asa Briggs, The Welfare State Reader, C. Pierson and F. G. Castles, Polity Press, UK, 2006, P 16
2 Leadbeater, C. The Rise of the Social Entrepreneur. Demos, 1997, February 2010.
http://www.demos.co.uk/publications/socialentrepreneur
maintaining a certain socio-economic standard in the society mainly through cash transfers and
subsidized services. Its preoccupation with cash transfers and provision of subsidized services
has managed to bring short term reliefs but has failed to bring a permanent solution to the
problems society is facing, keeping them dependent on its provision.

Structure and Scope

Social entrepreneurship usually targets specific individuals and/or communities and provides
customized goods and/or services specifically designed to confront the problems and meet the
needs of specific targets. The welfare being provided comes out of deep understanding of the
problems the targets are facing and the targets involvement in its provision. On the other hand
the welfare state usually covers the whole population and welfare provision is mass-produced
and usually emanates from shallow understanding of the problems facing society. In terms of the
array of problems it is dealing with and the outcome it produces social entrepreneurship is much
wider in scope but the welfare state is much bigger in coverage.

Characteristics
Innovative as opposed to repetitive. Social entrepreneurship constantly innovates and updates to
position itself according to the problems, needs and priorities of participants. In contrast the
welfare state is concerned with provision of certain social services and transferring of resources,
neglecting the ever changing and dynamic need of participants and the opportunity to address it
with less commitment of resources.

Table 1.1 summarizes the different attributes of each

Table 1.1
Social Entrepreneurship Welfare State
Resource Mixed resources Taxation
Targets Defined and Specific Whole Population
Outcome Empowerment Relief
Structure Flexible and Participatory Rigid
Welfare Customized Mass-produced
Characteristics Innovative Repetitive

In my view, Social entrepreneurship is the creation of a new practical concept in the process of
human endeavor to address social and economic problems. The concept and phenomenon of
social entrepreneurship is a glimmer that could lead to privatization of the welfare state, making
possible an efficient and well tailored provision of welfare. And also decrease the tax burden on
the private sector.

1 Asa Briggs, The Welfare State Reader, C. Pierson and F. G. Castles, Polity Press, UK, 2006, P 16
2 Leadbeater, C. The Rise of the Social Entrepreneur. Demos, 1997, February 2010.
http://www.demos.co.uk/publications/socialentrepreneur
 References

1. C. Pierson and F. G. Castles. The Welfare State Reader. Polity Press, UK, 2006
2. Leadbeater, C. The Rise of the Social Entrepreneur. Demos, 1997, Viewed on February 2010.
http://www.demos.co.uk/publications/socialentrepreneur
3. Claus Offe. Some Contradictions on the Welfare State. PRAXIS International, 1981, viewed
on March 30 2010. www.ceeol.com.

1 Asa Briggs, The Welfare State Reader, C. Pierson and F. G. Castles, Polity Press, UK, 2006, P 16
2 Leadbeater, C. The Rise of the Social Entrepreneur. Demos, 1997, February 2010.
http://www.demos.co.uk/publications/socialentrepreneur