A Quantitative Comparison of Social and Commercial Entrepreneurship: Toward a More Nuanced Understanding of Social Entrepreneurship Organizations in Context

Abstract

This study empirically addresses the differences between social and commercial entrepreneurship by using the largest available quantitative data source, namely the Global Entrepreneurship Monitor (GEM) 2009 survey on social entrepreneurship in Belgium and The Netherlands. We use a combination of exploratory statistical analyses and qualitative techniques to generate propositions on the organizations and initiatives that social entrepreneurs are involved in and contrast them with our understanding of commercial entrepreneurs. This study contributes to answer the call for more quantitative research and simultaneously argues that, despite the potential contribution of large-scale data, the validity and reliability of measurement instruments cannot be seen independently from their particular context. With this important observation in mind, our findings indicate a predominance of younger social organizations or initiatives that rely to a great extent on government funding, whereas earned income is limited. Furthermore, social entrepreneurs show less ambition in terms of employment growth and progression to more mature stages of the entrepreneurial process compared with commercial entrepreneurs.

Key Words:

• Social entrepreneurship
• commercial entrepreneurship
• organizational features
• Global Entrepreneurship Monitor (GEM)
• quantitative analysis
• context

Acknowledgements

We would like to express our appreciation to all key informants for their cooperation and for sharing their opinions and expertise with us. In addition, our thanks go to Jolanda Hessels, Frank Janssen, Jan Lepoutre, Enrico Pennings, André van Stel, Roy Thurik, and Sander Wennekers for their constructive comments on earlier versions of this paper, which were presented at the Seventh Annual Satter Conference on Social Entrepreneurship, November 2010, New York, USA, and at the 24th RENT Conference, November 2010, Maastricht, The Netherlands. The paper was written with financial support from the Intercollegiate Center for Management Science, Erasmus School of Economics, and the research program SCALES (http://www.entrepreneurship-sme.eu) carried out by Panteia/EIM and financed by the Dutch Ministry of Economic Affairs.

Notes

Source: GEM Adult Population Survey 2009.

Source: GEM Adult Population Survey 2009.

Source: GEM Adult Population Survey 2009.

Source: GEM Adult Population Survey 2009.

1. See also http://www.gemconsortium.org.

2. ‘Nascent social entrepreneurship,’ ‘young social business entrepreneurship,’ and ‘social established entrepreneurship’ are expressions borrowed from the GEM terminology. See Section 3.1 on ‘Data Sources and Definitions’ for an explanation of their meaning.

3. Different schools of thought have different opinions on the relationship between earned income and mission. See Bacq and Janssen (2011), Defourny and Nyssens (2010), and Hoogendoorn et al. (2010) for an overview of different schools of thought and their distinguishing features.

4. In contrast to the aggregate level data that are available for all the 49 participating countries, the microlevel data are available only for the national team of the country concerned; data from the other participating countries are not freely available. Since this study is the result of cooperation between the Belgian and the Dutch teams, we were able to use the data relating to these two countries.

5. For more details on the methodology of measuring social entrepreneurial activity within the GEM, see Terjesen et al. (2012).

6. We chose to consider this category of respondents as social entrepreneurs. They are thus not counted as commercial entrepreneurs.

7. All interviews were recorded and transcribed – their average length was 1 hour.

8. Data on the number of volunteers and part-time workers are not available for commercial entrepreneurs.

9. These specific measures for innovation are available only for social entrepreneurs, not for commercial entrepreneurs.

10. The intermediate space at the crossroad of market, state and civil society has been claimed to represent: associations (Streeck and Schmitter 1985), third sector (Pestoff 1992, Evers and Laville 2004), social economy that incorporates social enterprises (Nyssens 2006, Defourny and Nyssens 2009), social ventures (Kievit et al. 2008), and social entrepreneurship (Nicholls 2006a, 2006b).