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Social Entrepreneurship As a Potential Trailblazer for a Social and Humane Form of Society

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Social Entrepreneurship As a Potential Trailblazer for a Social and Humane Form of Society Social Entrepreneurship as a Potential Trailblazer for a Social and Humane Form of Society A Qualitative Study of the Social Entrepreneurship Ecosystem of Israel - Master Thesis submitted in partial fulfilment of the requirements for the degree of M.Soc.Sc Organizational Innovation and Entrepreneurship Copenhagen Business School Student Names: Niklas Hencke, William Hovmand Johs, Niklas Yves Peter Student Numbers: 124251, 125021, 125386 Submission Date: 15.05.2020 Supervisor: Christiane Mossin Characters/Pages: 348.551 / 150 Table of Content Table of Content ii List of Figures iv List of Tables v List of Abbreviations vi Abstract vii 1.Introduction 1 2. Capitalism 5 2.1 Intro to Capitalism 5 2.1.1 Contemporary Capitalism: Development 5 2.1.2 Status Quo 6 2.2 Shortcomings of the hegemonial system 7 2.2.1 Inequality 7 2.2.2 Sustainability 9 2.3 Towards Altering the Status-Quo 11 2.3.1 Real Utopias 12 2.3.2 Overcoming Capitalism 16 2.3.3 Altering Capitalism 19 3. Social Entrepreneurship 24 3.1. Social Entrepreneurship as a Concept 24 3.1.1 Defining Social Entrepreneurship 24 3.1.2 Social versus Business Entrepreneurship - Differences and Similarities 28 3.1.3 The Hybrid Model - Opportunity or Neoliberal Takeover of SE 34 3.1.4 The SE Ecosystem - The Relation between SE and Institutions 37 3.2. Challenges of Implementing Social Entrepreneurship 40 3.2.1 Money is not Everything, but Everything Needs Money - The Challenge of Financing SE 40 3.2.2 The Challenge of Measuring Impact as Social Venture 42 4. Israel - A brief introduction 46 4.1 Creation of a Jewish Nation State 46 4.2 Major Conflicts 47 4.3 Israel - The Start-up Nation 49 5. Analytical Strategies and Methods 51 5.1 What, Why and How? 51 5.2 Quantitative versus Qualitative Research 54 5.3 Research Design 56 5.3.1 Sample & People 56 5.3.2 Questionnaire 57 5.3.3 Research Timeline 58 5.3.4 Hypotheses 60 ii 5.4 Operationalization of Analytical Framework 63 5.5 Biases & Limitations of our Research Methods 65 6. Analysis of Research Results 68 6.1 Subjects & Institutions 68 6.2 Israel Social Entrepreneurship Ecosystem 82 6.3 Analysis of Hypotheses 99 7. Discussion 116 8. Limitations and Future Research 135 9. Conclusion 141 Acknowledgements 143 References 144 Appendix 154 A: Ann-Christina Petersen Lange 154 B: Varda Shoham 169 C: TheHive 177 D: Omri Boral 180 E: Oren Glanz 195 F: Jennifer Werthwein 197 G: Inbar Blum 209 H: Nir Gordon 212 I: Anonymous Military Source 221 J: Questionnaire Social Entrepreneurship Israel 226 K: Balance Sheet Vaude 2018 - Economy for Common Good 229 iii List of Figures Figure 1 Health and social problems are closely related to inequality within rich countries (Wilkinson and Pickett, 2011) .................................................................................................. 8 Figure 2 Growth curves for economic and ecological systems. Jackson (2009, p.8) ........... 10 Figure 3 Pathways to social empowerment. (Wright, 2010, p. 86) ........................................ 14 Figure 4 Overview of the most important types of property, their functions, limits and conditions (Felber et. Al., 2017, p.14) .................................................................................... 18 Figure 5 The Economy for Common Good Model. All key players with Society in the center (Felber et al., 2017) ................................................................................................................ 19 Figure 6 The entrepreneurship spectrum illustrating the boundaries of social entrepreneurship (Abu-Saifan, 2012, p. 26) .......................................................................... 26 Figure 7 The SE Ecosystem Map (derived from Bozhikin et al., 2019, p. 739) .................... 38 Figure 8 Research Timeline .................................................................................................. 59 Figure 9 Social Entrepreneurship Ecosystem Map of Israel ................................................. 83 Figure 10 Median age at which students get their undergraduate degrees in OECD countries (Maltz, 2015)) ......................................................................................................................... 86 Figure 11 Traditional model (Isenberg, 2011, p. 4) ............................................................... 87 Figure 12 Gross Domestic Spending on R&D (OECD, 2020) ............................................... 89 Figure 13 Population by Religious Affiliation in 1949-2009 / Population by Ethnic Origin in 1948-2009 (Bystrov, 2012) .................................................................................................... 96 iv List of Tables Table 1 Definition and Characteristics of Entrepreneurship (Derived from Abu-Saifan, 2012, p. 23) ...................................................................................................................................... 30 Table 2 Definition and Characteristics of Social Entrepreneurship (Derived from Abu-Saifan, 2012, p. 24) ............................................................................................................................ 31 Table 3 Differences between Qualitative and Quantitative Research Methods (Derived from Belk et al., 2012) .................................................................................................................... 55 Table 4 List of Interview Subjects with respective Roles and Interview Format .................... 60 v List of Abbreviations CGBS: Common Good Balance Sheet COVID-19: Coronavirus disease 2019 CSR Corporate Social Responsibility CVC: Corporate Venture Capital DBL: Double Bottom Line DIC: Danish Innovation Centre ECG: Economy for the Common Good FDI: Foreign Direct Investment FROI: Financial Return on Investment GDP: Gross Domestic Product GISEP: German Israeli Start-up Exchange Program IP: Intellectual Property IVN: Israel Venture Network KPI: Key Performance Indicator MNC: Multinational Corporation MVP: Minimum Viable Product NGO: Non-governmental Organization OECD: Organization for Economic Cooperation and Development PR: Public Relations R&D: Research and Development ROI: Return on Investment SDGs: Social Development Goals SE: Social Entrepreneurship SIM: Social Impact Measurement SME: Small and Mid-Sized Enterprises SROI: Social Return on Investment TBL: Triple Bottom Line TRPF: Tendency of the Rate of Profit to Fall UBI: Universal Basic Income VC: Venture Capital vi Abstract Contemporary global capitalism is undoubtedly creating tensions and inequalities in fields like social justice and sustainability. While there are a lot of existing proposals to overcome the hegemonial system or alter it towards a more social future, those rarely receive enough attention when structural changes are debated. Our research focuses on these approaches while introducing Social Entrepreneurship (SE) as a possible key pillar for a socially humane tomorrow in the form of a field study. The study was predominantly conducted in the form of qualitative research in Israel, the country with the highest ratio of innovation per capita. We analyse feedback from various stakeholders in order to create a comprehensive map of the SE ecosystem of Israel and identify both takeaways and challenges of SE in this context. Along with our research findings we identify major challenges of SE in general, being its definition, the financing of social ventures and the measurement of their created impact. Derived from this we argue for the creation of hybrid models, for-profit ventures with a primarily social mission. Since, in a complex configuration of stakeholders and influence relations, SE cannot be a standalone approach to achieve a more balanced and social world, we point out which other factors need to be in place and indicate how a transition process can be structured. Finally, we take a look at criticisms of SE and discuss how more capitalism included in a discipline like SE can actually help to reduce capitalist influence on a broader scale. This study lays a foundation for a process of social empowerment through SE. It is not providing a detailed universal blueprint for the implementation of SE as a pillar of a more humane future, but it paves the way to the implementation of use cases and long-term studies of the field in order to get a complete understanding of interplay of different institutions and stakeholders, with the end goal to define tailored transition approaches. vii 1. Introduction The introduction of capitalism in our society has led to an immense increase in output and efficiency, with the benchmark of success being measured by relative growth (Jackson, 2009). While capitalism has brought us the likes of the industrial revolution and immeasurably increased our quality of life, it has also created a society that is obsessed with growing, whereby politicians and economists seem to be more worried about their Gross Domestic Product (GDP) than their people. Our world is suffering from extreme inequality, unsustainable practices and questionable law-making, meanwhile, it is the poorest parts of the population that suffer the consequences. If, according to an Oxfam report (2016), the sixty-two richest people in the world have as much as the poorest 3.6 billion people, then global capitalism is no longer the best of all possible worlds and is on a rapid downhill trajectory. Worst of all, without any self- correcting mechanisms or national government to stop it. An old society, created in the first industrial revolution - the liaison between liberal-capitalist
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