Creating an Enabling Institutional Context

Critical explorations of the state under the influences of globalization and neoliberal economic management have identified, among other trends, a weakening of state sovereignty, a decline in state resources, and the increasing uptake of public-private partnerships and networked governance (Dredge & Jenkins, 2007). These trends not only contribute to a reduction in state power, but also to the need for governments to work in collaboration with multiple interests to shape the social, political and institutional conditions that in turn create the optimism, knowledge and awareness of actors with regard to social entrepreneurship and its opportunities (Bramwell & Lane, 2010).

To illustrate, in the UK’s ‘Big Society’ approach (Box 2), the role of government was an important dimension shaping the extent to which social entrepreneurship could be empowered. The ‘Big Society’ policy agenda was a significant plank in the UK Prime Minster David Cameron’s first term in office and thoughts on its success are mixed (Civil Exchange, 2015; North, 2011). However, there is a strong critique that ‘Big Society’ failed to gain traction because, firstly, the government failed to create the conditions necessary for local actors to imagine, create and pursue social action. Secondly, ‘Big Society’ failed because the policy’s intentions were not consistent with the government’s deep philosophical commitment to neoliberal economic management. For example, practices such as competitive tendering of government contracts undermined support for social entrepreneurship because decisions prioritized financial cost and the social benefits of choosing a particular supplier with a social mission were not (or could not be) incorporated into decisionmaking (Social Enterprise UK, 2013).

Box 2. The UK’s ‘Big Society’: How Good Ideas Fail

In the neoliberal context where governments across the world were downsizing, outsourcing and hollowing out, it was becoming increasingly clear that governments did not have the resources to address the increasing array and complexity of wicked policy issues. In this context, the work of sociologist Anthony Giddens (1998, 2000) gained considerable traction in the lead up to the UK election in 2010. Many of the policy issues surfacing at the time (and indeed continue to surface) were derived from the market failures of capitalism. They were giving rise to a range of social, economic and environmental issues that governments (and particularly central governments at a distant to citizens) did not have the capacity to address. Giddens (1998) had previously observed a broad social shift from the ‘emancipatory politics’ associated with equity and freedom towards a more individualized ‘life politics’ project that prioritized self-actualization. In the process, Britain’s welfare state was becoming weaker and mini-public spheres were emerging that circulated around environmental, social, gender or other issues (Tucker, 1998), and that made it increasingly difficult for government to do its job.

Giddens response was to argue for a ‘third way’ political project: governments needed to acknowledge that they could no longer effectively address the complex public-private problems using traditional government centered approaches, and that greater attention needed to be placed on unlocking the potential of communities, individuals and businesses to address social and environmental problems using market-based mechanisms such as social enterprise. The ‘Big Society’ policy platform of David Cameron’s first term in office bears witness to this commitment to community empowerment and social action through market-based, non-government led solutions.

The ‘Big Society’ policy agenda finds its antecedents in the political shifts linked to neoliberal economic management discourses that gained a foothold in the 1980s, and that produced quite profound social failures including a rise in unemployment, a rise in precariat workers, and increase in crime rates, among other social indicators. In essence, the aggressive commitment to neoliberal free market principles adopted from the 1980s was producing a range and complexity of market failures and wicked policy problems, particularly in social and environmental arenas, that a ‘hollowed out’ government was unable to deal with. There was a perceived political risk that these issues, left unaddressed, would fester and leave governments to deal with potential social unrest and even greater uncertainty in the future. The ‘Big Society’ policy agenda was intended to empower local communities, and facilitate ground up solutions driven by civil society actors (e.g. individuals, for profit and not-for profit NGOs and businesses). By tapping into self-actualizing life politics the government sought to embrace a triple helix i.e. government, business and community-approach, to address societal problems. However,


Box 2 (continued)

an audit of the ‘Big Society’ in 2015 revealed widespread disenchantment, a belief that communities had in fact become weaker, and that government polices had undermined the key goals of the big society (Civil Exchange, 2015).

Among the key reasons cited for this failure are: that the market-based model of economic management works against the Big Society; power had not been transferred at any scale to communities; the government had done very little to progress the ‘empowered community’ agenda; that the government had failed to establish strong partnerships with the voluntary sector; and there had been a failure to encourage and mobilize the private sector to work for the common good (Civil Exchange, 2015: 62-64).

This contrasts with the situation in Nepal, a country where civil war (1996-2006) left the country and its government severely debilitated. Ranking 145 out of 187 countries in the UN’s 2014 Human Development Index, poverty, unemployment and social marginalization are key issues (UNDP, 2014). Government is highly centralized in Kathmandu, local government exists but has not had elections since 2002, and Local and District Development Committees take responsibility for local needs but are under-resourced and poorly co-ordination (Sapkota, 2013). In this context, tourism social entrepreneurship, which leverages the bourgeoning international adventure tourism market to deliver social value to the Nepalese, has grown strongly, and there is increasing evidence that it has moved from being a plethora of individual social enterprises to become increasingly “joined up” as a social movement. International institutions, global travel companies and NGOs inside and outside the country are working with local village development committees to deliver social outcomes, and there is a growing number of social enterprises that take a “peak body” function to lobby for social entrepreneurship support and to work with individual social enterprises to transfer knowledge, provide business advice and incubate ideas, connect supply chains, mentor and so on (e.g. Biruwa, 2015; NSEF, 2015). Many of these social enterprises focus on the delivery of social, economic and environmental support to communities outside the tourism region focused on Nepal, Mt Everest and Annapurna. Case studies in the literature suggest that social enterprises are now operating as quasigovernments, providing a range of services including infrastructure provision, health, education and social services (Jones, 2013). In this case it is the absence of government and the presence of a deeply committed section of society (both Nepalese expats and residents) that have driven a wide range of social enterprises to deliver social benefits. Moreover, there is also strong support from international institutions, NGOs, tourism businesses and other external agencies, which not only gives further credibility and legitimacy to social entrepreneurship, but these links provide much needed access to expertise, financial support, international markets and supply chains.

While the context in the UK and Nepal are very different, they highlight the different roles governments play in different contexts. Shockley and Frank (2011) observe that, in systems where there is low state capacity such as in developing countries, social innovation and entrepreneurship tend to happen externally following a bottom up path of innovation, and governments, if they do join in, tend to join the process later. Alternatively, in developed countries the situation appears to be the reverse, where governments play a supportive role most often indirectly through grants and business support, awareness raising and so on (Shockley & Frank, 2011). Dorado and Ventresca (2013) also warn against placing too much attention on the characteristics and motivations of heroic entrepreneurs and that more important are the institutional conditions that shape the presence of those motivations in the first place. They suggest that the presence of soft institutional conditions conducive to building social enterprise might in fact be more important than the motivations of individuals and identify two conditions likely to influence an actor’s motivation: public awareness and dissonant loyalty. Increased public awareness adds incentive because a favorable public profile contributes to social approval. Dissonant loyalty suggests that actors are more likely to be motivated to start social enterprise because they share some kind of collective identity or membership, such as a shared goal or a “difficult initiation”. So, to Dorado and Ventresca (2013), creating these conditions where collective identity or membership can flourish, is important. Tourism offers particular advantages in creating these conditions for dissonant loyalty. Travel, particularly pleasure travel, it is generally a rewarding experience, so that travelers could be positively disposed to the creation of this collective identity or membership.

These observations, both from the literature and anecdotally from tourism practice, suggest we need to think more broadly about the institutional context, how is it shaped, and by which actors and agencies. The literature suggests that governments help to create the right conditions to catalyze the visions and passions of individual social entrepreneurs, and second, governments help to create the political and social conditions-the societal norms-that help to synergize and scale the benefits of social entrepreneurship across communities (Seraphin, Butler, & Vanessa, 2013). The above discussion also suggests that while what governments do may be important, if indeed public awareness and dissonant loyalty are important factors in creating enabling institutional conditions for social enterprise, then destination management organizations may be able to assist in creating and fostering these conditions. Governments’ role in helping to create enabling institutional conditions must therefore assist (1) in building supportive institutional structures and actions, and (2) in managing the soft governance of power, positioning and influence so that stakeholders (government, non-government, societal, travellers, etc) are enrolled in the idea and value of social entrepreneurship.

Given that there is a wide variety of tourism-oriented social enterprises with different objectives, business models and social goals, in various stages of development, and operating in different contexts (Von der Weppen & Cochrane, 2012), it would be inappropriate to provide a universal list of directives for governments wishing to enable social entrepreneurship. However, drawing upon the broader literature, as well as the limited case study research in tourism, it is possible to identify key characteristics of enabling institutional conditions that warrant further consideration.

First, within tourism policy discourses, social entrepreneurship should be positioned as a complementary economic activity and not cordoned off as a separate set of initiatives that compete with the existing businesses. There are a great number of tourism social enterprises that integrate seamlessly into the tourism system, and whilst their social mission may not be immediately obvious, they contribute visitor interest and deepen the products and experiences available for visitors. The boom in social enterprise cafes and restaurants in many large cities in western developed economies is evidence of this integration so tourism and social entrepreneurship (Sadler, 2015). In this way, tourism marketing and management organizations could recognize that social enterprise adds an attractive dimension to the suite of tourism products in a destination region, and they could profile them and raise awareness of the contributions they make to local communities and environments.

Second, careful attention to the balance between bottom-up and top-down policies is required. For example, in examining UK economic development policy, Huggins and Williams (2011) note that economic development tends to be delivered from a top-down central framework, but that social entrepreneurship usually starts on the ground with individuals who see a social issue and have a creative way to address it using a business proposition. These authors argue nurturing ground up social entrepreneurial creativity is not easily achieved by traditional top down economic development policies that tend to favor tourism industry business logics. Such industry policies, as previous discussed, tend to focus on increasing tourism demand, initiatives to improve productivity, initiatives to attract investment, and policies to address market failures. It is therefore important that any tensions, conflicts or countervailing influences in the existing policy context are addressed.

Third, and related to the above, the way that policies across different sectors work together (or not) has an impact on the overall level of institutional support for tourism social entrepreneurship. Well-meaning policies relating to environmental protection, tourism, heritage conservation and economic development, for example, might work to support or hinder the development of social enterprise. A mapping of policy complementarities and trade-offs across different sectors, and their implications for tourism social entrepreneurship would be an important step in assessing institutional support.

Fourth, as previously discussed social entrepreneurship relies heavily upon its ability to be competitive in the marketplace, and to replicate and scale its model to grow social benefit. By corollary, an enabling institutional environment will support the development of formal and informal relationships—i.e., the hard and soft structures of governance. Formal relationships include facilitating the building of partnerships between diverse actors and agencies, while informal relationships are enabled by creating spaces of dialogue, information sharing and co-creation through which awareness is raised and social enterprise is legitimated. For governments, facilitating these formal and informal relationships is not only necessary in recognizing social entrepreneurs as legitimate stakeholders in formal governance arrangements, but could also entail managing power relations by encouraging participation, allocating particular roles and responsibilities, and other strategies to empower (see Phi, Whitford, & Dredge, 2016).

Fifth, an important feature of enabling institutional conditions is the need for cultural change. Various authors argue that there is a need for overt political commitment to social entrepreneurship and a need for cultural change so that it be accepted as an important plank in social-economic-environmental activity (e.g. Quak, 2014). However, casting an eye beyond the Global North context within which this observation is made, we need a more nuanced understanding of this claim. In many developed countries, where interest in social entrepreneurship is undergoing something of a rebirth and its scholars are generating a voluminous literature on the topic, a call for government commitment to incorporate social value in economic activity might be reasonable. However, in many developing countries social entrepreneurship already enjoys recognition, legitimacy and strong government support. In Brazil, Bolivia, Ecuador and Argentina, for example, policies supporting the Solidarity Economy (which embodies cooperation, co-responsibility, communication and community) have been well established since the mid-1980s (Allard, Davidson, & Matthaei, 2007; Miller, 2010). As a result, this point that governments should take action to facilitate cultural change, support social entrepreneurship and other forms of economic activity to assert social value, must be understood and actioned within context.

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