The aim of the paper is to conceptualise the still under-researched role of social entrepreneurs in the multilevel network arena of rural contexts. While social entrepreneurship is sometimes used as a euphemism for the cost-driven outsourcing of public services to private contractors, the paper conceptualises rural social entrepreneurship as complementing an entrepreneurial mission with a social mission (Steinerwoski et al., 2008b). The business activity of rural social entrepreneurs contributes innovative ways to meet the needs of local rural communities. Over and above the positive externalities of entrepreneurship, such as innovation and structural change, the business models of rural social entrepreneurs address societal challenges such as unemployment, poverty, social exclusion and marginalisation. This extra contribution justifies more tax-financed support schemes for rural social entrepreneurship, because it is based on a pro-active and risk-taking mindset of actors who develop innovative answers to challenges in rural societal contexts. The innovation can be reflected in new forms of service delivery or in the delivery of new services that meet challenges in rural societies that have not traditionally been addressed in the location. This is clearly different from an understanding of social entrepreneurship where firms deliver standardised public services based on contracts that grant them the value of the services that have been outsourced to them.
We introduce a conceptual framework in this paper that is informed by social capital theory and draws on literature dealing with place-based entrepreneurship. This framework facilitates understanding and further systematic empirical investigation of how rural social entrepreneurs strategically mobilise and reconfigure different types of social capital for their business model by leveraging community-level resources through vertical linkages to regime-level actors,
such as government bodies, development agencies, fund raising agencies and public research institutions (Geels, 2004). The presented framework provides a critical refinement of previous network approaches to social entrepreneurship and delivers a more nuanced and multilevel understanding of the interplay between horizontal and vertical linkages of a rural social entrepreneur (e.g. Shaw and Carter, 2007; McKeever et al., 2014).
We believe our framework and the empirical support provided particularly help to understand the complex role of social entrepreneurs as intermediaries between local communities and powerful regime-level actors in the context of rural development. However, future studies should test the framework empirically on a broader empirical basis and clarify whether it holds true in other rural or even in urban settings. One indication that might question the transferability of our framework across rural settings is the empirical evidence that rural contexts are very disparate (Breitenecker and Harms, 2010). Moreover, the transferability to urban settings must be tested in view of the identified differences in legitimacy of entrepreneurship between rural and urban contexts (Kibler et al., 2014). Moreover, our framework suggests that establishing downward and upward linkages depends on the rural social entrepreneur’s ability to connect with clearly identifiable place-based communities and their respective socioeconomic challenges.
Researchers might use follow-up single case studies to push further and dig especially deep into the precise meaning of specific networking practices of rural social entrepreneurs. Comparing institutional context factors and corresponding entrepreneurial practices in different case studies should make it possible to identify generalities and differences, and to contextually verify individual elements. Follow-up studies might also develop a more dynamic perspective of our suggested network model which currently represents a rather static actor configuration of rural social entrepreneurship.
In later phases in the development of this stream of research, the new ground broken through exploratory research activities should be secured by testing the insights in confirmatory studies. However, researchers must ensure appropriate contextualisation when employing quantitative methods. Interdependencies uncovered in the qualitative studies can be modelled as moderators or mediators. Confirmatory studies can also identify the boundary conditions of the framework. We assume that the effectiveness of rural social entrepreneurs in filling their intermediary position in the presented network model is somewhat over-estimated based on our case evidence. While the empirical picture supports the intermediary position of the rural social entrepreneurs proposed in the theoretical framework, the entrepreneurs in both cases turned out to be pronounced change agents who facilitated significant effects in their regions. Thus, they might differ from other types of rural social entrepreneurs in their capacity to mobilise resources from regime-level actors and their impact on the community. Another boundary condition might be different levels of absorptive capability in local communities and their different levels of need for such activities. We studied structurally weak regions and thus our findings apply to rural contexts with a weak public sector that leaves voids in the institutional setting that offer viable business opportunities for social entrepreneurship. Future studies should verify the existence of such business opportunities in institutional settings with a stronger public sector.
A key insight from our analysis refers to the dialectic of horizontal and vertical networking which characterises the role of the rural social entrepreneur. Relationship building and social capital mobilisation requires actors to obtain legitimacy within the rural community (and its different LCGs) (see also Munoz et al., 2014) which also involves authentic resource access to the regime level and vice versa. This is a fundamental challenge for the rural social entrepreneur when implementing a business model. To put it bluntly, the entrepreneur has to make a value proposition to both rural community members and regime actors which in reality is often based on potential rather than actual resource access in his or her networks.
Our model further reflects insights from structuration theory and its conceptualisation of the interplay between agency and structure (Giddens, 1984; Jack and Anderson, 2002), as it has previously been applied in studies on rural social entrepreneurship (Steinerwoski et al., 2008b; Steinerowski and Steinerowska-Streb, 2012). The social challenges which rural social entrepreneurs initially address are often related to particular configurations on the regime level, such as failures of public policies or market actors in the efficient delivery of services to rural communities. Moreover, regime actors are responsible for promoting or hindering rural social enterprise activity. In our model, we highlight that the agency aspect of rural social entrepreneurs lies in their intermediary position between rural communities and the (structural) regime level. Given local knowledge and their expertise on the regime level, rural social entrepreneurs can adapt their business models to the circumstances of the place, as well as to structural enablers and limitations. According to structuration theory and insights from the multilevel perspective, innovative niche strategies of rural social entrepreneurs can offer palatable solutions to problems on the regime level itself and thus might lead to a transition towards more sustainable social and economic systems (Nicholls and Cho, 2008; Smith et al., 2010).
However, applying the analytical framework in a multiple case study has also reinforced the notion of the limited transferability of all forms of social capital, because they are highly context-specific and cannot be easily institutionalised in organisations or transferred through time and space (Leana and Van Buren, 1999; Andrews, 2010). For example, in our northern European case, the frequent changes in government threatened the social entrepreneurship model, while in the southern European case the financial crisis caused the funding schemes to dry up, thus tying the hands of the regime actors. This specific characteristic poses a major challenge to the scalability of business models in rural social entrepreneurship. Owing to its far-reaching practical implications, the issue of limited scalability must be addressed in future
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Figure 1: Interplay of different forms of social capital in rural social entrepreneurship Note: Network actor Bonding social capital Bridging social capital Linking social capital
Community Level (Level 1) Regime Level (Level 3)
Intermediary Level (Level 2) Social Entrepreneur B Social Entrepreneur A Social Entrepreneur C Local Community Group B Local Community Group D Local Community Group A Local Community Group C Funding Body Government Body Research Institution Development Agency
Table 1. Overview of the collected empirical data Case
study
Rural region
No. of conducted interviews Extent of participatory observation
(pages of field notes collected during 8 weeks of sight visits