Applied scientific study “Social entrepreneurship opportunities of municipalities and opportunities to utilize private social entrepreneurship in order to fulfil objectives of municipalities”


As a result of a procurement procedure and within the framework of the Programme “Capacity-Building and Institutional Cooperation between Latvian and Norwegian Public Institutions, Local and Regional Authorities”, financed by the Norwegian Financial Mechanism in the planning period 2009-2014, Latvian Association of Local and Regional Governments involved Dynamic University Ltd. to carry out the applied scientific study on approximation of municipality objectives by developing public-private partnership in the field of the social entrepreneurship.

The research has been carried out between March and August 2016.

Following four tasks have been defined:

  1. To examine and describe the social entrepreneurship practice in other municipalities abroad.
  2. To examine and describe the social entrepreneurship experience of the public benefit organisations, commercial associations and agencies in Latvia.
  3. To assess the possibilities of the social entrepreneurship in order to address following problems: involvement of the parties that need social encouragement; involvement of the socially excluded; delegation of the social municipal functions; human resource development; improvement of public areas. 
  4. To justify the possibilities for the municipalities to get directly involved in entrepreneurship (business) that is aimed at social and not economic gains.


Following methodology has been applied:

  • secondary data analysis;
  • quantitative data collection method (survey);
  • qualitative method (semi-structured interviews);
  • data analysis: regression, cluster analysis dispersion analysis;
  • deductive method.

Three deliverables have been prepared and presented as a result:

1st deliverable: “Types and use of social entrepreneurship in other municipalities abroad. Utilization of commercial associations, NGOs and agencies, if the aim of the economic activity is not the profit” (written interim report and a presentation).

2nd deliverable: “Potential of developing and operating social enterprises for the municipalities” (written interim report and a presentation).

3rd deliverable: “Potential of the municipal social entrepreneurship and utilization of private social enterprises in order to achieve the objectives of the municipalities” (written scientific research - final report - and a presentation).

Most significant conclusions of the research:

  • Official legal provisions exclusively related to social entrepreneurship promotes public interest on the matter.
  • Presence of consumers of major social enterprises and accrediting and promoting organisations and incubators play a significant role in the increase of the number of social enterprises. Organisations that are involved in the accreditation and the promotion of social enterprises are also important players when it comes to raising interest of the society about social entrepreneurship. 
  • Lack of understanding the idea of social entrepreneurship (it is mostly associated with providing social services), might lead to incomprehension that new social enterprises in municipalities are intended to serve and employ the clients of social services. 
  • The most common type of social entrepreneurship in Latvia is an NGO.
  • The majority of the municipalities, namely, 59% of respondents, are willing to support the development of private social enterprises instead of establishing their own. However, at the same time the municipalities are reluctant to delegate their functions to the private sector. 
  • Municipalities are strong in starting new enterprises but lack material and administrative resources to develop new ideas and manage them. On the other hand, private enterprises are strong in developing and implementing new business ideas. Considering this, it is suggested for the private sector and the municipalities to combine their resources in order to establish and run social enterprises. 
  • Municipalities has mentioned involvement of the parties that need social encouragement as the most essential problem identified by the research (it has been pointed out by 49% of respondents).

The essential suggestions of the research include:

  • To explain the term of social entrepreneurship in order to emphasise the public and not the social dimension of it.
  • Municipal leaders should view the benefits of the social entrepreneurship in a broader perspective, namely, in a public scope instead of just the context of social services.
  • To concentrate on identifying those businesses that are involved in the social or so called hybrid entrepreneurship unknowingly.
  • To consider the possibility to assign the status of the social entrepreneur instead of social enterprise in the social entrepreneurship law draft regardless of the legal status (NGO, Ltd., municipal institution or agency).
  • While establishing social enterprises in the future, utilize them not only in order to implement certain policies but also as a tool of developing innovative ideas.