Pest-factors of social entrepreneurship development in Ukraine: helicopter view

Key words: social entrepreneurship, PEST-factors, social problems, challenges, opportunities.

Introduction. For the last 20 years, social entrepreneurship (SE) in Ukraine continues to arouse interest as a leader of innovation in solving social problems. New opportunities are emerging, the use of which can be a significant impetus for the growth of this sector. These include expanding the powers of local governments in the framework of administrative reform, disseminating the ideas of an inclusive economy, and so on. However, the external environment contains some uncertainties and risks. Permanent fluctuations of political, economic, socio-cultural, technological factors strengthen or weaken SE as a whole system. Therefore, the periodic analysis of the complex of these factors is designed to contribute to the development of strategies for its development in the upcoming years.

Literature Review. PEST factors of SE development in Ukraine have not been the subject of special research. However, to some extent, they are reflected in publications that address various aspects of this phenomenon.

The most profound research in recent years was made by Svynchuk [13], who has provided the classification and characteristics of main factors intensifying the SE development (social, economic, regulatory, organizational). The scolar connects the high rates of SE development with the economic development of countries and the social consciousness of citizens and sees the intensification of SE development in Ukraine primarily in providing the legal basis for their activities, public policy, a sufficient level of social responsibility of business. The importance to attract alternative state sources of funding is also considered.

NGO «Youth Center for Social Transformation SOCIUM-XXI» with the financial support of the Western

NIS Enterprise F und in 2017 conducted a survey of SEs in Ukraine. The survey results (unrepresentative, using the Google platform, N = 150) presented the organizational forms of activity, SEs types, the content of their activities and the area of distribution. It was found that the main difficulties for SEs are lack of financial support, qualified staff / volunteers, and own premises, insufficient support from the state / local authorities. The main development factors are «financial support, support of the state / local government, training of SE leaders, expansion of production and technical base, raising public awareness» [12, с.27].

The publication «Ecosystem of Social Entrepreneurship in Ukraine: Challenges and Opportunities» [7] presents the results of applied political economy analysis (APEA) conducted by the international organization PACT (Pact). Ecosystem participants such as social enterprises, incubators and accelerators, donors / investors are described. It is concluded that the ecosystem is not fully formed. The researchers consider the main gap to be «the lack of systemic interaction and communication between players» [7, с.31]. There is a lack of methodology for measuring the social effect of SE activities. Among the necessary steps are SE promotion, interactive information exchange and networking. It is emphasized that investments in this sector require monitoring of financial and social results, introduction of hybrid financing, establishment of interaction with business. Higher education institutions are considered as potential incubators.

The publication of the Ukrainian Forum of Philanthropists [17] reveals the legislative field, the available financial and non-financial infrastructure to support the SE and their main characteristics. Lack of political recognition, stereotypes and lack of awareness, unstable economic and political situation, high level of corruption and bureaucracy, legal irregularities and rather difficult access to credit are among the macrosocial factors that hinder the favorable environment for its development. At the same time, the presence of significant potential for development is recognized.

In 2017, through the efforts of various author teams, manuals on SEs were published [4], providing important information on possible organizational and legal forms of SEs in Ukraine, business planning, tax regimes, lending mechanisms, attracting non-refundable and repayable investments, accounting and reporting. F actors influencing the development of SEs are grouped by the authors in the form of opportunities. These include the economic situation, legislation, human resources, support for international funds and organizations, and more.

Svynchuk et al. [14] present the prospects of SEs development in Ukraine, which depend on factors that cannot always be influenced, so the scenarios are different. Among them, gwowth as a: «1) reaction of society to a large number of social problems and vulnerable groups; 2) result of the emergence of the status of «social enterprise» in the legislation of Ukraine; 3) result of economic development of Ukraine» [14, с.69-72]. Given the lack of relevant information, the methodology for assessing the social performance of SE is also of particular importance.

Scientific articles on the development of SE in Ukraine are quite diverse. They reveal the specifics of SE, their organizational and legal forms and business models, as well as the peculiarities of creation and experience. However, a number of publications in recent years have shown new trends: 1) the transition from the analysis of SE as a tool for solving social problems to clarifying its socio-economic characteristics; 2) attention to the regulation of the development of SE at the regional and local levels in connection with the reform of public administration.

Turskyi summarizes the experience, main features and functions of SE in Ukraine in the context of inclusive economy, which is one of the priorities of global development until 2030. The easiest way to implement it is to use the cooperative model ESOP (models of co-ownership of the company by its employees and investors). The researcher argues that «the application of the ESOP model in Ukrainian enterprises can ensure the overcoming of social inequality, strengthening the middle class and the formation of SE in the regions of Ukraine» [18, с.23]. Liakh [10] focused on institutional support for the SE development and sees the importance of social enterprises development in the Donbass region in achieving sustainable socio-economic development of local communities, reducing social tensions, strengthening social capital.

Diuk [5; 6] and Kosovych [9] link the prospects of the SE to the creation of economic models of the welfare state. Diuk [6] analyzes SE as an innovative form of business organization. At the same time, he sees innovation not in advanced management technologies, but in socially important approaches to the distribution of goods, the formation of new values of a social nature, and so on. The author evaluates the principles of cooperation for their compliance with the principles of SE development [5]. In general, cooperation of public organizations potential, business and state policy is considered as a priority form of SEs organization in modern conditions. Kosovych's [9] opinion on the need to transform the domestic SE from the format of various charitable organizations to effective forms of management seems quite correct. The researcher analyzes the feasibility of changes at the level of legal, economic, and ideological factors. In particular, given the limited opportunities for state financial support, he sees the expediency of using preferential bank lending under state guarantees.

Hulevska-Chernysh [2; 3] examines the current state of SE development and development prospects in the context of foreign experience, current issues and international support. Current challenges include a lack of government support and a shortage of professionals, a lack of understanding of SE concept and a positive attitude towards it, and problems with access to investment. According to the author, the SE development is complicated by the high cost of resources and unstable and unpredictable market conditions. Despite certain challenges in the field of social procurement and procurement of social services under the Law of Ukraine «On Social Services», these opportunities are considered promising for local governments. Yurchenko [19] describes the SE role in the development of society and local communities abroad and the barriers and restrictions that prevent the development of SE in Ukraine. Also considers the current challenges of Ukrainian society, namely military action and the problems of internally displaced persons, as additional reasons for intensifying social initiatives.

Ivanyshyn et al. [8] substantiate the need to form an appropriate institutional environment for SE in rural communities through the creation of the Regional Center for Social Entrepreneurship Development in their study. The content of the Center's activity is seen in identifying social initiatives, changing the worldview of rural residents and providing practical support to SEs. Contrary to the prevailing opinion among scholars on the lack of a separate law on SEs as a problem for its development, Nazaruk [11] sees some opportunities in this and singles out the availability of resources that are not involved in traditional business (human, unused buildings owned by communities), big business interest in outsourcing, increasing consumer loyalty to SE products, support of international funds and organizations.

The above analyzed publications demonstrate that in recent years considerable information has been accumulated on the development of SEs in Ukraine. However, opinions on the macro-environment that affects its functioning are quite mosaic. This makes it difficult to develop strategies for the coming years.

The aim of research: to identify the current and projected impact of PEST factors on the SE development in the coming years to develop an action strategy.

Methodology and research methods. The main methodological approaches were system-structural and system-dynamic approaches. This allowed us to consider the macroenvironment of the SE as a holistic dynamic system, the constituent elements of which interact with each other and influence its development. The application of the PEST analysis method included four stages:

1) desk research for the collection, analysis, systematization of secondary information on the basic characteristics of PEST-factors (political, economic, socio-cultural, technological), which affect the state of SE at the present stage. Development of a questionnaire for interviewing experts.

2) expert survey to identify the extent of the impact of PEST factors on the development of SE. The impact of PEST factors was proposed to be assessed on a five- point scale (1 - minimum impact, 5 0 maximum impact); the probability of their change - on a three-point scale (0 - in the future the factor will cease to exist, 1 - the factor will not change in the near future, 2 - the factor will increase in the near future). The experts represented different regions of Ukraine, taking into account their geographical location (North-South-East-West). Responses to the proposed questionnaires were received from 9 experts from six regions of Ukraine (Donetsk, Zakarpattia, Lviv, Poltava, Chernivtsi regions and Kyiv). Among them, 6 experts are representatives of public organizations that directly implement SE, as well as 3 experts are scientists whose subject of study is SE.

3) the obtained results analysis: a) summary table preparation; b) calculation of the average value of the influence of PEST factors and the weighted average value for each of the factors, taking into account the forecast of their changes.

4) development of optimal actions for the development of the SE for the coming years (within the key factors identified by experts of each of the PEST- groups).

Results. The results of expert assessment by the PEST method are shown in Table 1. They present the extent to which each of the factors influenced the SE development and allowed to develop a set of possible actions in response to existing opportunities and challenges of the macro environment.

Table 1

The impact of PEST factors on the development of social entrepreneurship in Ukraine (according to experts)

Source: developed by the authors according to an expert survey.

In the group of political factors, expert evaluation showed the highest importance of institutional capacity of civil society organizations. Opportunities for decentralization of power and challenges of socioeconomic and political instability gained almost equal weight. Assessing the political factors of SE's development, the experts note that strengthening the institutional capacity of civil society organizations has the greatest impact on SE spread and is of key importance in the coming years. The process of power decentralization in Ukraine, involving the provision of basic administrative and social services at the territorial communities level, may also intensify SE spread. Some of the services may be provided by SEs. According to one expert, SE in Ukraine has «enormous potential at the regional level and this is the aspect we need to focus on». Respondents note that the processes of transferring power to local communities in the framework of administrative reform will be more important in the future and contribute to SE development. Scientists note the need to combine the efforts of civil society organizations and local authorities for SEs to become one of the mechanisms to mitigate the negative impact of social problems on vulnerable groups [8; 10; 19].

Another important political factor influencing the development of the SE is the socio-economic and political instability in Ukraine, which encourages the establishment of social enterprises as a way to overcome these challenges. Experts give a little less importance to the lack of understanding of SE concept at the level of government and society. They do not expect this factor to change in the near future.

Legislative unregulated SE received the least weight in the group of political factors. This assessment of experts correlates with the position of Nazaruk [11], who believes that the lack of a special law does not hinder the SE development, but provides an opportunity to evolve from a commercial project of a public organization to a public company. In the near future, experts also do not expect the adoption of certain regulations that would directly regulate the functioning of the SE in Ukraine.

Among the economic factors influencing the SE development, the most important was the dependence on funding from international donors and international technical assistance (grants). According to experts, it will intensify in the near future. Therefore, they attach great importance to the development of budget funding. At the same time, there is some skepticism about increasing the role of public authorities and local governments in financing SEs, in particular through projects and social procurement. In this context, one of the experts involved in SE notes: «So far, there are no promises from the authorities in the SE field. There is no desire to direct part of the income tax to the development of civil society. The authorities did not want and do not want to see the NGO as a partner».

In general, social entrepreneurs emphasize the lack of support (including financial) from the state / local authorities [12].

According to experts, the challenge of low competitiveness and the possibility of targeted bank lending gained almost the same weight (3.5 and 3.2, respectively). The market of venture philanthropy and social investment received the least weight in the group of economic factors. The need to attract alternative government sources of funding for SEs is justified by a number of researchers. It is proposed to set up clusters, issue social bonds [13], apply the cooperative model ESOP (model of co-ownership of the company by its employees and investors [18], introduction of hybrid financing [6], use of preferential bank lending under state guarantees [9].

The group of socio-cultural factors is characterized by the smallest gap between the weight of some of them. Experts have attached the greatest importance to the spread of social problems and predict an increase in the impact of this factor in the coming years. That is, the increase in the number of SEs may be a kind of response to growing socio-economic tensions. The probability of such a scenario was considered by researchers in 2017 [14]. It should be noted that this factor is especially relevant in the context of the Covid-19 pandemic, which caused a crisis not only in the health care system, but also affects social protection: increasing unemployment, increasing poverty, declining incomes of the working population. According to some forecasts, the crisis may increase the risk of poverty among those who have traditionally been at a disadvantage (single parents with children, households with children under 3, single retirees over 65), and the growth of deprivation poverty may be delayed by 2021-2022 [1]. The unemployment rate (by the ILO methodology) for the first quarter of 2021, compared to the first quarter of 2020 increased from 8.6% to 10.5% [15].

Opportunities for scaling up and causing a shortage of qualified staff for SE in the experts' assessments gained equal weight (4.1 and 4.0, respectively). The coherence of opinions on organizational aspects of SE development is indicative. Socio-cultural factors such as fragile ecosystem, low level of self-organization and lack of effective interaction mechanisms in the triangle "state - civil society - business" have a fairly high and almost equivalent weight (3.9 and 3.8, respectively). In the group of socio-cultural factors the smallest gap is between the weight of individual factors (5.7 highest, 3.8 lowest). Some studies state positive expectations for the ecosystem development that provides access to knowledge, mentoring and resources, as well as the transformation of some benefactors into venture philanthropists and social investors [2; 3]. Significant potential is seen in the high public demand for SE activities, potential reserves of human capital and NGOs, successful experience, the need for quality social services [17].

The use of online resources is recognized as a key technological factor for SE development. According to experts, its importance will increase in the coming years. Today, the development of SEs is significantly affected by the lack of strong teams, development strategies, financial and marketing plans, as well as the lack of tools to assess financial and social efficiency. According to experts, these factors will not change in the near future. The problem of lack of financial and social impact assessment tools (4.0) balances with the possibility of forming incubation / acceleration programs (4.0). The factor of lack of necessary equipment and premises received the lowest weight in group of technological ones. Thus, the issues of business education, financial and personnel management in the field of SE functioning, which were discussed in scientific circles [4; 5; 19], remain problematic.

The results of the expert assessment allow us to propose further actions for the development of SE in Ukraine (Table 2).

Conclusion. The external environment of SE development in Ukraine is characterized by ambivalence. The most illustrative ambivalent tendencies are found in political and sociocultural groups of factors. The challenges of socio-economic and political instability border on the capacity of civil society organizations and decentralization. Despite the lack of qualified personnel, the scaling of SE in Ukraine is a reaction to the spread of social problems. However, social entrepreneurs are in dire need of mastering basic entrepreneurial competencies. Most challenges are grouped in the group of economic factors (dependence on international donors, insufficient budget funding, low competitiveness, etc.). There is an imbalance in the technological factors group: the use of online resources received the most weight among all those proposed for evaluation in the format of PEST-analysis. Lack of necessary equipment and premises - the lowest. Achieving their elimination is currently quite difficult. However, mitigating these challenges can enhance the positive potential in the political and socio-cultural spheres. The set of actions for the further SE development is to focus on the possibilities of administrative reform due to the factors: a) communities have labor, infrastructure and other resources; b) provision of basic social services has been transferred to the level of local authorities, which places new demands on them and opens additional opportunities for the development of SE; c) actions for SE development are to be coordinated with the key areas of state development. This approach can be justified in further monitoring studies of SE in the United Territorial Oommunities of Ukraine. In the context of the information society and the Covid-19 pandemic, the possibility of using online resources requires separate interdisciplinary research.

Table 2

Action strategy for the development of social entrepreneurship in Ukraine

Source: developed by the authors according to an expert survey.

кандидат соціологічних наук, доцент кафедра соціології та соціальної роботи ДВНЗ «Ужгородський національний університет», м.Ужгород, Україна

кандидат соціологічних наук, доцент кафедра соціології та соціальної роботи ДВНЗ «Ужгородський національний університет», м.Ужгород, Україна

PEST-ФАКТОРИ РОЗВИТКУ СОЦІАЛЬНОГО ПІДПРИЄМНИЦТВА В УКРАЇНІ: HELICOPTER VIEW

Анотація. Матеріал статті побудовано за результатами дослідження PEST-факторів розвитку соціального підприємництва (далі - СП) в Україні. Ставилася мета виявити їх вплив на розвиток СП задля розробки дій на найближчі роки. Дослідження проводилося упродовж серпня 2020 - травня 2021 року. Застосовувалася методологія PEST-аналізу. За допомогою кабінетного дослідження та експертного опитування виявлена відносна міра впливу кожного з PEST-факторів на розвиток СП та запропоновані дії на найближчі роки. Отримані результати підтверджують, що, попри амбівалентні тенденції, PEST-фактори залишаються визначальними каталізаторами розвитку СП. У політичних і соціокультурних групах найбільше факторів, що балансують між собою на рівні «виклики - можливості». Група економічних факторів вирізняється з-поміж інших тим, що у ній значиму вагу в оцінках експертів отримали негативні чинники розвитку СП (залежність від міжнародних донорів, недостатнє бюджетне фінансування, низька конкурентоспроможність). Використання онлайн ресурсів як технологічний фактор отримав найбільшу вагу з-поміж усіх, запропонованих для оцінювання у форматі PEST-аналізу. В умовах інформаційного суспільства та пандемії цей ресурс має підвищену значущість і потребує додаткових досліджень як ресурс СП. Виявлено, що основні виклики для розвитку СП в Україні містять групи економічних і технологічних факторів. Відзначено, що ці виклики певною мірою компенсуються наявним потенціалом у політичній та соціокультурній сферах. Запропоновані авторами дії пов'язані із можливостями децентралізації. Такий підхід обґрунтований необхідністю узгодження з ключовими напрямками розвитку держави. Відповідні наукові дослідження потребують зусиль міждисциплінарних команд науковців і практиків.

Ключові слова: соціальне підприємництво, PEST-фактори, соціальні проблеми, виклики, можливості.

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