Social business in Ukraine: challenges and obstacles

Abstract

The aim of this paper is to analyze the current situation of social entrepreneurship in Ukraine and to define challenges and obstacles it faces during development. A multidimensional study of the phenomenon, the relevance of which is due to a change in the whole paradigm thinking about what business is, what responsibility they bear to society, and what impact they can have on the society around them.This article contributes to the literature on combining qualitative and quantitative methods of research on social business in Ukraine. The empirical part of the study was conducted through document analysis (a catalog of social enterprises), semistructured interviews, and a quantitative survey. The perception and understanding of phenomena by social entrepreneurs were clarified. The barriers to social business development were identified and typified by resource, financial, communicational, system, and the quarantine as specific challenges during COVID-19 time.There is no universal definition of “social enterprise”, even among those involved in social business. However, there is a common idea of the image of a social entrepreneur, the emphasis being mainly on intrinsic motivation and outstanding personal characteristics. Resource barriers include rooms/building, land, and materials. Financial barriers are the startup capital, chances to get loans, taxes, and rent. Communication barriers are in interaction with government agencies, investors, and employees search and selection. System barriers are connected to lack of a specific status in legislation and the registration form for social business, also rejection and misunderstanding of the phenomenon by society. Quarantine was named as a specific challenge, because it threatened both social and traditional business during a coronavirus pandemic.The development of social business creates the demand for training programs and for the events where experiences and ideas can be shared. Considering the differences between social and traditional business models, there is a need to develop an appropriate system for monitoring and performance evaluation.