The Implications of Schumpeter’s Theories of Innovation for the Role, Organisation and Impact of Community-Based Social Enterprise in Three European Countries

Abstract

Social enterprises, with strong ties to local areas and communities, have been a growing phenomenon in many European countries at least since the financial crisis of 2007-2008 and the resulting retrenchment of state involvement in welfare provision. The paper draws on the empirical findings from nine case studies of community-based social enterprises (CBSE) in three countries which were investigated in depth in our study. Our objective is to use Schumpeter’s work as a lens to assess the effects of social innovation on different aspects of this type of social organisation. Thus, we aim to address the questions: (i) to what extent can CBSEs be considered as a form of social innovation and how does this innovation arise in terms of role, organisation and impact of CBSEs? (ii) What are the similarities and differences between CBSEs in the three selected European countries? And (iii) how far does Schumpeter’s conceptual framework of “creative destruction” provide insights into the process of organisational change in this form of social enterprise? In doing so we identify and discuss a series of innovations in organisation, project selection and delivery and conclude with insights relating to Schumpeter’s theory of “creative destruction”.