Inconsistencies, overlapping concepts, and contradictions appear in the developing literature on social entrepreneurship and its role in economic development and social value creation. However, the theoretical and practical importance of developing and applying social entrepreneurship to sustain social development and enhance human well-being in rapidly changing environments has catapulted this issue to the forefront of the research agendas of many scholars. This article examines the historical backdrop of social entrepreneurship, as well as the contexts of Latvia and the Nordic and Baltic countries. The study examines how the definition of social entrepreneurship has changed through time in various studies. Different scientists' definitions are compared, and the issues with a common definition barrier are discussed. The definitions of social entrepreneurship are examined in the Latvian context between M. Yunus' concept, the European Commission's definition, and the Social Enterprise Law. Finally, the definitions of social entrepreneurship in the Nordic and Baltic nations that have legalized social entrepreneurship are examined to see where there are similarities and discrepancies.
Social enterprises have positive effect on sustainable development, and they have become an important instrument for solving social problems (especially in rural areas), as the national and local governments alone cannot solve all such problems. To foster the development of social entrepreneurship, Latvia has introduced several support instruments for social enterprises, which include tax relief, privileged procurement contracts, grants, as well as non-monetary kinds of support. However, social entrepreneurs often point out that support from the national and local governments is insufficient, while the support instruments stipulated in the Social Enterprise Law are not widely used. Therefore, the aim of the research is to analyse national and local government support instruments for social enterprises in Latvia. The research found that the most important financial instrument fostering the development of social entrepreneurship in Latvia is a grant scheme administered by the Ministry of Welfare and the JSC Development Finance Institution Altum, which is available in the range of EUR 5000 to 200000 for investment and working capital. In the period 2017-2020, 94 social entrepreneurship projects with a total budget of EUR 6 million were supported, which could be viewed as significant financial support. In contrast, immovable property tax relief, exemption from enterprise income tax (on profits) and relief from this tax for several categories of non-business expenses are considered by social entrepreneurs to be an insignificant kind of support. There is also lack of experience and practice regarding the inclusion of social criteria in public procurement in Latvia.
As social entrepreneurs address various socio-economic problems in society, there has also been an increased interest in how social enterprises can support specific regions. In Latvia, social enterprises have been operating for a long time, but only recently the Social Enterprise Law was adopted, which regulates the tasks of social entrepreneurship and the support possibilities. This study highlights the level of entrepreneurship activity in the country as a whole (the number of enterprises and the number of newly established enterprises) and within individual statistical regions in the period from 2018 till 2020, analysing the structure of enterprises and indicators representative of entrepreneurship in Latvia and its regions: the dynamics of the number of enterprises per 100 000 inhabitants. The following hypothesis was made: Social entrepreneurship in the regions of Latvia has a disproportionate impact on socio-economic problems. It was found that social enterprises operate twice as much in Riga region as in any other region of Latvia, which has the lowest poverty index. However, the highest poverty index is found in Latgale region, where proportionally the lowest number of social enterprises operates. Social entrepreneurship can be a successful tool for addressing socio-economic problems in the regions and for regional development. For this development to take place, it would be necessary to develop instruments to support social entrepreneurship with the aim of improving the well-being of all regions, not only the region where the social enterprise operates.
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