Austria: How High Living Standards Can Restrain the SE Ecosystem

Austria’s social entrepreneurship scene is small but dynamic. The main reason why the sector is still in its early stage is the relatively high level of social welfare and low level of unemployment, which might impact the perceived need for new actors and innovative solutions. Social businesses are largely absent from the traditional welfare sectors such as social services and health services. However, the Austrian social economy, the high level of social welfare and an active non-profit sector still strongly contribute to social businesses.  

The sector is characterized by a high degree of heterogeneity and complexity concerning the organizational legal forms. There are two main groups of social businesses with a little overlap. On one hand we found young social start-ups that provide new and innovative solutions for specific social challenges. On the other hand, Work Integration Social Enterprises (WISEs) aim at the integration of hard-to-place persons into the regular labour market. They are operating based on federal directives and are mostly publicly funded. This type of social business is well established and occupy an important place in the country’s social entrepreneurship sector.

The Austrian social business sector benefits of various assets. Several awards, competitions and programs have been launched in the last few years with the aim to support social entrepreneurs and social innovation (e.g. Social Impact Award, TRIGOS, Investment Ready Program). Several student-driven initiatives are promoting Social Entrepreneurship. This initiatives strengthen a growing network of actors mostly structured around a number of well established organizations such as the Impact HUB Vienna, Ashoka, Pioneers of Change, and the Social Entrepreneurship Forum. Lately, the AWS Social Business Call, providing funding especially for Social Entrepreneurs, has been launched.

Sadly, social entrepreneurship has not yet been integrated to governmental policies. This lack of political commitment and recognition strongly impacts social businesses. There is currently no official definition or legal framework regarding social entrepreneurship in Austria. Public funds and private impact investments are also scarce and difficult to gain. Empirical data on the topic is hardly available. These obstacles limit people’s innovation spirit and potentials. This leads to a lack of know-how in term of business planning and impact modeling which slows down the sector’s growth.

Despite these difficulties, Austria is on the way to provide an increasing number of opportunities for social entrepreneurs. There is a high growth potential for social businesses which are benefiting of more socially aware consumption behaviors and values. Universities have started new educational programs on the topic of social and sustainable entrepreneurship which can lead to an increased number of skilled people ready to start their own social start-up. The existing social security system and traditional NPOs might also benefit from innovative solutions as a response to current and upcoming social issues. Therefore, we can conclude that Austria’s social entrepreneurship scene is on the rise, stimulated by the launch of the Social Entrepreneurship Network Austria which got recently founded as an umbrella organization and lobby for social entrepreneurs. New actors will still have to find a space to expand in a saturated sector dominated by a few large welfare organizations which are closely affiliated to political parties such as Caritas. This makes it difficult for new players to access the large sectors of service provision and health care. Expertise, funds and networks for scaling up solutions developed by social businesses still remain ineffective when a lack of follow-up funding may also endangered the development of young social start-ups.

Sources:

  • Vandor, P.; Millner, R.; Moder, C.; Schneider, H.; Meyer, M. (2015). Das Potential von Social Business in Österreich.
  • Ketsetzopoulou, M.; Chiaf, E. (2012). Benchmarking Study on Social Entrepreneurship. Austria – Bulgaria – Hungary – Greece – Italy – Serbia – Slovenia – Urkaine. ISEDE-NET.
  • Benadusi, M.; Schetelig, K.; Sapienza, R. (2015). Social Enterprise, Social Innovation and Social
  • Entrepreneurship in Austria: a National Report. EFESEIIS.
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