Armenia

SE in Armenia

Social entrepreneurship is a widely researched concept all around the world and appears in the focus of social science studies, behavioral science and entrepreneurship research. It is aimed at solving social problems through entrepreneurial practices.
The concept is being developed across the globe for solving pressuring social issues, such as hunger, poverty, health, education, sustainable energy and other issues. Social entrepreneurship is not aimed at generating profit for the owners, but primarily to reach the social mission. Earned income through entrepreneurial activities is more viewed as a measure for sustaining the enterprise to continue to serve the social mission.

The concept has recently emerged in Armenia as the first enterprises were officially established in 2005. Since then, many enterprises practicing social mission with entrepreneurship have emerged. Although Social Entrepreneurship is very actual for today’s Armenia, it is rather not very well understood among a wider public in the country. Having personal work experience in international charitable organizations, I have frequently been in rural and less developed communities and aware of the problems people face. The projects I was involved in were fostering entrepreneurship of local people through assets provision, business knowledge and mentorship. However, over a period of years, community development and transformation were not as visible as desired. Sustainability and long- lasting changes for communities brought by such charitable donations was among the main concerns of mine and my colleagues. I came up with a thought, that the only missing part of the chain is an entrepreneurial approach to a problem solution that communities confront, which will ensure sustainability and replicability of the means invested in the development of communities. It is also obvious that communities should rely on themselves rather than on charities for a constant growth and development.

The development of Social entrepreneurship can foster regional development of Armenia in a sustainable and long-lasting manner. On the status of the SE within the concept isn’t considered any official research in the country. That is why our efforts are primary focused on providing seminal analyses of the topic and solid ground for the future research.
This research is aimed at understanding the status of SE in Armenia, models of operation, present and prospects, as well as describing the environment in which the concept is developing. To reach our goal, several key concepts and features were identified in the academic literature. The main method is primary and secondary data comparison, which was conducted with data collected among social enterprises currently operating in Armenia. The units of observation in this research are social entrepreneurs, people who practice social entrepreneurship and the legal entities established by them- the social enterprises. The research also discusses relationships between the key actors of the field, such as international development organizations and donors as funders of social enterprises, social entrepreneurs in the communities and beneficiaries targeted by the social mission of these enterprises.
The goal of my thesis work is to provide deep and contextual analyses of social entrepreneurship as a phenomenon for academics, field practitioners, as well as to strengthen valuable insights to the society.

The environment of SE development in Armenia
For the lifetime of the Third Armenian Republic, international donors have played an important role in the development of civil society, democracy, peacebuilding and rule of law in Armenia. Many field experts distinguish the important role of the international development agencies, benevolent organizations and non-profit organizations on the growth of civil society with financial, technical assistance, education and development of most recent concepts of Armenia.

In one of the reports by field expert (Tadevosyan, 2017), non-profit sector in Armenia is described in 3 phases of development since 1991: 
-evolving from humanitarian aid purposes during 1991-1998,
-civil society development and democracy period in 2000-2007,
-NGOs and foundations that provide developmental services to local communities aiming at sustainability of the latter in 2008-2016.

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In search for providing solutions to local communities and solving social problems, and with the mentorship and financial assistance of donor organizations operating in Armenia, an observation can be made that new forms of non-profit organization activities and tasks emerged. On the other hand, civil society organizations were heavily relying on international donor organizations financial support and more and more think on sustainability and self-financing. This internal development within Armenian non-profit sectors leads to thinking about developing financially-sustainable models for CSOs and NGOs operating locally and all over Armenia to both continue their mission and contribute to solving social problems.

International non-profit organizations, governmental agencies and donors played crucial role in development of social entrepreneurship in Armenia. Important role of international donor organizations in development of social entrepreneurship concept, understanding, funding and promotion of social enterprises and consider them to continue to determine the field.

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It was difficult to determine the social enterprise operating in Armenia in 1991-2005 within the frames of current research, as the concept was not widespread then, but many companies and organizations were involved in social entrepreneurship for self-financing and in the frames of rural community development. Based on secondary data review, it can be recalled that KASA, World Vision Armenia, USAID and many other donor organizations were present in communities on the course of many years and provided constant support to development of rural areas. Particularly, they were involved into SME support, but concept of SE was not in circulation among them.

Based on the donor organization reports, secondary analyses and interview with experts, the first social entrepreneurship promoting initiative in Armenia was back in 2005, aimed at supporting financial sustainability and decreased donor reliance of civil society organizations. The Ministry for Foreign Affairs of Czech Republic was the donor of the project and the Eurasia Partnership Foundation implemented it. Participants passed extensive six-months-trainings and received financial support to establish social enterprises. Also all SEs established then are successful up to now, although some of them have had mission drift from SE to business. Since then the provision of extensive trainings, mentorship and seed funding or grants is attributable in SE promotion projects by other organizations.

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Since then, donor organizations and civil society members themselves started to think more on the sustainability of nonprofit entities and see SE as a model of it. The second major donor-initiated project that aimed at establishing SEs in Armenia was Livelihood Improvement through Fostered Employment (LIFE) by USAID and Save the Children Armenia, which aimed at promoting equal employment opportunities and employment for people with disabilities. The approach was to establish work inclusion social enterprises and enroll them in business, NGOs and local community administration structures. The project provided vocational education, trainings, grants for becoming WISE and extensive public awareness on ways to promote creation of this type of SEs in Armenia.
British Council Armenia, with the financial support of the EU, implemented another project in 2014-2015 to increase SE awareness in Armenia and to participate in development of concept on SE for Armenia.Community Development Through Social Entrepreneurship is a project financed by EU and Austrian Development Cooperation, which aimed at establishing SEs and provided conceptual basis and financing for participants across 8 marzes (regions). As a result, 10 SEs were established and funded within the project. Training participants – entrepreneurs, interviewed within the scope of this research, recall the high value and deep understanding of SE concept they gained during one-year extensive trainings.

Thus, to conclude, it is to state that all necessary determinants of social entrepreneurship are available within the representative sample. Our findings also state about the high socioeconomic impact on local communities where SEs operate. SE is a newly emerging sector within the Armenian economy and is capable of solving its social mission.

The material is presented from this source.

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