Social entrepreneurs serve vulnerable groups by providing them with services and making an effort to solve social problems in an innovative way. The recent pandemic and economic crises emphasize the need to study social enterprises in terms of their contribution to society and the economy but also how they were affected by the crisis. Since market failure has become common in Georgia as the rapid transformation toward the market economy facilitated less ethical and more profit-oriented business behaviour and as ineffective government actions deepened social inequality, social entrepreneurship is considered to be a successful opportunity. This chapter intends to overview the present state of social entrepreneurship in Georgia. It is based on the research conducted by the author aiming to comprehensively investigate Georgian social enterprises. Findings suggest that social enterprises can facilitate solving newly arisen social problems, but they require state support to survive.
Top1. Introduction
The transformation from the planned economy to the market economy after the breakdown of the Soviet Union caused numerous changes in all areas of economic, social, and political relations. Georgia, as a post-communist country, has undergone constant fluctuations in all domains for three decades. Under such circumstances, entrepreneurship plays a key role to take initiative and searching proactively for new business opportunities to solve emerging problems, contribute to the economy, create jobs, and engage in innovation. Furthermore, emerging markets provide an opportunity for investments and entrepreneurial possibilities. However, the soviet communism inertia made entrepreneurs dependent on governmental aid instead of taking risks (Gigauri, 2022). Moreover, market failure has become common since the rapid transformation toward the market economy facilitated less moral and more profit-oriented behaviour of business, as well as the ineffectiveness of government interventions, omitting vulnerable citizens from accessible and affordable products and services (Gigauri, 2022). As a result, Georgian non-profit/nongovernmental organizations took the responsibility to serve disadvantaged groups by creating specific projects and launching social enterprises. The population of Georgia amounts to 3.688 million, about 20% of the population is unemployed, and 17% of them are living under the absolute poverty line (Geostat, 2021). Social entrepreneurs understand social problems that society is facing and try to solve them with entrepreneurial activities. Yet they have scarce business skills and experience in profit-oriented operations (Gigauri, 2022). It is noteworthy that the lack of legislation on social entrepreneurship in Georgia creates obstacles for social entrepreneurs as the concept and its scope are not defined formally (Gigauri, 2022; Giorbelidze, 2021).
In addition, major events that occurred recently including climate change, coronavirus outbreak, pandemic, lockdowns, and economic crises have swung the world. In this regard, Social Entrepreneurship has become a significant field of research taking into consideration urgent social problems the pandemic Covid-19 and the economic crisis caused. Scholars argue that studies should be conducted to investigate the influence of the pandemic crisis on entrepreneurship in different countries as prolonged uncertainties and constant changes caused fluctuations in the economy (Brown and Rocha, 2020; Kuckertz et al., 2020; Palazzo et al., 2022). Thus, the concept aims to improve the potential to solve problems and enable the implementation of Sustainable Development Goals. Nevertheless, social entrepreneurship is still an undeveloped area in the context of post-communist countries. At present, most studies explore social entrepreneurship in Asian, European, and North American countries (Li 2019; Chandra and Kerlin 2020; Li et al. 2020), but social entrepreneurship as a complicated phenomenon requires further academic research in various countries to understand its practice (Pellegrini et al., 2020). Moreover, studies highlight the increased focus on social policy toward entrepreneurial activities in order to cope with the pandemic crisis, which integrates the value co-creation notion (Ratten, 2020a). In this respect, studies in the field of social entrepreneurship are of importance provided that social entrepreneurship is seen as a rapid response to solve urgent grand challenges (Bacq et al., 2020).
The chapter, based on previous studies carried out by the author in 2021, enhances the discussion on social entrepreneurship by comprehensively overviewing the present state of social entrepreneurship in Georgia and outlines the future tendencies of the concept in a post-communist country context. It discusses the practice of social enterprises, their missions, goals, activities, and analyses the management issues during the pandemic crisis. The chapter also investigates the impact of the pandemic on social entrepreneurs in Georgia and explores the measures undertaken by social entrepreneurs to deal with the crisis.