1. Social Entrepreneurship
Chapter 9
Social Entrepreneurship
in the Public Sector

2. Opening Discussion
Read the case of Seattle’s Solid Waste Utility and answer the following questions:
What factors may have led to the failure of the recycling plan?
What were the key factors that led to the success of the Solid Waste Utility plan?

3. Chapter Outline Context of public sector entrepreneurship
New public management (NPM) and Reinventing Government
New public service (NPS)
Current practices and approaches

4. Context of Public Sector Entrepreneurship
Because government is responsible for the public good, government entrepreneurship is social entrepreneurship – the process of creating value for citizens by bringing together unique combinations of public and/or private resources to exploit social opportunities.
Social entrepreneurship includes entrepreneurship in the operations, outputs, and outcomes of public sector organizations.

5. Context of Public Sector Entrepreneurship
This entrepreneurship is influenced by the nature of the public sector.
Limiting factors include:
Multiple, ambiguous, hard-to-measure goals
Hard-to-risk taxpayer money
Limited managerial autonomy and high visibility
Short-term budgeting and election cycles
Bureaucracy and civil service protecting the status quo
Lack of incentives for improvement
Concerns about increased autonomy of public managers

6. Context of Public Sector Entrepreneurship
There are, however, also facilitating factors:
Goal ambiguity can increase managerial discretion.
The media can be used as a source of power.
Outsiders can be co-opted.
A study of public managers found that most managers:
Felt positive about entrepreneurship.
Thought it would improve performance.
Thought the workplace could be designed to foster employee entrepreneurship.

7. New Public Management (NPM)
Was developed in the late 1980s to counter excessive government bureaucracy and hierarchy
Suggests that managers be more entrepreneurial and use business-sector, market-oriented principles to improve efficiency
Establishes ten principles for government: to be catalytic, community-owned, competitive, mission-driven, results-oriented, customer-driven, enterprising, anticipatory, decentralized, and market-oriented

8. New Public Management (NPM)
Entrepreneurial techniques would enhance flexibility, responsiveness, efficiency, and innovativeness.
Techniques are still widely used today.
Some concerns have been raised:
Reconciliation between decentralization and need for control
Promotes a view of individuals as customers rather than citizens

9. New Public Service (NPS)
Developed in reaction to NPM
Draws on work in democratic citizenship, community, and civil society
Public sector and public administrators should:
Serve society
Build the public interest
Think strategically and act democratically
Serve citizens, not customers
Accept complex accountability
Value people, not just productivity
Value citizenship and public service above entrepreneurship

10. New Public Service (NPS)
Moves away from using entrepreneurial techniques from business
Is based on model of owners using their resources
States that public administrators are not owners, but stewards of public resources
Sees importance of developing innovative solutions
Advocates carrying out public entrepreneurship in a shared-power, collaborative, multisector setting

11. Public Sector Innovations
Eggers & Singh authored a guide for public sector innovation.
Innovation can come from internal (staff, partners) or external (citizens, partners) sources.
Each can be strategically used for the innovation process, which includes:
Idea generation
Selection
Implementation
Diffusion

12. Public Sector Innovations
Eggers & Singh’s framework for the first stage of the innovation process
Figure 9.1

13. Encouraging Social Entrepreneurship
Government can take steps to encourage social entrepreneurship:
Lay the foundation: support, promote, recognize, convene stakeholders.
Set policy: new tax structures, agency R&D policies.
Develop and leverage resources: partner with foundations and business, coordinate volunteer resources.

14. Culture of Performance Improvement
The Government Performance and Results Act of 1993 (GPRA) instituted standards for public agency performance improvement.
The Office of Management and Budget produces an annual report on agency performance.
A performance improvement focus has been continued in subsequent administrations.

15. Culture of Performance Improvement
Recent recommendations include:
Build a learning culture.
Balance top-down targets with bottom-up innovations.
Ensure management commitment to performance improvement.
President’s 2014 budget expects agencies to:
Test new practices to identify what works.
Adjust and reallocate resources or change practices based on evidence of what works.
Constantly seek lower-cost ways to get the job done.

16. Social Entrepreneurship Incubators
State-level initiatives can also be used to support social entrepreneurship; for example:
The Louisiana Office of Social Entrepreneurship was created in 2006.
It launched a state-wide initiative to promote citizen involvement in social entrepreneurship.
It established the Social Innovators Institute to recognize and support the most promising statewide social innovations.

17. New State-Level Financing
Minnesota “pay for performance” bond proposal:
Plan would offer private investors a 4-percent return on investments made to needed state services.
State would pay nonprofit providers, but only if they produced results that save the state money.
Investors get their return no matter what.
Nonprofits carry the risk and get paid only if they succeed.

18. What about Korea?

19. Discussion
Consider the points just made about the social entrepreneurship of public agencies and answer the following questions:
How might social entrepreneurship differ depending on the level of government (federal, state, local)?
How might the different branches of the federal government differ in terms of entrepreneurship?
When might entrepreneurship conflict with other public values?