Social Entrepreneurship in Bosnia and

Dragana Vilic Herzegovina - Opportunities and Constraints

EEMR
Economics, Entrepreneurship and Management Research
Vol. 1 No. 1 2022. e-ISSN ..........

Dragana Vilić1
Original scientific paper
DOI

Social Entrepreneurship in Bosnia and Herzegovina -

Opportunities and Constraints

Abstract

This research explores the possibilities and constraints to the de-

velopment of social entrepreneurship in Bosnia and Herzegovina
(B&H). The first part of the paper relies on some theoretical views
on social entrepreneurship as a special business activity and social
entrepreneurs as its actors. The second part checks whether these
activities and their actors exist (and to what extent) in Bosnia and
Herzegovina. We developed this reserach on the sample of 136 so-
cial entrepreneurs in B&H, who were the respondents in our sur-
vey and whose perceptions were analyzed in the research. The aim
of this research is to show the relationship between opportunities
and constraints for the development of social entrepreneurship in
B&H. The findings of the research show that there are significant
opportunities for the development of social entrepreneurship, but
that they are insufficiently used. There are also numerous obstacles,
both internal (the lack of self-confidence, determination and fear
of failure) and external ones (financial, infrastructural, local gov-
ernment support).

Key words: social entrepreneurship, social entrepreneurs, opportunities, barri-

ers, models of social entrepreneurship in B&H

1
University of Banja Luka, Faculty of Economics, Banja Luka,
e-mail: [email protected]

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Introduction

Social entrepreneurship is attracting increasing attention, both of theorists

and policy makers, as well as innovative and creative people - entrepreneurs.
The growing popularity of this topic, as a consequence, has the increased in-
terest of scientists and theorists to explore all forms of social entrepreneur-
ship and to more precisely determine its elements, as well as its definition. In
addition to defining the notion of social entrepreneurship as a business ac-
tivity, researchers want to define the terms “social entrepreneurship” and “an
entrepreneur” (Martin & Osberg, 2007). The idea of social entrepreneurship
is becoming more and more popular with regard to the growing social issues
that occur every day in contemporary societies, especially in underdeveloped
societies, where there is a high level of poverty and a greater number of mar-
ginal social groups.
Social entrepreneurship seeks to exploit the dynamic development of total
entrepreneurship, designated as commercial entrepreneurship. It seeks to fill
the space of unsatisfied needs of people, which remains between the activities
of general entrepreneurship and the activities of public and state institutions.
What (commercial) entrepreneurs present to economy, the social ones pres-
ent to society. The former are interested in profit, while the emphasis of the
latter is on solving social problems and achieving social values and changes
(Austin & Vei-Skillern, 2006).
Social entrepreneurship is often the result of the initiative, intuition and
creativity of individuals who manage to find and exploit new opportunities
or to question the already accepted norms and refuse to give up until they
change the causes of social problems (Baporikar 2016). Social entrepreneurs
have the same business impulse as commercial entrepreneurs, but use their
talent, ideas and skills to tackle local and global social problems, such as:
poverty, employment of people with disabilities, education of children from
poor suburbs, the formation of a co-operative from small rural fruit produc-
ers, etc. The more numerous the challenges and problems in social sector, the
greater the opportunity for the development of social entrepreneurship and
the creation of social values.
In the continuation of the paper, we first gave a brief overview of the the-
oretical understanding of social entrepreneurship, then we presented some
of the characteristics of social entrepreneurship research in B&H, and finally
we analyzed the possibilities and restraints to the development of social en-
trepreneurship in Bosnia and Herzegovina, based on the perception of social
entrepreneurs that work in this field.

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 Social Entrepreneurship in Bosnia and
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The Literature Review

Why is social entrepreneurship important?

Social entrepreneurship is a process in which individuals or groups build

or transform institutions to find and improve solutions to social problems,
such as poverty, illness, illiteracy, environmental damage, human rights viola-
tion and corruption (Bornstein and Davis, 2010: 11). Social entrepreneurship
is an activity that seeks to improve the life of a large number of people (Fie-
dler, Anne M.; Mann, Philip H., 2012). Experts, practitioners and philanthro-
pists describe social entrepreneurship in a different way: as a profession, an
area and a movement (Berzin, 2012). Social entrepreneurship creates public
value, strives for new opportunities, innovations and adapts to different con-
ditions, acts boldly and shows a strong sense of responsibility (Dees, 2001).
Drayton (2002) points out that both types of entrepreneurship (com-
mercial and social ones) recognize the situation when a part of the society is
stalled and try to provide new ways to solve the issue. He claims that social
entrepreneurs see an opportunity, where others see problems. Peredo and
McLean (2006) state that social entrepreneurship is achieved when an indi-
vidual or a group show the ability to recognize and exploit opportunities and
resources to create social value.
Social entrepreneurship adopts the mission of creating and maintaining
social benefits. It is the core that distinguishes social entrepreneurship from
business (commercial) entrepreneurship (Dees, 2001). By adopting such a
social mission, social entrepreneurship cannot be reduced to creating pri-
vate benefits for an individual or a group. Making profits, creating wealth, or
serving the wishes of customers can be a part of the model of social entre-
preneurship, but these are only means to achieve social benefits. Profit is not
the only measure of value creation, nor it is customer satisfaction, but it is
social impact and importance in the community (Del Forno and Ugo, 2009).
Social entrepreneurship creates new models for products and services provi-
sion that is directly related to the social needs on which the objectives of sus-
tainable development of the group, community and society are based. Social
entrepreneurship often creates immense value when it comes to addressing
basic needs, such as administering medicines or foods that can be the issue
of the life or death of those who receive them (Densil and Kadamawe, 2012).

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The role of social entrepreneurs

Social entrepreneurs work to ensure that rational ideas are rooted and tru-
ly change the thinking and behavior of people in a society (Martin & Osberg,
2007). Social entrepreneurs look for a long-term return on investment. They
want something more than quick success. They want to create lasting im-
provements in a society. They think of expanding and maintaining the impact
of good and socially useful ideas and entrepreneurial ventures (Bornstein and
Davis, 2010). Social entrepreneurs solve social problems (poverty, homeless-
ness, illiteracy, the lack of food and drinking water, employment and educa-
tion) through business methods (Roundy, 2014). A social entrepreneur helps
others find a new opportunity to appreciate their knowledge and recognize
how the momentum for a change toward the better is created. Entrepreneurs
are builders of natural institutions that are more concerned about resolving
social problems than becoming personally rich (Bronstein, 2004).
Social entrepreneurs are those people - practical dreamers who have the
talent, skills and vision to solve problems, whose aim is to change the world
for the better. Social entrepreneurs have a unique approach that is both evalu-
ative and revolutionary, operating in a free market where success is measured
not only in financial gain, but also in improving the quality of people’s lives.
They believe that each individual has the potential to make positive changes
not only in their communities, but also in the society as a whole (Nicholls,
2006: 3). Social entrepreneurs’ basic notion is that they need to “save the
world or at least make it a better place”, but at the same time earn enough
money to ensure the long-term sustainability of the business entity. (Tomma-
so and Antonino, 2014, 2). This means that social entrepreneurship combines
a noble goal with business success.

Difference between social entrepreneurship and other similar
activities

For social entrepreneurs, the ultimate goal is to maximize some form

of social impact, usually by addressing an urgent need that is neglected by
other institutions. For commercial entrepreneurs, the ultimate result can be
to maximize profits or wealth of managers and shareholders. According to
Nicholls (2006), the world needs both types of entrepreneurship and one
should not be considered superior over another, although social entrepre-
neurship is often more challenging because it deals with issues that have been

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rejected by governments, and the market has not yet shown interest or offered
solutions. Both types of entrepreneurship require a vision, initiative, organ-
ization building and “marketing”. In terms of skills and temperament, social
and business entrepreneurs are astoundingly similar, but their main goals are
different (Nichlls, 2006: 5-7). The social mission and the creation of the so-
cial value of the company make a clear boundary that separates social entre-
preneurship from other business ventures (Weerawardena, and Mort, 2006).
Unlike a commercial entrepreneur who attempts to identify an empty space
in order to gain a unique position on the market, a social entrepreneur seeks
innovative ways to meet unsatisfied needs of the community and society (As-
cigil, 2012). As commercial entrepreneurs change the face of business, the
social entrepreneurs change the society, “using the opportunities that others
miss to improve the system,” find new approaches and create new solutions
for old practices to change society for the better (Baporikar, 2016, 25) .
We have already noted that profit is not necessarily the motivation of a
social entrepreneur, but it is, most frequently, the need for a social problem
solving and thus helping the community and society. However, social en-
trepreneurship is not the same as charity, philanthropy, altruism or volun-
teering. Social entrepreneurs are business people who passionately approach
their business, even though their primary motivation is not profit, but benefit
for the community (Roberts and Voods, 2005, 46). Therefore, social entre-
preneurship is an activity that has economic rationality, strives for business
success, develops a sustainable entrepreneurial venture, but all for the sake of
social benefits and social value creation.
Also, social entrepreneurship is different from social activism, as a social
entrepreneur launches direct business activity to provide a service or product
that would help the community solve a problem. On the other hand, social
activists try to solve problems by influencing others, such as governments,
institutions, political organisations and NGOs to take action to solve them
(Martin & Osberg, 2007; Galpin and Greg, 2010). However, social entrepre-
neurs can use some ideas of social activists in order to start a business with
social value.

Possibilities for social entrepreneurship development

In the literature, the possibilities of social entrepreneurship are defined as

those opportunities and resources that will, once used, enable entrepreneurs
to develop a sustainable business with the goal of creating a better social value
(Monllor, 2010). The possibilities of social entrepreneurship appear as a re-

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sult of market failures and government failures. Social entrepreneurs should

discover these opportunities, use them and thus create desirable social values
(Seelos and Mair, 2005).
According to Thompson (2002) and Monllor (2010), the process of social
entrepreneurship development passes through four steps: (1) understanding
of all possibilities (resources, economic conditions, infrastructure, compe-
tition, social needs); (2) the process of using the perceived opportunities to
launch an entrepreneurial venture (using local capacities to address the prob-
lem of poverty, education, employment, housing policy of vulnerable social
categories); (3) using resources to meet identified needs (making cheap prod-
ucts for poorer community layers); (4) project management through continu-
ous innovation and adaptation to create a sustainable business that meets the
mission of building social values.
Mair and Marti (2006) argue that social entrepreneurs must be embedded
in the environment in which they operate (community, society), because they
are at the same time responsible for their environment and are limited by the
environment.
The resources currently available to entrepreneurs play an important role
in their decision to take advantage of the opportunity. Entrepreneurs must
have necessary resources (Shane, 2003; Shrader, 2006), such as financial equi-
ty from appropriate funds or favorable government funding.

Obstacles to the development of social entrepreneurship

For the development of social entrepreneurship, it is important to identi-

fy the barriers that disturb and prevent the development of entrepreneurial
intent. It is necessary to examine the types of barriers and the degree of their
negative impact on the initiation and development of a sustainable social en-
trepreneurial business.
The first significant research at the beginning of the XXI century indicates
initial barriers such as: high labour costs, high interest rates, strict state reg-
ulations, the lack of managerial experience, insufficient technical knowledge
and the fear of uncertainty that they will face when launching and developing
a new venture (Dees , 2001; Levit, 2004). Later on, some authors pointed to
additional barriers in the absence of structural support and new knowledge,
then, operational risk, initial risks and the lack of social support (Pruett et al.,
2009, Giacomin et al., 2011).
Starting from the research carried out by Chuah et al. (2016); Wildmann’s
(2018); Zahari et al. (2018), the barriers to social entrepreneurship can be

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divided into three groups: (1) personal entrepreneurial factors (the fear of
failure, the lack of necessary skills, the insufficient knowledge of the area in
which the business is started, the lack of organization and determination);
(2) local policies and services (the lack of financial support, the lack of in-
frastructure support, the lack of entrepreneurial climate); (3) the state of the
environment (general economic climate, political climate, tax policy, compe-
tition, technological progress and social structure of the society).

Social entrepreneurship in Bosnia and Herzegovina

Social entrepreneurship in Bosnia and Herzegovina started to develop

only in the beginning of the XXI century. The beginnings are linked to the
Youth Employment Project (YEP), which was initiated and supported by the
Swiss Embassy in Bosnia and Herzegovina, and its implementation started
in 2008. The project implementer is the German consulting company GOPA
mbH. The aim of the project is to reduce youth unemployment in Bosnia
and Herzegovina through better integration of young people in the labour
market, especially the youth from vulnerable groups (The Romani, the poor
from suburban settlements, children whose parents died in the 1992-1995
war in Bosnia). The stated goal is achieved through three groups of activities
aimed at: (1) improving the performance of public employment services; (2)
increasing the access of disadvantaged young people to the use of employ-
ment services and (3) increasing the importance of the youth employment in
the public arena of B&H (Domazet, 2016).
The development context of social entrepreneurship in Bosnia and Her-
zegovina can be presented in several points: (1) there are many social prob-
lems (high unemployment, poverty, socially excluded groups, such as jobless
young people, the workers after bankruptcy or liquidation of their compa-
nies, older workers that were dismissed after the privatization of state-owned
enterprises, single-parented mothers without jobs, the persons with reduced
ability to work, then certain ethnic groups such as the Romani or members
of minority ethnic groups in certain areas, pensioners, young people from
poor families and the poor in the countryside); (2) there is a good opportu-
nity for social entrepreneurship to be much more economically and socially
acceptable way of addressing the issue of poverty and social exclusion than
governmental aid through budgetary separation or commercial entrepre-
neurship; (3) Instead of being passive consumers of public money or various
occasional donations, vulnerable groups are given the opportunity to be cre-
ative, create their income through social entrepreneurship, contribute to the

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development of their community and support social values; (4) It is necessary

to develop numerous models of social entrepreneurship that will disseminate
knowledge, experience and find financial resources for the organization and
sustainable development of social enterprises.
In Bosnia and Herzegovina, several studies on the topic of social entrepre-
neurship have been made (Ninković-Papić, et al., 2012, Papić, Ž. ed al., 2015;
Halilbašić, M., Osmanković, J., Talić, A. 2015; Domazet, A. 2016; Miljević,
D. 2016). These studies were based on the needs of mapping the actors and
institutions of social entrepreneurship, forms and models in which social en-
trepreneurship is taking place, and the needs of developing a legal and insti-
tutional framework and measures to support social entrepreneurship.
Starting from these studies on social entrepreneurship, and especially
bearing in mind the views of Halibašić et. al. (2015); Šoljić, K. et al. (2005)
and Selak, V. et al. (2002) it is possible to identify three main models of legal
and organizational forms that are suitable for the development of social en-
trepreneurship in Bosnia and Herzegovina.
Firstly, the Co-operative model refers to co-operatives oriented towards
social goals. This form is present in Italy, France, Portugal and Poland. Social
co-operatives make the model primarily oriented towards achieving social
goals. What distinguishes them from “ordinary” co-operatives is the social
mission, i.e. the basic orientation towards some kind of social integration
with the interests of the community. Additionally, they are not necessarily
focused solely on the interests of their members, but they can include users
from and outside the community to which they belong directly. Co-operative
model provides direct benefit to its target group or “clients”, members of the
co-operative, through member services (market information, technical and
advisory support, collective agreements, organisation of purchase of prod-
ucts, better access to products and services, access to external markets for
products and services members, access to other resources, for example capital
or health care). A special target group in the model of social co-operation in
B & H is the youth (18-30 years olds) living in the countryside, who own land
and other economic facilities in villages. Self-help groups shall be mentioned,
which bring together low-income women and are often organised into co-op-
eratives to support the diversity of interests of trade, health and education of
their members. Credit unions are another example of co-operatives linked to
economic development and financial services programs.
Secondly, the Company model is partly based on profit-making, as well as
the targeted and limited distribution of realized profits. This model is encoun-
tered in Belgium and the United Kingdom. This model of a social enterprise
shows a stronger connection with the laws regulating the work of commercial
enterprises and companies. In this model, social entrepreneurship is treated

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as a type of enterprise, as a market activity with a social purpose. Although

reinvesting profits to further institutional activities is preferred, a partial dis-
tribution of profits among members is made possible. Also, the underlying
principle of governance is not necessarily normative and there is a greater,
though limited, attachment to the principle of decision-making according
to equity participation. Although emphasis is placed on the attachment to
the community and its needs, the collective character of this type of social
entrepreneurship is not the only motive, but strives to motivate people to
develop a similar business. The Company model can achieve market linkage,
as it facilitates trade relationships between the target group (customers or
clients) with small producers, local businesses and co-operatives. Here, the
social enterprise functions as a broker, which connects buyers with producers
and vice versa. Types of these social enterprises include import-export, mar-
ket research and brokerage services. Most importantly, their intention and
motivation are aimed at meeting social needs and resolving social problems
in the community and society by mediating the market.
Thirdly, the Open Form Model implies that there are laws regulating social
entrepreneurial activities, but laws do not prevent a particular new legal-or-
ganizational form for such action. Therefore, social entrepreneurship can oc-
cur in different organizations or companies. For example, the law in Finland
encourages any form of company that employs people with disabilities, the
disabled and the unemployed who are looking for a job for a long time. Spe-
cial incentives have been developed for such enterprises. The focus is primar-
ily on social activities they pursue and the goals they achieve, not in the form
of organization and management. Unlike the Finnish, the Italian law does
not aim to promote a specific activity or areas of action, nor does it anticipate
incentives and benefits. It refers to all forms of enterprises and organizations
that are at least partly involved in social-entrepreneurial activities and are
directed towards the general good (Ninković-Papić, R., 2012; Halibašić et al.,
2015). This model of social entrepreneurship is suitable for the working in-
tegration of people with disabilities and the need for other forms of medical
care. Ex-Yugoslavia, with B&H in it, founded the companies that employed
people with some degree of disability.
Within the Open Form model, there is a narrow sub-model designated as
“Entrepreneurial Support Model” (Halilbašić et al., 2015) which includes the
sale of business support and financial services to its target group or “clients”,
self-employed individuals or firms, but also sells its products and services in
the open market. This model includes operations such as: financial entities
(microcredit organisations), consulting agencies, professional services (ac-
counting, legal advice and various service agencies).

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Methodology

The aim of the paper is to analyze the possibilities for the development of
social entrepreneurship in B&H, as well as the obstacles hindering this de-
velopment.

Hypotheses

H1: Social entrepreneurship in Bosnia and Herzegovina is not sufficiently

developed, although there is a need for its development.
H2: The launching and development of social entrepreneurship in Bos-
nia and Herzegovina encounters numerous obstacles, which range from
financial to cultural ones.
H3: Regardless of the unfavorable business climate, there are many oppor-
tunities that open the way for the development of social entrepreneurship
in Bosnia and Herzegovina.
H4: The conditions for the development of social entrepreneurship are
nevertheless recognized by those actors who started social entrepreneur-
ship in B&H.

Research questions

1. What are the possibilities that could influence the faster development
of social entrepreneurs in Bosnia and Herzegovina?
2. Are there barriers that prevent entrepreneurs from starting up and
developing a business that is socially motivated and driven by social
values?
3. Is the lack of confidence one of the barriers to the development of
social entrepreneurship and is it more pronounced for younger en-
trepreneurs?
4. Are the external social barriers more dominant than internal in social
entrepreneurs?
5. What is the overall perspective of social entrepreneurship in B&H?

Sample characteristics

The survey involved 136 respondents, including social entrepreneurs,

those who are already engaged in business, who themselves initiated, inherit-
ed or otherwise entered into a business with a social motive and social values.

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The research was carried out in several major cities in Bosnia and Herzego-
vina (Sarajevo, Zenica, Tuzla, Mostar, Banja Luka, Bijeljina, Doboj, Prijedor
and Trebinje) in the pre-selected enterprises. A total of 150 questionnaires
were distributed, 141 questionnaires were returned, but a detailed survey
found that 5 questionnaires were filled in incorrectly. Our respondents are
from different areas of social entrepreneurship: co-operatives (among them
few which employ only young people); companies that employ people with
disabilities; foundations that support projects for the employment of mem-
bers of marginal social groups; agencies and bureaus that employ workers
who have lost their jobs due to bankruptcy and privatization of former social
enterprises; agencies that train and retrain the unemployed; small souvenir
manufacturers; healthy food stores; small companies in the field of environ-
mental protection, as well as companies for the production of recycled mate-
rials packaging.
The questions from our survey (questions from the questionnaire) were
conceived in the form of variables (grouped into categories): general charac-
teristics of social entrepreneurs; general information about a business; per-
ception of opportunities and barriers that hinder the development of social
entrepreneurship. Each question from the questionnaire that relates to mo-
tivational factors and barriers is a variable coded as numbers from 1 to 5 in
the following way: 1 - strongly disagree, 2 - disagree, 3 - neither agree nor
disagree, 4 - agree, 5 - strongly agree.
Respondents’ answers obtained by the above survey were processed by
descriptive statistical method, as well as the method for allocating frequen-
cies in the SPSS program package. We also used the chi-square independence
test to analyse the relationship between categorical variables. The result was
considered statistically significant if the probability was p <0.05.

Results and discussion

The strongest motivational factor for starting a social business, according

to our respondents, is “the issues of vulnerable social categories” in their en-
vironment (Table 1). Therefore, the respondents perceive the issues of certain
social categories as an opportunity and possibility to start an entrepreneurial
venture.
Social entrepreneurship networks are another option in the opinion of
our respondents, which suggests that social entrepreneurs in B&H consider
collective pressure to be necessary for governmental institutions in order to
create more space for social entrepreneurial activities. The frequency of “so-

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cial value” is very high and belongs to the category “totally agree”, as a factor
that motivates social entrepreneurs. This factor can have a double value: first,
starting a business out of satisfaction with a sense of responsibility for the
social problems of its environment. Second, this can show that social entre-
preneurs, like other entrepreneurs, have a motive and intention to “create”
work, and they do not just wait to get “employed somewhere”. We see that the
attitude “the initial knowledge of client problems is the key to the develop-
ment of social entrepreneurship”, is one of the 5 most common motivators for
starting a business with social entrepreneurs in B&H. This is an indicator that
social entrepreneurs
entrepreneurs in B&H. Thisconsider that starting
is an indicator a business
that social with
entrepreneurs a social
consider thatand value
starting a
goals is a very complex and responsible task.
business with a social and value goals is a very complex and responsible task.

Table
Table 1. Respondents’
1. Respondents’ perceptions
perceptions of the of
of the possibilities possibilities of social development
social entrepreneurship entrepreneur-
in
B& H - descriptive
ship development in B&H - descriptive statistics
statistics

N Min Max Arithmetic Standard

mean deviation
Prior knowledge of the market is important for 136 1 3 2.17 .805
starting a social business
Prior knowledge of the clients’ issues is crucial 136 3 5 4.16 .721
for social entrepreneurship development
The issues of vulnerable social categories can be 136 4 5 4.80 .302
a motive for starting social entrepreneurial
venture.
Social entrepreneur should link his knowledge 136 1 3 2.84 .721
of social needs with the means to meet those
needs.
Networks established by social entrepreneurs 136 3 5 4.75 .468
will significantly increase the impact of social
entrepreneurship on the B&H government.
For social entrepreneurs, social values are a 136 3 5 4.25 .770
bigger motive for starting a business than solely
gaining profit.
There are significant resources in B&H for 136 1 3 2.05 .845
social entrepreneurship development.
Access to resources determines the strategy the 136 3 5 4.13 .737
entrepreneur will undertake during the
development phase.
In the following period much more attention 136 2 4 3.62 .737
should be paid to innovations in the area of
social entrepreneurship in B&H
Social entrepreneurs should use market failures 136 2 4 3.42 .638
and government failures as a motive for the
development of their business
Valid N (listwise) 136

Table (1) shows that the view that "there are significant resources in B&H for social
entrepreneurship development" is lowly valued by the respondents. This tells us about the
12
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 Social Entrepreneurship in Bosnia and
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Table (1) shows that the view that “there are significant resources in B&H
for social entrepreneurship development” is lowly valued by the respondents.
This tells us about the difficulties encountered by people who want to start a
business with a social dimension, which is useful for the community and not
just for individuals.
When it comes to the barriers that stand in the way of social entrepre-
neurship development, we saw that our respondents (Table 2) perceive the
“financial barriers” as more explicit than the “lack of knowledge and skills”,
“the effort that should be invested in starting a social business”, “the lack of
determination, self-confidence and fear of failure”. These are high barriers
because they are located predominantly on the right of the horizontal side in
the distribution of frequencies of these barriers (“agree” and “strongly agree”).
It is understandable that the lack of finance and the weak financial stimulus
stand as major obstacles to overall entrepreneurship in B&H, and thus to the
social entrepreneurship, because B&H is underdeveloped and poor country,
so financials are a general social problem. However, the “indecisiveness and
fear of failure” and the awareness that “a lot of effort is needed to launch a
social enterprise”, as well as “the lack of knowledge and skills” indicate poor
psychological performance, poor knowledge, preparedness and determina-
tion of people in B&H to decide on personal entrepreneurial ventures aimed
at general social benefit.

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Tabela 2. Barriers
Tabela hindering
2. Barriers hinderingsocial entrepreneurs
social entrepreneurs in starting
in starting up business
up business
– descriptive statistics – descriptive statistics

N Min. Max. Arithmetic Standard

mean deviation
Lack of financial support from local 136 4 5 4.78 .416
authorities as a barrier to social
entrepreneurship
A poor general entrepreneurial and business 136 1 4 2.53 .643
climate can be a barrier to social
entrepreneurship
Lack of determination, self-confidence and 136 1 5 4.20 1.488
fear of failure represent a significant barrier
to starting a social business
It requires a lot of effort to get started and run 136 3 5 4.31 .662
a business with a social goal and value
Lack of knowledge and skills required can be 136 3 5 4.57 .740
a significant barrier to the launch of social
entrepreneurship
Lack of initial capital as a barrier to starting a 136 2 5 3.16 1.253
social business
Political climate in B&H as a barrier to social 136 2 5 3.98 1.310
entrepreneurship development
Strong competition as a barrier to social 136 1 3 1.80 .853
entrepreneurship
Tax policy as a barrier to social 136 1 5 3.18 1.466
entrepreneurship development
Bureaucratic procedures prevent the 136 1 4 2.4 1 .534
establishment of more social enterprises
Valid N (listwise) 136

The barriers to “self-confidence”, “determination”, a priori “sense of effort”

and
The “the lack
barriers of knowledge”"determination",
to "self-confidence", are the most important
a priori "sense ofinternal
effort" andbarriers
"the lackthat
of
prevent the commitment to entrepreneurship, especially social
knowledge" are the most important internal barriers that prevent the commitment to entrepreneur-
ship. It is noticeable
entrepreneurship, that
especially theentrepreneurship.
social barrier “the Itlack of self-confidence
is noticeable that the barrier and deter-
"the lack of
mination” has full horizontal frequency (1-5) and that all respondents
self-confidence and determination" has full horizontal frequency (1-5) and that all respondents
see it
as very important. Its concentration at the beginning of the right side of the
see it as very important. Its concentration at the beginning of the right side of the frequency
frequency distribution, as well as its vertical maximum on the option “agree”
distribution, as well as its vertical maximum on the option "agree" and the subsequent decline in
and the subsequent decline in the final option “strongly agree”, indicate that
the final option "strongly agree", indicate that confidence presents a significant barrier in social
confidence presents a significant barrier in social entrepreneurship, but that
itentrepreneurship,
is not of solidbutstructure
that it is not of solid
and can structure and can be significantly
be significantly improvedimproved
by certainby certain
train-
ing and education. By applying the chi - square test of independence for the 15
variables “age” and “barriers of self-confidence”, the received value of Pirson’s
statistics was 91.187, with an extended level of significance of 0.000. Since this
value is well below the significance level of 0.05, it is clear that it is statistically
significant.
The barrier “political climate in B&H” is the second most common ex-
ternal barrier (in addition to the “lack of financial support from local com-

14
 Social Entrepreneurship in Bosnia and
Dragana Vilic Herzegovina - Opportunities and Constraints

munity”) and occupies the fifth place in the overall order of barriers among
our respondents. Its concentration on the right side of frequency horizontal
dispersion speaks of a multitude of psychological dilemmas caused by politi-
cal relations that hinder the people who have started social entrepreneurship
in B&H. This can be a significant discouraging fact, both for social, as well as
for total entrepreneurship in B&H. It is especially important to point out that
this barrier is more pronounced in male respondents, i.e. age group between
35 and 45.
By analysis of the key indicators from our research, we noticed that there
are significant opportunities for the development of social entrepreneurship
in B&H. Our respondents pointed out that “problems of vulnerable social
categories” and “social values” ahead of net profit, are good enough motives
to start a business with a social mark. This indicates a high degree of aware-
ness and responsibility among social entrepreneurs, which can further influ-
ence the creation of a favorable atmosphere for solving social problems and
the development of social values in B&H.
Our research has shown that the respondents perceive “access to resourc-
es” and “good knowledge of client needs” as important factors that expand
the opportunities for the social entrepreneurship development in B&H. Par-
ticularly important is the cognition that social entrepreneurs recognize the
importance of “networks” that are created by interconnection and collective
influence on authorities and other stakeholders in the society responsible for
creating a favorable climate for social entrepreneurship development. The
answer to our first question (“what are the possibilities for developing social
entrepreneurship in B&H”) is that these are the social problems of the major-
ity of the population, then the business activities aimed at developing social
values, and that it is necessary to take wider and more resolute approach to
the total social resources, in order to further develop the social entrepreneur-
ship in B&H in the following period.
When it comes to the barriers that hinder, impede and prevent the social
entrepreneurship development in B&H, our research shows that external bar-
riers (financial, infrastructural and political) are almost equally present as the
internal barriers (confidence, the fear of failure, the lack of knowledge and
skills). Our second research question (“Are there barriers that inhibit entre-
preneurs in starting and developing a business that is socially motivated and
driven by social values?”) indicates that there are significant objective exter-
nal barriers, but that there are also significant internal barriers and that these
two types of barriers are brought closer and have equal impact on the social
entrepreneurship development.

15
EEMR Vol. 1 No. 1. 2022. p. 1-19

Conclusion

The main goal of this research is the intention to examine the perception
of the potential of social entrepreneurship in B&H and the barriers that entre-
preneurs face and make it difficult for them to start, develop and improve so-
cial entrepreneurship. In the theoretical part, we have found the main points
behind our attitudes on these two key issues of social entrepreneurship, while
in the research work we collected indicators for our claims about the impor-
tance of the perception of opportunities for social entrepreneurship, as well
as the barriers that hinder it. It is important to note that we have examined
people who already deal with social entrepreneurship and that their attitudes
can be considered as very relevant. The research has shown that there are
good opportunities for the development of social entrepreneurship in B&H
and that the actors already dealing with social entrepreneurship are aware of
them.
Furthermore, the respondents pointed to the existence of significant in-
ternal and external barriers that hinder the further development of social en-
trepreneurship in B&H. If we take into account both our starting categories
(opportunities and barriers), we can conclude that social entrepreneurship is
not sufficiently developed in B&H, although there is a sufficient need, as well
as expectations for its development.

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