building social capital for social entrepreneurship - SSRN papers

Annals of Public and Cooperative Economics 83:1 2012

pp. 101–116

BUILDING SOCIAL CAPITAL FOR SOCIAL ENTREPRENEURSHIP by Hans WESTLUND KTH (Royal Institute of Technology), Stockholm, Sweden Jönköping International Business School, Jönköping, Sweden IRSA (Institute for Developmental and Strategic Analyses), Ljubljana, Slovenia

and Malin GAWELL Entrepreneurship and Small Business Research Institute, Stockholm. Sweden KTH (Royal Institute of Technology), Stockholm, Sweden

ABSTRACT:

By entrepreneurial combinations of voluntary resources, project means from public and private sources, commissions on contracts and other ways of financing, the youth house Fryshuset, with a great number of social activities for primarily young people in Stockholm, Sweden, has been able to allocate resources for establishing and expanding its activities. This development would not have been possible without struggle against established norms, values, traditions and institutions, not least the ‘close to monopoly’ that the public sector in practice was having on the fields in which Fryshuset emerged. Step by step, Fryshuset has built partnerships and alliances with public, private as well as civil actors. Expressed in a general way, Fryshuset has built a new social capital and created new norms and values. The aim of the paper is to investigate how Fryshuset has managed to build social capital through, and for entrepreneurial efforts aiming to facilitate young peoples’ development.

´ del capital social por el empresariado social Construccion

La casa de jóvenes Fryshuset, que desarrolla un gran numero ´ de actividades sociales para los jóvenes de Estocolmo (Suecia), ha sido capaz de captar recursos para asentar y extender sus actividades a través de conglomerados empresariales de recursos benévolos, de medios procedentes de fuentes publicas ´ y privadas, de comisiones de contratos y de otras fuentes de financiación. Este desarrollo no habr´ıa sido posible sin combatir las normas establecidas, valores, tradiciones e instituciones, sin contar el cuasimonopolio

Email: [email protected]. C 2012 The Authors C 2012 CIRIEC. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Annals of Public and Cooperative Economics Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, MA 02148, USA

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HANS WESTLUND AND MALIN GAWELL

que el sector publico ´ ten´ıa en el campo de actividad en el que opera Fryshuset. Esta organización, construyendo partenariados y alianzas con los sectores publico ´ y privado, as´ı como con la sociedad civil, ha creado un nuevo capital social, nuevas normas y valores. El objetivo de este art´ıculo es examinar como Fryshuset ha conseguido construir capital social a través de impulsos empresariales para facilitar el desarrollo de los jóvenes.

¨ soziales unternehmerisches Handeln Aufbau von Sozialkapital fur

Durch unternehmerische Kombinationen von ehrenamtlichen Ressourcen, Projektmitteln aus o¨ ffentlichen und privaten Quellen, Kommissionszahlungen aus Vertragen ¨ und anderen Arten der Finanzierung war das Jugendhaus Fryshuset, mit seiner großen Anzahl sozialer Aktivitaten ¨ fur ¨ vor allem junge Menschen in Stockholm, in der Lage, Ressourcen fur ¨ den Aufbau und die Erweiterung seiner Aktivitaten ¨ aufzubringen. Diese Entwicklung ware ¨ nicht möglich gewesen ohne Kampf gegen etablierte Normen, Werte, Traditionen und Institutionen, nicht zuletzt gegen das “Beinahe-Monopol“, das der o¨ ffentliche Sektor praktisch auf den Feldern hatte, auf denen Fryshuset in Erscheinung trat. Schritt fur ¨ Schritt entwickelte Fryshuset Partnerschaften und Allianzen mit o¨ ffentlichen, privaten wie auch zivilgesellschaftlichen Akteuren. Allgemein gesagt, hat Fryshuset ein neues Sozialkapital aufgebaut und neue Normen und Werte geschaffen. Der Zweck dieses Beitrags ist zu untersuchen, wie Fryshuset es geschafft hat, durch und mit unternehmerischen Mitteln Sozialkapital aufzubauen, mit dem Ziel, die Entwicklung junger Menschen zu fördern.

Construire du capital social pour de l’entrepreneuriat social

Par des combinaisons entreprenariales de ressources bénévoles, des moyens provenant de sources publiques et privées, des commissions sur des contrats et d’autres modes de financement, la maison des jeunes Fryshuset qui développe un grand nombre d’activités sociales pour les jeunes a` Stockholm (Suède) a e´ té capable d’allouer des ressources pour asseoir et e´ tendre ses activités. Ce développement n’aurait pas e´ té possible sans combattre les normes e´ tablies, valeurs, traditions et institutions, sans compter le presque monopole que le secteur public avait dans le domaine d’activité ou` opère Fryshuset. Fryshuset en construisant des partenariats et alliances avec les secteurs public et privé ainsi qu’avec la société civile a crée´ un nouveau capital social, de nouvelles normes et valeurs. L’objectif de ce papier est d’examiner comment Fryshuset a réussi a` construire du capital social par des efforts entrepreneuriaux pour faciliter le développement des jeunes. C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

BUILDING SOCIAL CAPITAL FOR SOCIAL ENTREPRENEURSHIP

1

Introduction

1.1

The many forms of entrepreneurship

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Most definitions of entrepreneurship are centered on the discovery (or creation) of business opportunities, the evaluation of them and the collecting of resources to exploit them. One example is Shane and Venkataraman (2000): ‘Entrepreneurship is an activity that includes the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes, and raw materials, through organizing efforts that previously had not existed’. An expanding literature has taken this opportunity approach as a base for applying the entrepreneurship concept in areas outside the business sphere. The fundamental idea behind this broadening of the entrepreneurship concept is that discovery, evaluation and exploitation of opportunities obviously can also be considered taking place outside the business sphere. Although still primarily bound to the economic field, both conceptually and theoretically entrepreneurship is now often associated with a wider sphere than economy and business alone (Steyaert and Hjorth 2003, Gawell 2006, Westlund 2011). In line with this idea there is now a relatively developed field of research on social entrepreneurship (see e.g. Boschee 1995, Leadbetter 1997, Borzaga and Defourny 2001, Nicholls 2006, Peredo and McLean 2006). Civil/civic entrepreneurship is an additional concept that is being used primarily in research on the civil society and local communities (Henton et al. 1997, Banuri et al. 2002). Another type of entrepreneurship starting to be discussed in the literature is political entrepreneurship within or connected to the public sector (Buchanan and Badham 1999, Harris and Kinney 2004, Chatterjee and Lakshmanan 2009). Entrepreneurship in certain sectors is something being strongly acknowledged as well, with academic entrepreneurship as the most noticed example (Klofsten and Jones-Evans 2000, Shane 2004, Powers and McDougall 2005, Wright et al. 2007). Other examples of these novel interpretations of the entrepreneurship concept are innovative entrepreneurship – in contrast to replicative entrepreneurship (Baumol 2010, Piergiovanni and Santarelli 2006, Wennekers and Thurik 1999), activist entrepreneurship (Gawell 2006), and societal entrepreneurship (Gawell et al. 2009, Lundqvist and Williams Middleton 2010). The field of entrepreneurship can be seen as a multidisciplinary research field with focus on such varying aspects as organizational creation and dynamics (Gartner 1988, Aldrich 1999, Hjorth et. al. 2003), networks and mobilization of resources (Aldrich and Fiol 1994, Aldrich and Brickman 1997) entrepreneurship in local and regional development (Westlund and Bolton 2003) and opportunities and opportunity exploitation (Gartner et al. 2003, Sarasvathy et al. 2003). Of particular interest here is research focused on entrepreneurial social capital (Westlund and Bolton 2003) and entrepreneurship capital as a subset of social capital (Audretsch and Keilbach 2004, 2005). The increased interest in entrepreneurship with primarily social aims raises the questions of how social entrepreneurship relate to social capital and what this means for the mobilization of resources?

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1.2


Social capital

Just as in the case of entrepreneurship, there is no single and overall accepted definition of the concept of social capital. In this paper we stick to the mainstream view, expressed by among others Putnam (1993), OECD (2001) and Westlund (2006), that social capital consists of social networks/relations and the norms and values that are generated, accumulated and disseminated through these networks. However, we deviate from the mainstream idea that social capital always is positive for society – a view that often is connected to the claim that social capital is a public good. Instead we view social capital as a club good (Buchanan 1965, Westlund 2006), i.e. that social capital have features of being an excludable good, limited to members or otherwise connected actors of a network or group. Those connected to the network have access to its social capital, while the outsiders have not. This implies that social capital varies between different groups and organizations and that social capital not necessarily always is ‘good’ from society’s point of view (see e.g. Portes 1998). Based on Putnam (2000) a division of social capital into the categories of bridging, bonding and linking social capital can be made. The bonding social capital can be viewed as the internal network of a group or organization and the common values and norms that keeps the group together. The bridging social capital can be considered as the links to actors in other groups and the shared values that make these links emerge and to be maintained. The linking social capital often is seen as hierarchical links between actors of different power positions. Social capital is highly related to entrepreneurship. Even if he did not use the term social capital, Schumpeter (1911/1934, p 86) pointed out the negative influence of ‘. . .the reaction of the social environment against one who wishes to do something new. . .’ Granovetter (1973) highlighted the positive role of weak network ties for reaching a wide audience in marketing as well as in politics. Strong and weak ties’ importance for building legitimacy for ideas as well as emerging organizations has also been related to entrepreneurship research (Aldrich and Brickman 1997; Johannisson 1998). However, cognitive understanding, norms and values of networks has also been related to inertia facing emerging initiatives (Aldrich and Fiol 1994; Aldrich 1999). The entrepreneurial process involves actors from the same and/or different sectors. As entrepreneurship stretches beyond a specific sector it is challenged by different sectoral principles. Private companies base their business on a market principle for which profit is a necessary goal. The public sector’s activities are governed by political decisions which are based on a principle of redistribution. The third sector is founded on a reciprocity principle, based on actions that benefit the group or society and from which the actor can expect direct or indirect benefit in the future (cf. Polanyi’s (1944) description of the historical development of these principles of exchange). Organizations in sectors with such fundamental differences generate very different social capitals, i.e. different networks with varying stakeholders and with various norms and values (Westlund 2006). However, from a stakeholder perspective we can establish that there are individuals or organizations that are capable of acting as ‘brokers’ by residing and being active in different fields and who are able to ‘translate’ and compile different institutional contexts. This in turn creates high demands for building and handling C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics


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cross-sectoral social capital, both for developing activities and for mobilizing resources across sectoral borders. Expressed in other words, if an entrepreneurial organization takes on processes that need involvement of actors from several sectors of society, it needs to develop and maintain all the three types of social capital. Bonding social capital is necessary to hold the organization together and to keep its entrepreneurial spirit. A bridging social capital to partner organization and actors is used to set up and implement projects and activities for which there is a common interest. The linking social capital can in this perspective consist of links in two directions. On the one hand, a linking social capital needs to be built to actors that have power and (economic) resources to finance and/or support the entrepreneurial activities. On the other hand, if the entrepreneurial activity has a target group (as activities of societal entrepreneurs often have) a linking social capital to this target group has to be created as well. To sum up, entrepreneurial initiatives and social capital are highly interconnected. The increased interest in social entrepreneurship raises the questions of how these connections are built within a particular field as well as across sectors. A social entrepreneurial case will here further the analysis in an emerging field of research.

1.3

Method and outline

The empirical part of this paper is based on a study of social entrepreneurship: the activity house and organization Fryshuset in Stockholm, Sweden, which was founded in 1984. The study is based on analyses of written material, interviews and observations. Semi-structured interviews were conducted with people in the management team. Questions have focused on Fryshuset’s processes, values and resources, and how to deal with challenges and tensions. The analysis is done in an interpretive approach and related to theories on entrepreneurship and social capital. The analysis is conducted with an interpretive approach drawing from the above mentioned studies. It is characterized by a narrative approach with a focus on what people say as expressions of ideas and linked to action. Analysis is related to the linguistic approach developed in organizational and entrepreneurship theory (Czarniawska 1998, 2004; Steyaert and Bouwen 1997; Gawell 2006). The analysis aims to further our understanding of social entrepreneurship in relation to other types of entrepreneurship and to discuss the role of various types of social capital in developing social entrepreneurship. The qualitative study can provide carefully explored aspects on the particular case as well as the particular context. These insights can then be of importance for further studies. Section 2 presents the case in study, Fryshuset, its emergence and development. This section also describes Fryshuset as an entrepreneurial actor and the social capital of Fryshuset. Based on the empirical findings of Section 2, Section 3 discusses the connections and mutual influence between social entrepreneurship and the three categories of social capital in the case of Fryshuset. Section 4 contains some concluding remarks. C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

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2

The case of Fryshuset

2.1

Emergence and development

Fryshuset was founded in 1984 by a group of engaged people and the YMCA in Stockholm. A former cold store (in Swedish: fryshus) was used for social activities primarily with a focus on anti-violence, sports primarily for the YMCA basketball team, and music primarily through providing rehearsal studios for pop and rock bands. The three components has through the years dynamically interplayed in the development of what is today a vivid and in many ways an established organization – still, however, struggling in an entrepreneurial way to continue the development of activities and to continuously mobilize resources. At an early stage the need to find premises for sports and music was a strong drive in finding a house. For the YMCA with a rather successful basketball team among other sport activities as keys factors in their work with youth this was a way to solve a practical problem but also to revitalize and to find renewed forms for their rather traditional youth work. They brought experience, administrative structures and legitimacy into the venture. The groups of enthusiasts with focus on music did, to a large extent, not belong to established associations in the same way. During the 1970s and 1980s there had been an increase in numbers of young people playing and singing through the public initiatives providing music afternoon classes on municipality level all over Sweden. Educational associations grounded in a tradition of adult and alternative education also supported young people to organize study circles to play together, develop bands and of course to finance rehearsal premises. The demand for rehearsal premises that new and old bands could access exceeded the supply. In this group there was, alongside with the movement of rock & roll and punk, a strong sense of playing and organizing on ‘one’s own conditions’ and not only on terms set by others. We will later see how this resembled other sources of influence and played an important part of the emerging Fryshuset spirit. The interests of sports and music coincided with the need to renew activities for and with young people. In the mid 1980’s there were now and then turmoil where frustrated youth became violent and some informal gatherings turned into riots in Stockholm. Among these youth groups there were groups alienated from established associations and the society at large. Within the police there were people starting to work together with some of the troublemakers to find ways to a more constructive development. This led to the start of the association ‘Non-Fighting Generation’ where former fighters were recruited to work against violence, later also to Lugna Gatan (Calm Street) to which young people were recruited and trained to work on the streets and in schools to prevent violence, and many other activities run by Fryshuset today. Lugna Gatan is today a well-known brand and a service being sold to schools, public transportation companies and city district committees. People from different interest groups joined forces in this entrepreneurial initiative. A man called Anders Carlberg, a middle aged construction worker with engagement in union work and social issues was asked to organize some of the activities as a response to the riots mentioned above. This group, headed by Carlberg, became C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics


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the team to start and run Fryshuset. Carlberg has since then been the top leader with slightly different positions. During 2010 he started retiring and a new executive director has been appointed. Early on Fryshuset identified the importance of working close to those with the problems. In most cases this was different groups of young people. ‘The ones who know the problems are also the ones who know and can find and carry through solutions’ are repeated again and again. This has partly been an ideological idea, but it has also proved to be successful for establishing relations to groups that no other organization really reaches out to. This aspect of participation has in interviews and also in other material been described as a necessity. ‘Youth themselves just have to be allowed dealing with their own lives and communities they live in. They know the problems and also how to solve them’ is a way to summarize how it has been expressed. Throughout the years Fryshuset has spread their ideas and shared experiences to other parts of Sweden. In 1986 they traveled to schools around the country together with some other invited voluntary organizations giving seminars on constructive alternatives to violence. On this, and other tours it was confirmed that many teenagers deplored violence and had a lot of vital ideas of their own to offer about today’s society and future developments. Since then, Fryshuset has gained a lot of experience about young people’s lives as well as society in general. The mobilization for an effective youth engagement on young people’s term has continued and been scaled up both through Fryshuset’s own activities also in other cities in Sweden and through a current large scale campaign called Fryshusandan (the Fryshuset Spirit). Through this campaign Fryshuset reaches 150 municipalities in all Sweden’s regions with information and education based on their experiences of youth work. Today Fryshuset has moved to new premises, a big 9 storey house in Stockholm. They have 2 skateboard halls, 3 basketball halls, concert halls, dance halls, rehearsal studies and cafés. They furthermore run an upper secondary school and around 30 different social projects. They also run activities in other cities in Sweden. They have approximately 490 people employed and a turnover of over €21 million (2009). They have up to 40000 visits a month. A combination of grants, fees and sponsors finance various activities. Fryshuset’s receipts in 2009 are shown as percentages in Table 1. Early initiatives were both responses to YMCA and music groups’ demand for premises as well as the public demand to solve the problems of security in the city. The public demand for services reaching out to and being able to handle youth groups that schools and ordinary public or established non-profit organizations had difficulty in reaching was an opportunity for mobilizing resources even though these resources have Table 1 – Fryshuset’s receipts in percent in 2009 High school grants Sales of services Project grants Sponsor gifts Grants from Stockholm City and County Sum Source: Fryshuset’s arsredovisning (annual financial report) 2009. ˚ C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

38.3% 31.9% 20.9% 3.7% 5.2% 100%

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been far from easy to access. Anders Carlberg, with his engagement and persistence as well as networks in politics and other influential groups has been of great importance for mobilizing resources throughout the years. There has also been an opportunity for Fryshuset to expand and develop new activities through a reform improving conditions for running schools in private forms in Sweden during the last decade. The high school at Fryshuset is now an important activity that both demand and bring administrative and financial structure that Fryshuset as a whole benefit from. In the fall of 2010 Fryshuset started a senior level compulsory school. But the entrepreneurial journey has not been smooth. A rather cheeky attitude without hesitations to convince top level decision makers when contacts with lower levels has not been fruitful has at times provoked established structures. A rather expansionist approach has at times provoked other organizations in the field. Trial and error has characterized the development. Until the middle of the 2000s, Fryshuset was entirely a project organization and its organizational chart shifted with the ongoing projects. Gradually a more systematic strategic approach has developed and management instruments have been introduced. Since 2007 the activities are divided into four areas with managers:

• • • •

2.2

Social perspectives (primarily anti-violence activities) Passions (sports, skateboard, music, theater, etc) Commissioned education and labor market activities Schools (high school and compulsory school).

An entrepreneurial actor

Fryshuset has in many ways challenged established practices in youth work during its 26 years of existence. It has had an ability to identify opportunities/needs, to evaluate them, to allocate resources and to take action to meet the needs. In the 1980s youth activities were primarily organized through the public youth centers run by municipalities. In addition to these youth centers there were civil society associations in sports, in scouting and other kinds of activities. Many of these organizations had long traditions and activities were to a large extent influenced by ideas during the 1960s and 1970s – a time when ideas and practices were questioned and revitalized. However, these organizations/activities did not energetically meet the needs of the 1980’s or more specifically the new frustrated groups of young people that did not join established activities/organizations. The founders of Fryshuset, and soon Fryshuset as an actor, met these groups, talked to them and included them in different ways. They became a part of Fryshuset and Fryshuset became a part of them. Fryshuset’s main aim and engagement in social issues relating to youth is fully in line with the increasingly used conceptualization of social entrepreneurship referred to earlier in this paper. Fryshuset has furthermore, already from the start, engaged actors from different sectors in society in its activities, as collaborators and co-workers, as participants and subject of activities or as subscribers and sponsors,. Moreover, as shown above, Fryshuset has also combined a broad spectrum of leisure activities of different kinds, primarily for youth, with running a high school and an extensive information C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics


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activity. Also, the societal impacts of Fryshuset’s work with various groups of youth are regarded very positively by politicians, business managers, third sector leaders and other leading actors of society. In this way Fryshuset also relates closely to the emerging conceptualizations societal entrepreneurship that at times are used as an umbrella concept for entrepreneurial activities primarily with social or societal aims (Gawell et al. 2009), or entrepreneurial activities involving collaboration across sector borders (Westlund 2009). Fryshuset whose aim mainly is to create social value for marginalized or exposed youth groups has, through seeing needs and combining resources from various sources, been able to meet those needs and to create social value. From the perspective of economic entrepreneurship there is no doubt that the non-profit foundation of Fryshuset has been a very successful ‘company’. Even if the focus of the activities has been on social issues, Fryshuset has in an entrepreneurial way successfully secured the necessary resources for its expansion. Moreover, over the years Fryshuset has built a famous and popular brand that many private companies have been willing to attach to by sponsorships or other forms of cooperation. From the civil/civic and activist entrepreneurship perspective, Fryshuset has when needed been able to mobilize substantial voluntary resources. An important factor behind this ability is probably that Fryshuset has been seen as the volunteers’ own organization and not as a traditional, established organization that performs activities for certain groups – an entrepreneurial achievement in itself. Academic entrepreneurship seems to be a field that Fryshuset cannot be connected to. The reason is of course that Fryshuset’s activities, albeit being broad, have stayed outside the academic sphere. Regarding innovative entrepreneurship the situation is different. Fryshuset has not developed any patents, but it has indeed developed innovative methods in social work. These methods are also being used in a partly replicative way in the geographically spreading campaign Fryshusandan (the Fryshuset Spirit). Regarding political entrepreneurship, Fryshuset has been a very active political entrepreneur. Anders Carlberg and his coworkers early developed a strategy for getting financial and political support from the City of Stockholm and other governmental bodies at the local, regional and national level. Instead of applying for public resources in the slow, regulated, bureaucratic way that normally is the only way for organizations in the third sector to get public resources, Fryshuset started the actual project without any financing, presented the project informally to leading politicians, required and often received immediate support, and the continued activities were secured. How to incorporate these ad hoc decisions with the normal, slow and regulated process became the task of officials. Due to these unorthodox methods, Fryshuset has not always been the favorite of all public sector officials. In a similar way, through personal contacts, Fryshuset has also applied for resources from private companies. In these, the decision processes have often been faster and less bureaucratic which has meant fewer tensions with the administrators. Fryshuset has furthermore acted to influence public opinions and normative aspects of how to view and relate to young people. This has for example been done through debates on how schools in general respond and treat pupils or how parents relate to youth. Fryshuset has debated the lack of adults’ engagement and specifically the lack of fathers’ presence in young trouble makers lives. In this way Fryshuset also relate to the concept of activist entrepreneurship (Gawell 2006, 2010). C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

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2.3


Fryshuset’s social capital

The idea of youth work; to meet groups of young people and to organize activities for and with them, is of course not new but a part of an old tradition. One of the members of the management team mentions two of Spencer Tracy’s Oscar awarded films, Captains Courageous (1937) and Boys’ Town (1938), both about making good men of bad boys, as sources of inspirations for his engagement. In a Swedish context this youth work has, as much else in society, been characterized by equality and participation fostering youth into democratic participation in practice. These normative pillars are also very strong within Fryshuset. The values and norms are deeply rooted in ideas of the Swedish Folkhem, a concept that has characterized the Swedish welfare model during the 20th century. Literally translated it means ‘peoples’ home’ and is referred to ‘a good home for everyone’. However, Fryshuset put groups that at the time could be seen as new in focus. If the value part of Fryshuset’s social capital in many ways can be described as very traditional, the networks being built in and around the organization have been much more of a novelty – at least in the context of the Scandinavian welfare society. Traditionally, youth activities have mainly been organized within local public sector bodies where the size of the politically decided budget has governed the activities or by regular voluntary organizations where the size of the public grants and possible private contributions has set the limits for the activities. Both types of organizations have been embedded in a grant and allotment system with stable networks to fixed contributors and target groups. The resources given have decided the amount of activities. Fryshuset has had a different approach. For Fryshuset it has been the current needs of its target groups that has decided what networks it needs to develop and use in order to secure financing of the needed activities. This approach has meant that Fryshuset has developed sector-crossing flexible social capitals in four dimensions: 1 – with diverse youth groups1 of which each group might be stable, but consist of an ever changing flow of individuals. To these groups, Fryshuset has built linking social capitals, which for certain individuals who have been more strongly engaged in the activities, have been developed to bonding social capitals. 2 – with adults and some youth in the target groups, with different backgrounds, education and perspectives, being employed in various Fryshuset projects. This group has become integrated with the bonding social capital of Fryshuset. 3 – with public and private financiers and partners, i.e. officials in public offices/departments, private foundations, companies and NGOs. The actors in this group can be labeled as equal partners and to them a bridging social capital has been built. 4 – with politicians and other decision makers. To these actors, Fryshuset has build a linking social capital.

1 Some of the various youth groups participating in Fryshuset’s activities are basket ball players (about 50% immigrants), skateboarders (almost all native Swedes) and amateur rock & roll musicians. C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics


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Fryshuset’s strategy for building social capital with its target groups can be divided in two levels. The first level have included the target groups as a whole and have aimed at establishing a linking social capital by offering activities, peer support and a place to be. The second level can be summarized as ‘finding the toughest guys, surprising them by trusting them and hiring them and thereby winning them over to the right side’. This strategy, to focus on winning over the leaders and creating a bonding social capital with them, has been surprisingly successful, although there are of course examples of failures. A prerequisite seems to be that the candidates cannot be too involved in destructive networks, as the more they are involved in such networks the harder it is to get them to break with the norms and demands of these networks. Over the years, a large number of potential troublemakers and their followers have been brought to ‘the right side’ by this strategy. The bonding networks within Fryshuset’s own organization have consisted of very diverse groups of people with different knowledge and interest. The aims, values and the fighting spirit of Fryshuset are the things that have united them. Thus, Fryshuset has in itself been a network of learning, where sectoral divides gradually have decreased and at times even been erased. Together with the strong networks with the target groups, this has resulted in innovative activities. Fryshuset’s bridging social capitals to potential financiers and partners on equal level have been just as diverse as these groups are. To public sector bodies being responsible for areas that Fryshuset is active within, different relations have been developed. Departments within the social welfare service of the city of Stockholm that have tasks in certain sectors, have often developed a functioning cooperation with Fryshuset as it has been considered a good complement to their own activities. The opposite holds for departments being geographically organized, for which Fryshuset has become a competitor for local government means in the resource allocation between geographical areas. As mentioned above, Fryshuset has developed a popular brand that private companies willingly want to connect to by e.g. sponsorships and awards. By attaching to Fryshuset’s brand the companies want to build or strengthen their social relations the anonymous mass of existing or potential customers (cf. Westlund 2006). It also seems to be that entrepreneurs in the private sector recognize an entrepreneur in the social sector, i.e. that common values and attitudes lay the ground for a common social capital. A common value ground also exists with a number of other organizations in the third sector. On this ground Fryshuset, itself formally being a YMCA foundation, has found partners among other non-profit organizations. The relations in the networks have varied. Relations to different actors have varied in strength and also over time. This has also influenced the board structure and the role of the board. Over time there have been shifts primarily related to a dynamic interplay with the front figure Anders Carlberg, different stakeholders, organizational and resource mobilizing aspects etc. The flexibility has been constructive and even powerful according to most people involved. It has also been criticized for not being open and democratically structured. Currently, a rather broad leadership team consisting of both executive management and the board is heading Fryshuset. As pointed out above, Fryshuset has built good linking relations to politicians and other decision makers. Being active in politics himself, Fryshuset’s founder Anders C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

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Carlberg has used his extensive network to build strong support for his organization across the party frontiers. The fact that Fryshuset has represented traditional values, supported by all major parties, facilitated this support. The youthful and straightforward way in which the activities were performed also appealed to many politicians. The emergence and growth of Fryshuset can be interpreted as an evidence for it being more successful than its ‘competitors’ in building social capitals with the four above-mentioned groups. In that case, what is the reason? One answer has already partly been mentioned: from the 1980s and onwards, substantial youth groups have not felt at home in or not even been recognized by the traditional activities organized by the public sector’s youth centers and the third sector’s leisure activities. Fryshuset has been much more flexible and has to a much larger extent than its competitors been able to involve youth in decisions and activities. For certain youth groups Fryshuset has functioned as a catalyst for transforming frustration to ‘positive energy’ – something that its competitors mainly have failed in. Another answer – in terms of social capital – lies probably in the fact that it has been able to combine the building of bonding, bridging and linking social capitals in the four dimensions of social capital building better than its competitors. The youth centers are public sector bodies with the lack of flexibility this means, and have for that reason had difficulties in building linking social capital with many of Fryshuset’s target groups. Regarding the youth organizations of the civil society they are to a large extent established organizations that were built up several generations ago. Moreover, most of their activities are dependent on regular public sector grants, which mean an inflexibility to respond to new needs. Fryshuset’s two competitors have had strong linking social capitals with ‘the establishment’ that have secured resources for their activities, but these strong, established social capitals seem to have made it difficult to build linking social capitals with some of the new youth groups.

3

Building social capital for social and societal entrepreneurship

Section 2 showed that Fryshuset has been able to build a social capital in and around itself, based on traditional values but unorthodox methods and much more extensive and diverse networks than regular third sector organizations. This section discusses the interplay between the entrepreneurship practiced by Fryshuset and the social capital it has built up. By acting entrepreneurially from a social, innovative, economic, civil, and not least a political perspective, Fryshuset has created and developed relations with a large number of actors in different sectors of society. Being able to build bonding, bridging and linking social capitals – and the latter in two directions – the sector-crosser Fryshuset has also been able to transform these sector-specific social capitals to a (partly) joint social capital in which Fryshuset is the central actor, norm distributor and network node. Thus, it is the fact that Fryshuset has managed to be entrepreneurial in a number of fields simultaneously and combined them in the performance of practical activities that has made it possible for it to build a sector-crossing social capital. This sector-crossing social capital has in its turn enhanced the societal aspects of Fryshuset’s entrepreneurship, as C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics


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Figure 1 – The mutual, cumulative process by which Fryshuset combines societal entrepreneurship with social capital building.

it has created a common understanding that has facilitated the participation of actors from different sectors in the performance of Fryshuset’s activities. In this way, societal entrepreneurship and the building of the three types of social capital have become components of a mutual, cumulative process by which Fryshuset has strengthened and expanded its organization and its activities. This is illustrated in Figure 1.

4

Concluding remarks

This paper has discussed the concepts of social and societal entrepreneurship and their connections to the concept of social capital. The empirics have consisted of a case study of the youth house Fryshuset in Stockholm, Sweden. The analysis has shown that Fryshuset has fulfilled our criteria of social entrepreneurship and that the combination of societal entrepreneurship and social capital building that Fryshuset has achieved can be seen as an explanation for its success. The obvious question regarding these results is of course to what extend these conclusions from a single case study can be generalized. Is the successful Fryshuset a unique case whose experiences cannot be transferred to other organizations? From one point of view the answer is yes It seems very hard to find contemporary corresponding cases even internationally and this could indicate that no general lessons can be drawn. However, there is also a question about the possibility to generalize processes that are so integrated in specific contexts as all types of entrepreneurial processes are. And even if Fryshuset currently is a unique case, it is quite possible that it is a forerunner of a new type of third sector organizations in the post-industrial society. The vast majority of the current third sector organizations in Sweden and internationally was formed C 2012 The Authors C 2012 CIRIEC Annals of Public and Cooperative Economics

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in the industrial era and was adapted to the institutional frameworks of that time. Fryshuset’s consequent, but often unconscious break with existing institutions, sector divisions and expectations on how a third sector organization should behave has been an entrepreneurial achievement. As successes always are worthy of imitation, it is highly probable that other organizations start to learn from Fryshuset’s experiences of developing social and societal entrepreneurship and new, dynamic forms of social capital. If such a development is taking place, the conclusions of this paper can be examined and compared, and possibly generalized. REFERENCES

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