Social entrepreneurship in Russia

Social entrepreneurship in Russia is in its infancy.^[1][2] Its origin as a phenomenon of the post-Soviet history of the country should be attributed to the first half of the 2000s, ^[3][4] although similar initiatives of individual enthusiasts occasionally took place already in the 1990s,^[5] and prototypes of social and entrepreneurial activity can be found also in earlier periods, up to the turn of the XIX-XX centuries.^[6]

The systematic development of this area of business activity has started in the second half of the 2000s in Russia^[4] and it was associated, first of all, with the emergence of a number of strong systemic private players developing infrastructure, stimulating social entrepreneurs, developing and promoting the theoretical base. Through their efforts, ideas of social entrepreneurship are conveyed to the legislative and executive authorities, the business communities, society in general and potential social entrepreneurs, which gradually creates, formalizes and structures this area. Since the early 2010s, Social Innovation Centers (SICs) have emerged in Russia, which provide training in social entrepreneurship methods and support existing projects.^[7]

As of the end of 2020, the popularity of social entrepreneurship in Russia remains low: no more than 1% of Russian entrepreneurs are engaged in social business.^[8][9] Their contribution to the country's GDP in 2015 was 0.36%.^[10] More than half of Russian social entrepreneurs are women aged 30–60.^[10]

A number of sustainable projects are operating in Russia, mainly in the areas of farming, recycling of certain types of household waste, supporting for the disabled and elderly persons and graduates of orphanages as well, the revival of folk crafts, local tourism,^[11] but they also cannot boast of an unconditional success, scale of activity, and even more the replicability of their experience. Large problem areas of paramount importance, such as drug addiction, alcoholism, unemployment, general low living standards, corruption and bureaucracy, are left out of the scope of social entrepreneurs.^[12]

Among the reasons for the low popularity of social entrepreneurship in Russia, one should single out the general lack of formation of the class of traditional entrepreneurs, from which representatives of social business should later stand out,^[2] insufficient awareness^[13]] and poor elaboration of the theoretical base. The curtailment of the work of international non-profit organizations in Russia since the early 2000s,^[14][15] the lack of real support at the federal level for a number of traditional social entrepreneurs activities^[16] and the scarcity of the legislative framework also hinder progress in this area.^[13]

On July 26, 2019, Law No. 245-FL “On Amendments to the Federal Law “On the Development of Small and Medium-Sized Businesses in the Russian Federation” in terms of consolidating the concepts of “social entrepreneurship”, “social enterprise”» entered into force in Russia.^[17]