The role of work integration social enterprises in welfare provision: Critical perspectives from nonprofits

Abstract

People with disabilities (PWDs) have been systematically excluded from mainstream market place in Hong Kong, a city whose public policies have been heavily influenced and informed by the productivist welfare regime that places heavy emphasis on profit maximization and economic growth and productivity in lieu of social rights and inclusion (Holliday, 2000). As a result, disparities in poverty rates and other human capital outcomes can be observed among PWDs. Over the past decade, various countries across the East Asian region, including Hong Kong, have witnessed the rapid proliferation of social enterprises, especially in the form of Work Integration Social Enterprises (WISEs). This phenomenon has partially resulted from the implementation of “aggressive” policy measures aimed at facilitating the setting up of social enterprises as a way to combat rising unemployment and poverty rates, especially among PWDs, during the Asian financial crisis. These WISEs are overwhelmingly operated by nonprofits in Hong Kong. While previous research has shown that WISEs were able to generate a range of positive social values for disadvantaged employees (Chui et al., 2018), its role in relation to welfare policies is less clear. Critics have for instance questioned whether WISEs have simply been used as a convenient outlet for the government to cede its own responsibility for poverty alleviation to the third sector. Relatedly, many WISEs continue to rely on some form of government subsidy or affiliated nonprofits for survival, thereby violating the principle of “double bottom line”. This poses the question as to whether or not WISEs are a viable and sustainable form of organization capable of fulfilling their originally intended function of poverty alleviation. Furthermore, that WISEs have to continue rely on nonprofits for survival may also incur unexpected costs for the nonprofit, which also puts into question the sustainability of WISEs and their effect on nonprofits. This study attempts to address these issues through a combination of document analysis and in-depth qualitative interviews with a sample of founders and CEOs of WISEs and representatives of nonprofits in Hong Kong (n=11). Data was analysed using thematic analysis (Braun & Clark, 2006). Several insights can be generated from our findings. First, we found that while benefits can be gleaned from WISEs for employees on the individual level, the operation of WISEs have also incurred unexpected negative consequences and costs to nonprofits at the organisational level. Participants revealed that almost always is the case where the parent nonprofit would dilute its own resources in order to subsidise the WISE. This, in turn, jeopardised the quality of traditional services rendered to clients. Second, participants also viewed that while the government promotes and encourages nonprofits to set up social enterprises, the dearth of corresponding measures (e.g. efforts to lower rental costs) poses serious challenges to the smooth operation of WISEs, with some participants revealing that the WISE model may not an ideal form of organisation (or 'social innovation') after all. Third, we found that although WISEs have been “branded” in the public policy discourse as an anti-poverty measure, their actual effects in assisting disadvantaged people out of poverty remain ambiguous at best, if not unfounded. Finally, some participants expressed that while WISEs do provide employment opportunities for PWDs, they should not be taken as panacea for the government's lack of systematic disability or work integration policies. In this light, the productivist welfare institutional logic prevails. With reference to international literature (Defourny & Nyssens, 2010; Gerrard, 2017), discussion pertaining to the role of social enterprise in the production of welfare and future directions for work integration social enterprises are presented. Specifically, our study contributes critical insights into the viability and sustainability of the WISE model as a form of anti-poverty measure and its relation to government responsibility from the perspectives of nonprofit representatives of WISEs. References: Chui, C. H. K., Shum, H. Y. M., & Lum, T. Y S. (2018). Work integration social enterprises as vessels of empowerment? Perspectives from employees. Asia Pacific Journal of Social Work and Development, 1-16. Defourny, J., & Nyssens, M. (2010). Social enterprise in Europe: At the crossroads of market, public policies and third sector. Policy and Society, 29(3), 231-242. Esping-Andersen, Gosta. 1990. The Three Worlds of Welfare Capitalism. Princeton University Press. Gerrard, J.( 2017). Welfare rights, self-help and social enterprise: Unpicking neoliberalism’s mess. Journal of Sociology, 53(1), 47-62. Holliday, I. (2000). Productivist Welfare Capitalism: Social Policy in East Asia. Political Studies, 48(4), 706-723.