Institutional and territorial drivers of rural social enterprise ecosystems: Evidence from Finland

Authors

  • Harri Kostilainen Diaconia University of Applied Sciences, Finland https://orcid.org/0000-0003-0523-6103
  • Jari Karjalainen Diaconia University of Applied Sciences, Finland

DOI:

https://doi.org/10.15678/SER.2025.2.09

Keywords:

rural social enterprise, institutional support, ecosystem development, regional policy, Finland

Abstract

Background: This article investigates the interplay between institutional frameworks and territorial conditions in shaping the development of rural social enterprise (RSE) ecosystems in Finland.

Research objectives: Drawing on comparative case analysis across three regions—Lapland, Satakunta, and Kainuu—the study identifies key configurations of governance structures, socio-economic conditions, and infrastructural dynamics that enable or constrain the emergence and sustainability of RSEs.

Research design and methods: Through document analysis, expert interviews, and regional data, the research introduces the concept of "institutional–territorial fit" to explain the varied trajectories of ecosystem formation.

Results: The findings show that successful RSE ecosystems are contingent on multi-level institutional coordination, place-based adaptability, and civic engagement.

Conclusions: The article concludes with strategic recommendations for fostering resilient, inclusive, and territorially embedded social enterprise ecosystems.

Downloads

Download data is not yet available.

References

Adner, R. (2016). Ecosystem as structure: An actionable construct for strategy. Journal of Management, 43(1), 39–58. https://doi.org/10.1177/0149206316678451

Biggeri, M., Testi, E., & Bellucci, M. (2017). Enabling ecosystems for social enterprises and social innovation: A capability approach perspective. Journal of Human Development and Capabilities, 18(2), 299–306. https://doi.org/10.1080/19452829.2017.1306690

Centre of Expertise for Social Enterprises (n.d.) https://yyo.fi/en/home/

Davies, I. A., Haugh, H., & Chambers, L. (2019). Barriers to social enterprise growth. Journal of Small Business Management, 57(4), 1616–1636. https://doi.org/10.1111/jsbm.12429

Defourny, J., & Nyssens, M. (2017). Fundamentals for an international typology of social enterprise models. International Journal of Voluntary and Nonprofit Organizations, Special Issue on Social Enterprises and Welfare Regimes, 28, 2469–2497, https://doi.org/10.1007/s11266-017-9884-7

Di Domenico, M., Haugh, H., & Tracey, P. (2010). Social bricolage: Theorizing social value creation in social enterprises. Entrepreneurship Theory and Practice, 34(4), 681–703. https://doi.org/10.1111/j.1540-6520.2010.00370.x

Establishments of enterprises by industry and region 2018–2023. Statistics Finland. https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__alyr/statfin_alyr_pxt_13ww.px

European Commission. (2019). Social enterprises and their ecosystems in Europe. Country report: Finland. Author: Kostilainen, H. Publications Office of the European Union. https://data.europa.eu/doi/10.2767/044718

Eversole, R., Barraket, J. & Luke, B. (2014). Social enterprises in rural community development. Community Development Journal, 49(2), 245–261. https://doi.org/10.1093/cdj/bst030

Folke, C., Pritchard, L., Jr., Berkes, F., Colding, J., & Svedin, U. (2007). The problem of fit between ecosystems and institutions: Ten years later. Ecology and Society, 12(1), 30. https://doi.org/10.5751/ES-02064-120130

Gao, C. & Psenner, E. (2024). Transforming the creative and social entrepreneurial ecosystem: The broker roles of rural collaborative workspaces. Societies, 14(6), 81. https://doi.org/10.3390/soc14060081

Data on Social Enterprises. (n.d.). https://yyo.fi/tietopankki/data

Disadvantage in Finland map site (n.d.). https://karttasovellus.diak.fi

Innovation and skills in Finland 2021–2027. EU regional and structural policy programme. (2023). [Uudistuva ja osaava Suomi 2021–2027 EU:n alue- ja rakennepolitiikan ohjelma. Työ- ja elinkeinoministeriö 27.4.2023].

https://rakennerahastot.fi/documents/91635434/120111163/Uudistuva+ja+osaava+Suomi+2021-2027+ohjelma.pdf/deb0126a-d68f-bc5d-5f2e-dac95d97a451/Uudistuva+ja+osaava+Suomi+2021-2027+ohjelma.pdf?t=1684927591791

Kainuu-ohjelma (2021). Kainuun maakuntaliitto 2021 A:15. https://kainuunliitto.fi/elinkeinot-ja-aluekehitys/kainuu-ohjelma-topsu/

Key figures on population by region 1990–2024. Statistics Finland. https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__vaerak/statfin_vaerak_pxt_11ra.px

Kostilainen, H. (2019). Finding a niche. Social enterprises and the public service reform in Finland. Kuopio: Itä-Suomen yliopisto, 2019. Publications of the University of Eastern Finland Dissertation in Social Sciences and Business Studies, 196. http://urn.fi/URN:ISBN:978-952-61-3072-9

Kostilainen, H., Houtbeckers, E. & Pättiniemi, P. (2021). A new typology of social enterprise in Finland. In J. Defourny & M. Nyssens (Eds.), Social enterprise in Western Europe – Theory, models and practices (pp. 52–68). https://doi.org/10.4324/9780429055140-3-5

Kostilainen, H. & Pättiniemi, P. (2016). Evolution of the social enterprise concept in Finland. In L. Lundgaard Andersen, M. Gawell, & R. Spear (Eds.), Social entrepreneurship and social enterprises: Nordic contributions to social entrepreneurship. Routledge.

Laki julkisista hankinnoista ja käyttöoikeussopimuksista 1397/2016. https://www.finlex.fi/fi/lainsaadanto/2016/1397

Lapin maakuntaohjelma 2022–2025 (2022). Lapin liitto. https://www.lapinliitto.fi/wp-content/uploads/2022/02/Lappi-sopimus-2022-1.pdf

Lapin liitto (2025). Lapin tilanne- ja kehityskuva 2024.

https://www.lapinliitto.fi/wp-content/uploads/2025/01/Lapin-tilanne-ja-kehityskuva-2024-1.pdf

Massey, D. (2004). Geographies of responsibility. Geografiska Annaler: Series B, Human Geography, 86(1), 5–18. https://doi.org/10.1111/j.0435-3684.2004.00150.x

Mazzucato, M. (2018). Mission-oriented innovation policy: Challenges and opportunities. Industrial and Corporate Change, 27(5), 803–815. https://doi.org/10.1093/icc/dty034

Migration between regions by level of education, age group and sex, 2005–2023. Statistics Finland. https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__muutl/statfin_muutl_pxt_11a6.px/

Moore, J. F. (1993). Predators and prey: A new ecology of competition. Harvard Business Review, 71(3), 75–86.

North, D. C. (1991). Institutions. Journal of Economic Perspectives, 5(1), 97–112. https://doi.org/10.1257/jep.5.1.97

Olmedo, L., & O’Shaughnessy, M. (2022). Community‑based social enterprises as actors for neo‑endogenous rural development: A multi‑stakeholder approach. Rural Sociology, 87(4), 1191–1218. https://doi.org/10.1111/ruso.12462

Olmedo, L., Rinne-Koski, K. M., O’Shaughnessy, M., Matilainen, A., & Lahdesmäki, M. (2023). Support structures for a plural economy in rural areas? Analysing the role of community-based social enterprises. Sociologia Ruralis, 64(1), 82–103. https://doi.org/10.1111/soru.12463

Olmedo, L., van Twuijver, M. & O’Shaughnessy, M. (2023). Rurality as context for innovative responses to social challenges – The role of rural social enterprises. Journal of Rural Studies, 99, 272–283. https://doi.org/10.1016/j.jrurstud.2021.04.020

Paasi, A. (2002). Place and region: Regional worlds and words. Progress in Human Geography, 26(6), 802–811. https://doi.org/10.1191/0309132502ph404pr

Perikangas, S., Kostilainen, H. & Kainulainen, S. (2024), Co-production of social innovations and enabling ecosystems for social enterprises. International Journal of Public Sector Management, 37(3), 351–369. https://doi.org/10.1108/IJPSM-04-2023-0111

Pestoff, V. (2012). Co-production and third sector social services in Europe: Some Concepts and evidence. Voluntas, 23, 1102–1118. https://doi.org/10.1007/s11266-012-9308-7

Project information service for European Union’s region and structure policy for program period 2021–2027. https://eura2021.fi/hanketietopalvelu

Proposal for a council recommendation on developing social economy framework conditions (2023) COM (2023) 316 final. European Commission. https://op.europa.eu/fi/publication-detail/-/publication/16b6ff21-09eb-11ee-b12e-01aa75ed71a1/language-fi

Richter, R. (2019). Rural social enterprises as embedded intermediaries: The innovative power of connecting rural communities with supra-regional networks. Journal of Rural Studies, 70, 179–187. https://doi.org/10.1016/j.jrurstud.2017.12.005

Ricket, A. L., Jolley, G. J., Knutsen, F. B., & Davis, S. C. (2023). Rural Sustainable prosperity: Social Enterprise ecosystems as a framework for sustainable rural development. Sustainability, 15(14), 11339. https://doi.org/10.3390/su151411339

Rinne-Koski, K., & Lähdesmäki, M. (2024). Legitimacy of community-based social enterprises (CBSE) in service provision in rural areas. International Journal of Public Sector Management, 37(3), 388–401. https://doi.org/10.1108/IJPSM-04-2023-0127

Rodríguez-Pose, A. (2013). Do institutions matter for regional development? Regional Studies, 47(7), 1034–1047. https://doi.org/10.1080/00343404.2012.748978

Roy, M. J. (2021). Towards a ‘Wellbeing Economy’: What can we learn from social enterprise? In B. Gidron, & A. Domaradzka (Eds.), The new social and impact economy. Nonprofit and civil society studies. Springer. https://doi.org/10.1007/978-3-030-68295-8_13

Satakunnan alue-ennakointi ja aluetieto. (n.d.). Satakuntaliitto. https://satakunta.fi/aluekehitys/alue-ennakointi-ja-aluetieto/

Satakunta-strategia. Satakunnan maakuntaohjelma 2022–2025 (2021). Satakuntaliitto. https://satakunta.fi/aluekehitys/strategiat-ja-ohjelmat/satakunta-strategia/

Steiner, A. & Teasdale, S. (2019). Unlocking the potential of rural social enterprise. Journal of Rural Studies, 70, 144–154. https://doi.org/10.1016/j.jrurstud.2017.12.021

Steinerowski, A. A., & Steinerowska-Streb, I. (2012). Can social enterprise contribute to creating sustainable rural communities? Using the lens of structuration theory to analyse the emergence of rural social enterprise. Local Economy, 27(2), 167–182. https://doi.org/10.1177/0269094211429650

Strategy for Social Enterprises (2022). Ministry of Economic Affairs and Employment. Publications of the Ministry of Economic Affairs and Employment 2022:5 http://urn.fi/URN:ISBN:978-952-327-586-7

Tilastoja ja tilannekuvaa Kainuusta 2/2025. Kainuun liitto. https://kainuunliitto.fi/tietopalvelut/tilastot/

Universities Act (558/2009; amendments up to 644/2016 included). Finlex Data Bank. https://www.finlex.fi/en/laki/kaannokset/2009/en20090558

Universities of Applied Sciences Act (932/2014; amendments up to 516/2020 included). Finlex Data Bank. https://www.finlex.fi/en/laki/kaannokset/2014/en20140932

van Twuijver, M. W., Olmedo, L., O’Shaughnessy, M., & Hennessy, T. (2020). Rural social enterprises in Europe: A systematic literature review. Local Economy, 35(2), 121–142. https://doi.org/10.1177/0269094220907024

Downloads

Published

2025-12-31

How to Cite

Kostilainen, H., & Karjalainen, J. (2025). Institutional and territorial drivers of rural social enterprise ecosystems: Evidence from Finland. Social Entrepreneurship Review, 2, 137–151. https://doi.org/10.15678/SER.2025.2.09

Similar Articles

1-10 of 139

You may also start an advanced similarity search for this article.