Understanding the Fourth Sector: Governance Implications and Emerging Trends
The concept of the Fourth Sector, blending profit and non-profit principles, challenges traditional tripartite societal frameworks. This shift necessitates a reevaluation of governance structures and policy development to accommodate the evolving landscape. Academic interest in this sector is growing, with initiatives like the World Economic Forum's Fourth Sector Development Initiative in place. The fusion of sectors creates a dynamic space requiring innovative approaches for effective governance.
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UNDERSTANDING THE EMERGING FOURTH SECTOR AND ITS GOVERNANCE IMPLICATIONS MIKKO RASK POLITICS OF CO-CREATION 28.3.2020
TRADITIONAL SECTORS OF THE SOCIETY PUBLIC SECTOR (E.G., MINISTRY OF EDUCATION AND CULTURE, THE ACADEMY OF FINLAND, UNIVERSITIES) ROLE IN BALANCING BETWEEN COMPETING INTEREST GROUPS FOR-PROFIT OR BUSINESS SECTOR (E.G., NOKIA, DEMOS EFFECT) NON-PROFIT OR THIRD SECTOR (E.G., NGO S & CSO S) REFERENCES GOULET, L. R., & FRANK, M. L. (2002). ORGANIZATIONAL COMMITMENT ACROSS THREE SECTORS: PUBLIC, NON-PROFIT, AND FOR-PROFIT. PUBLIC PERSONNEL MANAGEMENT, 31(2), 201-210. SCOTT, P. G., & FALCONE, S. (1998). COMPARING PUBLIC AND PRIVATE ORGANIZATIONS: AN EXPLORATORY ANALYSIS OF THREE FRAMEWORKS. THE AMERICAN REVIEW OF PUBLIC ADMINISTRATION, 28(2), 126-145.
ARGUMENT THE TRIPARTITE CONCEPTUALIZATION OF THE SOCIETY IS BECOMING OBSOLETE, AND THERE ARE GOOD REASONS TO TAKE SERIOUSLY CLAIMS OF THE EMERGING FOURTH SECTOR , WHICH IS A SOCIETAL SECTOR CONSTITUTED THROUGH A FUSION OF THE PROFIT AND NON-PROFIT PRINCIPLES.
POLICY policy makers politicians funders research councils parliamentary committees EU R&I agencies RANDOM passersby consumers festival guests randomly selected citizens HYBRID gendered experts sceptics of S&T schools science parliaments LIFE WORLD youth senior citizens coloured persons patients handicapped inhabitants immigrants parents families community artists young offenders vulnerable groups ACADEMIA universities research institutes researchers academic leaders philosophers gender scholars technological experts FIELD EXPERTS activists hobbyists opinion leaders users web activists young artists BUSINESS companies service providers product manufacturers business leaders developers designers science communicators ENVIRONMENT & POLITICS environmental NGOs political organisations employers employees religious groups women s organizations churches local groups youth organisations CULTURE & SOCIETY teachers science centers youth workers museum staff health care organisations Rask, M. et al. (2018). Public participation, science and society: Tools for dynamic and responsible governance of research and innovation. Routledge, London & New York.
WHY BOTHER ABOUT THE FOURTH SECTOR? ACADEMIC ATTENTION IS INCREASING BUT DISPERSED POLICIES FOR THE 4TH SECTOR ARE BEING DEVELOPED, E.G., WORLD ECONOMIC FORUM S FOURTH SECTOR DEVELOPMENT INITIATIVE FINLAND: SEVERAL MUNICIPALITIES AND THE CENTRE PARTY HAVE ADOPTED A POLICY OF 4TH SECTOR PROBLEM: HOW CAN POLICIES BE PREPARED IN LACK OF A SHARED UNDERSTANDING? SOLUTION: BETTER UNDERSTANDING -> BETTER INVOLVEMENT STRATEGIES AND MANAGEMENT OF COMPLEXITIES INVOLVED!
LITERATURE REVIEW AUTHORS: RASK, M., PUUSTINEN, A. & RAISIO, H. SCANDINAVIAN JOURNAL OF PUBLIC ADMINISTRATION RESEARCH QUESTIONS HOW IS THE FOURTH SECTOR DEFINED IN THE THREE MAIN STREAMS OF ACADEMIC DISCUSSION, AND WHAT ARE THEIR COMMONALITIES AND DIFFERENCES? WHAT ARE THE MAIN CHARACTERISTICS AND DRIVING FORCES OF THE FOURTH SECTOR AS AN EMERGING SOCIETAL PHENOMENON? WHAT ARE THE MAIN GOVERNANCE ISSUES AND CHALLENGES AROUND FOURTH-SECTOR INVOLVEMENT? NON-SYSTEMATIC/ EXPLORATORY LITERATURE REVIEW
THREE STREAMS OF FOURTH SECTOR RESEARCH 1. MICRO-LEVEL ONE-TO-ONE AID (ORGANIZATIONAL AND ADMINISTRATION SCIENCES) 2. SELF-ORGANIZED CIVIC ACTIVISM (SOCIOLOGY AND SOCIAL MOVEMENT STUDY) 3. HYBRID ORGANIZATIONS (ECONOMISTS) OTHER: (A) ZAKAT ORGANIZATIONS, AND (B) OTHER ACTORS NOT BELONGING TO THE TRADITIONAL SECTORS OF THE SOCIETY (HYBRID EXPERTS, RANDOMLY SELECTED PEOPLE, FIELD EXPERTS, LIFE WORLD EXPERTS)
1. ONE-TO-ONE AID KEY AUTHOR: COLIN WILLIAMS (2002, 2003, 2008) FOCUS: HOW INDIVIDUALS CAN, AND OFTEN DO, HELP THEIR FELLOW CITIZENS ON THE BASIS OF INFORMAL VOLUNTEERING SOCIAL PSYCHOLOGICAL ROOTS: PROSOCIAL BEHAVIOUR THE AUTHORS IN THIS STREAM OF RESEARCH SUGGEST THAT THE ROLE AND SIGNIFICANCE OF THE FOURTH SECTOR HAS NOT BEEN SUFFICIENTLY ACKNOWLEDGED, PARTICULARLY BY GOVERNMENTS, WHO UNJUSTIFIABLY FAVOUR THE THIRD SECTOR WHEN DESIGNING COMMUNITY PARTICIPATION STRATEGIES (HARJU 2003; WILLIAMS IBID) EXAMPLE: VOLONTEERS IN THE UT YA ISLAND
Traditional volunteering One-to-one aid (as fourth-sector activity) Organization Organized through formal agencies or Emergent, self-organizing, no formal organization, organizations spontaneous Time span Long periods of time One-time acts, episodic, ad hoc Motivational basis Prosocial behaviour, no explicit expectation of Prosocial behaviour, no explicit expectation of reward reward Aim To benefit and serve people and causes that Community participation, to serve those in desire help immediate need of help and aid Form of activity Organized activities to benefit those desiring help Emergency helping, neighbourly help, does not require an explicit desire to be helped by the receiver Governance implications Acknowledged as part of the social organization Often not acknowledged as part of the social of societies, a sector in itself, often at least partly organization of societies, informal, outside the controlled by the authorities, predictable control of authorities, unpredictable and emergent
2. SELF-ORGANIZING CIVIC ACTIVISM STRONGLY A FINNISH FRAMING, INCLUDING M ENP AND FAENHLE AMONG KEY AUTHORS M ENP AND FAEHNLE (2017: 78) DEFINITION: BY THE FOURTH SECTOR, WE REFER TO THE AREA OF CIVIL SOCIETY THAT, WITH ITS QUICK, LIGHTLY ORGANISED, PROACTIVE AND ACTIVITY-CENTRED NATURE, IS STRUCTURED OUTSIDE OF THE THIRD SECTOR, OR THE FIELD OF NON-GOVERNMENTAL ORGANISATIONS EXAMPLES: LOCAL MOVEMENTS, PEER-TO-PEER TRADE AND SERVICES, SOCIAL PEER SUPPORT, AND HACKTIVISM SELF-ORGANIZATION AS A KEY CHARACTERISTICS
Comparison of ideal types of civic society practices Binary oppositions associated with formal and informal (M enp , Faehnle & Schulman, 2017: 254) organizations (Polanska, 2018: 6) Traditional NGOs Fourth-sector type practices Formal Informal Organization: NGO Organization: e.g. only social media Hierarchical Horizontal group Social media as an aid Social media essential Rules Norms Impact through influencing Hacker attitude to influence Bureaucracy Pleasure preparation and decision making Influence (formal) Events, activities, DIY Dependence Independence Municipality as a partner Community Constraining Liberating Representativeness Networking, companies Conformity Challenging and opposing Continuity Openness, sharing Instrumental Ideational Advocacy Visibility Structure Interpersonal relationships Controlled overall development Short duration Responsibility Creativity Hierarchical Avoiding hierarchies Let s do as before Passion for action, innovating Resistance, NIMBY Proactivity, YIMBY
POSITIVE BIAS SELF-ORGANIZATION -> AGILITY AND ADAPTABILITY CREATIVE, FLEXIBLE, UNCONVENTIONAL; ENABLING, MOTIVATING EMPOWERING; FRIENDSHIP, DIVERSITY, ENTHUSIASM HOWEVER, THERE ARE INDICATIONS OF THE EMERGENCE OF EVIL (BELLA, 2006), WHEN SELF- ORGANIZATION CAN LEAD TO MALIGN ACTIVITIES, E.G., SOLDIERS OF ODIN CITIZEN WATCH MOVEMENT CAN LEAD TO (PUTNAMIAN) BONDING OVER BRIDGING
HYBRID ORGANIZATIONS KEY AUTHOR: SABETI (2009): THE EMERGING FOURTH SECTOR HYBRID ORGANIZATIONS REFER TO THE AMALGAM OF FOR-PROFIT AND NON-PROFIT ORGANIZATIONS. AS SINUANY- STERN AND SHERMAN (2014: 3) PUT IT, [THE] HYBRID SECTOR DEDICATES RESOURCES TO DELIVER SOCIAL BENEFITS USING BUSINESS METHODS TO OPTIMIZE THEIR SOCIAL BENEFIT . DIFFERENT LABELS USED, E.G., SOCIAL ENTERPRISE, LOW-PROFIT LIMITED LIABILITY COMPANY, BLENDED VALUE, FOR-BENEFIT, VALUES DRIVEN, MISSION DRIVEN, AND BENEFIT CORPORATION (B-CORPORATION) DIFFERENT TACTICS USED CORPORATE SOCIAL RESPONSIBILITY, NON-PROFIT MANAGEMENT, SOCIAL ENTREPRENEURSHIP, AND INCLUSIVE BUSINESS (I.E., BOTTOM OF THE PYRAMID), CAUSE-RELATED MARKETING, SOCIALLY RESPONSIBLE INVESTING, CORPORATE PHILANTHROPY, AND SOCIAL MARKETING, ETHICAL TRADING, MICROFINANCE, SOCIAL VENTURE CAPITAL, COMMUNITY DEVELOPMENT, AND PUBLIC PRIVATE PARTNERSHIPS
Traditional organisations Hybrid organisations (fourth sector) Social and environmental missions as secondary Social and environmental missions as primary goals goals Relationships with suppliers, employers, and Relationships with suppliers, employers, and customers primarily functional and transactional customers based on mutual benefits and sustainability outcomes Industry activity focused on creating markets for Industry activity focused on creating markets for traditional goods and services, and altering hybrid goods and services, and altering industry industry standards for self-serving benefit standards to serve both the company and the condition of the social and environmental contexts
OBSERVATIONS HYBRID ORGANIZATIONS INCREASED IN NUMBER; LEGISLATIONS CHANGED RESPECTIVELY UNDERLYING DEMOGRAPHIC TRANSITION: LIFESTYLES OF HEALTH AND SUSTAINBILITY (LOHAS) WITH A CONSUMER MARKET OF $290 BILLION IN 2011) EXPLANATIONS MARKET FAILURE (EUROPE): BOTTOM UP MOVEMENTS CAN HELP ADDRESS PROBLEMS OF CAPITALISM STATE FAILURE (THE U.S.): THE STATE CANNOT PROVIDE ADEQUATE SOCIAL SERVICES EFFICIENTLY CONSENSUS: TRADITIONAL BUSINESS MODELS NOT ADEQUATE TO ADDRESS SOCIETAL AND ENVIRONMENTAL CHALLENGES
VARIONS IN THE FORMS Exclusiveness Hybrid organizations Level of organization Self-organizing civic- activism One-to-one aid Stability over time
COMMONALITIES ACTORS: INVOLVEMENT IN THE FOURTH SECTOR IS BASED ON NON-REPRESENTATIONAL PARTICIPATION TOOLS: FOURTH SECTOR ACTIVITY FAVOURS OPEN APPLICATION OF CO-CREATION OBJECTIVES: FOURTH-SECTOR PROCESSES ALWAYS CALL FOR THE ACTIVITY TO HAVE PROSOCIAL AND NON-PROFIT BASED AIMS OUTCOMES: FOURTH-SECTOR ACTIVITY DOES NOT RESULT IN A FORMALIZED INSTITUTION, BUT WILL RESULT IN AN ADAPTIVE ACTOR OR ORGANIZATION THAT CONSTANTLY SEEKS NEW RESPONSES TO THE CHANGING CONDITIONS OF THE CONTEXT.
KEY GOVERNANCE ISSUES (1) ISSUE#1 IT IS ABOUT SHARED VALUES AND VISIONS, NOT ABOUT POLITICAL REPRESENTATION! THE NON-REPRESENTATIONAL NATURE OF THE ACTORS INVOLVED IN FOURTH-SECTOR PROCESSES PROVIDES NEW OPPORTUNITIES TO OVERCOME SITUATIONS PARALYSING PLANNING OR DECISION MAKING. ISSUE#2 LESS ORGANIZATION CAN BE MORE EMANCIPATORY! EVEN THOUGH THE FOURTH SECTOR, ALMOST BY DEFINITION, CALLS FOR PEOPLE TO PARTICIPATE BEYOND ESTABLISHED STRUCTURES AND CHANNELS OF PARTICIPATION, THEY ARE NOT POLITICALLY NEUTRAL.
KEY GOVERNANCE ISSUES (2) ISSUE#3 THE SHARING ECONOMY REQUIRES NEW RULES OF OPERATION! THE OPEN APPLICATION OF CO-CREATION IS LEADING TOWARDS A NEW WAY OF THINKING ABOUT THE NATURE OF BUSINESSES, SOCIAL COOPERATION, AND POLICY MAKING. ISSUE#4 FOURTH-SECTOR PROCESSES ARE TRANSITORY AND TEND TO FOLLOW A PROJECT CYCLE! THE FOURTH SECTOR BOTH EMERGES FROM AND STIMULATES THE ACTIVITIES OF THE OTHER THREE SECTORS. ISSUE#5 FOURTH-SECTOR PARTICIPATION DOES NOT AUTOMATICALLY LEAD TO BETTER PARTICIPATION! ONE ISSUE IN VOLUNTEERING RESEARCH THAT IS ALSO RELEVANT TO THE FOURTH SECTOR IS THE POSSIBLE ANTISOCIAL NATURE OF VOLUNTEERING OR FOURTH-SECTOR TYPE ACTIVITIES.
