Municipality as a business

Great hope is placed in social entrepreneurs, as they are considered to be change agents who can break unfavourable routines through social innovation.

Lang, R., Fink, M. and Kibler,E.

Results from the research into regional development within Central and Eastern Europe show, that social enterprises drive social innovation to address current social challenges prevalent in marginalised rural regions across Europe.  This is also the case of rural Slovakia, where several case studies of successful social entrepreneurship can be observed.  ‘Municipal enterprise’ appears to be the most convenient form of a social enterprise. The municipality represented by the mayor, acts on behalf of the founder and the residents as employees directly benefit from its social aspects and economic stability. Workers usually carry out different construction works, repair local buildings, clean the streets, work with wood…  The model of the municipal enterprise does not only decrease high unemployment of low-qualified people, but often contributes to improvement of the built environment.

Spišský Hrhov

Spišský Hrhov is a phenomenon within the Slovak context and proves that a positive socio-economic change could come from the bottom-up, without relying on external funding. The Mayor Vladimír Ledecký established a social enterprise in 2005 to decrease unemployment and increase social inclusion of a high Roma minority. At that time, the population in the village was decaying and people were moving out to the western parts of the country. The basic infrastructure was partly missing and there were almost no opportunities for social life. Roma were living in illegal cottages on the outskirt of the village, without proper education.

And what is the situation now?

The population doubled and new people are constantly moving in. Infrastructure is fully built, most of the buildings are fixed. All illegal cottages were destroyed and replaced by the new ones, self-built by the residents as the employees of the municipal enterprise. Roma are integrated in the village life and some of them even study at the university. Land ownership is solved by all the plots. In 2015, Spišský Hrhov won a national price ‘The village of the year’, which is given for an exemplary development of the local management, by using innovative forms of employability support, care taken for the place and environment, clever use of local resources, respecting the local heritage and supporting the life of individual residents as well as life of the village as a community. ….a list of successful stories is very long…

I had a very pleasant talk with Mr. Ledecký, during which we talked about his village, my own project and our ideas about how to make Slovakia a better place to live in. I will summarise the parts which are the most important for the direction of my project:

-       The village can be independent in almost all its production. It’s good to have a variety of services and products, these usually come with the time.

-       There shouldn’t be any benefits given preferentially neither to Roma nor to white population. The aim of the social enterprise is to bring welfare to all residents, what means everybody get the same chance.

-       The sewage and the water-supply are the problems almost all Mayors always complain about. There should be rather a clear vision of how we want the municipality to be and problems such as sewage will be solved as a by-product.

-       After the municipality reaches the point when everything works and is stable, the municipality begins to grow. Social enterprise in Spissky Hrhov already established a swimming pool, gallery, shop with local cheese products and many other facilities. Every year they organise a festival, where the visitors can enjoy apart from the music local products and admire local craftsmen.

-       The success lies in a good business plan and motivated people in a team. 

Mr. Ledecký is one of the specialists involved in the governmental programme to support Slovak lagging regions through the development of action plans, which I described in my blog earlier in June.  Although the model of a social enterprise appears as the best solution for improvement of the underdeveloped regions, Mr. Ledecky sees a low engagement and motivation of Mayors as the biggest impediment to its successful implementation. His role in the team is to guide the Mayors, step by step and although they initially seem to be excited about this idea, they easily give up once they find out it takes extra time and responsibity, which they’re not willing to give. What Mr. Ledecky sees as a possible option would be to established a team of people- the potential ‘teachers’, who would be working together with the Mayors to start running the business. Interestingly, the Mayor of my case village also visited Mr. Ledecky to discuss a social enterprise already a long time ago. Could I possibly help moving this process forward?

Running a social enterprise is about using the resources you have, both human, and natural. I asked every single person what he wants to improve and what are the skills he can offer. Suddenly, there was lot of pottential, which we could built upon. More than 10 years ago, people were leaving our village. Now, people from neighbouring villages are coming here, asking for work.

Vladimír Ledecký

New houses are being builtProducts of local craftsmen

Love (Láska)

The statue is fully made by Roma population. The pieces of left-over tiles are used for the cladding.Oversized wooden axe made by the local craftsmen, The shop with local cheese products and sausages is seen in the backgroundLocal swimming poolLocal destilleryLocal meeting room for the seniors                    Low-cost and low-energy wooden houses built by the municipal enterprise

Lang, R., Fink, M. and Kibler,E. (2004) “understanding place-based entrepreneurship in rural Central Europe: A comparative institutional analysis”, International Small Business Journal, vol.32 No.2, pp.204-27