The Theory and Processes of Citizen Entrepreneurship: How Does Citizen Entrepreneurship Work?

The Concept of Citizen Entrepreneurship

The term Citizen Entrepreneurship (CE) refers to a situation in which the citizens of a society solve an issue that occurs in their respective society (Aschoff & Schwabe, 2013). Specifically, CE is not characterised by immediate solution-finding. Similar to the problem itself, the solution often develops within the process of CE. Thereby, CE evolves mainly in a non-economic context and is not profit- but solution-oriented (Mitra et al., 2020). It requires creative citizens who are motivated to solve an issue rather than to achieve high financial returns. Due to these features, CE differs fundamentally from what is often referred to as business entrepreneurship or social entrepreneurship. While business entrepreneurship is much about running the business itself and generating profit, social entrepreneurship aims at the process of reorganisation and pursuing different opportunities to create social value. In addition, the people who become citizen entrepreneurs do not need an economic or business background and require no other features than facing a certain (social) issue. By definition, they do not even need to start a business and might sometimes solely start new organisations to run their projects. Thus, CE shares some features with other forms of entrepreneurship but still holds its unique characteristics.

Moreover, CE requires creative people, individuals with the aim to innovate, and those who do not want to settle if they can picture a solution (Davies & Simon, 2013). In this context, external actors might not be as driven or motivated to solve the different issues because they do not face them on a daily. Plus, local citizen entrepreneurs are commonly driven by psychological or intangible factors such as a sense of civic duty or belonging. Based on this understanding, CE requires a society in which citizens feel that their ideas are heard and, more importantly, that they are backed up by other citizens who empower each other and want to collaborate for and contribute to the development of their society. Also, the fundament of a sense of civic duty or belonging requires a society that provides citizens with a sense of belonging by building an environment which makes citizens feel at home, safe and aligned with their ideals.

In the process of CE, people come together and collaboratively work on solving the problem. Besides the citizens, (local) companies and governments can contribute and become important actors in the problem-solving process. Due to its characteristics and the mainly solution-focused context, CE does not require external actors to step in and present the solution to an issue. As it evolves within a society, CE accelerates the organisational processes and further drives innovation. For instance, Project Zero from Sønderborg in Denmark aims at the promotion and implementation of a low-carbon lifestyle (Project Zero, 2014). Thereby, the project aims to make the entire city CO₂-neutral by 2029. To achieve this, trainings and workshops are conducted for stakeholders, including citizens, corporations, companies, schools and more. As shown in this example, Project Zero directly accelerates the organisational process within Sønderborg regarding their carbon emissions and sustainability. Second, the process innovates the lifestyle of the citizens in Sønderborg as water and electricity consumption went down strongly (Project Zero, n.d.).

CE in a Theoretical Context

Owing to the natural, unintentional development of CE within a society and the multiple contexts in which CE occurs, the topic is not intuitively aggregated into one specific theory. Instead, different theories address the topic and use different ways to approach the process. Although they engage with and depend on each other, the entire topic of CE remains a constant matter of analysis and evaluation, also in the scientific literature (Mitra et al., 2020).

Today, the three following main theories address CE. At first, the ‘commons’-based approach to entrepreneurship follows the idea that citizen are directed by intrinsic autonomy and collective efficiency to be able to jointly achieve governance over a social issue they face in their respective society or environment (Ostrom, 2008). According to this theory, citizen fulfil their ideals and wishes regarding their society by applying individual knowledge, developing and learning new skills, engaging with each other and expressing moral integrity (Sen, 1997, 2008). Therefore, the result of CE is similar to the common good and requires resources, as well as cooperation and integration within the society (Parker & Johannson, 2012). Nevertheless, the ‘commons’-based approach to CE faces challenges such as the over-exploitation of finite resources by utility-maximising individuals and the free-rider dilemma, which refers to citizens who do not contribute to the cooperation within the society and only take from it (Mitra et al., 2020; Ostrom, 2008).

Second, the idea of innovation as a social good is a combinatorial concept which creates an essential framework for CE (Mitra et al., 2020). It addresses social and environmental challenges such as poverty, inequality, climate issues and access to healthcare (Mongelli & Rullani, 2017) and drives social and political change (Avelino et al., 2019). The theory originates from Schumpeter’s idea of the public intellectual in the late 1920s and early 1930s and further offers insights into the social roots of the entrepreneur, the workers and the economy at large (Avelino et al., 2019). With regard to CE, the theory explains how the results of CE can raise the standard of living for all groups in society affected (Mitra et al., 2020). Nevertheless, challenges are faced in the context of funding and resources, which can become a detrimental barrier for citizens who aim to induce societal change (Popov et al., 2020). Similarly, scaling up can become very resource-intensive and unprofitable, which itself becomes a risk for the viability of the product or project (Davies & Simon, 2013).

Lastly, the use of the capabilities approach to economic, personal and social development is a broad normative framework for the evaluation and assessment of individual well-being and social arrangements (Robeyns, 2006). The theory follows the ideal of expanding the capabilities of citizens to reduce poverty, allow for more justice and improve human and institutional relationships (Alkire, 2005). It thereby focuses on the sets of individual capabilities, socially created capabilities referring to networks and external capabilities referring to direct human and institutional relationships (Foster & Handy, 2009). By focusing on the individual as an agent of social activities and the empowerment of the development of new and further capabilities, the theory uses an approach with political impact (Mitra et al., 2020; Robeyns, 2006). Still, the theory is challenged by the difficulty of initially determining the goal of a society and the potential judgement of a well-functioning society (Alkire, 2005).

Combining all three theoretical approaches to CE, these theories build a conceptual framework for the analysis and evaluation of CE, as depicted in Figure 1. To break down the framework, one can understand the idea of the commons as the overall conceptual idea of CE. With the understanding that the results of CE contribute to citizens similarly to common goods, the theory describes how citizens act to fulfil their ideals and wishes regarding their society. Building on this, the theory of innovation as a social good addresses challenges of social and environmental dimensions and how CE thereby drives social and political change (Avelino et al., 2019; Mongelli & Rullani, 2017). Ultimately, the theory of the capabilities approach refers to the creation and expansion of new capabilities to realise the CE projects and thereby solve their issues and improve their situation. Accordingly, the theories on CE do not stand individually but complement and build on each other.

OPEN IN VIEWER Figure 1.

The Theoretical Framework of Citizen Entrepreneurship is Shown by Mitra et al. (2020).

Conducting Research on CE

In order to engage in research on CE, different research designs are possible. Here, case study research might be suitable as it enables the researcher to delve deep into the CE process. Based on the fact that CE in every manner is unique and that projects are not possible to compare, already by the definition of CE. Similarly, action research is equally flexible with regard to the design and setup. It allows the researcher to investigate a process and simultaneously bridges the gap between theory and practice. In the context of CE, researchers can observe the CE process and make recommendations, draw conclusions or share learnings based on their results. Depending on the form of CE, this might be especially suitable for projects of common goods that may benefit from continuous improvements even after the start. Third, ethnographic research looks directly at the social interaction of citizens in a given environment. As CE is focused on solving issues within a specific society, this research design provides an opportunity to obtain in-depth insights into citizens’ actions, ideas and perceptions. Then, these can result in valuable information for the citizen entrepreneurs. In contrast to these research designs, others, such as quantitative research might only be suitable for very specific research on CE and cannot be applied fundamentally. This is again due to the individuality of CE processes, their occurrence in any society and lastly the creativity that influences the process.

With regards to the methods, in-situ and direct approaches for gathering information might be the most suitable to understand the unique character of each CE project perfectly. Therefore, surveys, questionnaires, on-site analysis and observations, participation and network analysis provide the ideal basis to gather and obtain information directly from the field. Plus, the before mentioned methods ensure that the information gathered is not purely numeric or categorial, but offers room for subjective, intuitive and personal aspects. Especially for something that is so inimitable and customised as CE, this should be an important aspect when deciding on research design, method and device. All in all, the before often referred to the uniqueness of CE projects, processes and results are ultimately the reason why no general recommendation for the most suitable research strategy can be made. Thus, researchers need to keep the characteristics of CE in mind and strategically make a choice based on the intent of their research. Ultimately, theoretical approaches to CE and the aim to understand these are important as the standard economic market model does not provide the tools required to analyse and more substantially understand the public non-market systems in which CE is categorised.

CE in Practice

When looking at the practical context of CE, the previously addressed theories show different motivational aspects. With regards to the ‘commons’-based approach and the idea of innovation as a social good, the driving motivation of CE can be understood as the wish or desire for a safer society, a clean environment, better health and education, caring communities as well as a growing economy and adapting business sectors within their society. The capabilities approach to economic, personal and social development further demonstrates how the right capabilities and the creation and development of those empower citizens to become entrepreneurs and step-by-step create and innovate their society.

Also, with the increasing opportunities and a number of platforms on the internet, citizens are empowered by new opportunities which do not only empower them to easily target and reach a higher audience but also to contact, interact and engage with policymakers. Thereby, new ways of policy-making arise. While citizens who regularly face issues easily identify these and might come up with reasonable solutions, it is today easier than ever for them to reach out and share their ideas for new products, services, or forms of organisational development. What is essentially interesting for policymakers in this context is that the problem originates from the same citizens who face the issue. Thereby, their motives for finding a solution are ultimately only solution-driven, and other common entrepreneurial motives such as financial or representative aspects remain unconsidered. One could consider the citizens’ solution as purely targeted at the higher goal without considering ulterior motives. Above all, this concept creates an entrepreneurial space as a commons when considering the innovative part as a social good. Further, developing the required capabilities, as seen in the capabilities approach to economic, personal and social development, can be used to achieve and realise a collective good.

By doing so, citizens can be included in the process of CE in multiple ways, as shown in Figure 2. On the fundamental level, citizens can be co-creators who use, produce and decide on the (social) good or project. Second, citizens can become collaborators who both use and produce. Lastly, citizens can become contributors who use the product or result of CE and thereby ensure its viability. In any case, CE requires all groups of citizens to ensure the success of the respective CE project. Without the creators, no use is possible at all. Without users, the creation or production is irrelevant and without collaboration, it loses its essential and vital societal and social components and again, risks the success of the project.

OPEN IN VIEWER

Figure 2.

Source: Own depiction based by Mitra et al. (2020).

If we consider the entrepreneurial aspect of CE, the key characteristics of entrepreneurship can be described as follows: Entrepreneurship describes the entrepreneurial utilisation of an issue or situation as well as the creative process of organisation and development. If this is transferred to CE, the fact that citizen faces an issue in their society and aim to solve it describes the same entrepreneurial utilisation of a societal issue. Plus, the process of finding, forming, and developing the solution fundamentally, reflects the same creative process of organising and developing. However, fundamentally different from business, often capitalist and financial success-oriented entrepreneurship, CE is more about solving an issue and developing towards the solution. Therefore, CE can also be understood as citizens who behave entrepreneurial without doing entrepreneurship. CE requires not one citizen with a good idea but people who become economic agents and contribute with different characteristics to be collaboratively driven by self-efficacy and the desire to create an opportunity where they face an issue. In the process, they create organisations with relevant forms and structures, features and human, financial and social capital. Finally, these citizen organisations impact the citizen’s environment with regard to physical spaces, geography, systems or framework conditions. As a result, citizen entrepreneurs create economic, social and personal value and drive (organisational) change. The three-dimensional process as previously described, further opens up new ways of policy making. For instance, the Bologna Regulation on Public Collaboration for Urban Commons aims at the de-politicisation of the Commons and aims to induce new and alternative collaborative arrangements for managing common spaces. Thereby, the CE project directly impacted traditional policymaking and resulted in 357 collaboration pacts signed within only 3 years. Plus, further 54 cities adopted similar regulations (Comune di Bologna, 2014; de Nictolis & Iaione, 2021).

Chances and Continuing Challenges of CE

As discussed in the previous sections, CE distinguishes fundamentally from other forms of entrepreneurship. But why exactly is it essential and should continue gaining more and more popularity? CE is directly addressed to the issues citizens face daily. The solutions developed throughout the process require creativity and a sense of innovation plus the citizen who are eager to tackle their issues. As the solution arises on-site CE projects can drive innovation and social development without the mandatory requirement of external actors. More importantly, the process empowers citizens to collaborate, become co-creators and users of their CE projects and additionally may even drive new forms of collaboration between governments and the citizen. As seen in the Bologna Regulation, citizens can thereby become part of a regulatory level.

CE holds its innovative character because it may solve problems people did not even know existed in other areas and because these can be solved by the people who face them. Citizens are not driven by expensive external R&D projects but make use of what is already there and are driven by self-efficacy and a public sense. However, the same aspects that make CE so unique ultimately cause limitations: CE requires people who engage in alternative thinking to address problems concerning their society. Plus it requires an environment open for innovation and new approaches to common routines and practises. Therefore, it should not only be an interesting topic for research, citizens themselves or the media, but also for governments as it might lead avenues to form new bonds of relationship with the public. In the same sense, (local) governments should themselves consider how they might empower and engage in CE and provide citizen with a platform to communicate their solutions and to find co-creators and collaborators. Here, local governments can share experiences and together formulate successful strategies to empower citizen. Similarly, this should be addressed further in research to add to the theoretical framework of CE and provide theoretical approaches to the question of what (local) governments can do to empower their citizen and the development of CE. Ideally, governments and politicians can even see CE as a strategy to empower the development of local regions by encouraging social change induced by citizen entrepreneurs and empowering local citizens with the capabilities to think of and implement new ideas.

Also, as CE is further dependent on the collaboration of multiple entities, CE should generally receive more awareness. As CE is not bound by high capital or other non-financial resources required, CE offers an avenue for any person within a society to engage in change for their society. While the aims of CE projects are not capitalist or purely representative, the projects should be fundamentally integrated into the news, either local or a superior level, to share the successes, educate on the topic and demonstrate to citizen that they can achieve something and should pursue their ideas. A further strategy to raise the awareness of CE is to make it become part of social studies or classes on politics as held in school. If students understand the concept of CE from an early age on and grow up already with the understanding that they can make a change for their society, it becomes more rooted within them. Even if these students then do not create something new themselves, they may become much better collaborators or users, if they understand the core principles and values of CE.

All in all, CE is a vital differentiation from other forms of entrepreneurship as it empowers the citizen to tackle their issues, become creative and ultimately drive, innovate and form public policies in their environment. Nowhere else are issues and solutions so close that it requires little more than the creativity and willpower of citizens to make a fundamental change, initiate progress and engage society. If local governments, administrations, schools and the media work together to provide a larger platform for CE and researchers continue to develop the theoretical framework of CE, then it might ultimately receive the fundamental popularity it deserves in every context and moreover increase the amount of citizen to act and engage in change and innovation of their society. Regardless of the process, CE and its innovative characteristics need to go beyond citizen engagement and rethink the traditional models of entrepreneurship. Thereby, it may answer questions such as: How do we empower and support citizens to develop and implement their ideas as citizen entrepreneurs? What platforms are most suitable for a citizen to reach out with their ideas to solve societal issues? How can local communities support the change that CE causes while strengthening the community sense? However, to answer these questions, governments, companies, citizen and any other instance need to collaborate to empower citizen to not just be heard but to provide them with the tools to make a change and thereby ensure that CE continues to drive change and innovation around the world.