Timmons' Framework

Opportunity cognition is the core of entrepreneurship and the basic ability of social entrepreneurs to solve social problems. To successfully identify and develop opportunities, social entrepreneurs need to meet two conditions. First, there are indeed many social entrepreneurial opportunities in the social environment, and such opportunities can be objectively perceived and utilized by social entrepreneurs. Second, social entrepreneurs have the objective conditions needed to identify development opportunities, such as knowledge.

Sources of Opportunities for Social Entrepreneurship

Entrepreneurial opportunity is a prerequisite for entrepreneurial activities. Traditional entrepreneurial opportunity refers to the situation where new products, services or organizational methods can be transferred at a price higher than their cost. It is often affected by the generation of new technologies, information asymmetry and resource substitution. However, social entrepreneurship is different, whose essence is to use market methods to solve deep-rooted social problems . Social entrepreneurs not only pay attention to the premium in the process of commodity transfer, but also the positive impact of the entrepreneurial process on themselves and their surroundings. Social entrepreneurship opportunities mostly come from market failure and government function failure, closely linked to the special circumstances of entrepreneurs themselves.

The institutional environment can shape the entrepreneur's pursuit of social influence. Macroeconomic factors such as politics, social culture and taxation can affect their social value proposition and value creation concept . When the government fails to meet the supply of (quasi) public goods (such as medical care) or the market fails to meet the public demand, the institutional void leaves some social demands unattended, forming opportunities or motivation for social entrepreneurship and development. For example, as the US government reduced its funding to non-profit organizations in 1980, emerging social organizations have developed rapidly by innovatively mobilizing alternative sources of funding. A similar situation occurred in Western Europe in the 1870s. The sustained high unemployment rate promoted the development of social integration enterprises serving the long-term unemployed. The lack of national social projects and the scale of government activities respectively promote and hinder the production of social enterprises. In addition, legal system and economic system are the key systems that affect social entrepreneurship. The traditional view is that the threat of legal expropriation reduces the expected entrepreneurial returns of new organizations and lead to the reduction of entrepreneurial activities. However, social entrepreneurship is just the opposite, different entrepreneurial goal significantly reducing the deterrent effect of expropriation of entrepreneurial returns. Moreover, the imperfection of law promotes the formation of social entrepreneurial opportunities. The irrational economic system has led to an endless stream of environmental problems, but it has awakened the environmental awareness of some members of society. They give birth to the idea of changing the status quo of society and actively seek to achieve an environmentally sustainable business model, becoming a special social entrepreneur - environmental entrepreneurs. Moreover, financial instruments, including interest rates, can significantly affect the social and financial performance created by social organizations such as microfinance . These findings are in line with the idea that social entrepreneurship is more likely to occur in areas where the system is empty or imperfect.

Informal system is also a key external factor affecting social entrepreneurship opportunities, of which the most critical is social culture. It directly affects the overall values of society and has an indirect impact on entrepreneurship through demand and motivation. In order to realize social influence and stimulate social change, social entrepreneurs need to establish cooperative relations with many stakeholders . The social support culture (SSC), as an informal cultural norm based on friendship and support, realizes this requirement under weak social capital. It encourages more social members to choose social entrepreneurship as a career and strengthens the motivation and opportunity supply of a country's potential social entrepreneurship. Later, other scholars further find that regional cultural values can play a greater role than the national environment in influencing entrepreneurs' attitudes, behaviors and corporate growth vision. Fritsch and Wyrwich specifically point out that regional entrepreneurship culture affects the dissemination of entrepreneurship models, the social acceptance of entrepreneurship and entrepreneurship support services. Huggins and Thompson also explore specific local cultures from the importance of entrepreneurial legitimacy and the role of entrepreneurial local social capital. There are several other studies that explore the relationship between different values and entrepreneurship. For example, Schwarz and his colleagues identify two values that reflect pro-social motives: kindness and universalism. Inglehart and Baker find that when society experiences industrialization and economic growth, the dominant values in society would shift to more interpersonal trust, quality of life, environmental protection and non-material values, thus enriching the sources of opportunities for social entrepreneurship.

In practice, the emergence of social entrepreneurship opportunities is often driven by many factors. From the perspective of system reform, both social factors and institutional environment can promote the development of social entrepreneurship. The existing research has also paid more attention to the institutional void and market failure, but rarely incorporated such background variables into specific analysis models. The social system environment is very rich, including language, culture, the prevalence of crime, the nature and form of government, etc. However, existing research ignores these factors. In addition, there seems to be no research on how social entrepreneurs use various strategies to participate in and change the complex entrepreneurial system environment. In the future, we can try to analyze the environment and institutional arrangements in which different strategies would be more effective.

Opportunity Identification of Social Entrepreneurship

The first step in creating a new business is opportunity identification, that is, potential entrepreneurs find unmet needs or create new business models. There are always two perspectives in the recognition mechanism of entrepreneurial opportunities, namely "opportunity discovery perspective" and "opportunity creation perspective". The former holds that entrepreneurial opportunities exist objectively in the existing market and are independent of entrepreneurs' will, influenced by the external environment . The latter holds that opportunities are formed endogenously by entrepreneurs through creative actions, reflecting their own perception of changes in the external environment . Compared with the former, opportunity creation places more emphasis on the innovative interaction between entrepreneurs and the social environment. It is a process of purposefully changing the environment, aiming at promoting other groups to gradually recognize new opportunities. It is closely influenced by the problems, information and environmental changes implied in the specific fields in which entrepreneurs are located. And entrepreneurs are more likely to identify opportunities within their knowledge capabilities or social relationships. This is especially obvious in the field of social entrepreneurship. Groups troubled by social problems are more likely to find or create opportunities to realize social values. However, what is different is that the identification of social entrepreneurship opportunities needs to be promoted through dual logic, resource bricolage. Therefore, some scholars put forward the viewpoint of "opportunity co-creation" , explaining that it is a process in which many different participants jointly define and solve social problems. For example, through stakeholder participation and dialogue, microfinance institutions can find more effective ways to mobilize supporters to lower interest rates, thus serving poor entrepreneurs better . Secondly, opportunity co-creation is a way for stakeholders to choose and construct each other. Some stakeholders are committed to rescuing the poor in remote communities, while other interest groups may be more eager to provide opportunities for female entrepreneurs. Therefore, multi-party interests compete with each other. But stakeholders can promote the transfer of new technologies and social knowledge, establish new markets and form new opportunities for social entrepreneurship in repeated interactions. For example, micro-finance institutions can adjust pro-social cost-benefit analysis in the process of mutual selection and learning, set key performance indicators (such as interest rate in social impact assessment), and continuously adjust and evaluate the roles played by various stakeholders. Opportunity co-creation creates intrinsic value for each group of stakeholders. Once opportunities and markets emerge, stakeholders follow the opportunity co-creation logic to acquire and share value and benefits like entrepreneurs when balancing interests with other stakeholders . For example, micro-finance institutions can empower women to promote gender equality while reducing poverty and promoting economic development. Therefore, the negotiation and consensus of stakeholders can establish a sustainable economic and social foundation for social entrepreneurship.

Existing researches based on "opportunity discovery perspective" and "opportunity creation perspective" have explored the factors affecting opportunity identification from the aspects of entrepreneur's personal characteristics, cognitive logic, social network, etc . However, relevant research generally focuses on independent elements such as entrepreneurs, entrepreneurial organizations, and the external environment. They ignore the synergistic functions and roles of different elements. However, the idea of "opportunity co-creation" breaks with the norm, pointing out that social entrepreneurial opportunities are not only discovered or created by entrepreneurs, but are the results created by different participants through direct or indirect interaction. Although interactive mechanism in the entrepreneurial process has received attention, it still not been effectively studied. For example, the understanding of the interactive mechanism, antecedents and effects is still insufficient. In the future, research can be conducted on a series of issues concerning interaction mechanism, such as how various factors interact in the process of social entrepreneurship, which situational factors restrict the interaction between different factors, and the effect of different interaction modes on the co-creation of entrepreneurial opportunities.

Opportunity Development of Social Entrepreneurship

Social entrepreneurs pursue fundamental or innovative social changes. After identifying entrepreneurial opportunities, they will adopt various strategies and implement various decisions to continuously develop and utilize entrepreneurial opportunities to expand the social influence of the organization. In fact, social impact is regarded as one of the most important outcome variables of social entrepreneurship . However, due to the differences in relevant terms and research backgrounds, their meanings have not yet formed a relatively consistent view. They are usually conceptualized through different terms such as social value, social performance, and social return on investment. Moreover, the results of social impact analysis based on different research backgrounds such as education, medical care, and environmental protection are hardly comparable. Considering the current controversy over the concept of social impact, we use Stephan's view to define social impact as a beneficial result of pro-social behavior, which is in line with the expectations of a wide range of individuals, organizations or social groups. The advantage is that it covers most of the existing methods for studying social impacts and recognizes that social impacts include many different phenomena and the complexity of target group data.

Although social entrepreneurs give weight to value creation rather than value acquisition, they still need to win the attention and support of stakeholders (such as donors and governments). Therefore, they focus their attention and resources on various strategies to maximize social value, mainly including diversification, horizontal expansion, scale expansion and depth expansion . Diversification can help social enterprises expand the range of products or services, so as to meet new needs based on existing professional knowledge. Horizontal expansion can mobilize other actors (investors, partners, governments, etc.) to help spread and share the social innovation of the social organization. In addition, absorbing new beneficiaries through scale expansion is also a way to improve business design and directly expand social impact. However, in-depth expansion is different. The focus is on improving the quality of the organization's social impact rather than quantity, so it is more concerned with how to improve and enrich existing processes. Comparing the relative values of the four strategies, it is found that scale expansion is the most direct and widely used means to enhance social organizations' influence. But its implementation will face greater challenges of resource mobilization, process optimization and performance evaluation.

Maintaining capacity for sustainable development is the foundation for social enterprises to build and expand their influence. Successful social enterprises are particularly good at using social networks to catalyze change and create social value. First, lobbying stakeholder participation is an important means to convey community needs and expand influence. By communicating and persuading donors, customers and communities to support the effectiveness of their social mission values, social enterprises can avoid obstacles in the integration of resources and the acquisition of legitimacy. Second, access to government support is an effective way for social enterprises to benefit from favorable government regulations, legal norms, and regulatory changes. Political activities help social enterprises to establish a trust relationship with the government and obtain scarce resources controlled by the government. It is more likely to expand new geographic markets and increase the number of their beneficiaries. Then the ability to realize excess income (income greater than expenditure) is regarded as the key to a strong business model for social enterprises. According to the resource-based view, market-based income can increase the possibility of sustainable development of the organization. The ability to generate income can enhance the economic autonomy of the organization and enable it to focus on the development of social influence . For example, the "service charge" mode of operation enables social enterprises to purchase subsidized charity to serve more beneficiaries. Finally, cultivating a more open organizational model is another ability to expand the influence. But it depends on the perception of the extent to which social entrepreneurs are ethical in the social environment. The higher moral requirements entrepreneurs perceive, the more likely they would choose to use a more open organizational model to create a faster and broader expansion of social innovation. On the contrary, they would adopt a more closed expansion model (e.g. branches), only hoping that the solutions can alleviate local social problems.

So far, the research on the influence of social enterprises is still mainly qualitative analysis, mostly case studies. Academic circles have not yet unified the explanation of the nature of social influence. We know little about what kind of ability can effectively expand the social influence of organizations . Moreover, researchers have not developed a method for scientific assessment of social influence. The obstacle lies not only in the fact that social organizations are difficult to realize the balance of interests of all parties, but also in the fact that the measurement process involves the assessment of subtle changes in specific events, too difficult to measure and trace back. For example, how should we measure the enhancement effect of social enterprises on the self-confidence of poor students? How could this effect be traced back to specific events (after-school plans, teaching methods, etc.)? More importantly, how could the changes in confidence be linked to the broad mission of a social enterprise that aims to provide quality education for poor students? For such problems, no corresponding solutions have been put forward. Therefore, these problems lead to the opacity of most of the basic assumptions based on the "causal chain" method (the implementation path of "input-result-influence") hindering the development of social influence research.