As global inequality becomes the new public enemy, being the main topic on spotlight at the 2018 World Economic Forum in Davos, the public itself started numerous initiatives to address the “social void” that helps create and/or maintain the inequality. These initiatives, mostly in the form of business models founded by socially driven individuals, are often labelled as social enterprise. Many social enterprises consider themselves as the “vehicle for social change”, aiming at the betterment of the community, the environment and the future generations. Even though, essentially, they share the same value, social enterprises all over the world take various form, may it be in model, core business, industry, as well as the social concern they try to ameliorate. For example, in Australia there is a company that promotes sustainable craft beer production through crowdfunding and their profit will be donated to the preservation fund of Great Barrier Reef. A tour provider in Prague employ homeless people as its guide to show tourists around the city along with added tale of homelessness livelihood. In the UK, there is a charity that operates enterprises which provide employment for people with mental health issue or other disadvantages. In the recent years, a large amount of social enterprises have been mushrooming all over the world and it is an interesting phenomena for practitioners, academics, policy makers, independent observers and the general public alike.

The journey of social entrepreneurship started as early as the late 80s, although there is no record of the precise form, year, and location, and up until today there is still no consensus on the definition of social enterprise. However, there are several recurring characteristics on the available literature relating to social entrepreneurship, including, but not limited to: “change agent”, “social value”, “continuous innovation”, and “financial sustainability”. In a very reductionist manner, social enterprise can be described as a hybrid institution of for-profit business with not-for-profit initiative. Inherently, the business part of social enterprise is complementary to its other bottom lines (i.e. social, ecological, and/or future generation perspectives), and financial profit is not regarded as much as a mean of organizational sustainability. It has often been regarded as the product of the present reliance in the market mechanism to provide solutions, whereas the innovation is born from the lacking capacity of the public sector to address various social concerns. Social entrepreneurs are the ones who manage to conceive the innovation that can tackle a particular social/environmental concern while fit an identified business opportunity.

Another typical characteristic of social enterprise is its participatory nature, whereas all parties involved in the business are equally regarded as “agents of change”. From founders, funders, employees, volunteers and target recipients are all contributors of the social improvement. This appeal to the sense of community involvement and the promotion of collective identity in an individual. In other words, everyone has the same opportunity to become a hero and contribute to a change in the world. Furthermore, the people at the receiving end of the social enterprise initiatives (e.g. farmers recipients of a crowdfunding project, housewives receiving handicrafts training, or former inmates reintegrating back into society) are not romanticised as the “poor” sitting idle waiting for a helping hand. They proactively involved in the process of continuous improvement and are an integral part of the social enterprises’ existence. Indeed, they are the direct beneficiaries, but simultaneously there are indirect benefits for other stakeholders of the services provided by the social enterprises. Funders get the financial return and personal satisfaction of contributing in a cause that they concern about, founders get the business sustainability, and the social enterprise even contribute in providing employment for the workforce.

With the growing number of social enterprise all over the world which, on the one hand, excites the passion-driven heroes, and, on the other hand, intrigues the minds of the sceptics, the lingering question would be: what about the future of social enterprise? Is it just a short-lived trend or will it stay for the long haul? There is no easy and straight-forward way to answer these questions, however some sort of performance evaluation can help in forecasting the continuance of a social enterprise, as well as to ensure the deliverance of the social mission the enterprise proclaimed to carry. There are numerous reports of evaluation on social enterprises but most of them are context-specific: it depends on the kind of social or environmental issue that the enterprise is focusing on, the maturity level of the enterprise, the approach of evaluation (including the evaluation design, methodology and knowledge base), and the purpose of the evaluation itself (is it to ensure accountability, program development, measuring impact or tactical/political purpose?). Until date, there is no uniform, one-size-fits-all formula to evaluate social enterprises that transverse their globally diverse practices.

As a relatively ‘young’ industry, there is no certain way to tell how the future trajectory of social enterprise will be. This is not only due to the dynamic and constantly-improving nature of social enterprise, but also because the social, economic and political environment in which the social enterprise is in will respond to the inception of the whole social entrepreneurship concept. Nevertheless, the social enterprises are also perceptive with the uncertainties they face, and they are equipped with the flexibility to adapt and integrate with their environment and the bigger system they are conceived in. The growing trend can be easily perceived on face-value as increasing interest of the broader public of something that is fairly new, but it can also mean a growing public faith in the whole idea of social enterprise.

What do you think about it?


List of references:

Daya, S. (2014). Saving the Other: Exploring the social in social enterprise. Geoforum, 57, 120-128.

Dart, R. (2004). The legitimacy of social enterprise. Nonprofit management and leadership, 14(4), 411-424.

Pratono, A. H., & Sutanti, A. (2016). The ecosystem of social enterprise: Social culture, legal framework, and policy review in Indonesia. Pacific Science Review B: Humanities and Social Sciences, 2(3), 106-112.

Szijarto, B., Milley, P., Svensson, K., & Cousins, J. B. (2018). On the evaluation of social innovations and social enterprises: Recognizing and integrating two solitudes in the empirical knowledge base. Evaluation and program planning, 66, 20-32.