Social Entrepreneurship Is Key to Rebuilding Our Future
Updated: Jun 24, 2020
This is the first piece of an ongoing commentary series, Stories of Our Future, which discusses the role, value and future of socially-driven enterprises under a post-pandemic lens.
What is a social enterprise? For many, the answer to this question continues to be blurred or misguided. Quite often, social enterprises are clumped into the same category as nonprofits, charities or even misinterpreted as futile organizations that rely on handouts to simply break even on costs – none of which could be further away from the truth.
To define a social enterprise, we look no further than the second word in its phrase: enterprise. The fancy synonym for business. And that is just what a social enterprise is, a social business. Like many non-profit organizations and charities, social enterprises are driven to fulfil a social or environmental need, but they do so by following sustainable business principles, practices and models. Just like any business in our market-driven world, social enterprises must be self-sustaining and profitable. This distinction is fundamental for cultivating long-term and sustainable social impact, something other socially-driven organizations have struggled to achieve for decades.
It is crucial and only fair that we, as a global society, understand the unparalleled value and stake that social enterprises hold in our future. As we enter this new chapter of history, where the socio-economic impacts of COVID-19 are anticipated to linger for years to come — social enterprises have the exceptional opportunity to repair and rebuild more just and equitable systems across the globe. Especially here in Asia, a region that holds nearly 60% of the world’s population — and that may see 11 million people driven into poverty when the pandemic is all said and done — there is a dire need for economic stimulation with socially-driven collective intent. As the World Economic Forum duly notes, businesses have often prioritized profits over quality of life, which in turn has contributed to systems that abuse humanity’s most vulnerable and severely damage the natural structures of our planet. However, if there is any silver lining to the COVID-19 pandemic, it has set the stage for a collective purpose; a collective purpose to move towards a world where entrepreneurship and the economy reconcile with greater social good.
With systemic change almost seeming palpable, we must consider the next steps needed to leverage potential for social enterprises. In a recent report published by the Centre for Asian Philanthropy and Society, Business for Good: Maximizing the Value of Social Enterprises in Asia, certain gaps that social enterprises are facing are identified, along with suggestions for how those gaps can be filled. Such critical needs are as follows:
Philanthropy: Grants are needed to provide critical support to social enterprises that are just starting up.
Impact Investing: Social enterprises struggle to obtain investments due to investors’ expectations of high financial returns. Impact investors must strategize how to build a diverse portfolio of investments to meet their financial & social total return.
Talent: There is a talent shortage for social enterprises in Asia.
Ecosystem & Mentorship: Young social enterprise ecosystems often lack a diverse set of enablers and mentorship for both business advice and industry expertise.
Government: There is a lack of government facilitation to fill various gaps and government incentives that make it easier for social enterprises to do business.
Mythbusting: Social enterprises continue to be misunderstood, and it is critical that fallacies are verified through comprehensive data analysis.
What can be recognized from these six points is that none of them are impossible or even difficult to achieve. More than anything, these points further reinforce the significance of the role collective intent will play in enabling social entrepreneurship. Although our current situation is bleak, and we are all yearning to return to normalcy, we must accept that the normal we used to know will no longer exist. It sounds alarming, I know, but trust me that there is so much hope in that reality.
We don’t have to return to a normal that tolerated socio-economic inequality and environmental injustice. As a collective, we can revolutionize the way we do business to rebuild a more socially- conscious and sustainable future. Only doing so can we rebuild a society that is inclusive for all.
Do you agree that socially-driven enterprises can pave the way for a more inclusive and sustainable future for all? Let us know what you think in the comments. Our Entrepreneurship Programmes are now online! Interested to run a virtual programme for your school? Enquire now at Reactor School.
Written by Isabella Steinhauer
Isabella Steinhauer is the Experience Lieutenant at Reactor School.
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