Social enterprise

Origins and definitions

One of the first examples of a social enterprise, in the form of a social cooperative, can be traced back to the Victorian era.[5] Like social cooperatives, social enterprises are believed to have emerged as a result of state and market failure. However, market failure is emphasised in the UK, while state failure is emphasised in the United States. Contemporary social enterprises are viewed to have been created as a result of the evolution of non-profits.

The first description of a social enterprise as a democratically owned and run trading organisation that is financially independent, has social objectives and operates in an environmentally responsible way, was put forward by Freer Spreckley[6][7] in the UK in 1978 and later written as a publication in 1981. It was developed as an alternative commercial organisational model to private businesses, co-operatives, and public enterprises.[8]

Kenya

In Kenya, many NGOs use business models to improve the lives of people, mainly in rural Kenya. KOMAZA is a social enterprise that plants trees with smallholder farmers and uses economies of scale to enable them to access high value markets for processed trees. Another organisation, RISE Kenya, runs projects to mitigate climate change in the semiarid Eastern Province of Kenya. They also run weaving projects whereby women who would traditionally engage in weaving make products that are marketed in Nairobi and in European and American markets. Other social enterprises in Kenya include the One Acre Fund, Nuru International and M-Pesa, the latter of which facilitates economic transactions via mobile phone. The organisation Alive & Kicking has produced over 200,000 sports balls from its stitching centre in Nairobi.[30] Social enterprises iHub and NaiLab are centres for technological enterprise, with ventures such as Tandaa in cooperation with the ICT Board of Kenya and Akirachix.[31]

Zambia

China

Researcher Meng Zhao states that social enterprise as a concept emerged in China around 2012, although it was not yet a well-known idea among the general public, and the Chinese government was still "trying to understand the new phenomenon".[34] He identified three forms in China: the social enterprise; the social startup; and the startup for social good. The terms "startup" is used because it carries some of the spirit associated with "enterprise" in English, such as innovation, risk taking or "venture".[34]

There is no separate legal entity for social enterprises in Hong Kong. They are normally registered as companies or non-profit organisations. The Hong Kong Government defines social enterprises as businesses that achieve specific social objectives, and its profits will be principally reinvested in the business for the social objectives that it pursues, rather than distribution to its shareholders.[35] In recent years, venture philanthropy organisations, such as Social Ventures Hong Kong and Social Enterprise Business Centre of the Hong Kong Council of Social Service, have been set up to invest in viable social enterprises with a significant social impact.

Chile

Social enterprises in Chile adopt various forms, like cooperatives, associations, private limited companies or corporations. The Ministry of Economy developed a legal form used to establish the rights and duties for social enterprises.[48] Chile's Productivity, Innovation and Growth Agenda, which has 47 measures, 10 bills and 37 administrative initiatives, invested US$1.5 million into programmes to support social enterprises between 2014 and 2018. The Chilean government's Chilean Economic Development Agency (CORFO) initiative helped implement programmes like the Social Innovation Program and the Seed Subsidy for Flexible Asignation to Support Social Innovation Start-up Program, both of which have provided seed capital to incubators supporting social entrepreneurs. The Ministry of Social Development also promoted grant-matching funds, like Más por Chile[49] and Incubia Fund to support the development programmes aiming to reduce poverty and strengthen youth.

Definition

The European research network, EMES, uses a more Weberian 'ideal type' definition for social enterprises, rather than a prescriptive definition. This relies on nine criteria in two categories:[50]

Meanwhile, as part of its Social Business Initiative,[51] which ran from 2011 until 2014, the European Commission developed its own definition based on three key criteria: social objective, limited profit distribution, and participatory governance. Here, social enterprises are defined as "an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders." It uses entrepreneurship and innovation to provide and market goods and services, and uses its profits primarily to achieve social objectives. Additionally, it is "managed in an open and responsible manner and, in particular, involve[s] employees, consumers and stakeholders affected by its commercial activities."[52]

Canada

The Social Enterprise Council of Canada (SECC) defines social enterprises as "businesses owned by nonprofit organizations, that is directly involved in the production and/or selling of goods and services for the blended purpose of generating income and achieving social, cultural, and/or environmental aims. Social enterprises are one more tool for non-profits to use to meet their mission to contribute to healthy communities."[80] Canadian social enterprise characteristics vary by region and province in the ways they differentiate social enterprises from other types of businesses, not-for-profits, co-operatives, and government agencies. Significant regional differences in legislation, financing, support agencies and corporate structures can be seen across Canada as a result of different historical development paths in the social economy.

Social enterprises may directly address social needs through their products and services, the number of people they employ, or the use of their financial surplus. This can distinguish them from "socially responsible for-profit businesses", which create positive social change indirectly through the practice of corporate social responsibility (e.g., creating and implementing a charitable foundation; paying fair wages to their employees; using environmentally friendly raw materials; providing volunteers to help with community projects). Social enterprises may use earned revenue strategies to pursue a double or triple bottom line, either alone (as a social economy business, in either the private or the not-for-profit sector) or as a significant part of a not-for-profit corporation's mixed income stream that may include charitable contributions and

Australia

In Australia, a social enterprise is a business that exists specifically to "make the world a better place." The Social Enterprise National Strategy (SENS) project was started in 2020 with the aim of developing the country's "first social enterprise strategy and [to] secure Federal Government support for its implementation." The group's advisory committee included the Australian Centre for Rural Entrepreneurship (ACRE), Social Enterprise Network Victoria (SENVIC), Social Traders, the South Australian Social Enterprise Council, YLab, Good Cycles and the English Family Foundation (EFF). Their work resulted in the foundation of Social Enterprise Australia in February 2022. This organisation was intended to "facilitate and lead the development of a national strategy" for social enterprise. Its mission was framed around "environmental care, people-centred services, access to decent work, and community-led innovation." A 2022 report by SENS showed that there were more than 12,000 social enterprises operating in Australia, employing more than 206,000 people and making a sum contribution of $21.3 billion to the economy.[86]

In 2017, the Centre for Social Impact at Swinburne University undertook a comprehensive mapping project of social enterprise in Victoria.[87] The report identified 3,500 social enterprises in Victoria alone, employing over 60,000 people, or 1.8% of the state's workforce.