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For 15 years, the Social Enterprise World Forum[32] has been a pivotal gathering for leaders and practitioners in the field from across the globe. The 2023 Forum, held in Amsterdam this October, carried the theme “People and Planet First.” This year’s event provided a platform for experts and attendees to deliberate on the current challenges and objectives social entrepreneurs face, emerging trends in their work, the significance of transitioning to a new economy, and the role social enterprises play in this paradigm shift.

Sofiya Gorovaya

Journalist

MISSION FIRST

Social Enterprises (SEs) are businesses that, like any commercial entity, generate revenue through the sale of goods or services. However, they are distinct in their core mission: to address social and/or environmental issues. This mission is fundamental to their operations, and unlike traditional businesses, social entrepreneurs prioritize their mission over profit. For instance, SEs consistently reinvest a portion of their profits to achieve social or environmental objectives.

Wan Dazriq, co-founder and managing director of PurpoSE Malaysia, points out that the concept of social business is often misunderstood by society and government alike. If the primary goal of these enterprises is to address social issues, why the need to generate profit? Why not operate solely as non-profits? Unlike non-profit organizations, which often rely on grants, donations, and sponsorships, social enterprises aim for self-sufficiency and stability. Thus, they represent another crucial sector of the economy (other than NGOs), capable of influencing the global social and environmental landscape.

“Ultimately, social entrepreneurs’ aim is to better the world, making profit a means to an end rather than the goal itself,” explains Wieteke Dupain, CEO of Euclid Network, Denmark. “Currently, only 10 % of European companies are social enterprises. Our objective in the coming years is to double this to 20 %. Achieving this requires funding – we need to invest in and develop social enterprises. And for this growth, these enterprises must also generate and reinvest their earnings.”

Jerry Higgins, founder and managing director of the Social Entrepreneurs World Forum, notes that despite significant progress in the last 30 years, we cannot yet claim a global transformation towards social responsibility in business. However, social enterprises are increasingly becoming a trend. The mindset, especially within the business community, has evolved to recognize the importance of not just financial capital but also natural, social, and cultural capital.

“Social entrepreneurs are crafting significant values beyond profit,” Higgins elaborates. “Their work underscores the worth of human life and dignity, resonating deeply with contemporary societal values that are increasingly being recognized and emphasized.”

CARING FOR THE PLANET

Social enterprises are champions of the circular economy, emphasizing resource renewal, recycling secondary materials, and shifting from fossil fuels to renewable energy sources. These initiatives demonstrate social entrepreneurs’ commitment to conserving planetary resources and prioritizing public health. For example, they avoid using ingredients and materials harmful to humans and the environment, minimize unnecessary transport, reduce waste production, and recycle what is already available.

Take Fairphone, a Dutch company deeply concerned about the growing problem of electronic waste, which is increasing faster than any other type of waste. Annually, 1.4 billion smartphones are sold, each with a lifespan of just two to three years, and merely 20 % of these devices are recycled. Monique Lempers, Fairphone’s Impact Innovation Director, attributes this issue partly to the economic models of many businesses, which push for higher sales by convincing consumers to replace phones that are still functional. This trend harms the planet through excessive resource consumption and results in toxic waste affecting people and wildlife. Fairphone addresses this by manufacturing smartphones from recyclable materials and designing devices for reparability.

Social enterprises are champions of the circular economy. They minimize unnecessary transport, reduce waste production, and recycle what is already available.

Another Dutch initiative, 2050 Factory, tackles textile waste. According to founder Naz Kawan, too much fabric is produced and excess is discarded. 2050 Factory seeks out surplus fabric from other manufacturers, reducing the need for new production, and repurposes it. Similarly, Roetz, another Dutch company, produces bicycles from scrap metal, recycling old and discarded bikes.

Hester Van Buren, Vice Mayor of Amsterdam, notes: “Due to the climate crisis, business as usual is no longer viable. Companies must mitigate their environmental impact. Unfortunately, many still expand at the expense of nature and human well-being, disregarding the finite nature of our planet’s resources. To change this trajectory, we need fundamental shifts in how we work, produce, consume, and travel. Innovation, mutual care, and respect for nature are key. Social entrepreneurs are at the forefront of this change.”

INCLUSION AND SUPPORT FOR VULNERABLE POPULATION GROUPS

A core principle of social enterprises is the respect for and support of the underprivileged. These businesses oppose exploitation in all forms, ensuring fair wages that never fall below subsistence minimum, practicing inclusive employment, and actively hiring individuals with disabilities. For instance, Azima Dhanjee’s ConnectHear in Pakistan develops technologies for the hearing impaired and assists other companies in employing and collaborating with people with disabilities. Meanwhile, Tiemen Ter Hoeven’s Roetz employs individuals with mental challenges and those in difficult economic or social circumstances.

Global conflicts and economic crises influence migration patterns, posing unique challenges for social entrepreneurs working with refugees and migrants. Governments’ responses vary, with many policies exacerbating inequality and the plight of refugees. In contrast, social enterprises focus on addressing the security, health, education, and employment needs of these groups.

For example, Kakuma Ventures in Kenya’s Kakuma refugee camp offers digital access and services, connecting residents to the internet for online education (including higher education), job finding, and remote work. This connectivity facilitates quicker integration into local society, as described by camp co-founder Innocent Tshilombo. Such initiatives empower refugees, reducing their reliance on host country assistance.

In Germany, the StartSteps startup aids migrants in entering the tech industry. It offers career guidance, training assistance, and job placement. Mozamel Aman, co-founder and CEO of StartSteps, explains: “Our aim is to empower refugees to be self-reliant and financially independent, contributing to the society they live in, rather than solely relying on state aid. While not all governments recognize the importance of supporting refugees in this manner, we are committed to this exact way of addressing the global challenges of refugee and migrant integration.”

SUPPORTING LOCAL COMMUNITIES AND FOSTERING LOCAL MANUFACTURING

Social entrepreneurs are deeply committed to supporting ethnic minorities and others facing inequality in opportunities. By working at a grassroots level, they aim to comprehend the cultural context of each country and community, using their ventures as catalysts to address challenges faced by vulnerable populations. They help local residents find employment and foster community development.

For instance, the Durian Foundation in Nigeria aids rural inhabitants by demonstrating how to utilize local resources and waste, like bamboo. These villagers learn to craft alternatives to plastic using it and produce biogas from waste as a sustainable substitute for fossil fuels.

By working at a grassroots level, social entrepreneurs aim to comprehend the cultural context of each country and community, using their ventures as catalysts to address challenges faced by vulnerable populations.

“Preserving the identity and culture of local people is crucial,” observes Tony Joy, co-founder and executive director of the Durian Foundation.

“When you take pride in your roots and heritage, you’re more driven to make positive changes in your land, including conserving resources and protecting nature. I believe change starts locally and then expands globally. So, supporting and initiating change at the local level is essential.”

Social entrepreneurs also recognize that local community members best understand their context and challenges. Thus, initiatives in specific regions typically involve local partnerships, building an ecosystem that strengthens these communities. Local production is also environmentally beneficial as it conserves resources and reduces the need for transportation. An example is the 2050 Factory, addressing textile waste issues. It focuses on exclusively local production and plans to expand its network of factories across Europe.

TRANSITIONING TO A NEW OR IMPACT ECONOMY?

Social entrepreneurs are driving the creation of a new economy. Some advocate for an ‘impact economy,’ a topic that sparked debates among forum speakers who explored the differences between these economic types and the roles social entrepreneurs play in each.

Katie Hill, a policy advisor for the European Union at B Lab, highlights the impact economy’s goal of involving businesses in addressing social and environmental issues. The focus shifts from GDP to the positive impact companies have on the world. Investors play a crucial role in this: if they, when investing, are interested in the company achieving social impact, they make sure the company actually does that.

Investors play a crucial role in impact economy: if they, when investing, are interested in the company achieving social impact, they make sure the company actually does that.

“The impact economy can reduce hyperconsumption, encouraging people to mend an old jacket instead of buying a new one,” Hill explains. “If there are not too many people around desperate to sell you the new thing, and someone suggests repairing an old one, such situation will benefit everyone. But it’s not just investors who are vital; everyone’s participation counts. Social entrepreneurs, with their invaluable experience, should be exemplified.”

However, the impact economy does not necessitate a complete replacement of the existing financial model. According to Hill, significant systemic changes can distract from immediate, tangible improvements. The goal should be to refine the current system, Katie believes: “It’s about upgrading the train we’re on, not changing trains. The competitive economic system we have can continue, just in a more refined form.”

In contrast, proponents of a new economy seek a fundamental shift away from the current system, directing resources towards enterprises that prioritize people and the planet. Within the current economic model, people keep on neglecting the elephant in the room, it being big capital and its distribution, believes Erinh Sahan, Head of Business & Enterpises at Doughnut Economics Action Lab. He argues that the dominant role of finance needs to be diminished: today it determines what smaller businesses can do and what they cannot. And the big capital does not particularly like the idea of financing solutions to social problems because those companies don’t know if the money will pay off. To change the situation, it is necessary to build enterprises and financial structures so as not to depend only on big capital and thus fight the ‘elephant’, Sahan believes.

“This dependence on finance is the main problem that holds businesses back. Turns out we actually are on the wrong train, one that’s been on the same track since the 20th century, prioritizing profit over all else, so our whole life and economy is at the service of finance. The 21st century demands a systemic change to realign our economic priorities and power balance. We need a new economic model that serves life, not just finance.” – says Sahan.

We must shift towards an economy that prioritizes the planet and its people. Social entrepreneurship is key in this transition.

He advocates for fair trade, fair taxes, wages big enough to cover basic human needs, a circular economy, and sustainable resource use. Social enterprises which place people and the planet ahead of profit, are pivotal in driving this transition.

Stefan Panhuijsen, Director of Social Enterprise NL, asserts, “Significant changes are necessary. We must shift towards an economy that prioritizes the planet and its people. Social entrepreneurship is key in this transition, evidenced by steps like the UN resolution and the European action plan for social enterprises. The journey ahead involves building a robust social enterprise movement, central to the future economy.”

PEOPLE AND PLANET FIRST

Participants at the forum highlighted several other key benefits and achievements of social entrepreneurs:

• Their response to global crises, including recovery efforts following natural disasters, military conflicts, and other emergencies.

• A strong commitment to the Sustainable Development Goals (SDGs), with a focused plan to build a sustainable world by 2030.

• Mutually beneficial collaborations with businesses – various support methods for social enterprises from corporations, including procurement, mentoring, volunteering, and pro bono services. Significant positive trends in social entrepreneurship include 1) internationalization, encompassing the engagement of international markets to amplify social and/or environmental impact, and 2) increasing consumer and potential employee interest in social enterprises. There’s a growing preference to patronize companies with social or environmental missions, and for young professionals to seek employment in organizations that reflect their values.

The primary challenge currently facing social entrepreneurs, as identified by forum experts, is to engage a broader spectrum of people in their activities. Jerry Higgins noted the COVID-19 pandemic as an example of successful global mobilization. While the coronavirus presented an immediate and direct threat to lives, environmental and social crises often appear distant and less tangible for current generations. Social entrepreneurs play a crucial role in changing this perception and motivating society to understand the urgency and magnitude of these issues.

Helene Malandain, Chair of the World Social Enterprise Forum, stated: “It is important to increase visibility for social enterprises. By promoting their activities and sharing their stories, we can collectively focus on a shared goal. This collaborative effort can create an alternative economy, one that enables people to thrive without overexploiting Earth’s resources. The ‘People and Planet First’ motto encapsulates our core values and lays the foundation for the transformative changes that will shape our future.”