There’s no denying that social entrepreneurialism has experienced significant global growth over the last few years. But according to the Great Social Enterprise Census, many of the individual social enterprises have remained small, operating on modest budgets and employing less than 100 people on average. In an industry where the driving motivation is social change before profit margin, some may wonder about its sustainability.
Here are three reasons why we’re confident that social enterprises will continue to thrive and grow:
1. The positive impact is measurable.
Social enterprises have impacted the lives of millions around the world, whether it be through a product that saves lives or a company that offers income opportunities to local people. Earlier this year, the Roberts Enterprise Development Fund (REDF) released the results of a multi-year study assessing the impact of social enterprises that focused on hiring and assisting people who face barriers to work.
The study saw a near tripling of the employment rate, less reliance on government transfers, and a substantial increase of workers living in stable housing. What’s more, the study found that social enterprises are providing a big net benefit beyond the confines of their employee roster. REDF’s findings state, “For every dollar the SE spent, the return on that investment was $2.23 for society as a whole.” The study demonstrates the measurable economic impact that social businesses have on society.
2. A noticeable shift toward better business practices.
In a Harvard study on social innovation, Jane Nelson and Beth Jenkins wrote, “In periods of economic and political change and uncertainty, where business budgets tend to be tight and community needs high, there is greater incentive than ever for companies, communities and public officials to work together to leverage social and commercial investments as effectively and efficiently as possible.” Today, consumers expect much more from corporations. Being a financially sound company is no longer enough; businesses must have a mission for social good.
Taking a page from social enterprises, traditional corporations such as Coca-Cola and Starbucks are models of modern corporate social responsibility. By partnering with socially conscious businesses on special projects and internal operations, big corporations improve their shared value. Some corporations are even acquiring smaller do-good companies to be part of their established brands as a way to improve the company’s social impact.
3. The power of millennials.
There’s no denying that millennials have a huge capacity to influence. When it comes to business, they aren’t dazzled by the corporate careers that enticed previous generations. Millennials are the future leaders of the business world, and they will do things differently.
Many young business leaders are going the way of startups, creating social ventures and putting themselves out there as change makers. Even those who take the more traditional corporate route are infiltrating the private sector with a new energy. Millennials know that having a positive social impact isn’t a choice. It’s a necessity.
It’s hard to say exactly how the business landscape will unfold in the coming years. But, based on what we see here, social good -whether it’s done by a 20-person team or a Fortune 500 company- is the future of successful business, and it’s here to stay.
The Venture is a new global social enterprise initiative searching for extraordinary startups and new ideas that use business to create positive change. If you have a GCC-based social enterprise or an idea for a social enterprise, enter The Venture #WinTheRightWay to potentially win your share of US$1 million.