Keprah is dedicated to utilising enterprise and market systems as a catalyst for development and sees these as critical components to reaching the Sustainable Development Goals (SDGs). In this short blog, we will start to cover some of the key thoughts on why we support Social Enterprise, and how we can use the power for entrepreneurship to reach the SDGs.
The idea of entrepreneurs and businesses using market-driven strategies to tackle social issues isn’t new, nor is it without an already sizeable ecosystem. However, the enormity of the SDGs, the critical lack in funding globally, and the changing political landscapes provide an impetus to continue to build innovative solutions that solve social issues but are able to operate beyond the support of donors. Businesses that have impact embedded within their core purpose provide a sustainable way to engage with social or environmental issues, which doesn’t require external funding, bureaucracy or reliance on the goodwill of donors.
Essentially Social Enterprises are market-based enterprises which have a social impact at their core. While the exact definition is often still for debate, the motivation behind the business, to solve social issues rather than the creation of wealth, is often central. In development, this can mean businesses that employ underserved communities, marketplaces for artisan products to reach global markets or environmental businesses that protect the environment.
While acknowledging that not all social or environmental issue can be solved through a business approach, it’s prudent to ensure that where it is possible for these market-based approaches to work we should explore. The more programs that are able to wean themselves off donor funding, the more of the limited funds available can be spent on the wicked problems that need large scale engagement.
Beyond freeing resources, entrepreneurs are often more adaptive to the needs of the market and able to pivot and change their approach to fit. Rather than large programs from Governments or NGO’s that take time, enterprises can quickly pivot to market opportunities. This flexibility, combined with in-depth local knowledge and ability to innovate provide a fertile opportunity to develop tailored impacts that solve real social issues, in ways not tried, or possible, through traditional development.
A great quote that sums up this approach, and why we love social enterprise, was written by Suzanne Skees from the Skees Family Foundation (SFF), who wrote on the next billion blog : ‘We’ve found that smaller, scrappier enterprises (often led by younger entrepreneurs) tend to do more with a smaller budget than larger NGOs or businesses. They often listen more deeply to local needs and solutions, and innovate both products and processes that build jobs in places with a dearth of employment.’
This local engagement is the key ingredient for success, but also, the greatest challenge for scaling. And this remains one of the key roadblocks in utilising social enterprise on a large scale. The ability for entrepreneurs to develop solutions to social issues is often connected to their own engagement in those communities. For these enterprises to scale, the tailoring of the business needs to adapt. Through targets solutions organisations like Keprah can provide support, but national or international scaling is a challenge.
But, these restrictions also provide an opportunity. And while that sounds strange when no answer is obvious, we are firm believers that restrictions build innovation. When you are left with a blank state it is easy to stay with the familiar. But, as we add restrictions, whether financial, social or challenges of scale, we need to find new ways to solve these. If we place social impact as a requirement for every business, the ingenuity of entrepreneurs would provide a wide array of solutions and very many new opportunities.
This isn’t to say that all social enterprises are solving amazing challenges, or are succeeding as businesses. Many struggle to shake the Non-profit approaches that have been core to impact-focused programs and are essentially charities with a different tag. As we look at social issues, it’s easy to try and remove the restrictions of being a successful business and focus on the social issue. But to be successful in the long run we need to stay in the tension of both sides. To ensure that Social enterprises are effective in solving their nominated social issue/s AND are able to be profitable. Without both, then a social enterprise is not achieving its goals.
If your business, International Development Org or Social Enterprise would like support in developing a strategy to transition to market systems, support in winning new projects or monitoring your impact, contact Keprah at [email protected]