Social Entrepreneurs Can Build South Africa

Is “social entrepreneurship” an overworked buzzword? Is it pipe-dream? Or is it something that could actually have a worthy impact in South Africa?

According to Kerryn Krige, Chief Technical Advisor at the International Labour Organisation, social entrepreneurship (essentially a business approach that generates both social value and economic value at the same time) in South Africa is no longer just a dream – the Department of Economic Development is committed to creating a policy in the social economy to present to Parliament by 2020. So, while we are still at the beginning of that process, it does mean that the topic of social entrepreneurship is no longer just a vague concept spoken about by a few individuals, but it is something that is bound to become an important sector in South Africa.

In 2009, the Global Entrepreneurship Model did a study that included social entrepreneurship in South Africa. It found that social entrepreneurship thrives, and should be thriving, in South Africa. Why? Because it is the most multi-racial form of entrepreneurship that we have; it is the form of entrepreneurship with the least barriers to entry (whereas most for-profit entrepreneurs tend to have some form of university degree, the majority of social entrepreneurs don’t); it is highly appealing to young people; and social entrepreneurship works best in countries of high inequality – particularly where that next generation is still very connected to their roots. This is because they still have a strong motivation to do good. In a lot of other countries, we see that the middle class doesn’t care. In South Africa, though, the inequality is still very prevalent and visible, and this is a motivator.

But can social entrepreneurship and social enterprise be the solution to many of our country’s challenges? And why can’t we rely on government or the not-for-profit industry to look after the needs of the underprivileged?

In South Africa, as in most western countries, your civil society organisations exist to provide goods and services that business and government can’t, or won’t provide. We see our civil society organisations being largely responsible for our social development. They are the organisations that provide child protection services, palliative care throughout our hospice organisations etc. These organisations are fundamental to the functioning of our society. And how do we fund them? By gifting – by giving money as and when we can or through channels such as corporate social investment.

Our government subsidises but never fully funds civil society. For this reason, we see that civil society is constantly in this crippled eco-system, because it never has sufficient funds to be able to deliver the breadth and complexity of services that it needs to.

 The consequence is that social development in South Africa continues to be crippled. We have to address our reality, our inequality. And it cannot be addressed by benevolence. We cannot continue to rely on grant funding and philanthropy to support civil society organisations to move people forward. We must enable our ecosystem in better ways so that our social development can progress alongside our economic development, and not rely on one or the other.

And this is where social enterprise comes in. It brings the best that business has to offer (organizational structures, focus on accountability and internal governance systems) and blends it with the best that civil society offers (the declared social mission, an accountability to a broad number of stakeholders, and the engagement of community when considering what good is). The social enterprise is able to earn an income, which frees it up from that grant-funded restriction and enables it to spend that money in a way that extends its impact. It creates a virtuous circle between income and impact. Technically, the more income that the social enterprise earns, the greater the impact it can have on society.

We tend to frame entrepreneurship through a financial-return-on-investment lense. We have to shift our thinking one where we want to grow our society. We have to develop our society, and the only way we can do that is to make space for and encourage people to spot opportunities in the negatives, and then act on those opportunities in innovative, sustainable ways.