Media Management and Transformation Centre (MMTC) at JIBS
Social entrepreneurship is the key driving force in reaching the 2030 Agenda
People all around the world may have heard, seen or read about Greta Thunberg, the 16-year-old Swedish environmental activist, and wondered if Sweden has social issues other than environmental issues.
The Swedish fascination, or some may say obsession, with a teenager playing truant for the climate does not come as a surprise for me as Sweden is one of the most environmentally friendly countries I know and had the privilege to live in.
But even though the country has set high environmental goals, the Swedish lifestyle still make it hard for the country to circumvent being among greenhouse gas emitters in the world. Statistics Sweden(SCB) states that the greenhouse gas emission by the Swedish economy was estimated to 1.1 percent in 2019 which increased in comparison to 2018 because there was an increase in fuel demand for private transportation. This means that the Swedish economy and households added up to 15.6 million tonnes of carbon dioxide proportional.
The Swedish struggle to put the money where its mouth is, is shared by many countries. In fact, the social and environmental challenges the world faces today require a sustainable, effective approach to resolve them, given that the old institutions seem incapable of dealing with present-day concerns. On that account, there have been a lot of discussions about how these issues can be resolved.
As it might be expected in the process of eliminating these challenges, collaborations and a holistic approach is a prerequisite. Hence in the quest of finding solutions, the 2030 Agenda for Sustainable Development Goals (SDGs) was established. This is an initiative signed by all of the UN member states pledging to work towards a socially, environmentally and economically sustainable world. The SDGs acknowledge numerous social problems shared around the globe, including but not limited to climate change, immigration, social inequalities and poverty. However, the path forward in the agenda suggests strategies which foster economic growth while tackling social needs, climate change and environmental protection.
For that reason, social entrepreneurship seems to be one of the processes and/or strategies which contributes in resolving social and environmental issues because of its effectiveness. Typically, social entrepreneurship includes individuals and organizations who employ a business logic in novel and entrepreneurial ways to improve the condition of segments of the population who are excluded, marginalized, or suffering and are themselves not capable of changing this situation. To take a Swedish example, the social venture called Yalla Trappan is a work integration social enterprise and women’s cooperative in Rosengård, Malmö. This social venture focuses on what Swedish citizens have in common with immigrants, provides Swedish language training and creates new jobs for immigrants. Another example of a social venture is an Australian company called ThankYou, where its entire profit from different products goes to helping poor people in need all around the world. ThankYou products include bottled water, personal care, baby care and nappies.
Both examples of social ventures are committed to ensuring that every decision they make maximizes social impact. One would expect that much attention has been paid to social entrepreneurship development and placed at the center of SDGs and yet that is not the case.
One of many reasons why all countries should care about social entrepreneurship development is that several existing policies and structures have proven inadequate in resolving problems such as widening inequalities, climate change, health issues, poverty etc. However, social ventures encounter a number of challenges. This could be attributed to the fact that the social entrepreneurship sector typically seems to work independently. As a result, among many other factors that could contribute to the stagnation of social entrepreneurship is related to the 1. constraints put bylegal frameworks and 2. the structure and ramifications of welfare systems. That said, I do not dis-acknowledge progress made so far as unquestionably social ventures have gained prominence and considerable attention attributed to their appropriateness in addressing twenty-first century challenges.
1. The structure and ramifications of the Swedish welfare system
Needless to say, it is hard to generalize because different countries have different social entrepreneurship coverage specifics and attitudes to social entrepreneurship development. To give context, let us use Sweden as an example: the country is known for its extensive and well-distributed welfare system. As a result, the Swedish citizens have a strong trust in government. Therefore, this could be one of the reasons why Swedish citizens would be less enthusiastic to engage in social entrepreneurship. Note that a decade or two ago, social issues were handled by government but in today’s world social and environmental issues cannot be single-handed. As far as we know, too much dependence on government puts pressure on the country’s welfare system and it is worth noting that government has its own limitations. Even if the civil society can chip in different forms such as community movements, churches etc., the problem is that these groups typically employ short term solutions for a particular cause. Also, people who usually engage in such programs can easily opt out due to what they may perceive as not beneficiary to their personal lives or inconvenienced. Not to exclude non-profit association, the problem is that this form of venture has its own limitations when it comes to the lack of resource access and they are usually legally bound not to profit-maximize. Therefore, this calls for a process that is sustainable, financially viable and most importantly is very much social at its core. I argue that with no doubt social ventures are one of the key drivers to take part in resolving issues and can simultaneously be economically viable.
2. Effects of Legal framework constraints on social entrepreneurship development
Under other conditions, let us talk about the immigration issue as another example apart from environmental issues. Sweden experienced migration issues between 2000-2012, to 2013-2014 where the country was battling with integration and then between 2015-2018 there was the refugee challenge, to name but a few. Furthermore, in 2014 the European Union reported that Sweden was at a 7.3% unemployment rate; that being said, this rate did not decline but instead it has continued to stay above 6% in the past 12 years. So, what does this mean? I can only speculate that even though entrepreneurship is seen as a method of economic development and prosperity, people’s reluctance to engage in social entrepreneurship could be the outcome of the democratic welfare system where people generally believe that it is government’s responsibility to resolve social issues that I have explained above. What is also apparent is the vague understanding of social entrepreneurship and its importance at the governmental level, which can obviously filter down. But this didn’t stop the growth of social ventures who thrive to integrate immigrants. For example, in Halmstad there are different types of social ventures that focus on different aspect of immigration issues. One social venture was developed as a cleaning service that only hires immigrants, which allows them to interact with Swedish people in different companies. Another social venture also in Halmstad is a female network which helps bringing women together ,who may not have met otherwise. The founder was moved to do so because she realized that immigrant women are taking years to integrate into Swedish society.
As a result, what seems to be the biggest challenge among other challenges concerning social entrepreneurship development in Sweden is the legal framework for social ventures. Firstly, government’s definition of what social ventures are limits their ability to access resources and/or provided limited support structures. This could possibly discourage interested parties who would like to engage in social entrepreneurship. Secondly, the majority of social ventures in Sweden are still registered as non-profit organizations. A smaller portion use the legal form of foundations, cooperatives, which are regular Work Integrated Social Enterprises (WISEs) . Hybrid social venture seem to be a common type of business. There are those new social ventures who are legally registered as “Aktiebolag med särskild vinstutdelningsbegränsning” (SVB). These types of classification limits social ventures only as a mechanism for resolving unemployment issues and integration. However, regardless of their efficiency in resolving employment issues, social ventures can and are capable of developing innovative solutions beyond employment.
A big part of the problem is that most of the social issues we face today in our societies cannot be resolved by one individual or one institution: they require a collective effort by each and every one of us across the nation, continent and worldwide. Therefore, all countries should see the value of social ventures as advocates and champions of social change and thrive to create a conducive environment for social entrepreneurship’s development. Again, innovative solutions require stakeholders (government, public and private sector) to work together in addressing present-day and future societal and environmental issues.
Presumably the next question to yourself is whether developing SDGs is enough to combat social and environmental issues? What about the current solutions each country has been implementing and promoting, are they enough? And last but not least you are probably wondering if social entrepreneurship is sufficient? If this has not got you thinking and googling then read again this blog post until you are inspired. In my next blog post, I will do my best to answer all these questions.
Zanele Penny Lurafu, PhD Candidate