Social Enterprise: a force for good

I previously mentioned in another post about the concept of social enterprises and value of leveraging a for profit operation for the benefit of a social cause. And in the case of the Philippines, poverty alleviation is a major social cause. Let’s hope as the attraction of entrepreneurship is being promoted as a career option, social enterprises be a business model to be encouraged as the best way to go to help the country too.

From BusinessWorld Philippines

November 26, 2012

Social enterprise: A force of social change

RECENT SURVEYS show worsening figures regarding poverty in the Philippines. The latest family income and expenditure survey done by the National Statistics Office in 2009 revealed that 26.5% of the Philippine population suffers from poverty. This is slightly higher than that of the 2006 survey which is 26.4%. Furthermore, Social Weather Station’s (SWS) self-rated poverty survey in the third quarter of this year showed that 47% of the Filipinos consider themselves poor (the report showed a drop of 8%age points from 51% the previous quarter).

While poverty is a problem in itself, more problems are offshoots of poverty. Crime rates continue to increase. Filipinos who want to work overseas continue to increase. Human trafficking is ballooning. While everyone thinks that overseas Filipino workers (OFWs) shielded the country from the effects of the global recession, the bigger picture would paint the problems associated with it. For instance, more and more Filipinos have become victims of illegal recruiters and at some point drug syndicates. Then there are the social costs of families being separated by the OFW phenomenon. These are problems that could have been prevented if the economic conditions within the country were conducive for decent living.

Poverty in the country is not really a result of Filipinos indolence. It has been argued that if one person is not doing well economically, then there must be something wrong with that person. But if more and more Filipinos are suffering from poverty, then there must be something wrong within the system itself. While there is no contention that the government should be at the forefront of such matters, initiatives among the private sector are also important. Moreover, economists would agree that in a lot of cases private sector initiatives are more efficient than the government’s. An offshoot of this line of thinking is the concept of social entrepreneurship.

The proliferation of social enterprises that encompass both social objectives and profit goals is a new means of utilizing the efficiency of the private sector for the purpose of improving economic and social circumstances. The idea has been around for so long although the term was coined just recently, which is defined as the use of entrepreneurial skills to solve social problems. Technically, the idea is still profit-oriented, but the purpose leans more towards being socially relevant.

Inequality has been a problem in the country for so long. While the economy has been growing, the disparity between income groups continues to widen as well. Economic growth is essential to achieve development. In fact, everything starts with economic growth as it is a prerequisite to development. But the problem of the distribution of economic wealth in the country is very serious.

The area of income disparity is where the idea of social entrepreneurship will be most relevant. The goal of social entrepreneurs to put forward the welfare of marginalized Filipino groups over profit orientation will certainly aid the redistribution of economic output while simultaneously supporting the growth of the economy. As a result, income disparities will narrow. Because of a social enterprise’s profit-orientation, however, one can expect a certain degree of efficiency to minimize costs and maximize profits in its operation.

The bullish outlook for the Philippine economy is a perfect time to exploit the possibility of social entrepreneurship as a means to alleviate poverty. The key factor will be whether the current positive economic perception can be translated into increased investments into the country, not only into traditional but also social enterprises.

Moreover, the 2006-2007 Philippine Report of the Global Entrepreneurship Monitor contains findings of a survey of 2,000 Filipinos nationwide, which indicated that 57% perceived business opportunities in their locality while 83% of those surveyed wanted to start their own businesses. Meanwhile, 46% are expecting to establish their own ventures.

Tommy Hutchinson, a social entrepreneur and founder and chief executive officer of i-genius, a network of social entrepreneurs around the world, said that people recognize that we need to do business and run society in a different way.

Hence, the government should initiate programs that will encourage entrepreneurs to tackle social problems while at the same time making money out of it. One way of fostering a conducive environment for social entrepreneurs is to put up funding and subsidy programs to support existing social entrepreneurs and to encourage aspiring ones to take action as well.

As a Chinese proverb says, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Social entrepreneurs will work in the same manner. More than profit-seeking, they can be mentors who will teach men how to fish.

The success of social entrepreneurial ventures like Hapinoy and Human Nature in changing lives is an indication that everyone should believe or perhaps consider the idea of social entrepreneurship as an innovation and a social change-maker.

The Institute for Development and Econometric Analysis (IDEA), Inc. is a non-stock, non-partisan institution dedicated to high-quality economic research, instruction, and communication. The views and opinions expressed herein are those of the author and do not necessarily reflect those of the organization. For questions and inquiries, please contact Remrick Patagan via ideainc.mail@gmail.com or telefax no. 920-6872.

Article location : http://www.bworldonline.com/content.php?section=Beyond&title=Social enterprise: A force of social change&id=61999

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