Social entrepreneurship: Can it curb unemployment?
“People should wake up in the morning and say, ‘I am not a job seeker, I am a job-creator’.”
- Muhammad Yunus
As per International Labor Organization, in 2018, global unemployment levels fell one percentile to a steady five percent in 2018, the lowest figures since the economic crisis that wreaked havoc on labor markets. World Employment and Social Outlook Trends 2019 report further emphasizes that unemployment rates were anticipated to fall further to 4.9 percent this year. The number of jobless in real terms is estimated to rise from 172 million to 174 million in that time as the labor market expands.
As economies across the globe look to curb the unemployment crisis, there are two areas to focus on, one is job creation and second is skilling and reskilling. On one side economies need a more skilled and job-ready workforce, on the other they need to create relevant job opportunities for this population of employable workforce. While there are many ways in which the unemployment crisis could be dealt with, from constructing relevant policies around skill development to fueling various sectors with funds, boosting the social entrepreneurship sector or building the social economy is also one of the effective mediums.
Besides assisting in overcoming poverty and achieving social integration, social entrepreneurship can also help in creating productive employment. Intergovernmental organization, the United Nations reiterated the role social entrepreneurship can play in curbing unemployment, when it launched UNICEF’s UPSHIFT Program. Recently, in the World Economic Forum 2020, Schwab Foundation for Social Entrepreneurship in its 2020 Impact Report highlighted how it has improved the lives of more than 622 million people in 190 countries.
Social entrepreneurs have proven how employees, customers, suppliers, local communities and the environment can benefit
An alternative working model
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said, “By having as its mission the engagement of all stakeholders in the creation of social and economic value, social entrepreneurs have proven how employees, customers, suppliers, local communities and the environment can benefit.”
Nobel Peace Prize winner Muhammad Yunus believes social entrepreneurship is derived from the need to value the abilities of every human being and understanding that saving the environment must be a collective effort. With social entrepreneurship, many birds can be hit with one stone. It empowers individuals to utilize their potential and work for a better livelihood, and improve the lives of the consumers from all socio economic backgrounds and all of this is done keeping in mind the greater good of the entire environment. Hence, social entrepreneurship benefits many stakeholders of the ecosystem and eventually the whole ecosystem at large.
As WEF puts is, social entrepreneurship, as an organizational expression of social innovation, is the demonstration of alternative working models as we face the current challenges to our planet, our societies and our economies. With the role of HR evolving and the scope of its function going beyond the people of the organization to the community at large, it is important for HR leaders to understand the opportunities of this emerging sector and what it could mean for them.
Lack of access to support and advisory services, lack of finance and funding, lack of technical skills and social enterprise awareness are some of the barriers to growth
How are some countries reaping the benefits?
Bangladeshi social enterprises have an average of 22 full-time equivalent staff and average turnover of around £21,000 (BDT 2,134,475). In the latest survey done, it was identified that Bangladeshi social enterprises have created an increasing number of jobs over the past years, and expect job creation to continue. In terms of anticipated job creation, a majority of the surveyed social enterprises anticipate hiring new staff in the coming years.
Other countries like the United States, Canada and the UK have also attracted a lot of skilled talent through social entrepreneurship and made it to the top ranks of the report by the Thomson Reuters Foundation, Deutsche Bank, UnLtd and the Global Social Entrepreneurship Network. Asian countries like Singapore, Hong Kong and Malaysia also made it to the top list of the countries with the best environment for social entrepreneurs. In fact, as per another report, compared to other regions, young entrepreneurs in South and East Asia have the highest percentage of businesses creating between one to four jobs, and roughly half of the youth businesses providing no additional jobs.
Here are some initiatives that have accelerated the growth of social entrepreneurship in some of the countries in Asia:
- Philippines: Youth Entrepreneurship Program (YEP), a nationwide program by the National Youth Commission to help young Filipinos develop their entrepreneurial skills.
- Hong Kong, SAR China: Young Entrepreneurs (YE) aims to foster entrepreneurship globally and to connect entrepreneurs with global markets, in business, capital, education and services.
- Singapore: The Singapore-ASEAN Youth Fund was launched in 2007 and is administered by the National Youth Council of Singapore. It is an initiative of Singapore’s Ministry of Foreign Affairs and Ministry of Community Development, Youth, and Sports, with the main aim of promoting greater interaction among youth in the ASEAN member countries.
All of these initiatives directly or indirectly empower the talent in countries to utilize their potential and put their skills to use and take care of their own development while also adding value to the society at large.
The India perspective
Rituparna Chakraborty, President , Indian Staffing Federation, says, “ Social Entrepreneurship in India has come a long way over the years.”
As she also shared, the numbers state that there are nearly two million social enterprises, and given the country’s socio-economic challenges, these are only expected to grow. Chakraborty believes that social entrepreneurship provides a unique opportunity to focus on specific challenges while remaining relevant and sustainable in the long-run. The good part is that the government is also interested in promoting these, through funding options, advisory services and making the sector more regulated.
She highlighted how the Skill India program, with an allocation of Rs. 3,000 cr, is a good example that could boost social enterprises in the vocational education sector. A number of such programs are being pursued and an active private sector participation could help scale social enterprises.
Chakraborty agrees that social enterprises are uniquely positioned to help improve the employment situation by working on both sides - on the demand side from organizations and supply side with access to the remotest part of the country.
Social enterprises as job creators
Having identified the benefits of social enterprises and the value it can create for the entire society and economies at large, some companies like PwC have extended foundations working for the cause. Through either funding or knowledge sharing there are some companies working along with social enterprises and empowering them to further create an impact.
Tanya Kothari, Program Manager, Shell Foundation shared that all of their portfolio companies so far have created cumulatively 3.6 lakhs jobs, globally.
Jaivir Singh, Vice Chairman, PwC India foundation, also shared similar data. He said, “One statistic available from the global experience of School for Social Entrepreneurs is that social entrepreneurs on an average create two jobs and 11 volunteering opportunities by the end of one year of their operations and this grows as their social business grows. This however varies across countries and depends on the size of the enterprise.”
He further added that since the sector is still at a nascent stage, its ability to cause for a multiplier effect in creating jobs is still limited but has great potential considering the issues faced by modern society.
What do the social entrepreneurs think?
Yashveer Singh, Co-founder & Global Director, Ashoka Young Changemakers believes that all organizations globally are going through a profound change. It is no longer enough for them to hire someone with specific skills and hope those skills would be relevant for ages. “For organizations and companies to thrive, they need people who not only can adapt constantly and navigate this change effectively but who also help others to thrive as drivers of change,” he shared.
“Many social entrepreneurs around the world now work with the objective of teaching new skills providing opportunities for the underprivileged and creating employment. While some work on creating direct employment, there are others who work at the systems level to bring policy shifts in creating an enabling ecosystem to create jobs and livelihoods for all,” added Singh.
Another social entrepreneur and UN Environment Leadership Awardee, Dr. Vaibhav Tidke, CEO, S4S Technologies, emphasized how social entrepreneurship challenges the traditional model of employment.Most of the social entrepreneurs we interacted with shared the same concern. While the future for social entrepreneurship majorly looks promising, there are many roadblocks to its growth as well.
Social entrepreneurship, as a sector, has contributed towards employment generation and skill development for jobs; and has a long way to be a major driver of improving employment status nationwide
The way forward
“While social enterprises have made big strides, they are still very concentrated and fragmented. Firms would need to scale up, work together and collaborate with the government to make noteworthy impact. The scale of transformation required is massive and coupled with the “for-profit” objective, Social Enterprises would need more time before they start delivering at scale,” said Chakraborty.
Kothari from Shell Foundation, in an interaction with us had also highlighted the importance of having social enterprises with ideas that can scale and impact billions and not only millions. She advises that it’s beneficial to invest in them and support them in their journey from the beginning phase.
Lack of access to support and advisory services, lack of finance and funding, lack of technical skills and social enterprise awareness are some of the barriers to growth for social enterprises.
Singh from PwC India foundation said, “Social entrepreneurship, as a sector, has contributed towards employment generation and skill development for jobs; and has a long way to be a major driver of improving employment status nationwide. Private sector partnerships can serve as important tools to catalyze the development of the sector. Whilst there is much more to be done, the trends are pointing in the right direction but will need the sustained support of government, the private sector, and the social sector.”
With the World Bank supporting this notion with data point that 70 percent of jobs are created by small and medium enterprise, social entrepreneurship is an area for the betterment of which government, academic institutions, professional bodies and companies should work together. Business and HR leaders of the organizations can probably be the one taking the ownership of going beyond the scope of their business and in the new age of work as 'People Leaders', work for uplifting the entire community. If you are already making efforts in this direction, then do share your story with us.
As a people leader, would you be willing to contribute towards promoting Social Entrepreneurship? Write to me at email@example.com and let me know your thoughts.