A Background Paper on the Performance and Impact of Social Entrepreneurs Wolfgang Hein und Robert Kappel Siemens Stiftung 2015, München
This background paper has been produced on request of the Siemens Foundation in the first instance as an input to the Research Conference on Social Business on 25th and 26th November 2014 in Mexico City. It is primarily based on visits to eight social enterprises, four each in Latin America and in East Africa and, by interpreting our experiences in the framework of the older discussion on the “Third Sector” and the rapidly growing literature on social entrepreneurship, intends to offer an interpreted list of critical questions for a self-reflecting discussion among teams of social enterprises. Chapter 1 gives a short introduction to the historical roots of the recent discourse on social enterprises reaching back to the so-called “Third Sector” (neither public nor private) in the 19th century, i.e. cooperative welfare organizations initiated by churches or the labour movement. Based on these insights we discuss the background the specific characteristics of contemporary social enterprises. The second part of the chapter introduces the social enterprises which the authors of this paper had visited in mid-2014. Four of them work in Latin America (Peru, Chile and Uruguay) on various aspects of waste management and recycling including the formalization of formerly informally working waste-pickers and one on mobile medical diagnosis services in remote regions. The other four are situated in Africa (Burkina Faso, Kenya, Uganda and Rwanda), producing low-cost hygienic pads for girls and women, low-cost and locally produced eye-glasses, organizing waste-collection and resource recycling in Nairobi, and distributing energy from renewable sources. These businesses give an idea of the diversity of social enterprises supported by the Siemens Foundation Networks. Chapter 2 raise a number of basic issues for the self-conception of social enterprises and on various fields which are important for their success (considering the broad range of entrepreneurial and associational forms in which they work), taking up important points discussed in the literature on social enterprises. These are issues which will be raised in this background paper and in the SAMforSE tool. Chapter 3 links the issues discussed in the previous chapter to our observations on the eight projects we visited (see Chapter 1.2) and thus to more concrete questions of specific social enterprises. We illustrate the way how they deal with the challenges analyzed before by providing concrete examples in the form of short focus statements and supplemented by some short explanations where necessary. This demonstrates that various types of challenges are handled and probably have to be handled quite differently by social enterprises in different social, political and economic environments. Chapter 4 will present the conclusions of this background paper. This chapter gives a summary of the main results of our analysis of what we consider to be the most important challenges for the establishment and the success of social enterprises. This is based on our interviews with the eight social enterprises and the examination of their experiences as well as on the literature on social enterprises and the “Social and Solidarity Economy” presented in Chapter 1. Our main focus is on the performance and the impact of social enterprises with respect to scaling-up their activities and achieving social and environmental changes. In particular those issues are raised which are related to the challenge of “change-making” towards a more sustainable world, which is another form of concluding that a project has had a discernable impact on social life. Change-making does not only depend on the successful expansion of the business as such (without losing sight of its social purpose), but also on contributing to the whole ecology of local development (including fighting for appropriate public regulations and their implementation) and finally on contributing to invigorate social and political dialogues for sustainable development.