Social entrepreneurship and social enterprises are terms that have lately been rising in the world of start-ups, being part of the global movements addressing entrepreneurship as one of the most important tools to reduce youth unemployment.
It has become clear to everyone that unemployment isn’t only about the lack of job opportunities, but also about pre-career societal, environmental, educational and economical challenges that youths are facing, especially in developing countries, and the MENA region is no an exception.
We see many examples in the MENA region of young people who have taken the responsibility of creating change at the grassroots level, addressing various issues in different areas.
One of the most interesting insights about these developmental missions is a mentality shift from doing things on a non-profit basis to building financially sustainable businesses with impact. This diversion is slowly helping to break the taboo of making money out of doing development work. Youth movements have also influenced the way international and local developmental funding, support, and programmes are channelled.
Many MENA-based social enterprises have started as non-profits and shifted to a social enterprise model. The new ones are starting as businesses from day one.
For example, Rawan Barakat, founder of Raneen Media, which creates audio drama stories for blind children, has been building her model as a non-profit. Nowadays, she is exploring other options and working on increasing the revenues generated through selling her products versus finding donors.
Khalid Al Khudair is one of the social entrepreneurs in KSA focused on women’s empowerment through Glowork, which originally started as a platform to create job opportunities for Saudi women, but with a business model.
Helen Al Uzaizi of BizWorld UAE has started a business that focuses on teaching entrepreneurship in schools. Al Uzaizi’s plan is to establish her business in the UAE and expand it regionally. These and many other examples involve different stakeholders who have direct and indirect involvement in the enterprises’ mission.
However, how are all these stakeholders playing a role in supporting a culture of social entrepreneurship in a region where it is very much needed? What is being done?
What more can be done? And what shouldn’t be done at all?
The role of government
In some countries, governments should step out, whereas in other places, governments should help. In Levant, for example, social entrepreneurs are considered competitors to the government. Their work is often duplicated by governmental entities instead of being supported by them.
In most cases, social entrepreneurs in developing countries work on areas in which their respective governments have failed to do their job. Nevertheless, governments should realise that those individuals can be of great help, whether due to their knowledge and passion or their existing work. Collaborating with social enterprises and helping them to grow has proven to be a very effective approach.
On a brighter note, the UAE government is very much interested in seeing more youths being proactively engaged. The ecosystem and the infrastructure are more enabling for such ventures, but areas young people can get involved in are limited and mainly revolve around healthcare and environment.
The shift from CSR models to sustainability is evident among regional corporations, with Aramex and Hikma Pharmaceuticals being among the first movers in that direction.
Nowadays, we can see multinational and local companies launching initiatives to get involved in the entrepreneurial space, under the sustainability umbrella. Through my work with Wamda, and as part of the Collaborative Entrepreneurship Initiative, which we developed with Expo 2020 Dubai, I have witnessed and got involved in some of these corporation-led initiatives. Zain Jordan, Aramex, GE, PayFort and others were among the first movers in MENA.
MENA-based corporates have realised the importance of being part of the entrepreneurial movement for several reasons. Start-ups are more agile and have a faster pace that allows them to be more innovative. They can bring this mindset to big corporates that are often stuck with a very traditional way of thinking. This can happen through different channels, from a simple mentorship programme to a full acquisition. Big corporates can look at start-ups as vendors and integrate them in their supply chain.
PepsiCo, for example, is one of the companies that is focusing on social enterprises. Last year, they partnered with Wamda to run their own social impact challenge to recognise and reward existing impact entrepreneurs. They currently work with different impact entrepreneurs, especially the ones focused on renewable energy, such as like SunUtions in Egypt.
Zain Al Mubadara in Jordan, which is a programme that encourages the youth to come up with ideas that address challenges in their local communities, is another example of how corporates can support social ventures at an idea stage.
Organisations, such as Ashoka, King Abdullah II Fund for Development, Synergos, have worked on supporting the region’s social entrepreneurs at different stages.
However, these organisations have recently started considering revenue and profit generating social enterprises. Both Glowork, a Riyadh-based recruitment platform that connects Saudi Arabian women with jobs, and Zoomaal, a Beirut-based crowdfunding platform, are companies that were chosen as Ashoka entrepreneurs.
The role of such supporting arms is very important, and it can fall under funding, networking, mentorship, capacity building, and so on. These organisations have been heavily working across Levant and North Africa for the past year, while at the same time trying to expand their work to reach more entrepreneurs in the GCC.
Some educational institutes are also addressing social enterprises, such as the Annual NYUAD International Hackathon for Social Good, which is again being held on April 6, 2017.
Last month, Sandooq Al Watan, a private philanthropic fund set up to support social entrepreneurship by providing Emiratis with career guidance, talent development, and funding research and development, was launched in the UAE.
The more of such support organisations and initiatives we have, the more aware and empowered the youth will be.
Investors and venture capitalists
Impact investors and patient VCs are almost nonexistent in the region. Investments in this space are in proven business models that also have a social impact.
Furthermore, most investment money in the region is focused on the tech industry. Some angel investors and philanthropists have put some money in social entrepreneurs, but in most of the cases they were more a case of donations rather than real investments.
The struggle of fundraising is more of a challenge for already established social entrepreneurs than for the newly established ones, since they can focus on building the business model early on, proving it, and then approaching investors.