The Rise of Social Enterprise: Powering Positive Change with Innovation and Impact
Source – The State of Social Enterprise 2024
The Global State of Social Enterprise report highlights the crucial role social enterprises play in tackling pressing global issues. Social, environmental and economic challenges are at unprecedented highs, yet the impact and potential of social enterprises are often underestimated.
These businesses bridge the gap between business and social good. They create innovative solutions that generate economic value while driving positive social and environmental change. By examining data from over 80 countries, the report offers valuable insights for policymakers and investors.
- Global Presence: Over 10 million social enterprises operate worldwide, constituting more than 3% of all businesses.
- Economic Powerhouse: These enterprises generate a combined $2 trillion in revenue annually.
- Job Creation: Social enterprises are responsible for creating nearly 200 million jobs around the world.
- Women at the Helm: Social enterprises are champions of gender equality, with one in two being led by women, compared to one in five for conventional businesses.
Global Picture of Social Enterprises
The exact number of social enterprises per country is difficult to pinpoint, ranging from a mere 47 to a staggering 2 million. On average, a country has around 107,341 social enterprises, with a median of 7,833. Leading the pack is India with an estimated 2 million social enterprises, followed by China (1.75 million) and the United States (1.3 million).
Social enterprises generate $2 trillion annually, representing roughly 2% of global GDP (based on a 2021 estimate of $96 trillion). This contribution surpasses the apparel industry and is nearly double the size of the advertising industry.
Social enterprises are leading the charge for gender equality. Globally, data from 50 countries shows an average of one in two social enterprises have women in leadership roles, compared to just one in five for traditional businesses. This varies by region, with countries like Latvia, Ireland, and Sweden reaching nearly 70% female leadership, while places like India and Bangladesh have a lower percentage (slightly less than 25%).
Barriers Faced by Social Enterprises
Despite their positive impact, social enterprises globally face hurdles throughout their journey. These include:
- Difficulty securing funding: Traditional lenders struggle to assess the mix of social and financial goals social enterprises pursue.
- Low public awareness: Many stakeholders, from consumers to policymakers, don’t fully understand the social and financial benefits these businesses offer.
- Limited government support: Policymakers may not provide the frameworks and incentives social enterprises need to thrive.
- Complex regulations: Navigating unclear legal structures and cumbersome bureaucracy hinders efficient operations and resource access.
- Procurement challenges: Social enterprises often struggle to compete for public and private contracts due to a lack of focus on social and environmental impact in procurement processes.
To leverage the potential of social enterprises in tackling global challenges, governments and international organizations should invest in:
- Data Collection: Social enterprise data needs improvement in availability, quality, and comparability across regions.
- Data Frameworks: Collaboration among stakeholders is crucial to creating robust frameworks for collecting social and environmental impact data alongside economic performance.
- Research Coordination: Regional and global efforts should be streamlined to ensure consistent data collection and analysis of social enterprises.
Investing in robust data on social enterprises empowers policymakers to craft effective support systems. This fosters the growth of the sector, directs resources towards impactful initiatives, and ultimately strengthens social enterprises as drivers of positive change.
Read the full report here
