Viewpoint: social enterprise

What more could GCC governments do to recognise and foster the rise of social enterprises? Six experts share their views.

Khalid AlKhudairi, founder and CEO, Glowork

Rather than seeing it as solely the government’s job to foster the rise of social enterprises, I’m in favour of the business community taking a bigger role. Many businesses have corporate social responsibility (CSR) initiatives, but it can be difficult to track the impact of this investment.

Instead, I’d like to see firms establish social entrepreneurship responsibility departments, which invest directly in social entrepreneurs that have a vision aligned with their own. Governments in the GCC and elsewhere could also encourage firms to invest tax and zakat in social entrepreneurship. This policy would ensure job creation and, long term, a more sustainable business community.

Noor Shawwa, managing director, Endeavor UAE

Social enterprises have a critical role to play in the business community, but for-profit firms can also have a positive social impact. They create jobs, a pressing social issue for the Middle East, with small and medium-sized enterprises being the largest employers in economies.

At Endeavor, we’ve found the top five to 10 per cent of these firms generate 50 to 70 per cent of all jobs. Supporting the entrepreneurs behind these businesses is an effective way to accelerate job creation. Furthermore, many give back in other ways, such as through CSR or as inspiration to the next generation. Aiding these high-impact entrepreneurs has a magnified effect, which ultimately leads to social impact.

Genny Ghanimeh, founder, Pi Slice

In recent years, we’ve seen a wave of accelerators, incubators and competitions supporting entrepreneurship in the Middle East and North Africa (MENA). Social entrepreneurship does not yet have the same support. Philanthropic capital as well as regional CSR budgets could and should be used in a strategic way to provide early-stage funding for social firms. 

Governments can play a role in raising awareness of social ventures, their scalability and their impact. The social investment market offers both an opportunity to access huge untapped potential, and to contribute to solving urgent challenges. Governments can be the catalyst for this change.

Sahar Wahbeh, founder, Dumyé

The financial commitment required to start a company in the GCC is prohibitive for many young entrepreneurs and the laws are intimidating. These challenges are amplified in social enterprise. To my knowledge, the GCC has – as yet – no way to legally recognise a social enterprise. You are either a business or a nonprofit organisation: there is no category to account for social entrepreneurs’ double bottom line of financial growth and impact.

We need the legal systems in the region to evolve to acknowledge, respect and nurture social entrepreneurs and the contributions they make to our communities. Remove the financial barriers, give social entrepreneurs legal status and make the broader laws surrounding enterprise more forgiving.

Raed Al Emadi, deputy CEO and COO, Silatech

Social entrepreneurs face many of the same challenges that traditional entrepreneurs encounter, including access to finance and a lack of mentoring and incubation services. Improving the overall climate for entrepreneurship in the region, for example the region’s bankruptcy laws, will benefit social entrepreneurs as well.

One of the best ways to support social enterprises in the long run is simply to do business with them, and governments can take the lead by integrating social enterprises into their own supply chains. Fostering social entrepreneurship in the GCC can support a virtuous cycle in the region, contributing to much-needed economic development and to improved social cohesion.

Soushiant Zanganehpour, director, Tribeca Impact Partners

By its nature, social entrepreneurship blurs the lines of public, private and non-profit sectors. While the involvement of states and the private sector is not mutually exclusive, I think state coordination could be the difference between a thriving and recognised social entrepreneurship ecosystem, and the sector being dominated by a few examples of market-oriented ventures.

Government has the legitimate convening power to bring highly unlikely allies and partners to the same table. That power must be directed towards tangible measures to eliminate obstacles to social entrepreneurship’s rise in the region, such as low consumer awareness rates, absence of early-stage risk finance, limitations of existing legal models, and absence of proper, long-term technical support.

Illustration credit: Hanna Robinson