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Why social entrepreneurs and big business need each other

Posted by: Jonathon Henderson / 31 October 2018

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Edinburgh’s Old Town is famous for its castle and buildings dating back to the Medieval era. But something new is taking root in the capital of Scotland; It is quickly becoming a global hub for social enterprises.

While there is no formal definition of social enterprise, it is usually defined as a commercially viable organization focused on benefiting the public – rather than shareholders or owners. This can mean anything from helping alleviate conditions for people living in poverty, to protecting the environment. And the sector is booming: 42 percent of social enterprises have been established in the past 10 years.

In a country of less than 5.5 million people, Scotland’s social enterprise sector includes approximately 5,600 organizations, contributes 1.68 billion pounds (about $2.2US billion) to the economy annually, and employs over 100,000 people.

 

Advancing Collaboration Between Social Enterprises and Big Business

So, it’s fitting that the eleventh Social Enterprise World Forum, an annual global event designed to “create a global social enterprise movement,” was recently held in Edinburgh. Over 1400 delegates from 47 countries gathered to collaborate, network and discuss how they could help tackle the world’s social and environmental problems. Throughout the event a common theme emerged: the need to strengthen the relationship between the commercial and social business sectors.

Gerry Higgins, CEO of Community Enterprise in Scotland, founded the Social Enterprise World Forum (SEWF) and has over 30 years of experience starting and running social businesses. “Partnerships between social and private enterprises have come a long way,” he said. “But over the last few years we’ve really reached a tipping point – the corporate sector is recognizing that it can make a significant difference in communities through social enterprise partnerships.”

In part, Higgins thinks the impetus comes from millennials. “Young people are realizing that business as usual isn’t good enough, and that we have a lot of challenges globally.” This generation has inspired more interest than ever in the social sector, but also put pressure on big business to show their responsibility towards addressing social and environmental challenges.

Higgins believes that bringing corporate and social worlds closer together is a win-win for both. Companies are being asked increasingly to report on how they positively impact communities. One way they can demonstrate socially responsible business practices to shareholders is by buying from social enterprises. Conversely, corporate buyers provide social enterprises with a new and potentially lucrative customer base, which will help increase their social impact.

 

SAP Doubles Down On Commitment to Social Enterprises

As a global business software provider, SAP agrees that working with social enterprises is mutually beneficial — and is doubling down on its commitment to the sector. The company participated in SEWF as the organization’s first global partner. The three-year partnership will help drive growth in the social enterprise sector and includes a new massive open online course (MOOC), designed by SAP and SEWF members to teach participants how social enterprises can enhance corporate supply chains.

For many years, SAP has supported social enterprises primarily through its social sabbatical program, that matches SAP employees with social enterprises, NGOs and non-profits where employees use their expertise to help organizations address strategic challenges. But Alexandra van der Ploeg, vice president of corporate social responsibility at SAP, believes there are two main reasons why there is more momentum than ever across the company to engage with social enterprises.

First, in 2015 the United Nations established the 2030 Agenda for Sustainable Agenda and its 17 Sustainable Development Goals (SDGs) aimed at fighting poverty, equality, and climate change. “Agenda 2030 and the SDGs have increased awareness about the private sector’s role in helping to achieve the societal, economic and environmental goals of the UN,” said van der Ploeg.

Second, (but related) the investment community wants to see that corporations conduct business more responsibly. Van der Ploeg explains, “There’s a push from investors that makes this a pivotal moment. They are urging companies to look beyond the economic bottom line to the triple bottom line that measures economic, social and environmental achievements.”

She believes SAP can help accelerate social enterprises with its technology, employees and ecosystem. SAP technologies can boost social enterprises and help them scale, for example, SAP Ariba can connect buyers worldwide to purveyors of socially-responsibly made goods.

Employees can volunteer their expertise and time to support existing social entrepreneurs and maximize their impact. Or start their own through internal initiatives like 1 Billion Lives initiative, an incubation program that supports employees who want to launch socially-minded businesses. Last, the SAP ecosystem of partners (including for, and not-for, profit organizations,) can provide social entrepreneurs with new business opportunities and markets.

This dovetails neatly with SAP’s purpose: to help the world run better and improve people’s lives. Adaire Fox-Martin is an Executive Board member at SAP SE, in charge of Global Customer Operations across Europe, the Middle East, Africa and Greater China. She has long been a champion of social entrepreneurship; for example, she started SAP’s 1 Billion Lives program. As Fox-Martin put it, “The opportunity that we have with social enterprises is to allow our employees to live our values, engage with projects and ideas close to their hearts and truly help the world run better.”

Next year SEWF will take place in Ethiopia, one of Africa’s fastest growing economies with over 100 million inhabitants. Ethiopia already has a strong social enterprise sector. Watch this space.