On social enterprises

In my view, social enterprises are a class of enterprises which:

  • Have business models that are sustainable (Note: Profits or surpluses are the simplest and cleanest route to¬†sustainability¬†and growth; but other ways exist)
  • Create value for society (or some part of it) by offering products and/or services that address certain problems or unmet needs of society, but in the case of social enterprises also: 1) create significant positive social and/or environmental impact and/or 2) serve marginalized, under-served sections of society; typically those who have limited ability to pay for products and services or have limited access or could represent an unattractive commercial market segment, and/or 3) create significant enhancement in quality of life, productivity, upward mobility of the economically weaker sections of the society.
  • Inspires considerable good-will in society and can thus enlist the support of the government, charitable organisations, employees, customers, suppliers, investors etc.

Social enterprises have to be sustainable initiatives like any other commercial enterprises. The basics of building a social enterprises are the same as for commercial enterprises. The key difference is only in how they arrange to secure their resources.

What constitutes a social enterprise is always contextual and changes with locations, times and specifics in each society.

Examples of social enterprises:

  • A company addressing societies most pressing problems like health, water, food, energy etc with an element of compassion such as a company delivering clean drinking water in rural India, a company building local distributed clean energy solutions in rural India etc
  • A company addressing needs of the disabled and aged.
  • Companies working towards addressing the UN’s Millennium Development Goals by offering affordable solutions in the poorest regions of the world.

Examples of enterprises unlikely (note: I am aware that there are exceptions) to be social enterprises:

  • A cigarette company
  • A luxury fashion chain
  • A jewellery chain
  • A sports car company