Excerpt Eight From A Recent Interview With University College London | State Of Social Enterprises Ecosystems In Kenya
Earlier this year, The Youth Café was interviewed by Eliana Summer-Galai, a Masters student with the Institute of Global Prosperity at University College London (UCL). This interview was to provide insight into her research on the Kenyan Social Enterprise Ecosystem. The research explores the actors across the ecosystem, looking at stakeholders from four stages of the entrepreneurial life cycle (entrepreneurial education, idea generation, funding, and growth), and the opportunities and challenges for local social entrepreneurs.
The questions asked and our responses form a series of 8 blog posts dissecting important issues with regard to the Social Enterprise Ecosystem in Kenya. This is the eighth post of the series on Finding business models that enable both profit and purpose can be challenging globally, how do you see this in the Kenyan Context?
Social Entrepreneurship seeks to create value or generate a positive impact on society by offering services or products that answer unmet needs or by offering different solutions to social challenges. Social Entrepreneurship is often perceived as a mechanism for addressing unfair situations that contribute to exclusion, marginalization or suffering within segments of society that are not empowered to change these situations on their own.
The main “customers” of Social Entrepreneurs are marginalized or disadvantaged groups or individuals who do not possess substantial financial means. Although profits matter to Social Entrepreneurs, they do not represent the impetus behind their endeavors. The financial goals of Social Enterprises are in place to support and maximize the intended social impact.
Typically, most of the profits generated are reinvested in a manner that will further support the social impact goals and sustainability of the social enterprise. A limited proportion of the profits may be distributed among the members involved in Social Enterprises, though decision-making processes are not tied to capital ownership.
In Kenya, most Social Enterprises include the poor/marginalized communities into the company’s supply chains as employees, producers and business owners or develop affordable goods and services needed by the poor. In this case, we can say that Kenya mainly uses the Inclusive business model. Inclusive business models build bridges between businesses and the poor for mutual benefit that go beyond immediate profits and higher incomes.
Social Enterprises can strengthen their competitiveness (earn profits) first by: Building new markets because the demand for products and services in developing countries is growing and widely underserved. Companies can expand their customer base in emerging markets that will enable future growth when industrialized economies are saturated.
Secondly they can strengthen supply chains by including new suppliers into their business operations or offer products with special quality (e.g. organic or artisanal) or lower costs than traditional suppliers.
Thirdly, they can improve their reputation since the social impact generated by inclusive businesses increases the reputation of companies and builds trust among customers, NGOs or investors. Brokering Inclusive Business Models – Private Sector Division, Partnerships Bureau.
Fourth, driving innovations for special market conditions requires adapted products, operations and business models and developing them demands a fresh and different look at conventional operations and stimulates innovation.
Lastly, retaining employees mainly because employees expect their employer to be a good corporate citizen and identify themselves a lot more with a company when it actively contributes to social progress where inclusive business can be used as an opportunity for corporate volunteering, executive training or executive exchanges.
While the disadvantaged and marginalized communities (Purpose) can benefit through: Satisfying basic needs where inclusive business models provide people in poverty with vital goods like clean water, nutritious food, health care or safe housing;
Increasing productivity so that people in poverty can increase their productivity when they have access to electricity, phones or the Internet since these tools help them to organize their everyday life more efficiently and open up new opportunities for smallholder businesses and they can also acquire new skills when they are integrated as suppliers or entrepreneurs;
Generating income where farmers, fisher- and craftsmen can access new sales channels, demand for services increases and new jobs are created – this raises the total income and cheaper products raise the real income;
Lastly through, Being empowered because new opportunities and collaborative forms of market engagement (like cooperatives or consumer groups) empower people to take their lives into their own hands.
Three types of inclusive business models can be distinguished:
The Youth Café works with young men and women around Africa as a trailblazer in advancing youth-led approaches toward achieving sustainable development, social equity, innovative solutions, community resilience and transformative change.
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