ISEA-Oxfam Poverty Reduction and Women Economic Leadership Report: Roles, Potentials and Challenges of Social Enterprises in Developing Countries in Asia

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PREFACE BY Pascal van Griethuysen, UNRISD

It is a pleasure for me and for the United Nations Research Institute for Social Development, UNRISD, which I represent, to write the preface to the report of the ISEA-Oxfam Research Project on Social Enterprises with the Poor as Primary Stakeholders (SEPPS).

The objectives of the research were to (1) characterize the current state of social enterprises in the Philippines, Indonesia and Bangladesh and the context they find themselves in; (2) analyse how and to what extent social enterprises have contributed to poverty reduction and the economic empowerment of women over the past 5-10 years; and (3) assess the role and potential/challenges for social enterprises to emerge as key players in poverty reduction and women‘s empowerment in the next 10 years.

By  mobilising  a  suitable  methodology  the  research  project  has  provided  both  conceptual  and practical  insights  into  social  enterprises  as  vehicles  for  poverty  reduction  and  the  economic leadership of women in Asia. Despite a number of challenges faced in obtaining data  the findings of this research have successfully (1) validated and enriched the concept of SEPPS as an emerging and relevant social enterprise segment in developing countries in Asia; (2) provided insights into the roles, potential and challenges faced by SEPPS in becoming key players in poverty reduction and women’s economic leadership (WEL); (3) provided insights into the roles, potential and challenges faced by support institutions and organizations, including businesses, governments and civil society; and (4) given additional information on WEL as a transformational framework for SEPPS to serve as vehicles for women‘s economic empowerment in developing contexts.

This  research  has  succeeded  in  reaching  its  goals. What  I  would  like  to  emphasise  are  the conceptual enrichment and insights this study has provided for an appraisal of the position and role of social enterprises and SEPPS in particular, as key tools for poverty reduction and women’s socioeconomic enhancement. Among other conceptual innovations, the notion of social enterprises as hybrid socioeconomic organizations straddling the for-profit and non-profit as well as the market and non-market spheres of the economy is key to apprehending the real nature of social enterprises in both their diversity and commonalities. As hybrid organizations, they provide a combination of market and non-market services to the poor they serve, which the study proposes to term transactional services and transformational services (based on Dacanay 2012, 2013), and social inclusion services.

As defined in the study, market-oriented transactional services assist the poor to become effective workers, suppliers and clients. Transformational services assist them in overcoming their capability deprivation to become instrumental in their own development. Social inclusion services directly assist the poor and their families to access basic needs and improve their quality of life. This clearly shows   the   multifunctional   nature   of   social   enterprise:   SEPPS   pursue   a   combination   of socioeconomic  objectives  and  balance  means  and  ends  to  reach  these  goals.  They  mobilise different types of funding to provide different types of outcome, many of which are not monetary, but in kind services to the poor. This economic rationale contrasts with the capitalist rationale of profit- driven economic units which focuses on the monetary counterparts of economic goods and services in response to purchasing power only. It also explains why the social outcome of SEPPS is so difficult to assess. The heterogeneous nature of the social benefits provided by social enterprise requires a complex qualitative appraisal that goes far beyond what economic conventional tools are able to provide.  Some repercussions such as self-esteem, emancipation and happiness might even remain intangible in nature.

In essence, social enterprises face economic conditions, opportunities and challenges that are context-specific and thus diverse. This, however, does not prevent conceptual appraisal in terms of what social enterprises commonly share. What the research has suggested is that the type of services the SEPPS provide, as well as the needs and challenges, both internal and external, they face, depend on the stage of development that SEPPS have reached, a process that is also dependent on the context it occurs in. In particular, the research underlines the evolutionary nature of social enterprise development: social enterprise seems to have the potential to evolve from a rather primitive stage of economic organization – characterized by low internal organization, weak governance and a lack of efficient management-  to external support in a more mature stage – where financially autonomous socioeconomic enterprises show their ability to serve the poor, women and the community at large through innovation and collective learning.

This socioeconomic development path, which, when adequate conditions are met, characterises the evolution of the social enterprise from the pre-social enterprise to the mature social enterprise, seems to me to be the great revelation of this study. Showing why and how social enterprise has needs and faces challenges that are fundamentally different while sharing a common rationale explains the great variety of social enterprises in an integrated but differentiated way. Above all, it sheds some light on the appropriate conditions that are conducive to making social enterprises active vehicles for poverty eradication and women‘s economic empowerment. In a context where conventional programmes for reducing poverty and attaining gender equity have shown a lack of effectiveness and adequate appraisal of social enterprises remains fragmented, this achievement is crucial, relevant and timely.

Every development process depends on intrinsic and contextual factors. At every stage, SEPPS face different needs, as well as internal and external challenges. Evolving SEPPS might need considerable external funding and improved management skills while mature social enterprises might need appropriate support to scale-up and activate their social impact. Overcoming those obstacles requires (1) identifying the specific needs and challenges; (2) developing ways to fulfil these needs and overcome these challenges; (3) elaborating common strategies that reinforce internal and external relations, notably through internal reforms, learning and collaborative partnerships. Based on such methodology, further research can be done on identifying the types of needs and challenges social enterprises face depending on their specific level of development, as well as on the specific context they operate in. In my opinion, government policies, international organizations and NGO programmes and partnerships should be conceived and elaborated in line with the different level of development achieved by SEPPS and the different needs and challenges they face, in a process of co-conception and collaboration of policies, programmes and partnerships.

Overall, the research study has delivered what it promised in terms of research objectives and findings. However, its seems to me that it has gone beyond this, as not only many findings, but the overall methodology it proposes are potentially relevant to the whole Asian region, and even beyond. Local experiences cannot be replicated as such (context matters), but learning is possible, and is required to identify the common elements that may inspire the co-development of policies in different contexts. In this sense, the general methodology of this research study can be reinforced through its extension and application to additional countries in Asia and other regions.

Let me congratulate the authors and researchers who have contributed to this excellent study and inspiring research work, in particular the team leader, Marie Lisa Dacanay, President of the Institute for Social Entrepreneurship in Asia. Allow me also to thank Oxfam for having made this study possible. As a representative of UNRISD, I have found it both useful and insightful.