LONDON — Canada was named the best country for business leaders seeking to tackle social problems in a global poll on Tuesday while the United States fell from top slot due to political uncertainty.
Australia came second in the Thomson Reuters Foundation’s second global survey on the best countries for social entrepreneurs, seeing the biggest gain of 24 places from the inaugural poll in 2016, while France came third.
Mexico came last, down 15 places from 2016, but the United States was the biggest loser, plunging to 32nd place from No. 1, with the poll of about 900 social enterprise experts pointing to difficulties with government policy and access to investment.
Francois Bonnici, head of the Schwab Foundation for Social Entrepreneurship, said over the past three years there had been “some amazing gains and some ongoing challenges” for social entrepreneurs addressing issues from climate change to refugees.
“Governments are recognizing that to meet their own agendas this is a group of citizens and entrepreneurs that actually want to improve society and the environment,” said Bonnici.
“But it has a slightly different flavour in each country and that government role is important (as it) can legitimize the sector in their country by creating these policies.”
Business entrepreneurs globally are increasingly setting their sights on social problems with ventures that can be a commercial success while addressing problems like unemployment, homelessness, mental health, knife crime and even loneliness.
For example in South Africa social enterprise Harambee has created a ‘dating service’ to match unemployed youth with employers, while in India Project Patradya is tackling the waste problem by employing Afghan refugee women to make edible bowls.
But with little data on which nations were encouraging the sector, the Thomson Reuters Foundation, in partnership with Deutsche Bank, began a poll in 2016 which was repeated in 2019. Social entrepreneurs, academics, investors and support agencies in the world’s 45 biggest economies, as ranked by the World Bank, were asked their views. Iran and Saudi Arabia were dropped in 2019 as it was impossible to get the right sample.
Lack of Understanding
The 2019 poll found most experts, 82 per cent, said social entrepreneurship was gaining momentum in their countries – although this was down three percentage points from 2016.
Canada, Indonesia and South Africa were named as the top countries where social entrepreneurship was gaining momentum, while Mexico, the United States and China saw the biggest falls.
Despite this, more than half of respondents – 54 per cent – said the public still did not understand what they did which was not helped by the lack of a global definition of social enterprise. Italians were most aware of their work and Poles the least.
“People are becoming aware that the whole notion of social entrepreneurship is not just kumbaya,” said former Bangladeshi-U.S. investment banker Durreen Shahnaz, founder of the first social stock exchange, Impact Investment Exchange (IIX).
“It really is about doing serious work and making sure that work is scalable … There are signs the industry is maturing.”
The rising interest of young people — under the age of 25 — was a new finding, with three in four experts saying more young people were interested in working in social enterprises.
Indonesian social entrepreneur Denica Flesch wanted a career where she had a direct impact in the fight against poverty so in 2016, aged 26, she founded SukkhaCitta, an online marketplace selling clothes made by female artisans in Indonesian villages. “Young people are really challenging the notion of work, and combining purpose and career in one place,” said Flesch.
“They’re more idealistic and want to do something that’s beyond just looking for money.”
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Canada was named as the top country where young people were playing a leading role as social entrepreneurs, followed by Germany and France, as well as the top place for women leaders.
Women Taking a Lead
“Culturally we are about diversity and inclusion at a national level. That’s our brand, so that is helpful for the environment for social enterprise,” said Marcia Nozick, founder and chief executive of Vancouver-based social enterprise EMBERS.
She said policies that encouraged governments to buy the services of social impact ventures had been vital in helping the growth of EMBERS, which finds flexible jobs for people in a deprived part of Vancouver.
Nozick said there were many female leaders because it was “about caring and relationships and that has always been at the forefront of what women have brought to the business sector.”
Women were also seen as playing a leading role as social entrepreneurs in Australia, Belgium, Sweden and Malaysia.
The United States was named the worst place for female social entrepreneurs — the same as in 2016 — while Argentina and China slumped the most in questions regarding women in the poll conducted online and by telephone between May 7 and July 30.
The biggest falls for the United States overall related to access to investment, selling to businesses and supportive government policy.
Attracting investment continued to be a challenge, according to 56 per cent of experts, down two percentage points from 2016.
Bonnie Chiu, founder and chief executive of Lensational, a social enterprise that trains marginalized women as photographers, said there was more capital available to social entrepreneurs but they had to jump through hoops to get it.
“So much time is spent chasing these opportunities,” said Chiu, whose business is based in Britain and Hong Kong.
“Traditional businesses just need to prove that they are financially sound, traditional charities just need to prove that they are generating social impact – but social enterprises need to do both.”
But regardless of the problems getting political support, financing or selling to businesses, experts said there would always be a need for social entrepreneurs to address the world’s largest problems where markets or public policy had failed.
“The more our political leaders might struggle to solve the world’s most pressing problems, the more opportunity for social entrepreneurs to come up with solutions,” said Jude O’Reilly, a senior director at U.S. nonprofit the Skoll Foundation.
© Thomson Reuters 2019