by Subhanjan Sengupta | Posted on 10th April 2020

The emerging economies are the new industrializing countries post 80’s which have a rapid pace of economic development, government policies favouring economic liberalization, and the adoption of a free-market system. This blog post does not aim to talk much on social entrepreneurship in general because much can be found on what the term means for different actors in an ecosystem. In fact, past research has found as much as more than 50 definitions of social entrepreneurship and social enterprises out there. But social entrepreneurship has often been argued as a phenomenon in a context. It means that every social enterprise in every corner of the world does not need to be replicable (to the extend of standard operations and processes) because they work so close to the grassroots and the problems they deal with are different in their own ways due to the contextual idiosyncrasies, it is intriguing to know what it entails in an emerging economy context. An extensive research by the author on social entrepreneurship research in emerging economies, particularly Brazil, Russia, India, Indonesia, China, and South Africa (BRIICS), published in 2018, helps us understand social entrepreneurship in emerging economies as consisting of five key dimensions.

Social Welfare

Here, welfare generation is embedded in an element of trust that is one of the key things that a social enterprise tries to establish in a community. The trust is omnipresent as it is generated from social long neglected problems and improving the quality of life of those people. The nature of work is emancipatory; reaching out to powerless communities, and using market principles combined with social sensitivity to uplift communities. The ‘social’ of social enterprises in these economies caters to powerless and marginalized communities at rural locations, suffering from poverty, gender-bias, and other socio-economic issues, which are no the typical problems in higher income countries.

Social Capital

Creating strong social capital was found to be one of the key competitive advantages of social enterprises in these economies. These enterprises develop strong relationships with others working in the same area of work, and with suppliers/partners, many of whom would probably be from the very communities that are being served. There will be people from the community who will also become part of the enterprise and join the cause. In fact, the enterprises put in significant amount of efforts in creating a strong social connect with a wide variety of stakeholders so as to innovate and institutionalize their practices.

Collective Endurance

Most of these emerging economies have gone through a complicated phase of history spread over hundreds, even thousands of years (with that of India, for example, as old as 5000 years). Needless to mention centuries of colonisation and invasion, political transitions from communism to democratic systems, socio economic struggles caused by epidemics as much by political instabilities, to mention a few. Hence many of these economies had developed deep rooted social norms and complex social issues for a long time. The consequence is a huge diversity of languages and social norms, thereby causing complexities in social acceptances. To face a pile of complicated problems from micro to right up to the macro level, social enterprises in these economies had been battling their way through these with a collective endurance, which is close engagement with the communities, considering them as stakeholders, building and connecting social capital, understanding and partnering with the society at large, all for sustainably generating social welfare and economic value.

Economic value creation

Poverty and socio-economic backwardness have been common historical backgrounds for all the emerging economies. Economically mobilizing the beneficiary communities, with the use of innovative earned-income strategies, rich social capital, social innovation, community participation, and market orientation, had been a major aspect of social entrepreneurship. Economic value is thereby created for the beneficiary communities as well as for the enterprise. The key to successful social entrepreneurship is achieving economic sustainability while maintaining the social mission; without being dependent on traditional donations as received by NGOs or government funding.

Social Entrepreneur

Finally, if the entrepreneur is right, the enterprise will succeed and the impact will be visible. The relationship of the entrepreneur with social capital, his/her challenge to negative stereotyping, a compassionate spirit with a caring disposition, and the ability to aggregate resources for the social mission and for economic sustainability, are some of the key characteristics of a social entrepreneur. Leadership qualities of the social entrepreneur, coupled with background and personal capabilities, are critical success factors for social enterprises. This, however, is not so specific to emerging economies, but is true for social enterprises anywhere in the world.

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