What Is It?
With customers demanding greater transparency about a company’s social responsibilities and the environment in need of more care, social entrepreneurship provides a platform for entrepreneurs to build businesses while also doing good.
Today, millennials and Gen-Z expect more than just a paycheck. They seek jobs with meaning, purpose, or a good cause. For young entrepreneurs, social entrepreneurship is the new approach to making a difference in their business model while still profiting.
Why Does It Matter?
Businesses are currently at a pivotal moment in the realm of social entrepreneurship. As social media pushes social concerns to the forefront of our attention, investors and customers are more interested than ever before in a company’s purpose and its products and services. A company’s goal and vision are more important than ever before for success.
Low-carbon indexes, green bonds, and sustainable funds are some of the more comprehensive strategies used to encourage social entrepreneurship and investment. Even more fundamentally, while competing for business, firms worldwide are forced to demonstrate their social responsibility credentials. This means that those that wish to promote socially responsible activities are experiencing substantial growth in their consumer base.
Social entrepreneurship is significant for a range of reasons. The following are a few reasons you should consider it:
- Economic value: Social entrepreneurs contribute to the economic rejuvenation of the country by creating employment, generating revenue, and nurturing a complete network of business partners—suppliers, shipping firms, lenders, and utility providers. Add to that the multiplier effect, in which employees of socially driven enterprises may spend their earnings to support the local economy.
- Redefine corporate social responsibility: Corporate social responsibility (CSR) has garnered headway in the business community lately. However, some social entrepreneurs are concerned that firms only use CSR as a public relations tactic.
- One-of-a-kind prospects: Social entrepreneurs may create unique chances for millions of people worldwide via their activities and ideas.
- Influence government policy: Movements inspired or driven by social promoters have attracted widespread support worldwide, strengthening the political resolve required to effect significant changes. Whether in public health, environmental awareness, workplace safety, or education, socially oriented projects have revolutionized how we live, work, and act on today’s most pressing concerns.
Social Entrepreneurship in UAE
Governments are taking increased measures to emphasize Environmental, Social, and Corporate Governance (ESG) as scientists warn us about our impact on the natural environment. Entrepreneurs, businesses, and anybody with a positive vision strive to support people.
As a worldwide financial excellence hub, the UAE has considerably improved sustainable finance across all sectors. The government believes in the essence of social entrepreneurship. The value found in supporting it is evidenced by initiatives led by the Dubai Declaration on Sustainable Finance, the UAE Green Agenda 2015-30, the UAE Climate Change Plan 2017-2050, and the Net Zero 2050 Strategic Initiative.
“Social entrepreneurship is still in its infancy in the Arab world. However, over the last decade, it has gained a lot of momentum. Today, if you ask young people whether they want to be a bureaucrat or an entrepreneur, most would choose the latter,” said Maytha Al Habsi, Deputy CEO of Emirates Foundation.
Despite the odds, there is increasing interest in this industry. Today, as problems have become more nuanced, the growth of social entrepreneurship represents a significant new possibility in the UAE.
Becoming A Social Entrepreneur
The UAE is ambitious and progressive, especially in building businesses and supporting entrepreneurs. Regarding social entrepreneurship, companies in the country have already started understanding the cause and implementing it.
In general, social entrepreneurs attempt to assist those who are marginalized or who find themselves in unjust positions due mainly to circumstances beyond their influence. The difference between a social entrepreneur and another entrepreneur is that the former tries to earn a profit. At the same time, the latter seeks to promote long-term societal change.
For all those budding entrepreneurs with exceptional ideas to make a difference – this one is for you. Before starting your new business setup process, consider looking into social entrepreneurship first.
Hatem ElSafty, CEO of Business Link, commented on the increasing importance of social entrepreneurship and the benefits it will bring to businesses. If all companies highlight the significance of the cause and work towards it as a community, we can see better results.
“With entrepreneurial activities, we can achieve two objectives at once: establishing more socially responsible companies and teaching the youth about the need of environmental protection,” he concluded.
Challenges of Social Entrepreneurship
Before we conclude, it is crucial to discuss the challenges faced by social entrepreneurs to better understand the subject.
Lack of funding
Funding support remains a big challenge, especially since it is common for social entrepreneurial businesses to be solo-led. Traditional financial support systems are slow compared to funding for business entrepreneurs. Currently, most social entrepreneurs establish new businesses with their own funding and savings.
Most startups start with a positive social outlook and immense enthusiasm for a good cause. However, primarily due to the lack of support from other parties, scaling up becomes troublesome.
Balancing dual missions
Social entrepreneurs aim to build profitable businesses while caring for a social cause. This is where the problem lies, as the duality of managing both causes remains a big problem. Certain people try to set up a business by becoming ethical in their practices. In contrast, others try to draw social value from it.