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Confusion over definition of Social Enterprise/Entrepreneurship

"The term ‘social enterprise’, though often heard, is used rather loosely, and its definition continues to be debated even in societies such as the UK or USA, where the so-called ‘Third Sector’ has enjoyed a long and active history. In general, the term is typically used to describe a business set up with the goal of addressing specific challenges in a community, society or on a larger scale. The most frequently-cited definition comes from the Office for Civil Society in the UK to refer to “… businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners.”

"Impact Investment Exchange Asia, which focuses on regulating trading platforms for social enterprises and investors, explains that companies must meet key criteria to be recognized as social enterprises. For example, the primary reason for the entity’s existence must be to accomplish a specific positive social impact (not as an ancillary or secondary development, such as a company’s Corporate Social Responsibility program). Also, the company’s business model should reflect responsible entrepreneurship and growth for staff and overseers, beneficiaries/customers, overall community/environment. And finally, the company must retain a market orientation. We might note that the success of IIX itself is an early indicator of the rise of social enterprises."

Implications from Noviscape:

"In Asia, social enterprises often need to be operated as for-profit organizations in order to generate cash flows required to maintain sustainability and growth. Social enterprises do not rely on handouts to survive; entrepreneurs in this region are often able to run their business to fulfil their objectives without support from government and funding from philanthropists. In this region, there are many issues – social, financial, environmental and educational – and there are also many NGOs running activities to tackle those problems. Those NGOs have often struggled and competed with one another to gain funding from those organizations in order to survive and help others at the same time.

"In addition, the concept of social enterprise has only recently gained momentum in Southeast Asia. Pham Kieu Oanh, Director of the Centre for Social Initiatives Promotion (CSIP) observes that “Social enterprises as well as social entrepreneurs are new concepts in Vietnam.” Existing social enterprises and entrepreneurs who want to step into this field therefore must surmount new challenges, including lack of funding, weak capacity, lack of government support and lack of networks."

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Noviscape, June 2011, page 2: http://newsletters.clearsignals.org/Noviscape_June2011#page=2

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