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China's social revolution
Stefan Herrick |
In five years social media and e-commerce have exploded as the channels by which hundreds of millions of China's newly connected citizens seek out and buy products.
20 Oct 2015
The social enterprise shift in Hong Kong
Last year the eyes of the world turned to Hong Kong as the Occupy Central movement set up camp in the city's financial district. However, elsewhere a much quieter revolution is taking place in the form of social entrepreneurism.
Social enterprises lie somewhere between business and charity. They work to bring social benefits to the world around them, but they do so by working as a business, generating revenue and, hopefully, a profit. They generate investment from socially-minded individuals who are looking for a return.
"Some experts believe {social enterprise] could soon be seen as a separate asset class in its own right."
Tom Cropper, Freelance social enterprise journalist based in the UK
In most cases, this is a flat return allowing them to recycle money that would have otherwise have been used for charitable donations. In some cases, though, businesses have been able to generate a positive financial, as well as social, return.
Globally, social investment is growing rapidly, with some experts believing it could soon be seen as a separate asset class in its own right, but Hong Kong is emerging as one of the most promising areas for social investment in the world.
FERTILE TERRITORY
Hong Kong is fertile territory for social enterprise. It's already a global centre for business, with a hard working and educated workforce, but it also has plenty of social problems for entrepreneurs to address.
The gap between rich and poor is growing; access to university education is limited and youth unemployment is on the rise. Historically, a focus on business has seen social problems swept under the carpet, but as last year's protests proved, there is a growing enthusiasm among the young for change.
“The unique problem in Hong Kong is that people's values are mostly geared towards money making,” says Tony Yet, of the Good Lab – an organisation providing workspace and support for social enterprise.
“Social enterprises are here to manifest a new set of values (while not necessarily compromising revenue) and care for the marginalised.”
The Good Lab is one of a number of organisations nurturing the growing social enterprise movement. It's the city's first social innovation hub offering a workspace for entrepreneurs, capacity building courses, and much more.
Photo credit: Lewis Tse Pui Lung / Shutterstock.com
Other groups, such as the Yes Network, offer mentorship and development programmes for new start-ups. The government is getting involved pumping millions of dollar into the sector, while businesses are showing a willingness to sponsor emerging enterprises. The result of this work has been to spark rapid development within the social enterprise sector.
“The Good Lab was founded in September 2012. At that time, there were few social enterprises started by individuals in Hong Kong, and most were started by big NGOs,” Yet says. “But since then, we've witnessed a growth in social enterprises started by individuals.”
REACHING SCALE
The annual Social Enterprise Summit has grown from a small gathering to a showcase of social innovation. International organisations are also sitting up and taking notice.
Unlimited, one of the leading supporters of social enterprise in the UK recently launched a Hong Kong branch and the city is also competing to host the Social Enterprise World Forum. From only a handful of start-ups a few years ago, there are now 457, turning over $HK 1.1 billion a year.
It's promising growth, but there is plenty to do. Only a small number of enterprises have been able to reach real scale, with most still reliant on donations and corporate sponsorship.
Sindy Chow, of Happy Grannies, which works to improve the lives of people in later life, says sustainability is a key issue.
“Only one or two big scale social enterprises could be regarded as successful models,” she explains. “It takes some time for SEs to germinate among the community. Among all ages, most of us would prefer to get a stable life first before we are confident enough to start up our SEs.”
The emphasis is to move towards a financially sustainable business model – one which can attract substantial levels of social investment. Speaking after the announcement of a cash injection into the sector, Kee Chi-hing, a government advisor on social enterprise, said social enterprises should aim to turnover $HK10 billion a year.
Sustainability will be truly achieved when social enterprises learn to progress from reliance on sponsorship and voluntary work and to generate a genuinely sustainable income in their own right.
Social enterprises may be short of that goal so far, but in just a few years the sector has already achieved a great deal. As well as the social benefit, they are also serving as a source of inspiration – an alternative way of doing business. They've helped spark a renaissance in corporate social responsibility and a recognition that business can work in a more socially sustainable way.
The wheels, then, are turning. Although the road ahead may be long, the potential within this sector is enormous. It's an area of exciting growth and one that can offer plenty of lessons for business in the rest of the world.
Tom Cropper is a freelance social enterprise journalist based in the UK
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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