Wednesday, February 23, 2011

Social business could play a big role in the Middle East and North Africa

With the political change sweeping through the Middle East, people are beginning to ask "now what?" If the protests stem from a lack of an economic opportunity and a lack of a political voice, what is the best way to give to those things to the masses.

Suzi Sosa of the RGK Center for Philanthropy and Community Service at the University of Texas at Austin says that social business could be one of the answers. The dual aims of profit and social benefit that these type of businesses bring can help give the people of the Middle East what they need. Soza's latest op-ed piece was found at INC Magazine.

Social entrepreneurship can be a powerful solution for the MENA (Middle East and North Africa) region. By blending both financial sustainability (profits) with a prioritization of social impact, social enterprises will contribute to both economic revitalization and social reconstruction. Social entrepreneurship is also particularly well suited to youth. It not only taps into the desire for independence and self-actualization, but it is also relevant for a generation whose worldview incorporates a sense of responsibility that goes significantly beyond immediate family and self.

Social entrepreneurship provides a "third way" that can productively balance the desire for greater social equity with the need for rapid economic growth. At the macroeconomic level, social entrepreneurship deploys a stakeholder model that not only provides more robust checks-and-balances in the system but also more fairly distributes profits and benefits and adds greater emphasis to long-term planning. For example, in social entrepreneurship, instead of just focusing on shareholders, the enterprise governs itself by taking into account a network of stakeholders, including customers, employees, suppliers, investors, the community, and the environment. In the MENA region many states governed from a semi-socialist approach while informal economies practiced unregulated capitalism. Social entrepreneurship can balance wealth creation with equity and fairness and can provide greater accountability without the overbearing bureaucracy and regulation that inhibits growth.

Finally, social entrepreneurship is a powerful solution because it contributes to the reduction of social and environmental problems without having to rely on charity or public funding. For example, in Egypt there are virtually no public resources to fund social programs. Currently, Egypt's public debt is more than 80 percent of GDP and government spending on education is less than 4 percent of GDP. The national GDP per capita is a meager $6,000 per year, leaving more than 20 percent of the country living in poverty. The only hope of achieving sustainable, scalable solutions to pressing social and environmental problems is to create enterprises that can provide for the public good while being financially sustainable and scalable on their own.

The MENA region is already home to some impressive social entrepreneurs. Synergos recently recognized 22 Arab World Social Innovators, including Kamal Mouzawak, a Lebanese social entrepreneur who founded two enterprises, Souk el Tayeb and Tawlet—both focused on the economic empowerment of rural farmers by providing profitable opportunities for them to sell their goods. In the Palestinian territories, Mohammed Kilany and Lana Hijazi founded Souktel, a social enterprise that leverages mobile networks and SMS messaging to connect unemployed Palestinians to job opportunities for an affordable monthly fee.

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