My Take: Five Spices to Warm Up the Social Enterprise Scene
I vividly remember the feeling of apprehension and shock I felt when I was forced to shut down the physical operations of Masala Wheels – the food and beverage social enterprise that I co-founded – in start of the Covid-19 pandemic. My heart sank: there were so many people who relied on our restaurant and our food truck to make a living.
We have lost 90% of our revenue – revenue that we rely on as a social enterprise that empowers and provides support to disadvantaged and underserved communities and at-risk youth.
The pandemic has hit everyone hard and social enterprises have not been spared. But the reality is that even before the pandemic, social enterprises have been pushed aside in recent years by the push for technology, innovation and commercialization.
In 2015, the Social Enterprise Blueprint (2015-2018) aimed to raise Malaysia’s awareness of social enterprises, harnessing them in a model of social innovation that could solve some of the country’s pressing socio-economic problems.
At that time, the Malaysian Global Innovation and Creativity Center (MaGIC) was the anchor agency overseeing the implementation of the Blueprint, allowing the social enterprise ecosystem to grow and thrive. However, with the recent merger of MaGIC with Technology Park Malaysia to form the Malaysian Research Accelerator for Technology and Innovation (MRANTI), there has been a greater focus on improving the country’s commercialization rate, leaving a gap in the social enterprise development. ecosystem.
The commercialization of technology is all well and good, but what good is technology if it is not accessible to everyone?
Enter Social Enterprise: Social enterprises are cause-driven businesses that put people and profit in equal priority, channeling revenue and profits to its cause in a way that is sustainable, with a business model that operates and funds its initiatives for social good.
The spirit of social enterprise, in my view, needs to stay alive.
So when the Social Enterprise Action Framework (SEAF) 2030 was recently launched by the Prime Minister, I had high hopes. The main theme of SEAF is the integration of social enterprises and the normalization of social impact, thus contributing to an inclusive, balanced and sustainable nation. In this regard, this is in line with Malaysia’s 12th Plan which also recognizes the role of social enterprises in nation building.
With five strategic directions, 20 strategies and 45 initiatives, this is a voluminous tome, which I hope will take us all the way to 2030, but the reality is that there is still a lot missing from this picture.
Spice things up
SEAF has, no doubt, outlined some good strategies and also key enablers to achieve those strategies, but there are five ‘spices’ that will help social enterprises continue and help enable social enterprises to contribute more effectively to sustainability. social and economic growth. in Malaysia.
First, there must be a follow-up process and attention to the accreditation of social enterprises. Although this accreditation framework was launched in the previous Master Plan, the improvement of these accreditation measures was not addressed in the SEAF — not directly.
It is imperative, I believe, that this accreditation system be addressed quickly, as it would be essential for social enterprises to achieve social and economic equality among the beneficiaries they impact. Currently, according to the Ministry of Entrepreneurs and Cooperative Development, there are 414 registered social enterprises in Malaysia, of which 48 are accredited, but this needs to be further expanded and accelerated to achieve the critical mass that SEAF promises in its goals.
Second, the importance of a strong governance structure cannot be overstated. The details of this governance structure remain vague at this stage; a Council of Social Enterprises would be in preparation to provide a transparent and systematic monitoring mechanism. Since 2018, advocacy efforts have been made for the creation of an independent council, equally represented by policy makers and practitioners, and we hope this will materialize with the SEAF.
Third: Interdepartmental collaboration with clear demarcation of roles and responsibilities in achieving these goals would also be needed. The role of key players and intermediaries, both public and private organizations, is equally important in building this ecosystem.
Fourth: There must be a clear impact measurement framework and constant gap assessments conducted on an annual basis, with input from all stakeholders – both top-down and bottom-up – integrating input from social enterprises with good leadership from both the Prime Minister’s Office and also the Minister’s Office. In the United States, President Barack Obama created an Office for Social Innovation during his administration. Only with the leadership of the nation’s highest body can we see progress in social and economic impact towards achieving the United Nations Sustainable Development Goals.
Fifth, but not least, there is a central coordinating agency to bring all these “flavors” together.
For SEAF to be successful, we must recognize that for years the social enterprise ecosystem has been fragmented.
One of the main successes of the first Social Enterprise Blueprint (2015-2018) was that MaGIC was named the anchor coordination agency. However, since 2019 and for the past three years, there has been no clear go-to agency for social enterprises.
MaGIC itself had been placed under different ministries – first under the Ministry of Finance (in 2014), then the Ministry of Entrepreneurs and Cooperatives Development, followed by the Ministry of Science, Technology and Innovation . Under Mosti, its focus shifted to focus more on technology and technical matters rather than social entrepreneurship.
Therefore, having a central coordinating agency would be essential to achieve the objectives, strategies and milestones identified in the SEAF. It would be even better if such an agency was independently managed by experienced social entrepreneurship practitioners and intermediaries while being supported by the government, with an appropriate governance structure.
The challenges faced by social enterprises are constant; many social enterprises lack support from financial institutions and sufficient security to scale up their activities, and there is little support for business development to go beyond local, regional or even to enter the international arena .
Social enterprises also tend not to have market access, providing equal opportunities like all other small and medium enterprises, where social enterprises are able to tap into the full spectrum of the supply chain.
Social enterprises also do not receive enough attention or support for the adoption of technology and innovation in terms of increasing the impact of social enterprises, unlike other purpose-driven technology enterprises. lucrative.
It is good that SEAF has recognized these challenges and will work to address them.
But the goals are really ambitious.
The SEAF aims for social enterprises to provide 47,000 job opportunities by 2025, from 5,000 social enterprises. The government further intends to grow the social entrepreneurship ecosystem up to RM1.3 billion in procurement from government and industry by 2025.
It’s no easy feat to get there, and there’s a long way to go. The first steps have already been taken, but it will take political leadership, stamina and will if we really want to help social enterprises shine brightly for the good of the people.
Kuhan Pathy is a multi-award winning social entrepreneur, co-founder of the Social Entrepreneur Development Chamber, President of Catalyst 2030 Malaysia and President of the Social Entrepreneur Development Association. He co-founded Masala Wheels – an integrated F&B social enterprise to empower underserved communities – and led it through the first private acquisition of a social enterprise in Malaysia.