Social Entrepreneurship in the Middle East

Social entrepreneurship is a new trend that has taken the world of business by storm. Across the globe, social entrepreneurship (SE) continues to advance and seems to be increasingly recognized as a welcome addition to the traditional business lexicon, given its immense potential for shared value creation. According to Gregory Dees, who is credited as the father of social entrepreneurship and to whom we dedicate this book, given his untimely passing earlier this year, “A social entrepreneurial organization places a social mission as the priority over creating profit or wealth, tackling social issues with a business-like approach” (Dees, 2001). SE thus brings much needed entrepreneurial energy into the social space, harnessing the power and ingenuity of business to generate positive social innovations and social change across the world.

This chapter gives an overview of social entrepreneurship, both as a concept and as a practice in the Arab World. It has two main focuses: to interrogate and define the term “social entrepreneurship” and differentiate it from other, related, concepts; and to demonstrate why social entrepreneurship is an essential tool for solving social challenges, which has particular relevance for the Arab World in the light of the “Arab Spring” (or Arab Awakening).

Since the popularization of the term in the 1980s and 1990s, the concept of “social entrepreneurship” (SE) has continued to attract a significant amount of attention from a diverse set of actors. The community includes entrepreneurs, investors, educators, and policymakers who share a commitment to achieving positive social impact using innovative and financially sustainable methods. In parallel, theoretical and empirical research in this area has proliferated, engaging scholars across fields such as business and management, social sciences, organizational studies, and public policy.¹

Many communities and nations across the Arab World face compounding social and environmental challenges. The rising levels of unemployment, illiteracy, poverty, corruption, and inequality coupled with increasing resource dependency, high rates of pollution, water shortages, and ensuing conflicts have sown many seeds of disenchantment across the region. More importantly, those trying to usher in positive change on any single one of these challenges appear to be faced with superhuman barriers; the underlying complexities and structural considerations make direct action with scalable results a near impossibility.

As active members of Middle East and North Africa’s (MENA) emerging social enterprise community, our beliefs regarding the potential of social enterprise in the MENA region are optimistic based on empirical observation of the convergence of different stakeholder efforts (such as strategic philanthropy, corporate social responsibility (CSR), public–private partnerships) towards social enterprise models. Not only do we believe social enterprise is necessary to create sustainable social impact (in particular where philanthropy or economic development has failed to do so), but we also appreciate its business potential and its resilience to market volatility. Nonetheless, through our work at C3 — Consult and Coach for a Cause¹ — we have experienced, first hand, some of the challenges that social entrepreneurs encounter when launching and growing their organizations.

This chapter looks at the combined regional curse of high unemployment and high levels of youth disengagement and seeks to establish the extent to which “enterprise” and specifically “social enterprise” can provide a common solution for both. While particularly entrenched in the Arab World, neither youth unemployment nor disengagement is unique to it, suggesting that we first need to look more broadly at what ails global socio-economic progress and how multiple failures to deliver equitable prosperity — partly, one could argue, due to the breakdown of modern capitalism — have fuelled and inspired the world of social innovation.

The main purpose of this chapter is to examine how we can maximize the public benefit of entrepreneurial activity and increasingly engage the strengths of the private sector in boosting social impact in the Middle East through growth of scalable social enterprises. The chapter examines challenges to social enterprise scaling in the Middle East and offers recommendations for enhancing the scalability of social impact and social enterprises through using tools and adaptations of tools that have been developed for use in for-profit entrepreneurship and that address specific challenges to social enterprises in the region.

The practice of impact investment is becoming increasingly prominent. The Monitor Institute posits that in the past few years, hundreds of new impact investment funds with billions of dollars in potential investments have appeared across the globe.¹ According to a 2012 survey of over 100 impact investment funds by the Global Impact Investment Network (GIIN), participating funds committed US$8 billion in capital to impact investments and planned to commit another US$1 billion in the following year.²

Impact investing refers to the practice of investing with a dual objective: generating positive social and/or environmental impact while also achieving a financial return.¹ Impact investments are often characterized by (i) the pursuit of an identified social and/or environmental impact, often with the view of benefiting an under-served or excluded segment of the population, (ii) the measure of the impact post-investment to be able to track progress, (iii) a longer term approach to the investment cycle (impact investing is also sometimes described as “patient capital”), and (iv) an innovative approach to structuring investments (impact investing is often considered part of a broader “innovative finance” field). Although there is still much debate around terms and definitions, the concept has gained considerable traction in recent years and moved to the centre stage of the discussion on how to tackle some of our most pressing challenges with limited, sometimes decreasing, resources.²

Social enterprises are full of economic and social promise for the Middle East. Social entrepreneurship raises hopes in difficult times for the Arab World. The Middle East and North Africa (MENA) region suffers from the highest unemployment rate worldwide (ILO, 2014). Egypt is undergoing a severe economic crisis (World Bank, 2014). While 2.5 million refugees have fled Syria to neighbouring countries and North Africa, 6.5 million have been internally displaced in March 2014 (OCHA, 2014). Iraq, under reconstruction, has been plunged into chaos by ISIS.