Social Enterprise in Asia: Context and Opportunities

Abstract

Asia is the birthplace of several successful and large Social Enterprises (SEs) such as Grameen Bank, BRAC and PDA. While extensively covered in the media, these entities are the exception rather than the norm. These SEs were, and some remain, lucky to receive unquestioned government and donor support. Not all the SEs in Asia is in the same position. Unfortunately most of the SEs are mid-sized; with neither have the unlimited access to capital nor the required recognition of their impactful work. At the same time, SEs in Asia operate within contexts that, while impossible to generalise across the whole region, provide some unique opportunities for growth. In an increasing number of instances, SEs are accomplishing the region’s socio-economic goals in both the for-profit and not-for-profit sectors. Moreover, Asian SEs are finding increasing opportunities to raise capital, in line with the emergence of an exchange or financial platform specifically for SEs, a rise in Islamic banking and Shariah compliant funds and increasing government interest in incubating social enterprises as a new sector. While SEs have had, and are likely to continue to have, significant impact on their communities, they have received little attention from academia. There is a dearth of analytical research aimed at understanding the causes and impacts of Asia’s explosion of social innovation, or of the direction such innovation is likely to take. This paper aims to provide such a comprehensive overview. In particular, this paper will contextualise the efforts to develop a methodology for measuring social impact of sustainable SEs in Asia. By defining the motivations of financial platforms, institutional and retail impact investors, government regulators, clients and operators of SEs in Asia, and how these might differ from those in Europe or the United States, this paper will not only provide a clearer general understanding of the environment in which the Asian SEs thrive and operate, it will also analyse to what ends and how different stakeholders are likely to process the information stemming from such measurement. This work will therefore provide the foundational understanding of how the flow of capital and indeed the entire social enterprise sphere is likely to develop in Asia in the years to come.