10 million reasons for the private sector to invest in social enterprise

A first-in-kind research by the Schwab Foundation’s Global Alliance for Social Entrepreneurship finds that there are approximately 10 million social enterprises worldwide, accounting for 3% of all businesses worldwide. These enterprises are distinct from traditional business in that they go beyond a focus on revenue and profit alone.

Putting people and the planet first, social enterprises are driving tangible solutions for pressing issues like climate change and poverty. The 2022 report Unlocking the Social Economy highlights the potential of the social economy, including social enterprises, to create more inclusive and resilient societies by addressing inequalities, creating and maintaining jobs for marginalized communities, adopting green business models, and leveraging digital tools to deploy distributive ownership models.

Collectively, social enterprises generate around $2 trillion in annual revenues, creating over 200 million jobs. Crucially, these enterprises align their missions with the Sustainable Development Goals, notably in decent work, climate action and poverty alleviation.

What’s striking is that half of the social enterprises are led by women, compared to a mere 20% of conventional businesses. It underscores the inherent inclusivity and diversity ingrained within these ventures, both in their structure and goals. Besides the significance of social enterprise in economic terms, they positively impact the lives of millions. The 470 social entrepreneurs awarded by the Schwab Foundation alone have already impacted more than 891 million lives over the past 25 years.

The potential of social enterprise has not gone unnoticed by policymakers around the world. Earlier this year, the United Nations General Assembly adopted a Resolution on the Social and Solidarity Economy that recognizes its contribution towards sustainable development. This came after the ILO’s resolution on Decent Work and the Social and Solidarity Economy, the OECD’s recommendation on the Social and Solidarity Economy and Social Innovation, and the EU’s Action Plan on the Social Economy.

Despite the increased interest in social enterprise, the research by the Schwab Foundation’s Global Alliance for Social Entrepreneurship highlights a significant funding need of $1.13 trillion to realize the potential of social enterprises around the world.

To bridge this need, private sector engagement is crucial. Therefore, the Schwab Foundation’s Global Alliance for Social Entrepreneurship, in partnership with Deloitte, has launched the Corporate Social Innovation Compass.

Developed with the support of over 100 members of the Global Alliance, this framework guides companies in engaging with social innovators. It presents over 10 mechanisms of engagement between the private sector and social innovators, along with tangible case studies illustrating the business benefits of such engagements. The compass also outlines the corporate social innovation journey, describing how companies can leverage their partnerships with social enterprises to transform their operations into more sustainable and inclusive models.

Anna Marks, Global Chair of Deloitte, DTTL, emphasizes the significance of this compass: “Beyond the data and strategies provided in this report, it is a narrative of hope and a roadmap for meaningful impact. The report underscores the undeniable fact that when corporations join forces with social enterprises, they do not just change the game. They help change lives, build communications, protect our planet and create a world where business success and social progress go hand in hand.”

Social enterprise, with its remarkable global presence and impact, offers a transformative path for businesses and communities alike. By embracing social enterprise principles, companies can play a pivotal role in fostering a more equitable, sustainable, and inclusive world. The 10 million social enterprises in the world are certainly open for business – a new kind of business that puts people and the planet at the centre.

This new data was surfaced by the Schwab Foundation’s Global Alliance for Social Entrepreneurship at the World Economic Forum in partnership with Bertelsmann Foundation, Catalyst 2030, Euclid Network, Social Enterprise UK, Social Enterprise World Forum and SAP.