11M social enterprises exist globally – and all share a similar story

A first-of-its-kind report into how many social enterprises there are worldwide has just been released, revealing many similarities exist between businesses in the sector – no matter where in the world they are based.

It has long been a figure that those in the social enterprise sector wonder: just how many social enterprises are there around the world? Now we know, approximately 11 million.

The figure comes from what is the most comprehensive data ever gathered on the sector, based on surveys from 27 countries and territories representing 40 per cent of the world’s population.

In the report foreword, Dr François Bonnici, director of the Schwab Foundation for Social Entrepreneurship and head of social innovation at the World Economic Forum, said this “historic report demonstrates how social enterprise is one of the largest movements of our time”.

“It does not have a visible leader or figurehead, or feature media-made unicorn successes, but it is rather driven by a movement of millions of people developing the kinds of companies we need in the 21st century,” he said.

One of the big takeaways from the report, published this month by the British Council and Social Enterprise UK, is the many similarities in how these businesses are being run and the similar challenges they face, regardless of where they are based.

The data from More in common: The global state of social enterprise suggests the reason for this is shared common experiences and situations across countries based on similar histories, origin stories, work cultures and geographies.

“The study shows [these businesses] are principally directing surpluses or profits towards their mission, taking a wide variety of legal forms, with diverse objectives but often working to improve a particular community,” the report reads.

The study acknowledged that language, terminology and definitions looked different in different places. However the report said in the majority of countries, social enterprises were most commonly understood to exhibit three characteristics:

• a significant or the greater proportion of income earned through trading, selling goods and services in markets;
• a commitment to a primarily social or environmental mission above the pursuit of profit; and
• principally directing surpluses or profits towards that mission.

Examples of similarities in social enterprises around the world include working for a wide range of beneficiaries but often serving particular groups of people and balancing social and financial imperatives whilst taking steps to measure their social impact.

Research found that in almost every country and territory, social enterprises were more likely to be led by women than business more widely. 

Kyrgyzstan and Thailand have the highest proportion of full-time women staff, with 63.6 per cent and 62.4 per cent respectively, while Bangladesh and Ghana have relatively lower proportions of female full time staff, around 33 per cent and 37 per cent respectively. Similar patterns were evident for part-time staff.

The report also found that these businesses are often young, “founded in the last few years”, and quite often small although not exclusively. The average year of establishment across all countries is 2010.

All share the same struggle of attracting grants and investment from a diverse range of sources, including government, friends and family, and financial institutions.

That said, social enterprises in Bangladesh and Algeria received a relatively low proportion of their income from grants. Almost all survey respondents in these countries (91.3 per cent and 97 per cent respectively) report they received less than 25 per cent of their income from grants.

Indonesia and Jamaica were at the other end, with 43 per cent and 52.1 per cent of social enterprises in each country receiving up to 25 per cent of their income through grants.

Many social enterprises struggle with making a profit, but when they do they direct it to their cause of choice.

The research also explored the range of players in the social enterprise support ecosystem. 

In some places, it is very early days, while in others this ecosystem is more mature. What is consistent, is whether social enterprises were operating in a western country or a developing economy, the space was equally “messy, dynamic and growing.”

The researchers looked into support systems in place for social enterprise, focusing on  policy makers, from governments to think tanks, international agencies and incubators, accelerators and coworking spaces, often with a focus on start-ups and digital technology.

The trend throughout the research showed these much-needed supports were almost exclusively concentrated in major cities, even if a significant proportion of social enterprise activity was taking place in more rural or peripheral areas.