The COVID-19 pandemic has had a profound impact on most people’s daily lives in nearly every part of the world. Supply chains were interrupted, education was halted, jobs were lost and something as simple as a trip to the grocery store suddenly involved an array of safety protocols.
It was as if a bomb had gone off at the center of society, sending out shockwaves that affected most of the things we took for granted, like being able to see our loved ones or go to work. In some areas of life, the pandemic also acted as a magnifying glass, amplifying problems that already existed such as inadequate health services, social isolation, and unsustainable working conditions. And while the pandemic has led to significant loss of life, it has also triggered some unexpected changes to our society, which give reason to have hope.
Many businesses were forced to either halt trading temporarily or permanently close during covid restrictions, but 2021 gave new life to the global social enterprise sector. In the United Kingdom, according to figures from Social Enterprise UK, over 12,000 social enterprises were founded in 2021 alone. A global survey led by Deloitte revealed that companies were beginning to centre human well-being into their business models. The focus has shifted from surviving to thriving, and a new business mindset is emerging. The aim is no longer to solely generate profit, but to also create a positive social impact.
What Is Social Entrepreneurship?
Social entrepreneurship is a philosophy, not a business model. A business that exists as a social enterprise is motivated by a mission to better its community and reinvest its profits in a socially productive way. Like a traditional business, it still aims to generate revenue, but a certain percentage of that is often used to give back to the community. Whether it’s a café or a tech company, businesses in any sector can be social enterprises if their central aim is to be a force for good in society.
Social enterprises step into areas of perceived social failure, filling the needs gap and creating solutions. A socially oriented café might double as a community centre, providing a free venue for community interest groups, youth programs, and support groups. You might decide to open a clothing company that donates a certain amount of its proceeds to a charity. Alternatively, you could set up a restaurant that contributes to former convict rehabilitation by training and hiring them as kitchen staff.
Regardless of sector or industry, what ties social entrepreneurs together is a mission for positive social change at the heart of their business operations.
Finding Purpose During The Great Resignation
Social entrepreneurs have always existed, but why did they begin to increase in number during the pandemic? The pandemic forced both companies and people to make many unexpected adjustments to their lives, which has triggered a societal change on a mass scale. People’s experience of the pandemic has differed greatly according to their unique circumstances, but for many, it forced them to reevaluate their lives and priorities.
Two Sides To Every Story
Certain workers were forced to take long periods off work, in many cases for the first time in their adult lives. This compulsory pause in their working life allowed them to assess their happiness. Finally experiencing time and breathing space to think, they realised that they were not satisfied with the daily grind. For some, the pandemic forced them to confront their own mortality and the limited time they had available to leave their mark on the world. For others, they realised they wanted more time with their families and friends and less time sitting at a desk.
On the flipside, many frontline workers experienced exhaustion and even harsher working conditions than usual. Working extremely long hours, these burnt-out nurses, doctors, health-care providers, and carers no longer felt they could sustain their unhealthy work/life balance. This collection of shared experiences has triggered what is now termed as “The Great Resignation”.
2021 saw an unprecedented number of people leaving their jobs. By November 2021, a record 4.5 million people in the US decided to hand in their resignation. Quit rates usually decrease during periods of economic hardship, so this trend of rapidly increasing worker turnover was not anticipated. Many quitters cited a lack of empathy on the part of their employers, and a desire to permanently work from home as the motivation behind their resignation. It has become clear that workers are looking for change.
Startups Are Benefiting Greatly
This friction between workers and employers has directly boosted the startup economy. A survey by Zapier revealed a 50% increase in business creation across the US, with 69% of respondents citing a desire to contribute to their community and society as a motivating factor. Seizing the opportunity to forge a path with greater purpose, free from the restraints of corporate management, many talented individuals decided to finally set up their dream businesses with a goal to create positive change.
How Social Entrepreneurs Will Help Rebuild Economies
Even in the early days of the virus, economists predicted that COVID-19 would have dire consequences for the global economy. By the third quarter of 2020, seven of the world’s largest economies had taken a significant hit. The UK was the worst affected, experiencing a growth rate of a negative 9.6% (-9.6%) compared to the previous year. We are now entering our third year of the pandemic and it’s time to rebuild and heal the economic damage while continuing to live with emerging variants.
With the hyper-capitalist focus of entrepreneurialism becoming less prominent, social enterprises are beginning to take the lead. Current societal trends have demonstrated that people don’t want to go back to how life was pre-pandemic — they want to rebuild a better future. From environmentalism and sustainability to mental health and well-being, entrepreneurs are founding startups motivated by a wide variety of altruistic causes.
Social enterprises are well-positioned to rebuild the global economy because they can bridge the gaps and fulfill the needs of their local communities where governments have failed to do so. The most disadvantaged and vulnerable segments of society were the worst hit by the pandemic, so it makes sense that the first step to create a more resilient future should entail uplifting these communities.
While governments continue to direct their focus towards fighting the ongoing fire of the global pandemic, social entrepreneurs can turn their sights to more specific issues affecting their direct communities such as homelessness, youth unemployment, gender and racial inequality, poverty, and food insecurity.
Social Enterprises Demonstrate Resilience During Crisis
Resilience — it’s a word we see thrown around now more than ever concerning business survival mid-pandemic. It’s the foundation of any thriving economy, so how can we foster more resilience in our society? Businesses that survived the mass-closures of the past two years were the ones that operated flexibly, adapted quickly and maintained a purpose in a rapidly changing market.
In a global research initiative carried out by the British Council towards the end of 2020, only 3% of social enterprises surveyed expected to close within the following six months. Their findings painted an overall optimistic snapshot of the future of social enterprise globally and indicated that businesses with a social motivator were faring better than traditional businesses during the ongoing crisis.
Another study by the New Philanthropy Capital, examined 153 social enterprises in the UK to compare any advantages they may have over both traditional business structures and charity organisations. Their results suggested that socially motivated businesses were more likely to thrive in the current climate. They contributed their resilience to a variety of factors — namely that their funding came from diverse sources. Interestingly, the data showed that these mission-based enterprises were continuing to work in the UK’s most deprived postcodes, creating growth where most needed.
No matter how the pandemic changes our lives, basic social needs such as food security, access to education, social support and stable living conditions will always exist. Perhaps social enterprises have demonstrated such resilience because they are not simply driven by profit, but rather the desire to fill a need within society. The pandemic may have been a grim experience for many business owners forced to shut their doors, but the future looks bright for social entrepreneurs paving the way towards a more stable and resilient economy.