Social enterprises, though having differing definitions and constantly evolving, are emerging everywhere around the globe. Researchers seek a deeper understanding of the social enterprise phenomenon. Recently, a paper by Jacques Defourny and Shin-Yang Kim called Emerging models of social enterprise in Eastern Asia: a cross-country analysis presents the current existence of 5 social enterprise models in East Asia. The paper also highlights how social enterprises and challenges in East Asia may differ from that of Western European. Despite diverse types of social initiatives, each can be considered to varying degrees as social enterprises.
The countries included in this study are China, Hong Kong, Japan, South Korea, and Taiwan. These countries can be compared because of different geo-political situations yet examined together as they share similar socio-cultural backgrounds.
A unique feature these countries share is increased unemployment rate following the 1997 financial crisis. Income inequality and poverty problems have grown steadily. An especially crucial challenge for these East Asian countries is the growing population of “working poor” in the years unemployment rate started to fall. As a result, the emergence of social enterprises is closely linked to the socio-economic changes of the 1990s as early attempts to cope with social problems. The last decade saw social enterprises spread rapidly thanks to a combination of changing regimes, public policy, increasing CSR and foundations set up by for-profits, and consequences of globalization. Currently, only South Korea has enacted a specific law in 2006 to promote social enterprises and give it a common definition.
Today, it is possible to identify at least 5 broad categories of initiatives as social enterprises. Some social enterprises may also belong to more than one category.
Model A: Trading Non-profit Organization
NPOs looking for other sources of income or seeking to achieve financial sustainability through the delivery of social services (other than work integration)
Model B: Work Integration Social Enterprise
Provision of (stable or temporary) job opportunities with training and/or employment services
Model C: Non-profit Co-operative
Collective self-employment and innovative responses to unmet needs based on co-operative tradition
Model D: NPO-FPO partnership
Involvement of private companies (or company foundations) to support NPOs or joint initiatives with a social mission
Model E: Community Development Enterprise
Multi-stakeholder partnerships (NPO, FPO and public) promoting participatory local development
A final element to examine is how social enterprises differ from the East and the West. A particular argument of the research paper is that the overall landscape of social enterprises in East Asia is influenced strongly by state policy. Social enterprises are also becoming an increasing role in civil society. The Western European landscape of social enterprises relies on market mechanisms. They stand at the crossroad between market, public policies, and civil society. Both East Asian and Western European social enterprise landscapes are witnessing a significant involvement of co-operative movements.
Contemporary challenges in Western Europe and North America are the need for environmental protection, the fight against unemployment and social exclusion, fast aging population challenges, immigrant integration challenges, search for fair trade among rich and poor countries, as well as better quality food products. Innovative solutions are sought on a variety of organizational structures as well, namely co-operatives, NPOs, and partnerships with foundations, private companies, and public authorities.
Information from Emerging models of social enterprise in Eastern Asia: a cross-country analysis by Jacques Defourny and Shin-Yang Kim in Social Enterprise Journal Vol. 7 No. 1, 2011.
