The district of Smichov – known today as Prague’s Silicon Valley – lies southwest of Prague’s old town, right beside the river Vltava where the infamous Charles Bridge crosses.
In Smichov, companies that have claimed their territory include Skype, Google, and startup incubators and accelerators such as StartupYard and Node5.
Social innovators are also making their mark in the area.
The Hub, a collaborative space and community for social innovators which began in London in 2005, has come to Prague. Located in Smichov, Hub Prague was founded in 2010 by Petr Baše, Zdeněk Rudolský, Jakub Mareš, and Petr Vítek.
Why Hub Prague?
“Our common idea was that society would need something to connect the good aims of NGOs and the effectiveness and ability of corporates,” said Mareš.
Before starting Hub Prague, the four co-founders had experience working for non-governmental organizations such as Amnesty International as well as working in the corporate sector. Mareš worked at PricewaterhouseCoopers.
What they noticed was that unlike Western Europe, the Czech Republic lacks even a co-working space for people to use.
So in 2009, the four of them started looking for a suitable space in Prague and found the current location in Smichov. With support from the foundation of one of the largest Czech banks, they invested 4 million crowns (approximately $200,000) through private financing to found Hub Prague.
Hub Prague’s operations
Today, similar to other co-working spaces around the world, Hub Prague relies on three sources of income: membership, meeting room and conference space rentals, and office space rentals.
But Mareš reveals that many of Hub Prague’s members do not work on social innovation projects or things that he would define as something interesting, done differently, or good for the society and nature.
“Here it’s different than in Western Europe when the first Hubs came into being. When Jonathan Robinson started the first Hub, there were dozens of similar co-working spaces connecting people. He wanted to do something different so when he founded The Hub, he said it’s a space for social innovators and social enterprises.”
“We were in a different situation,” said Mareš. “There were a few co-working spaces shared by six to ten people. So we started the first big co-working space and that’s why we have many normal businesses here.”
Mareš estimates that about 75 percent of Hub Prague’s operations and members fall outside the social innovation and social enterprise space. He credits traditional businesses for allowing Hub Prague to be sustainable, and for bringing something to the table.
“It’s good that we have a majority of normal businesses here for two reasons. First it makes Hub Prague sustainable and second, they mingle.”
Social Impact Award
Three years later, other co-working spaces have emerged throughout the city and Hub Prague wants to expand the social enterprise and innovation section of the business pie. To do this, they came up with an idea last year to launch an annual Social Impact Award (SIA).
Open to university students in Austria, the Czech Republic, Romania, and Slovakia, the SIA is designed to encourage and help those who want to try to start a social business. Winners of the SIA are provided with a stipend and membership at The Hub to grow their ideas. Last year, the winners were Pragulic, a blossoming social business that employs homeless people to give walking tours of Prague.
Social enterprise in the Czech Republic
The fact that few of Hub Prague’s members work in the social innovation space gives an image of the sector in the Czech Republic.
To understand its slow growth, one has to look no further than the term itself. When translated into Czech language, “social enterprise” gives a bad connotation because of the word “social”. Up until 1990, Czechoslovakia was official called Česká socialistická republika or Czech Socialist Republic.
“People think social enterprise is connected with state support for people who can’t earn money themselves,” said Mareš. “What can be a challenge is the definition of social enterprise and the understanding among the society of what it is.”
In addition, social enterprise in reality is often narrowly tied to businesses that employ disadvantaged groups.
“We had discussions on what’s social entrepreneurship here in this country, and it’s perceived as businesses who employ people who have difficulty getting employment. It’s very narrow, and we say no it’s everything,” said Mareš.
Agnese Lesinska, who has done research on social entrepreneurship with a Latvian think-tank, also found that certain groups view social enterprises as merely businesses that help disadvantaged people get employment. A majority of Latvia’s current social enterprises are considered work integration social enterprises.
When analyzing how this narrow view came about, Mareš explains that in the Czech Republic, there are two main uses and players of social enterprises trying to promote inclusion into the workforce. One of which are NGOs who want to help their target group by generating their own income independent of state.
“It’s a very big problem,” said Mareš, “because NGOs are very bad at doing business. They are able to get money from the European Union, they invest into coffee shops, employ three disabled people and maybe two others to take care of the business, but when money runs out, the project is finished. They have a big problem to continue to sustain. So usually they vanish. It’s the same anywhere in the world.”
“95 percent of NGOs think that social entrepreneurship is employing difficult-to-employ people,” added Mareš.
The second group is entrepreneurs who have never heard of the term social entrepreneurship, but employ people who would have difficulties getting employment.
What’s true is that social entrepreneurs have long been characterized as implementers of radical ideas for society, and that a new generation of social entrepreneurs is putting their ideas into running profitable businesses that address issues such as employment.
For Mareš, the uses of social enterprise are still subject to untapped potential beyond addressing employment. He hopes to see more people engaged in the sector, especially corporate types who have a personal connection with certain issues and who may not be content with their work.
“What we still don’t have much of are people who have the biggest probability of success. These are people who are personally engaged in the topic and who have business skills.”