In late 2016, the British Council (Pakistan) partnered with Sustainable Development Policy Institute (SDPI) to launch a study on ‘Social Enterprise Landscape in Pakistan’. That launch informed that there were at least 19 national policy frameworks, policies and programmes, 12 statutory laws and regulatory frameworks and about 5 intellectual property laws relevant to social enterprises, across federal and sub-national governments and their various institutions. To make all these work towards growth and development of social enterprises required a coordination job of Himalayan proportions. No surprises, therefore, that to-date, progress on that front has made snail’s pace look like the speed of light.
Undeterred by the slow march of progress, the BC-SDPI partnership has produced another report. It is called: Social Enterprise Development in Pakistan: Way Forward. This report talks about the specific challenges and solutions to foster social enterprises. One hopes federal and provincial governments and their institutions will take note.
However, that the report does not see the absence of accounting & audit framework to asset social impact, and weak implementation of right to information laws as a challenge to growth in social enterprises is rather strange. The former may be a bit farfetched like social impact bonds. But the latter is critical. If social enterprises don’t have access to data and information pertaining to location-specific social problems, then bottom-up mushrooming of small, innovative social enterprises will remain a pipe dream. (See BR Research’s ‘Social enterprise in Pakistan: a 120-year dream’, Nov 15, 2016)
The key question to ask is what is our collective imagination of social enterprises. Will social enterprises be large scale, top down organisations funded by government or financing arms of multilaterals? Or are they small innovative firms started by young entrepreneurs, which may or may not scale up? The latter seems more plausible. To expect the likes of Goldman Sachs and Exon Mobile to wake up tomorrow morning and pronounce their faith over social enterprises is futile. So is the expectation that hordes of mid-career or senior professionals will turn over a new leaf – some may, but a majority won’t. And that’s understandable since their opportunity cost is too high.
The real growth potential in social enterprises comes from the young lot; 15-year onwards. An 18-year old university going student, who has already been exposed to the concept of social enterprises in his high school, has far less opportunity cost to try address a local-level problem through her innovative ideas, which may be with or without a mobile app. (See also Want entrepreneurship? Change mindset! June 26, 2019)
To this end, business schools in Pakistan would do well to develop a module on social enterprises as a compulsory course for all its business and economics students. The reason is two folds.
First, the opportunity cost to experiment is low when you are student or have just left the university, whereas the will to experiment and those warm notions of passion for society or country is also relatively high at that stage. Later in life, the reality hits them, and they all want a job at a bank or at a multinational company. So get them when they are young. Second, there are a lot of conceptual or theoretical confusions about social enterprises that need to be sorted out. For instance, how does one reconcile different motivations: profit maximization versus welfare maximization? Questions like this need to be researched on at academic level.
Theoretical deliberations aside, be assured that social enterprises is the direction the developed world and is heading to. Again, big boys of old school won’t necessarily change. But the direction is very clear. Speaking at the launch of the Global Entrepreneurship Summit in The Hague last month, Dutch Prime Minister Mark Rutte spoke about the role of business in tackling major global challenges.
“Climate change, food production, connectivity, energy and health. It is crystal clear that society is your next big customer. It is clear that sustainability is by far the largest business issue of our time. And for that, innovation is crucial.” Nearly 2000 entrepreneurs, investors and representatives of government organizations from 134 countries attended that moot, and most nodded in agreement.
Price signals and ease of doing business covered in BC-SDPI report are important. But mindset is the single biggest underpinning factor. Hopefully, the British Council and the SDPI will explore this theme in their next round. And for those who think social enterprises are cute ideas or too cute for Pakistan, think again. The world has not waited for Pakistan before; it will not in the future.
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