What Drives Young Adults Towards Social Entrepreneurship?

By

Prethiba Esvary

12-08-2016

9 min read

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Moving against the current by doing the right thing

On July 8, the world mourned the passing of Abdul Sattar Edhi, Pakistan’s most revered philanthropist and human rights activist. The Edhi Foundation – which was run by him, his wife and his four children – is one of the biggest welfare organisations in the world, with women’s refuges, orphanages, mental health clinics, and food kitchens peppered throughout the globe.

Born in 1928, Edhi grew up in Gujarat taking care of his mother who was paralysed by stroke. The partition of India in 1947 forced him to move to Pakistan, where he planted the seeds of his global foundation by placing benches on the side of the pavements for poor sick people to rest on, and gathering volunteer medical students to treat them.

He later transformed a pickup van into an ambulance to rush poor people to nearby hospitals. This later expanded to an ambulance service with 1,500 vehicles, whose efficiency rivalled that of many state-owned hospitals around the world.

He was known to have said, “No religion is higher than humanity.” His ambulance and other services provided aid to anyone in need without discriminating race or religion – a core principle that Edhi lived by.

Edhi was not alone in his quest for social impact. Today, thousands are engaging in a global movement called social entrepreneurship, where they build and grow organisations that work towards changing their societies.

For life-changing lessons from Edhi, click here.

What is it, really?

Rather than being solely profit-driven companies, social enterprises are organisations that aim for a higher cause. It could be helping the needy, caring for disadvantaged communities, preserving a cultural heritage, producing eco-friendly products or building a more sustainable environment.

People-switch-to-social-entrepreneurship-in-a-pursuit-of-a-higher-purpose.

The term “social entrepreneurship” made its way into popular vocabulary when Bill Drayton used it to describe the company he founded in 1980, Ashoka. Inspired by the works of Mahatma Gandhi and the Civil Rights Movement, Ashoka was set up to aid individuals who are passionate in creating social change to realise their goals. Nonetheless, “social entrepreneurship” fittingly describes many movements that were founded before the term gained widespread popularity.

Recent studies have found a rising trend among Malaysian youths in this sector. From 2014 to 2015, the Malaysian Global Innovation and Creativity Centre (MaGIC) conducted the Social Enterprise National Survey. The study revealed the tremendous pace in which social entrepreneurship has grown in recent years.

According to the survey, 64% of Malaysian social enterprises were set up in the past six years, with 26% of them being founded only a year or less prior to the survey. The study shows that social entrepreneurship is a growing phenomenon mainly driven by a younger, vibrant generation.

Seeking a higher purpose

Self-actualisation

Humans generally seek to fulfil the higher needs after the lower ones have been satisfied, until they reach the highest point which is self-actualisation.

The renowned psychologist, Abraham Maslow, said that human needs can be thought of as a multi-layered hierarchy. These layers consist of the following, from lowest to highest order: 1) Physiological needs, like food and water; 2) Safety; 3) Love and belonging; 4) Self-esteem; and finally 5) Self-actualisation.

Humans generally seek to fulfil the higher needs after the lower ones have been satisfied – until they reach the highest point which is self-actualisation. Self-actualisation is a state of transcendence, where a person realises his or her full potential as a human being. Self-actualisation is the experience of a meaningful life. Some people achieve this through contributions in the arts and the sciences. Some do so by leaving behind legacies they can be proud of.

In recent history, there has been a sharp shift in society. Hunger, disease, poverty and violent conflict have been significantly reduced compared to other periods in human history, with advancements in science and human rights. Education has been more widely available. With the spread of democracy and free-market capitalism, more people have become empowered politically, economically and socially.

As people living in modern, urbanised societies need to care less and less about the lower needs, there has been an increasing concern for those who have been marginalised from such development.

When asked by MaGIC’s survey about what drove them to run a social enterprise, 60% of respondents said that they wanted to contribute to creating more meaningful and tangible social impact. The majority – a whopping 97% – of people engaging in this sector have previously been employed, either in the corporate sector or as social workers.

They have given up a comfortable and financially stable life to pursue a cause that is meaningful to them. These include individuals who are disenchanted by corporations and the pursuit of quarterly bottom lines. They may see little positive impact coming from the work they are doing in the communities they serve.

Scott Harrison, who founded charity: water, exemplifies this pursuit of meaning. He left behind a glamourous life as a bar promoter in New York after experiencing “spiritual bankruptcy.” Joining the humanitarian group Mercy Ships, he landed in West Africa where he served as a volunteer.

His perception of the world changed after witnessing children who suffered from severe and deforming diseases caused by unclean water. Harrison set up charity: water which collects funds to provide clean water to rural communities who need it.

Doing good where others have failed

Social entrepreneurship also often thrives in places where governments have either failed or are absent to provide for the basic needs of disadvantaged communities. Besides Pakistan as we have seen, Bangladesh is the cradle of some of the most prominent models for social entrepreneurship.

Bangladeshi economist, Muhammad Yunus, wanted to create a bank that provided small loans to the poor. He realised that poor rural folk who needed to borrow money were refused by conventional banks. Low returns and low probability of repayment among the poor convinced conventional banks to deem such loans unprofitable.

Muhammad Yunus

Professor Muhammad Yunus. Photo taken from University of Salford Press Office on Flickr and is copyright material under the Creative Commons license.

Muhammad Yunus thus founded the Grameen Bank, an innovative “microcredit” organisation. By combining his knowledge and experience in economics with a lot of trial-and-error experimentation among villagers in Bangladesh, Grameen Bank became a success story that is widely imitated.

Muhammad Yunus was later awarded the Nobel Prize for his contributions to helping poor villagers launch their small businesses. Today, the microcredit banking model has spawned numerous branches and offshoot ventures across the globe.

Disrupting ‘business as usual’

Although successful social entrepreneurs are revered for their charitable deeds, an often overlooked trait is their tendency to be mavericks in their industry. Individuals who become social entrepreneurs have a strong desire to bring about change even if it means stepping on some toes, going against the grain, or making others reconsider deeply held assumptions.

Driven

Yvon Chouinard, one of the earliest proponents of the movement, embodies this non-conformist attitude. From a young age, Chouinard has had a deep connection with nature. He would spend his time going fishing, exploring the woods or climbing mountains, to the detriment of his studies.

After his initial success running a business selling climbing tools, he went on to start Patagonia in 1973, a company that sells clothing suited to rugged, outdoor activities. Being a self-described “reluctant businessman” who despised ecological damage, Patagonia started pioneering many technological breakthroughs primarily aimed at producing more environmentally friendly, durable and multi-functional outdoor clothing.

At a time when social entrepreneurship was a novelty, Patagonia made people realise that a business model focusing on creating social impact could compete alongside traditional corporations. Patagonia further proved critics wrong after it was able to survive a crisis that almost led to its bankruptcy in the 90s.

Patagonia implemented many practices that were considered unorthodox for its time – practices that were believed to impair a company’s profits. The company meticulously measures environmental impact and adjusts its strategies to minimise harm. It allows employees to take time off work, grab a surfboard and hit the waves. It has also created some of the best parental leave policies before such policies were popular in traditional corporations.

In his book Let My People Go Surfing, Chouinard described the philosophy behind his policies, which boils down to “avoiding unnecessary harm.” Looking away from American corporate culture, he considers himself deeply influenced by the Iroquois tradition of thinking seven generations ahead.

When the Iroquois people hold a council to decide on matters pertaining to the tribe, one council member would play the role of a tribesperson living seven generations from the present. His job is to question the other elders on how their decisions would affect the future and what they would do to make up for it.

Social entrepreneurship in Malaysia: What does the future hold?

Although their sole aim is not to meet short-term sales targets, social entrepreneurship is championed by individuals with entrepreneurial attributes such as leadership, perseverance, creativity, proactivity, results-driven, and the ability to manage risks. Edhi did not acquire 1,500 ambulances in a day. He built his foundation over a period of nearly 70 years, persistently accumulating small successes as the years went by.

People who are attracted to social entrepreneurship are extremely dedicated to a cause and possess the grit of entrepreneurs in other sectors. The intense desire to do purpose-driven work offsets the burden of running a social enterprise.

Thinking

MaGIC’s study revealed the bitter challenges faced by these entrepreneurs. In Malaysia, six out of ten social enterprises have unpredictable revenues and more than half have not recouped the costs of running their organisations.

Ian Hall, founder of Arkitrek, recalls a time when the company hit a wall with a project that was too big to complete on time within the given budget. “It would be melodramatic to say that this project might bankrupt the company, but it felt like that at times,” he said.

Arkitrek is a company that creates fine architectural designs inspired by nature for rural communities in Malaysia. The perseverance and professionalism of the team soon brought them through.

Aside from limited funding and financial instability, the study also found that social enterprises in Malaysia have problems finding talent to ensure sustainable growth. Despite growing interest in the sector, most people are still in mainstream corporate or government jobs. Unlike in more mature markets for social entrepreneurship such as the United Kingdom, less attractive salaries and lower job security deter the average Malaysian from joining this sector.

However, the talent shortage is counteracted by the fact that social entrepreneurship attracts people of diverse backgrounds. MaGIC’s survey revealed that diversity in leadership positions is more pronounced in the social enterprise scene than in any conventional sector. Women, youths below 30, and people from disadvantaged backgrounds stand a better chance of following career paths towards leadership positions in social enterprises than in conventional sectors.

The study also revealed that the public’s perception of the sector is a top concern among respondents. Social entrepreneurship straddles between the conventional dichotomy of “for-profit” and “non-profit.” When seeking funding, some social entrepreneurs find it difficult to justify why their businesses are labelled as for-profit rather than non-profit, which drives many to misconstrue their motives.

This, too, is taking a turn for the better, as various initiatives have been set up to support young social entrepreneurs. Organisations like MaGIC and Shell Malaysia (through its Sustainable Development Grant), are providing various forms of assistance and recognition to those who want to bring positive change.

Bringing it all together

With growing enthusiasm among youths to further a good cause, social entrepreneurship seems to be gaining a firm ground in Malaysia. More and more people are beginning to realise the role they have to play in making the world a more liveable place for everyone.

As Edhi once said, “It is everyone’s responsibility to take care of others. That’s what being human means. If more people thought that way, so many problems could be solved.”


Social enterprises in Malaysia

Malaysia flag

The PT Foundation, (previously known as Pink Triangle Sdn Bhd) currently chaired by Hisham Hussein, provides education and support on AIDS-related topics. They provide food, lodging, counselling, HIV testing and other services to vulnerable communities.

The MAD Experience was founded by Charu Agarwal and Navin Muruga, who had both volunteered in war-torn Sri Lanka. Upon returning to Malaysia, they set up MAD with aims of alleviating poverty. They achieve this by crafting programs that deal with specific needs of a target community.

EPIC Homes was founded by John-Son Oei and his team. Its mission is to train volunteers to build houses for Orang Asli families.

Arkitrek, was founded by Ian Hall. It is a company that produces beautiful eco-friendly architecture for rural communities using recycled materials.

Tatana Roots, founded by Suzane Samy, is devoted to preserving the heritage of Dusun Tatana, a Sabahan ethnic group. The organisation wishes to breathe new life to traditions like house-building and handicraft-making.

Jack Chua majors in psychology and currently works as a researcher in the field of psychometrics. He is also a regular Leaderonomics writer on leadership topics. Share your thoughts with him at editor@leaderonomics.com.

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