Social Enterprise – is it a trend, a revolution, or something in between?
The fact that most social enterprises fail, won’t ever experience even a fraction of the fame enjoyed by the Airbnbs and Ubers of the world, and are unlikely to exit at any point – isn’t deterring thousands of purpose driven people from giving it a shot.
This should come as no surprise, as the motivators for launching and building a successful social enterprise can be intoxicating. More than ever before, the exciting success stories of social enterprises like Toms, ThankYou Group, Patagonia, Terracycle, and One Acre Fund continue to enchant idealist, consultants, developers and problem-solvers to jump on the entrepreneurial wagon in the hope of creating a commercially viable business that generates significant social impact.
There are numerous theoretical and practical considerations to take into account when starting a social enterprise. One of these is an awareness of social enterprises’ evolving landscape and the limitations of the current system in which it operates.
If we are genuinely committed to the long haul that is social enterprise, it is important to understand its context, impediments and scope. In doing so, we put ourselves in a better position to harness the potential of social entrepreneurship and advocate on its behalf. By understanding what is happening, we can contribute towards designing a more effective system to meet societies most pressing issues.
To help you get started, here are some social enterprise statistics from around the world.
Estimated 20,000 social enterprises, 34% have been in operation for between 2-5 years and constitute 2-3% of GDP (2010).
63% self-generated over 50% of their revenues through fees or sales (2014).
57% are less than three years old (2015). 81% describe themselves as having a social purpose, 45% operate to achieve a cultural purpose, 26% work towards employment development, and 27% focus on the environment (2016).
1 out of 4 new enterprises set-up every year are social enterprises.
More than 89% less than 10 years old and 88% in the pilot, start-up, or growth stage (2012). One-third grew by over 50% and only 6% had negative growth (2010).
80% are small-scale enterprises (2012).
21% lack adequate funding (2015).
75% of universities teaching social entrepreneurship (2009). Estimated 78 globally recognised social entrepreneurs operating in the region (2010). 20-30% of business plan competition submissions are social enterprises (2013).
25% have become ‘multi-organisational systems’ – combination of for-profit corporation and non-profit corporation forms (2015).
42% formed in the last 10 years, 54% generated half or more of their income from trading and 60% are led by a woman (2015).
18.1% of the population are pursuing social entrepreneurial activity (2015).
68% are working towards poverty reduction and 48% have environmental objectives (2012).
More likely to be led by women and those from minority ethnic groups (2014). 50% reported a profit, 73% earn more than 75% of their income from trade, and 27% have the public sector as their main source of income (2015).
UNITED STATES OF AMERICA
22% have over $2 million in revenue, 89% were created since 2006 and 90% focus on solving problems at home (2012).
If you know of other social enterprise statistics, please add them (including a URL to the source) in the comments below.
Just a link to the full UK report:
and to the full Scottish report:
Also to add that I’m not sure where you get the ‘most social enterprises fail’ bit – evidence in the UK doesn’t back that up. Failure rate is similar to mainstream business equivalents, and in some research shown to be better.
A final note that we have been working with British Council, ODI & UnLtd on baseline mapping of India, Pakistan, Bangladesh & Ghana social enterprise sectors as well, which will come out soon.
Hi Nick, thank you for the comment and links to the full reports, most appreciated. Please feel free to share the mapping report once it’s released.
Regarding the ‘most social enterprises fail’ remark. If research broadly suggests that around 8 out of 10 mainstream businesses fail and that this, as you note, is similar for social enterprises (give or take) – then would it not be fair to assume that most social enterprises fail?
are there any updates for the mapping of Social Enterprises in India, Pakistan, Bangladesh & Ghana?
Thank you for your links, they are very helpful.
[…] help you get started, here are some social enterprise statistics from around the […]
My point was really that you pulled it out as if they were any different – starting a social enterprise is as likely (if not more) to be successful/survive as a normal business. It’s also kind of pointless to talk failure rate without putting time periods to it: 50% may fail in the first year; 96% may fail after 20 years. AirBnB & Uber might not be around in 5 years time etc.
The stats re Australia are higher – see Social Traders and Centre for Social Impact research from 2015/6 for more current data
Thanks for the comment Robyn. The Finding Australia’s Social Enterprise Sector (FASES) 2016 report you’re referring to references 20,000 social enterprises as “an estimation based on secondary analysis (originally of the Giving Australia project). A revised figure will be available later this year. Based on the data from FASES 2016 we know there are many new entrants to the field and an increase in the ongoing sustainability of the sector as a whole.” I’m looking forward to the updated figures.
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Thanks for these stats, Jay. I’m planning to do my research in the area of how leaders experience and respond to the stress of running social enterprises. I’d love to connect with you to get a better sense of how you’re approaching your own research. Would you have time to talk further?
[…] at current statistics, this prediction seems to be valid: 1 in 4 new companies in the European Union pursue social goals. More to that, 59% of UK social enterprises are driving […]
Social Enterprises are the way forward for the planet earth to see following improvements:
Saving and sustaining planet
Love and help each other
To see a better beautiful and prosperous world
A balanced and natural planet
So let’s design systems/standards/codes of practices to all above mentioned objectives.
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