In South Africa, we’ve all heard the message loud and clear: small businesses are key to job creation, fighting poverty, and driving economic growth. And while that may be true in theory, things on the ground haven’t gone quite as planned.
Despite efforts by the government and private sector to boost small business development, the results have been underwhelming. Why? The usual suspects – lack of funding, skills gaps, red tape – are part of the problem. However, there’s something deeper at play.
Let’s explore a fresh approach to entrepreneurship: social entrepreneurship and social innovation.
What’s social innovation?
What is social innovation exactly? In short, it’s about devising innovative solutions to address significant societal issues, such as unemployment, housing shortages, or inadequate access to education.
Unlike traditional business innovation, which aims for profit, social innovation focuses on achieving positive outcomes for communities.
Consider low-cost water purification systems in rural areas or apps that connect unemployed youth to training opportunities. These ideas are socially transformative.
And in the context of social innovation in Africa, they’re urgently needed.
What is social entrepreneurship?
Now let’s talk about social entrepreneurship South Africa.
Social entrepreneurship is the act of starting a business that has a positive social impact. These aren’t charities, and they aren’t traditional profit-hungry companies either. They’re somewhere in the middle, using business tools to create lasting change.
For example, a local bakery that hires and trains homeless youth while reinvesting profits into job programs? That’s social entrepreneurship in action.
This model offers South Africans a way to understand and build wealth while uplifting others, thereby contributing directly to sustainable development through entrepreneurship.
What is the difference between social entrepreneurship and innovation?
The key difference between the two is:
- Social innovation refers to an idea or solution, such as creating mobile banking services for remote areas.
- Social entrepreneurship is a business built around that idea, such as launching a fintech startup that facilitates it.
In many cases, these two overlap. You need innovation and entrepreneurship to truly transform society.
Real-world examples of social enterprises
Let’s bring it home with some examples of social enterprises:
- A green energy company that installs solar panels and employs people from low-income communities.
- A food business that reduces waste by selling surplus groceries at discount prices.
- A mobile clinic business that brings healthcare to remote rural villages.
In each case, these businesses operate for the social good. They meet a community need, reinvest profits, and build stronger, healthier societies.
Why South Africa needs social entrepreneurship
Here’s the deal: In many emerging economies – India, Brazil, Malaysia – support for small businesses has taken off thanks to innovation and grassroots efforts. But in South Africa, something’s missing.
There’s often a disconnect between government, big business, and the small businesses they claim to support.
That’s why we need a “basic needs” approach. Instead of building businesses solely for profit, we can support enterprises that address urgent needs, such as clean water, housing, or education, from the ground up. Communities should be in the driver’s seat of their development.
How to fund your small business
You’ve probably heard of Muhammad Yunus’s Grameen Bank – one of the best-known social enterprises in the world.
It provides microloans to people (mostly women) who couldn’t access traditional banking, helping them start their own small businesses. Over 45 million people have been reached through this model.
It’s a great example of how small ideas, rooted in local needs, can create a big, lasting impact.
So, what’s holding us back?
One major challenge in South Africa is that our policies and business laws still primarily focus on traditional companies, those that exist to generate profits for shareholders. There’s little legal or financial support for businesses that want to reinvest in communities or tackle social issues.
This makes it harder for social enterprises to thrive. However, with the right support, such as changes in tax policy, business registration options, and funding models, this could change.
A Triple Bottom Line: People, Planet, Profit
Social enterprises aren’t about choosing between making money and doing good. They aim for all three:
- Profitability
- Social impact
- Environmental sustainability
This “triple bottom line” model is exactly what South Africa needs to build a future that’s fairer, greener, and more inclusive.
FAQ
Does Regent offer courses in social innovation?
Yes! REGENT Business School is actively integrating social innovation and social entrepreneurship into its academic programmes.
In fact, they’ve included an entrepreneurship curriculum in their MBA programme, which will focus on value-driven, socially conscious business models.
They also launched an Entrepreneurship Hub aimed at supporting the development of innovative small businesses, especially those that create a positive social impact.
So, if you’re looking to study social innovation and learn how to build businesses that change lives, REGENT is the place to be.
What types of businesses qualify as social enterprises?
Social enterprises are businesses that exist to address a social or environmental issue, while generating revenue. The key is that profits are reinvested back into the mission, not just pocketed by shareholders.
Here are a few examples of what counts as a social enterprise:
- A skills training centre that runs a café and employs unemployed youth.
- A recycling business that reduces landfill waste and employs previously incarcerated individuals.
- A water purification company that supplies affordable, clean water to underserved rural areas.
In short: If your business model is designed to tackle a real-world problem, improve lives, and reinvest profits into that mission, you’re a social enterprise.
Is social entrepreneurship profitable?
Yes, social entrepreneurship can be highly profitable. But it defines success differently.
Rather than focusing solely on financial returns, social enterprises measure the impact of social change. They balance income with purpose, often referred to as the “triple bottom line”: profit, people, and planet.
This makes them more resilient and more fulfilling. Many entrepreneurs report higher levels of satisfaction because they’re not just earning a living; they’re creating change.
What can we do next?
If we want to solve our most pressing challenges (poverty, unemployment, inequality), we need to stop relying solely on the government or big corporations. We need social change through business.
That’s where social innovation and social entrepreneurship South Africa come in. These models empower everyday people to develop effective solutions. They support the social sector and offer a real path toward sustainable development through entrepreneurship.
However, to make this work, we need an ecosystem that supports it, including funding, policy reform, and social enterprise education, such as what REGENT offers.
At REGENT Business School, we take this seriously. We embedded social entrepreneurship into our MBA curriculum and launched an Entrepreneurship Hub to support this new generation of change-makers.
