The concept of social enterprise and social business comes from Muhammad Yunus, winner of the Nobel Peace Prize in 2006 and inventor of microfinance. Social enterprises are businesses whose primary aim it is to find solutions to social problems. They are not intended to replace the state or charities, but rather to complement them. Social enterprises are commercial businesses that also generate profits but which predominantly reinvest them.
Social enterprises achieve high growth rates. In Austria there are currently some 1,200 to 2,000 social enterprises employing about 80,000 to 90,000 people. A recent study by the Vienna University of Economics and Business estimates the number of new annual start-ups is up to 160. In developing countries, too, where the first social enterprises came into being, there are numerous entrepreneurial business models addressing a variety of innovative solutions.
One problem faced by many business founders is the difficult access to capital markets and the frequently time-consuming task of attracting and managing financial backers, rather than being able to concentrate on the core business. Investors with a long-term view to investment can help here; supporting companies’ efforts to become properly established and enabling them to concentrate on the real work. There are many interesting ideas, such as the integration of disabled people in the labour market, the construction of simple, yet safe and stable homes in developing countries, or initiatives aimed at better reconciling work and family.
Concrete investment opportunities can be realised in the social private equity sector as well as through direct investments.