The Role of Social Enterprises in Promoting Community Development

Description

Abstract:

The academic field of social entrepreneurship has been on the rise for the last 20 years. In the context of development economics, social enterprises are in vogue, and they are claimed to be potentially promising actors in the pursuit of sustained economic development. However, despite high hopes for the impact of social enterprises on development, there is widespread dissent among scholars on what constitutes a social enterprise and the value it creates. This disunity may be due to overly simplistic assumptions about the features and potential impacts of a social enterprise.
Hence, this thesis examines the research question: What role do social enterprises play in promoting development? As a part of answering this question, the thesis investigates what a social enterprise is, what value it creates and how this value contributes to promoting development. To do so, it conducts a multiple case study of nine social enterprises in Kenya. The empirical data consists of interviews collected on site during a field study trip to Kenya. To understand what a social enterprise is, and what value it creates, this thesis develops a typol-ogy of enterprises and a value dimension framework based on a literature review. To examine how the value created by social enterprises may contribute to promoting development, the thesis compiles a value chain analysis framework.

By applying these frameworks to the nine social enterprises, the thesis makes three findings: First, a social enterprise is an independent business with an integrated social mission that applies a business model to solve a social problem. Second, a social enterprise creates different combinations of value, spanning all dimensions in the value dimension framework. However, it is difficult to tell if there is a difference in the value creation of social enterprises and of commercial enterprises, because social value is contextual. Third, the value a social enterprise creates potentially contributes to promoting development through productivity improvements and redistribution of the value across the value chain. Hence, a social enter-prise seeks to make the poor people in its local community gain more from their work.
On this basis, this thesis offers new theoretical and empirical insights regarding the explanatory power and applicability of value chain theory and knowledge of the concept of a social enterprise. Furthermore, the findings pave the way for further investigation of the vari-ous upgrading strategies and how they may contribute differently to promote community development.