Social Entrepreneurship: A Tool for ASEAN Integration?

October 28, 2015

By Heather Bonnell

2015 is a year of economic change for the Association of Southeast Asian Nations (ASEAN), as the region seeks to establish the ASEAN Economic Community (AEC) by December 31. The AEC will usher in a single economic market for the ASEAN member nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam – allowing the free movement of goods, services, skilled labor, and capital. The reorganization of the region’s economy will be a step toward ASEAN’s “Vision 2020,” which calls for a unified partnership that is outward-looking, peaceful, stable, prosperous, and developing in a dynamic way.

As ASEAN nations open their economies to the freer flow of capital, they may also open themselves to some short-term economic and social disruptions that often occur when more liberal economic logic takes precedence over protective social policies. Photo/Conor Ashleigh

The region will need more than economic cohesion, however, to accomplish Vision 2020. As ASEAN nations open their economies to the freer flow of capital, they may also open themselves to some short-term economic and social disruptions that often occur when more liberal economic logic takes precedence over protective social policies. The AEC is expected to boost regional trade and create new investment and employment opportunities, but members will also face a range of challenges to ensure that economic growth is inclusive and beneficial to all. There is a fear, indeed, that regional integration based purely on the rules of a market economy may favor those with capital and harm those without it. There is also a fear that opening national borders to new products and new companies, while offering more choice and lower prices for consumers, may also hurt less competitive local producers or farmers. The AEC, thus, presents a challenge to Southeast Asia: to create a regional model that provides both an open economy and social support for less developed nations, and in turn, its poorer citizens.

Social entrepreneurship (SE) offers a promising avenue of support for those in need, since it exists in a space that encompasses both the private and public sectors. The concept represents an amalgamation of the non-governmental organization (NGO) and the conventional for-profit enterprise. NGOs include a wide variety of not-for-profit organizations that generally seek to create some form of social change. NGOs typically depend on outside funding from governments, foundations, businesses, or private individuals. The concept of SE emerged from the desire to create a new framework for social change, one that would be sustainable and free of the need for outside funding, by incorporating conventional for-profit business strategies into the NGO model, creating a tool for social change that operates from within the private sector. While a traditional business works to make a profit for its owners or stakeholders, a social enterprise views the profits from its business activities as a means to its social ends. Thus, the social enterprise is intended to be self-sustaining, making it a promising tool for creating social change in an open, liberal economy like the AEC, which looks first to the private sector to address both economic and social needs.

One typical social enterprise, FruitFriends, in Laos, works to fight poverty in the agricultural sector. FruitFriends is a capacity-building enterprise for youth that specializes in education and agriculture. The organization sets up local, agricultural business ventures to not only create jobs, but also to directly fund school construction in areas where young people lack access to education. This type of social enterprise will be increasingly important as the ASEAN economy continues to open up and small farmers face increasing regional competition and international commodities markets.

The AEC is likely to have mixed impacts on small communities throughout the region.

Without a strong society that is able to adjust to a liberal economy, the AEC may do as much harm as good for certain sectors of the economy. The smallholder farmer, for example, may not be able to compete with large-scale commercial agriculture. ASEAN nations will need strategies, policies, and mechanisms to address the AEC’s impact on those who have relied on protected domestic markets for their livelihoods. This can be done by improving smallholder productivity, protecting their ownership of land, and connecting them to the wider regional market that the AEC will bring. Likewise, local partners can provide a boost to the success of government policy interventions. Social enterprises throughout ASEAN could work to boost small business and trade as an additional form of social support at the local level.

It will be a challenge, however, for SE to operate across national borders in the AEC. The social enterprise model typically requires individuals at the community level to take ownership of issues that they feel passionate about. To do this on a regional scale will be no easy task. Since the SE model prioritizes social impact, accumulating enough profit to scale up to a multinational level will be challenging, and will very likely require outside funding. Furthermore, a regional social enterprise must still find a way to be relevant to each country it seeks to operate in. While ASEAN member states share many similarities, each country has its own unique needs and social issues.

This is not to say that a regional social enterprise is impossible, however. Rather than focusing on expanding one enterprise, for example, the UK-based organization Ashoka is bringing together and supporting various social enterprises that have already been successful, in order to build a global network of social entrepreneurs who can cooperate to address regional issues (i.e. youth unemployment, migrant labor, or agriculture) in ways that are specific to their locations.

There are ways that the concept of social entrepreneurship can be adapted to a regional landscape. While economic integration will remain a priority on the official ASEAN agenda this year as the AEC deadline approaches, the public sector, private sector, and civil society must begin to address the social challenges that will emerge from the rapidly changing economic landscape. The social enterprise model provides a community-based alternative to a state-based social sector by allowing civil society to independently pursue social innovation and address problems in new ways.

Heather Bonnell is a senior at Queen’s University in Kingston, Ontario, Canada, and a recent intern with The Asia Foundation in Malaysia. She can be reached at [email protected]. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

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