Social Enterprise and South Africa

Scott Walker FRSA describes the challenges of directing an innovation project between the UK and South Africa on behalf of the UK government.

Over the past year I have been directing an innovation project between London and South Africa for the UK government as part of a new ‘Global Innovation Partners Programme’ (GIPP) under the UK/ South Africa bi-lateral Newton Fund agreement. Whilst we have built incredible (local) partnerships, including one with Africa’s biggest corporates which is looking at the future of work for the many who have been ‘left behind’, it’s been far from an easy journey. Quite the opposite. But I can’t stop thinking that some aspects might have been far easier, especially when it comes to identifying UK organisations with innovative solutions to serve real demand requirements in emerging markets. I ask myself, how could the system work better to help us find those pioneering UK social enterprises which can solve challenging problems far away from home?

A joint report published in 2012 by Social Enterprise UK and the British Council acknowledged that about half (49%) of social enterprises receive no support to export. The same document recommended that social enterprise support organisations should share resources; that greater collaboration is necessary (due to little signposting or joined-up working); and that more effort needs to be put into developing networks and market-building activity within the social enterprise sector. Arguably, those challenges very much remain today. Impact Hub does good work, as does Social Enterprise UK. The RSA’s International Development Committee can also play a useful role here, given the number of fellows in its network, but greater coherence and coordination from others is no doubt valuable. Greater leadership action would be useful.

Our efforts in South Africa are focused on social welfare impact through job / venture creation ‘in country’ by stimulating and channelling the innovation potential of entrepreneurship, with a particular focus on the township economy.  There are no easy answers for South Africa given the many historical complications: the country is fraught with difficult structural and political challenges and carries a heavy anchor from its bleak past. The current economic challenges facing the country are, incontrovertibly, very difficult. Income inequity stands as one of the worst globally and it is rising.   More than half the population lives in poverty and a further 27% of the population live in a state of susceptibility to poverty.  Of the 20.2 million young people aged 15-34 years, 39.3% are not in employment, education or training (NEET).  Entrepreneurial intentions in South Africa have dropped by more than a third (from 15.4% to 10.1%) from 2013 to 2017 and almost halved when compared to 2010.  Entrepreneurship requires fertile conditions to thrive yet these are hardly suitably foundations.

Our aim has been to try and identify, link, and drive best practice and collaboration across the enterprise / entrepreneur ecosystem in both countries. We are pouring UK innovation tools and techniques into the government and private small business learning networks via enterprise hubs because clear gaps exist. We are connecting township entrepreneurs with appropriate mentors from the business community for specialist guidance and advice to improve start-up survivability. We are linking UK tech businesses which can cater for the unique micro-financing needs and circumstances of township entrepreneurs because traditional banking mechanics have failed to supply their working capital needs. We have partnered with a UK organisation to help local South African organisations improve their approaches to measurement and evaluation. And throughout our project we have endeavoured to help join-up the support efforts of both UK and South African governments, as their well-intentioned efforts are sometimes fragmented. Identifying opportunities and appropriate bridging linkages can take time but fully functional formal channels are also needed.

Last year we published a report  for Thomson Reuters which cast the spotlight on ‘Innovation in Africa’. We noted that imported incubation and acceleration models have their place but also have significant limitations, so we are wary of exposing exported approaches because sometimes they misconstrue local context and need.  In our commentary we suggested that the ‘winner takes all‘ approach, whereby the focus of support rests too heavily on narrow-band help for high potential, scale-up businesses, may not lead Africa to the richer and faster path to growth once promised. To date, it has not worked to identify these ‘unicorns’ nor has it produced (and spread) economic growth, which is so badly needed on the continent. As a mechanic for distributing wealth, these models are simply ineffective and equally unlikely to support greater redistributive wealth in the future, except for in a small minority of cases. At best, the current approach will further drive the tiered (formal/informal) two speed economy and widen the gap between mainstream economy and those outside it. At worse, it will perpetuate corporate imperialism 2.0 and economic apartheid. We believe a different approach is needed to prevent these outcomes. Our aim is to promote a ‘scaling out and across’ to maximise the impact of collaborative innovation across the value chain (for the benefit of the majority inclusively). Social enterprise has a critical role to play here with local, context-specific, community-driven solutions promoting socio-economic change. 

Our report on African innovation ecosystems concluded that more radical breakthrough thinking is needed alongside collaborative leadership, smarter strategic partnerships and better capacity-building efforts aligned to actuals needs, as well as localised, agile solutions. The same can be said for supporting UK social enterprises to help export their service to emerging markets.

Sadly, the UK Department for International Trade has a focus on inward investment and helping South African businesses locate in the UK or gain entrepreneurship visas. The UK’s Catapults, which have a bounty of innovative businesses in their databases, only operate on a paid consultancy basis. The British Council works via grant-making according to its set programmes. More should be done to bring to life the social enterprise export recommendations advanced all those years ago.  We have created direct avenues for UK social enterprises to help us deliver against our programme objectives - we invite British-based innovators and social enterprises to also join us on our important, if rather bumpy, social impact journey ahead.